Steven Madden, Ltd. a leading designer, wholesaler and marketer of fashion footwear for women, men, and children today announced that it has purchased a specialized insurance product, a loss mitigation policy, which will provide coverage that the Company believes is sufficient to cover all reasonably anticipated damages and legal costs arising out of all lawsuits related to the June 2000 federal indictment of Steven Madden, the Company's former Chief Executive Officer. The specialized insurance product was purchased for $6.95 million in cash from American International Group, Inc. (AIG) to supplement the Company's existing policy with AIG. The Company confirms that excluding the impact of the payment for the loss mitigation policy, fourth quarter results will be in line with both its previously provided expectations and the current consensus analyst estimates. The Company will incur a one-time charge of $6.95 million, or approximately $0.30 - $0.32 per diluted share after tax, in the fourth quarter ended December 31, 2001. Jamieson Karson, Chief Executive Officer of Steven Madden, Ltd., commented, "After a thorough analysis, we concluded that purchasing the loss mitigation coverage effectively eliminates any potential recovery against the Company with respect to these lawsuits and, as a result, resolves a difficult chapter in our Company's history. We believe that this will allow our Company and management team to move forward unhindered by the risk of potentially costly legal proceedings and enables us to focus entirely on growing the business." The Company intends to report its fourth quarter and year-end results on Thursday, February 28, 2002 before the market opens, with a conference call to follow at 10:00 AM Eastern Time.
Steven Madden, Ltd. designs and markets fashion-forward footwear for women, men and children. The shoes are sold through Steve Madden Retail Stores, Department Stores, Apparel and Footwear Specialty Stores, and on-line at http://www.stevemadden.com, http://www.stevies.com, and http://www.stevemaddenmens.com. The Company has several licenses for the Steve Madden & Stevies brands -- including outerwear, leather sportswear, eyewear, hosiery, watches, handbags, and belts -- owns and operates two retail stores under its David Aaron brand, and is the licensee for l.e.i. Footwear.
Statements in this press release that are not statements of historical or current fact constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other unknown factors that could cause the actual results of the Company to be materially different from the historical results or from any future results expressed or implied by such forward-looking statements. In addition to statements which explicitly describe such risks and uncertainties readers are urged to consider statements labeled with the terms "believes," "belief," "expects," "intends," "anticipates" or "plans" to be uncertain and forward-looking. The forward-looking statements contained herein are also subject generally to other risks and uncertainties that are described from time to time in the Company's reports and registration statements filed with the Securities and Exchange Commission.
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