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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22
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32
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32
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32
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34
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35
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September 30,
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December 31,
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September 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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$ | 35,141 | $ | 66,151 | $ | 29,045 | ||||||
Accounts receivable, net of allowances of $7,114, $2,458 and $2,209
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113,461 | 18,742 | 12,846 | |||||||||
Due from factors, net of allowances of $12,496, $12,800 and $10,934
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105,694 | 52,206 | 81,815 | |||||||||
Inventories
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77,042 | 39,557 | 44,485 | |||||||||
Marketable securities – available for sale
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4,159 | 13,289 | 20,395 | |||||||||
Prepaid expenses and other current assets
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14,465 | 11,044 | 11,590 | |||||||||
Deferred taxes
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9,415 | 9,078 | 8,827 | |||||||||
Total current assets
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359,377 | 210,067 | 209,003 | |||||||||
Notes receivable
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7,318 | 7,024 | 33,195 | |||||||||
Note receivable – related party
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4,028 | 3,849 | 3,791 | |||||||||
Property and equipment, net
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30,400 | 20,791 | 21,054 | |||||||||
Deferred income taxes
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4,665 | 7,844 | 6,309 | |||||||||
Deposits and other
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1,970 | 2,529 | 2,775 | |||||||||
Marketable securities – available for sale
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72,500 | 114,317 | 103,179 | |||||||||
Goodwill – net
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74,976 | 38,613 | 36,613 | |||||||||
Intangibles – net
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95,780 | 42,662 | 14,095 | |||||||||
Total Assets
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$ | 651,014 | $ | 447,696 | $ | 430,014 | ||||||
LIABILITIES
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Current liabilities:
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||||||||||||
Accounts payable
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$ | 86,894 | $ | 37,089 | $ | 37,302 | ||||||
Accrued expenses
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34,864 | 18,425 | 21,525 | |||||||||
Contingent payment liability – current portion
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3,787 | 1,976 | 1,628 | |||||||||
Income taxes payable
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22,877 | — | 5,935 | |||||||||
Accrued incentive compensation
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13,402 | 15,917 | 11,864 | |||||||||
Total current liabilities
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161,824 | 73,407 | 78,254 | |||||||||
Contingent payment liability
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36,236 | 10,396 | 10,372 | |||||||||
Deferred rent
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5,799 | 5,467 | 5,494 | |||||||||
Other liabilities
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154 | 1,128 | 1,577 | |||||||||
Total Liabilities
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204,013 | 90,398 | 95,697 | |||||||||
Commitments, contingencies and other (Note W)
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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 – $.0001 par value, 60,000 shares authorized, 51,271, 50,423 and 49,982 shares issued, 42,868, 42,020 and 41,579 outstanding
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5 | 4 | 4 | |||||||||
Additional paid-in capital
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182,292 | 165,773 | 158,945 | |||||||||
Retained earnings
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396,639 | 323,092 | 305,465 | |||||||||
Other comprehensive income:
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Unrealized gain on marketable securities
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740 | 972 | 2,446 | |||||||||
Treasury stock – 8,403, 8,403 and 8,403 shares at cost
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(132,543 | ) | (132,543 | ) | (132,543 | ) | ||||||
Total Steven Madden, Ltd. stockholders’ equity
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447,133 | 357,298 | 334,317 | |||||||||
Noncontrolling interests
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(132 | ) | — | — | ||||||||
Total stockholders’ equity
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447,001 | 357,298 | 334,317 | |||||||||
Total Liabilities and Stockholders’ Equity
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$ | 651,014 | $ | 447,696 | $ | 430,014 |
Three Months Ended
September 30, |
Nine Months Ended
September 30, |
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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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$ | 313,887 | $ | 184,118 | $ | 688,794 | $ | 474,390 | ||||||||
Cost of sales
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204,434 | 106,610 | 426,114 | 268,096 | ||||||||||||
Gross profit
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109,453 | 77,508 | 262,680 | 206,294 | ||||||||||||
Commission, royalty and licensing fee income – net
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5,649 | 6,587 | 14,648 | 18,000 | ||||||||||||
Operating expenses
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(64,594 | ) | (46,707 | ) | (162,177 | ) | (129,994 | ) | ||||||||
Income from operations
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50,508 | 37,388 | 115,151 | 94,300 | ||||||||||||
Interest and other income, net
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1,732 | 1,201 | 4,905 | 2,927 | ||||||||||||
Income before provision for income taxes
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52,240 | 38,589 | 120,056 | 97,227 | ||||||||||||
Provision for income taxes
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20,372 | 15,673 | 46,641 | 39,127 | ||||||||||||
Net income
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31,868 | 22,916 | 73,415 | 58,100 | ||||||||||||
Net loss attributable to noncontrolling interests
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43 | — | 132 | — | ||||||||||||
Net income attributable to Steven Madden, Ltd.
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$ | 31,911 | $ | 22,916 | $ | 73,547 | $ | 58,100 | ||||||||
Basic income per share
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$ | 0.75 | $ | 0.55 | $ | 1.74 | $ | 1.40 | ||||||||
Diluted income per share
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$ | 0.74 | $ | 0.54 | $ | 1.70 | $ | 1.37 | ||||||||
Basic weighted average common shares outstanding
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42,430 | 41,520 | 42,180 | 41,390 | ||||||||||||
Effect of dilutive securities – options/restricted stock
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977 | 833 | 973 | 965 | ||||||||||||
Diluted weighted average common shares outstanding
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43,407 | 42,353 | 43,153 | 42,355 |
Nine Months Ended
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September 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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$ | 73,415 | $ | 58,100 | ||||
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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(4,178 | ) | (2,882 | ) | ||||
Depreciation and amortization
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7,849 | 7,364 | ||||||
Loss on disposal of fixed assets
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609 | 543 | ||||||
Non-cash compensation
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8,337 | 5,963 | ||||||
Provision for bad debts
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4,352 | (539 | ) | |||||
Accrued interest on note receivable – related party
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(179 | ) | (223 | ) | ||||
Deferred rent expense
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(556 | ) | 463 | |||||
Realized gain on marketable securities
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(1,254 | ) | (32 | ) | ||||
Changes in (net of acquisitions):
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Accounts receivable
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(40,030 | ) | (2,121 | ) | ||||
Due from factor
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(53,184 | ) | (32,728 | ) | ||||
Inventories
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(25,301 | ) | (13,732 | ) | ||||
Prepaid expenses, deposits and other assets
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(2,329 | ) | (4,216 | ) | ||||
Accounts payable and other accrued expenses
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41,969 | 26,534 | ||||||
Other liabilities
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(2,135 | ) | (102 | ) | ||||
Net cash provided by operating activities
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7,385 | 42,392 | ||||||
Cash flows from investing activities:
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Purchase of property and equipment
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(12,246 | ) | (2,280 | ) | ||||
Purchase of marketable securities
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(13,983 | ) | (54,341 | ) | ||||
Sale/redemption of marketable securities
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64,885 | 18,592 | ||||||
Purchase of notes receivable
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— | (34,186 | ) | |||||
Acquisitions, net of cash acquired
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(85,234 | ) | (11,119 | ) | ||||
Net cash used in investing activities
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(46,578 | ) | (83,334 | ) | ||||
Cash flows from financing activities:
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Proceeds from options exercised
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4,005 | 2,398 | ||||||
Tax benefit from exercise of options
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4,178 | 2,882 | ||||||
Purchase of common stock for treasury
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— | (4,559 | ) | |||||
Net cash provided by financing activities
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8,183 | 721 | ||||||
Net decrease in cash and cash equivalents
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(31,010 | ) | (40,221 | ) | ||||
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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$ | 35,141 | $ | 29,045 |
Due from Bakers Footwear Group, Inc.
