Steven Madden, Ltd 8-K/A, filed Feb 25, 2021
Steven Madden, Ltd. (SHOO)
About this 8-K/A
Steven Madden, Ltd filed this 8-K/A on February 25, 2021.
Items reported
- Item 2.02: Financial results
- Item 8.01: Other events
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report:
(Date of earliest event reported)
(Exact Name of Registrant as Specified in Charter)
| (State or Other Jurisdiction
of Incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
(Address of Principal Executive Offices) (Zip Code)
Registrant’s
telephone number, including area code:
Securities registered pursuant to Section 12(b) of the Exchange Act:
| Title of Each Class | Trading Symbol(s) | Name of each exchange on which registered |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
EXPLANATORY NOTE
This Amendment No. 1 on Form 8-K/A (“Amendment No. 1”) amends the Current Report on Form 8-K of Steven Madden, Ltd. (the “Company”) filed with the Securities and Exchange Commission on February 25, 2021. The purpose of this Amendment No. 1 is to add Exhibit 99.1, which had been inadvertently omitted from the original filing.
| Item 2.02 | Results of Operations and Financial Condition. |
On February 25, 2021, Steven Madden, Ltd. (the “Company”) issued a press release, furnished as Exhibit 99.1 and incorporated in this Item 2.02 by reference, announcing the Company’s financial results for the fourth quarter and fiscal year ended December 31, 2020.
| Item 8.01. | Other Events. |
The Company’s press release on February 25, 2021 also announced that the Company’s Board of Directors has declared a quarterly cash dividend of $0.15 per share on the Company’s outstanding shares of common stock. The dividend is payable on March 26, 2021, to the stockholders of record as of the close of business on March 16, 2021.
The full text of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K.
The information contained in this Current Report on Form 8-K, including Exhibit 99.1, is being furnished, and shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of Section 18. Furthermore, the information contained in this Current Report on Form 8-K, including Exhibit 99.1, shall not be incorporated by reference into any registration statement filed by the Company under the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated therein by reference. The furnishing of the information in this Current Report is not intended to, and does not, constitute a determination or admission by the Company that the information in this Current Report is material or complete, or that investors should consider this information before making an investment decision with respect to any security of the Company.
| Item 9.01 | Financial Statements and Exhibits. |
| (d) | Exhibits. |
| Exhibit | Description | |
| 99.1 | Press Release, dated February 25, 2021, announcing its 2020 Fourth Quarter and Annual Results and Declaration of Cash Dividend. | |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL). |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Dated: February 25, 2021
| STEVEN MADDEN, LTD. | ||
| By: | /s/ Edward R. Rosenfeld | |
| Edward R. Rosenfeld | ||
| Chief Executive Officer | ||
Exhibit 99.1
Steve Madden Announces Fourth Quarter and Full Year 2020 Results and
Reinstates Quarterly Dividend
LONG ISLAND CITY, N.Y., February 25, 2021 – Steve Madden (Nasdaq: SHOO), a leading designer and marketer of fashion-forward footwear, accessories and apparel for women, men and children, today announced financial results for the fourth quarter and full year ended December 31, 2020, and the reinstatement of a quarterly cash dividend.
Amounts referred to as “Adjusted” exclude the items that are described under the heading “Non-GAAP Adjustments.”
The Company reclassified commission and licensing fee income to Total Revenue and reclassified its respective expenses into Operating Expenses from previously labeled Commission and Licensing Fee Income - Net on the Company’s Consolidated Statement of Operations for each period provided.
