~ Net Sales of $173.9 million, an Increase
of 96.4% from Fiscal 2021 and 10.2% from Fiscal 2020 ~
~ Operating Income Increases to $24.6
million from ($8.9) million in Fiscal 2021 and $8.8 million in
Fiscal 2020 ~
~ Earnings Per Share of $0.82 ~
~ Ends Second Quarter with Cash of $199.7
million and No Debt ~
~ Board Declares Quarterly Dividend
~
Movado Group, