Attached files
file | filename |
---|---|
EX-31.1 - EX-31.1 - MOVADO GROUP INC | mov-ex311_201504308.htm |
EX-32.1 - EX-32.1 - MOVADO GROUP INC | mov-ex321_201504306.htm |
EX-31.2 - EX-31.2 - MOVADO GROUP INC | mov-ex312_201504309.htm |
EX-32.2 - EX-32.2 - MOVADO GROUP INC | mov-ex322_201504307.htm |
EX-10.3 - EX-10.3 - MOVADO GROUP INC | mov-ex103_20150430224.htm |
EX-10.1 - EX-10.1 - MOVADO GROUP INC | mov-ex101_20150430223.htm |
EX-10.2 - EX-10.2 - MOVADO GROUP INC | mov-ex102_20150430225.htm |
EXCEL - IDEA: XBRL DOCUMENT - MOVADO GROUP INC | Financial_Report.xls |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
x |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the Quarterly Period Ended April 30, 2015
¨ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File Number: 1-16497
MOVADO GROUP, INC.
(Exact Name of Registrant as Specified in its Charter)
New York |
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13-2595932 |
(State or Other Jurisdiction of Incorporation or Organization) |
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(IRS Employer Identification No.) |
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650 From Road, Ste. 375 Paramus, New Jersey |
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07652-3556 |
(Address of Principal Executive Offices) |
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(Zip Code) |
(201) 267-8000
(Registrant’s telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for that past 90 days. Yes x No ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,’’ “accelerated filer’’ and “smaller reporting company’’ in Rule 12b-2 of the Exchange Act.
Large accelerated filer x |
Accelerated filer ¨ |
Non-accelerated filer ¨ |
Smaller reporting company ¨ |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x
The number of shares outstanding of the registrant’s Common Stock and Class A Common Stock as of May 21, 2015 were 17,114,255 and 6,644,105, respectively.
MOVADO GROUP, INC.
Index to Quarterly Report on Form 10-Q
April 30, 2015
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Page |
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Part I |
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Item 1. |
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Consolidated Balance Sheets at April 30, 2015, January 31, 2015 and April 30, 2014 |
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3 |
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Consolidated Statements of Operations for the three months ended April 30, 2015 and April 30, 2014 |
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4 |
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5 |
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Consolidated Statements of Cash Flows for the three months ended April 30, 2015 and April 30, 2014 |
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6 |
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7 |
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Item 2. |
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Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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16 |
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Item 3. |
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22 |
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Item 4. |
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23 |
Part II |
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23 |
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Item 1. |
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23 |
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Item 1A. |
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23 |
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Item 2. |
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23 |
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Item 6. |
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25 |
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26 |
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements
MOVADO GROUP, INC.
(In thousands, except share and per share amounts)
(Unaudited)
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April 30, |
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January 31, |
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April 30, |
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2015 |
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2015 |
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2014 |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
$ |
185,828 |
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$ |
199,852 |
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$ |
137,827 |
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Short-term investments |
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— |
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|
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— |
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34,063 |
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Trade receivables |
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73,472 |
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74,106 |
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77,395 |
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Inventories |
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183,904 |
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|
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170,788 |
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184,443 |
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Other current assets |
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43,960 |
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40,532 |
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47,228 |
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Total current assets |
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487,164 |
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485,278 |
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480,956 |
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Property, plant and equipment, net |
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44,354 |
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46,673 |
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46,806 |
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Deferred income taxes |
|
13,536 |
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13,550 |
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15,058 |
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Other non-current assets |
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39,483 |
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37,522 |
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32,064 |
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Total assets |
$ |
584,537 |
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$ |
583,023 |
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$ |
574,884 |
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LIABILITIES AND EQUITY |
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Current liabilities: |
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Loans payable to bank |
$ |
25,000 |
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$ |
— |
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$ |
— |
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Accounts payable |
|
25,647 |
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27,767 |