For the Fourth Quarter 2020:
| · | Revenue decreased 15.9% to $353.0 million compared to $419.6 million in the same period of 2019. |
| · | Gross margin was 38.3% compared to 37.7% in the same period of 2019. Adjusted gross margin increased 40 basis points to 38.2% compared to 37.8% in the same period of 2019. |
| · | Operating expenses as a percentage of revenue were 31.8% compared to 33.1% in the same period of 2019. Adjusted operating expenses as a percentage of revenue were 30.9% compared to 30.0% in the same period of 2019. |
| · | Income from operations totaled $21.3 million, or 6.0% of revenue, compared to $19.5 million, or 4.6% of revenue, in the same period of 2019. Adjusted income from operations was $25.6 million, or 7.3% of revenue, compared to Adjusted income from operations of $33.0 million, or 7.9% of revenue, in the same period of 2019. |
| · | Net income attributable to Steven Madden, Ltd. was $22.6 million, or $0.28 per diluted share, compared to $17.8 million, or $0.21 per diluted share, in the same period of 2019. Adjusted net income attributable to Steven Madden, Ltd. was $21.8 million, or $0.27 per diluted share, compared to $32.2 million, or $0.39 per diluted share, in the same period of 2019. |
Edward Rosenfeld, Chairman and Chief Executive Officer, commented, “While the COVID-19 pandemic continues to have a negative impact on our business, we were pleased with our results in the fourth quarter, which exceeded our expectations and showed strong sequential improvement from the third quarter. We faced unprecedented challenges in 2020, but we relied on our strengths – an agile business model, a strong balance sheet, and our talented and resourceful employees – to successfully navigate the crisis. We continued investing in our brands and our digital capabilities while reducing expenses in other areas, and we utilized our test-and-react strategy and speed-to-market capability to quickly adjust our product mix to align with changing consumer preferences.
“As we look ahead, we remain focused on delivering trend-right product, deepening connections with our consumers, enhancing our digital commerce business, and efficiently managing our inventory and expenses. And while we are cautious on the near-term outlook due to continued headwinds from COVID-19, we are confident that the steps we have taken during the crisis – combined with the strength of our brands and our business model – leave us well-positioned to capitalize on market share opportunities and create value for our stakeholders over the long term.”
Fourth Quarter 2020 Segment Results
Revenue for the wholesale business decreased 16.2% to $263.0 million in the fourth quarter of 2020, including a 19.7% decline in wholesale footwear and a 5.9% decline in wholesale accessories/apparel. Gross margin in the wholesale business decreased to 28.3% in the fourth quarter of 2020 compared to 29.2% in the fourth quarter of 2019 due to the disposal of excess inventory resulting from COVID-19 disruption.
Retail revenue decreased 14.9% to $86.1 million in the fourth quarter of 2020 due to a significant decline in the brick-and-mortar business, partially offset by continued strength in the e-commerce business. Retail gross margin rose 400 basis points to 65.6% in the fourth quarter of 2020 compared to 61.6% in the fourth quarter of 2019 due primarily to less discounting.
The Company ended the quarter with 218 company-operated retail locations, including seven Internet stores, as well as 17 company-operated concessions in international markets.
The Company’s effective tax rate for the fourth quarter of 2020 was (10.9%) compared to 15.9% in the fourth quarter of 2019. On an Adjusted basis, the effective tax rate for the fourth quarter of 2020 was 13.3% compared to 6.3% in the fourth quarter of 2019.
Full Year Ended December 31, 2020
For the full year ended December 31, 2020, revenue decreased 32.8% to $1.2 billion from $1.8 billion in 2019.
Net loss attributable to Steven Madden, Ltd. was ($18.4) million, or ($0.23) per basic share, for the year ended December 31, 2020 compared to net income attributable to Steven Madden, Ltd. of $141.3 million, or $1.69 per diluted share, for the year ended December 31, 2019. On an Adjusted basis, net income attributable to Steven Madden, Ltd. was $51.8 million, or $0.64 per diluted share, for the year ended December 31, 2020 compared to $162.8 million, or $1.95 per diluted share, for the year ended December 31, 2019.
Balance Sheet
As of December 31, 2020, cash, cash equivalents and short-term investments totaled $287.2 million.
Reinstatement of Quarterly Cash Dividend
The Company’s Board of Directors approved the reinstatement of a quarterly cash dividend. The quarterly dividend of $0.15 per share is payable on March 26, 2021 to stockholders of record as of the close of business on March 16, 2021.
Fiscal Year 2021 Outlook
Given the continued disruption and uncertainty related to the ongoing COVID-19 pandemic, the Company is not providing guidance at this time.
Non-GAAP Adjustments
Amounts referred to as “Adjusted” exclude the items below.
