GlobeNewswire Inc | Jul 28, 2021 06:59AM EDT

July 28, 2021

LONG ISLAND CITY, N.Y., July 28, 2021 (GLOBE NEWSWIRE) -- Steven Madden, Ltd. (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 second quarter ended June30, 2021.

Amounts referred to as Adjusted exclude the items that are described under the heading Non-GAAP Adjustments.

Second Quarter 2021 Review

-- Revenue increased 178.6% to $397.9million compared to $142.8 million in the same period of 2020. -- Gross margin increased to 42.7% compared to 39.1% in the same period of 2020. -- Operating expenses as a percentage of revenue were 30.6% compared to 54.9% in the same period of 2020. Adjusted operating expenses as a percentage of revenue were 29.9% compared to 53.8% in the same period of 2020. -- Income from operations totaled $47.7million, or 12.0% of revenue, compared to loss from operations of ($23.7) million, or (16.6%) of revenue, in the same period of 2020. Adjusted income from operations was $51.0 million, or 12.8% of revenue, compared to Adjusted loss from operations of ($21.0) million, or (14.7%) of revenue, in the same period of 2020. -- Net income attributable to Steven Madden, Ltd. was $36.9 million, or $0.45 per diluted share, compared to net loss attributable to Steven Madden, Ltd. of ($16.6) million, or ($0.21) per diluted share, in the same period of 2020. Adjusted net income attributable to Steven Madden, Ltd. was $39.7 million, or $0.48 per diluted share, compared to Adjusted net loss attributable to Steven Madden, Ltd. of ($14.7) million, or ($0.19) per diluted share, in the same period of 2020.

Edward Rosenfeld, Chairman and Chief Executive Officer, commented, We are excited about the strong and accelerated recovery we are seeing in our business. Our second quarter results significantly exceeded our expectations, with earnings slightly ahead of pre-COVID-19 second quarter 2019. Our retail segment was the standout, as the exceptional performance in our e-commerce business fueled by the trend-right product assortments created by Steve and our design teams combined with effective digital marketing drove an increase in retail revenue of 63% compared to pre-COVID-19 second quarter 2019. Looking ahead, while the environment remains volatile, we are confident that the strength of our brands and momentum in our business position us to drive revenue and earnings growth in the back half of 2021 and beyond.

SecondQuarter 2021 Segment Results

Revenue for the wholesale business was $262.1 million, a 162.2% increase compared to the second quarter of 2020, with a 154.1% increase in wholesale footwear and a 190.7% increase in wholesale accessories/apparel. Gross margin in the wholesale business rose to 30.6% compared to 26.6% in the second quarter of 2020.

Retail revenue was $132.7 million, a 220.6% increase compared to the second quarter of 2020. Retail gross margin decreased to 65.4% compared to 67.4% in the second quarter of 2020.

The Company ended the quarter with 216 company-operated retail stores, including six internet stores, as well as 15 company-operated concessions in international markets.

Balance Sheet and Cash Flow

During the second quarter of 2021, the Company repurchased 876,241 shares of the Companys common stock for approximately $37.2 million, which includes shares acquired through the net settlement of employees stock awards.

As of June30, 2021, cash, cash equivalents and short-term investments totaled $302.7 million.

Quarterly Cash Dividend

The Companys Board of Directors approved a quarterly cash dividend of $0.15 per share. The dividend is payable on September 27, 2021 to stockholders of record as of the close of business on September 17, 2021.

Fiscal 2021 Outlook

For fiscal 2021, the Company expects revenue will increase 43% to 47% over fiscal 2020. The Company expects diluted EPS will be in the range of $1.90 to $2.00 and Adjusted diluted EPS will be in the range of $2.00 to $2.10.

Non-GAAP Adjustments

Amounts referred to as Adjusted exclude the items below.

For the second quarter of 2021:

-- $8.0 million pre-tax ($6.1 million after-tax) benefit associated with the sale of a trademark, included in operating expenses. -- $7.4 million pre-tax ($5.6 million after-tax) expense in connection with the change in valuation of contingent considerations, included in operating expenses. -- $2.9 million pre-tax ($2.2 million after-tax) expense in connection with payments related to rent restructuring of various leases, included in operating expenses. -- $0.5 million pre-tax ($0.4 million after-tax) expense in connection with restructuring and related charges, included in operating expenses. -- $0.5 million pre-tax ($0.4 million after-tax) expense in connection with the impairment of fixed assets and lease right-of-use assets. -- $0.5 million pre-tax ($0.4 million after-tax) expense in connection with the write-off of an investment, included in interest and other (expense) / income, net.