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$ | 4,074 | ||
Due from Betsey Johnson LLC (see Note S)
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3,244 | |||
Total
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$ | 7,318 |
●
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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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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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$ | 8,195 | $ | 8,195 | $ | — | $ | — | ||||||||
Current marketable securities – available for sale
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4,159 | 4,159 | — | — | ||||||||||||
Investment in Bakers
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996 | — | 996 | — | ||||||||||||
Note receivable – Bakers
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4,074 | — | — | 4,074 | ||||||||||||
Note receivable – Betsey Johnson
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3,244 | — | — | 3,244 | ||||||||||||
Long-term marketable securities – available for sale
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72,500 | 72,500 | — | — | ||||||||||||
Total assets
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$ | 93,168 | $ | 84,854 | $ | 996 | $ | 7,318 | ||||||||
Liabilities:
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Contingent consideration – Big Buddha, current
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$ | 3,787 | — | — | $ | 3,787 | ||||||||||
Contingent consideration – Cejon, non-current
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23,500 | — | — | 23,500 | ||||||||||||
Contingent consideration – Topline, non-current
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6,200 | — | — | 6,200 | ||||||||||||
Contingent consideration – Big Buddha, non-current
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6,536 | — | — | 6,536 | ||||||||||||
Total liabilities
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$ | 40,023 | — | — | $ | 40,023 |
Fair Value Measurements
Using Fair Value Hierarchy
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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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$ | 32,145 | $ | 32,145 | $ | — | $ | — | ||||||||
Current marketable securities – available for sale
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13,289 | 13,289 | — | — | ||||||||||||
Investment in Bakers
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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
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114,317 | 114,317 | — | — | ||||||||||||
Total assets
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$ | 167,771 | $ | 159,751 | $ | 996 | $ | 7,024 | ||||||||
Liabilities:
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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
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6,374,000 | |||
Common Stock available for grant of stock-based awards as of September 30, 2011
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2,770,000 |
Three Months Ended
September 30, |
Nine Months Ended
September 30,
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2011
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2010
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2011
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2010
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Restricted stock
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$ | 1,093 | $ | 1,110 | $ | 4,050 | $ | 3,440 | ||||||||
Stock options
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1,679 | 1,177 | 4,287 | 2,523 | ||||||||||||
Total
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$ | 2,772 | $ | 2,287 | $ | 8,337 | $ | 5,963 |
Three Months Ended
September 30, |
Nine Months Ended
September 30,
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2011
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2010
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2011
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2010
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Proceeds from stock options exercised
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$ | 520 | $ | 485 | $ | 4,005 | $ | 2,398 | ||||||||
Intrinsic value of stock options exercised
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$ | 1,062 | $ | 808 | $ | 8,861 | $ | 5,422 |
Nine Months Ended September 30,
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2011
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2010
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Expected volatility
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47.3% to 48.7%
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47.2% to 52.4%
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Risk-free interest rate
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0.61% to 1.78%
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1.08% to 2.16%
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Expected life (in years)
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2.8 to 4.4
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2.8 to 4.4
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Expected dividend yield
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None
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None
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Weighted average fair value
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$10.91
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$8.45
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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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582,000 | 29.80 | ||||||||||||||
Exercised
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(357,000 | ) | 11.21 |
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Cancelled/Forfeited
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(167,000 | ) | 19.30 |
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Outstanding at September 30, 2011
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2,761,000 | $ | 17.45 | 4.8 | $ | 35,899 | ||||||||||
Exercisable at September 30, 2011
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813,000 | $ | 14.25 | 4.2 | $ | 13,101 |
2011
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2010
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Number of Shares
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Weighted Average Fair Value at Grant Date
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Number of Shares
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Weighted Average Fair Value at Grant Date
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Non-vested at January 1
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563,000 | $ | 17.20 | 671,000 | $ | 13.98 | ||||||||||
Granted
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334,000 | 31.34 | 177,000 | 20.33 | ||||||||||||
Vested
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(179,000 | ) | 14.93 | (288,000 | ) | 13.35 | ||||||||||
Forfeited
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— | — | (15,000 | ) | 18.99 | |||||||||||
Non-vested at September 30
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718,000 | $ | 24.34 | 545,000 | $ | 14.67 |
Accounts receivable
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$ | 3,608 | ||
Inventory
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3,803 | |||
Prepaid expenses and other current assets
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56 | |||
Fixed assets
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292 | |||
Trade name
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27,065 | |||
Customer relationships
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3,225 | |||
Non-compete agreement
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305 | |||
Other assets
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23 | |||
Accounts payable
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(1,318 | ) | ||
Accrued expenses
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(2,041 | ) | ||
Total fair value excluding goodwill
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35,018 | |||
Goodwill
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17,590 | |||
Net assets acquired
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$ | 52,608 |
Accounts receivable
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$ | 55,738 | ||
Inventory
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8,381 | |||
Prepaid expenses and other current assets
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857 | |||
Fixed assets
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2,404 | |||
Trade name
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16,600 | |||
Customer relationships
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7,900 | |||
Non-compete agreement
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300 | |||
Other assets
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108 | |||
Accounts payable
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(40,612 | ) | ||
Accrued expenses
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(1,624 | ) | ||
Income tax payable
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(3,217 | ) | ||
Accrued expenses
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(3,280 | ) | ||
Total fair value excluding goodwill
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43,555 | |||
Goodwill
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18,773 | |||
Net assets acquired
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$ | 62,328 |
Accounts receivable
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$ | 668 | ||
Inventory
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1,212 | |||
Prepaid expenses and other current assets
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102 | |||
Trade name
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4,100 | |||
Customer relationships
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4,900 | |||
Non-compete agreement
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450 | |||
Accounts payable
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(171 | ) | ||
Accrued expenses
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(442 | ) | ||
Total fair value excluding goodwill
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10,819 | |||
Goodwill
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14,300 | |||
Net assets acquired
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$ | 25,119 |
Accounts receivable – net
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$ | 277 | ||
Inventory
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93 | |||
Fixed assets – net
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43 | |||
Current assets
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413 | |||
Due to Steven Madden, Ltd.
