STEVEN
MADDEN, LTD.
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(Exact
name of registrant as specified in its
charter)
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Delaware
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13-3588231
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(State
or other jurisdiction of
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(I.R.S.
Employer Identification No.)
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incorporation
or organization)
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52-16
Barnett Avenue, Long Island City, New York
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11104
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(Address
of principal executive offices)
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(Zip
Code)
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Large
accelerated filer x
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Accelerated
filer o
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Non-accelerated
filer o (do
not check if smaller reporting company)
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Smaller
reporting company o
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1
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2
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3
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4
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21
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31
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31
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32
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32
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33
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Signatures |
34
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June
30,
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December
31,
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June
30,
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||||||||||
2011
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2010
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2010
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||||||||||
(unaudited)
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(unaudited)
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|||||||||||
ASSETS
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||||||||||||
Current
assets:
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||||||||||||
Cash
and cash equivalents
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$ | 31,261 | $ | 66,151 | $ | 42,807 | ||||||
Accounts
receivable, net of allowances of $3,763, $2,458 and
$1,939
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77,822 | 18,742 | 11,942 | |||||||||
Due
from factor, net of allowances of $10,777, $12,800
and $10,758
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82,784 | 52,206 | 73,145 | |||||||||
Inventories
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67,723 | 39,557 | 44,466 | |||||||||
Marketable
securities – available for sale
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7,709 | 13,289 | 21,972 | |||||||||
Prepaid
expenses and other current assets
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9,891 | 11,044 | 13,716 | |||||||||
Deferred
taxes
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9,394 | 9,078 | 8,809 | |||||||||
Total
current assets
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286,584 | 210,067 | 216,857 | |||||||||
Notes
receivable
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7,237 | 7,024 | — | |||||||||
Note
receivable – related party
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3,967 | 3,849 | 3,733 | |||||||||
Property
and equipment, net
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25,896 | 20,791 | 21,297 | |||||||||
Deferred
taxes
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4,271 | 7,844 | 7,053 | |||||||||
Deposits
and other
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2,730 | 2,529 | 1,787 | |||||||||
Marketable
securities – available for sale
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93,228 | 114,317 | 99,183 | |||||||||
Goodwill
– net
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75,644 | 38,613 | 36,613 | |||||||||
Intangibles
– net
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96,720 | 42,662 | 14,831 | |||||||||
Total
Assets
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$ | 596,277 | $ | 447,696 | $ | 401,354 | ||||||
LIABILITIES
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||||||||||||
Current
liabilities:
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||||||||||||
Accounts
payable
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$ | 96,208 | $ | 37,089 | $ | 44,309 | ||||||
Accrued
expenses
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23,979 | 18,425 | 20,323 | |||||||||
Contingent
payment liability – current portion
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5,899 | — | — | |||||||||
Income
taxes payable
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7,263 | — | 3,300 | |||||||||
Accrued
incentive compensation
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7,961 | 15,917 | 7,447 | |||||||||
Total
current liabilities
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141,310 | 71,431 | 75,379 | |||||||||
Contingent
payment liability
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36,904 | 12,372 | 12,000 | |||||||||
Deferred
rent
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5,752 | 5,467 | 5,240 | |||||||||
Other
liabilities
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163 | 1,128 | 1,564 | |||||||||
Total
Liabilities
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184,129 | 90,398 | 94,183 | |||||||||
Commitments,
contingencies and other (Note V)
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||||||||||||
STOCKHOLDERS’
EQUITY
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||||||||||||
Preferred
stock – $.0001 par value, 5,000 shares
authorized; none issued; Series A Junior
Participating preferred stock
– $.0001 par value, 60 shares
authorized; none issued
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||||||||||||
Common
stock – $.0001 par value, 60,000 shares
authorized; 51,217, 50,423 and 49,911 shares
issued; 42,814, 42,020 and 41,508 shares
outstanding
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5 | 4 | 4 | |||||||||
Additional
paid-in capital
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178,663 | 165,773 | 155,803 | |||||||||
Retained
earnings
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364,728 | 323,092 | 282,551 | |||||||||
Other
comprehensive income:
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||||||||||||
Unrealized
gain on marketable securities
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1,384 | 972 | 1,356 | |||||||||
Treasury
stock – 8,403, 8,403 and 8,403 shares at
cost
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(132,543 | ) | (132,543 | ) | (132,543 | ) | ||||||
Total
Steven Madden, Ltd. stockholders’
equity
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412,237 | 357,298 | 307,171 | |||||||||
Noncontrolling
interests
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(89 | ) | — | — | ||||||||
Total
stockholders’ equity
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412,148 | 357,298 | 307,171 | |||||||||
Total
Liabilities and Stockholders’ Equity
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$ | 596,277 | $ | 447,696 | $ | 401,354 |
Three
Months Ended
June
30,
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Six
Months Ended
June
30,
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|||||||||||||||
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2011
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2010
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2011
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2010
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||||||||||||
Net
sales
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$ | 209,152 | $ | 158,664 | $ | 374,907 | $ | 290,272 | ||||||||
Cost
of sales
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125,057 | 89,815 | 221,680 | 161,486 | ||||||||||||
Gross
profit
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84,095 | 68,849 | 153,227 | 128,786 | ||||||||||||
Commission
and licensing fee income – net
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4,432 | 5,229 | 8,999 | 11,413 | ||||||||||||
Operating
expenses
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(51,339 | ) | (42,025 | ) | (97,583 | ) | (83,287 | ) | ||||||||
Income
from operations
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37,188 | 32,053 | 64,643 | 56,912 | ||||||||||||
Interest
and other income, net
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1,656 | 942 | 3,173 | 1,726 | ||||||||||||
Income
before provision for income taxes
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38,844 | 32,995 | 67,816 | 58,638 | ||||||||||||
Provision
for income taxes
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15,149 | 13,196 | 26,269 | 23,454 | ||||||||||||
Net
income
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23,695 | 19,799 | 41,547 | 35,184 | ||||||||||||
Net
loss attributable to noncontrolling
interests
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89 | — | 89 | — | ||||||||||||
Net
income attributable to Steven Madden, Ltd.
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$ | 23,784 | $ | 19,799 | $ | 41,636 | $ | 35,184 | ||||||||
Basic
income per share
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$ | 0.56 | $ | 0.48 | $ | 0.99 | $ | 0.85 | ||||||||
Diluted
income per share
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$ | 0.55 | $ | 0.47 | $ | 0.97 | $ | 0.83 | ||||||||
Basic
weighted average common shares outstanding
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42,156 | 41,442 | 42,053 | 41,313 | ||||||||||||
Effect
of dilutive securities – options/restricted
stock
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1,103 | 1,013 | 972 | 1,031 | ||||||||||||
Diluted
weighted average common shares outstanding
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43,259 | 42,455 | 43,025 | 42,344 |
Six
Months Ended
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||||||||
June
30,
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||||||||
2011
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2010
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Cash
flows from operating activities:
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||||||||
Net
income
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$ | 41,547 | $ | 35,184 | ||||
Adjustments
to reconcile net income to net cash provided by
operating activities:
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Excess
tax benefit from the exercise of options
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(3,841 | ) | (2,512 | ) | ||||
Depreciation
and amortization
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4,772 | 5,022 | ||||||
Loss
on disposal of fixed assets
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580 | 543 | ||||||
Non-cash
compensation
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5,565 | 3,676 | ||||||
Provision
for bad debts
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(718 | ) | (985 | ) | ||||
Deferred
rent expense
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(594 | ) | 196 | |||||
Realized
gain on marketable securities
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(438 | ) | (32 | ) | ||||
Changes
(net of acquisitions) in:
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||||||||
Accounts
receivable
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(1,040 | ) | (947 | ) | ||||
Due
from factor
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(28,555 | ) | (23,882 | ) | ||||
Note
receivable – related party
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(118 | ) | (165 | ) | ||||
Inventories
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(15,982 | ) | (13,713 | ) | ||||
Prepaid
expenses, deposits and other assets
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1,730 | (6,350 | ) | |||||
Accounts
payable and other accrued expenses
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18,986 | 24,816 | ||||||
Net
cash provided by operating activities
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21,894 | 20,851 | ||||||
Cash
flows from investing activities:
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||||||||
Purchase
of property and equipment
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(5,973 | ) | (1,232 | ) | ||||
Purchase
of marketable securities
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(13,984 | ) | (44,917 | ) | ||||
Sale/redemption
of marketable securities
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41,081 | 10,092 | ||||||
Acquisitions,
net of cash acquired
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(85,234 | ) | (11,119 | ) | ||||
Net
cash used in investing activities
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(64,110 | ) | (47,176 | ) | ||||
Cash
flows from financing activities:
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||||||||
Proceeds
from options exercised
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3,485 | 1,913 | ||||||
Tax
benefit from exercise of options
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3,841 | 2,512 | ||||||
Common
stock purchased for treasury
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— | (4,559 | ) | |||||
Net
cash provided by (used in) financing
activities
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7,326 | (134 | ) | |||||
Net
decrease in cash and cash equivalents
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(34,890 | ) | (26,459 | ) | ||||
Cash
and cash equivalents – beginning of
period
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66,151 | 69,266 | ||||||
Cash
and cash equivalents – end of
period
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$ | 31,261 | $ | 42,807 |
Due
from Bakers Footwear Group, Inc.
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$ | 4,056 | ||
Due
from Betsey Johnson LLC (see Note R)
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3,181 | |||
Total
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$ | 7,237 |
●
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Level
1: Observable inputs such as quoted prices in
active markets for identical assets or
liabilities.
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●
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Level
2: Inputs other than quoted prices that are
observable for the asset or liability, either
directly or indirectly.
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●
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Level
3: Significant unobservable inputs.
