MOVADO GROUP, INC.
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(Exact name of registrant as specified in its charter)
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New York
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(State or other jurisdiction of incorporation)
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1-16497
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13-2595932
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(Commission File Number)
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(I.R.S. Employer Identification No.)
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650 From Road, Suite 375
Paramus, NJ
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07652-3556
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(Address of principal executive offices)
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(Zip Code)
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(201) 267-8000
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(Registrant’s Telephone Number, Including Area Code)
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NOT APPLICABLE
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(Former Name or Former Address, if Changed Since Last Report)
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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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Exhibit No.
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Description
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99.1
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Press Release issued March 31, 2015 announcing fourth quarter and fiscal year 2015 results for the periods ended January 31, 2015. |
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MOVADO GROUP, INC.
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By:
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/s/ Timothy F. Michno
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Name: Timothy F. Michno
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Title: General Counsel
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CONTACT: |
ICR, Inc.
Rachel Schacter/Allison Malkin
203-682-8200
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— | Net sales were $133.9 million compared to adjusted net sales of $140.1 million in the prior year period. Adjusted net sales for the fourth quarter of fiscal 2014 excluded the impact of the $7.8 million charge in the fourth quarter of fiscal 2014 for anticipated sales returns related to the ESQ reallocation strategy described above. Net sales on a constant dollar basis decreased 1.5% compared to adjusted net sales for the fiscal 2014 fourth quarter. |
— | Gross profit was $67.4 million, or 50.3% of sales, compared to adjusted gross profit $74.3 million, or 53.0% of sales last year. Fourth quarter fiscal 2014 gross profit excludes the charge to gross profit for anticipated sales returns and the write down of excess inventory related to the ESQ reallocation strategy, in addition to the duty refund in the fourth quarter of fiscal 2014. |
— | Operating expenses decreased $2.6 million or 4.3% to $57.3 million in the fourth quarter of fiscal 2015 from an adjusted $59.9 million in the fourth quarter last year. Adjusted operating expenses in the fourth quarter of fiscal 2014 excluded the $2.0 million pre-tax charge related to a contribution to the Movado Group Foundation and a $0.8 million write down of excess displays and point of sale materials related to the ESQ reallocation strategy. |
— | Operating income in the fourth quarter was $10.1 million compared to adjusted operating income of $14.4 million in the prior year period. |
— | Provision for income tax was $33,000 compared to an adjusted tax provision of $2.2 million in the fiscal 2014 fourth quarter. |
— | Net income was $10.1 million, or $0.40 per diluted share, compared to adjusted net income of $12.0 million, or $0.46 per diluted share, for the same period in the prior year. |
— | Net sales were $133.9 million compared to $132.3 million in the fourth quarter of fiscal 2014. Net sales on a constant dollar basis increased 4.3% compared to the fiscal 2014 fourth quarter. |
— | Gross profit was $67.4 million, or 50.3% of sales, compared to $69.3 million, or 52.4% of sales, in the fiscal 2014 fourth quarter. |
— | Operating expenses were $57.3 million, or 42.8% of net sales from $62.6 million, or 47.4% of net sales in the fourth quarter last year. |
— | Operating income totaled $10.1 million compared to operating income of $6.6 million in the fiscal 2014 fourth quarter. |
— | Provision for income tax was $33,000 compared to a tax benefit of $793,000 in the fiscal 2014 fourth quarter. |
— | Net income was $10.1 million, or $0.40 per diluted share compared to $7.2 million, or $0.28 per diluted share, in the fiscal 2014 fourth quarter. |
— | Net sales were $587.0 million compared to adjusted net sales of $578.1 million in fiscal 2014. In the fourth quarter of fiscal 2014, adjusted net sales excluded the impact of the $7.8 million charge for anticipated sales returns related to the ESQ reallocation strategy mentioned above. Net sales on a constant dollar basis increased 1.9% from adjusted net sales in fiscal year 2014. |
— | Gross profit was $310.0 million, or 52.8% of sales, compared to adjusted gross profit of $310.3 million, or 53.7% of sales, last year. Fiscal 2014 gross profit excludes the charge to gross profit for anticipated sales returns and the write down of excess inventory related to the ESQ reallocation strategy, in addition to the duty refund in the fourth quarter of fiscal 2014. |
— | Operating expenses increased $3.7 million or 1.6% to $238.5 million in fiscal 2015 from adjusted operating expenses of $234.8 million last year. Adjusted operating expenses in fiscal 2014 excluded the $2.0 million pre-tax charge related to a contribution to the Movado Group Foundation and a $0.8 million write down of excess displays and point of sale materials related to the ESQ reallocation strategy. |
— | Operating income for fiscal 2015 was $71.5 million as compared to adjusted operating income of $75.5 million for fiscal 2014. |
— | The effective tax rate for fiscal 2015 was 27.1% which compared to the adjusted effective tax rate of 27.8% in fiscal 2014. |
— | Net income was $51.8 million, or $2.02 per diluted share, for fiscal 2015 compared to adjusted net income of $53.6 million, or $2.07 per diluted share, for the prior year. |
— | Net sales were $587.0 million compared to $570.3 million in fiscal 2014. Net sales on a constant dollar basis increased 3.3% from fiscal 2014. |
— | Gross profit was $310.0 million, or 52.8% of sales, compared to $305.3 million, or 53.5% of sales in fiscal 2014. |
— | Operating expenses were $238.5 million, or 40.6% of net sales compared to $237.5 million, or 41.7% of net sales in fiscal 2014. |
— | Operating income increased to $71.5 million compared to operating income of $67.7 million in fiscal 2014. |
— | Provision for income taxes was $19.3 million compared to $17.4 million in fiscal 2014. |
— | Net income was $51.8 million, or $2.02 per diluted share, in fiscal 2015. This compares to net income of $50.9 million, or $1.97 per diluted share, in fiscal 2014. |
Three Months Ended
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Twelve Months Ended
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|||||||||||||||
January 31,
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January 31,
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|||||||||||||||
2015
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2014
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2015
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2014
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|||||||||||||
Net sales
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$
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133,911
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$
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132,259
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$
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586,980
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$
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570,255
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Cost of sales
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66,528
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63,005
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276,998
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264,994
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Gross profit
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67,383
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69,254
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309,982
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305,261
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Operating expenses
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57,318
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62,641
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238,495
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237,519
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Operating income
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10,065
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6,613
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71,487
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67,742
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Other income
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-
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-
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-
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1,526
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Interest expense
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(217
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)
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(142
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)
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(489
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)
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(436
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)
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Interest income
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69
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33
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166
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86
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||||||||||||
Income before income taxes
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9,917
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6,504
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71,164
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68,918
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Provision for / (benefit from) income taxes
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33
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(793
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)
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19,264
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17,373
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Net income
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9,884
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7,297
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51,900
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51,545
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Less: Net (loss) / income attributed to noncontrolling interests
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(167
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)
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104
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124
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668
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Net income attributed to Movado Group, Inc.
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$
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10,051
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$
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7,193
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$
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51,776
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$
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50,877
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Per Share Information:
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Net income attributed to Movado Group, Inc.
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$