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17 | |||
Other current liabilities
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147 | |||
Current liabilities
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$ | 164 |
Wholesale
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Net Carrying
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|||||||||||||||
Footwear
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Accessories
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Retail
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Amount
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Balance at January 1, 2011
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$ | 1,547 | $ | 31,565 | $ | 5,501 | $ | 38,613 | ||||||||
Acquisition of Cejon
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— | 17,590 | — | 17,590 | ||||||||||||
Acquisition of Topline
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18,773 | — | — | 18,773 | ||||||||||||
Balance at September 30, 2011
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$ | 20,320 | $ | 49,155 | $ | 5,501 | $ | 74,976 |
Estimated Lives
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Cost Basis
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Accumulated Amortization
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Net Carrying Amount
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|||||||||||
Trade names
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6–10 years
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$ | 4,591 | $ | 1,062 | $ | 3,529 | |||||||
Customer relationships
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10 years
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22,834 | 4,428 | 18,406 | ||||||||||
License agreements
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3–6 years
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5,600 | 5,469 | 131 | ||||||||||
Non-compete agreement
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5 years
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1,985 | 1,113 | 872 | ||||||||||
Other
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3 years
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14 | 14 | — | ||||||||||
35,024 | 12,086 | 22,938 | ||||||||||||
Trademarks
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indefinite
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72,842 | — | 72,842 | ||||||||||
$ | 107,866 | $ | 12,086 | $ | 95,780 |
2011 (remaining three months)
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$ | 913 | ||
2012
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2,993 | |||
2013
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2,993 | |||
2014
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2,926 | |||
2015
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2,742 | |||
Thereafter
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10,371 | |||
$ | 22,938 |
Three Months Ended
September 30, |
Nine Months Ended
September 30,
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|||||||||||||||
2011
|
2010
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2011
|
2010
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|||||||||||||
Net income
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$ | 31,868 | $ | 22,916 | $ | 73,415 | $ | 58,100 | ||||||||
Unrealized gains (losses) on marketable securities
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(644 | ) | 1,090 | (232 | ) | 1,746 | ||||||||||
Comprehensive income, net of income taxes
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31,224 | 24,006 | 73,183 | 59,846 | ||||||||||||
Comprehensive loss attributable to the noncontrolling interest
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43 | — | 132 | — | ||||||||||||
Comprehensive net income attributable to Steven Madden, Ltd.
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$ | 31,267 | $ | 24,006 | $ | 73,315 | $ | 59,846 |
(a)
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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.
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(b)
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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. 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.
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U.S. Customs has not made a formal claim for collection of the duties allegedly owed and, as the statute of limitations for commencement of a collection claim is expiring, U.S. Customs has requested a waiver from the Company of the statue of limitations until December 5, 2013. The Company has submitted a proposed waiver of the statute of limitations to U. S. Customs in this regard the terms of which have not yet been agreed upon. If the Company and U. S. Customs do not reach agreement regarding the terms of the waiver, the statute of limitations for the commencement of a collection action will expire on December 5, 2011.
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(c)
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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.
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As of and three months ended,
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Wholesale
Footwear
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Wholesale
Accessories
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Total Wholesale
|
Retail
|
First Cost
|
Licensing
|
Consolidated
|
|||||||||||||||||||||
September 30, 2011:
|
||||||||||||||||||||||||||||
Net sales to external customers
|
$ | 211,223 | $ | 67,030 | $ | 278,253 | $ | 35,634 | $ | 313,887 | ||||||||||||||||||
Gross profit
|
66,652 | 21,973 | 88,625 | 20,828 | 109,453 | |||||||||||||||||||||||
Commissions and licensing fees – net
|
— | — | — | — | $ | 3,318 | $ | 2,331 | 5,649 | |||||||||||||||||||
Income from operations
|
31,616 | 10,974 | 42,590 | 2,269 | 3,318 | 2,331 | 50,508 | |||||||||||||||||||||
Segment assets
|
$ | 374,329 | $ | 157,369 | 531,698 | 69,242 | 50,074 | — | 651,014 | |||||||||||||||||||
Capital expenditures
|
$ | 4,558 | $ | 1,715 | $ | — | $ | — | $ | 6,273 | ||||||||||||||||||
September 30, 2010:
|
||||||||||||||||||||||||||||
Net sales to external customers
|
$ | 123,251 | $ | 29,801 | $ | 153,052 | $ | 31,066 | $ | 184,118 | ||||||||||||||||||
Gross profit
|
48,362 | 11,095 | 59,457 | 18,051 | 77,508 | |||||||||||||||||||||||
Commissions and licensing fees – net
|
— | — | — | — | $ | 5,617 | $ | 970 | 6,587 | |||||||||||||||||||
Income (loss) from operations
|