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Fair
Value Measurements
Using
Fair Value Hierarchy
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||||||||||||||||
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Fair
value
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Level
1
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Level
2
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Level
3
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Assets:
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||||||||||||||||
Cash
equivalents
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$ | 1,596 | $ | 1,596 | $ | — | $ | — | ||||||||
Current
marketable securities – available for
sale
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7,709 | 7,709 | — | — | ||||||||||||
Investment
in Bakers
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996 | — | 996 | — | ||||||||||||
Note
receivable – Bakers
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4,056 | — | — | 4,056 | ||||||||||||
Note
receivable – Betsey Johnson
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3,181 | — | — | 3,181 | ||||||||||||
Long-term
marketable securities – available for
sale
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93,228 | 93,228 | — | — | ||||||||||||
Total
assets
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$ | 110,766 | $ | 102,533 | $ | 996 | $ | 7,237 | ||||||||
Liabilities:
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||||||||||||||||
Contingent
consideration – Big Buddha, current
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$ | 5,899 | — | — | $ | 5,899 | ||||||||||
Contingent
consideration – Cejon, non-current
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23,000 | — | — | 23,000 | ||||||||||||
Contingent
consideration – Topline, non-current
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7,368 | — | — | 7,368 | ||||||||||||
Contingent
consideration – Big Buddha,
non-current
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6,536 | — | — | 6,536 | ||||||||||||
Total
liabilities
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$ | 42,803 | — | — | $ | 42,803 |
Fair
Value Measurements
Using
Fair Value Hierarchy
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||||||||||||||||
Fair
value
|
Level
1
|
Level
2
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Level
3
|
|||||||||||||
Assets:
|
||||||||||||||||
Cash
equivalents
|
$ | 32,145 | $ | 32,145 | $ | — | $ | — | ||||||||
Current
marketable securities – available for
sale
|
13,289 | 13,289 | — | — | ||||||||||||
Investment
in Bakers
|
996 | — | 996 | — | ||||||||||||
Note
receivable – Bakers
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4,024 | — | — | 4,024 | ||||||||||||
Note
receivable – Betsey Johnson
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3,000 | — | — | 3,000 | ||||||||||||
Long-term
marketable securities – available for
sale
|
114,317 | 114,317 | — | — | ||||||||||||
Total
assets
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$ | 167,771 | $ | 159,751 | $ | 996 | $ | 7,024 | ||||||||
Liabilities:
|
||||||||||||||||
Contingent
consideration
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$ | 12,372 | — | — | $ | 12,372 | ||||||||||
Total
liabilities
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$ | 12,372 | — | — | $ | 12,372 |
Common
Stock authorized
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9,144,000 | |||
Stock-based
awards, including restricted stock and stock
options, granted net of expired or cancelled
|
6,345,000 | |||
Common
Stock available for grant of stock-based awards as
of June 30, 2011
|
2,799,000 |
Three Months Ended June
30,
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Six Months
Ended June 30,
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|||||||||||||||
2011
|
2010
|
2011
|
2010
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|||||||||||||
Stock
options
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$ | 1,420 | $ | 816 | $ | 2,608 | $ | 1,346 | ||||||||
Restricted
stock
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1,620 | 1,043 | 2,957 | 2,330 | ||||||||||||
Total
|
$ | 3,040 | $ | 1,859 | $ | 5,565 | $ | 3,676 |
Three Months Ended June
30,
|
Six Months
Ended June 30,
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|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Proceeds
from stock options exercised
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$ | 3,254 | $ | 1,581 | $ | 3,485 | $ | 1,913 | ||||||||
Intrinsic
value of stock options exercised
|
$ | 7,510 | $ | 4,026 | $ | 7,799 | $ | 4,614 |
Six months ended June
30,
|
||||
2011
|
2010
|
|||
Expected
volatility
|
47.6%
to 48.7%
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47.5%
to 52.4%
|
||
Risk-free
interest rate
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1.22%
to 1.78%
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1.62%
to 2.16%
|
||
Expected
life (in years)
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2.8
to 4.4
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2.8
to 4.4
|
||
Expected
dividend yield
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None
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None
|
||
Weighted
average fair value
|
$10.83
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$8.48
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Number
of Shares
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Weighted
Average Exercise Price
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Weighted
Average Remaining Contractual Term
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Aggregate
Intrinsic Value
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|||||||||||||
Outstanding
at January 1, 2011
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2,703,000 | $ | 14.08 |
|
|
|||||||||||
Granted
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563,000 | 26.10 |
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Exercised
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(313,000 | ) | 11.13 |
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|
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Cancelled/Forfeited
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(158,000 | ) | 19.95 |
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||||||||||||
Outstanding
at June 30, 2011
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2,795,000 | $ | 16.50 | 5.0 | $ | 58,632 | ||||||||||
Exercisable
at June 30, 2011
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771,000 | $ | 12.95 | 4.5 | $ | 18,925 |
2011
|
2010
|
|||||||||||||||
Number
of Shares
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Weighted
Average Fair Value at Grant Date
|
Number
of Shares
|
Weighted
Average Fair Value at Grant Date
|
|||||||||||||
Non-vested
at January 1
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563,000 | $ | 17.20 | 671,000 | $ | 13.98 | ||||||||||
Granted
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323,000 | 31.16 | 177,000 | 20.33 | ||||||||||||
Vested
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(179,000 | ) | 14.93 | (267,000 | ) | 13.34 | ||||||||||
Forfeited
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— | — | (5,000 | ) | 15.13 | |||||||||||
Non-vested
at June 30
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707,000 | $ | 24.15 | 576,000 | $ | 18.96 |
Accounts
receivable
|
$ | 3,608 | ||
Inventory
|
3,803 | |||
Prepaid
expenses and other current assets
|
56 | |||
Fixed
assets
|
292 | |||
Trade
name
|
27,065 | |||
Customer
relationships
|
3,225 | |||
Non-compete
agreement
|
305 | |||
Other
assets
|
23 | |||
Accounts
payable
|
(1,318 | ) | ||
Accrued
expenses
|
(2,041 | ) | ||
Total
fair value excluding goodwill
|
35,018 | |||
Goodwill
|
17,090 | |||
Net
assets acquired
|
$ | 52,108 |
Accounts
receivable
|
$ | 55,738 | ||
Inventory
|
8,381 | |||
Prepaid
expenses and other current assets
|
857 | |||
Fixed
assets
|
2,404 | |||
Trade
name
|
16,600 | |||
Customer
relationships
|
7,900 | |||
Non-compete
agreement
|
300 | |||
Other
assets
|
108 | |||
Accounts
payable
|
(40,612 | ) | ||
Accrued
expenses
|
(1,624 | ) | ||
Income
tax payable
|
(3,217 | ) | ||
Accrued
expenses
|
(3,280 | ) | ||
Total
fair value excluding goodwill
|
43,555 | |||
Goodwill
|
19,941 | |||
Net
assets acquired
|
$ | 63,496 |
Accounts
receivable
|
$ | 668 | ||
Inventory
|
1,212 | |||
Prepaid
expenses and other current assets
|
102 | |||
Trade
name
|
4,100 | |||
Customer
relationships
|
4,900 | |||
Non-compete
agreement
|
450 | |||
Accounts
payable
|
(171 | ) | ||
Accrued
expenses
|
(442 | ) | ||
Total
fair value excluding goodwill
|
10,819 | |||
Goodwill
|
14,300 | |||
Net
assets acquired
|
$ | 25,119 |
Accounts
receivable - net
|
$ | 299 | ||
Inventory
|
166 | |||
Current
assets
|
465 | |||
Due
to Steven Madden, Ltd.
|
11 | |||
Other
current liabilities
|
204 | |||
Current
liabilities
|
$ | 215 |
Wholesale
|
Net
Carrying
|
|||||||||||||||
Footwear
|
Accessories
|
Retail
|
Amount
|
|||||||||||||
Balance
at January 1, 2011
|
$ | 1,547 | $ | 31,565 | $ | 5,501 | $ | 38,613 | ||||||||
Acquisition
of Cejon
|
— | 17,090 | — | 17,090 | ||||||||||||
Acquisition
of Topline
|
19,941 | — | — | 19,941 | ||||||||||||
Balance
at June 30, 2011
|
$ | 21,488 | $ | 48,655 | $ | 5,501 | $ | 75,644 |
Estimated
Lives |
Cost
Basis
|
Accumulated
Amortization
|
Net
Carrying
Amount |
|||||||||||
Trade
names
|
6–10
years
|
$ | 4,591 | $ | 944 | $ | 3,647 | |||||||
Customer
relationships
|
10
years
|
22,834 | 3,855 | 18,979 | ||||||||||
License
agreements
|
3–6
years
|
5,600 | 5,338 | 262 | ||||||||||
Non-compete
agreement
|
5
years
|
1,985 | 995 | 990 | ||||||||||
Other
|
3
years
|
14 | 14 | — | ||||||||||
35,024 | 11,146 | 23,878 | ||||||||||||
Trademarks
|
indefinite
|
72,842 | — | 72,842 | ||||||||||
$ | 107,866 | $ | 11,146 | $ | 96,720 |
2011
(remaining six months)
|
$ | 1,853 | ||
2012
|
2,993 | |||
2013
|
2,993 | |||
2014
|
2,926 | |||
2015
|
2,742 | |||
Thereafter
|
10,371 | |||
$ | 23,878 |
(a)
|
On
June 24, 2009, a class action lawsuit, Shahrzad
Tahvilian, et al. v. Steve Madden Retail, Inc. and
Steve Madden, Ltd., Case No. BC 414217, was
filed in the Superior Court of California, Los
Angeles County, against the Company and its
wholly-owned subsidiary alleging violations of
California labor laws. The parties submitted the
dispute to private mediation and, on August 31,
2010, reached a settlement on all claims. Based on
the proposed settlement, the Company increased its
reserve for this claim from $1,000 to $2,750 in the
third quarter of 2010. In June 2011, the court
approved the final settlement for $1,968. The
payment of the final settlement did not have a
material effect on the Company’s financial
position.
|
|
(b)
|
On
August 10, 2005, following the conclusion of an
audit of the Company conducted by auditors for U.S.
Customs and Border Protection (“U.S.
Customs”) during 2004 and 2005, U.S. Customs
issued a report that asserts that certain
commissions that the Company treated as
“buying agents’ commissions”
(which are non-dutiable) should be treated as
“selling agents’ commissions” and
hence are dutiable. Subsequently, U.S. Immigration
and Customs Enforcement notified the
Company’s legal counsel that a formal
investigation of the Company’s importing
practices had been commenced as a result of the
audit. In September of 2007, U.S. Customs notified
the Company that it had finalized its assessment of
the underpaid duties at $1,400. The Company, with
the advice of legal counsel, evaluated the
liability in the case, including additional duties,
interest and penalties, and believed that it was
not likely to exceed $3,045, and accordingly, a
reserve for this amount was recorded as of December
31, 2009. The Company contested the conclusions of
the U.S. Customs audit and filed a request for
review and issuance of rulings thereon by U.S.
Customs Headquarters, Office of Regulations and
Rulings, under internal advice procedures. On
September 20, 2010, the Company was advised by
legal counsel that U.S. Customs had issued a ruling
in the matter, concluding that the commissions paid
by the Company pursuant to buying agreements
entered into by the Company and one of its two
buying agents under review were bona
fide buying-agent commissions and,
therefore, were
non-dutiable. With respect to the second buying
agent, U.S. Customs also ruled that beginning in
February of 2002, commissions paid by the Company
were bona
fide buying agent commissions and,
therefore, were non-dutiable. However, U.S. Customs
found that the Company’s pre-2002 buying
agreements with the second agent were legally
insufficient to substantiate a buyer-buyer’s
agent relationship between the Company and the
agent and that commissions paid to the second agent
under such buying agreements, in fact, were
dutiable. U.S. Customs has not made a formal claim
for collection of the duties allegedly owed. At the
request of U.S. Customs, the Company has waived the
statute of limitations for the collection of the
duties allegedly owed until December 5, 2013. The
Company is reviewing the ruling, its consequences
and the Company’s options with its legal
counsel. On the basis of the U.S. Customs ruling,
the Company reevaluated the liability in the case
and believes that it is not likely to exceed $1,248
and the reserve was reduced from $3,045 to such
amount as of September 30, 2010.
|
(c)
|
The
Company has been named as a defendant in certain
other lawsuits in the normal course of business. In
the opinion of management, after consulting with
legal counsel, the liabilities, if any, resulting
from these matters should not have a material
effect on the Company’s financial position or
results of operations. It is the policy of
management to disclose the amount or range of
reasonably possible losses in excess of recorded
amounts.