For the fourth quarter 2020:
| · | $5.1 million pre-tax ($3.9 million after-tax) expense in connection with payments and a provision for early lease termination charges, included in operating expenses. |
| · | $1.7 million pre-tax ($1.4 million after-tax) expense associated with the impairment of a trademark. |
| · | $1.2 million pre-tax ($0.9 million after-tax) benefit in connection with the change in valuation of contingent considerations, included in operating expenses. |
| · | $1.1 million pre-tax ($0.9 million after-tax) benefit associated with the recovery from the Payless ShoeSource bankruptcy, included in operating expenses. |
| · | $0.5 million pre-tax ($0.4 million after-tax) benefit in connection with the termination of a joint venture, included in cost of goods sold. |
| · | $0.2 million pre-tax ($0.2 million after-tax) expense in connection with restructuring and related charges, included in operating expenses. |
| · | $4.2 million tax benefit in connection with the net operating loss carryback provision of the CARES Act. |
| · | $0.5 million tax benefit in connection with the tax treatment of a prior-year bad debt. |
| · | $0.7 million benefit in connection with adjustments attributable to noncontrolling interest. |
For the fourth quarter 2019:
| · | $8.9 million pre-tax ($8.9 million after-tax) expense in connection with vendor support associated with the Payless ShoeSource bankruptcy, included in operating expenses. |
| · | $4.0 million pre-tax ($3.0 million after-tax) expense in connection with a provision for a legal settlement and related fees, included in operating expenses. |
| · | $0.4 million pre-tax ($0.3 million after-tax) expense in connection with the termination of a joint venture, included in cost of goods sold. |
| · | $0.2 million pre-tax ($0.1 million after-tax) expense in connection with the termination of a joint venture, included in operating expenses. |
| · | $0.2 million after-tax income in connection with the termination of a joint venture, included in net loss attributable to noncontrolling interest. |
| · | $2.2 million tax expense in connection with deferred tax and other tax adjustments. |
For the fiscal year 2020:
| · | $44.3 million pre-tax ($33.8 million after-tax) expense associated with the impairment of certain trademarks. |
| · | $36.9 million pre-tax ($27.9 million after-tax) expense in connection with the impairment of store fixed assets and lease right-of-use assets, included in operating expenses. |
| · | $13.5 million pre-tax ($10.3 million after-tax) expense in connection with payments and a provision for early lease termination charges, included in operating expenses. |
| · | $7.1 million pre-tax ($5.4 million after-tax) expense in connection with restructuring and related charges, included in operating expenses. |
| · | $6.2 million pre-tax ($4.8 million after-tax) benefit in connection with the change in valuation of contingent considerations, included in operating expenses. |
| · | $2.0 million pre-tax ($1.5 million after-tax) expense in connection with benefits provided to furloughed employees, included in operating expenses. |
| · | $1.1 million pre-tax ($0.9 million after-tax) benefit associated with the recovery from the Payless ShoeSource bankruptcy, included in operating expenses. |
| · | $0.7 million pre-tax ($0.5 million after-tax) expense in connection with a provision for a loan receivable, included in operating expenses. |
| · | $0.5 million pre-tax ($0.4 million after-tax) benefit in connection with the termination of a joint venture, included in cost of goods sold. |
| · | $0.9 million loss in connection with the impairment of store fixed assets, impairment of lease right-of-use assets, restructuring and related charges attributable to noncontrolling interest. |
| · | $4.2 million tax benefit in connection with the net operating loss carryback provision of the CARES Act. |
| · | $1.9 million net tax expense in connection with deferred and foreign uncertain tax position adjustments. |
For the fiscal year 2019:
| · | $8.7 million pre-tax ($8.6 million after-tax) expense in connection with vendor support, net of recovery of bad debt expense associated with the Payless ShoeSource bankruptcy, included in operating expenses. |
| · | $5.4 million pre-tax ($4.1 million after-tax) expense in connection with early lease termination charges, included in operating expenses. |
| · | $4.1 million pre-tax ($3.0 million after-tax) expense associated with the impairment of a trademark. |
| · | $4.0 million pre-tax ($3.0 million after-tax) expense in connection with provision for a legal settlement and related fees, included in operating expenses. |
| · | $1.9 million pre-tax ($1.4 million after-tax) net benefit associated with the change in a contingent liability and the acceleration of amortization related to the termination of the Kate Spade license agreement as of December 31, 2019. |
| · | $1.1 million pre-tax ($0.8 million after-tax) expense in connection with the acquisitions of GREATS and BB Dakota, included in operating expenses. |
| · | $0.7 million pre-tax ($0.5 million after-tax) expense in connection with restructuring and related charges, included in operating expenses. |
| · | $0.4 million pre-tax ($0.3 million after-tax) expense in connection with the termination of a joint venture, included in cost of goods sold. |
| · | $0.2 million pre-tax ($0.1 million after-tax) expense in connection with the termination of a joint venture, included in operating expenses. |
| · | $0.2 million after-tax income in connection with the termination of a joint venture, included in net income attributable to noncontrolling interest. |
| · | $2.6 million tax expense in connection with deferred tax and other tax adjustments. |
Reconciliations of amounts on a GAAP basis to Adjusted amounts are presented in the Non-GAAP Reconciliation tables at the end of this release and identify and quantify all excluded items.