27,503 | 5,043 | 32,546 | (1,745 | ) | 5,617 | 970 | 37,388 | ||||||||||||||||||||
Segment assets
|
$ | 302,842 | $ | 72,078 | 374,920 | 42,964 | 12,130 | — | 430,014 | |||||||||||||||||||
Capital expenditures
|
$ | 337 | $ | 711 | $ | — | $ | — | $ | 1,048 |
As of and nine months ended,
|
Wholesale
Footwear
|
Wholesale
Accessories
|
Total Wholesale
|
Retail
|
First Cost
|
Licensing
|
Consolidated
|
|||||||||||||||||||||
September 30, 2011:
|
||||||||||||||||||||||||||||
Net sales to external customers
|
$ | 468,204 | $ | 119,480 | $ | 587,684 | $ | 101,110 | $ | 688,794 | ||||||||||||||||||
Gross profit
|
159,315 | 42,213 | 201,528 | 61,152 | 262,680 | |||||||||||||||||||||||
Commissions and licensing fees – net
|
— | — | — | — | $ | 8,605 | $ | 6,043 | 14,648 | |||||||||||||||||||
Income from operations
|
73,713 | 18,620 | 92,333 | 8,170 | 8,605 | 6,043 | 115,151 | |||||||||||||||||||||
Segment assets
|
$ | 374,329 | $ | 157,369 | 531,698 | 69,242 | 50,074 | — | 651,014 | |||||||||||||||||||
Capital expenditures
|
$ | 8,195 | $ | 4,051 | $ | — | $ | — | $ | 12,246 | ||||||||||||||||||
September 30, 2010:
|
||||||||||||||||||||||||||||
Net sales to external customers
|
$ | 310,176 | $ | 75,161 | $ | 385,337 | $ | 89,053 | $ | 474,390 | ||||||||||||||||||
Gross profit
|
123,929 | 29,308 | 153,237 | 53,057 | 206,294 | |||||||||||||||||||||||
Commissions and licensing fees – net
|
— | — | — | — | $ | 14,976 | $ | 3,024 | 18,000 | |||||||||||||||||||
Income (loss) from operations
|
65,045 | 12,169 | 77,214 | (914 | ) | 14,976 | 3,024 | 94,300 | ||||||||||||||||||||
Segment assets
|
$ | 302,842 | $ | 72,078 | 374,920 | 42,964 | 12,130 | — | 430,014 | |||||||||||||||||||
Capital expenditures
|
$ | 814 | $ | 1,466 | $ | — | $ | — | $ | 2,280 |
Three months ended
September 30, |
Nine months ended
September 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Domestic
|
$ | 297,873 | $ | 172,334 | $ | 650,408 | $ | 448,993 | ||||||||
International
|
16,014 | 11,784 | 38,386 | 25,397 | ||||||||||||
Total
|
$ | 313,887 | $ | 184,118 | $ | 688,794 | $ | 474,390 |
2011
|
2010
|
|||||||||||||
CONSOLIDATED:
|
||||||||||||||
Net sales
|
$ | 313,887 | 100 | % | $ | 184,118 | 100 | % | ||||||
Cost of sales
|
204,434 | 65 | 106,610 | 58 | ||||||||||
Gross profit
|
109,453 | 35 | 77,508 | 42 | ||||||||||
Other operating income – net of expenses
|
5,649 | 2 | 6,587 | 4 | ||||||||||
Operating expenses
|
64,594 | 21 | 46,707 | 25 | ||||||||||
Income from operations
|
50,508 | 16 | 37,388 | 20 | ||||||||||
Interest and other income, net
|
1,732 | 1 | 1,201 | 1 | ||||||||||
Income before income taxes
|
52,240 | 17 | 38,589 | 21 | ||||||||||
Net income
|
31,868 | 10 | 22,916 | 12 | ||||||||||
By Segment:
|
||||||||||||||
WHOLESALE FOOTWEAR SEGMENT:
|
||||||||||||||
Net sales
|
$ | 211,223 | 100 | % | $ | 123,251 | 100 | % | ||||||
Cost of sales
|
144,571 | 68 | 74,889 | 61 | ||||||||||
Gross profit
|
66,652 | 32 | 48,362 | 39 | ||||||||||
Operating expenses
|
35,036 | 17 | 20,859 | 17 | ||||||||||
Income from operations
|
31,616 | 15 | 27,503 | 22 | ||||||||||
WHOLESALE ACCESSORIES SEGMENT:
|
||||||||||||||
Net sales
|
$ | 67,030 | 100 | % | $ | 29,801 | 100 | % | ||||||
Cost of sales
|
45,057 | 67 | 18,706 | 63 | ||||||||||
Gross profit
|
21,973 | 33 | 11,095 | 37 | ||||||||||
Operating expenses
|
10,999 | 16 | 6,052 | 20 | ||||||||||
Income from operations
|
10,974 | 16 | 5,043 | 17 | ||||||||||
RETAIL SEGMENT:
|
||||||||||||||
Net sales
|
$ | 35,634 | 100 | % | $ | 31,066 | 100 | % | ||||||
Cost of sales
|
14,806 | 42 | 13,015 | 42 | ||||||||||
Gross profit
|
20,828 | 58 | 18,051 | 58 | ||||||||||
Operating expenses
|
18,559 | 52 | 19,796 | 64 | ||||||||||
Income (loss) from operations
|
2,269 | 6 | (1,745 | ) | (6 | ) | ||||||||
Number of stores
|
82 | 82 | ||||||||||||
FIRST COST SEGMENT:
|
||||||||||||||
Other commission income – net of expenses
|
$ | 3,318 | 100 | % | $ | 5,617 | 100 | % | ||||||
LICENSING SEGMENT:
|
||||||||||||||
Licensing income – net of expenses
|
$ | 2,331 | 100 | % | $ | 970 | 100 | % |
2011
|
2010
|
|||||||||||
CONSOLIDATED:
|
||||||||||||
Net sales
|
$ | 688,794 | 100 | % | $ | 474,390 | 100 | % | ||||
Cost of sales
|
426,114 | 62 | 268,096 | 57 | ||||||||
Gross profit
|
262,680 | 38 | 206,294 | 43 | ||||||||
Other operating income – net of expenses
|
14,648 | 2 | 18,000 | 4 | ||||||||
Operating expenses
|
162,177 | 24 | 129,994 | 27 | ||||||||
Income from operations
|
115,151 | 17 | 94,300 | 20 | ||||||||
Interest and other income – net
|
4,905 | 1 | 2,927 | 1 | ||||||||
Income before income taxes
|
120,056 | 17 | 97,227 | 20 | ||||||||
Net income
|
73,415 | 11 | 58,100 | 12 | ||||||||
By Segment:
|
||||||||||||
WHOLESALE FOOTWEAR SEGMENT:
|
||||||||||||
Net sales
|
$ | 468,204 | 100 | % | $ | 310,176 | 100 | % | ||||
Cost of sales
|
308,889 | 66 | 186,247 | 60 | ||||||||
Gross profit
|
159,315 | 34 | 123,929 | 40 | ||||||||
Operating expenses
|
85,602 | 18 | 58,884 | 19 | ||||||||
Income from operations
|
73,713 | 16 | 65,045 | 21 | ||||||||
WHOLESALE ACCESSORIES SEGMENT:
|
||||||||||||
Net sales
|
$ | 119,480 | 100 | % | $ | 75,161 | 100 | % | ||||
Cost of sales
|
77,267 | 65 | 45,853 | 61 | ||||||||
Gross profit
|
42,213 | 35 | 29,308 | 39 | ||||||||
Operating expenses
|
23,593 | 20 | 17,139 | 23 | ||||||||
Income from operations
|
18,620 | 16 | 12,169 | 16 | ||||||||
RETAIL SEGMENT:
|
||||||||||||
Net sales
|
$ | 101,110 | 100 | % | $ | 89,053 | 100 | % | ||||
Cost of sales
|
39,958 | 40 | 35,996 | 40 | ||||||||
Gross profit
|
61,152 | 60 | 53,057 | 60 | ||||||||
Operating expenses
|
52,982 | 52 | 53,973 | 61 | ||||||||
Income (loss) from operations
|
8,170 | 8 | (914 | ) | (1 | ) | ||||||
Number of stores
|
82 | 82 | ||||||||||
FIRST COST SEGMENT:
|
||||||||||||
Other commission income – net of expenses
|
$ | 8,605 | 100 | % | $ | 14,976 | 100 | % | ||||
LICENSING SEGMENT:
|
||||||||||||
Licensing income – net of expenses
|
$ | 6,043 | 100 | % | $ | 3,024 | 100 | % |
Payment due by period
|
||||||||||||||||||||
Contractual Obligations
|
Total
|
Remainder of
2011
|
2012-2013 | 2014-2015 |
2016 and after
|
|||||||||||||||
Operating lease obligations
|
$ | 148,505 | $ | 5,556 | $ | 41,785 | $ | 37,196 | $ | 63,968 | ||||||||||
Purchase obligations
|
126,548 | 126,548 | — | — | — | |||||||||||||||
Contingent payment liability
|
40,023 | 3,787 | 22,501 | 9,360 | 4,375 | |||||||||||||||
Other long-term liabilities (future minimum royalty payments)
|
2,048 | 355 | 1,693 | — | — | |||||||||||||||
Total
|
$ | 317,124 | $ | 136,246 | $ | 65,979 | $ | 46,556 | $ | 68,343 |
31.1
|
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.
