Movado Group, Inc. Announces First Quarter Results
~ First Quarter Revenue of
~ Updates Full Year Outlook to Sales of
~ Board Declares Quarterly Dividend ~
As expected, during the first quarter of fiscal 2017, the Company
recorded a
First Quarter Fiscal 2017 Results (see attached table for GAAP and non-GAAP measures)
-
Net sales were
$114.1 million compared to$120.5 million in the first quarter of fiscal 2016. Net sales on a constant dollar basis decreased 5.0% compared to net sales for the fiscal 2016 first quarter. -
Gross profit was
$61.3 million , or 53.8% of sales, compared to$62.4 million , or 51.8% 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 increase from adjusted gross margin percentage was primarily the result of the favorable impact of changes in foreign currency exchange rates as well as channel and product mix, selective price increases and certain sourcing improvements. -
Operating expenses were
$55.9 million as compared to$55.6 million in the first quarter of last year. For the first quarter of fiscal 2017, adjusted operating expenses were$54.1 million , which excludes$1.8 million of expenses related to the COO’s retirement in fiscal 2017. For the first quarter of fiscal 2016, adjusted operating expenses were$53.6 million , which excludes$2.0 million of expenses related to operating efficiency initiatives and other items. The increase in adjusted operating expenses was primarily the result of the unfavorable effect of fluctuations in foreign currency rates. -
Operating income was
$5.4 million compared to$6.9 million in the same period last year. Adjusted operating income for the first quarter of fiscal 2017, which excludes$1.8 million of expenses related to the COO’s retirement in fiscal 2017, was$7.2 million . Adjusted operating income for the first quarter of fiscal 2016, which excludes$2.7 million of expenses related to operating efficiency initiatives and other items, was$9.5 million . -
The Company recorded a tax provision of
$1.7 million as compared to a tax provision of$3.1 million , in the first quarter last year. Based upon adjusted pre-tax income, the adjusted tax provision for income tax was$2.4 million compared to an adjusted tax provision for income tax of$3.3 million in the first quarter of fiscal 2016. -
Net income was
$3.3 million , or$0.14 per diluted share, compared to net income of$3.6 million , or$0.15 per diluted share in the same quarter last year. For the first quarter of fiscal 2017, adjusted net income was$4.4 million , or$0.19 per diluted share, which excludes$1.1 million in expenses, net of tax, related to the COO’s retirement in fiscal 2017 compared to adjusted net income of$6.2 million , or$0.25 per diluted share, which excludes$2.5 million in expenses, net of tax, related to operating efficiency initiatives and other items in the first quarter of fiscal 2016.
Updated Fiscal 2017 Outlook
The Company is updating its outlook for fiscal 2017. In fiscal 2017, the
Company anticipates that net sales will be in a range of
Quarterly Dividend and Share Repurchase Program
The Company announced that on
During the first quarter of fiscal 2017, the Company repurchased
approximately 34,000 shares under its share repurchase program. As of
Conference Call
The Company’s management will host a conference call and audio webcast
to discuss its results today,
In this release, the Company presents certain financial measures that
are not calculated according to generally accepted accounting principles
in
This press release contains certain forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995. The
Company has tried, whenever possible, to identify these forward-looking