Conference Call Information
Interested stockholders are invited to listen to the fourth quarter and fiscal year 2020 earnings conference call scheduled for today, February 25, 2021 at 8:30 a.m. Eastern Time. The call will be broadcast live over the Internet and can be accessed by logging onto https://investor.stevemadden.com. An online archive of the broadcast will be available within two hours of the conclusion of the call and will remain available for 12 months following the live call.
About Steve Madden
Steve Madden designs, sources and markets fashion-forward footwear, accessories and apparel for women, men and children. In addition to marketing products under its own brands including Steve Madden®, Dolce Vita®, Betsey Johnson®, Blondo®, GREATS®, BB Dakota® and Mad Love®, Steve Madden is a licensee of various brands, including Anne Klein® and Superga®. Steve Madden also designs and sources products under private label brand names for various retailers. Steve Madden’s wholesale distribution includes department stores, specialty stores, luxury retailers, national chains, mass merchants and online retailers. Steve Madden also operates retail stores and e-commerce websites. Steve Madden licenses certain of its brands to third parties for the marketing and sale of certain products, including ready-to-wear, outerwear, eyewear, hosiery, jewelry, fragrance, luggage and bedding and bath products. For local store information and the latest Steve Madden booties, pumps, men’s and women’s boots, fashion sneakers, slippers, dress shoes, sandals and more, visit http://www.stevemadden.com.
Safe Harbor Statement Under the U.S. Private Securities Litigation Reform Act of 1995
This press release contains “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Examples of forward-looking statements include, among others, statements regarding revenue and earnings guidance, plans, strategies, objectives, expectations and intentions. Forward-looking statements can be identified by words such as: “may”, “will”, “expect”, “believe”, “should”, “anticipate”, “project”, “predict”, “plan”, “intend”, or “estimate”, and similar expressions or the negative of these expressions. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they represent the Company’s current beliefs, expectations and assumptions regarding anticipated events and trends affecting its business and industry based on information available as of the time such statements are made. Investors are cautioned that such forward-looking statements are inherently subject to risks and uncertainties, many of which cannot be predicted with accuracy and some of which may be outside of the Company’s control. The Company’s actual results and financial condition may differ materially from those indicated in these forward-looking statements. As such, investors should not rely upon them. Important risk factors include:
| · | the Company’s ability to maintain adequate liquidity when negatively impacted by unforeseen events such as an epidemic or pandemic (COVID-19), which may cause disruption to the Company’s business operations and temporary closure of Company-operated and wholesale partner retail stores, resulting in a significant reduction in revenue for an indeterminable period of time; |
| · | the Company’s ability to accurately anticipate fashion trends and promptly respond to consumer demand; |
| · | the Company’s ability to compete effectively in a highly competitive market; |
| · | the Company’s ability to adapt its business model to rapid changes in the retail industry; |
| · | the Company’s dependence on the retention and hiring of key personnel; |
| · | the Company’s ability to successfully implement growth strategies and integrate acquired businesses; |
| · | the Company’s reliance on independent manufacturers to produce and deliver products in a timely manner, especially when faced with adversities such as work stoppages, transportation delays, public health emergencies, social unrest, changes in local economic conditions, and political upheavals as well as meet the Company’s quality standards; |
| · | changes in trade policies and tariffs imposed by the United States government and the governments of other nations in which the Company manufactures and sells products; |
| · | disruptions to product delivery systems and the Company’s ability to properly manage inventory; |
| · | the Company’s ability to adequately protect its trademarks and other intellectual property rights; |
| · | legal, regulatory, political and economic risks that may affect the Company’s sales in international markets; |
| · | changes in U.S. and foreign tax laws that could have an adverse effect on the Company’s financial results; |
| · | additional tax liabilities resulting from audits by various taxing authorities; |
| · | the Company’s ability to achieve operating results that are consistent with prior financial guidance; and |
| · | other risks and uncertainties indicated from time to time in the Company’s filings with the Securities and Exchange Commission. |
The Company does not undertake any obligation to publicly update any forward-looking statement, including, without limitation, any guidance regarding revenue or earnings, whether as a result of new information, future developments or otherwise.