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25,644 |
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Accrued liabilities |
|
37,899 |
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30,933 |
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36,854 |
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Deferred and current income taxes payable |
|
1,352 |
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7,372 |
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|
5,777 |
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Total current liabilities |
|
89,898 |
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66,072 |
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|
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68,275 |
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Deferred and non-current income taxes payable |
|
3,505 |
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3,470 |
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3,792 |
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Other non-current liabilities |
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30,484 |
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|
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29,196 |
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27,244 |
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Total liabilities |
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123,887 |
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98,738 |
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99,311 |
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Commitments and contingencies (Note 8) |
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Equity: |
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Preferred Stock, $0.01 par value, 5,000,000 shares authorized; no shares issued |
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— |
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— |
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— |
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Common Stock, $0.01 par value, 100,000,000 shares authorized; 26,926,331,26,849,080 and 26,753,324 shares issued, respectively |
|
269 |
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268 |
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268 |
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Class A Common Stock, $0.01 par value, 30,000,000 shares authorized; 6,644,105,6,642,184 and 6,638,262 shares issued and outstanding, respectively |
|
66 |
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66 |
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66 |
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Capital in excess of par value |
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176,524 |
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174,826 |
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168,067 |
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Retained earnings |
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358,992 |
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358,006 |
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321,176 |
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Accumulated other comprehensive income |
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95,221 |
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98,854 |
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111,832 |
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Treasury Stock, 9,662,176, 8,784,497 and 8,081,423 shares, respectively, at cost |
|
(172,515 |
) |
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(149,811 |
) |
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(128,657 |
) |
Total Movado Group, Inc. shareholders' equity |
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458,557 |
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482,209 |
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472,752 |
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Noncontrolling interests |
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2,093 |
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2,076 |
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2,821 |
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Total equity |
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460,650 |
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484,285 |
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475,573 |
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Total liabilities and equity |
$ |
584,537 |
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$ |
583,023 |
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$ |
574,884 |
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See Notes to Consolidated Financial Statements
3
MOVADO GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
|
Three Months Ended April 30, |
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2015 |
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2014 |
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Net sales |
$ |
120,461 |
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$ |
120,921 |
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Cost of sales |
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58,012 |
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55,770 |
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Gross profit |
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62,449 |
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65,151 |
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Selling, general, and administrative |
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55,574 |
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54,230 |
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Operating income |
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6,875 |
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10,921 |
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Interest expense |
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(152 |
) |
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(94 |
) |
Interest income |
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53 |
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35 |
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Income before income taxes |
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6,776 |
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10,862 |
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Provision for income taxes (Note 9) |
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3,135 |
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3,433 |
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Net income |
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3,641 |
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|
7,429 |
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Less: Net income attributed to noncontrolling interests |
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19 |
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64 |
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Net income attributed to Movado Group, Inc. |
$ |
3,622 |
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$ |
7,365 |
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Basic income per share: |
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Weighted basic average shares outstanding |
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24,279 |
