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): September 8, 2005
MOVADO GROUP, INC.
(Exact name of registrant as specified in its charter)
NEW YORK 1-16497 13-2595932
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
650 From Road
Paramus, NJ 07652
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (201) 267-8000
NOT APPLICABLE
(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))
Item 2.02. Results of Operations and Financial Condition.
On September 8, 2005, Movado Group, Inc. issued a press release announcing
its results for the first quarter ended July 31, 2005. 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.
(c) Exhibits.
99.1 Press release of Movado Group, Inc. dated September 8, 2005.
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: September 8, 2005
MOVADO GROUP, INC.
By: /s/ Frank V. Kimick
-------------------------------------
Name: Frank V. Kimick
Title: Vice President and Treasurer
[LOGO]
MOVADO GROUP INC. Movado
Ebel
Concord
ESQ SWISS
Coach Watches
Tommy Hilfiger Watches
Hugo Boss Watches
APPROVED BY: Rick Cote
Executive Vice President and
Chief Operating Officer
201-267-8000
CONTACT: Investor Relations
Suzanne Michalek
Director of Corporate Communications
201-267-8000
Financial Dynamics
Melissa Myron/Rachel Albert
212-850-5600
FOR IMMEDIATE RELEASE
- --------------------------------------------------------------------------------
MOVADO GROUP, INC. ANNOUNCES SECOND QUARTER RESULTS
Paramus, NJ - September 8, 2005 -- Movado Group, Inc. (NYSE: MOV), today
announced second quarter results for the period ended July 31, 2005.
Second Quarter Fiscal 2006
o Net sales increased 17.9% to $115.3 million from $97.8 million last year.
o Comparable store sales increased 2.3% at the Company's Movado boutiques on
top of an 11.8% comparable store sales gain in the year-ago period.
o Gross margin was 60.7% this year compared to 59.3% last year.
o Operating profit increased to $12.3 million versus $8.7 million in the
year-ago period.
o Net income increased to $8.6 million, or $0.33 per diluted share, compared
to net income of $7.1 million, or $0.28 per diluted share, in the prior
year period. Net income in the year-ago period included a one-time gain of
$0.03 per fully diluted share associated with a legal settlement the
Company reached with Swiss Army Brands.
First Half Fiscal 2006
o Net sales increased 18.1% to $203.1 million from $172.0 million last year.
o Comparable store sales increased 2.7% at the Company's Movado boutiques on
top of an 18.4% comparable store sales gain in the year-ago period.
o Gross margin was 60.5% compared to 58.9%.
o Operating profit was $14.4 million versus $10.5 million in the year-ago
period.
o Net income was $9.5 million, or $0.37 per diluted share, compared to net
income of $7.8 million, or $0.31 per diluted share, in the prior year
period. Net income for the first half of last year included a one-time
gain of $0.03 per fully diluted share associated with a legal settlement
gain recorded in the second quarter of fiscal 2005.
Efraim Grinberg, President and Chief Executive Officer, commented, "The
results we have achieved stem from remaining true to our vision; building brands
with a commitment to long term success. Movado, Ebel, Concord, ESQ, Coach, and
Tommy Hilfiger Watches - are marked by exceptional quality and each possesses a
distinct brand image in the marketplace. We consistently support our brands with
compelling marketing and advertising support, while challenging our organization
to keep our brands fresh through an ongoing process of reinvention and product
innovation."
"Continued investment behind our brands and businesses demonstrates our
commitment toward building long-term shareholder value. We are on-track with our
strategy of rebuilding Ebel into a global luxury brand and we are very
encouraged with our progress. Our Movado Boutiques now operate in 27 locations
nationwide and we continue to develop and strengthen this business as we move
toward converting our investment into a profitable operation. Finally, our team
is preparing for the exciting launch of a new Hugo Boss watch collection in
March of 2006."
Rick Cote, Executive Vice President and Chief Operating Officer, stated,
"We are very pleased with the results we delivered during the first half of the
year, which reflects the success of our brand and business investments, new
product offerings and enhanced productivity. Fiscal 2006 is a year where we have
made a strategic decision to invest significantly behind our brands and
businesses as we position our company for accelerated growth. Consistent with
our strategy, we continue to expect earnings growth to outpace sales growth."
Movado Group now anticipates fiscal 2006 net sales to grow approximately
14% from last year and fully diluted earnings per share for the full year to be
at the upper-end of the Company's previously stated range of $1.18 to $1.24.
Included in this guidance is an expected $0.05 per diluted share expense related
to equity compensation of restricted stock. This guidance excludes any potential
impact associated with the American Jobs Creation Act, which the Company
continues to evaluate. To the extent that Movado Group repatriates any
international earnings, the Company would incur a one time income tax charge.
The Company's management will host a conference call today, September 8th
at 10:00 a.m. Eastern Time. 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.
- more -
Movado Group, Inc. designs, manufactures, and distributes Movado, Ebel, Concord,
ESQ, Coach, Tommy Hilfiger and Hugo Boss 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.
(Tables to follow)
MOVADO GROUP, INC.
Consolidated Statements of Operations
(in thousands, except per share data)
(Unaudited)
Three Months Ended Six Months Ended
July 31, July 31,
------------------- -------------------
2005 2004 2005 2004
-------- -------- -------- --------
Net sales $115,326 $ 97,788 $203,082 $171,975
Cost of sales 45,340 39,810 80,258 70,612
-------- -------- -------- --------
Gross profit 69,986 57,978 122,824 101,363
Selling, general and administrative expenses 57,701 49,230 108,400 90,908
-------- -------- -------- --------
Operating profit 12,285 8,748 14,424 10,455
Income from litigation settlement, net -- 1,444 -- 1,444
Interest expense 884 783 1,693 1,508
-------- -------- -------- --------
Income before income taxes 11,401 9,409 12,731 10,391
Income tax 2,850 2,352 3,183 2,598
-------- -------- -------- --------
Net income $ 8,551 7,057 $ 9,548 $ 7,793
======== ======== ======== ========
Net income per diluted share $ 0.33 $ 0.28 $ 0.37 $ 0.31
Shares used in per share computation 26,126 25,484 26,074 25,416
MOVADO GROUP, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
(Unaudited)
July 31, January 31, July 31,
2005 2005 2004
----------- ----------- -----------
ASSETS
Cash and cash equivalents $ 50,323 $ 63,782 $ 27,438
Trade receivables, net 105,533 102,622 95,841
Inventories 206,483 187,890 181,784
Other 37,127 34,409 31,899
----------- ----------- -----------
Total current assets 399,466 388,703 336,962
----------- ----------- -----------
Property, plant and equipment, net 50,282 50,283 48,193
Other assets 36,348 37,964 37,672
----------- ----------- -----------
$ 486,096 $ 476,950 $ 422,827
=========== =========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Loans payable to banks $ 37,500 $ 0 $ 25,000
Current portion of long-term debt 0 0 5,000
Accounts payable 35,283 38,488 30,965
Accrued liabilities 40,482 39,618 30,223
Deferred and current taxes payable 4,756 5,250 5,853
----------- ----------- -----------
Total current liabilities 118,021 83,356 97,041
----------- ----------- -----------
Long-term debt 45,000 45,000 25,000
Deferred and non-current income taxes 9,031 14,827 11,936
Other liabilities 17,363 17,209 12,214
Shareholders' equity 296,681 316,558 276,636
----------- ----------- -----------
$ 486,096 $ 476,950 $ 422,827
=========== =========== ===========