STEVEN MADDEN, LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS DATA
(In thousands, except per share amounts)
| Three Months Ended | Twelve Months Ended | |||||||||||||||
| December 31, 2020 | December 31, 2019 | December 31, 2020 | December 31, 2019 | |||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||||
| Net sales | $ | 349,066 | $ | 414,912 | $ | 1,188,943 | $ | 1,768,135 | ||||||||
| Commission and licensing fee income | 3,901 | 4,713 | 12,871 | 19,022 | ||||||||||||
| Total revenue | 352,967 | 419,625 | 1,201,814 | 1,787,157 | ||||||||||||
| Cost of sales | 217,655 | 261,291 | 737,273 | 1,101,140 | ||||||||||||
| Gross profit | 135,312 | 158,334 | 464,541 | 686,017 | ||||||||||||
| Operating expenses | 112,224 | 138,855 | 451,873 | 505,153 | ||||||||||||
| Impairment charges | 1,745 | — | 44,273 | 4,050 | ||||||||||||
| Income / (loss) from operations | 21,343 | 19,479 | (31,605 | ) | 176,814 | |||||||||||
| Interest and other income, net | 129 | 998 | 1,620 | 4,412 | ||||||||||||
| Income / (loss) before provision for income taxes | 21,472 | 20,477 | (29,985 | ) | 181,226 | |||||||||||
| (Benefit) / provision for income taxes | (2,338 | ) | 3,247 | (11,704 | ) | 39,504 | ||||||||||
| Net income / (loss) | 23,810 | 17,230 | (18,281 | ) | 141,722 | |||||||||||
| Less: net income / (loss) attributable to noncontrolling interest | 1,219 | (521 | ) | 116 | 411 | |||||||||||
| Net income / (loss) attributable to Steven Madden, Ltd. | $ | 22,591 | $ | 17,751 | $ | (18,397 | ) | $ | 141,311 | |||||||
| Basic income / (loss) per share | $ | 0.29 | $ | 0.23 | $ | (0.23 | ) | $ | 1.78 | |||||||
| Diluted income / (loss) per share | $ | 0.28 | $ | 0.21 | $ | (0.23 | ) | $ | 1.69 | |||||||
| Basic weighted average common shares outstanding | 78,588 | 78,754 | 78,635 | 79,577 | ||||||||||||
| Diluted weighted average common shares outstanding | 81,414 | 83,381 | 78,635 | 83,646 | ||||||||||||
| Cash dividends declared per common share | $ | — | $ | 0.15 | $ | 0.15 | $ | 0.57 | ||||||||
STEVEN MADDEN, LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET DATA
(In thousands)
| As of | ||||||||
| December 31, 2020 | December 31, 2019 | |||||||
| (Unaudited) | ||||||||
| Cash and cash equivalents | $ | 247,864 | $ | 264,101 | ||||
| Short-term investments | 39,302 | 40,521 | ||||||
| Accounts receivable, net | 277,715 | 254,637 | ||||||
| Inventories | 101,420 | 136,896 | ||||||
| Other current assets | 31,940 | 22,724 | ||||||
| Property and equipment, net | 43,268 | 65,504 | ||||||
| Operating lease right-of-use assets | 101,379 | 155,700 | ||||||
| Goodwill and intangibles, net | 283,456 | 334,058 | ||||||
| Other assets | 11,417 | 4,506 | ||||||
| Total assets | $ | 1,137,761 | $ | 1,278,647 | ||||
| Accounts payable | $ | 73,904 | $ | 61,706 | ||||
| Operating leases (current & non-current) | 132,849 | 171,796 | ||||||
| Other current liabilities | 127,755 | 180,941 | ||||||
| Contingent payment liability | 207 | 9,124 | ||||||
| Other long-term liabilities | 12,677 | 13,856 | ||||||
| Total Steven Madden, Ltd. stockholders’ equity | 776,586 | 828,501 | ||||||
| Noncontrolling interest | 13,783 | 12,723 | ||||||
| Total liabilities and stockholders’ equity | $ | 1,137,761 | $ | 1,278,647 | ||||
STEVEN MADDEN, LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED CASH FLOW DATA
(In thousands)
| Twelve Months Ended | ||||||||
| December 31, 2020 | December 31, 2019 | |||||||
| (Unaudited) | ||||||||
| Net cash provided by operating activities | $ | 44,206 | $ | 233,780 | ||||
| Investing Activities | ||||||||
| Purchases of property and equipment | (6,562 | ) | (18,311 | ) | ||||
| Maturity / sale of marketable securities and short-term investments, net | 1,678 | 27,736 | ||||||
| Acquisitions, net of cash acquired | — | (37,173 | ) | |||||
| Net cash used in investing activities | (4,884 | ) | (27,748 | ) | ||||
| Financing Activities | ||||||||