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25,325 |
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Net income per share attributed to Movado Group, Inc. |
$ |
0.15 |
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$ |
0.29 |
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Diluted income per share: |
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Weighted diluted average shares outstanding |
|
24,569 |
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|
25,696 |
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Net income per share attributed to Movado Group, Inc. |
$ |
0.15 |
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$ |
0.29 |
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Dividends declared per share |
$ |
0.11 |
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$ |
0.10 |
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See Notes to Consolidated Financial Statements
4
MOVADO GROUP, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) \ INCOME
(In thousands)
(Unaudited)
|
Three Months Ended April 30, |
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2015 |
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2014 |
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Comprehensive (loss) \ income, net of taxes: |
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|
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Net income including noncontrolling interests |
$ |
3,641 |
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$ |
7,429 |
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Net unrealized gain on investments, net of tax of $4 and $39, respectively |
|
10 |
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70 |
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Net change in effective portion of hedging contracts, net of tax benefit of $100 and $0, respectively |
|
(508 |
) |
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|
- |
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Foreign currency translation adjustments |
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(3,137 |
) |
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|
8,131 |
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Comprehensive income including noncontrolling interests |
|
6 |
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|
15,630 |
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Less: Comprehensive income attributable to noncontrolling interests |
|
17 |
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|
135 |
|
Total comprehensive (loss) \ income attributable to Movado Group, Inc. |
$ |
(11 |
) |
|
$ |
15,495 |
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See Notes to Consolidated Financial Statements
5
MOVADO GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
|
Three Months Ended April 30, |
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2015 |
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|
2014 |
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Cash flows from operating activities: |
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|
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Net income including noncontrolling interests |
$ |
3,641 |
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$ |
7,429 |
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Adjustments to reconcile net income to net cash (used in) operating activities: |
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|
|
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|
|
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Depreciation and amortization |
|
2,981 |
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|
|
3,022 |
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Transactional (gains) \ losses |
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(774 |
) |
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|
1,097 |
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Write-down of inventories |
|
330 |
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|
|
302 |
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Deferred income taxes |
|
283 |
|
|
|
155 |
|
Stock-based compensation |
|
1,520 |
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|
1,180 |
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Excess tax benefit from stock-based compensation |
|
(42 |
) |
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|
(858 |
) |
Operating efficiency initiatives and other items |
|
2,670 |
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|
- |
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Changes in assets and liabilities: |
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|
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Trade receivables |
|
685 |
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|
|
(8,092 |
) |
Inventories |
|
(14,205 |
) |
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|
(1,034 |
) |
Other current assets |
|
(3,959 |
) |
|
|
(2,775 |
) |
Accounts payable |
|
(2,079 |
) |
|
|
(8,228 |
) |
Accrued liabilities |
|
4,044 |
|
|
|
(5,950 |
) |
Income taxes payable |
|
(5,914 |
) |
|
|
1,473 |
|
Other non-current assets |
|
(1,641 |
) |
|
|
(1,477 |
) |
Other non-current liabilities |
|
1,286 |
|
|
|
1,703 |
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Net cash (used in) operating activities |
|
(11,174 |
) |
|
|
(12,053 |
) |
Cash flows from investing activities: |
|
|
|
|
|
|
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Capital expenditures |
|
(1,461 |
) |
|
|
(1,523 |
) |
Trademarks |
|
(94 |
) |
|
|
(20 |
) |
Net cash (used in) investing activities |
|
(1,555 |
) |
|
|
(1,543 |
) |
Cash flows from financing activities: |
|
|
|
|
|
|
|
Stock options exercised and other changes |
|
(513 |
) |
|
|
(1,324 |
) |
Excess tax benefit from stock-based compensation |
|
42 |
|
|
|
858 |
|
Proceeds from bank borrowings |
|
25,000 |
|
|
- |
|
|
Dividends paid |
|
(2,636 |
) |
|
|
(2,523 |
) |
Stock repurchase |
|
(22,154 |
) |
|
|
(5,312 |
) |
Net cash (used in) financing activities |
|
(261 |
) |
|
|
(8,301 |
) |
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash and cash equivalents |
|
(1,034 |
) |
|
|
2,065 |
|
Net (decrease) in cash and cash equivalents |
|
(14,024 |
) |
|
|
(19,832 |
) |
Cash and cash equivalents at beginning of period |
|
199,852 |
|
|
|
157,659 |
|
Cash and cash equivalents at end of period |
$ |
185,828 |
|
|
$ |
137,827 |
|
See Notes to Consolidated Financial Statements
6
MOVADO GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
BASIS OF PRESENTATION
The accompanying interim unaudited consolidated financial statements have been prepared by Movado Group, Inc. (the “Company”), in a manner consistent with that used in the preparation of the annual audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2015 (the “2015 Annual Report on Form 10-K”). In the opinion of management, the accompanying unaudited consolidated financial statements reflect all adjustments, consisting of only normal and recurring adjustments, necessary for a fair statement of the financial position and results of operations for the periods presented. The consolidated balance sheet data at January 31, 2015 is derived from the audited annual financial statements, which are included in the Company’s 2015 Annual Report on Form 10-K and should be read in connection with these interim unaudited financial statements. Operating results for the interim periods presented are not necessarily indicative of the results that may be expected for the full year.
