NEW YORK
(State or other jurisdiction
of incorporation)
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1-16497
(Commission File Number)
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13-2595932
(I.R.S. Employer
Identification No.)
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650 From Road, Suite 375
Paramus, NJ
(Address of principal executive offices)
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07652-3556
(Zip Code)
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ITEM 2.02.
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RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
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ITEM 9.01.
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FINANCIAL STATEMENTS AND EXHIBITS.
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(d)
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Exhibits.
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Exhibit No.
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Description
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99.1
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Press Release issued June 2, 2011 announcing results for the first quarter ended April 30, 2011.
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MOVADO GROUP, INC.
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|||
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By:
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/s/ Timothy F. Michno | |
Name: Timothy F. Michno | |||
Title: General Counsel | |||
APPROVED BY:
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Rick Coté
President and Chief Operating Officer
201-267-8000
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CONTACT:
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FD
Leigh Parrish/Stephanie Rich
212-850-5600
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●
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Net sales in the first quarter of fiscal 2012 increased 23.4% to $89.9 million compared to $72.8 million in the first quarter of fiscal 2011 driven by growth in every brand category.
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●
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Gross profit in the first quarter of fiscal 2012 was $48.6 million, or 54.1% of sales, compared to $38.5 million, or 52.9% of sales, in the first quarter last year. This increase is primarily the result of a shift in channel and product mix.
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●
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Operating expenses increased $3.4 million, or 7.8%, to $47.0 million compared to $43.6 million in the first quarter last year.
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●
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Operating income increased to $1.6 million in the first quarter of fiscal 2012 compared to operating loss of $5.1 million in the same period last year.
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●
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The Company recorded a tax provision in the first quarter of fiscal 2012 of $0.7 million, which equates to an effective tax rate of 58.3%. The effective tax rate for the quarter is impacted by the application of guidelines related to accounting for income taxes in interim periods.
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●
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On a GAAP basis, income from continuing operations was $0.5 million, or $0.02 per diluted share, in the first quarter of fiscal 2012 compared to loss from continuing operations of $6.4 million, or $0.26 per diluted share, in the first quarter of fiscal 2011.
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●
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Excluding a tax provision with a non-cash deferred tax expense of $2.5 million, or $0.10 per diluted share, recorded in the first quarter of the prior year, adjusted loss from continuing operations for the first quarter of the prior year was $4.0 million, or $0.16 per diluted share (see attached table for reconciliation of GAAP to non-GAAP measures). The first quarter of fiscal 2012 did not include any special items.
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●
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Net income for the first quarter of fiscal 2012 was $0.5 million, or $0.02 per diluted share, compared to net loss for the first quarter of fiscal 2011 of $12.4 million, or $0.50 per diluted share, including the results of discontinued operations of $6.0 million, or $0.24 per diluted share.
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●
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EBITDA in the first quarter of fiscal 2012 increased to $4.5 million compared to EBITDA loss of $1.6 million in the first quarter of fiscal 2011.
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Three Months Ended
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||||||||
April 30,
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||||||||
2011
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2010 (1)
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|||||||
Continuing Operations:
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||||||||
Net sales
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$ | 89,854 | $ | 72,804 | ||||
Cost of sales
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41,231 | 34,306 | ||||||
Gross profit
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48,623 | 38,498 | ||||||
Selling, general and administrative expenses
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47,043 | 43,641 | ||||||
Operating income / (loss)
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1,580 | (5,143 | ) | |||||
Interest expense
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(383 | ) | (672 | ) | ||||
Interest income
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29 | 27 | ||||||
Income / (loss) from continuing operations before income taxes
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1,226 | (5,788 | ) | |||||
Provision for income taxes
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715 | 417 | ||||||
Income / (loss) from continuing operations
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511 | (6,205 | ) | |||||
Discontinued Operations:
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||||||||
Loss from discontinued operations, net of tax
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- | (5,972 | ) | |||||
Net income / (loss)
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511 | (12,177 | ) | |||||
Less: income attributed to noncontrolling interests
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20 | 222 | ||||||
Net income / (loss) attributed to Movado Group, Inc.
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$ | 491 | $ | (12,399 | ) | |||
Income / (loss) attributable to Movado Group, Inc.:
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||||||||
Income / (loss) from continuing operations, net of tax
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$ | 491 | $ | (6,427 | ) | |||
Loss from discontinued operations, net of tax
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- | (5,972 | ) | |||||
Net income / (loss)
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$ | 491 | $ | (12,399 | ) | |||
Per Share Information:
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||||||||
Income / (loss) from continuing operations attributed to Movado Group Inc.
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$ | 0.02 | $ | (0.26 | ) | |||
Loss from discontinued operations
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$ | 0.00 | $ | (0.24 | ) | |||
Net income / (loss) attributed to Movado Group, Inc.
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$ | 0.02 | $ | (0.50 | ) | |||
Weighted diluted average shares outstanding
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25,078 | 24,670 | ||||||
(1)
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Effective February 1, 2011, the Company changed its method of valuing its U.S. inventory to the average cost method. The comparative consolidated financial statements of the prior year have been adjusted to apply the new accounting method retroactively.