|
31.2
|
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.
|
32.1
|
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.
|
32.2
|
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 September 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.*
|
* This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof and irrespective of any general incorporation language in any filing, except to the extent the Company specifically incorporates it by reference.
|
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
|
|
31.1
|
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.
|
|
31.2
|
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.
|
|
32.1
|
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.
|
|
32.2
|
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 September 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.*
|
* This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof and irrespective of any general incorporation language in any filing, except to the extent the Company specifically incorporates it by reference.
|
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
|
|
November 9, 2011
|
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 control and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls 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
|
|
November 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
|
|
November 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
|
|
November 9, 2011
|
Note R - Stock-Based Compensation (Detail) - (Table 2) (USD $) In Thousands | 3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2011 | Sep. 30, 2010 | |
Total | $ 8,337 | $ 5,963 | ||
Restricted Stock [Member] | ||||
Allocated Equity-based compensation | 1,093 | 1,110 | 4,050 | 3,440 |
Stock Options [Member] | ||||
Allocated Equity-based compensation | 1,679 | 1,177 | 4,287 | 2,523 |
Total | $ 2,772 | $ 2,287 | $ 8,337 | $ 5,963 |
Condensed Consolidated Balance Sheets (Parentheticals) (USD $) In Thousands, except Per Share data | Sep. 30, 2011 | Dec. 31, 2010 | Sep. 30, 2010 |
---|---|---|---|
Allowances for Accounts Receivables (in Dollars) | $ 7,114 | $ 2,458 | $ 2,209 |
Allowances for Due from Factors (in Dollars) | $ 12,496 | $ 12,800 | $ 10,934 |
Preferred stock - issued | 0 | 0 | 0 |
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 | 49,982 |
Common stock, shares outstanding | 42,868 | 42,020 | 41,579 |
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 |
Note R - Stock-Based Compensation (Detail) - (Table 5) (USD $) In Thousands, except Share data, unless otherwise specified | 9 Months Ended |
---|---|
Sep. 30, 2011 | |
Outstanding at January 1, 2011 | 2,703,000 |
Outstanding at January 1, 2011 (in Dollars per share) | $ 14.08 |
Granted | 582,000 |
Granted (in Dollars per share) | $ 29.80 |
Exercised | (357,000) |
Exercised (in Dollars per share) | $ 11.21 |
Cancelled/Forfeited | (167,000) |
Cancelled/Forfeited (in Dollars per share) | $ 19.30 |
Outstanding at September 30, 2011 | 2,761,000 |
Outstanding at September 30, 2011 (in Dollars per share) | $ 17.45 |
Outstanding at September 30, 2011 | 4.8 |
Outstanding at September 30, 2011 (in Dollars) | $ 35,899 |
Exercisable at September 30, 2011 | 813,000 |
Exercisable at September 30, 2011 (in Dollars per share) | $ 14.25 |
Exercisable at September 30, 2011 | 4.2 |
Exercisable at September 30, 2011 (in Dollars) | $ 13,101 |
Note R - Stock-Based Compensation | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Disclosure of Compensation Related Costs, Share-based Payments [Text Block] |
Note
R– 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 number of
stock-based awards granted (net of expired or cancelled
awards) under the Plan and the number of shares of common
stock available for the grant of stock-based awards under
the Plan:
Total
equity-based compensation expense for the three and nine
months ended September 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 nine-month periods ended
September 30, 2011 and 2010 are as follows:
During
the three and nine months ended September 30, 2011,
approximately 86,000 and 697,000 options vested with a
weighted average exercise price of $24.61 and $15.23,
respectively. During the three and nine months ended
September 30, 2010, 77,000 and 474,000 options vested with a
weighted average exercise price of $14.97 and $10.27,
respectively. As of September 30, 2011, there were 1,948,000
unvested options with a total of $10,463 of unrecognized
compensation cost and a weighted average vesting period of
2.5 years. As of September 30, 2010, there were 2,339,000
unvested options with a total of $10,752 of unrecognized
compensation cost and a weighted average vesting period of
3.1 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 a special dividend paid in each of
November 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:
Note
R – Stock-Based Compensation (continued)
Activity
relating to stock options granted under the Company’s
plans during the nine months ended September 30, 2011 is as
follows:
Restricted
Stock
The
following table summarizes restricted stock activity during
the nine months ended September 30, 2011 and 2010:
As
of September 30, 2011, there was $12,609 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 2.9 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.
|
Document And Entity Information (USD $) | 9 Months Ended | ||
---|---|---|---|
Sep. 30, 2011 | Nov. 05, 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 | 42,866,477 | ||
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 | Sep. 30, 2011 | ||
Document Fiscal Year Focus | 2011 | ||
Document Fiscal Period Focus | Q3 |
Note U - Goodwill and Intangible Assets | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Goodwill and Intangible Assets Disclosure [Text Block] |
Note
U– Goodwill and Intangible Assets
The
following is a summary of the carrying amount of goodwill by
segment for the nine months ended September 30, 2011:
The
following table details identifiable intangible assets as of
September 30, 2011:
The
estimated future amortization expense of purchased
intangibles as of September 30, 2011 is as follows:
|
Note Q - Net Income Per Share of Common Stock (Detail) | 3 Months Ended | 9 Months Ended | |
---|---|---|---|
Sep. 30, 2011 | Sep. 30, 2011 | Sep. 30, 2010 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 19,000 | 169,000 | 177,100 |
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Note G - Note Receivable - Related Party | 9 Months Ended |
---|---|
Sep. 30, 2011 | |
Related Party Transactions Disclosure [Text Block] |
Note
G – 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 September 30, 2011, $1,028 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 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 released 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 September 30, 2011, the total market value
of these shares was $9,482.
