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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported): MAY 31, 2007
MOVADO GROUP, INC.
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(Exact name of registrant as specified in charter)
NEW YORK
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(State or other jurisdiction of incorporation)
1-16497 13-2595932
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(Commission File Number) (IRS Employer Identification Number)
650 FROM ROAD
PARAMUS, NEW JERSEY 07652
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (201) 267-8000
NOT APPLICABLE
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(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (SEE General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
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TEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
On May 31, 2007, Movado Group, Inc. issued a press release
announcing its results for the first quarter ended April 30, 2007. The press
release is attached hereto as Exhibit 99.1 and is incorporated by reference
into this item. The information in this Current Report is being furnished and
shall not be deemed "filed" for the purposes of Section 18 of the Securities
Exchange Act of 1934 or otherwise subject to the liabilities of that Section.
The information in this Current Report shall not be incorporated by reference
into any registration statement or other document pursuant to the Securities
Act of 1933, except as shall be expressly set forth by specific reference in
any such filing.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
(d) Exhibits.
EXHIBIT NO. DESCRIPTION
99.1 Press Release of Movado Group, Inc. dated May 31,
2007 announcing results for the first quarter ended
April 30, 2007
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report on Form 8-K to be signed on
its behalf by the undersigned, hereunto duly authorized.
Dated: May 31, 2007
MOVADO GROUP, INC.
By: /s/ Timothy F. Michno
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Name: Timothy F. Michno
Title: General Counsel
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
99.1 Press Release of Movado Group, Inc. dated May 31,
2007 announcing results for the first quarter ended
April 30, 2007
EXHIBIT 99.1
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[GRAPHIC OMITTED]
MOVADO GROUP INC.
CONTACT: Investor Relations
Suzanne Rosenberg
Vice President, Corporate Communications
201-267-8000
Financial Dynamics
Leigh Parrish/Melissa Merrill
212-850-5600
FOR IMMEDIATE RELEASE
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MOVADO GROUP, INC. ANNOUNCES FIRST QUARTER RESULTS
PARAMUS, NJ - MAY 31, 2007 -- MOVADO GROUP, INC. (NYSE: MOV), today
announced first quarter results for the period ended April 30, 2007.
FIRST QUARTER FISCAL 2008
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o Net sales increased 3.7% to $101.4 million compared to $97.7 million last
year. Net sales for the quarter included $2.7 million of excess
discontinued product.
o Comparable store sales at the Company's Movado boutiques decreased 1.5%
versus a 4.5% increase in the year-ago period.
o Gross profit was $61.7 million, or 60.8% of sales, compared to $59.6
million, or 61.0% of sales last year. Excluding excess discontinued
product sales, adjusted gross profit was $62.0 million, or 62.9% of sales,
an improvement of 190 basis points over the year-ago period.
o Operating profit was $2.8 million compared to $3.4 million in the year-ago
period.
o Net interest income was $0.4 million versus net interest expense of $0.1
million last year.
o Income tax expense of $0.6 million reflects a 20.6% tax rate in the first
quarter compared to income tax expense of $0.6 million, or a 17.9% tax
rate, recorded last year. The Company adopted FASB Interpretation No.
(FIN) 48, "Accounting for Uncertainty in Income Taxes" effective as of
February 1, 2007, which resulted in an increase to income tax expense in
the first quarter of $0.2 million.
o Net income and earnings per diluted share were $2.4 million and $0.09,
respectively, versus net income of $2.9 million and earnings per diluted
share of $0.11 in the year-ago period. Average diluted shares outstanding
increased 3.0% from the prior year period.
Efraim Grinberg, President and Chief Executive Officer, stated, "We are
very pleased with the strength of our first quarter performance. As
anticipated, sales growth slowed in the quarter reflecting a shift in the U.S.
retail calendar, which resulted in timing differences in purchases by certain
of our customers. We continue to support all of our brands with strong new
product introductions and compelling advertising campaigns. Across our
portfolio, we received an excellent response from our retail partners to the
powerful array of new products debuted at the Basel Watch Fair in April."
Rick Cote, Executive Vice President and Chief Operating Officer, stated,
"Strong operating disciplines across our organization led to continued
improvement in gross margin, a key driver toward achieving our goal of
expanding operating margin into the mid-teens. Additionally, in the quarter we
converted additional discontinued product into cash, thereby improving our
inventory mix."
Movado Group projects fiscal 2008 diluted earnings per share of
approximately $1.72 based on an estimated 25% tax rate. This compares to fiscal
2007 adjusted diluted earnings per share of $1.54. Fiscal 2007 adjusted diluted
earnings per share exclude the impact of the tax benefit resulting from the
further utilization of the NOL acquired with Ebel in fiscal 2005 and previously
disclosed one-time items related to accounts receivable, foreign currency and
sale of a non-operating asset. On a GAAP basis, fiscal 2007 earnings per share
were $1.87 with a 5.4% tax rate. Fiscal 2008 net sales remain projected to
range between $550 million and $560 million.