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0.40
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$
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0.28
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$
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2.02
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$
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1.97
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Weighted diluted average shares outstanding
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25,326
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25,822
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25,581
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25,849
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As Reported
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% Change
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% Change
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|||||||||||||||
Three Months Ended
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% Change
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Constant
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Adjusted
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||||||||||||||
January 31,
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As Reported
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Dollar
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Constant Dollar (1)
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||||||||||||||
2015
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2014
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Total net sales
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$
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133,911
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$
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132,259
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1.2%
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4.3%
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-1.5%
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As Reported
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% Change
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% Change
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Twelve Months Ended
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% Change
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Constant
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Adjusted
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||||||||||||||
January 31,
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As Reported
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Dollar
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Constant Dollar (1)
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||||||||||||||
2015
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2014
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Total net sales
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$
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586,980
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$
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570,255
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2.9%
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3.3%
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1.9%
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(1)
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In the prior year, net sales were adjusted for a pre-tax charge of $7.8 million related to the ESQ reallocation strategy.
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Net Sales
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Gross Profit
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Operating Income
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Pre-tax Income
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Net Income
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Earnings Per Share
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Three Months Ended January 31, 2015
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As Reported (GAAP)
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$
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133,911
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$
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67,383
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$
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10,065
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$
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9,917
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$
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10,051
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$
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0.40
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Three Months Ended January 31, 2014
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As Reported (GAAP)
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$
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132,259
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$
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69,254
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$
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6,613
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$
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6,504
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$
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7,193
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$
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0.28
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Duty Refund (1)
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(2,500
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)
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(2,500
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)
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(2,500
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)
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(1,550
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)
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(0.06
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)
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Charitable Contribution (2)
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2,000
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2,000
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1,240
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0.05
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ESQ Strategy (3)
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7,800
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7,500
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8,263
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8,263
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5,123
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0.20
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Adjusted Results (Non-GAAP)
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$
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140,059
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$
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74,254
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$
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14,376
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$
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14,267
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$
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12,006
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$
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0.46
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* | |||||||||||
Twelve Months Ended January 31, 2015
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||||||||||||||||||||||||
As Reported (GAAP)
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$
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586,980
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$
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309,982
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$
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71,487
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$
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71,164
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$
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51,776
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$
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2.02
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Twelve Months Ended January 31, 2014
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As Reported (GAAP)
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$
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570,255
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$
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305,261
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$
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67,742
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$
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68,918
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$
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50,877
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$
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1.97
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||||||||||||
Duty Refund (1)
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(2,500
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)
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(2,500
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)
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(2,500
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)
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(1,550
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)
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(0.06
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)
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||||||||||||||
Charitable Contribution (2)
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2,000
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2,000
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1,240
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0.05
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||||||||||||||||||||
ESQ Strategy (3)
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7,800
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7,500
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8,263
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8,263
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5,123
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0.20
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||||||||||||||||||
Tax Adjustment (4)
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(1,000
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)
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(0.04
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)
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Building Sale (5)
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(1,526
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)
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(1,099
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)
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(0.04
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)
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Adjusted Results (Non-GAAP) (6)
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$
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578,055
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$
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310,261
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$
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75,505
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$
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75,155
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$
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53,591
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$
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2.07
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||||||||||||
(1)
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Reflects a duty refund on drawback claims filed to recover duty payments made by the Company in calendar years 2008 through 2011.
