PARAMUS, N.J., May 31 /PRNewswire-FirstCall/ -- Movado Group, Inc.
(NYSE: MOV), today announced first quarter results for the period ended April
First Quarter Fiscal 2008
- Net sales increased 3.7% to $101.4 million compared to $97.7 million
last year. Net sales for the quarter included $2.7 million of excess
- Comparable store sales at the Company's Movado boutiques decreased 1.5%
versus a 4.5% increase in the year-ago period.
- Gross profit was $61.7 million, or 60.8% of sales, compared to $59.6
million, or 61.0% of sales last year. Excluding excess discontinued
product sales, adjusted gross profit was $62.0 million, or 62.9% of
sales, an improvement of 190 basis points over the year-ago period.
- Operating profit was $2.8 million compared to $3.4 million in the year-
- Net interest income was $0.4 million versus net interest expense of
$0.1 million last year.
- Income tax expense of $0.6 million reflects a 20.6% tax rate in the
first quarter compared to income tax expense of $0.6 million, or a
17.9% tax rate, recorded last year. The Company adopted FASB
Interpretation No. (FIN) 48, "Accounting for Uncertainty in Income
Taxes" effective as of February 1, 2007, which resulted in an increase
to income tax expense in the first quarter of $0.2 million.
- Net income and earnings per diluted share were $2.4 million and $0.09,
respectively, versus net income of $2.9 million and earnings per
diluted share of $0.11 in the year-ago period. Average diluted shares
outstanding increased 3.0% from the prior year period.
Efraim Grinberg, President and Chief Executive Officer, stated, "We are
very pleased with the strength of our first quarter performance. As
anticipated, sales growth slowed in the quarter reflecting a shift in the U.S.
retail calendar, which resulted in timing differences in purchases by certain
of our customers. We continue to support all of our brands with strong new
product introductions and compelling advertising campaigns. Across our
portfolio, we received an excellent response from our retail partners to the
powerful array of new products debuted at the Basel Watch Fair in April."
Rick Cote, Executive Vice President and Chief Operating Officer, stated,
"Strong operating disciplines across our organization led to continued
improvement in gross margin, a key driver toward achieving our goal of
expanding operating margin into the mid-teens. Additionally, in the quarter
we converted additional discontinued product into cash, thereby improving our
Movado Group projects fiscal 2008 diluted earnings per share of
approximately $1.72 based on an estimated 25% tax rate. This compares to
fiscal 2007 adjusted diluted earnings per share of $1.54. Fiscal 2007
adjusted diluted earnings per share exclude the impact of the tax benefit
resulting from the further utilization of the NOL acquired with Ebel in fiscal
2005 and previously disclosed one-time items related to accounts receivable,
foreign currency and sale of a non-operating asset. On a GAAP basis, fiscal
2007 earnings per share were $1.87 with a 5.4% tax rate. Fiscal 2008 net
sales remain projected to range between $550 million and $560 million.
The Company's management will host a conference call today, May 31, 2007
at 10:00 a.m. Eastern Time to discuss its first 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, manufactures, 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
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.
For a reconciliation of 2007 adjusted diluted earnings per share to 2007
earnings per share on a GAAP basis, please see the Company's press release,
dated March 29, 2007.
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
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, 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, 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
MOVADO GROUP, INC.
Consolidated Statements of Operations
(in thousands, except per share data)
Three Months Ended
Net sales $101,363 $97,744
Cost of sales 39,711 38,154
Gross profit 61,652 59,590
Selling, general and administrative expenses 58,880 56,156
Operating profit 2,772 3,434
Interest expense (879) (943)
Interest income 1,247 891
Income before income taxes and minority interest 3,140 3,382
Income tax 647 606
Minority interest 93 (79)
Net income $2,400 $2,855
Net income per diluted share $0.09 $0.11
Shares used in per share computation 27,175 26,395
MOVADO GROUP, INC.
CONSOLIDATED BALANCE SHEETS
April 30, January 31, April 30,
2007 2007 2006
Cash $101,769 $133,011 $82,560
Trade receivables, net 105,753 111,417 116,523
Inventories 212,106 193,342 213,763
Other current assets 39,510 35,109 34,199
Total current assets 459,138 472,879 447,045
Property, plant and equipment, net 58,297 56,823 51,003
Other non-current assets 63,597 47,916 39,774
Total assets $581,032 $577,618 $537,822
LIABILITIES AND SHAREHOLDERS' EQUITY
Current portion of long-term debt $5,000 $5,000 $5,000
Accounts payable 26,304 32,901 26,949
Accrued liabilities 39,946 45,610 42,231
Deferred and current taxes payable 2,039 5,946 1,158
Total current liabilities 73,289 89,457 75,338
Long-term debt 71,454 75,196 97,323
Deferred and non-current
income taxes 33,086 11,054 13,181
Other liabilities 24,130 23,087 20,244
Minority interest 536 443 231
Shareholders' equity 378,537 378,381 331,505
Total liabilities and equity $581,032 $577,618 $537,822
Impact of adoption of FIN 48:
As a result of the adoption of FIN 48, we recorded a reduction to our
February 1, 2007 retained earnings in the amount of $7.7 million
representing the cumulative effect of the adoption.
SOURCE Movado Group, Inc.
CONTACT: Investors, Suzanne Rosenberg, Vice President, Corporate
Communications of Movado Group, Inc.,
Leigh Parrish or
Melissa Merrill, both of Financial Dynamics,