The Company's management will host a conference call today, May 31, 2007
at 10:00 a.m. Eastern Time to discuss its first quarter financial results. A
live broadcast of the call will be available on the Company's website:
www.movadogroup.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, Tommy Hilfiger, HUGO BOSS, Juicy Couture and LACOSTE
watches worldwide, and operates Movado boutiques and company stores in the
United States.
IN THIS RELEASE, THE COMPANY PRESENTS CERTAIN ADJUSTED FINANCIAL MEASURES THAT
ARE NOT CALCULATED ACCORDING TO GENERALLY ACCEPTED ACCOUNTING PRINCIPLES IN THE
UNITED STATES ("GAAP"). THESE NON-GAAP FINANCIAL MEASURES ARE DESIGNED TO
COMPLEMENT THE GAAP FINANCIAL INFORMATION PRESENTED IN THIS RELEASE BECAUSE
MANAGEMENT BELIEVES THEY PRESENT INFORMATION REGARDING THE COMPANY THAT
MANAGEMENT BELIEVES IS USEFUL TO INVESTORS. THE NON-GAAP FINANCIAL MEASURES
PRESENTED SHOULD NOT BE CONSIDERED IN ISOLATION FROM OR AS A SUBSTITUTE FOR THE
COMPARABLE GAAP FINANCIAL MEASURE.
THE COMPANY IS PRESENTING NET SALES EXCLUDING EXCESS DISCONTINUED PRODUCT SALES
(AND GROSS PROFIT EXCLUDING SUCH SALES) BECAUSE THE COMPANY BELIEVES THAT IT IS
USEFUL TO INVESTORS TO ELIMINATE THE EFFECT OF THESE UNUSUAL SALES IN ORDER TO
IMPROVE THE COMPARABILITY OF THE COMPANY'S RESULTS FOR THE PERIODS PRESENTED.
FOR A RECONCILIATION OF 2007 ADJUSTED DILUTED EARNINGS PER SHARE TO 2007
EARNINGS PER SHARE ON A GAAP BASIS, PLEASE SEE THE COMPANY'S PRESS RELEASE,
DATED MARCH 29, 2007.
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 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 NEWLY ACQUIRED AND/OR LICENSED BRANDS WITHOUT
DISRUPTION TO ITS OTHER BUSINESS ACTIVITIES, CHANGES IN CONSUMER DEMAND FOR THE
COMPANY'S PRODUCTS, RISKS RELATING TO THE FASHION AND RETAIL INDUSTRY, IMPORT
RESTRICTIONS, COMPETITION, SEASONALITY, COMMODITY PRICE AND EXCHANGE RATE
FLUCTUATIONS, CHANGES IN LOCAL OR GLOBAL ECONOMIC CONDITIONS, 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.
(Tables to follow)
MOVADO GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
THREE MONTHS ENDED
APRIL 30,
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2007 2006
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Net sales $ 101,363 $ 97,744
Cost of sales 39,711 38,154
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Gross profit 61,652 59,590
Selling, general and
administrative expenses 58,880 56,156
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Operating profit 2,772 3,434
Interest expense (879) (943)
Interest income 1,247 891
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Income before income taxes
and minority interest 3,140 3,382
Income tax 647 606
Minority interest 93 (79)
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Net income $ 2,400 $ 2,855
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Net income
per diluted share $ 0.09 $ 0.11
Shares used in
per share computation 27,175 26,395
MOVADO GROUP, INC.
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
(UNAUDITED)
APRIL 30, JANUARY 31, APRIL 30,
2007 2007 2006
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ASSETS
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Cash $101,769 $133,011 $ 82,560
Trade receivables,net 105,753 111,417 116,523
Inventories 212,106 193,342 213,763
Other current assets 39,510 35,109 34,199
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Total current assets 459,138 472,879 447,045
Property, plant and equipment, net 58,297 56,823 51,003
Other non-current assets 63,597 47,916 39,774
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Total assets $581,032 $577,618 $537,822
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LIABILITIES AND SHAREHOLDERS' EQUITY
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Current portion of long-term debt $ 5,000 $ 5,000 $ 5,000
Accounts payable 26,304 32,901 26,949
Accrued liabilities 39,946 45,610 42,231
Deferred and current taxes payable 2,039 5,946 1,158
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Total current liabilities 73,289 89,457 75,338
Long-term debt 71,454 75,196 97,323
Deferred and non-current income taxes 33,086 11,054 13,181
Other liabilities 24,130 23,087 20,244
Minority interest 536 443 231
Shareholders' equity 378,537 378,381 331,505
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Total liabilities and equity $581,032 $577,618 $537,822
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Impact of adoption of FIN 48
As a result of the adoption of FIN 48, we recorded a reduction to our
February 1, 2007 retained earnings in the amount of $7.7 million representing
the cumulative effect of the adoption.