|
As
of and three months ended,
|
Wholesale
Footwear
|
Wholesale
Accessories
|
Total
Wholesale
|
Retail
|
First
Cost
|
Licensing
|
Consolidated
|
|||||||||||||||||||||
June
30, 2011:
|
||||||||||||||||||||||||||||
Net
sales to external customers
|
$ | 148,530 | $ | 26,642 | $ | 175,172 | $ | 33,980 |
|
$ | 209,152 | |||||||||||||||||
Gross
profit
|
51,913 | 10,163 | 62,076 | 22,019 |
|
84,095 | ||||||||||||||||||||||
Commissions
and licensing fees - net
|
— | — | — | — | $ | 2,612 | $ | 1,820 | 4,432 | |||||||||||||||||||
Income
from operations
|
23,890 | 3,020 | 26,910 | 5,846 | 2,612 | 1,820 | 37,188 | |||||||||||||||||||||
Segment
assets
|
$ | 349,839 | $ | 133,718 | 483,557 | 66,239 | 46,481 | — | 596,277 | |||||||||||||||||||
Capital
expenditures
|
$ | 1,221 | $ | 1,050 | $ | — | $ | — | $ | 2,271 | ||||||||||||||||||
June
30, 2010:
|
||||||||||||||||||||||||||||
Net
sales to external customers
|
$ | 104,170 | $ | 25,023 | $ | 129,193 | $ | 29,471 | $ | 158,664 | ||||||||||||||||||
Gross
profit
|
40,135 | 9,875 | 50,010 | 18,839 | 68,849 | |||||||||||||||||||||||
Commissions
and licensing fees - net
|
— | — | — | — | $ | 4,413 | $ | 816 | 5,229 | |||||||||||||||||||
Income
(loss) from operations
|
20,442 | 4,430 | 24,872 | 1,952 | 4,413 | 816 | 32,053 | |||||||||||||||||||||
Segment
assets
|
$ | 228,039 | $ | 77,702 | 305,741 | 55,468 | 40,145 | — | 401,354 | |||||||||||||||||||
Capital
expenditures
|
$ | 213 | $ | 351 | $ | — | $ | — | $ | 564 |
As
of and six
months
ended,
|
Wholesale
Footwear
|
Wholesale
Accessories
|
Total
Wholesale
|
Retail
|
First
Cost
|
Licensing
|
Consolidated
|
|||||||||||||||||||||
June
30, 2011:
|
||||||||||||||||||||||||||||
Net
sales to external customers
|
$ | 256,981 | $ | 52,450 | $ | 309,431 | $ | 65,476 |
|
$ | 374,907 | |||||||||||||||||
Gross
profit
|
92,663 | 20,240 | 112,903 | 40,324 |
|
153,227 | ||||||||||||||||||||||
Commissions
and licensing fees - net
|
— | — | — | — | $ | 5,287 | $ | 3,712 | 8,999 | |||||||||||||||||||
Income
(loss) from operations
|
42,097 | 7,646 | 49,743 | 5,901 | 5,287 | 3,712 | 64,643 | |||||||||||||||||||||
Segment
assets
|
$ | 349,839 | $ | 133,718 | 483,557 | 66,239 | 46,481 | — | 596,277 | |||||||||||||||||||
Capital
expenditures
|
$ | 3,637 | $ | 2,336 | $ | — | $ | — | $ | 5,973 | ||||||||||||||||||
June
30, 2010:
|
||||||||||||||||||||||||||||
Net
sales to external customers
|
$ | 186,925 | $ | 45,360 | $ | 232,285 | $ | 57,987 | $ | 290,272 | ||||||||||||||||||
Gross
profit
|
75,567 | 18,213 | 93,780 | 35,006 | 128,786 | |||||||||||||||||||||||
Commissions
and licensing fees - net
|
— | — | — | — | $ | 9,359 | $ | 2,054 | 11,413 | |||||||||||||||||||
Income
(loss) from operations
|
37,183 | 7,485 | 44,668 | 831 | 9,359 | 2,054 | 56,912 | |||||||||||||||||||||
Segment
assets
|
$ | 228,039 | $ | 77,702 | 305,741 | 55,468 | 40,145 | — | 401,354 | |||||||||||||||||||
Capital
expenditures
|
$ | 477 | $ | 755 | $ | — | $ | — | $ | 1,232 |
Three
months ended June 30,
|
Six
months ended June 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Domestic
|
$ | 195,724 | $ | 150,662 | $ | 352,535 | $ | 276,659 | ||||||||
International
|
13,428 | 8,002 | 22,372 | 13,613 | ||||||||||||
Total
|
$ | 209,152 | $ | 158,664 | $ | 374,907 | $ | 290,272 |
2011
|
2010
|
|||||||||||||||
CONSOLIDATED:
|
||||||||||||||||
Net
sales
|
$ | 209,152 | 100 | % | $ | 158,664 | 100 | % | ||||||||
Cost
of sales
|
125,057 | 60 | 89,815 | 57 | ||||||||||||
Gross
profit
|
84,095 | 40 | 68,849 | 43 | ||||||||||||
Other
operating income –
net of expenses
|
4,432 | 2 | 5,229 | 3 | ||||||||||||
Operating
expenses
|
51,339 | 25 | 42,025 | 26 | ||||||||||||
Income
from operations
|
37,188 | 18 | 32,053 | 20 | ||||||||||||
Interest
and other income – net
|
1,656 | 1 | 942 | 1 | ||||||||||||
Income
before income taxes
|
38,844 | 19 | 32,995 | 21 | ||||||||||||
Net
income
|
23,695 | 11 | 19,799 | 12 | ||||||||||||
By
Segment:
|
||||||||||||||||
WHOLESALE
FOOTWEAR SEGMENT:
|
||||||||||||||||
Net
sales
|
$ | 148,530 | 100 | % | $ | 104,170 | 100 | % | ||||||||
Cost
of sales
|
96,617 | 65 | 64,035 | 61 | ||||||||||||
Gross
profit
|
51,913 | 35 | 40,135 | 39 | ||||||||||||
Operating
expenses
|
28,023 | 19 | 19,693 | 19 | ||||||||||||
Income
from operations
|
23,890 | 16 | 20,442 | 20 | ||||||||||||
WHOLESALE
ACCESSORIES SEGMENT:
|
||||||||||||||||
Net
sales
|
$ | 26,642 | 100 | % | $ | 25,023 | 100 | % | ||||||||
Cost
of sales
|
16,479 | 62 | 15,148 | 61 | ||||||||||||
Gross
profit
|
10,163 | 38 | 9,875 | 39 | ||||||||||||
Operating
expenses
|
7,143 | 27 | 5,445 | 22 | ||||||||||||
Income
from operations
|
3,020 | 11 | 4,430 | 18 | ||||||||||||
RETAIL
SEGMENT:
|
||||||||||||||||
Net
sales
|
$ | 33,980 | 100 | % | $ | 29,471 | 100 | % | ||||||||
Cost
of sales
|
11,961 | 35 | 10,632 | 36 | ||||||||||||
Gross
profit
|
22,019 | 65 | 18,839 | 64 | ||||||||||||
Operating
expenses
|
16,173 | 48 | 16,887 | 57 | ||||||||||||
Income
from operations
|
5,846 | 17 | 1,952 | 7 | ||||||||||||
Number
of stores
|
83 | 84 | ||||||||||||||
FIRST
COST SEGMENT:
|
||||||||||||||||
Other
commission income –
net of expenses
|
$ | 2,612 | 100 | % | $ | 4,413 | 100 | % | ||||||||
LICENSING
SEGMENT:
|
||||||||||||||||
Licensing
income –
net of expenses
|
$ | 1,820 | 100 | % | $ | 816 | 100 | % |
2011
|
2010
|
|||||||||||||||
CONSOLIDATED:
|
||||||||||||||||
Net
sales
|
$ | 374,907 | 100 | % | $ | 290,272 | 100 | % | ||||||||
Cost
of sales
|
221,680 | 59 | 161,486 | 56 | ||||||||||||
Gross
profit
|
153,227 | 41 | 128,786 | 44 | ||||||||||||
Other
operating income –
net of expenses
|
8,999 | 2 | 11,413 | 4 | ||||||||||||
Operating
expenses
|
97,583 | 26 | 83,287 | 29 | ||||||||||||
Income
from operations
|
64,643 | 17 | 56,912 | 20 | ||||||||||||
Interest
and other income – net
|
3,173 | 1 | 1,726 | 1 | ||||||||||||
Income
before income taxes
|
67,816 | 18 | 58,638 | 20 | ||||||||||||
Net
income
|
41,547 | 11 | 35,184 | 12 | ||||||||||||
By
Segment:
|
||||||||||||||||
WHOLESALE
FOOTWEAR SEGMENT:
|
||||||||||||||||
Net
sales
|
$ | 256,981 | 100 | % | $ | 186,925 | 100 | % | ||||||||
Cost
of sales
|
164,318 | 64 | 111,358 | 60 | ||||||||||||
Gross
profit
|
92,663 | 36 | 75,567 | 40 | ||||||||||||
Operating
expenses
|
50,566 | 20 | 38,384 | 21 | ||||||||||||
Income
from operations
|
42,097 | 16 | 37,183 | 20 | ||||||||||||
WHOLESALE
ACCESSORIES SEGMENT:
|
||||||||||||||||
Net
sales
|
$ | 52,450 | 100 | % | $ | 45,360 | 100 | % | ||||||||
Cost
of sales
|
32,210 | 61 | 27,147 | 60 | ||||||||||||
Gross
profit
|
20,240 | 39 | 18,213 | 40 | ||||||||||||
Operating
expenses
|
12,594 | 24 | 10,728 | 24 | ||||||||||||
Income
from operations
|
7,646 | 15 | 7,485 | 17 | ||||||||||||
RETAIL
SEGMENT:
|
||||||||||||||||
Net
sales
|
$ | 65,476 | 100 | % | $ | 57,987 | 100 | % | ||||||||
Cost
of sales
|
25,152 | 38 | 22,981 | 40 | ||||||||||||
Gross
profit
|
40,324 | 62 | 35,006 | 60 | ||||||||||||
Operating
expenses
|
34,423 | 53 | 34,175 | 59 | ||||||||||||
Income
(loss) from operations
|
5,901 | 9 | 831 | 1 | ||||||||||||
Number
of stores
|
83 | 84 | ||||||||||||||
FIRST
COST SEGMENT:
|
||||||||||||||||
Other
commission income –
net of expenses
|
$ | 5,287 | 100 | % | $ | 9,359 | 100 | % | ||||||||
LICENSING
SEGMENT:
|
||||||||||||||||
Licensing
income –
net of expenses
|
$ | 3,712 | 100 | % | $ | 2,054 | 100 | % |
Payment
due by period
|
||||||||||||||||||||
Contractual
Obligations
|
Total
|
Remainder
of 2011
|
2012-2013 | 2014-2015 |
2016
and after
|
|||||||||||||||
Operating
lease obligations
|
$ | 132,045 | $ | 10,648 | $ | 39,315 | $ | 33,498 | $ | 48,584 | ||||||||||
Purchase
obligations
|
119,084 | 119,084 | — | — | — | |||||||||||||||
Contingent
payment liability
|
40,803 | 5,899 | 21,479 | 9,075 | 4,350 | |||||||||||||||
Other
long-term liabilities (future minimum royalty
payments)
|
2,402 | 709 | 1,693 | — | — | |||||||||||||||
Total
|
$ | 294,334 | $ | 136,340 | $ | 62,487 | $ | 42,573 | $ | 52,934 |
Exhibit No.
|
Description
|
|
2.01
|
Stock Purchase Agreement
dated May 25, 2011 among Steven Madden, Ltd., David
Seerherman, Cejon, Inc., and Kenneth Rogala
(incorporated by reference to Exhibit 10.1 to the
Company’s Current Report on Form 8-K filed
with the Securities and Exchange Commission on May
26, 2011).
|
|
2.01
|
Stock Purchase Agreement
dated May 20. 2011 among Steven Madden, Ltd., The
Topline Corporation and William F. Snowden
(incorporated by reference to Exhibit 2.1 to the
Company’s Current Report on Form 8-K filed
with the Securities and Exchange Commission on May
25, 2011).
|
|
10.01
|
Earn-Out Agreement dated
May 25, 2011 among Steven Madden, Ltd., David
Seerherman, Cejon, Inc., Cejon Accessories, Inc.,
New East Designs, LLC and Kenneth Rogala
(incorporated by reference to Exhibit 10.2 to the
Company’s Current Report on Form 8-K filed
with the Securities and Exchange Commission on May
26, 2011).
|
|
31.01
|
Certification
of Chief Executive Officer pursuant to Rule
13a-14(a) or 15d-14(a) of the Securities Exchange
Act of 1934, as adopted pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.
|
|
31.02
|
Certification
of Chief Financial Officer pursuant to Rule
13a-14(a) or 15d-14(a) of the Securities Exchange
Act of 1934, as adopted pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.
|
|
32.01
|
Certification
of Chief Executive Officer pursuant to 18 U.S.C.
Section 1350 Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
|
|
32.02
|
Certification
of Chief Financial Officer pursuant to 18 U.S.C.
Section 1350 Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
|
|
101
|
The following materials
from Steven Madden, Ltd.’s Quarterly Report
on Form 10-Q for the quarter ended June 30, 2011,
formatted in XBRL (Extensible Business Reporting
Language): (i) the Condensed Consolidated Balance
Sheets, (ii) the Condensed Consolidated Statements
of Income, (iii) the Condensed Consolidated
Statements of Cash Flows, and (iv) Notes to
Condensed Consolidated Financial Statements, tagged
as blocks of text.*
|
STEVEN
MADDEN, LTD.
|
||
By:
|
/S/
EDWARD R. ROSENFELD
|
|
Edward
R. Rosenfeld
|
||
Chairman
and Chief Executive Officer
|
||
By:
|
/S/
ARVIND DHARIA
|
|
Arvind
Dharia
|
||
Chief
Financial Officer and Chief Accounting
Officer
|
Exhibit
No.
|
Description
|
|
2.01
|
Stock Purchase Agreement
dated May 25, 2011 among Steven Madden, Ltd., David
Seerherman, Cejon, Inc., and Kenneth Rogala
(incorporated by reference to Exhibit 10.1 to the
Company’s Current Report on Form 8-K filed
with the Securities and Exchange Commission on May
26, 2011).
|
|
2.01
|
Stock Purchase Agreement
dated May 20. 2011 among Steven Madden, Ltd., The
Topline Corporation and William F. Snowden
(incorporated by reference to Exhibit 2.1 to the
Company’s Current Report on Form 8-K filed
with the Securities and Exchange Commission on May
25, 2011).
|
|
10.01
|
Earn-Out Agreement dated
May 25, 2011 among Steven Madden, Ltd., David
Seerherman, Cejon, Inc., Cejon Accessories, Inc.,
New East Designs, LLC and Kenneth Rogala
(incorporated by reference to Exhibit 10.2 to the
Company’s Current Report on Form 8-K filed
with the Securities and Exchange Commission on May
26, 2011).
|
|
31.01
|
Certification
of Chief Executive Officer pursuant to Rule
13a-14(a) or 15d-14(a) of the Securities Exchange
Act of 1934, as adopted pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.
|
|
31.02
|
Certification
of Chief Financial Officer pursuant to Rule
13a-14(a) or 15d-14(a) of the Securities Exchange
Act of 1934, as adopted pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.
|
|
32.01
|
Certification
of Chief Executive Officer pursuant to 18 U.S.C.
Section 1350 Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
|
|
32.02
|
Certification
of Chief Financial Officer pursuant to 18 U.S.C.