statements using words such as “expects,” “anticipates,” “believes,”
“targets,” “goals,” “projects,” “intends,” “plans,” “seeks,”
“estimates,” “may,” “will,” “should” and variations of such words and
similar expressions. Similarly, statements in this press release that
describe the Company's business strategy, outlook, objectives, plans,
intentions or goals are also forward-looking statements. Accordingly,
such forward-looking statements involve known and unknown risks,
uncertainties and other factors that could cause the Company's actual
results, performance or achievements and levels of future dividends to
differ materially from those expressed in, or implied by, these
statements. These risks and uncertainties may include, but are not
limited to general economic and business conditions which may impact
disposable income of consumers in
MOVADO GROUP, INC. | |||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||
(In thousands, except per share data) | |||||||||||||
(Unaudited) | |||||||||||||
Three Months Ended | |||||||||||||
April 30, | |||||||||||||
2016 | 2015 | ||||||||||||
Net sales | $ | 114,063 | $ | 120,461 | |||||||||
Cost of sales | 52,746 | 58,012 | |||||||||||
Gross profit | 61,317 | 62,449 | |||||||||||
Operating expenses | 55,939 | 55,574 | |||||||||||
Operating income | 5,378 | 6,875 | |||||||||||
Interest expense | (375 | ) | (152 | ) | |||||||||
Interest income | 57 | 53 | |||||||||||
Income before income taxes | 5,060 | 6,776 | |||||||||||
Provision for income taxes | 1,723 | 3,135 | |||||||||||
Net income | 3,337 | 3,641 | |||||||||||
Less: Net income attributed to noncontrolling interests | 29 | 19 | |||||||||||
Net income attributed to Movado Group, Inc. | $ | 3,308 | $ | 3,622 | |||||||||
Per Share Information: | |||||||||||||
Net income attributed to Movado Group, Inc. | $ | 0.14 | $ | 0.15 | |||||||||
Weighted diluted average shares outstanding | 23,349 | 24,569 |
MOVADO GROUP, INC. | |||||||||||||||
GAAP AND NON-GAAP MEASURES | |||||||||||||||
(In thousands, except for percentage data) | |||||||||||||||
(Unaudited) | |||||||||||||||
As Reported | % Change | ||||||||||||||
Three Months Ended | % Change | Constant | |||||||||||||
April 30, | As Reported | Dollar | |||||||||||||
2016 | 2015 | ||||||||||||||
Total Net sales | $ | 114,063 | $ | 120,461 | -5.3 | % | -5.0 | % |
MOVADO GROUP, INC. | ||||||||||||||||||||||||
GAAP AND NON-GAAP MEASURES | ||||||||||||||||||||||||
(In thousands, except per share data) | ||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||
|
||||||||||||||||||||||||
Net Sales | Gross Profit | Operating Income | Pre-tax Income |
Net Income Attributed |
EPS | |||||||||||||||||||
Three Months Ended April 30, 2016 | ||||||||||||||||||||||||
As Reported (GAAP) | $ | 114,063 | $ | 61,317 | $ | 5,378 | $ | 5,060 | $ | 3,308 | $ | 0.14 | ||||||||||||
Retirement Charge (1) | - | - | 1,806 | 1,806 | 1,119 | 0.05 | ||||||||||||||||||
Adjusted Results (Non-GAAP) | $ | 114,063 | $ | 61,317 | $ | 7,184 | $ | 6,866 | $ | 4,427 | $ | 0.19 | ||||||||||||
Three Months Ended April 30, 2015 | ||||||||||||||||||||||||
As Reported (GAAP) | $ | 120,461 | $ | 62,449 | $ | 6,875 | $ | 6,776 | $ | 3,622 | $ | 0.15 | ||||||||||||
Operating Efficiency Initiatives and Other Items (2) | - | 693 | 2,670 | 2,670 | 2,536 | 0.10 | ||||||||||||||||||
Adjusted Results (Non-GAAP) | $ | 120,461 | $ | 63,142 | $ | 9,545 | $ | 9,446 | $ | 6,158 | $ | 0.25 |
(1) | Related to a charge for the retirement of the Vice Chairman and Chief Operating Officer. | |
(2) | Related to a charge for severance, occupancy expenses and the write-off of certain fixed assets. |