NOTE 1 – FAIR VALUE MEASUREMENTS
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Accounting guidance establishes a fair value hierarchy which prioritizes the inputs used in measuring fair value into three broad levels as follows:
● |
Level 1 – Quoted prices in active markets for identical assets or liabilities. |
● |
Level 2 – Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly. |
● |
Level 3 – Unobservable inputs based on the Company’s assumptions. |
The following tables present the fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis (in thousands) as of April 30, 2015 and 2014 and January 31, 2015:
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|
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Fair Value at April 30, 2015 |
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|||||||||||||
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Balance Sheet Location |
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Level 1 |
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Level 2 |
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Level 3 |
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Total |
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||||
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Available-for-sale securities |
|
Other current assets |
|
$ |
327 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
327 |
|
Long-term investment |
|
Other non-current assets |
|
|
— |
|
|
|
— |
|
|
|
1,264 |
|
|
|
1,264 |
|
SERP assets - employer |
|
Other non-current assets |
|
|
1,520 |
|
|
|
— |
|
|
|
— |
|
|
|
1,520 |
|
SERP assets - employee |
|
Other non-current assets |
|
|
26,047 |
|
|
|
— |
|
|
|
— |
|
|
|
26,047 |
|
Hedge derivatives |
|
Other current assets |
|
|
— |
|
|
|
866 |
|
|
|
— |
|
|
|
866 |
|
Total |
|
$ |
27,894 |
|
|
$ |
866 |
|
|
$ |
1,264 |
|
|
$ |
30,024 |
|
||
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SERP liabilities - employee |
|
Other non-current liabilities |
|
$ |
26,047 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
26,047 |
|
Hedge derivatives |
|
Accrued liabilities |
|
|
— |
|
|
|
690 |
|
|
|
— |
|
|
|
690 |
|
Total |
|
$ |
26,047 |
|
|
$ |
690 |
|
|
$ |
— |
|
|
$ |
26,737 |
|
|
|
|
|
Fair Value at January 31, 2015 |
|
|||||||||||||
|
|
Balance Sheet Location |
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
||||
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Available-for-sale securities |
|
Other current assets |
|
$ |
314 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
314 |
|
Long-term investment |
|
Other non-current assets |
|
|
— |
|
|
|
— |
|
|
|
1,240 |
|
|
|
1,240 |
|
SERP assets - employer |
|
Other non-current assets |
|
|
1,351 |
|
|
|
— |
|
|
|
— |
|
|
|
1,351 |
|
SERP assets - employee |
|
Other non-current assets |
|
|
24,811 |
|
|
|
— |
|
|
|
— |
|
|
|
24,811 |
|
Hedge derivatives |
|
Other current assets |
|
|
— |
|
|
|
1,298 |
|
|
|
— |
|
|
|
1,298 |
|
Total |
|
$ |
26,476 |
|
|
$ |
1,298 |
|
|
$ |
1,240 |
|
|
$ |
29,014 |
|
||
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SERP liabilities - employee |
|
Other non-current liabilities |
|
$ |
24,811 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
24,811 |
|
Hedge derivatives |
|
Accrued liabilities |
|
|
— |
|
|
|
71 |
|
|
|
— |
|
|
|
71 |
|
Total |
|
$ |
24,811 |
|
|
$ |
71 |
|
|
$ |
— |
|
|
$ |
24,882 |
|
7
|
|
|
|
Fair Value at April 30, 2014 |
|
|||||||||||||
|
|
Balance Sheet Location |
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
||||
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Available-for-sale securities |
|
Other current assets |
|
$ |
687 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
687 |
|
Time deposits |
|
Short-term investments |
|
|
34,063 |
|
|
|
— |
|
|
|
— |
|
|
|
34,063 |
|
SERP assets - employer |
|
Other non-current assets |
|
|
1,273 |
|
|
|
— |
|
|
|
— |
|
|
|
1,273 |
|
SERP assets - employee |
|
Other non-current assets |
|
|
22,478 |
|
|
|
— |
|
|
|
— |
|
|
|
22,478 |
|
Hedge derivatives |
|
Other current assets |
|
|
— |
|
|
|
772 |
|
|
|
— |
|
|
|
772 |
|
Total |
|
$ |
58,501 |
|
|
$ |
772 |
|
|
$ |
— |
|
|
$ |
59,273 |
|
||
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SERP liabilities - employee |
|
Other non-current liabilities |
|
$ |
22,478 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
22,478 |
|
Hedge derivatives |
|
Accrued liabilities |
|
|
— |
|
|
|
10 |
|
|
|
— |
|
|
|
10 |
|
Total |
|
$ |
22,478 |
|
|
$ |
10 |
|
|
$ |
— |
|
|
$ |
22,488 |
|
The fair values of the Company’s available-for-sale securities are based on quoted prices. The fair value of the long-term investment is based on the purchase price plus eight percent calculated annually. Time deposits are classified as short-term investments and held to original maturity. The assets related to the Company’s defined contribution supplemental executive retirement plan (“SERP”) consist of both employer (employee unvested) and employee assets which are invested in investment funds with fair values calculated based on quoted market prices. The SERP liability represents the Company’s liability to the employees in the plan for their vested balances. The hedge derivatives are entered into by the Company principally to reduce its exposure to Swiss franc and Euro currency exchange rate risk. Fair values of the Company’s hedge derivatives are calculated based on quoted foreign exchange rates, quoted interest rates and market volatility factors.