For the second quarter of 2020:

-- $5.4 million pre-tax ($4.1 million after-tax) expense in connection with restructuring and related charges, included in operating expenses. -- $4.6 million pre-tax ($3.5 million after-tax) benefit in connection with a change in valuation of contingent considerations, included in operating expenses. -- $1.2 million pre-tax ($0.9 million after-tax) expense in connection with the impairment of fixed assets and lease right-of-use assets. -- $0.7 million pre-tax ($0.6 million after-tax) expense in connection with benefits provided to furloughed employees, included in operating expenses. -- $0.2 million loss in connection with the impairment of lease right-of-use assets, trademark and other attributable to noncontrolling interest.

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 first quarter 2021 earnings conference call scheduled for today, July 28, 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 Maddens 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 outerwear, eyewear, hosiery, sunglasses, jewelry, fragrance, luggage and bedding and bath products. For local store information and the latest Steve Madden booties, pumps, mens and womens fashion sneakers, sandals, dress shoes, boots, slippers 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 Companys 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 Companys control. The Companys 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 Companys 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 Companys business operations for an indeterminable period of time; -- the Companys ability to accurately anticipate fashion trends and promptly respond to consumer demand; -- the Companys ability to compete effectively in a highly competitive market; -- the Companys ability to adapt its business model to rapid changes in the retail industry; -- the Companys dependence on the retention and hiring of key personnel; -- the Companys ability to successfully implement growth strategies and integrate acquired businesses; -- the Companys 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 Companys 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 Companys ability to properly manage inventory; -- the Companys ability to adequately protect its trademarks and other intellectual property rights; -- legal, regulatory, political and economic risks that may affect the Companys sales in international markets; -- changes in U.S. and foreign tax laws that could have an adverse effect on the Companys financial results; -- additional tax liabilities resulting from audits by various taxing authorities; -- the Companys ability to achieve operating results that are consistent with prior financial guidance; and -- other risks and uncertainties indicated from time to time in the Companys 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)

(Unaudited)

Three Months Ended Six Months Ended June 30, June 30, June 30, June 30, 2021 2020 2021 2020 Net sales $ 394,797 $ 141,363 $ 753,698 $ 497,047 Commission and 3,097 1,449 5,221 4,933 licensing fee incomeTotal revenue 397,894 142,812 758,919 501,980 Cost of sales 227,839 86,924 449,760 312,628 Gross profit 170,055 55,888 309,159 189,352 Operating expenses 121,860 78,412 232,308 199,785 Impairment of fixedassets and lease 477 1,178 1,089 29,999 right-of-use assetsImpairment of ? ? ? 9,518 intangiblesIncome / (loss) from 47,718 (23,702 ) 75,762 (49,950 )operationsInterest and other (777 ) 357 (814 ) 1,403 (expense) / income, netIncome / (loss) beforeprovision for income 46,941 (23,345 ) 74,948 (48,547 )taxesProvision / (benefit) 9,600 (6,201 ) 15,276 (13,602 )for income taxesNet income / (loss) 37,341 (17,144 ) 59,672 (34,945 )Less: net income /(loss) attributable to 489 (558 ) 1,623 (908 )noncontrolling interestNet income / (loss)attributable to Steven $ 36,852 $ (16,586 ) $ 58,049 $ (34,037 )Madden, Ltd. Basic net income / $ 0.47 $ (0.21 ) $ 0.74 $ (0.43 )(loss) per share Diluted net income / $ 0.45 $ (0.21 ) $ 0.71 $ (0.43 )(loss) per share Basic weighted averagecommon shares 78,899 78,517 78,968 78,696 outstanding Diluted weightedaverage common shares 82,061 78,517 81,981 78,696 outstanding Cash dividends declared $ 0.15 $ ? $ 0.30 $ 0.15 per common share

STEVEN MADDEN, LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEET DATA

(In thousands)