MOVADO GROUP, INC. | ||||||||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||||||||
(In thousands) | ||||||||||||||
(Unaudited) | ||||||||||||||
April 30, | January 31, | April 30, | ||||||||||||
2016 | 2016 | 2015 | ||||||||||||
ASSETS | ||||||||||||||
Cash and cash equivalents | $ | 203,909 | $ | 228,188 | $ | 185,828 | ||||||||
Trade receivables, net | 75,771 | 71,030 | 73,472 | |||||||||||
Inventories | 178,388 | 162,465 | 183,904 | |||||||||||
Other current assets | 36,472 | 27,352 | 37,705 | |||||||||||
Total current assets | 494,540 | 489,035 | 480,909 | |||||||||||
Property, plant and equipment, net | 37,247 | 38,553 | 44,354 | |||||||||||
Deferred and non-current income taxes | 20,697 | 20,323 | 19,791 | |||||||||||
Other non-current assets | 41,578 | 37,259 | 39,483 | |||||||||||
Total assets | $ | 594,062 | $ | 585,170 | $ | 584,537 | ||||||||
LIABILITIES AND EQUITY | ||||||||||||||
Loans payable to bank, current | $ | - | $ | 5,000 | $ | 25,000 | ||||||||
Accounts payable | 27,677 | 27,308 | 25,647 | |||||||||||
Accrued liabilities | 37,191 | 39,617 | 37,899 | |||||||||||
Income taxes payable | 893 | 6,257 | 1,130 | |||||||||||
Total current liabilities | 65,761 | 78,182 | 89,676 | |||||||||||
Loans payable to bank | 35,000 | 35,000 | - | |||||||||||
Deferred and non-current income taxes payable | 3,008 | 2,640 | 3,727 | |||||||||||
Other non-current liabilities | 30,875 | 28,201 | 30,484 | |||||||||||
Noncontrolling interests | 632 | 595 | 2,093 | |||||||||||
Shareholders' equity | 458,786 | 440,552 | 458,557 | |||||||||||
Total liabilities and equity | $ | 594,062 | $ | 585,170 | $ | 584,537 |
MOVADO GROUP, INC. | |||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||||
(In thousands) | |||||||||||||
(Unaudited) | |||||||||||||
Three Months Ended | |||||||||||||
April 30, | |||||||||||||
2016 | 2015 | ||||||||||||
Cash flows from operating activities: | |||||||||||||
Net income | $ | 3,337 | $ | 3,641 | |||||||||
Depreciation and amortization | 2,901 | 2,981 | |||||||||||
Other non-cash adjustments | 3,051 | 1,317 | |||||||||||
Operating efficiency initiatives and other items | - | 2,670 | |||||||||||
Changes in working capital | (29,167 | ) | (21,428 | ) | |||||||||
Changes in non-current assets and liabilities | (1,103 | ) | (355 | ) | |||||||||
Net cash (used in) operating activities | (20,981 | ) | (11,174 | ) | |||||||||
Cash flows from investing activities: | |||||||||||||
Capital expenditures | (538 | ) | (1,461 | ) | |||||||||
Restricted cash deposits | (1,070 | ) | - | ||||||||||
Short-term investment | (156 | ) | - | ||||||||||
Trademarks and other intangibles | (226 | ) | (94 | ) | |||||||||
Net cash (used in) investing activities | (1,990 | ) | (1,555 | ) | |||||||||
Cash flows from financing activities: | |||||||||||||
Proceeds from bank borrowings | - | 25,000 | |||||||||||
Repayments of bank borrowings | (5,000 | ) | - | ||||||||||
Dividends paid | (2,983 | ) | (2,636 | ) | |||||||||
Stock repurchase | (943 | ) | (22,154 | ) | |||||||||
Other financing | (1,307 | ) | (471 | ) | |||||||||
Net cash (used in) financing activities | (10,233 | ) | (261 | ) | |||||||||
Effect of exchange rate changes on cash and cash equivalents | 8,925 | (1,034 | ) | ||||||||||
Net change in cash and cash equivalents | (24,279 | ) | (14,024 | ) | |||||||||
Cash and cash equivalents at beginning of year | 228,188 | 199,852 | |||||||||||
Cash and cash equivalents at end of period | $ | 203,909 | $ | 185,828 |
View source version on businesswire.com: http://www.businesswire.com/news/home/20160526005392/en/
Source:
ICR, Inc.
Rachel Schacter/Allison Malkin, 203-682-8200