| Common stock share repurchases for treasury | (46,583 | ) | (101,768 | ) | ||||
| Investment of noncontrolling interest | 359 | 3,248 | ||||||
| Distribution of noncontrolling interest earnings | — | (1,444 | ) | |||||
| Proceeds from exercise of stock options | 1,609 | 6,212 | ||||||
| Cash dividends paid | (12,459 | ) | (48,426 | ) | ||||
| Net cash used in financing activities | (57,074 | ) | (142,178 | ) | ||||
| Effect of exchange rate changes on cash and cash equivalents | 1,515 | 216 | ||||||
| Net (decrease) / increase in cash and cash equivalents | (16,237 | ) | 64,070 | |||||
| Cash and cash equivalents - beginning of year | 264,101 | 200,031 | ||||||
| Cash and cash equivalents - end of year | $ | 247,864 | $ | 264,101 | ||||
STEVEN MADDEN, LTD. AND SUBSIDIARIES
NON-GAAP RECONCILIATION
(In thousands, except per share amounts)
(Unaudited)
The Company uses non-GAAP financial information to evaluate its operating performance and in order to represent the manner in which the Company conducts and views its business. Additionally, the Company believes the information assists investors in comparing the Company’s performance across reporting periods on a consistent basis by excluding items that are not indicative of its core business. The non-GAAP financial information is provided in addition to, and not as an alternative to, the Company’s reported results prepared in accordance with GAAP.
| Table 1 - Reconciliation of GAAP gross profit to Adjusted gross profit | ||||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||
| December 31, 2020 | December 31, 2019 | December 31, 2020 | December 31, 2019 | |||||||||||||
| GAAP gross profit | $ | 135,312 | $ | 158,334 | $ | 464,541 | $ | 686,017 | ||||||||
| (Gain) / loss in connection with the termination of a joint venture | (532 | ) | 386 | (532 | ) | 386 | ||||||||||
| Adjusted gross profit | $ | 134,780 | $ | 158,720 | $ | 464,009 | $ | 686,403 | ||||||||
| Table 2 - Reconciliation of GAAP operating expenses to Adjusted operating expenses | ||||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||
| December 31, 2020 | December 31, 2019 | December 31, 2020 | December 31, 2019 | |||||||||||||
| GAAP operating expenses | $ | 112,224 | $ | 138,855 | $ | 451,873 | $ | 505,153 | ||||||||
| Expense in connection with payments / provision for early lease termination charges | (5,083 | ) | — | (13,473 | ) | (5,424 | ) | |||||||||
| Benefit in connection with the change in valuation of contingent considerations | 1,213 | — | 6,233 | — | ||||||||||||
| Recovery / (bad debt expense) in connection with the Payless ShoeSource bankruptcy | 1,081 | (8,946 | ) | 1,081 | (8,687 | ) | ||||||||||
| Expense in connection with restructuring and related charges | (249 | ) | — | (7,138 | ) | (669 | ) | |||||||||
| Expense in connection with impairment of store fixed assets and lease right-of-use assets | — | — | (36,895 | ) | — | |||||||||||
| Expense in connection with benefits provided to furlough employees | — | — | (1,991 | ) | — | |||||||||||
| Expense in connection with a provision for legal settlement and related fees | — | (3,977 | ) | — | (3,977 | ) | ||||||||||
| Expense in connection with the termination of a joint venture | — | (158 | ) | — | (158 | ) | ||||||||||
| Expense in connection with provision for loan receivable | — | — | (697 | ) | — | |||||||||||
| Expense in connection with the acquisitions of GREATS and BB Dakota | — | (42 | ) | — | (1,120 | ) | ||||||||||
| Net benefit in connection with the change in a contingent liability and the acceleration of amortization related to the termination of the Kate Spade license agreement | — | — | — | 1,868 | ||||||||||||
| Adjusted operating expenses | $ | 109,186 | $ | 125,732 | $ | 398,993 | $ | 486,986 | ||||||||
| Table 3 - Reconciliation of GAAP income / (loss) from operations to Adjusted income from operations | ||||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||
