New
York
|
13-2595932
|
|
(State
of Other Jurisdiction
|
(IRS
Employer
|
|
of
Incorporation or Organization)
|
Identification
No.)
|
|
650
From Road, Paramus, New Jersey
|
07652
|
|
(Address
of Principal Executive Offices)
|
(Zip
Code)
|
Page
|
|||
Part
I
|
Financial
Information (Unaudited)
|
||
Item
1.
|
Consolidated
Balance Sheets at April 30, 2007, January 31, 2007 and April 30,
2006
|
3
|
|
Consolidated
Statements of Income for the three months ended April 30, 2007
and
2006
|
4
|
||
Consolidated
Statements of Cash Flows for the three months ended April 30, 2007
and
2006
|
5
|
||
Notes
to Consolidated Financial Statements
|
6
|
||
Item
2.
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
|
11
|
|
Item
3.
|
Quantitative
and Qualitative Disclosures About Market Risk
|
19
|
|
Item
4.
|
Controls
and Procedures
|
20
|
|
Part
II
|
Other
Information
|
||
Item
1A.
|
Risk
Factors
|
21
|
|
Item
6.
|
Exhibits
|
21
|
|
Signature
|
22
|
April
30, 2007
|
January
31, 2007
|
April
30, 2006
|
||||||||
ASSETS
|
||||||||||
Current
assets:
|
||||||||||
Cash
|
$
|
101,769
|
$
|
133,011
|
$
|
82,560
|
||||
Trade
receivables, net
|
105,753
|
111,417
|
116,523
|
|||||||
Inventories,
net
|
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
liabilities:
|
||||||||||
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
|
|||||||
Current
taxes payable
|
1,076
|
5,011
|
287
|
|||||||
Deferred
taxes
|
963
|
935
|
871
|
|||||||
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
non-current liabilities
|
24,130
|
23,087
|
20,244
|
|||||||
Total
liabilities
|
201,959
|
198,794
|
206,086
|
|||||||
Commitments
and contingencies (Note 7)
|
||||||||||
Minority
interest
|
536
|
443
|
231
|
|||||||
Shareholders’
equity:
|
||||||||||
Preferred
Stock, $0.01 par value, 5,000,000 shares authorized; no shares
issued
|
-
|
-
|
-
|
|||||||
Common
Stock, $0.01 par value, 100,000,000 shares authorized; 23,984,282,
23,872,262 and 23,260,013 shares issued, respectively
|
240
|
239
|
233
|
|||||||
Class
A Common Stock, $0.01 par value, 30,000,000 shares authorized;
6,638,239,
6,642,159 and 6,766,909 shares issued and outstanding,
respectively
|
66
|
66
|
68
|
|||||||
Capital
in excess of par value
|
119,566
|
117,811
|
109,387
|
|||||||
Retained
earnings
|
273,147
|
280,495
|
237,850
|
|||||||
Accumulated
other comprehensive income
|
38,975
|
32,307
|
34,742
|
|||||||
Treasury
Stock, 4,706,904, 4,678,244 and 4,613,645 shares, respectively,
at
cost
|
(53,457
|
)
|
(52,537
|
)
|
(50,775
|
)
|
||||
Total
shareholders’ equity
|
378,537
|
378,381
|
331,505
|
|||||||
Total
liabilities and equity
|
$
|
581,032
|
$
|
577,618
|
$
|
537,822
|
Three
Months Ended April 30,
|
|||||||
2007
|
2006
|
||||||
Net
sales
|
$
|
101,363
|
$
|
97,744
|
|||
Cost
of sales
|
39,711
|
38,154
|
|||||
Gross
profit
|
61,652
|
59,590
|
|||||
Selling,
general and administrative
|
58,880
|
56,156
|
|||||
Operating
income
|
2,772
|
3,434
|
|||||
Interest
expense
|
(879
|
)
|
(943
|
)
|
|||
Interest
income
|
1,247
|
891
|
|||||
Income
before income taxes and minority interest
|
3,140
|
3,382
|
|||||