Section 1350 Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
|
|
101
|
The following materials
from Steven Madden, Ltd.’s Quarterly Report
on Form 10-Q for the quarter ended June 30, 2011,
formatted in XBRL (Extensible Business Reporting
Language): (i) the Condensed Consolidated Balance
Sheets, (ii) the Condensed Consolidated Statements
of Income, (iii) the Condensed Consolidated
Statements of Cash Flows, and (iv) Notes to
Condensed Consolidated Financial Statements, tagged
as blocks of text.*
|
I, Edward R. Rosenfeld, certify that:
|
|||
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Steven Madden, Ltd.;
|
||
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
||
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
||
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
||
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
||
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
||
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
||
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
||
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
||
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
||
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/S/ EDWARD R. ROSENFELD
|
|
Edward R. Rosenfeld
|
|
Chairman and Chief Executive Officer
|
|
August 9, 2011
|
I, Arvind Dharia, certify that:
|
|||
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Steven Madden, Ltd.;
|
||
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
||
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
||
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
||
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
||
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
||
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
||
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
||
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
||
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
||
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/S/ ARVIND DHARIA
|
|
Arvind Dharia
|
|
Chief Financial Officer and Chief Accounting Officer
|
|
August 9, 2011
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/S/ EDWARD R. ROSENFELD
|
|
Edward R. Rosenfeld
|
|
Chairman and Chief Executive Officer
|
|
August 9, 2011
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/S/ ARVIND DHARIA
|
|
Arvind Dharia
|
|
Chief Financial Officer and Chief Accounting Officer
|
|
August 9, 2011
|
Note Q - Stock-Based Compensation (Detail) - (Table 2) (USD $)
In Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2011
|
Jun. 30, 2010
|
Jun. 30, 2011
|
Jun. 30, 2010
|
|
Total | $ 5,565 | $ 3,676 | ||
Stock Options [Member]
|
||||
Allocated Equity-based compensation | 1,420 | 816 | 2,608 | 1,346 |
Restricted Stock [Member]
|
||||
Allocated Equity-based compensation | 1,620 | 1,043 | 2,957 | 2,330 |
Total | $ 3,040 | $ 1,859 | $ 5,565 | $ 3,676 |
Condensed Consolidated Balance Sheets (Parentheticals) (USD $)
In Thousands, except Per Share data |
Jun. 30, 2011
|
Dec. 31, 2010
|
Jun. 30, 2010
|
---|---|---|---|
Allowances for Accounts Receivables (in Dollars) | $ 3,763 | $ 2,458 | $ 1,939 |
Allowances for Due from Factors (in Dollars) | $ 10,777 | $ 12,800 | $ 10,758 |
Common stock par value (in Dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 60,000 | 60,000 | 60,000 |
Common stock, shares issued | 51,217 | 50,423 | 49,911 |
Common stock, shares outstanding | 42,814 | 42,020 | 41,508 |
Treasury stock – shares at cost | 8,403 | 8,403 | 8,403 |
Preferred Class A [Member]
|
|||
Preferred stock – par value (in Dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Preferred stock – shares authorized | 5,000 | 5,000 | 5,000 |
Preferred Class B [Member]
|
|||
Preferred stock – par value (in Dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Preferred stock – shares authorized | 60 | 60 | 60 |
Condensed Consolidated Statements of Income (USD $)
In Thousands, except Per Share data |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2011
|
Jun. 30, 2010
|
Jun. 30, 2011
|
Jun. 30, 2010
|
|
Net sales | $ 209,152 | $ 158,664 | $ 374,907 | $ 290,272 |
Cost of sales | 125,057 | 89,815 | 221,680 | 161,486 |
Gross profit | 84,095 | 68,849 | 153,227 | 128,786 |
Commission and licensing fee income – net | 4,432 | 5,229 | 8,999 | 11,413 |
Operating expenses | (51,339) | (42,025) | (97,583) | (83,287) |
Income from operations | 37,188 | 32,053 | 64,643 | 56,912 |
Interest and other income, net | 1,656 | 942 | 3,173 | 1,726 |
Income before provision for income taxes | 38,844 | 32,995 | 67,816 | 58,638 |
Provision for income taxes | 15,149 | 13,196 | 26,269 | 23,454 |
Net income | 23,695 | 19,799 | 41,547 | 35,184 |
Net loss attributable to noncontrolling interests | 89 | 89 | ||
Net income attributable to Steven Madden, Ltd. | $ 23,784 | $ 19,799 | $ 41,636 | $ 35,184 |
Basic income per share (in Dollars per share) | $ 0.56 | $ 0.48 | $ 0.99 | $ 0.85 |
Diluted income per share (in Dollars per share) | $ 0.55 | $ 0.47 | $ 0.97 | $ 0.83 |
Basic weighted average common shares outstanding (in Shares) | 42,156 | 41,442 | 42,053 | 41,313 |
Effect of dilutive securities – options/restricted stock (in Shares) | 1,103 | 1,013 | 972 | 1,031 |
Diluted weighted average common shares outstanding (in Shares) | 43,259 | 42,455 | 43,025 | 42,344 |
Note Q - Stock-Based Compensation (Detail) - (Table 5) (USD $)
In Thousands, except Per Share data, unless otherwise specified |
6 Months Ended |
---|---|
Jun. 30, 2011
|
|
Outstanding at January 1, 2011 | 2,703,000 |
Outstanding at January 1, 2011 (in Dollars per share) | $ 14.08 |
Granted | 563,000 |
Granted (in Dollars per share) | $ 26.10 |
Exercised | (313,000) |
Exercised (in Dollars per share) | $ 11.13 |
Cancelled/Forfeited | (158,000) |
Cancelled/Forfeited (in Dollars per share) | $ 19.95 |
Outstanding at June 30, 2011 | 2,795,000 |
Outstanding at June 30, 2011 (in Dollars per share) | $ 16.50 |
Outstanding at June 30, 2011 | 5.0 |
Outstanding at June 30, 2011 (in Dollars) | $ 58,632 |
Exercisable at June 30, 2011 | 771,000 |
Exercisable at June 30, 2011 (in Dollars per share) | $ 12.95 |
Exercisable at June 30, 2011 | 4.5 |
Exercisable at June 30, 2011 (in Dollars) | $ 18,925 |
Note R - Acquisitions
|
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Jun. 30, 2011
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Business Combination Disclosure [Text Block] |
Note
R – Acquisitions
Cejon
On
May 25, 2011, the Company acquired all of the outstanding
shares of capital stock of privately held Cejon, Inc. and
Cejon Accessories, Inc. from its sole stockholder as well as
all of the outstanding membership interests in New East
Designs, LLC (together with Cejon Inc. and Cejon Accessories,
“Cejon”) from its members (together with the
Cejon stockholder, the “Sellers”). Founded in
1991, Cejon markets and sells cold weather accessories,
fashion scarves, wraps and other trend accessories primarily
under the Cejon brand name, private labels and the Steve
Madden brand name. Prior to the acquisition, Cejon had been a
licensee of the Company for cold weather and selected other
fashion accessories since September 2006. Management believes
that Cejon will further strengthen and expand the
Company’s accessories platform. The acquisition was
completed for consideration of $29,108 cash plus possible
contingent payments pursuant to an earn-out agreement with
the Sellers. The earn-out agreement specifies two tiers of
potential payments to the Sellers based on the financial
performance of Cejon for each of the twelve-month periods
ending on June 30, 2012 through 2016, inclusive. The tier one
earn-out is based on a graduated percentage of EBITA up to a
maximum EBITA of $11,000 in each of the earn-out periods,
provided that the total aggregate payments under this tier do
not exceed $25,000. The tier two earn-out is based on a
multiple of the amount that EBITA exceeds certain levels in
each of the earn-out periods, provided that the total
aggregate payments under this tier do not exceed $33,000. The
fair value of the contingent payments was estimated using the
present value of management’s projections of the
financial results of Cejon during the earn-out period. As of
June 30, 2011, the Company estimates the fair value of the
contingent consideration to be $23,000.
Note
R – Acquisitions (continued)
The
transaction was accounted for using the acquisition method
required by GAAP. Accordingly, the assets and liabilities
of Cejon were adjusted to their fair values, and the excess
of the purchase price over the fair value of the assets
acquired, including identified intangible assets, was
recorded as goodwill. The fair values assigned to tangible
and intangible assets acquired and liabilities assumed are
based on management’s estimates and assumptions,
which are subject to change. The purchase price has been
preliminarily allocated as follows:
The
purchase price and related allocation are preliminary and may
be revised as a result of adjustments made to the purchase
price as may be required as additional information regarding
assets and liabilities is revealed. Contingent consideration
classified as a liability will be remeasured at fair value at
each reporting date, until the contingency is resolved, with
changes recognized in earnings. The goodwill related to this
transaction is expected to be deductible for tax purposes
over 15 years.
The
Company incurred approximately $446 in acquisition
related costs applicable to the Cejon transaction during the
six-month period ended June 30, 2011. These expenses are
included in operating expenses in the Company’s
Condensed Consolidated Statements of Income.
The
results of operations of Cejon have been included in the
Company’s Condensed Consolidated Statements of Income
from the date of the acquisition. Unaudited pro forma
information related to this acquisition is not included, as
the impact of this transaction is not material to the
Company’s consolidated results.
Topline
On
May 20, 2011, the Company acquired all of the outstanding
shares of capital stock of the privately held company, The
Topline Corporation (“Topline”) from its sole
stockholder (“Seller”). Founded in 1980, Topline
and its subsidiaries design, manufacture, market and sell
private label and branded women’s footwear primarily to
specialty retailers and department stores. Topline has
sourcing capabilities resident in China which include
personnel and facilities engaged in direct sourcing.
Management believes that Topline is a strategic fit for the
Company. The acquisition was completed for consideration of
$56,128 cash, net of cash acquired, plus possible contingent
payments pursuant to an earn-out agreement with the Seller.
The earn-out agreement provides for potential payments to the
Seller based on the financial performance of Topline for the
twelve-month period ending on June 30, 2012. The fair value
of the contingent payments was estimated using the present
value of management’s projections of the financial
results of Topline during the earn-out period. As of June 30,
2011, the Company estimates the fair value of the contingent
consideration to be $7,368.
Note
R – Acquisitions (continued)
The
transaction was accounted for using the acquisition method
required by GAAP. Accordingly, the assets and liabilities
of Topline were adjusted to their fair values, and the
excess of the purchase price over the fair value of the
assets acquired, including identified intangible assets,
was recorded as goodwill. The fair values assigned to
tangible and intangible assets acquired and liabilities
assumed are based on management’s estimates and
assumptions, which are subject to change. The purchase
price has been preliminarily allocated as follows:
The
purchase price and related allocation is preliminary and may
be revised as a result of adjustments made to the purchase
price as may be required as additional information regarding
assets and liabilities is revealed. Contingent consideration
classified as a liability will be remeasured at fair value at
each reporting date, until the contingency is resolved, with
changes recognized in earnings. The trade name, customer
relationships, non-compete agreement and goodwill related to
this transaction are not deductible for tax purposes.
The
Company incurred approximately $433 in acquisition
related costs applicable to the Topline transaction during
the period ended June 30, 2011. These expenses are included
in operating expenses in the Company’s Condensed
Consolidated Statements of Income.
The
results of operations of Topline have been included in the
Company’s Condensed Consolidated Statements of Income
from the date of the acquisition. Unaudited pro forma
information related to this acquisition is not included, as
the impact of this transaction is not material to the
Company’s consolidated results.
Betsey
Johnson intellectual property
On
October 5, 2010, pursuant to a Restructuring Agreement
between the Company and Betsey Johnson LLC (“Betsey
Johnson”), the Company acquired all right, title and
interest in substantially all of the intellectual property of
Betsey Johnson, including, among other things, the Betsey
Johnson® and Betseyville® trademarks, and certain
intellectual property licenses and other contracts, including
the right to receive royalties and other income with respect
thereto (the “Betsey Johnson Assets”). Management
believes that the Betsey Johnson Assets offer meaningful
growth opportunity for the Company. Prior to the acquisition,
Betsey Johnson had licensed to the Company the right to use
the Betsey Johnson® and Betseyville® trademarks in
connection with the sale and marketing of handbags, small
leather goods, belts and umbrellas. The acquisition of the
Betsey Johnson Assets was the culmination of a series of
transactions. First, in August 2010, the Company purchased
from various members of a loan syndicate their respective
participations in a term loan in the aggregate outstanding
principal amount of $48,750 (the “Loan”) made by
the syndicate lenders to Betsey Johnson. The Company paid the
syndicate lenders an aggregate purchase price of $29,217,
including transaction costs, for their participations in the
Loan. The Loan was secured by a first priority security
interest in substantially all of the assets of Betsey Johnson
and was in default on the date of purchase. On October 5,
2010, the Company entered into the Restructuring Agreement
with Betsey Johnson, pursuant to which, in consideration of
the elimination of all amounts owed with respect to the Loan,
the Company acquired the Betsey Johnson Assets. The Company
believes that Betsey Johnson® is a well known, iconic
brand and thus the trademark is an indefinite lived asset. As
such, the $29,217 purchase price for the Betsey Johnson
intellectual property will not be amortized, rather, it will
be tested for impairment on an annual basis or more often if
events or circumstances change that could cause the Betsey
Johnson intellectual property to become impaired. The Company
made a new secured term loan to Betsey Johnson on October 5,
2010 in the principal amount of $3,000, which accrues
interest at the rate of 8% per annum and becomes due on
December 31, 2015. As of June 30, 2011, $181 of interest has
accrued on the note and has been reflected on the
Company’s Condensed Consolidated Financial Statements.
The new term loan is secured by a first priority security
interest in substantially all of the remaining properties and
assets of Betsey Johnson.
