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, NEW JERSEY
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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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☐
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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☐
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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☐
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d-2(b))
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☐
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR 240.13e-4(c))
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Exhibit No.
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Name
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99.1
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Press Release issued August 27, 2015 announcing results for the second quarter ended July 31, 2015.
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MOVADO GROUP, INC.
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By:
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/s/ Timothy F. Michno | |
Name: |
Timothy F. Michno
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Title: |
General Counsel
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Exhibit No.
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Name
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99.1
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Press Release issued August 27, 2015 announcing results for the second quarter ended July 31, 2015. |
CONTACT: |
ICR, Inc.
Rachel Schacter/Allison Malkin
203-682-8200
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—
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Net sales increased 1.4% to $145.6 million compared to $143.6 million in the second quarter of fiscal 2015. Net sales on a constant dollar basis increased 6.1% compared to net sales in the second quarter of fiscal 2015.
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—
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Gross profit was $79.0 million, or 54.3% of sales, compared to $77.6 million, or 54.0% of sales, in the second quarter last year. The increase in gross margin percentage was due to channel and product mix, selective price increases and certain sourcing improvements, partially offset by the unfavorable impact of changes in foreign currency exchange rates.
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—
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Operating expenses increased $0.4 million, or 0.6%, to $60.8 million. This increase was primarily the result of an increase in compensation and benefit expenses as well as higher marketing expenses, partially offset by the favorable impact of foreign currency exchange rates.
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—
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Operating income increased to $18.2 million, or 12.5% of net sales, compared to operating income of $17.2 million, or 12.0% of net sales, in the second quarter of fiscal 2015.
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—
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The Company recorded a tax provision of $6.1 million, which equates to an effective tax rate of 33.8%, compared to an effective tax rate of 28.7% in the second quarter of fiscal 2015. The increase in the effective tax rate was primarily due to not recognizing tax benefits on losses incurred by certain foreign operations.
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—
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Net income was $12.1 million, or $0.50 per diluted share, compared to $12.2 million, or $0.47 per diluted share, in the second quarter of fiscal 2015.
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—
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Net sales increased 0.6% to $266.0 million compared to $264.5 million in the first six months of fiscal 2015. Net sales on a constant dollar basis increased 5.6% compared to net sales in the first six months of fiscal 2015.
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—
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Gross profit was $141.5 million, or 53.2% of sales, compared to $142.8 million, or 54.0% of sales in the same period last year. Adjusted gross profit for the first six months of fiscal 2016, which excludes $0.7 million in charges related to operating efficiency initiatives and other items in the first quarter of fiscal 2016, was $142.2 million, or 53.4% 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, selective price increases and certain sourcing improvements.
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—
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Operating expenses were $116.4 million as compared to $114.7 million in the first half of last year. For the first six months of fiscal 2016, adjusted operating expenses were $114.4 million, excluding $2.0 million of expenses related to operating efficiency initiatives and other items recorded in the first quarter. Operating expenses remained relatively flat due to the favorable impact of foreign currency exchange rates partially offset by an increase in compensation and benefit expenses as well as other higher miscellaneous operating costs.
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—
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Operating income was $25.1 million, or 9.4% of net sales, compared to operating income of $28.1 million, or 10.6% of net sales in the first six months of fiscal 2015. Adjusted operating income for the first half of fiscal 2016, excluding $2.7 million of expenses related to operating efficiency initiatives and other items recorded in the first quarter, was $27.8 million or 10.4% of net sales.
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—
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The Company recorded a tax provision in the first six months of fiscal 2016 of $9.2 million, which equates to an effective tax rate of 37.2% compared to an effective tax rate of 29.9% for the first six months of fiscal 2015. The adjusted effective tax rate for first half of fiscal 2016 was 34.1%.
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—
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Net income was $15.7 million, or $0.65 per diluted share, compared to $19.5 million, or $0.76 per diluted share, in the first six months of fiscal 2015. Adjusted net income for the first six months of fiscal 2016 was $18.2 million, or $0.75 per diluted share, excluding $2.5 million in expenses, net of tax, related to operating efficiency initiatives and other items in the first quarter of fiscal 2016.
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Three Months Ended
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Six Months Ended
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|||||||||||||||
July 31,
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July 31,
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|||||||||||||||
2015
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2014
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2015
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2014
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|||||||||||||
Net sales
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$
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145,569
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$
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143,591
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$
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266,030
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$
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264,512
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||||||||
Cost of sales
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66,531
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65,985
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124,543
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121,755
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||||||||||||
Gross profit
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79,038
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77,606
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141,487
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142,757
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||||||||||||
Operating expenses
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60,804
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60,438
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116,378
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114,668
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||||||||||||
Operating income
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18,234
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17,168
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25,109
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28,089
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||||||||||||
Interest expense
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(256
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)
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(100
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)
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(408
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)
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(194
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)
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||||||||
Interest income
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35
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11
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88
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46
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||||||||||||
Income before income taxes
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18,013
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17,079
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24,789
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27,941
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||||||||||||
Provision for income taxes
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6,080
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4,909
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9,216
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8,342
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||||||||||||
Net income
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11,933
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12,170
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15,573
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19,599
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||||||||||||
Less: Net (loss) / income attributed to noncontrolling interests
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(120
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)
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19
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(101
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)
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83
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||||||||||
Net income attributed to Movado Group, Inc.