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(2)
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Reflects a contribution to the Movado Group Foundation.
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(3)
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Reflects a charge related to the Company’s decision to reduce the presence of ESQ Movado in certain retail doors while expanding the Movado brand offering. This charge consists of anticipated returns from affected customers and the write down of exceess inventory, displays and point of sale materials related to this strategy.
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(4)
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Reflects the release of liabilities for uncertain tax positions as a result of favorable U.S. and foreign audit settlements.
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(5)
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Reflects a gain on a sale of a building in Switzerland.
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(6)
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The adjusted tax rate for the twelve months ended January 31, 2014, was 27.8%.
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*
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The sum of the items may not equal the calculated total due to rounding.
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January 31,
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January 31,
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|||||||
2015
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2014
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|||||||
ASSETS
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||||||||
Cash and cash equivalents
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$
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199,852
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$
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157,659
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||||
Short-term investments
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-
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33,099
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||||||
Trade receivables
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74,106
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68,683
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||||||
Inventories
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170,788
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181,305
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||||||
Other current assets
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40,532
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44,564
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||||||
Total current assets
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485,278
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485,310
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||||||
Property, plant and equipment, net
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46,673
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47,796
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||||||
Deferred income taxes
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13,550
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14,891
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||||||
Other non-current assets
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37,522
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30,613
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||||||
Total assets
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$
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583,023
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$
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578,610
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||||
LIABILITIES AND EQUITY
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||||||||
Accounts payable
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$
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27,767
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$
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33,598
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||||
Accrued liabilities
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25,921
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29,118
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||||||
Accrued payroll and benefits
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5,012
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14,455
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||||||
Deferred and current income taxes payable
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7,372
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6,422
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||||||
Total current liabilities
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66,072
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83,593
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||||||
Deferred and non-current income taxes payable
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3,470
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3,518
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||||||
Other non-current liabilities
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29,196
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25,509
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||||||
Noncontrolling interests
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2,076
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2,686
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||||||
Shareholders’ equity
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482,209
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463,304
|
||||||
Total liabilities and equity
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$
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583,023
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$
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578,610
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Twelve Months Ended | ||||||||
January 31, | ||||||||
2015
|
2014
|
|||||||
Cash flows from operating activities:
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||||||||
Net income
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$
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51,900
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$
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51,545
|
||||
Depreciation and amortization
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12,469
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12,233
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||||||
Other non-cash adjustments
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15,675
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12,504
|
||||||
Changes in working capital
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(20,216
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)
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(18,945
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)
|
||||
Changes in non-current assets and liabilities
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(232
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)
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(2,821
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)
|
||||
Net cash provided by operating activities
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59,596
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54,516
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||||||
Cash flows from investing activities:
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||||||||
Capital expenditures
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(11,132
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)
|
(16,707
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)
|
||||
Proceeds from short-term investments
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33,736
|
-
|
||||||
Proceeds from sale of an asset held for sale
|
-
|
2,196
|
||||||
Short-term investments
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-
|
(33,099
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)
|
|||||
Long-term investments
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(1,200
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)
|
-
|
|||||
Other investing
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189
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(285
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)
|
|||||
Net cash provided by / (used in) investing activities
|
21,593
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(47,895
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)
|
|||||
Cash flows from financing activities:
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||||||||
Dividends paid
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(10,104
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)
|
(6,637
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)
|
||||
Stock repurchase
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(26,382
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)
|
(10,488
|
)
|
||||
Other financing
|
306
|
610
|
||||||
Net cash (used in) financing activities
|
(36,180
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)
|
(16,515
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)
|
||||
Effect of exchange rate changes on cash and cash equivalents
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(2,816
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)
|
(336
|
)
|
||||
Net change in cash and cash equivalents
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42,193
|
(10,230
|
)
|
|||||
Cash and cash equivalents at beginning of year
|
157,659
|
167,889
|
||||||
Cash and cash equivalents at end of year
|
$
|
199,852
|
$
|
157,659
|
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