Note
R – Acquisition (continued)
Big
Buddha
On
February 10, 2010, the Company acquired all of the
outstanding shares of stock of privately held Big Buddha,
Inc. (“Big Buddha”) from its sole stockholder
(“Seller”). Founded in 2003, Big Buddha designs
and markets fashion-forward handbags to specialty retailers
and better department stores. Management believes that Big
Buddha is a strategic fit for the Company. The acquisition
was completed for consideration of $11,119 in cash, net of
cash acquired, plus contingent payments pursuant to an
earn-out agreement with the Seller. The earn-out agreement
provides for potential payments to the Seller based on the
financial performance of Big Buddha handbags for each of the
twelve-month periods ending on March 31, 2011, 2012 and 2013.
The fair value of the contingent payments was estimated using
the present value of management’s projections of the
financial results of Big Buddha during the earn-out period.
The Company estimated the fair value of the contingent
consideration to be $14,000. The earn-out payment for the
twelve-month period ended March 31, 2011 was $3,603.
The
transaction was accounted for using the acquisition method
required by GAAP. Accordingly, the assets and liabilities of
Big Buddha were adjusted to their fair values, and the excess
of the purchase price over the fair value of the assets
acquired, including identified intangible assets, was
recorded as goodwill. The fair values assigned to tangible
and intangible assets acquired and liabilities assumed are
based on management’s estimates and assumptions, which
are subject to change. The purchase price has been allocated
as follows:
Contingent
consideration classified as a liability will be remeasured at
fair value at each reporting date, until the contingency is
resolved, with changes recognized in earnings. The goodwill
related to this transaction is expected to be deductible for
tax purposes over 15 years.
The
Company incurred approximately $430 in acquisition related
costs applicable to the Big Buddha transaction during the
six-month period ended June 30, 2010. These expenses are
included in operating expenses in the Company’s
Condensed Consolidated Statements of Income.
The
results of operations of Big Buddha have been included in the
Company’s Condensed Consolidated Statements of Income
from the date of the acquisition. Unaudited pro forma
information related to this acquisition is not included, as
the impact of this transaction is not material to the
Company’s consolidated results.
|
Document And Entity Information (USD $)
|
6 Months Ended | ||
---|---|---|---|
Jun. 30, 2011
|
Aug. 04, 2011
|
Jun. 30, 2010
|
|
Document and Entity Information [Abstract] | |||
Entity Registrant Name | STEVEN MADDEN, LTD. | ||
Document Type | 10-Q | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Common Stock, Shares Outstanding | 27,673,699 | ||
Entity Public Float | $ 786,065,000 | ||
Amendment Flag | false | ||
Entity Central Index Key | 0000913241 | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Well-known Seasoned Issuer | No | ||
Document Period End Date | Jun. 30, 2011 | ||
Document Fiscal Year Focus | 2011 | ||
Document Fiscal Period Focus | Q2 |
Note U - Comprehensive Income
|
6 Months Ended |
---|---|
Jun. 30, 2011
|
|
Comprehensive Income (Loss) Note [Text Block] |
Note
U – Comprehensive Income
Comprehensive
income for the three- and six-month periods ended June 30,
2011, including unrealized gain on marketable securities of
$494 and $412, was $24,189 and $41,959, respectively.
Comprehensive income for the comparable periods ended June
30, 2010 including unrealized gain on marketable securities
of $436 and $656, was $20,235 and $35,840,
respectively.
|
Note P - Net Income Per Share of Common Stock (Detail)
|
6 Months Ended | |
---|---|---|
Jun. 30, 2011
|
Jun. 30, 2010
|
|
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 150,000 | 236,000 |
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Note G - Marketable Securities
|
6 Months Ended |
---|---|
Jun. 30, 2011
|
|
Marketable Securities, Policy [Policy Text Block] |
Note
G – Marketable
Securities
Marketable
securities consist primarily of corporate and U.S. government
and federal agency bonds with maturities greater than three
months and up to six years at the time of purchase as well as
marketable equity securities. These securities, which are
classified as available-for-sale, are carried at fair value,
with unrealized gains and losses, net of any tax effect,
reported in stockholders’ equity as accumulated other
comprehensive income (loss). These securities are classified
as current and non-current marketable securities based upon
their maturities. Amortization of premiums and discounts is
included in interest income. For the three- and six-month
periods ended June 30, 2011, the amortization of bond
premiums totals $321 and $664, respectively, compared to $269
and $502 for the comparable periods in 2010. The values of
these securities may fluctuate as a result of changes in
market interest rates and credit risk.
|
Note V - Commitments, Contingencies and Other
|
6 Months Ended | ||||||||||||
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Jun. 30, 2011
|
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Commitments and Contingencies Disclosure [Text Block] |
Note
V – Commitments, Contingencies and Other
Legal
proceedings:
Note
V – Commitments, Contingencies and Other
(continued)
|
Note H - Fair Value Measurement (Detail) (USD $)
In Thousands, except Share data |
Aug. 26, 2010
Note Receivable From Bakers [Member]
|
Jun. 30, 2011
Big Buddha Acquisition [Member]
|
---|---|---|
Unregistered Shares Of Common Stock Acquired (in Shares) | 1,844,860 | |
Contingent Liability Payment | $ 3,603 |
Note D - Due To and From Factor (Detail) (USD $)
|
6 Months Ended |
---|---|
Jun. 30, 2011
|
|
Line of Credit Facility, Collateral | 85% |
Line of Credit Facility, Maximum Borrowing Capacity (in Dollars) | $ 30 |
Letters Of Credit SubLimit Capacity Amount (in Dollars) | $ 15 |
Factoring Fee | 0.275% |
Note T - Goodwill and Intangible Assets
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Jun. 30, 2011
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Goodwill and Intangible Assets Disclosure [Text Block] |
Note
T – Goodwill and Intangible Assets
The
following is a summary of the carrying amount of goodwill by
segment for the six months ended June 30, 2011:
The
following table details identifiable intangible assets as of
June 30, 2011:
Note
T – Goodwill and Intangible Assets (continued)
The
estimated future amortization expense of purchased
definite-lived intangibles as of June 30, 2011 is as
follows:
|
Note L - Taxes Collected From Customers
|
6 Months Ended |
---|---|
Jun. 30, 2011
|
|
Revenue Recognition, Excise and Sales Taxes |
Note
L – Taxes Collected From Customers
The
Company accounts for certain taxes collected from its
customers in accordance with the accounting guidance which
permits companies to adopt a policy of presenting taxes in
the income statement on either a gross basis (included in
revenues and costs) or a net basis (excluded from revenues).
Taxes within the scope of the accounting guidance would
include taxes that are imposed on a revenue transaction
between a seller and a customer, for example, sales taxes,
use taxes, value-added taxes and some types of excise taxes.
The Company has consistently recorded all taxes on a net
basis.
|
Note C - Use of Estimates
|
6 Months Ended |
---|---|
Jun. 30, 2011
|
|
Use of Estimates, Policy [Policy Text Block] |
Note
C – Use of Estimates
The
preparation of financial statements in conformity with
accounting principles generally accepted in the United States
of America requires management to make estimates and
assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of revenue and expenses during the reporting
period. Actual results could differ from those
estimates.
Significant
areas involving management estimates include allowances for
bad debts, returns and customer chargebacks and contingent
payment liability. The Company provides reserves on trade
accounts receivables and due from factors for future customer
chargebacks and markdown allowances, discounts, returns and
other miscellaneous compliance related deductions that relate
to the current period sales. The Company evaluates
anticipated chargebacks by reviewing several performance
indicators of its major customers. These performance
indicators, which include retailers’ inventory levels,
sell-through rates and gross margin levels, are analyzed by
management to estimate the amount of the anticipated customer
allowance.
|
Note T - Goodwill and Intangible Assets (Tables)
|
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2011
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Schedule of Goodwill [Table Text Block] |
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Schedule of Finite-Lived Intangible Assets by Major Class [Table Text Block] |
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Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block] |
|
Note I - Fair Value of Financial Instruments
|
6 Months Ended |
---|---|
Jun. 30, 2011
|
|
Fair Value of Financial Instruments, Policy [Policy Text Block] |
Note
I – Fair Value of Financial Instruments
The
carrying value of certain financial instruments such as
accounts receivable, due from factor and accounts payable
approximate their fair values due to the short-term nature of
their underlying terms. The fair values of these financial
instruments are determined by reference to market data and
other valuation techniques, as appropriate. Fair value of the
note receivable – related party approximates its
carrying value based upon its interest rate, which
approximates current market interest rates.
|
Note N - Cost of Sales
|
6 Months Ended |
---|---|
Jun. 30, 2011
|
|
Cost of Sales, Policy [Policy Text Block] |
Note
N – Cost of Sales
All
costs incurred to bring finished products to the
Company’s distribution center and, in the Retail
segment, the costs to bring products to the Company’s
stores, are included in the cost of sales line on the
Condensed Consolidated Statement of Income. These include the
cost of finished products, purchase commissions, letter of
credit fees, brokerage fees, sample expenses, custom duty,
inbound freight, royalty payments on licensed products,
labels and product packaging. All warehouse and distribution
costs related to the Wholesale segments and freight to
customers, if any, are included in the operating expenses
line item of the Company’s Condensed Consolidated
Statements of Income. The Company’s gross margins may
not be comparable to those of other companies in the industry
because some companies may include warehouse and distribution
costs, as well as other costs excluded from cost of sales by
the Company, as a component of cost of sales, while other
companies report on the same basis as the Company and include
them in operating expenses.
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Note J - Inventories
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6 Months Ended |
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Jun. 30, 2011
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Inventory, Policy [Policy Text Block] |
Note
J – Inventories
Inventories,
which consist of finished goods on hand and in transit, are
stated at the lower of cost (first-in, first-out method) or
market.
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Note Q - Stock-Based Compensation (Tables)
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Schedule of Share-based Compensation, Shares Authorized under Stock Plans, Issued and Avaliability [Table Text Block] |
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Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Table Text Block] |
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Schedule Of Cash Proceeds And Intrinsic Values For Stock Options Exercised [TableText Block] |
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Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block] |
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Schedule of Nonvested Share Activity [Table Text Block] |
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Note H - Fair Value Measurement
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Jun. 30, 2011
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Fair Value Disclosures [Text Block] |
Note
H – Fair Value Measurement
The
accounting guidance under “Fair Value Measurements and
Disclosures” (“ASC 820-10”) permits the
Company to elect to measure non-financial assets and
non-financial liabilities at fair value effective January 1,
2009. ASC 820-10 clarifies the principle that fair value
should be based on the assumptions market participants would
use when pricing an asset or liability and establishes a fair
value hierarchy that prioritizes the information used to
develop those assumptions. ASC 820-10 utilizes a fair value
hierarchy that prioritizes the inputs to valuation techniques
used to measure fair value into three broad levels. A brief
description of those three levels is as follows:
The
Company’s financial assets and liabilities subject to
fair value measurements as of June 30, 2011 are as
follows:
Note
H – Fair Value Measurement (continued)
The
Company’s financial assets subject to fair value
measurements as of December 31, 2010 are as follows:
Pursuant
to the Debenture and Stock Purchase Agreement with Bakers
(see Note E), the Company acquired 1,844,860 unregistered
shares of Bakers common stock, which trades on the OTC
Bulletin Board. These shares, which are thinly traded, were
valued using the quoted price of similar registered shares of
Bakers common stock adjusted for the effect of the transfer
restriction, considering factors such as the nature and
duration of the transfer restriction, the volatility of the
stock and the risk free interest rate. The shares are
included in deposits and other assets on the Company’s
Condensed Consolidated Balance Sheets. For the note
receivable due from Bakers (see Note E), which was purchased
at a substantial discount, the carrying value was determined
to be the fair value. For the note receivable due from Betsey
Johnson (see Note R), the carrying value was determined to be
the fair value.
The
Company has recorded a liability for contingent consideration
as a result of the May 25, 2011 acquisition of Cejon, Inc.,
Cejon Accessories, Inc. and New East Designs, LLC
(collectively, “Cejon”) (see Note R). Pursuant to
the terms of the acquisition, earn-out payments may be due
annually to the sellers of Cejon based on the financial
performance of Cejon for each of the twelve-month periods
ending on June 30, 2012 through 2016, inclusive. The fair
value of the contingent payments was estimated using the
present value of management’s projections of the
financial results of Cejon during the earn-out period.
The
Company has recorded a liability for contingent consideration
as a result of the May 20, 2011 acquisition of The Topline
Corporation (“Topline”) (see Note R). Pursuant to
the terms of the acquisition, an earn-out payment may be due
to the seller of Topline based on the financial performance
of Topline for the twelve-month period ending on June 30,
2012. The fair value of the contingent payment was estimated
using the present value of management’s projections of
the financial results of Topline during the earn-out
period.