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$
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12,053
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$
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12,151
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$
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15,674
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$
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19,516
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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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0.50
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$
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0.47
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$
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0.65
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$
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0.76
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Weighted diluted average shares outstanding
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23,904
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25,674
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24,230
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25,685
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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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||||||||||||||
July 31,
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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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145,569
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143,591
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1.4% |
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6.1% |
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||||||||||
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|||||||||||||||
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||||||||||||||
As Reported
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% Change
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|||||||||||||||
Six Months Ended
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% Change
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Constant
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||||||||||||||
July 31,
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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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266,030
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264,512
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0.6% |
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5.6% |
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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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EPS
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|||||||||||||||||||
Three Months Ended July 31, 2015
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||||||||||||||||||||||||
As Reported (GAAP)
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$
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145,569
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$
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79,038
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$
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18,234
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$
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18,013
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$
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12,053
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$
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0.50
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||||||||||||
Three Months Ended July 31, 2014
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||||||||||||||||||||||||
As Reported (GAAP)
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$
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143,591
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$
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77,606
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$
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17,168
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$
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17,079
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$
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12,151
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$
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0.47
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||||||||||||
Six Months Ended July 31, 2015
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||||||||||||||||||||||||
As Reported (GAAP)
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$
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266,030
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$
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141,487
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$
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25,109
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$
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24,789
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$
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15,674
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$
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0.65
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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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266,030
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$
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142,180
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$
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27,779
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$
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27,459
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$
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18,210
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$
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0.75
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||||||||||||
Six Months Ended July 31, 2014
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||||||||||||||||||||||||
As Reported (GAAP)
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$
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264,512
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$
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142,757
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$
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28,089
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$
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27,941
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$
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19,516
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$
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0.76
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(1)
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Related to a charge for severance, occupancy expenses and the write-off of certain fixed assets.
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July 31,
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January 31,
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July 31,
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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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188,012
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$
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199,852
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$
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169,649
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||||||
Trade receivables
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80,818
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74,106
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91,214
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|||||||||
Inventories
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188,515
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170,788
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195,331
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|||||||||
Other current assets
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37,962
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40,532
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41,018
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|||||||||
Total current assets
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495,307
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485,278
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497,212
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|||||||||
Property, plant and equipment, net
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42,723
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46,673
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46,141
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Deferred income taxes
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13,625
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13,550
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14,604
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Other non-current assets
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38,356
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37,522
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33,486
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Total assets
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$
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590,011
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$
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583,023
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$
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591,443
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LIABILITIES AND EQUITY
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Accounts payable
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$
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31,687
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$
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27,767
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$
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37,604
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||||||
Accrued liabilities
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38,182
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30,933
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40,334
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|||||||||
Deferred and current income taxes payable
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1,703
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7,372
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4,819
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|||||||||
Total current liabilities
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71,572
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66,072
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82,757
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|||||||||
Loans payable to bank
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40,000
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-
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-
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|||||||||
Deferred and non-current income taxes payable
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3,002
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3,470
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3,360
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|||||||||
Other non-current liabilities
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30,353
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29,196
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28,063
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|||||||||
Noncontrolling interests
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2,089
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2,076
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2,751
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|||||||||
Shareholders' equity
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442,995
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482,209
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474,512
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|||||||||
Total liabilities and equity
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$
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590,011
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$
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583,023
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$
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591,443
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Six Months Ended
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||||||||
July 31,
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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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15,573
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$
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19,599
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||||
Depreciation and amortization
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6,131
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6,097
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||||||
Other non-cash adjustments
|
3,364
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3,363
|
||||||
Operating efficiency initiatives and other items
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2,670
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-
|
||||||
Changes in working capital
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(25,748
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)
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(34,317
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)
|
||||
Changes in non-current assets and liabilities
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584
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(421
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)
|
|||||
Net cash provided by / (used in) operating activities
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2,574
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(5,679
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)
|
|||||
Cash flows from investing activities:
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||||||||
Capital expenditures
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(3,668
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)
|
(4,294
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)
|
||||
Proceeds from short-term investments
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-
|
33,736
|
||||||
Other investing
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(138
|
)
|
275
|
|||||
Net cash (used in) / provided by investing activities
|
(3,806
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)
|
29,717
|
|||||
Cash flows from financing activities:
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||||||||
Proceeds from bank borrowings
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50,000
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-
|
||||||
Repayments of bank borrowings
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(10,000
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)
|
-
|
|||||
Dividends paid
|
(5,239
|
)
|
(5,059
|
)
|
||||
Stock repurchase
|
(39,129
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)
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(7,684
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)
|
||||
Other financing
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(447
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)
|
1,312
|
|||||
Net cash (used in) financing activities
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(4,815
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)
|
(11,431
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)
|
||||
Effect of exchange rate changes on cash and cash equivalents
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(5,793
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)
|
(617
|
)
|
||||
Net change in cash and cash equivalents
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(11,840
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)
|
11,990
|
|||||
Cash and cash equivalents at beginning of year
|
199,852
|
157,659
|
||||||
Cash and cash equivalents at end of period
|
$
|
188,012
|
$
|
169,649
|