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, 2004 MOVADO GROUP, INC. (Exact name of registrant as specified in its charter) NEW YORK (State or other jurisdiction of incorporation) 0-22378 13-2595932 (Commission File Number) (IRS Employer 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, 2004, Movado Group, Inc. (the "Company") issued a press release announcing the Company's results of operations and financial condition for the quarter ended July 31, 2004. A copy of the press release is included as Exhibit 99.1 to, and is incorporated by reference in, this Item 2.02 of this current report on Form 8-K. The information in this Current Report shall not be deemed "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, 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 such filing. ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS (c) Exhibit 99.1: Press Release, dated September 8, 2004 (Furnished pursuant to Item 2.02 of 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 on Form 8-K to be signed on its behalf by the undersigned hereunto duly authorized. Dated: September 8, 2004 MOVADO GROUP, INC. By: /s/ Timothy F. Michno ---------------------------- Name: Timothy F. Michno Title: General Counsel and Secretary
EXHIBIT 99.1 ------------ [LOGO OMITTED] Movado M O V A D O G R O U P I N C. Ebel Concord ESQ Coach Watch Tommy Hilfilger 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 212-850-5600 FOR IMMEDIATE RELEASE - -------------------------------------------------------------------------------- MOVADO GROUP, INC. REPORTS STRONG SECOND QUARTER RESULTS ~ COMPANY POSTS 28% SALES GAIN OVER LY, INCLUDING EBEL ACQUISITION ~ PARAMUS, NJ - SEPTEMBER 8, 2004 -- MOVADO GROUP, INC. (NYSE: MOV), today announced second quarter results for the period ended July 31, 2004. These results include the Ebel business, which was acquired on March 1, 2004. All share data has been adjusted to reflect a two-for-one stock split distributed to shareholders on June 25, 2004. SECOND QUARTER FISCAL 2005 o Net sales increased 27.8% to $97.8 million from $76.5 million last year. The acquisition of Ebel accounted for net sales of $9.4 million. o Comparable store sales increased 11.8% at the Company's Movado boutiques. o Gross margin was 59.3% this year compared to 61.7% last year. The acquisition of Ebel had a negative effect on gross margins in the second quarter of fiscal 2005 of approximately 0.7%. o Operating profit was $8.7 million versus $8.8 million in the year-ago period. The acquisition of Ebel resulted in a $1.7 million decrease in operating profit in the second quarter of fiscal 2005. o Net income was $7.1 million, or $0.28 per diluted share, compared to net income of $5.8 million, or $0.23 per diluted share, in the prior year period. Second quarter net income includes the dilutive impact of Ebel, which was partially offset by the previously announced gain of $835,000, or $0.03 per diluted share, associated with a legal settlement the Company reached with Swiss Army Brands. The combined effect of these two items reduced net income in the second quarter of fiscal 2005 by approximately $500,000, or $0.02 per diluted share. - more -
FIRST HALF FISCAL 2005 o Net sales increased 25.8% to $172.0 million from $136.7 million last year. The acquisition of Ebel accounted for net sales of $12.8 million. o Comparable store sales increased 18.4% at the Company's Movado boutiques. o Gross margin was 58.9% compared to 61.2%. The acquisition of Ebel had a negative effect on gross margins in the first half of fiscal 2005 of approximately 0.8%. o Operating profit was $10.5 million versus $10.8 million in the year-ago period. The acquisition of Ebel resulted in a $4.1 million decrease in operating profit in the first half of fiscal 2005. o Net income was $7.8 million, or $0.31 per diluted share, compared to net income of $6.6 million, or $0.27 per diluted share, in the prior year period. Net income for the first half of fiscal 2005 includes the dilutive impact of Ebel, which was partially offset by the aforementioned gain associated with a legal settlement the Company reached with Swiss Army Brands during the second quarter of fiscal 2005. The combined effect of these two items reduced net income in the first half of fiscal 2005 by approximately $2.3 million, or $0.09 per diluted share. Efraim Grinberg, President and Chief Executive Officer, commented, "Our solid results during the second quarter reflect strength across our brands, geographic regions, and channels of business. Movado boutiques continue to gain traction, with double-digit comparable store sales increases posted in the