Provision
for income taxes (Note 2)
|
647
|
606
|
|||||
Minority
interest
|
93
|
(79
|
)
|
||||
Net
income
|
$
|
2,400
|
$
|
2,855
|
|||
Basic
income per share:
|
|||||||
Net
income per share
|
$
|
0.09
|
$
|
0.11
|
|||
Weighted
basic average shares outstanding
|
25,916
|
25,436
|
|||||
Diluted
income per share:
|
|||||||
Net
income per share
|
$
|
0.09
|
$
|
0.11
|
|||
Weighted
diluted average shares outstanding
|
27,175
|
26,395
|
|||||
Dividends
paid per share
|
$
|
0.08
|
$
|
0.06
|
Three
Months Ended April 30,
|
|||||||
2007
|
2006
|
||||||
Cash
flows from operating activities:
|
|||||||
Net
income
|
$
|
2,400
|
$
|
2,855
|
|||
Adjustments
to reconcile net income to net cash used in operating
activities:
|
|||||||
Depreciation
and amortization
|
4,101
|
3,669
|
|||||
Deferred
income taxes
|
(1,304
|
)
|
(858
|
)
|
|||
Provision
for losses on accounts receivable
|
324
|
684
|
|||||
Provision
for losses on inventory
|
161
|
180
|
|||||
Loss
on disposition of property, plant and equipment
|
1,075
|
-
|
|||||
Stock-based
compensation
|
915
|
539
|
|||||
Excess
tax benefit from stock-based compensation
|
(572
|
)
|
(460
|
)
|
|||
Minority
interest
|
93
|
(79
|
)
|
||||
Changes
in assets and liabilities:
|
|||||||
Trade
receivables
|
6,626
|
(6,159
|
)
|
||||
Inventories
|
(15,481
|
)
|
(12,142
|
)
|
|||
Other
current assets
|
(1,628
|
)
|
(2,147
|
)
|
|||
Accounts
payable
|
(6,999
|
)
|
(2,493
|
)
|
|||
Accrued
liabilities
|
(4,983
|
)
|
(7,561
|
)
|
|||
Current
taxes payable
|
(3,389
|
)
|
(6,965
|
)
|
|||
Other
non-current assets
|
(1,691
|
)
|
(1,063
|
)
|
|||
Other
non-current liabilities
|
1,039
|
748
|
|||||
Net
cash used in operating activities
|
(19,313
|
)
|
(31,252
|
)
|
|||
Cash
flows from investing activities:
|
|||||||
Capital
expenditures
|
(6,080
|
)
|
(2,138
|
)
|
|||
Trademarks
|
(66
|
)
|
(119
|
)
|
|||
Net
cash used in investing activities
|
(6,146
|
)
|
(2,257
|
)
|
|||
Cash
flows from financing activities:
|
|||||||
Net
repayments of bank borrowings
|
(4,936
|
)
|
(9,391
|
)
|
|||
Stock
options exercised and other changes
|
(650
|
)
|
423
|
||||
Excess
tax benefit from stock-based compensation
|
572
|
460
|
|||||
Dividends
paid
|
(2,073
|
)
|
(1,523
|
)
|
|||
Net
cash used in financing activities
|
(7,087
|
)
|
(10,031
|
)
|
|||
Effect
of exchange rate changes on cash
|
1,304
|
2,475
|
|||||
Net
decrease in cash
|
(31,242
|
)
|
(41,065
|
)
|
|||
Cash
at beginning of period
|
133,011
|
123,625
|
|||||
Cash
at end of period
|
$
|
101,769
|
$
|
82,560
|
Three
Months Ended April 30,
|
|||||||
2007
|
2006
|
||||||
Net
income
|
$
|
2,400
|
$
|
2,855
|
|||
Net
unrealized gain on investments, net of tax
|
18
|
7
|
|||||
Effective
portion of unrealized gain on hedging contracts, net of
tax
|
806
|
1,905
|
|||||
Foreign
currency translation adjustment (1)
|
5,844
|
5,157
|
|||||
Total
comprehensive income
|
$
|
9,068
|
$
|
9,924
|
Net
Sales
|
Operating
Income (Loss)
|
||||||||||||
2007
|
2006
|
2007
|
2006
|
||||||||||
Wholesale
|
$
|
83,147
|
$
|
81,003
|
$
|
4,427
|
$
|
4,686
|
|||||
Retail
|
18,216
|
16,741
|
(1,655
|
)
|