The
Company has recorded a liability for contingent consideration
as a result of the February 10, 2010 acquisition of Big
Buddha, Inc. (see Note R). Pursuant to the terms of the
acquisition, earn-out payments may be due annually to the
seller of Big Buddha based on the financial performance of
Big Buddha for each of the twelve-month periods ending on
March 31, 2012 and 2013. The fair value of the contingent
payments was estimated using the present value of
management’s projections of the financial results of
Big Buddha during the earn-out period. The contingent payment
for the twelve-month period ended March 31, 2011 was
$3,603.
No
gains or losses resulting from the fair value measurement of
financial assets were included in the Company’s
earnings for the three and six months ended June 30, 2011 and
2010.
Note
H – Fair Value Measurement (continued)
Accounting
guidance permits entities to choose to measure financial
instruments and certain other items at fair value that are
not currently required to be measured at fair value. The
accounting guidance also establishes presentation and
disclosure requirements designed to facilitate comparisons
between entities that chose different measurement attributes
for similar assets and liabilities. The Company has elected
not to measure any eligible items at fair value.
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Note Q - Stock-Based Compensation (Detail) - (Table 4) (USD $)
|
6 Months Ended | |
---|---|---|
Jun. 30, 2011
|
Jun. 30, 2010
|
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Expected volatility | 47.6% to 48.7% | 47.5% to 52.4% |
Risk-free interest rate | 1.22% to 1.78% | 1.62% to 2.16% |
Expected life (in years) | 2.8 to 4.4 | 2.8 to 4.4 |
Expected dividend yield | ||
Weighted average fair value (in Dollars per share) | $ 10.83 | $ 8.48 |
Note A - Basis of Reporting
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6 Months Ended |
---|---|
Jun. 30, 2011
|
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Basis of Accounting [Text Block] |
Note
A – Basis of Reporting
The
accompanying unaudited condensed consolidated financial
statements of Steven Madden, Ltd. and subsidiaries (the
“Company”) have been prepared in accordance with
the generally accepted accounting principles in the United
States of America (“GAAP”) for interim financial
information and pursuant to the rules and regulations of the
Securities and Exchange Commission (the “SEC”).
Accordingly, they do not include all of the information and
footnotes required by GAAP for complete financial statements.
In the opinion of management, such statements include all
adjustments (consisting only of normal recurring items) which
are considered necessary for a fair presentation of the
financial position of the Company and the results of its
operations and cash flows for the periods presented. The
results of its operations for the three- and six-month
periods ended June 30, 2011 are not necessarily indicative of
the operating results for the full year. It is suggested that
these financial statements be read in conjunction with the
financial statements and related disclosures for the year
ended December 31, 2010 included in the Annual Report of
Steven Madden, Ltd. on Form 10-K filed with the SEC on
February 28, 2011.
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Note D - Due To and From Factor
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6 Months Ended |
---|---|
Jun. 30, 2011
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Due ToAnd From Factor |
Note
D – Due
From Factor
The
Company has a collection agency agreement with Rosenthal
& Rosenthal, Inc. (“Rosenthal”) that became
effective on September 15, 2009. The agreement can be
terminated by the Company or Rosenthal at any time upon 60
days’ prior written notice. Under the agreement, the
Company can request advances from Rosenthal of up to 85% of
aggregate receivables submitted to Rosenthal. The agreement
provides the Company with a $30 million credit facility with
a $15 million sub-limit for letters of credit, at an interest
rate based, at the Company’s election, upon either the
prime rate or LIBOR. The Company also pays a fee of 0.275% of
the gross invoice amount submitted to Rosenthal. Rosenthal
assumes the credit risk on a substantial portion of the
receivables the Company refers to it and, to the extent of
any loans made to the Company, Rosenthal maintains a lien on
all of the Company’s receivables to secure the
Company’s obligations. On February 10, 2010, the
agreement was amended to include foreign accounts
receivable.
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Note E - Notes Receivable (Detail) - (Table) (USD $)
In Thousands |
Jun. 30, 2011
|
---|---|
Total | $ 7,237 |
Note Receivable From Bakers [Member]
|
|
Due from | 4,056 |
Note Receivable From Betsey Johnson [Member]
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Due from | $ 3,181 |
Note H - Fair Value Measurement (Tables)
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Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block] |
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Note T - Goodwill and Intangible Assets (Detail) - (Table 1) (USD $)
In Thousands |
6 Months Ended |
---|---|
Jun. 30, 2011
|
|
Wholesale Footwear [Member]
|
|
Balance at January 1, 2011 | $ 1,547 |
Acquisition of Topline | 19,941 |
Balance at June 30, 2011 | 21,488 |
Wholesale Accessories [Member]
|
|
Balance at January 1, 2011 | 31,565 |
Acquisition of Cejon | 17,090 |
Balance at June 30, 2011 | 48,655 |
Retail [Member]
|
|
Balance at January 1, 2011 | 5,501 |
Acquisition of Cejon | 0 |
Acquisition of Topline | 0 |
Balance at June 30, 2011 | 5,501 |
Net Carrying Amount [Member]
|
|
Balance at January 1, 2011 | 38,613 |
Acquisition of Cejon | 17,090 |
Acquisition of Topline | 19,941 |
Balance at June 30, 2011 | $ 75,644 |
Note T - Goodwill and Intangible Assets (Detail) - (Table 3) (USD $)
In Thousands |
6 Months Ended |
---|---|
Jun. 30, 2011
|
|
2011 (remaining six months) | $ 1,853 |
2012 | 2,993 |
2013 | 2,993 |
2014 | 2,926 |
2015 | 2,742 |
Thereafter | 10,371 |
[FiniteLivedIntangibleAssetsFutureAmortizationExpense] | $ 23,878 |
Note Q - Stock-Based Compensation (Detail) - (Table 3) (USD $)
In Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2011
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Jun. 30, 2010
|
Jun. 30, 2011
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Jun. 30, 2010
|
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Proceeds from stock options exercised | $ 3,254 | $ 1,581 | $ 3,485 | $ 1,913 |
Intrinsic value of stock options exercised | $ 7,510 | $ 4,026 | $ 7,799 | $ 4,614 |
Note W - Operating Segment Information (Detail) - (Table 2) (USD $)
In Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2011
|
Jun. 30, 2010
|
Jun. 30, 2011
|
Jun. 30, 2010
|
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Domestic | $ 195,724 | $ 150,662 | $ 352,535 | $ 276,659 |
International | 13,428 | 8,002 | 22,372 | 13,613 |
Total | $ 209,152 | $ 158,664 | $ 374,907 | $ 290,272 |
Note E - Notes Receivable
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6 Months Ended | |||||||||||||||
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Jun. 30, 2011
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Loans, Notes, Trade and Other Receivables Disclosure [Text Block] |
Note
E – Notes Receivable
As
of June 30, 2011, Notes Receivable were comprised of the
following:
On
August 26, 2010, the Company entered into a Debenture and
Stock Purchase Agreement with Bakers Footwear Group, Inc.
(“Bakers”) pursuant to which the Company paid
$5,000 to acquire a subordinated debenture in the principal
amount of $5,000 and 1,844,860 unregistered shares of Bakers
common stock which trades on the Over-the-Counter Bulletin
Board. The Company allocated $996 of the purchase price to
the common stock and $4,004 to the subordinated debenture
based upon their relative fair values. Interest accrues on
the debenture at the rate of 11% per annum and is payable
quarterly in cash. The principal amount of the debenture is
payable by Bakers in four equal installments of $1,250 due on
August 31, 2017, 2018, 2019 and 2020. The difference between
the $4,004 purchase price of the debenture and the $5,000
principal amount of the debenture is considered original
issue discount and is being amortized over the life of the
debenture. As of June 30, 2011, the total amount of the
discount amortized was $52, bringing the value of the note to
$4,056.
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Note G - Marketable Securities (Detail) (USD $)
|
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2011
|
Jun. 30, 2010
|
Jun. 30, 2011
|
Jun. 30, 2010
|
|
Investment Income, Amortization of Premium | $ 321 | $ 269 | $ 664 | $ 502 |
Note W - Operating Segment Information
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Jun. 30, 2011
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Segment Reporting Disclosure [Text Block] |
Note
W – Operating Segment Information
The
Company operates the following business segments: Wholesale
Footwear, Wholesale Accessories, Retail, First Cost and
Licensing. The Wholesale Footwear segment, through sales to
department stores, mid-tier retailers and specialty stores
worldwide, derives revenue from sales of branded and private
label women’s, men’s, girls’ and
children’s footwear. The Wholesale Accessories segment,
which includes branded and private label handbags, belts and
small leather goods as well as cold weather and selected
other fashion accessories, derives revenue from sales to
department, mid-tier and specialty stores worldwide. The
Retail segment, through the operation of Company owned retail
stores and the Company’s websites, derives revenue from
sales of branded women’s, men’s and
children’s footwear, accessories and licensed products
to consumers. The First Cost segment represents activities of
a subsidiary which earns commissions for serving as a buying
agent of footwear products to mass-market merchandisers,
mid-tier department stores and other retailers with respect
to their purchase of footwear. In the License segment, the
Company licenses its Steve Madden® and Steven by Steve
Madden® trademarks for use in connection with the
manufacture, marketing and sale of sunglasses, eyewear,
outerwear, bedding, hosiery and women’s fashion apparel
and jewelry. The Company licenses the Big Buddha® brand
for use in connection with the manufacture, marketing and
sale of sunglasses and cold weather accessories. In addition,
the Company licenses the Betsey Johnson® and
Betseyville® trademarks for use in connection with the
manufacture, marketing and sale of apparel, jewelry,
lingerie, swimwear, eyewear, watches and outerwear.
Note
W – Operating Segment Information (continued)
Note
W – Operating Segment Information (continued)
Revenues
by geographic area for the three- and six-month periods ended
June 30, 2011 and 2010 are as follows:
|
Note V - Commitments, Contingencies and Other (Detail) (USD $)
In Thousands |
Jun. 30, 2011
|
Sep. 30, 2010
|
Jun. 30, 2010
|
Dec. 31, 2009
|
Sep. 30, 2007
|
---|---|---|---|---|---|
Estimated Litigation Liability | $ 2,750 | $ 1,000 | |||
Litigation Settlement | 1,968 | ||||
Loss Contingency, Estimate of Possible Loss | $ 1,248 | $ 3,045 | $ 1,400 |
Note R - Acquisitions (Tables)
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2011
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Schedule of Purchase Price Allocation [Table Text Block] |
|
Note F - Note Receivable - Related Party (Detail) (USD $)
In Thousands, except Share data, unless otherwise specified |
1 Months Ended | 3 Months Ended | 10 Months Ended | 21 Months Ended | 27 Months Ended | 34 Months Ended | 48 Months Ended | |||
---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2011
|
Jul. 12, 2010
|
May 31, 2011
|
Mar. 31, 2009
|
Jun. 30, 2011
|
May 02, 2010
|
Jun. 30, 2011
|
Dec. 31, 2010
|
Jun. 30, 2010
|
Jun. 25, 2007
|
|
Notes Receivable, Related Parties, Noncurrent (in Dollars) | $ 3,967 | $ 3,967 | $ 3,967 | $ 3,849 | $ 3,733 | $ 3,000 | ||||
Related Party Transaction, Rate | 8.00% | 6.00% | ||||||||
Interest Income Related Party (in Dollars) | 967 | |||||||||
Related Party Shares Pledged As Collateral | 315,000 | 765,000 | 210,000 | 510,000 | ||||||
Shares Released Related Party Transaction | 555,000 | |||||||||
Market Value Shares Pledged As Collateral Related Party (in Dollars) | $ 6,798 | |||||||||
Stock SplitB [Member]
|
||||||||||
Stock Split Conversion Ratio | 3-for-2 | |||||||||
Stock SplitA [Member]
|
||||||||||
Stock Split Conversion Ratio | 3-for-2 | 3-for-2 | 3-for-2 |
Note E - Notes Receivable (Tables)
|
6 Months Ended | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2011
|
||||||||||||||||
Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block] |
|
Note M - Sales Deductions
|
6 Months Ended |
---|---|
Jun. 30, 2011
|
|
Revenue Recognition, Allowances [Policy Text Block] |
Note
M – Sales Deductions
The
Company supports retailers’ initiatives to maximize
sales of the Company’s products on the retail floor by
subsidizing the co-op advertising programs of such retailers,
providing them with inventory markdown allowances and
participating in various other marketing initiatives of its
major customers. In addition, the Company accepts returns for
damaged products for which the Company’s costs are
normally charged back to the responsible factory. Such
expenses are reflected in the financial statements as
deductions to net sales. For the three- and six-month periods
ended June 30, 2011, the deduction to sales for these
expenses as a total dollar amount and as a percentage
of wholesale gross sales was $10,991or 5.9% and $18,424
or 5.6%, respectively, as compared to $8,311or 6.4% and
$14,351 or 6.2% for the comparable periods in 2010.