The following table presents a reconciliation of the assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) as of April 30, 2015 and 2014 and January 31, 2015. Level 3 consists of a long-term investment.
|
|
April 30, 2015 |
|
|
January 31, 2015 |
|
|
April 30, 2014 |
|
|||
Balance, beginning of fiscal year |
|
$ |
1,240 |
|
|
$ |
— |
|
|
$ |
— |
|
Purchase of long-term investment |
|
|
— |
|
|
|
1,200 |
|
|
|
— |
|
Interest income |
|
|
24 |
|
|
|
40 |
|
|
|
— |
|
Balance, end of period |
|
$ |
1,264 |
|
|
$ |
1,240 |
|
|
$ |
— |
|
8
NOTE 2 – EQUITY
The components of equity for the three months ended April 30, 2015 and 2014 are as follows (in thousands):
|
|
Movado Group, Inc. Shareholders' Equity |
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
|
Common Stock (1) |
|
|
Class A Common Stock (2) |
|
|
Capital in Excess of Par Value |
|
|
Retained Earnings |
|
|
Treasury Stock |
|
|
Accumulated Other Comprehensive Income |
|
|
Noncontrolling Interests |
|
|
Total |
|
||||||||
Balance, January 31, 2015 |
|
$ |
268 |
|
|
$ |
66 |
|
|
$ |
174,826 |
|
|
$ |
358,006 |
|
|
$ |
(149,811 |
) |
|
$ |
98,854 |
|
|
$ |
2,076 |
|
|
$ |
484,285 |
|
Net income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,622 |
|
|
|
|
|
|
|
|
|
|
|
19 |
|
|
|
3,641 |
|
Dividends |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2,636 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2,636 |
) |
Stock repurchase |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(22,154 |
) |
|
|
|
|
|
|
|
|
|
|
(22,154 |
) |
Stock options exercised, net of tax benefit of $42 |
|
|
1 |
|
|
|
|
|
|
|
78 |
|
|
|
|
|
|
|
(550 |
) |
|
|
|
|
|
|
|
|
|
|
(471 |
) |
Supplemental executive retirement plan |
|
|
|
|
|
|
|
|
|
|
100 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100 |
|
Stock-based compensation expense |
|
|
|
|
|
|
|
|
|
|
1,520 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,520 |
|
Net unrealized gain on investments, net of tax of $4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10 |
|
|
|
|
|
|
|
10 |
|
Net change in effective portion of hedging contracts, net of tax benefit of $100 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(508 |
) |
|
|
|
|
|
|
(508 |
) |
Foreign currency translation adjustment (3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3,135 |
) |
|
|
(2 |
) |
|
|
(3,137 |
) |
Balance, April 30, 2015 |
|
$ |
269 |
|
|
$ |
66 |
|
|
$ |
176,524 |
|
|
$ |
358,992 |
|
|
$ |
(172,515 |
) |
|
$ |
95,221 |
|
|
$ |
2,093 |
|
|
$ |
460,650 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock (1) |
|
|
Class A Common Stock (2) |
|
|
Capital in Excess of Par Value |
|
|
Retained Earnings |
|
|
Treasury Stock |
|
|
Accumulated Other Comprehensive Income |
|
|
Noncontrolling Interests |
|
|
Total |
|
||||||||
Balance, January 31, 2014 |
|
$ |
266 |
|
|
$ |
66 |
|
|
$ |
165,342 |
|
|
$ |
316,334 |
|
|
$ |
(122,406 |
) |
|
$ |
103,702 |
|
|
$ |
2,686 |
|
|
$ |
465,990 |
|
Net income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,365 |
|
|
|
|
|
|
|
|
|
|
|
64 |
|
|
|
7,429 |
|
Dividends |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2,523 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2,523 |
) |
Stock repurchase |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(5,312 |
) |
|
|
|
|
|
|
|
|
|
|
(5,312 |
) |
Stock options exercised, net of tax benefit of $858 |
|
|
2 |
|
|
|
|
|
|
|
856 |
|
|
|
|
|
|
|
(1,324 |
) |
|
|
|
|
|
|
|
|
|
|
(466 |
) |
Supplemental executive retirement plan |
|
|
|
|
|
|
|
|
|
|
18 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18 |
|
Stock-based compensation expense |
|
|
|
|
|
|
|
|
|
|
1,180 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,180 |
|
Net unrealized gain on investments, net of tax of $39 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
70 |
|
|
|
|
|
|
|
70 |
|
Stock donation |
|
|
|
|
|
|
|
|
|
|
671 |
|
|
|
|
|
|
|
385 |
|
|
|
|
|
|
|
|
|
|
|
1,056 |
|
Foreign currency translation adjustment (3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,060 |
|
|
|
71 |
|
|
|
8,131 |
|
Balance, April 30, 2014 |
|
$ |
268 |
|
|
$ |
66 |
|
|
$ |
168,067 |
|
|
$ |
321,176 |
|
|
$ |
(128,657 |
) |
|
$ |
111,832 |
|
|
$ |
2,821 |
|
|
$ |
475,573 |
|
(1) Each share of common stock is entitled to one vote per share.