As of June 30, 2021 December 31, June 30, 2020 2020 (Unaudited) (Unaudited) Cash and cash equivalents $ 262,144 $ 247,864 $ 318,101 Short-term investments and 40,513 39,302 38,837 marketable securitiesAccounts receivable, net 279,143 277,715 143,679 Inventories 125,525 101,420 103,282 Other current assets 36,455 31,940 32,022 Property and equipment, net 38,213 43,268 49,594 Operating lease right-of-use 97,222 101,379 120,489 assetsGoodwill and intangibles, net 282,952 283,456 315,742 Other assets 10,976 11,417 10,646 Total assets $ 1,173,143 $ 1,137,761 $ 1,132,392 Accounts payable $ 91,822 $ 73,904 $ 42,474 Operating leases (current & 125,740 132,849 151,520 non-current)Other current liabilities 150,115 127,755 115,866 Advances from factor ? ? 42,662 Contingent payment liability 8,041 207 1,829 (current & non-current)Other long-term liabilities 14,903 12,677 10,921 Total Steven Madden, Ltd. 774,335 776,586 755,084 stockholders? equityNoncontrolling interest 8,187 13,783 12,036 Total liabilities and $ 1,173,143 $ 1,137,761 $ 1,132,392 stockholders? equity

STEVEN MADDEN, LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED CASH FLOW DATA

(In thousands)

(Unaudited)

Six Months Ended June 30, June 30, 2021 2020 Net cash provided by operating activities $ 91,924 $ 57,867 Investing Activities Capital expenditures (2,782 ) (4,320 )Proceeds from sale of a trademark 8,000 ? Purchases of marketable securities and short-term (114 ) (162 )investments, netNet cash provided by / (used in) investing 5,104 (4,482 )activities Financing Activities Common stock purchased for treasury (42,794 ) (29,678 )Acquisition of incremental ownership of joint (19,127 ) ? venturesInvestment of noncontrolling interest ? 359 Distribution of noncontrolling interest earnings (2,859 ) ? Proceeds from exercise of stock options 6,823 960 Cash dividends paid (24,773 ) (12,459 )Advances from factor, net ? 42,662 Net cash (used in) / provided by financing (82,730 ) 1,844 activities Effect of exchange rate changes on cash and cash (18 ) (1,229 )equivalents Net increase in cash and cash equivalents 14,280 54,000 Cash and cash equivalents - beginning of period 247,864 264,101 Cash and cash equivalents - end of period $ 262,144 $ 318,101

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 Companys 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 Companys reported results prepared in accordance with GAAP.

Table 1 - Reconciliation of GAAP operating expenses to Adjusted operating expenses Three Months Ended Six Months Ended June 30, June 30, June 30, June 30, 2021 2020 2021 2020 GAAP operating expenses $ 121,860 $ 78,412 $ 232,308 $ 199,785 Expense in connectionwith payments related torent restructuring of (2,912 ) ? (9,505 ) (142 )various leases and leaseterminations Recovery in connectionwith the Payless ? ? 917 ShoeSource bankruptcy Expense in connectionwith restructuring and (488 ) (5,414 ) (1,294 ) (5,414 )related charges (Expense) / benefit inconnection with thechange in valuation of (7,364 ) 4,611 (7,834 ) 4,611 contingentconsiderations Expense in connectionwith benefits provided ? (733 ) ? (1,991 )to furloughed employees Expense in connection ? ? ? (697 )with loan receivable Sale of trademark 8,000 ? 8,000 ? Adjusted operating $ 119,096 $ 76,876 $ 222,592 $ 196,152 expenses

Table 2 - Reconciliation of GAAP income / (loss) from operations to Adjustedincome / (loss) from operations Three Months Ended Six Months Ended June 30, June 30, June 30, June 30, 2021 2020 2021 2020 GAAP income / (loss) from $ 47,718 $ (23,702 ) $ 75,762 $ (49,950 )operations Expense in connectionwith payments related torent restructuring of 2,912 ? 9,505 142 various leases and leaseterminations Recovery in connectionwith the Payless ? ? (917 ) ? ShoeSource bankruptcy Expense in connectionwith restructuring and 488 5,414 1,294 5,414 related charges Impairment of fixedassets and lease 477 1,178 1,089 29,999 right-of-use assets Expense / (benefit) inconnection with the 7,364 (4,611 ) 7,834 (4,611 )change in valuation ofcontingent considerations Expense in connectionwith benefits provided to ? 733 ? 1,991 furloughed employees Expense in connection ? ? ? 697 with loan receivable Sale of trademark (8,000 ) ? (8,000 ) ? Impairment of certain ? ? ? 9,518 trademarks Adjusted income / (loss) $ 50,959 $ (20,988 ) $ 86,567 $ (6,800 )from operations