|
Note R - Acquisitions (Detail) - (Tables) (USD $)
In Thousands |
May 25, 2011
Cejon Acquisition [Member]
|
May 20, 2011
Topline Acquisition [Member]
|
Feb. 10, 2010
Big Buddha Acquisition [Member]
|
---|---|---|---|
Accounts receivable | $ 3,608 | $ 55,738 | $ 668 |
Inventory | 3,803 | 8,381 | 1,212 |
Prepaid expenses and other current assets | 56 | 857 | 102 |
Fixed assets | 292 | 2,404 | |
Trade name | 27,065 | 16,600 | 4,100 |
Customer relationships | 3,225 | 7,900 | 4,900 |
Non-compete agreement | 305 | 300 | 450 |
Other assets | 23 | 108 | |
Accounts payable | (1,318) | (40,612) | (171) |
Accrued expenses | (2,041) | (1,624) | (442) |
Income tax payable | (3,217) | ||
Accrued expenses | (3,280) | ||
Total fair value excluding goodwill | 35,018 | 43,555 | 10,819 |
Goodwill | 17,090 | 19,941 | 14,300 |
Net assets acquired | $ 52,108 | $ 63,496 | $ 25,119 |
Note U - Comprehensive Income (Detail) (USD $)
In Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2011
|
Jun. 30, 2010
|
Jun. 30, 2011
|
Jun. 30, 2010
|
|
Other Comprehensive Income (Loss), Unrealized Holding Gain (Loss) on Securities Arising During Period, Net of Tax | $ 494 | $ 436 | $ 412 | $ 656 |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent | $ 24,189 | $ 20,235 | $ 41,959 | $ 35,840 |
Note F - Note Receivable - Related Party
|
6 Months Ended |
---|---|
Jun. 30, 2011
|
|
Related Party Transactions Disclosure [Text Block] |
Note
F – Note Receivable – Related Party
On
June 25, 2007, the Company made a loan to Steve Madden, its
Creative and Design Chief and a principal stockholder of the
Company, in the amount of $3,000 in order for Mr. Madden to
satisfy a personal tax obligation resulting from the exercise
of options that were due to expire and retain the underlying
Company common stock, which he pledged to the Company as
collateral to secure the loan. Mr. Madden executed a secured
promissory note in favor of the Company bearing interest at
an annual rate of 8% which was due on the earlier of the date
Mr. Madden ceases to be employed by the Company or December
31, 2007. The note was amended and restated as of December
19, 2007 to extend the maturity date to March 31, 2009, and
amended and restated again as of April 1, 2009 to change the
interest rate to 6% and extend the maturity date to June 30,
2015 when all principal and accrued interest is due. As of
June 30, 2011, $967 of interest has accrued on the
note and has been reflected on the Company’s Condensed
Consolidated Financial Statements. Due to the 3-for-2 stock
split effected on May 3, 2010 (see Note B above) the number
of shares securing the loan increased from 510,000 shares to
765,000 shares. Based upon the increase in the market value
of the Company’s common stock since the inception of
the loan, on July 12, 2010, the Company determined to release
from its security interest 555,000 shares of the
Company’s common stock, retaining 210,000 shares with a
total market value on that date of $6,798, as collateral for
the loan. Subsequently, pursuant to the 3-for-2 stock split
effected on May 31, 2011 (see Note B above) the number of
shares securing the loan has increased from 210,000 shares to
315,000 shares. On June 30, 2011, the total market value of
these shares was $11,702.
|
Note P - Net Income Per Share of Common Stock
|
6 Months Ended |
---|---|
Jun. 30, 2011
|
|
Earnings Per Share [Text Block] |
Note
P – Net Income Per Share of Common Stock
Basic
net income per share is based on the weighted average number
of shares of common stock outstanding during the period,
which does not include unvested restricted stock subject to
forfeiture. Diluted net income per share reflects: a) the
potential dilution assuming shares of common stock were
issued upon the exercise of outstanding in-the-money options
and the proceeds thereof were used to purchase shares of the
Company’s common stock at the average market price
during the period, and b) nonvested restricted stock awards
for which the assumed proceeds upon grant are deemed to be
the amount of compensation cost attributable to future
services and are not yet recognized using the treasury stock
method, to the extent dilutive. For both the three- and
six-month periods ended June 30, 2011, 150,000 options to
purchase shares of the Company’s common stock have
been excluded from the calculation because inclusion of such
shares would be anti-dilutive as compared with options to
purchase 236,000 shares of the Company’s
common stock that have been excluded from the
calculation for the three and six months ended June 30,
2010.
|
Note W - Operating Segment Information (Detail) - (Table 1) (USD $)
In Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2011
|
Jun. 30, 2010
|
Jun. 30, 2011
|
Jun. 30, 2010
|
|
Net sales to external customers | $ 209,152 | $ 158,664 | $ 374,907 | $ 290,272 |
Gross profit | 84,095 | 68,849 | 153,227 | 128,786 |
Commissions and licensing fees - net | 4,432 | 5,229 | 8,999 | 11,413 |
Income (loss) | 37,188 | 32,053 | 64,643 | 56,912 |
Segment assets | 596,277 | 401,354 | 596,277 | 401,354 |
Capital expenditures | 2,271 | 564 | 5,973 | 1,232 |
Wholesale Footwear [Member]
|
||||
Net sales to external customers | 148,530 | 104,170 | 256,981 | 186,925 |
Gross profit | 51,913 | 40,135 | 92,663 | 75,567 |
Income (loss) | 23,890 | 20,442 | 42,097 | 37,183 |
Segment assets | 349,839 | 228,039 | 349,839 | 228,039 |
Wholesale Accessories [Member]
|
||||
Net sales to external customers | 26,642 | 25,023 | 52,450 | 45,360 |
Gross profit | 10,163 | 9,875 | 20,240 | 18,213 |
Income (loss) | 3,020 | 4,430 | 7,646 | 7,485 |
Segment assets | 133,718 | 77,702 | 133,718 | 77,702 |
Total Wholesale [Member]
|
||||
Net sales to external customers | 175,172 | 129,193 | 309,431 | 232,285 |
Gross profit | 62,076 | 50,010 | 112,903 | 93,780 |
Income (loss) | 26,910 | 24,872 | 49,743 | 44,668 |
Segment assets | 483,557 | 305,741 | 483,557 | 305,741 |
Capital expenditures | 1,221 | 213 | 3,637 | 477 |
Retail [Member]
|
||||
Net sales to external customers | 33,980 | 29,471 | 65,476 | 57,987 |
Gross profit | 22,019 | 18,839 | 40,324 | 35,006 |
Income (loss) | 5,846 | 1,952 | 5,901 | 831 |
Segment assets | 66,239 | 55,468 | 66,239 | 55,468 |
Capital expenditures | 1,050 | 351 | 2,336 | 755 |
First Cost [Member]
|
||||
Commissions and licensing fees - net | 2,612 | 4,413 | 5,287 | 9,359 |
Income (loss) | 2,612 | 4,413 | 5,287 | 9,359 |
Segment assets | 46,481 | 40,145 | 46,481 | 40,145 |
Licensing [Member]
|
||||
Commissions and licensing fees - net | 1,820 | 816 | 3,712 | 2,054 |
Income (loss) | $ 1,820 | $ 816 | $ 3,712 | $ 2,054 |
Note E - Notes Receivable (Detail) (Note Receivable From Bakers [Member], USD $)
In Thousands, except Share data, unless otherwise specified |
Jun. 30, 2011
|
Aug. 26, 2010
|
---|---|---|
Note Receivable From Bakers [Member]
|
||
Payment To Acquire Subordinated Debenture | $ 5,000 | |
Subordinated Debenture Face Amount | 5,000 | |
Unregistered Shares Of Common Stock Acquired (in Shares) | 1,844,860 | |
Unregistered Shares Of Common Stock Acquired Value | 996 | |
Purchase Price Allocated To Note Receivable | 4,004 | |
Note Receivable, Interest Rate | 11.00% | |
Repayments Of Subordinated Debenture | 1,250 | |
Receivables with Imputed Interest, Amortization Amount | 52 | |
Note Receivable Net | $ 4,056 |
Note X - Recently Issued Accounting Standards
|
6 Months Ended |
---|---|
Jun. 30, 2011
|
|
New Accounting Pronouncement or Change in Accounting Principle, Description |
Note
X – Recently Issued Accounting Standards
In
June 2011, the Financial Accounting Standards Board
(“FASB”) issued Accounting Standards Update No.
2011-05 “Comprehensive Income (Topic 220): Presentation
of Comprehensive Income” (“ASU No.
2011-05”). Under ASU No. 2011-5, an entity has the
option to present the total of comprehensive income, the
components of net income, and the components of other
comprehensive income either in a single continuous statement
of comprehensive income or in two separate but consecutive
statements. In both choices, an entity is required to present
each component of net income along with total net income,
each component of other comprehensive income along with a
total for other comprehensive income, and a total amount for
comprehensive income. ASU No. 2011-5 eliminates the option to
present the components of other comprehensive income as part
of the statement of changes in stockholders’ equity.
ASU No. 2011-5 is effective for fiscal years, and interim
periods within those years, beginning after December 15, 2011
and effects the presentation of financial statements and thus
will have no impact on the Company’s consolidated
financial statements.
In
May 2011, the FASB issued ASU No. 2011-04 “Amendments
to Achieve Common Fair Value Measurement and Disclosure
Requirements” (“ASU No. 2011-04”) in GAAP
and the International Financial Reporting Standards
(“IFRS”). ASU No. 2011-04 amends FASB ASC Topic
820, Fair Value Measurements and Disclosures, to establish
common requirements for measuring fair value and for
disclosing information about fair value measurements in
accordance with GAAP and IFRS. ASU No. 2011-04 is effective
for interim and annual periods beginning after December 15,
2011. Management is currently evaluating ASU No. 2011-04 and
does not believe that it will have a material impact on the
Company’s consolidated financial statements.
In
December 2010, the FASB issued ASU No. 2010-28, “When
to Perform Step 2 of the Goodwill Impairment Test for
Reporting Units with Zero or Negative Carrying Amounts”
(“ASU 2010-28”). ASU 2010-28 modifies Step 1 of
the goodwill impairment test, which requires an entity to
compare the fair value of a reporting unit with its carrying
amount, including goodwill. For reporting units with zero or
negative carrying amounts, an entity is required to perform
Step 2 of the goodwill impairment test if it is more likely
than not that a goodwill impairment exists. Step 2 requires
an entity to compare the fair value of a reporting unit
goodwill with the carrying amount of that goodwill. The
implied fair value of goodwill is determined by assigning a
fair value to all the assets and liabilities of the reporting
unit as if the reporting unit had been acquired in a business
combination. The adoption of ASU 2010-28, which became
effective for the Company on January 1, 2011, did not have a
material impact on the Company’s consolidated financial
statements.
In
December 2010, FASB issued ASU No. 2010-29 “Business
Combination (Topic 805): Disclosure of Supplementary Pro
Forma Information for Business Combinations”
(“ASU No. 2010-29”). ASU no. 2010-29 specifies
that if a public entity presents comparative financial
statements, the entity should disclose revenue and earnings
of the combined entity as though the business combination(s)
that occurred during the current year had occurred as of the
beginning of the comparable prior annual reporting period
only. ASU No. 2010-29 also expands the supplemental pro forma
disclosures to include a description of the nature and amount
of material, nonrecurring pro forma adjustments directly
attributable to the business combination included in the
reported pro forma revenue and earnings. ASU No. 2010-29 is
effective prospectively for business combinations for which
the acquisition date is on or after the beginning of the
first annual reporting period beginning on or after December
15, 2010. The adoption of ASU No. 2010-29 did not have a
material impact on the Company’s consolidated financial
statements.
|
Note Q - Stock-Based Compensation
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2011
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Disclosure of Compensation Related Costs, Share-based Payments [Text Block] |
Note
Q – Stock-Based Compensation
In
March 2006, the Board of Directors approved the Steven
Madden, Ltd. 2006 Stock Incentive Plan (the
“Plan”) under which nonqualified stock options,
stock appreciation rights, performance shares, restricted
stock, other stock-based awards and performance-based cash
awards may be granted to employees, consultants and
non-employee directors. The stockholders approved the Plan on
May 26, 2006. On May 25, 2007, the stockholders approved an
amendment to the Plan to increase the maximum number of
shares that may be issued under the Plan from 2,700,000 to
3,487,500. On May 22, 2009, the stockholders approved a
second amendment to the Plan that increased the maximum
number of shares that may be issued under the Plan to
9,144,000. The following table summarizes the number of
shares of common stock authorized for use under the Plan, the
amount of stock-based awards issued (net of expired or
cancelled) under the Plan and the amount of common stock
available for the grant of stock-based awards under the
Plan:
Total
equity-based compensation for the three and six months ended
June 30 is as follows:
Equity-based
compensation is included in operating expenses on the
Company’s Condensed Consolidated Statements of
Income.