(1,252
|
)
|
|||||||
Consolidated
total
|
$
|
101,363
|
$
|
97,744
|
$
|
2,772
|
$
|
3,434
|
Total
Assets
|
||||||||||
April
30, 2007
|
January
31, 2007
|
April
30, 2006
|
||||||||
Wholesale
|
$
|
512,865
|
$
|
510,380
|
$
|
474,521
|
||||
Retail
|
68,167
|
67,238
|
63,301
|
|||||||
Consolidated
total
|
$
|
581,032
|
$
|
577,618
|
$
|
537,822
|
Net
Sales
|
Operating
(Loss) Income
|
||||||||||||
2007
|
2006
|
2007
|
2006
|
||||||||||
United
States
|
$
|
60,875
|
$
|
64,383
|
$
|
(3,825
|
)
|
$
|
(3,820
|
)
|
|||
International
|
40,488
|
33,361
|
6,597
|
7,254
|
|||||||||
Consolidated
total
|
$
|
101,363
|
$
|
97,744
|
$
|
2,772
|
$
|
3,434
|
Total
Assets
|
||||||||||
April
30, 2007
|
January
31, 2007
|
April
30, 2006
|
||||||||
United
States
|
$
|
344,252
|
$
|
357,650
|
$
|
321,611
|
||||
International
|
236,780
|
219,968
|
216,211
|
|||||||
Consolidated
total
|
$
|
581,032
|
$
|
577,618
|
$
|
537,822
|
Long-Lived
Assets
|
||||||||||
April
30, 2007
|
January
31, 2007
|
April
30, 2006
|
||||||||
United
States
|
$
|
43,451
|
$
|
42,702
|
$
|
36,393
|
||||
International
|
14,846
|
14,121
|
14,610
|
|||||||
Consolidated
total
|
$
|
58,297
|
$
|
56,823
|
$
|
51,003
|
April
30, 2007
|
January
31, 2007
|
April
30, 2006
|
||||||||
Finished
goods
|
$
|
140,285
|
$
|
129,082
|
$
|
139,476
|
||||
Component
parts
|
64,345
|
55,930
|
67,561
|
|||||||
Work-in-process
|
7,476
|
8,330
|
6,726
|
|||||||
$
|
212,106
|
$
|
193,342
|
$
|
213,763
|
Three
Months Ended April 30,
|
|||||||
2007
|
2006
|
||||||
Wholesale:
|
|||||||
United
States
|
$
|
42,659
|
$
|
47,642
|
|||
International
|
40,488
|
33,361
|
|||||
Total
Wholesale
|
83,147
|
81,003
|
|||||
Retail
|
18,216
|
16,741
|
|||||
Net
Sales
|
$
|
101,363
|
$
|
97,744
|
10.1 |
Third
Amendment to License Agreement dated as of January 1, 1992 between
Registrant and Hearst Magazines, a Division of Hearst Communications,
Inc., effective February 15, 2007.*
|
10.2 |
Fifth
Amendment to License Agreement dated December 9, 1996 between Registrant
and Coach, Inc. effective March 9, 2007.*
|
10.3 |
Sixth
Amendment to License Agreement dated June 3, 1999 between Registrant
and
Tommy Hilfiger Licensing, Inc. effective April 11,
2007.*
|
31.1 |
Certification
of the Chief Executive Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
|
31.2 |
Certification
of the Chief Financial Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
|
32.1 |
Certification
of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as
adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
|
32.2 |
Certification
of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as
adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
|
*
|
Confidential
portions of Exhibits 10.1, 10.2 and 10.3 have been omitted and
filed
separately with the Securities and Exchange Commission pursuant
to Rule
24b-2 of the Securities Exchange Act of
1934.
|
MOVADO
GROUP, INC.
|
||
(Registrant)
|
||
Dated: May
31, 2007
|
By:
|
/s/
Eugene J. Karpovich
|
Eugene
J. Karpovich
|
||
Senior
Vice President,
|
||
Chief
Financial Officer and
|
||
Principal
Accounting Officer
|
||