UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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 2, 2008

 

 

 

 

 

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):

 

 

 

o    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

o    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Exhibit 99.1

 

 

 

 

 

Suzanne Rosenberg

Vice President, Corporate Communications

201-267-8000

 

Financial Dynamics

Leigh Parrish/Melissa Merrill

 

FOR IMMEDIATE RELEASE

 

MOVADO GROUP, INC. ANNOUNCES SECOND QUARTER AND

SIX-MONTH RESULTS

~ Q2 Includes Charge Associated with Previously Announced Expense Reduction Plan ~

~ Company Reiterates Full Year Guidance ~

 

Paramus, NJ – September 4, 2008 -- Movado Group, Inc. (NYSE: MOV), today announced second quarter and six-month results for the period ended July 31, 2008. For the second quarter, adjusted diluted earnings per share were $0.39 compared with $0.45 in fiscal 2008 (see attached table for reconciliation of GAAP to non-GAAP measures). On a GAAP basis, diluted earnings per share were $0.32 and included a $2.2 million pre-tax charge related to the Company’s previously announced expense reduction plan.

Second Quarter Fiscal 2009

 

First Half Fiscal 2009

 

Efraim Grinberg, President and Chief Executive Officer, commented, “While our second quarter results reflect the continued challenging macroeconomic environment, the decisive actions we’ve taken to reduce expenses and improve productivity are designed to position our company to emerge quickly and even stronger than before, as the economy recovers. At the same time, we continue to gain market share with a combination of strong product innovation and a powerful presence at the point-of-sale, along with consistent marketing support and advertising investment across our spectrum of brands.”

Mr. Grinberg continued, “Our business is well positioned as we enter the second half of the year and we remain on track to achieve our financial objectives and strategic initiatives. The importance of branding is paramount in today’s consumer spending environment and we will continue to strongly support and differentiate each of our brands with exciting new product introductions and bold new image-building advertising campaigns.”

Rick Cote, Executive Vice President and Chief Operating Officer, stated, “As previously announced on August 7, 2008, we have initiated an expense reduction plan to streamline operations, reduce expenses, and improve efficiencies across the Company’s global organization. Our expense reduction plan is targeted to generate $25 million in annualized savings, or 8% of the Company’s operating expenses, with $6 million of these savings expected to be realized in the current fiscal year. These actions, together with continued gross margin improvement, will enable us to achieve our mid-teen operating margin objective on an accelerated basis. Importantly, our balance sheet remains strong and we will continue to leverage our solid financial flexibility to invest in the future growth of our business.”

Excluding the charge and cost savings associated with Movado Group’s previously announced expense reduction plan, and recognizing the limited visibility on the economic environment, the Company is maintaining its fiscal 2009 diluted earnings per share guidance of approximately $1.65 to $1.72, based on a projected tax rate of 24%. In fiscal 2008, the Company reported adjusted diluted earnings per share of $1.71, which excluded a net realized tax benefit and an accrual for product returns recorded in the fourth quarter.

 

 

Upon completion of a one million share repurchase program in April of fiscal 2009, Movado Group initiated a new repurchase program during the first quarter of fiscal 2009 to buyback up to one million additional shares of its common stock. To-date, with both programs, the Company has repurchased a total of 1.9 million shares at a total cost of $38.9 million.

The Company’s management will host a conference call today, September 4, 2008 at 10:00 a.m. Eastern Time to discuss its second 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, sources, 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. Adjusted gross margin is based on net sales excluding excess discontinued product sales, which did not contribute to gross profit in any of the periods presented.

 

The Company is presenting adjusted operating profit, which is operating profit excluding the effect of a pre-tax charge associated with the Company’s expense reduction program, and adjusted net income, which is net income excluding the after-tax effect of such charge. The company is presenting adjusted operating profit and adjusted net income because it believes that it is useful to investors to eliminate the effect of such a non-recurring charge, in order to improve the comparability of the periods presented and to better show trends in the Company’s results of operations for the periods presented.

 

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, trends, 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, reduced discretionary spending by consumers due to the recent tightening of credit, 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)