(2) Each share of class A common stock is entitled to 10 votes per share on all matters submitted to a vote of the shareholders. Each holder of class A common stock is entitled to convert, at any time, any and all of such shares into the same number of shares of common stock. Each share of class A common stock is converted automatically into common stock in the event that the beneficial or record ownership of such shares of class A common stock is transferred to any person, except to certain family members or affiliated persons deemed “permitted transferees” pursuant to the Company’s Restated Certificate of Incorporation as amended. The class A common stock is not publicly traded and consequently, there is currently no established public trading market for these shares.
(3) The currency translation adjustment is not adjusted for income taxes to the extent that it relates to permanent investments of earnings in international subsidiaries.
NOTE 3 – SEGMENT INFORMATION
The Company follows accounting guidance related to disclosures about segments of an enterprise and related information. This guidance requires disclosure of segment data based on how management makes decisions about allocating resources to segments and measuring their performance.
9
The Company conducts its business in two operating segments: Wholesale and Retail. The Company’s Wholesale segment includes the designing, manufacturing and distribution of watches of quality luxury brands or licensed brands, in addition to revenue generated from after-sales service activities and shipping. The Retail segment includes the Company’s outlet stores.
The Company divides its business into two major geographic locations: United States operations, and International, which includes the results of all other Company operations. The allocation of geographic revenue is based upon the location of the customer. The Company’s International operations in Europe, the Americas (excluding the United States), the Middle East and Asia accounted for 18.6%, 11.0%, 8.7% and 8.1%, respectively, of the Company’s total net sales for the three months ended April 30, 2015. For the three months ended April 30, 2014, the Company’s International operations in Europe, the Americas (excluding the United States), the Middle East and Asia accounted for 20.3%, 12.8%, 8.1% and 7.4%, respectively, of the Company’s total net sales. Substantially all of the Company’s International assets are located in Switzerland and Hong Kong.
Operating Segment Data for the Three Months Ended April 30, 2015 and 2014 (in thousands):
|
Net Sales |
|
|||||
|
2015 |
|
|
2014 |
|
||
Wholesale: |
|
|
|
|
|
|
|
Luxury brands category |
$ |
44,903 |
|
|
$ |
44,220 |
|
Licensed brands category |
|
60,842 |
|
|
|
61,729 |
|
After-sales service and all other |
|
3,852 |
|
|
|
3,736 |
|
Total Wholesale |
|
109,597 |
|
|
|
109,685 |
|
Retail |
|
10,864 |
|
|
|
11,236 |
|
Consolidated total |
$ |
120,461 |
|
|
$ |
120,921 |
|
|
Operating Income |
|
|||||
|
2015 |
|
|
2014 |
|
||
Wholesale |
$ |
5,925 |
|
|
$ |
9,375 |
|
Retail |
|
950 |
|
|
|
1,546 |
|
Consolidated total |
$ |
6,875 |
|
|
$ |
10,921 |
|
|
Total Assets |
|
|||||||||
|
April 30, |
|
|
January 31, |
|
|
April 30, |
|
|||
Wholesale |
$ |
563,947 |
|
|
$ |
562,462 |
|
|
$ |
553,833 |
|
Retail |
|
20,590 |
|
|
|
20,561 |
|
|
|
21,051 |
|
Consolidated total |
$ |
584,537 |
|
|
$ |
583,023 |
|
|
$ |
574,884 |
|
Geographic Location Data for the Three Months Ended April 30, 2015 and 2014 (in thousands):
|
Net Sales |
|
|
Operating Income / (Loss) |
|
||||||||||
|
2015 |
|
|
2014 |
|
|
2015 |
|
|
2014 |
|
||||
United States (1) |