|
Note V- Comprehensive Income | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Comprehensive Income (Loss) Note [Text Block] |
Note
V– Comprehensive Income
The
following table displays comprehensive income for the three
and nine months ended September 30, 2011 and 2010:
|
Note H - Marketable Securities (Detail) (USD $) In Thousands | 3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2011 | Sep. 30, 2010 | |
Investment Income, Amortization of Premium | $ 234 | $ 320 | $ 898 | $ 822 |
Note B - Stock Split (Detail) (Stock Split B (Member)) | May 31, 2011 | May 05, 2011 |
---|---|---|
Stock Split B (Member) | ||
Stock Split Conversion Ratio | 3-for-2 | three-for-two |
Addtional Shares Issued Due To Stock Split | one | |
Common Stock Shares Owned Prior To Stock Split | two |
Note T - Consolidated Variable Interest entity | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2011 | |||||||||||||||||||||||||||||||||||||||||
Variable Interest Entity, Qualitative or Quantitative Information, Nature of VIE |
Note
T – 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 September 30, 2011:
|
Note L - Revenue Recognition | 9 Months Ended |
---|---|
Sep. 30, 2011 | |
Revenue Recognition, Policy [Policy Text Block] |
Note
L– 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. The Company licenses its 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. 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 C - Recently Adopted Accounting Standards | 9 Months Ended |
---|---|
Sep. 30, 2011 | |
New Accounting Pronouncement or Change in Accounting Principle, Description |
Note
C – Recently Adopted Accounting Standards
In
September 2011, the FASB issued Accounting Standards Update
No. 2011-08, “Intangibles – Goodwill and
Other” (“ASU
2011-08”).
Under ASU 2011-08, when testing goodwill for impairment, an
entity has the option to first assess qualitative factors to
determine whether the existence of events or circumstances
leads to a determination that it is more likely than not (a
likelihood of more than 50%) that the fair value of a
reporting unit is less than its carrying amount. If an entity
believes, as a result of its qualitative assessment that the
fair value of a reporting unit is less than its carrying
amount, performing the current two-step impairment test is
not required. The guidance also includes a number of events
and circumstances that an entity should consider in
conducting the qualitative assessment. ASU 2011-08 is
effective for annual and interim goodwill impairment tests
performed for fiscal years beginning after December 15, 2011.
Early adoption is permitted if an entity has not yet issued
financial statements for the most recent annual or interim
period, provided the entity has not yet performed its annual
impairment test. We do not expect this guidance to have a
material impact on our financial statements..
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. Regardless of which option is selected, 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 October 2011, the FASB announced plans to
defer the presentation of items that are reclassified from
other comprehensive income to net income alongside their
respective components of net income and other comprehensive
income.
Note
C – Recently Adopted Accounting Standards
(continued)
May
2011, the FASB issued ASU No. 2011-04 “Amendments to
Achieve Common Fair Value Measurement and Disclosure
Requirements” (“ASU No. 2011-04”) under
GAAP and under 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 No. 2010-28”). ASU No. 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 No. 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.
|
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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] |
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Fair Value Disclosures [Text Block] |
Note
I – Fair Value Measurement
The
accounting guidance under Accounting Standards Codification
(“ASC”) “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 subject to fair value
measurements as of September 30, 2011 are as follows:
Note
I – 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 F), 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 F), 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 S), 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 S). 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 S). 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 S). 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.
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Note N - Sales Deductions | 9 Months Ended |
---|---|
Sep. 30, 2011 | |
Revenue Recognition, Allowances [Policy Text Block] |
Note
N– 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.
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Note J - Fair Value of Financial Instruments | 9 Months Ended |
---|---|
Sep. 30, 2011 | |
Fair Value of Financial Instruments, Policy [Policy Text Block] |
Note
J– Fair Value of Financial Instruments
The
carrying value of certain financial instruments such as
accounts receivable, due from factors 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.
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Note R - Stock-Based Compensation (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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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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Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Method Used |
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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 - Marketable Securities | 9 Months Ended |
---|---|
Sep. 30, 2011 | |
Marketable Securities [Text Block] |
Note
H– 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 nine-month
periods ended September 30, 2011, the amortization of bond
premiums totals $234 and $898, respectively, compared to $320
and $822 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.
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Note R - Stock-Based Compensation (Detail) - (Table 4) (USD $) | 9 Months Ended | |
---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | |
Expected volatility | 47.3% to 48.7% | 47.2% to 52.4% |
Risk-free interest rate | 0.61% to 1.78% | 1.08% 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) | $ 10.91 | $ 8.45 |
Note A - Basis of Reporting | 9 Months Ended |
---|---|
Sep. 30, 2011 | |
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 nine-month
periods ended September 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 - Use of Estimates | 9 Months Ended |
---|---|
Sep. 30, 2011 | |
Use of Estimates, Policy [Policy Text Block] |
Note
D – 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.