Stock
Options
Cash
proceeds and intrinsic values related to total stock options
exercised during both the three- and six-month periods ended
June 30, 2011 and 2010 are as follows:
Note
Q –
Stock-Based
Compensation (continued)
During
the three and six months ended June 30, 2011, approximately
489,000 options with a weighted average exercise price of
$13.48 and approximately 611,000 options with a weighted
average exercise price of $13.92 vested, respectively. During
the three and six months ended June 30, 2010, approximately
350,000 options with a weighted average exercise price of
$9.55 and approximately 398,000 options with a weighted
average exercise price of $9.36 vested, respectively. As of
June 30, 2011, there were 2,024,000 unvested options with a
total of $12,285 of unrecognized compensation cost and
an average vesting period of 2.6 years.
The
Company estimates the fair value of options granted using the
Black-Scholes option-pricing model, which requires several
assumptions. The expected term of the options represents the
estimated period of time until exercise and is based on the
historical experience of similar awards. Expected volatility
is based on the historical volatility of the Company’s
common stock. The risk free interest rate is based on the
U.S. Treasury yield curve in effect at the time of the grant.
With the exception of special dividends paid in November of
each 2005 and 2006, the Company historically has not paid
dividends and thus the expected dividend rate is assumed to
be zero. The following weighted average assumptions were used
for stock options granted:
Activity
relating to stock options granted under the Company’s
plans and outside the plans during the six months ended June
30, 2011 is as follows:
Note
Q –
Stock-Based
Compensation (continued)
Restricted
Stock
The
following table summarizes restricted stock activity during
the six months ended June 30, 2011 and 2010:
As
of June 30, 2011, there was $14,195 of total unrecognized
compensation cost related to restricted stock awards granted
under the Plan. This cost is expected to be recognized over a
weighted average of 3 years. The Company determines the
fair value of its restricted stock awards based on the market
price of its common stock on the date of grant.
|
Note H - Fair Value Measurement (Detail) - (Table) (USD $)
In Thousands |
Jun. 30, 2011
|
Dec. 31, 2010
|
---|---|---|
Big Buddha Acquisition [Member] | Estimate of Fair Value, Fair Value Disclosure [Member]
|
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Liabilities: | ||
Contingent consideration – Big Buddha, current | $ 5,899 | |
Contingent consideration, non-current | 6,536 | |
Big Buddha Acquisition [Member] | Fair Value, Inputs, Level 3 [Member]
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Liabilities: | ||
Contingent consideration – Big Buddha, current | 5,899 | |
Contingent consideration, non-current | 6,536 | |
Cejon Acquisition Fair Value [Member] | Estimate of Fair Value, Fair Value Disclosure [Member]
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Liabilities: | ||
Contingent consideration, non-current | 23,000 | |
Cejon Acquisition Fair Value [Member] | Fair Value, Inputs, Level 3 [Member]
|
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Liabilities: | ||
Contingent consideration, non-current | 23,000 | |
Topline Acquisition Fair Value [Member] | Estimate of Fair Value, Fair Value Disclosure [Member]
|
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Liabilities: | ||
Contingent consideration, non-current | 7,368 | |
Topline Acquisition Fair Value [Member] | Fair Value, Inputs, Level 3 [Member]
|
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Liabilities: | ||
Contingent consideration, non-current | 7,368 | |
Note Receivable From Bakers [Member] | Estimate of Fair Value, Fair Value Disclosure [Member]
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Assets: | ||
Note receivable | 4,024 | |
Note Receivable From Betsey Johnson [Member] | Estimate of Fair Value, Fair Value Disclosure [Member]
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Assets: | ||
Note receivable | 3,000 | |
Estimate of Fair Value, Fair Value Disclosure [Member]
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Assets: | ||
Cash equivalents | 1,596 | 32,145 |
Current marketable securities – available for sale | 7,709 | 13,289 |
Investment in Bakers | 996 | 996 |
Long-term marketable securities – available for sale | 93,228 | 114,317 |
Total assets | 110,766 | 167,771 |
Liabilities: | ||
Contingent consideration | 12,372 | |
Total liabilities | 42,803 | 12,372 |
Estimate of Fair Value, Fair Value Disclosure [Member] | Note Receivable Fair Value From Bakers [Member]
|
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Assets: | ||
Note receivable | 4,056 | |
Estimate of Fair Value, Fair Value Disclosure [Member] | Note Receivable Fair Value From Betsey Johnson [Member]
|
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Assets: | ||
Note receivable | 3,181 | |
Fair Value, Inputs, Level 1 [Member]
|
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Assets: | ||
Cash equivalents | 1,596 | 32,145 |
Current marketable securities – available for sale | 7,709 | 13,289 |
Long-term marketable securities – available for sale | 93,228 | 114,317 |
Total assets | 102,533 | 159,751 |
Fair Value, Inputs, Level 2 [Member]
|
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Assets: | ||
Investment in Bakers | 996 | 996 |
Total assets | 996 | 996 |
Note Receivable From Bakers [Member] | Fair Value, Inputs, Level 3 [Member]
|
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Assets: | ||
Note receivable | 4,024 | |
Note Receivable From Betsey Johnson [Member] | Fair Value, Inputs, Level 3 [Member]
|
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Assets: | ||
Note receivable | 3,000 | |
Fair Value, Inputs, Level 3 [Member]
|
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Assets: | ||
Total assets | 7,237 | 7,024 |
Liabilities: | ||
Contingent consideration | 12,372 | |
Total liabilities | 42,803 | 12,372 |
Fair Value, Inputs, Level 3 [Member] | Note Receivable Fair Value From Bakers [Member]
|
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Assets: | ||
Note receivable | 4,056 | |
Fair Value, Inputs, Level 3 [Member] | Note Receivable Fair Value From Betsey Johnson [Member]
|
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Assets: | ||
Note receivable | $ 3,181 |
Note S - Consolidated Variable Interest entity
|
6 Months Ended | |||||||||||||||||||||||||||||||||||
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Jun. 30, 2011
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Variable Interest Entity, Qualitative or Quantitative Information, Nature of VIE |
Note
S – Consolidated Variable Interest entity
On
April 15, 2011, the Company formed a joint venture with two
individuals through a limited liability company, Madlove, LLC
(“Madlove”), as to which the Company is the
primary beneficiary. Madlove designs and markets
women’s footwear under the Madlove label. As the
primary beneficiary of Madlove, the assets, liabilities and
results of operations of Madlove are included in the
Company’s condensed consolidated financial statements.
The other members’ interests are reflected in
“Net loss attributable to noncontrolling
interests” in the Condensed Consolidated Statements of
Income and “Noncontrolling interests” in the
Condensed Consolidated Balance Sheets. The following table
summarizes the carrying amount of Madlove’s assets and
liabilities included in the Company’s Condensed
Consolidated Balance Sheets at June 30, 2011:
|
Note B - Stock Splits
|
6 Months Ended |
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Jun. 30, 2011
|
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Stockholders' Equity Note, Stock Split |
Note
B – Stock Splits
On
May 5, 2011, the Company announced that its Board of
Directors had declared a three-for-two stock split of the
Company’s outstanding shares of common stock, to be
effected in the form of a stock dividend on the
Company’s outstanding common stock. Stockholders of
record at the close of business on May 20, 2011 received one
additional share of Steven Madden, Ltd. common stock for
every two shares of common stock owned on this date. The
additional shares were distributed on May 31, 2011.
Stockholders received cash in lieu of any fractional shares
of common stock they otherwise would have received in
connection with the dividend. All share and per share data
provided herein gives effect to this stock split, applied
retroactively.
Previously,
on March 24, 2010, the Company’s Board of Directors
declared a three-for-two stock split of the Company’s
outstanding shares of common stock, which was effected in the
form of a stock dividend on the Company’s outstanding
common stock. Stockholders of record at the close of business
on April 20, 2010 received one additional share of Steven
Madden, Ltd. common stock for every two shares of common
stock owned on this date. The additional shares were
distributed on May 3, 2010. Stockholders received cash in
lieu of any fractional shares of common stock they otherwise
would have received in connection with the dividend. All
share and per share data provided herein gives effect to this
stock split, applied retroactively.
|
Note K - Revenue Recognition
|
6 Months Ended |
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Jun. 30, 2011
|
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Revenue Recognition, Policy [Policy Text Block] |
Note
K – Revenue Recognition
The
Company recognizes revenue on wholesale sales when products
are shipped pursuant to its standard terms, which are freight
on board (“FOB”) warehouse, or when products are
delivered to the consolidators as per the terms of the
customers’ purchase order, persuasive evidence of an
arrangement exists, the price is fixed or determinable and
collection is reasonably assured. Sales reductions for
anticipated discounts, allowances and other deductions are
recognized during the period when sales are recorded.
Customers retain the right to replacement of the product for
poor quality or improper or short shipments, which have
historically been immaterial. Retail sales are recognized
when the payment is received from customers and are recorded
net of returns. The Company also generates commission income
acting as a buying agent by arranging to manufacture private
label shoes to the specifications of its clients. The
Company’s commission revenue includes partial recovery
of its design, product and development costs for the services
provided to certain suppliers in connection with the
Company’s private label business. Commission revenue
and product and development cost recoveries are recognized as
earned when title to the product transfers from the
manufacturer to the customer and collections are reasonably
assured and are reported on a net basis after deducting
related operating expenses.
The
Company licenses its Steve Madden® and Steven by Steve
Madden® trademarks for use in connection with the
manufacture, marketing and sale of sunglasses, eyewear,
outerwear, bedding, hosiery, women’s fashion apparel
and jewelry. We license our Big Buddha® brand for use in
connection with the manufacture, marketing and sale of
sunglasses and cold weather accessories. In addition, we
license the Betsey Johnson® and Betseyville®
trademarks for use in connection with the manufacture,
marketing and sale of apparel, jewelry, lingerie, swimwear,
eyewear, watches and outerwear. The license agreements
require the licensee to pay the Company a royalty and, in
substantially all of the agreements, an advertising fee based
on the higher of a minimum or a net sales percentage as
defined in the various agreements. In addition, under the
terms of retail selling agreements, most of the
Company’s international distributors are required to
pay the Company a royalty based on a percentage of net sales,
in addition to a commission and a design fee on the purchases
of the Company’s products. Licensing revenue is
recognized on the basis of net sales reported by the
licensees, or the minimum guaranteed royalties, if higher. In
substantially all of the Company’s license agreements,
the minimum guaranteed royalty is earned and payable on a
quarterly basis.
|
Note T - Goodwill and Intangible Assets (Detail) - (Table 2) (USD $)
In Thousands |
Jun. 30, 2011
|
---|---|
Trade Names [Member]
|
|
Estimated Lives | 6-10 years |
Cost Basis | $ 4,591 |
Accumulated amortization | 944 |
Net Carrying Amount | 3,647 |
Customer Lists [Member]
|
|
Estimated Lives | 10 years |
Cost Basis | 22,834 |
Accumulated amortization | 3,855 |
Net Carrying Amount | 18,979 |
Licensing Agreements [Member]
|
|
Estimated Lives | 3-6 years |
Cost Basis | 5,600 |
Accumulated amortization | 5,338 |
Net Carrying Amount | 262 |
Noncompete Agreements [Member]
|
|
Estimated Lives | 5 years |
Cost Basis | 1,985 |
Accumulated amortization | 995 |
Net Carrying Amount | 990 |
Other Intangible Assets [Member]
|
|
Estimated Lives | 3 years |
Cost Basis | 14 |
Accumulated amortization | 14 |
Total [Member]
|
|
Cost Basis | 35,024 |
Accumulated amortization | 11,146 |
Net Carrying Amount | 23,878 |
Total [Member]
|
|
Cost Basis | 107,866 |
Accumulated amortization | 11,146 |
Net Carrying Amount | 96,720 |
Trademarks [Member]
|
|
Estimated Lives | indefinite |
Cost Basis | 72,842 |
Net Carrying Amount | $ 72,842 |
Note S - Consolidated Variable Interest entity (Tables)
|
6 Months Ended | |||||||||||||||||||||||||||||||||||
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Jun. 30, 2011
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Variable Interest Entity, Classification of Carrying Amount, Assets and Liabilities, Net |
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Note O - Income Taxes
|
6 Months Ended |
---|---|
Jun. 30, 2011
|
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Income Tax Disclosure [Text Block] |
Note
O – Income Taxes
The
Company’s effective income tax rate for the six months
ended June 30, 2011 and 2010 was 38.7% and 40.0%,
respectively. The primary reason for this decrease is that
this year’s tax provision does not include a valuation
allowance while last year’s tax provision included a
valuation allowance that increased the effective tax rate by
74 basis points. A decrease in expenses that are
non-deductible for tax purposes also contributed to the lower
effective income tax rate in the first quarter of
2011.
|
Note W - Operating Segment Information (Tables)
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2011
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Schedule of Segment Reporting Information, by Segment [Table Text Block] |
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Entity-Wide Disclosure on Geographic Areas, Basis for Attributing Revenue to Countries |
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