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Three Months Ended
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||||||||
April 30, | ||||||||
2011
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2010 (1)
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|||||||
Continuing Operations:
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||||||||
Operating income / (loss) (GAAP)
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$ | 1,580 | $ | (5,143 | ) | |||
Depreciation and amortization
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2,943 | 3,521 | ||||||
EBITDA (non-GAAP)
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$ | 4,523 | $ | (1,622 | ) | |||
Three Months Ended
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||||||||
April 30, | ||||||||
2011 | 2010 (1) | |||||||
Continuing Operations:
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||||||||
Income / (loss) attributed to Movado Group, Inc. (GAAP)
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$ | 491 | $ | (6,427 | ) | |||
Tax adjustments (2)
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- | 2,472 | ||||||
Adjusted income / (loss) attributed to Movado Group, Inc. (non-GAAP)
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$ | 491 | $ | (3,955 | ) | |||
Adjusted income / (loss) per share (non-GAAP)
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$ | 0.02 | $ | (0.16 | ) | |||
Weighted diluted average shares outstanding
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25,078 | 24,670 | ||||||
(1)
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Effective February 1, 2011, the Company changed its method of valuing its U.S. inventory to the average cost method. The comparative consolidated financial statements of the prior year have been adjusted to apply the new accounting method retroactively.
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(2)
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Actual taxes in prior period reflect a non-cash charge to record valuation allowances on certain of the Company's net deferred tax assets.
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April 30,
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January 31,
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April 30,
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||||||||||
2011
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2011 (1)
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2010 (1)
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||||||||||
ASSETS
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||||||||||||
Cash and cash equivalents
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$ | 109,256 | $ | 103,016 | $ | 62,020 | ||||||
Trade receivables, net
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60,610 | 59,768 | 59,228 | |||||||||
Inventories
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185,885 | 181,265 | 206,911 | |||||||||
Other current assets
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35,222 | 30,444 | 39,945 | |||||||||
Total current assets
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390,973 | 374,493 | 368,104 | |||||||||
Property, plant and equipment, net
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37,642 | 38,525 | 41,764 | |||||||||
Deferred income taxes
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8,282 | 8,317 | 12,561 | |||||||||
Other non-current assets
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23,120 | 22,522 | 30,348 | |||||||||
Total assets
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$ | 460,017 | $ | 443,857 | $ | 452,777 | ||||||
LIABILITIES AND EQUITY
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||||||||||||
Accounts payable
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$ | 21,168 | $ | 21,487 | $ | 18,759 | ||||||
Accrued liabilities
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38,731 | 39,734 | 35,621 | |||||||||
Deferred and current income taxes payable
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410 | 1,328 | 523 | |||||||||
Total current liabilities
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60,309 | 62,549 | 54,903 | |||||||||
Long-term debt
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- | - | 10,000 | |||||||||
Deferred and non-current income taxes payable
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7,174 | 6,960 | 7,944 | |||||||||
Other non-current liabilities
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18,618 | 17,869 | 22,668 | |||||||||
Noncontrolling interests
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2,455 | 2,280 | 2,005 | |||||||||
Shareholders' equity
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371,461 | 354,199 | 355,257 | |||||||||
Total liabilities and equity
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$ | 460,017 | $ | 443,857 | $ | 452,777 | ||||||
(1)
|
Effective February 1, 2011, the Company changed its method of valuing its U.S. inventory to the average cost method. The comparative consolidated financial statements of the prior year have been adjusted to apply the new accounting method retroactively.
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Three Months Ended | ||||||||
April 30, | ||||||||
2011
|
2010
|
|||||||
Cash flows provided by / (used in) operating activities:
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||||||||
Income /(loss) from continuing operations
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$ | 511 | $ | (6,205 | ) | |||
Depreciation and amortization
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2,943 | 3,521 | ||||||
Other non-cash adjustments
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539 | 460 | ||||||
Changes in working capital
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(657 | ) | (293 | ) | ||||
Changes in non-current assets and liabilities
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268 | (1,030 | ) | |||||
Cash provided by / (used in) continuing operating activities
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3,604 | (3,547 | ) | |||||
Cash used in discontinued operating activities
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(19 | ) | (2,328 | ) | ||||
Net cash provided by / (used in) operating activities
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3,585 | (5,875 | ) | |||||
Cash flows used in investing activities from continuing operations:
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||||||||
Capital expenditures
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(1,622 | ) | (1,480 | ) | ||||
Trademarks
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(24 | ) | (158 | ) | ||||
Net cash used in investing activities
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(1,646 | ) | (1,638 | ) | ||||
Cash flows (used in) / provided by financing activities:
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||||||||
Dividends Paid
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(746 | ) | - | |||||
Other Financing
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(71 | ) | 302 | |||||
Cash (used in) / provided by financing activities
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(817 | ) | 302 | |||||
Effect of exchange rate changes on cash
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5,118 | (1,744 | ) | |||||
Net change in cash
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6,240 | (8,955 | ) | |||||
Cash and cash equivalents at beginning of period
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103,016 | 70,975 | ||||||
Cash and cash equivalent at end of period
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$ | 109,256 | $ | 62,020 | ||||
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