Table 3 - Reconciliation of GAAP interest and other (expense) / income, net toAdjusted interest and other (expense) / income, net Three Months Ended Six Months Ended June 30, June June 30, June 30, 2021 30, 2021 2020 2020 GAAP interest and other (expense) / $ (777 ) $ 357 $ (814 ) $ 1,403 income, net Write-off of investment 500 ? 500 ? Adjusted interest and other $ (277 ) $ 357 $ (314 ) $ 1,403 (expense) / income, net

Table 4 - Reconciliation of GAAP provision / (benefit) for income taxes toAdjusted provision / (benefit) for income taxes Three Months Ended Six Months Ended June 30, June 30, June 30, June 30, 2021 2020 2021 2020 GAAP provision / (benefit) $ 9,600 $ (6,201 ) $ 15,276 $ (13,602 )for income taxes Tax effect of expense inconnection with paymentsrelated to rent 694 ? 2,251 34 restructuring of variousleases and leaseterminations Tax effect of recovery inconnection with the ? ? (201 ) ? Payless ShoeSourcebankruptcy Tax effect of expense inconnection with 115 1,284 305 1,284 restructuring and relatedcharges Tax effect of impairmentof fixed assets and lease 113 277 275 7,243 right-of-use assets Tax effect of expense /(benefit) in connectionwith the change in 1,742 (1,092 ) 1,853 (1,092 )valuation of contingentconsiderations Tax effect of expense inconnection with benefits ? 174 ? 472 provided to furloughedemployees Tax effect of expense inconnection with provision ? ? ? 165 for loan receivable Tax effect of write-off of 118 ? 118 ? investment Tax effect of sale of (1,893 ) ? (1,893 ) ? trademark Tax effect of impairment ? ? ? 2,254 of certain trademarks Adjusted provision / $ 10,489 $ (5,558 ) $ 17,984 $ (3,242 )(benefit) for income taxes

Table 5 - Reconciliation of GAAP net income / (loss) attributable tononcontrolling interest to Adjusted net income / (loss) attributable tononcontrolling interest Three Months Ended Six Months Ended June June 30, June 30, June 30, 30, 2020 2021 2020 2021 GAAP net income / (loss)attributable to noncontrolling $ 489 $ (558 ) $ 1,623 $ (908 )interest Adjustments attributable to ? 163 24 470 noncontrolling interest Adjusted net income / (loss)attributable to noncontrolling $ 489 $ (395 ) $ 1,647 $ (438 )interest

Table 6 - Reconciliation of GAAP income / (loss) attributable to Steven Madden,Ltd. to Adjusted net income / (loss) attributable to Steven Madden, Ltd. Three Months Ended Six Months Ended June 30, June 30, June 30, June 30, 2021 2020 2021 2020 GAAP net income / (loss)attributable to Steven $ 36,852 $ (16,586 ) $ 58,049 $ (34,037 )Madden, Ltd. After-tax impact ofexpense in connectionwith payments related to 2,218 ? 7,254 109 rent restructuring ofvarious leases and leaseterminations After-tax impact ofrecovery in connection ? ? (716 ) ? with the PaylessShoeSource bankruptcy After-tax impact ofexpense in connection 372 4,130 988 4,130 with restructuring andrelated charges After-tax impact ofimpairment of store 364 900 814 22,755 assets and leaseright-of-use assets After-tax impact ofexpense / (benefit) inconnection with the 5,621 (3,519 ) 5,980 (3,519 )change in valuation ofcontingent considerations After-tax impact ofexpense in connection ? 560 ? 1,520 with benefits provided tofurloughed employees After-tax impact ofexpense in connection ? ? ? 532 with provision for loanreceivable After-tax impact of 382 ? 382 ? write-off of investment After-tax impact of sale (6,107 ) ? (6,107 ) ? of trademark After-tax impact ofimpairment of certain ? ? ? 7,265 trademarks Less: Adjustmentsattributable to ? (163 ) (24 ) (470 )noncontrolling interest Adjusted net income /(loss) attributable to $ 39,702 $ (14,678 ) $ 66,620 $ (1,715 )Steven Madden, Ltd. GAAP diluted income / $ 0.45 $ (0.21 ) $ 0.71 $ (0.43 )(loss) per share Adjusted diluted income / $ 0.48 $ (0.19 ) $ 0.81 $ (0.02 )(loss) per share

Contact

Steven Madden, Ltd.Director of Corporate Development & Investor RelationsDanielle McCoy718-308-2611InvestorRelations@stevemadden.com