| December 31, 2020 | December 31, 2019 | December 31, 2020 | December 31, 2019 | |||||||||||||
| GAAP income / (loss) from operations | $ | 21,343 | $ | 19,479 | $ | (31,605 | ) | $ | 176,814 | |||||||
| Expense in connection with payments / provision for early lease termination charges | 5,083 | — | 13,473 | 5,424 | ||||||||||||
| Expense in connection with impairment of certain trademarks | 1,745 | — | 44,273 | 4,050 | ||||||||||||
| Benefit in connection with the change in valuation of contingent considerations | (1,213 | ) | — | (6,233 | ) | — | ||||||||||
| Recovery / (bad debt expense) in connection with the Payless ShoeSource bankruptcy | (1,081 | ) | 8,946 | (1,081 | ) | 8,687 | ||||||||||
| Expense in connection with restructuring and related charges | 249 | — | 7,138 | 669 | ||||||||||||
| Expense in connection with impairment of store fixed assets and lease right-of-use assets | — | — | 36,895 | — | ||||||||||||
| Expense in connection with benefits provided to furlough employees | — | — | 1,991 | — | ||||||||||||
| Expense in connection with a provision for legal settlement and related fees | — | 3,977 | — | 3,977 | ||||||||||||
| (Gain) / loss in connection with the termination of a joint venture | (532 | ) | 544 | (532 | ) | 544 | ||||||||||
| Expense in connection with provision for loan receivable | — | — | 697 | — | ||||||||||||
| Expense in connection with the acquisitions of GREATS and BB Dakota | — | 42 | — | 1,120 | ||||||||||||
| Net benefit in connection with the change in a contingent liability and the acceleration of amortization related to the termination of the Kate Spade license agreement | — | — | — | (1,868 | ) | |||||||||||
| Adjusted income from operations | $ | 25,594 | $ | 32,988 | $ | 65,016 | $ | 199,417 | ||||||||
| Table 4 - Reconciliation of GAAP (benefit) / provision for income taxes to Adjusted provision for income taxes | ||||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||
| December 31, 2020 | December 31, 2019 | December 31, 2020 | December 31, 2019 | |||||||||||||
| GAAP (benefit) / provision for income taxes | $ | (2,338 | ) | $ | 3,247 | $ | (11,704 | ) | $ | 39,504 | ||||||
| Tax effect of expense in connection with payments / provision for early lease termination charges | 1,209 | — | 3,195 | 1,361 | ||||||||||||
| Tax effect of expense in connection with impairment of certain trademarks | 385 | — | 10,456 | 1,017 | ||||||||||||
| Tax effect of benefit in connection with the change in valuation of contingent considerations | (282 | ) | — | (1,472 | ) | — | ||||||||||
| Tax effect of recovery / (bad debt expense) in connection with the Payless ShoeSource bankruptcy | (149 | ) | — | (149 | ) | 85 | ||||||||||
| Tax effect of expense in connection with restructuring and related charges | 70 | — | 1,704 | 168 | ||||||||||||
| Tax effect of expense in connection with impairment of store fixed assets and lease right-of-use assets | — | — | 8,946 | — | ||||||||||||
| Tax effect of expense in connection with benefits provided to furlough employees | — | — | 471 | — | ||||||||||||
| Tax effect of expense in connection with a provision for legal settlement and related fees | — | 961 | — | 961 | ||||||||||||
| Tax effect of (gain) / loss in connection with the termination of a joint venture | (133 | ) | 136 | (133 | ) | 136 | ||||||||||
| Tax effect of expense in connection with provision for loan receivable | — | — | 165 | — | ||||||||||||
| Tax effect of expense in connection with the acquisitions of GREATS and BB Dakota | — | 10 | — | 281 | ||||||||||||
| Tax effect of net benefit in connection with the change in a contingent liability and the acceleration of amortization related to the termination of the Kate Spade license agreement | — | — | — | (469 | ) | |||||||||||
| Tax benefit in connection with the net operating loss carryback provision of the CARES Act | 4,191 | — | 4,191 | — | ||||||||||||