second quarter. Our overall success continues to be driven by the execution of our strategy to support our brands with innovative advertising campaigns, to deliver unique and compelling product assortments, and to maintain an intense focus on our customers." Mr. Grinberg continued, "The integration and revitalization of the Ebel brand continues and we are encouraged by our progress thus far. We are looking forward to the important second half of the year when our customers will begin to see the impact of our efforts to-date. On the advertising front, we have launched a powerful image-building global campaign featuring internationally recognized supermodel, Claudia Schiffer. This campaign, along with a new Ebel men's campaign, has a prominent presence in the key fall fashion publications. We also expect Ebel to benefit from exciting new products and refined marketing programs we have planned for the second half of the year, which represent a return to the successful roots of the brand and truly convey the luxury image and rich heritage of Ebel." Rick Cote, Executive Vice President and Chief Operating Officer, stated, "Our business is strong, and we are poised for growth across all areas of our organization. We continue to be focused on the fundamentals of our business and our investments are bearing fruit. Throughout the first half of this year, top line initiatives including product development efforts, marketing and advertising, drove consumer interest and translated into strong sales gains. These efforts were supported and enhanced by our efficient operating - more -
structure, allowing us to generate strong bottom line results, despite the planned dilutive impact of the Ebel acquisition. Additionally, our strong balance sheet and focus on cash flow management ensure we have the ability to continue to appropriately invest across all of our businesses and capitalize on growth initiatives." The Company anticipates diluted earnings per share for the full year to range between $0.95 and $1.00, including the dilutive impact of Ebel and the legal settlement gain. The Company plans fiscal year 2005 sales to be approximately $410 million, an increase in excess of 20% from last year, including sales from Ebel which are now projected to range between $40 million and $45 million. 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.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. (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, ------------------------- ------------------------- 2004 2003 2004 2003 -------- -------- -------- -------- Net sales $ 97,788 $ 76,545 $171,975 $136,715 Cost of sales 39,810 29,306 70,612 53,036 -------- -------- -------- -------- Gross profit 57,978 47,239 101,363 83,679 Selling, general and administrative expenses 49,230 38,426 90,908 72,894 -------- -------- -------- -------- Operating profit 8,748 8,813 10,455 10,785 Interest expense 783 825 1,508 1,608 -------- -------- -------- -------- Income before litigation settlement 7,965 7,988 8,947 9,177 Litigation settlement 1,444 -- 1,444 -- -------- -------- -------- -------- Income before taxes 9,409 7,988 10,391 9,177 Income tax 2,352 2,237 2,598 2,570 -------- -------- -------- -------- Net income $ 7,057 $ 5,751 $ 7,793 6,607 ======== ======== ======== ======== Net income per diluted share $ 0.28 $ 0.23 $ 0.31 $ 0.27 Shares used in per share computation 25,484 25,140 25,416 24,906
MOVADO GROUP, INC. CONSOLIDATED BALANCE SHEETS (in thousands, except per share data) (UNAUDITED) JULY 31, JANUARY 31, JULY 31, 2004 2004 2003 -------- ----------- -------- ASSETS Cash and cash equivalents $ 27,438 $ 82,083 $ 47,737 Trade receivables, net 95,841 88,800 99,192 Inventories 181,784 121,678 125,325 Other 30,818 26,693 22,767 -------- -------- -------- Total current assets 335,881 319,254 295,021 -------- -------- -------- Property, plant and equipment, net 48,193 42,112 39,127 Other assets 38,902 29,601 27,631 -------- -------- -------- $422,976 $390,967 $361,779 ======== ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY Loans payable to banks $ 25,000 $ 0 $ 14,000 Current portion of long-term debt 5,000 10,000 5,000 Accounts payable 30,965 23,631 21,836 Accrued liabilities 29,264 25,781 23,812 Deferred and current taxes payable 16,989 18,111 14,962 -------- -------- -------- Total current liabilities 107,218 77,523 79,610 -------- -------- -------- Long-term debt 25,000 25,000 30,000 Deferred and non-current income taxes 800 2,282 2,835 Other liabilities 13,322 11,449 9,568 Shareholders' equity 276,636 274,713 239,766 -------- -------- -------- $422,976 $390,967 $361,779 ======== ======== ========