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): January 31, 2004
MOVADO GROUP, INC.
(Exact Name of Registrant as Specified in Charter)
NEW YORK 0-22378 13-2595932
(State or Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) 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 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION
On March 12, 2004, we issued a press release announcing results for the
fourth quarter and fiscal year ended January 31, 2004. A copy of the press
release is furnished as Exhibit 99.1 to this report. In addition, our capital
expenditures for the year were $10.8 million, with approximately 60% going
toward the build out of our new boutiques.
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.
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: March 12, 2004 By: /s/ Eugene Karpovich
---------------------------------
Name: Eugene Karpovich
Title: Senior Vice President and
Chief Financial Officer
EXHIBIT INDEX
99.1 Press Release, dated March 12, 2004
EXHIBIT 99.1
------------
CONTACT: Investor Relations:
Suzanne Michalek
Director of Corporate Communications
201-267-8000
Financial Dynamics
Investor Relations: Melissa Myron
Press: Stephanie Sampiere
212-850-5600
FOR IMMEDIATE RELEASE
MOVADO GROUP, INC. REPORTS RECORD FOURTH QUARTER
AND FISCAL 2004 RESULTS
~ COMPANY POSTS 17% SALES INCREASE IN FOURTH QUARTER~
~ FULL YEAR NET INCOME INCREASES 14% ~
~ CASH FLOW FROM OPERATIONS EXCEEDS $50 MILLION ~
PARAMUS, NJ - MARCH 12, 2004 -- MOVADO GROUP, INC. (NYSE: MOV), today
announced results for the fourth quarter and fiscal year ended January 31,
2004.
FOURTH QUARTER FISCAL 2004
o Net sales for the quarter were $92.7 million, a 16.6% increase over last
year, or an increase of 14.6% on a constant dollar basis.
o Comparable store sales increased 15.1% at the Company's Movado boutiques.
o Gross margin was 59.6% compared to 61.4%, primarily resulting from the
impact of the weak U.S. dollar.
o Operating profit increased 7.8% to $9.2 million.
o Net income increased 11.2% to $6.2 million compared to $5.5 million last
year.
o Earnings per diluted share increased to $0.49 from $0.46 last year, with a
4.3% increase in diluted shares outstanding.
Efraim Grinberg, President and Chief Executive Officer, commented, "Our
excellent fourth quarter performance capped a banner year for Movado Group.
For both the quarter and the
year, we delivered record sales, profits and cash flow. During the fourth
quarter, we experienced growth across all of our brands - Movado, Concord,
Coach, ESQ and Tommy Hilfiger - with year-over-year sales gains recorded,
domestically and internationally. Our boutique business also posted strong
sales results throughout fiscal 2004 and continues to strengthen the luxury
brand image of Movado. In addition to our financial performance in fiscal
2004, we are very excited about the acquisition of premier Swiss luxury
watch brand, Ebel, and the future growth potential that lies ahead for our
company."
FISCAL 2004 RESULTS
o Net sales increased 10.0% to $330.2 million versus net sales of $300.1
million last year, or an 8.2% increase on a constant dollar basis.
o Comparable store sales increased 20.1% at the Company's Movado boutiques.
o Gross margin was 60.7% compared to 61.4%, primarily resulting from the
impact of the weak U.S. dollar.
o Operating profit increased 9.5% to $34.8 million.
o Net income increased 13.9% to $22.9 million compared to $20.1 million last
year.
o Earnings per diluted share increased 11.5% to $1.84 from $1.65 last year,
with a 2.0% increase in diluted shares outstanding.
o Cash flow from operations increased to $51.6 million.
Rick Cote, Executive Vice President and Chief Operating Officer,
stated, "Over the past several years, our team has worked diligently to
develop an efficient and scalable infrastructure from which to grow our
business. The results of these efforts, particularly in the areas of
working capital management and operational improvements, are best
highlighted by our second consecutive year of record cash flow from
operations, which was in excess of $50 million in fiscal 2004. We are
encouraged by our progress and we remain focused on our key operating
initiatives of driving our growth initiatives and improving our financial
strength by continuing to focus on generating strong and consistent cash
flow."
As announced on March 1, 2004, the Company completed its acquisition of
Swiss luxury watch brand, Ebel. With its distinctive and internationally
recognized image, Ebel extends Movado Group's presence within the luxury
watch category and international markets. Over the next six months, Ebel
will be integrated into Movado Group's worldwide operations. As part of
this process, the Company has initiated a restructuring of the Ebel
operations in Switzerland.
Mr. Grinberg concluded, "As we enter fiscal 2005, we are well positioned to
capitalize on the positive trends we are experiencing across all of our
brands. We will continue our relentless focus on delivering newness to the
marketplace, while supporting our brands with compelling marketing and
advertising programs. We are looking forward to the exciting new product we
plan to introduce at the Basel Watch Fair in April."
Prior to including Ebel in its financial results, Movado Group anticipates
fiscal year 2005 earnings per share to range between $2.00 to $2.05. After
accounting for the Ebel integration into Movado Group, the Company expects
earnings per share to range between $1.84 and $1.92 in fiscal 2005.
The Company's management will host a conference call today, March 12,
2004 at 10:00 a.m. Eastern Time to discuss its fourth quarter and year-end
financial results. The Company will also provide financial projections for
fiscal 2005 and a progress update on the acquisition of Ebel. 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 TWELVE MONTHS ENDED
JANUARY 31, JANUARY 31,
------------------- -------------------
2004 2003 2004 2003
---- ---- ---- ----
Net sales $ 92,732 $ 79,539 $330,214 $300,077
Cost of sales 37,444 30,696 129,908 115,907
-------- -------- -------- --------
Gross profit 55,288 48,843 200,306 184,170
Selling, general and administrative expenses 46,047 40,268 165,525 152,394
-------- -------- -------- --------
Operating profit 9,241 8,575 34,781 31,776
Interest expense 672 871 3,044 3,916
-------- -------- -------- --------
Income before taxes 8,569 7,704 31,737 27,860
Income tax 2,399 2,157 8,886 7,801
-------- -------- -------- --------
Net income $ 6,170 $ 5,547 $ 22,851 $ 20,059
======== ======== ======== ========
Net income per share $ 0.49 $ 0.46 $ 1.84 $ 1.65
Shares used in per share computation 12,682 12,157 12,439 12,190
MOVADO GROUP, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
(UNAUDITED)
JANUARY 31, JANUARY 31, JANUARY 31,
2004 2003 2002
---- ---- ----
ASSETS
Cash and cash equivalents $ 82,083 $ 38,365 $ 16,971
Trade receivables, net 88,800 94,438 92,014
Inventories 121,678 111,736 98,589
Other 27,932 36,646 19,467
-------- -------- --------
Total current assets 320,493 281,185 227,041
-------- -------- --------
Property, plant and equipment, net 42,112 39,939 38,726
Other assets 28,451 24,030 24,909
-------- -------- --------
$391,056 $345,154 $290,676
======== ======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Loans payable to banks $ 0 $ 0 $ 6,500
Current portion of long-term debt 10,000 0 5,000
Accounts payable 23,631 22,712 23,824
Accrued liabilities 25,781 22,735 25,417
Deferred and current taxes payable 18,111 16,318 12,368
-------- -------- --------
Total current liabilities 77,523 61,765 73,109
-------- -------- --------
Long-term debt 25,000 35,000 35,000
Deferred and non-current income taxes 2,282 4,229 1,513
Other liabilities 11,450 7,948 8,584
Shareholders' equity 274,801 236,212 172,470
-------- -------- --------
$391,056 $345,154 $290,676
======== ======== ========