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Note F - Notes Receivable (Detail) (Note Receivable From Bakers [Member], USD $) In Thousands, except Share data, unless otherwise specified | Sep. 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 | 70 | |
Note Receivable Net | $ 4,074 |
Note I - Fair Value Measurement (Tables) | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block] |
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Note U - Goodwill and Intangible Assets (Detail) - (Table 1) (USD $) In Thousands | 9 Months Ended |
---|---|
Sep. 30, 2011 | |
Wholesale Footwear [Member] | |
Balance at January 1, 2011 | $ 1,547 |
Acquisition of Topline | 18,773 |
Balance at September 30, 2011 | 20,320 |
Wholesale Accessories [Member] | |
Balance at January 1, 2011 | 31,565 |
Acquisition of Cejon | 17,590 |
Balance at September 30, 2011 | 49,155 |
Retail [Member] | |
Balance at January 1, 2011 | 5,501 |
Acquisition of Cejon | 0 |
Acquisition of Topline | 0 |
Balance at September 30, 2011 | 5,501 |
Net Carrying Amount [Member] | |
Balance at January 1, 2011 | 38,613 |
Acquisition of Cejon | 17,590 |
Acquisition of Topline | 18,773 |
Balance at September 30, 2011 | $ 74,976 |
Note U - Goodwill and Intangible Assets (Detail) - (Table 3) (USD $) In Thousands | 9 Months Ended |
---|---|
Sep. 30, 2011 | |
2011 (remaining three months) | $ 913 |
2012 | 2,993 |
2013 | 2,993 |
2014 | 2,926 |
2015 | 2,742 |
Thereafter | 10,371 |
[FiniteLivedIntangibleAssetsFutureAmortizationExpense] | $ 22,938 |
Note R - Stock-Based Compensation (Detail) - (Table 3) (USD $) In Thousands | 3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2011 | Sep. 30, 2010 | |
Proceeds from stock options exercised | $ 520 | $ 485 | $ 4,005 | $ 2,398 |
Intrinsic value of stock options exercised | $ 1,062 | $ 808 | $ 8,861 | $ 5,422 |
Note X - Operating Segment Information (Detail) - (Table 2) (USD $) In Thousands | 3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2011 | Sep. 30, 2010 | |
Domestic | $ 297,873 | $ 172,334 | $ 650,408 | $ 448,993 |
International | 16,014 | 11,784 | 38,386 | 25,397 |
Total | $ 313,887 | $ 184,118 | $ 688,794 | $ 474,390 |
Note E - Due To and From Factor | 9 Months Ended |
---|---|
Sep. 30, 2011 | |
Due ToAnd From Factor |
Note
E–
Due
To and 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 G - Note Receivable - Related Party (Detail) (USD $) In Thousands, except Share data, unless otherwise specified | 2 Months Ended | 4 Months Ended | 10 Months Ended | 21 Months Ended | 30 Months Ended | 34 Months Ended | 51 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jul. 12, 2010 | Sep. 30, 2011 | May 31, 2011 | Mar. 31, 2009 | Sep. 30, 2011 | May 03, 2010 | Sep. 30, 2011 | Dec. 31, 2010 | Sep. 30, 2010 | Jun. 25, 2007 | May 03, 2010
Stock Split A (Member) | May 31, 2011
Stock Split B (Member) | May 05, 2011
Stock Split B (Member) | |
Notes Receivable, Related Parties, Noncurrent (in Dollars) | $ 4,028 | $ 4,028 | $ 4,028 | $ 3,849 | $ 3,791 | $ 3,000 | |||||||
Related Party Transaction, Rate | 8.00% | 6.00% | |||||||||||
Interest Income Related Party (in Dollars) | 1,028 | ||||||||||||
Stock Split Conversion Ratio | 3-for-2 | 3-for-2 | three-for-two | ||||||||||
Related Party Shares Pledged As Collateral | 765,000 | 315,000 | 210,000 | 510,000 | |||||||||
Shares Released Related Party Transaction | 555,000 | ||||||||||||
Market Value Shares Pledged As Collateral Related Party (in Dollars) | $ 6,798 | $ 9,482 | $ 9,482 | $ 9,482 |
Note W - Commitments, Contingencies and Other | 9 Months Ended | ||||||||||||||||||
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Sep. 30, 2011 | |||||||||||||||||||
Commitments and Contingencies Disclosure [Text Block] |
Note
W – Commitments, Contingencies and Other
Legal
proceedings:
Note
W – Commitments, Contingencies and Other
(continued)
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Note W - Commitments, Contingencies and Other (Detail) (USD $) In Thousands | Jun. 30, 2011 | Sep. 30, 2010 | Jun. 30, 2010 | Dec. 31, 2009 | Sep. 30, 2007 |
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Estimated Litigation Liability | $ 2,750 | $ 1,000 | |||
Litigation Settlement | 1,968 | ||||
Loss Contingency, Estimate of Possible Loss | $ 1,248 | $ 3,045 | $ 1,400 |
Note S - Acquisitions (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Schedule of Purchase Price Allocation [Table Text Block] |
|
Note F - Notes Receivable (Detail) - (Table) (USD $) In Thousands | Sep. 30, 2011 |
---|---|
Total | $ 7,318 |
Note Receivable From Bakers [Member] | |
Due from | 4,074 |
Note Receivable From Betsey Johnson [Member] | |
Due from | $ 3,244 |
Note F - Notes Receivable (Tables) | 6 Months Ended | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2011 | ||||||||||||||||
Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block] |
|
Note M - Taxes Collected From Customers | 9 Months Ended |
---|---|
Sep. 30, 2011 | |
Revenue Recognition, Excise and Sales Taxes |
Note
M– 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 S - 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 |
Trade name | 4,100 | ||
Fixed assets | 292 | 2,404 | |
Trade name | 27,065 | 16,600 | |
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 | 17,590 | 18,773 | 14,300 |
Net assets acquired | $ 52,608 | $ 62,328 | $ 25,119 |
Note V- Comprehensive Income (Detail) - (Table 1) (USD $) In Thousands | 3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2011 | Sep. 30, 2010 | |
Net income | $ 31,868 | $ 22,916 | $ 73,415 | $ 58,100 |
Unrealized gains (losses) on marketable securities | (644) | 1,090 | (232) | 1,746 |
Comprehensive income, net of income taxes | 31,224 | 24,006 | 73,183 | 59,846 |
Comprehensive loss attributable to the noncontrolling interest | 43 | 132 | ||
Comprehensive net income attributable to Steven Madden, Ltd. | $ 31,267 | $ 24,006 | $ 73,315 | $ 59,846 |
Note F - Notes Receivable | 9 Months Ended | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2011 | ||||||||||||||||
Loans, Notes, Trade and Other Receivables Disclosure [Text Block] |
Note
F – Notes Receivable
As
of September 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 September 30, 2011, the total amount of the
discount amortized was $70, bringing the value of the note to
$4,074.
