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 May 27, 2015 announcing first quarter results for the period ended April 30, 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 $120.5 million compared to $120.9 million in the first quarter of fiscal 2015. Net sales on a constant dollar basis increased 5.0% compared to net sales for the fiscal 2015 first quarter. |
· | Gross profit was $62.4 million, or 51.8% of sales, compared to $65.2 million, or 53.9% of sales, in the first quarter last year. Adjusted gross profit for the first quarter of fiscal 2016, which excludes $0.7 million in charges related to operating efficiency initiatives and other items, was $63.1 million, or 52.4% of sales. The decline in adjusted gross margin percentage was primarily the result of the unfavorable impact of changes in foreign currency exchange rates partially offset by channel and product mix. |
· | Operating expenses were $55.6 million as compared to $54.2 million in the first quarter of last year. For the first quarter of fiscal 2016, adjusted operating expenses were $53.6 million, excluding $2.0 million of expenses related to operating efficiency initiatives and other items. The decrease in adjusted operating expenses was primarily the result of the impact of foreign currency exchange rates partially offset by an increase in compensation and benefits expense. |
· | Operating income was $6.9 million compared to $10.9 million in the same period last year. Adjusted operating income for the first quarter of fiscal 2016, excluding $2.7 million of expenses related to operating efficiency initiatives and other items, was $9.5 million. |
· | The Company recorded a tax provision of $3.1 million, which equates to an effective tax rate of 46.3%, as compared to a tax provision of $3.4 million, which equates to an effective tax rate of 31.6% in the first quarter last year. The adjusted effective tax rate for first quarter of fiscal 2016 was 34.6%. The increase in the adjusted effective tax rate in the first quarter of fiscal 2016 as compared to the prior year is primarily due to the tax impact of fluctuations in losses incurred by certain foreign operations. |
· | Net income was $3.6 million, or $0.15 per diluted share, compared to net income of $7.4 million, or $0.29 per diluted share in the same quarter last year. For the first quarter of fiscal 2016, adjusted net income was $6.2 million, or $0.25 per diluted share, excluding $2.5 million in expenses, net of tax, related to operating efficiency initiatives and other items. |
MOVADO GROUP, INC.
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CONSOLIDATED STATEMENTS OF OPERATIONS
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(In thousands, except per share data)
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(Unaudited)
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Three Months Ended
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April 30,
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2015
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2014
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Net sales
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$
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120,461
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$
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120,921
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Cost of sales
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58,012
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55,770
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Gross profit
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62,449
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65,151
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Operating expenses
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55,574
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54,230
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Operating income
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6,875
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10,921
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Interest expense
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(152
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(94
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)
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Interest income
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53
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35
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Income before income taxes
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6,776
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10,862
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Provision for income taxes
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3,135
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3,433
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Net income
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3,641
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7,429
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Less: Net income attributed to noncontrolling interests
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19
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64
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Net income attributed to Movado Group, Inc.
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$
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3,622
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$
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7,365
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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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0.15
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$
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0.29
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Weighted diluted average shares outstanding
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24,569
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25,696
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MOVADO GROUP, INC.
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GAAP AND NON-GAAP MEASURES
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(In thousands, except for percentage data)
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(Unaudited)
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As Reported
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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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April 30,
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As Reported
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Dollar
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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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120,461
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$
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120,921
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-0.4%
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5.0%
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MOVADO GROUP, INC.
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GAAP AND NON-GAAP MEASURES
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(In thousands, except per share data)
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(Unaudited)
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Net Sales |
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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Diluted Earnings
Per Share |
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Three Months Ended April 30, 2015
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As Reported (GAAP)
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$
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120,461
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$
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62,449
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$
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6,875
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$
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6,776
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$
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3,622
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$
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0.15
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Operating Efficiency Initiatives and Other Items (1)
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693
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2,670
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2,670
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2,536
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0.10
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Adjusted Results (Non-GAAP)
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$
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120,461
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$
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63,142
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$
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9,545
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$
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9,446
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$
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6,158
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$
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0.25
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Three Months Ended April 30, 2014
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As Reported (GAAP)
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$
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120,921
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$
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65,151
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$
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10,921
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$
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10,862
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$
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7,365
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$
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0.29
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MOVADO GROUP, INC.
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CONSOLIDATED BALANCE SHEETS
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(In thousands)
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(Unaudited)
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April 30,
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January 31,
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April 30,
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2015
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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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185,828
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$
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199,852
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$
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137,827
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Short-term investments
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-
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-
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34,063
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Trade receivables
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73,472
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74,106
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77,395
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Inventories
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183,904
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170,788
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184,443
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Other current assets
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43,960
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40,532
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47,228
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Total current assets
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487,164
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485,278
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480,956
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Property, plant and equipment, net
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44,354
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46,673
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46,806
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Deferred income taxes
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13,536
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13,550
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15,058
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Other non-current assets
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39,483
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37,522
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32,064
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Total assets
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$
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584,537
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$
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583,023
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$
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574,884
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LIABILITIES AND EQUITY
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Loan payable to bank
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$
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25,000
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$
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-
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$
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-
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Accounts payable
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25,647
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27,767
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25,644
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Accrued liabilities
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37,899
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30,933
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36,854
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Deferred and current income taxes payable
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1,352
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7,372
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5,777
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Total current liabilities
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89,898
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66,072
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68,275
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Deferred and non-current income taxes payable
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3,505
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3,470
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3,792
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Other non-current liabilities
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30,484
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29,196
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27,244
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Noncontrolling interests
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2,093
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2,076
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2,821
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Shareholders' equity
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458,557
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482,209
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472,752
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Total liabilities and equity
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$
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584,537
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$
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583,023
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$
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574,884
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MOVADO GROUP, INC.
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
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(In thousands)
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(Unaudited)
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Three Months Ended
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||||||||
April 30,
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2015
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2014
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Cash flows from operating activities:
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Net income
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$
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3,641
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$
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7,429
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Depreciation and amortization
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2,981
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3,022
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Other non-cash adjustments
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1,317
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1,876
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Operating efficiency initiatives and other items
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2,670
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-
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Changes in working capital
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(21,428
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)
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(24,606
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)
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Changes in non-current assets and liabilities
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(355
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)
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226
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Net cash (used in) operating activities
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(11,174
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(12,053
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Cash flows from investing activities:
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Capital expenditures
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(1,461
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(1,523
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Trademarks
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(94
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(20
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Net cash (used in) investing activities
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(1,555
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(1,543
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Cash flows from financing activities:
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Proceeds from bank borrowings
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25,000
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-
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Dividends paid
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(2,636
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)
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(2,523
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Stock repurchase
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(22,154
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(5,312
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Other financing
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(471
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(466
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)
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Net cash (used in) financing activities
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(261
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)
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(8,301
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Effect of exchange rate changes on cash and cash equivalents
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(1,034
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)
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2,065
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Net change in cash and cash equivalents
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(14,024
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)
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(19,832
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)
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Cash and cash equivalents at beginning of year
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199,852
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157,659
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Cash and cash equivalents at end of period
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$
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185,828
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$
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137,827
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