Movado Group, Inc. Reports Record Fourth Quarter and Fiscal 2004 Results
PARAMUS, N.J., Mar 12, 2004 /PRNewswire-FirstCall via COMTEX/ -- Movado Group, Inc. (NYSE: MOV), today announced results for the fourth quarter and fiscal year ended January 31, 2004.
Fourth Quarter Fiscal 2004 * Net sales for the quarter were $92.7 million, a 16.6% increase over last year, or an increase of 14.6% on a constant dollar basis. * Comparable store sales increased 15.1% at the Company's Movado outiques. * Gross margin was 59.6% compared to 61.4%, primarily resulting from the impact of the weak U.S. dollar. * Operating profit increased 7.8% to $9.2 million. * Net income increased 11.2% to $6.2 million compared to $5.5 million last year. * Earnings per diluted share increased to $0.49 from $0.46 last year, with a 4.3% increase in diluted shares outstanding.
Efraim Grinberg, President and Chief Executive Officer, commented, "Our excellent fourth quarter performance capped a banner year for Movado Group. For both the quarter and the year, we delivered record sales, profits and cash flow. During the fourth quarter, we experienced growth across all of our brands -- Movado, Concord, Coach, ESQ and Tommy Hilfiger -- with year-over- year sales gains recorded, domestically and internationally. Our boutique business also posted strong sales results throughout fiscal 2004 and continues to strengthen the luxury brand image of Movado. In addition to our financial performance in fiscal 2004, we are very excited about the acquisition of premier Swiss luxury watch brand, Ebel, and the future growth potential that lies ahead for our company."
Fiscal 2004 Results * Net sales increased 10.0% to $330.2 million versus net sales of $300.1 million last year, or an 8.2% increase on a constant dollar basis. * Comparable store sales increased 20.1% at the Company's Movado boutiques. * Gross margin was 60.7% compared to 61.4%, primarily resulting from the impact of the weak U.S. dollar. * Operating profit increased 9.5% to $34.8 million. * Net income increased 13.9% to $22.9 million compared to $20.1 million last year. * Earnings per diluted share increased 11.5% to $1.84 from $1.65 last year, with a 2.0% increase in diluted shares outstanding. * Cash flow from operations increased to $51.6 million.
Rick Cote, Executive Vice President and Chief Operating Officer, stated, "Over the past several years, our team has worked diligently to develop an efficient and scalable infrastructure from which to grow our business. The results of these efforts, particularly in the areas of working capital management and operational improvements, are best highlighted by our second consecutive year of record cash flow from operations, which was in excess of $50 million in fiscal 2004. We are encouraged by our progress and we remain focused on our key operating initiatives of driving our growth initiatives and improving our financial strength by continuing to focus on generating strong and consistent cash flow."
As announced on March 1, 2004, the Company completed its acquisition of Swiss luxury watch brand, Ebel. With its distinctive and internationally recognized image, Ebel extends Movado Group's presence within the luxury watch category and international markets. Over the next six months, Ebel will be integrated into Movado Group's worldwide operations. As part of this process, the Company has initiated a restructuring of the Ebel operations in Switzerland.
Mr. Grinberg concluded, "As we enter fiscal 2005, we are well positioned to capitalize on the positive trends we are experiencing across all of our brands. We will continue our relentless focus on delivering newness to the marketplace, while supporting our brands with compelling marketing and advertising programs. We are looking forward to the exciting new product we plan to introduce at the Basel Watch Fair in April."
Prior to including Ebel in its financial results, Movado Group anticipates fiscal year 2005 earnings per share to range between $2.00 to $2.05. After accounting for the Ebel integration into Movado Group, the Company expects earnings per share to range between $1.84 and $1.92 in fiscal 2005.
The Company's management will host a conference call today, March 12, 2004 at 10:00 a.m. Eastern Time to discuss its fourth quarter and year-end financial results. The Company will also provide financial projections for fiscal 2005 and a progress update on the acquisition of Ebel. A live broadcast of the call will be available on the Company's website: www.movadogroupinc.com. This call will be archived online within one hour of the completion of the conference call.
Movado Group, Inc. designs, manufactures, and distributes Movado, Ebel, Concord, ESQ, Coach and Tommy Hilfiger watches worldwide, and operates Movado boutiques and Company stores in the United States.
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," "projects," "may," "will," "should" 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: the Company's ability to successfully introduce and sell new products, the Company's ability to successfully integrate the operations of Ebel without disruption to its other business activities, changes in consumer demand for the Company's products, risks relating to the retail industry, import restrictions, competition, seasonality and the other factors discussed in the Company's Annual Report on Form 10-K and other filings with the Securities and Exchange Commission. These statements reflect the Company's current beliefs and are based upon information currently available to it. Be advised that developments subsequent to this press release are likely to cause these statements to become outdated with the passage of time.
MOVADO GROUP, INC. Consolidated Statements of Operations (in thousands, except per share data) (Unaudited) Three Months Ended Twelve Months Ended January 31, January 31, 2004 2003 2004 2003 Net sales $92,732 $79,539 $330,214 $300,077 Cost of sales 37,444 30,696 129,908 115,907 Gross profit 55,288 48,843 200,306 184,170 Selling, general and administrative expenses 46,047 40,268 165,525 152,394 Operating profit 9,241 8,575 34,781 31,776 Interest expense 672 871 3,044 3,916 Income before taxes 8,569 7,704 31,737 27,860 Income tax 2,399 2,157 8,886 7,801 Net income $6,170 $5,547 $22,851 $20,059 Net income per share $0.49 $0.46 $1.84 $1.65 Shares used in per share computation 12,682 12,157 12,439 12,190 MOVADO GROUP, INC. CONSOLIDATED BALANCE SHEETS (in thousands, except per share data) (Unaudited) January 31, January 31, January 31, 2004 2003 2002 ASSETS Cash and cash equivalents $82,083 $38,365 $16,971 Trade receivables, net 88,800 94,438 92,014 Inventories 121,678 111,736 98,589 Other 27,932 36,646 19,467 Total current assets 320,493 281,185 227,041 Property, plant and equipment, net 42,112 39,939 38,726 Other assets 28,451 24,030 24,909 $391,056 $345,154 $290,676 LIABILITIES AND SHAREHOLDERS' EQUITY Loans payable to banks $0 $0 $6,500 Current portion of long-term debt 10,000 0 5,000 Accounts payable 23,631 22,712 23,824 Accrued liabilities 25,781 22,735 25,417 Deferred and current taxes payable 18,111 16,318 12,368 Total current liabilities 77,523 61,765 73,109 Long-term debt 25,000 35,000 35,000 Deferred and non-current income taxes 2,282 4,229 1,513 Other liabilities 11,450 7,948 8,584 Shareholders' equity 274,801 236,212 172,470 $391,056 $345,154 $290,676
SOURCE Movado Group, Inc.
Suzanne Michalek, Director of Corporate Communications of Movado Group, +1-201-267-8000; or Investors: Melissa Myron, or Press: Stephanie Sampiere, +1-212-850-5600, both of Financial Dynamics for Movado Group