|
Note P - Income Taxes | 9 Months Ended |
---|---|
Sep. 30, 2011 | |
Income Tax Disclosure [Text Block] |
Note
P – Income Taxes
The
Company’s effective income tax rate for the nine months
ended September 30, 2011 and 2010 was 38.8% and 40.2%,
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 X - Operating Segment Information (Detail) - (Table 1) (USD $) In Thousands | 3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2011 | Sep. 30, 2010 | |
Net sales to external customers | $ 313,887 | $ 184,118 | $ 688,794 | $ 474,390 |
Gross profit | 109,453 | 77,508 | 262,680 | 206,294 |
Commissions and licensing fees - net | 5,649 | 6,587 | 14,648 | 18,000 |
Income (loss) from operations | 50,508 | 37,388 | 115,151 | 94,300 |
Segment assets | 651,014 | 430,014 | 651,014 | 430,014 |
Capital expenditures | 6,273 | 1,048 | 12,246 | 2,280 |
Wholesale Footwear [Member] | ||||
Net sales to external customers | 211,223 | 123,251 | 468,204 | 310,176 |
Gross profit | 66,652 | 48,362 | 159,315 | 123,929 |
Income (loss) from operations | 31,616 | 27,503 | 73,713 | 65,045 |
Segment assets | 374,329 | 302,842 | 374,329 | 302,842 |
Wholesale Accessories [Member] | ||||
Net sales to external customers | 67,030 | 29,801 | 119,480 | 75,161 |
Gross profit | 21,973 | 11,095 | 42,213 | 29,308 |
Income (loss) from operations | 10,974 | 5,043 | 18,620 | 12,169 |
Segment assets | 157,369 | 72,078 | 157,369 | 72,078 |
Total Wholesale [Member] | ||||
Net sales to external customers | 278,253 | 153,052 | 587,684 | 385,337 |
Gross profit | 88,625 | 59,457 | 201,528 | 153,237 |
Income (loss) from operations | 42,590 | 32,546 | 92,333 | 77,214 |
Segment assets | 531,698 | 374,920 | 531,698 | 374,920 |
Capital expenditures | 4,558 | 337 | 8,195 | 814 |
Retail [Member] | ||||
Net sales to external customers | 35,634 | 31,066 | 101,110 | 89,053 |
Gross profit | 20,828 | 18,051 | 61,152 | 53,057 |
Income (loss) from operations | 2,269 | (1,745) | 8,170 | (914) |
Segment assets | 69,242 | 42,964 | 69,242 | 42,964 |
Capital expenditures | 1,715 | 711 | 4,051 | 1,466 |
First Cost Member | ||||
Commissions and licensing fees - net | 3,318 | 5,617 | 8,605 | 14,976 |
Income (loss) from operations | 3,318 | 5,617 | 8,605 | 14,976 |
Segment assets | 50,074 | 12,130 | 50,074 | 12,130 |
Licensing [Member] | ||||
Commissions and licensing fees - net | 2,331 | 970 | 6,043 | 3,024 |
Income (loss) from operations | $ 2,331 | $ 970 | $ 6,043 | $ 3,024 |
Note E - Due To and From Factor (Detail) (USD $) In Millions | 9 Months Ended |
---|---|
Sep. 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 X - Operating Segment Information | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Segment Reporting Disclosure [Text Block] |
Note
X– 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 website, 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 Licensing 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
X – Operating Segment Information (continued)
Note
X – Operating Segment Information (continued)
Revenues
by geographic area for the three- and nine-month periods
ended September 30 are as follows:
|
Note Q - Net Income Per Share of Common Stock | 9 Months Ended |
---|---|
Sep. 30, 2011 | |
Earnings Per Share [Text Block] |
Note
Q–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.
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 treasury stock at the average
market price during the period, and (b) the vesting of
granted 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 the three- and nine-month periods ended
September 30, 2011, options to purchase 19,000 and 169,000
shares, respectively, 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 177,100 shares of the Company’s common
stock that have been excluded from the calculation for both
the three and nine months ended September 30, 2010.
|
Note I - Fair Value Measurement (Detail) (USD $) | Aug. 26, 2010
Note Receivable From Bakers [Member] | Mar. 31, 2011
Big Buddha Acquisition [Member] |
---|---|---|
Unregistered Shares Of Common Stock Acquired | 1,844,860 | |
Contingent Liability Payment (in Dollars) | $ 3,603 |
Note S - Acquisitions | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Business Combination Disclosure [Text Block] |
Note
S – 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
September 30, 2011, the Company estimates the fair value of
the contingent consideration to be $23,500.
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 $517 in acquisition related
costs applicable to the Cejon transaction during the
nine-month period ended September 30, 2011. These expenses
are included in operating expenses in the Company’s
Condensed Consolidated Statements of Income.
Note
S – Acquisitions (continued)
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
September 30, 2011, the Company estimates the fair value of
the contingent consideration to be $6,200.
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 $477 in acquisition related
costs applicable to the Topline transaction during the period
ended September 30, 2011. These expenses are included in
operating expenses in the Company’s Condensed
Consolidated Statements of Income.
Note
S – Acquisitions (continued)
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”). In
connection with the transaction, the Company also received a
10%, non-voting membership interest in Betsey Johnson.
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 September 30, 2011, $244 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.
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.
Note
S – Acquisitions (continued)
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.
|
Note B - Stock Split | 9 Months Ended |
---|---|
Sep. 30, 2011 | |
Stockholders' Equity Note, Stock Split |
Note
B – Stock
Split
On
May 5, 2011, the Company’s Board of Directors announced
a three-for-two stock split of the Company’s
outstanding shares of common stock, 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.
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Note K - Inventories | 9 Months Ended |
---|---|
Sep. 30, 2011 | |
Inventory, Policy [Policy Text Block] |
Note
K– 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.
|
Note U - Goodwill and Intangible Assets (Detail) - (Table 2) (USD $) In Thousands | Sep. 30, 2011 |
---|---|
Trade Names [Member] | |
Estimated Lives | 6-10 years |
Cost Basis | $ 4,591 |
Accumulated amortization | 1,062 |
Net Carrying Amount | 3,529 |
Customer Lists [Member] | |
Estimated Lives | 10 years |
Cost Basis | 22,834 |
Accumulated amortization | 4,428 |
Net Carrying Amount | 18,406 |
Licensing Agreements [Member] | |
Estimated Lives | 3-6 years |
Cost Basis | 5,600 |
Accumulated amortization | 5,469 |
Net Carrying Amount | 131 |
Noncompete Agreements [Member] | |
Estimated Lives | 5 years |
Cost Basis | 1,985 |
Accumulated amortization | 1,113 |
Net Carrying Amount | 872 |
Other Intangible Assets [Member] | |
Estimated Lives | 3 years |
Cost Basis | 14 |
Accumulated amortization | 14 |
Total [Member] | |
Cost Basis | 35,024 |
Accumulated amortization | 12,086 |
Net Carrying Amount | 22,938 |
Total [Member] | |
Cost Basis | 107,866 |
Accumulated amortization | 12,086 |
Net Carrying Amount | 95,780 |
Trademarks [Member] | |
Estimated Lives | indefinite |
Cost Basis | 72,842 |
Net Carrying Amount | $ 72,842 |
Note T - Consolidated Variable Interest entity (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||
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Variable Interest Entity, Classification of Carrying Amount, Assets and Liabilities, Net |
|
Note O - Cost of Sales | 9 Months Ended |
---|---|
Sep. 30, 2011 | |
Cost of Sales, Policy [Policy Text Block] |
Note
O– 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 V- Comprehensive Income (Tables) | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Comprehensive Income (Loss) [Table Text Block] |
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