| Tax benefit / (expense) in connection with deferred and foreign uncertain tax position | 472 | (2,207 | ) | (1,921 | ) | (2,590 | ) | |||||||||
| Adjusted provision for income taxes | 3,425 | 2,147 | 13,749 | 40,454 | ||||||||||||
| Table 5 - Reconciliation of GAAP net income / (loss) attributable to noncontrolling interest to Adjusted net income / (loss) attributable to noncontrolling interest | ||||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||
| December 31, 2020 | December 31, 2019 | December 31, 2020 | December 31, 2019 | |||||||||||||
| GAAP net income / (loss) attributable to noncontrolling interest | $ | 1,219 | $ | (521 | ) | $ | 116 | $ | 411 | |||||||
| Adjustments attributable to noncontrolling interest | (698 | ) | 204 | 933 | 204 | |||||||||||
| Adjusted net income / (loss) attributable to noncontrolling interest | $ | 521 | $ | (317 | ) | $ | 1,049 | $ | 615 | |||||||
| Table 6 - Reconciliation of GAAP net income / (loss) attributable to Steve Madden, Ltd. to Adjusted net income attributable to Steve Madden, Ltd. | ||||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||
| December 31, 2020 | December 31, 2019 | December 31, 2020 | December 31, 2019 | |||||||||||||
| GAAP net income / (loss) attributable to Steven Madden, Ltd. | $ | 22,591 | $ | 17,751 | $ | (18,397 | ) | $ | 141,311 | |||||||
| After-tax impact of expense in connection with payments / provision for early lease termination charges | 3,874 | — | 10,277 | 4,063 | ||||||||||||
| After-tax impact of expense in connection with impairment of certain trademarks | 1,360 | — | 33,817 | 3,033 | ||||||||||||
| After-tax impact of benefit in connection with the change in valuation of contingent considerations | (930 | ) | — | (4,761 | ) | — | ||||||||||
| After-tax impact of (recovery) / bad debt expense in connection with the Payless ShoeSource bankruptcy | (932 | ) | 8,946 | (932 | ) | 8,602 | ||||||||||
| After-tax impact of expense in connection with restructuring and related charges | 178 | — | 5,434 | 501 | ||||||||||||
| After-tax impact of expense in connection with impairment of store fixed assets and lease right-of-use assets | — | — | 27,949 | — | ||||||||||||
| After-tax impact of expense in connection with benefits provided to furlough employees | — | — | 1,519 | — | ||||||||||||
| After-tax impact of expense in connection with a provision for legal settlement and related fees | — | 3,016 | — | 3,016 | ||||||||||||
| After-tax impact of (gain) / loss in connection with the termination of a joint venture | (399 | ) | 408 | (399 | ) | 408 | ||||||||||
| After-tax impact of expense in connection with provision for loan receivable | — | — | 532 | — | ||||||||||||
| After-tax impact of expense in connection with the acquisitions of GREATS and BB Dakota | — | 32 | — | 839 | ||||||||||||
| After-tax impact of net benefit in connection with the change in a contingent liability and the acceleration of amortization related to the termination of the Kate Spade license agreement | — | — | — | (1,399 | ) | |||||||||||
| Tax benefit in connection with the net operating loss carryback provision of the CARES Act | (4,191 | ) | — | (4,191 | ) | — | ||||||||||
| Tax (benefit) / expense in connection with deferred and foreign uncertain tax position | (472 | ) | 2,207 | 1,921 | 2,590 | |||||||||||
| Less: Adjustments attributable to noncontrolling interest | 698 | (204 | ) | (933 | ) | (204 | ) | |||||||||
| Adjusted net income attributable to Steven Madden, Ltd. | $ | 21,777 | $ | 32,156 | $ | 51,836 | $ | 162,760 | ||||||||
| GAAP diluted income / (loss) per share | $ | 0.28 | $ | 0.21 | $ | (0.23 | ) | $ | 1.69 | |||||||
| Adjusted diluted income per share | $ | 0.27 | $ | 0.39 | $ | 0.64 | $ | 1.95 | ||||||||
Contact
Steven Madden, Ltd.
Director of Corporate Development & Investor Relations
Danielle McCoy
718-308-2611
InvestorRelations@stevemadden.com