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 29, 2003
MOVADO GROUP, INC.
(Exact Name of Registrant as Specified in Charter)
NEW YORK 0-22378 13-2595932
(State or Other Jurisdiction (Commission File (IRS Employer
of Incorporation) Number) Identification Number)
650 FROM ROAD
PARAMUS, NEW JERSEY 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)
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) EXHIBITS.
EXHIBIT
NUMBER DOCUMENT DESCRIPTION
------ --------------------
99.1 Press release, dated May 29, 2003.
ITEM 9. REGULATION FD DISCLOSURE (ITEM 12, DISCLOSURE OF RESULTS OF
OPERATIONS AND FINANCIAL CONDITION)
The following information is being furnished under Item 12, "Disclosure
of Results of Operations and Financial Condition" in accordance with the interim
guidance provided by the Securities and Exchange Commission (the "SEC") pursuant
to SEC Release Nos. 33-8216 and 34-47583.
On May 29, 2003, Movado Group, Inc. (the "Company") issued a press
release announcing the Company's results of operations and financial condition
for the quarter ended April 30, 2003. A copy of the press release is included as
Exhibit 99.1 to, and is incorporated by reference in, this current report on
Form 8-K.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
MOVADO GROUP, INC.
Date: June 10, 2003 By: /s/ Eugene J. Karpovich
---------------------------------------
Name: Eugene J. Karpovich
Title: Senior Vice President and
Chief Financial Officer
EXHIBIT INDEX
99.1 Press Release, dated May 29, 2003
EXHIBIT 99.1
------------
FOR IMMEDIATE RELEASE
================================================================================
MOVADO GROUP, INC. ANNOUNCES Q1 RESULTS
~ EPS INCREASES TO $0.07 FROM $0.03 ~
~ SALES INCREASE 2.7% ON CONSTANT DOLLAR BASIS ~
PARAMUS, NJ - MAY 29, 2003 -- MOVADO GROUP, INC. (NYSE: MOV), today
announced first quarter results for the period ended April 30, 2003.
FIRST QUARTER FISCAL 2004
- -------------------------
o Net sales increased 5.1% to $60.2 million compared to $57.3 million last
year. On a constant dollar basis, net sales increased 2.7%. This year over
year increase was driven by the domestic expansion of Movado and ESQ,
international growth of the Tommy Hilfiger watch brand and strong sales of
the Company's Coach watches. Sales in the Company's international
businesses were negatively impacted by the Iraq war and SARS outbreak.
o Comparable store sales increased 24.7% at the Company's Movado boutiques.
o Gross margin remains strong at 60.6%.
o Operating profit increased 42.1% to $2.0 million versus $1.4 million in the
year ago period.
o Net income increased to $856,000, or $0.07 per diluted share, compared to
$332,000, or $0.03 per diluted share, in the prior year.
Efraim Grinberg, President and Chief Executive Officer, stated, "Our ability to
post a strong quarter, particularly a 2.7% constant dollar net sales increase,
in a time of continued economic uncertainty and slow domestic and international
consumer spending is a testament to the strength of our portfolio of brands. We
are also pleased with the strong performance of our Movado boutiques, which was
primarily driven by positive consumer reaction to our compelling new product
introductions. Developing the luxury lifestyle image of the Movado brand through
continued expansion of our boutiques remains an important avenue for
- more -
MOVADO GROUP, INC. ANNOUNCES Q1 RESULTS Page 2
strengthening brand equity and driving top line growth. As such, we have
recently signed leases to open a total of four new doors in the Chicago and
Boston markets, which will bring our nationwide store count to 16 boutiques."
Rick Cote, Executive Vice President and Chief Operating Officer, commented, "In
addition to our strong sales results, we are pleased with the resilience of our
gross margin given the continued weakening of the U.S. dollar and the continued
shift in product mix during the quarter, and believe it represents a level
commensurate with where we expect gross margin to be for the remainder of this
fiscal year.
"Over the past few years, we have successfully instituted Company-wide
productivity initiatives that have resulted in enhanced levels of operating
efficiency and significant cost savings. This year, we will make investments in
inventory and infrastructure to drive top line growth. Accordingly, we expect
operating expenses to increase relatively in line with sales growth this fiscal
year. We also expect inventory levels to increase in support of our boutique
expansion."
Mr. Grinberg concluded, "Our priority over the next few years is driving top
line growth. Our operating structure is efficient, allowing us to focus on and
invest in our brands and growth initiatives. While the geopolitical environment
remains uncertain, we are confident in our long-term growth prospects and look
to gain further traction as the economic environment improves. As such, we
remain comfortable with our previously stated range of diluted earnings per
share for the full year of $1.75 to $1.78."
The Company's management will host a conference call today, May 29, 2003 at
10:00 a.m. Eastern Time. 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, 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 WITH RESPECT TO
THE FUTURE PERFORMANCE OF MOVADO GROUP THAT INVOLVE RISKS AND UNCERTAINTIES.
MOVADO'S ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE EXPRESSED OR
INDICATED BY FORWARD-LOOKING STATEMENTS. FACTORS THAT COULD CAUSE OR CONTRIBUTE
TO SUCH DIFFERENCES INCLUDE, BUT ARE NOT LIMITED TO, THE COMPANY'S ABILITY TO
SUCCESSFULLY INTRODUCE AND SELL NEW PRODUCTS, CHANGES IN CONSUMER DEMAND FOR THE
COMPANY'S PRODUCTS, RISKS RELATING TO THE RETAIL INDUSTRY, IMPORT RESTRICTIONS,
COMPETITION, SEASONALITY AND OTHER FACTORS DISCUSSED IN MOVADO'S FILINGS WITH
THE SECURITIES AND EXCHANGE COMMISSION.
MOVADO GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
THREE MONTHS ENDED
APRIL 30,
------------------
2003 2002
---- ----
Net sales $60,170 $57,271
Cost of sales 23,730 22,092
------- -------
Gross profit 36,440 35,179
Selling, general and administrative expenses 34,468 33,791
------- -------
Operating profit 1,972 1,388
Interest expense 783 927
------- -------
Income before taxes 1,189 461
Income tax 333 129
------- -------
Net income $ 856 $ 332
======= =======
Net income per share $ 0.07 $ 0.03
Shares used in per share computation 12,348 12,146
MOVADO GROUP, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
(UNAUDITED)
APRIL 30, JANUARY 31, APRIL 30,
2003 2003 2002
---- ---- ----
ASSETS
- ------
Cash and cash equivalents $ 34,453 $ 38,365 $ 21,407
Trade receivables, net 97,362 94,438 94,223
Inventories 119,445 111,736 106,272
Other 34,440 36,646 26,063
-------- -------- --------
Total current assets 285,700 281,185 247,965
-------- -------- --------
Property, plant and equipment, net 39,579 39,939 37,897
Other assets 25,055 24,030 24,304
-------- -------- --------
$350,334 $345,154 $310,166
======== ======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
- ------------------------------------
Loans payable to banks $ 18,750 $ 0 $ 31,000
Current portion of long-term debt 5,000 0 5,000
Accounts payable 14,436 22,712 15,951
Accrued liabilities 18,659 22,735 20,691
Deferred and current taxes payable 13,202 16,318 11,037
-------- -------- --------
Total current liabilities 70,047 61,765 83,679
-------- -------- --------
Long-term debt 30,000 35,000 35,000
Deferred and non-current income taxes 4,245 4,229 1,591
Other liabilities 8,657 7,948 7,766
Shareholders' equity 237,385 236,212 182,130
-------- -------- --------
$350,334 $345,154 $310,166
======== ======== ========
# # #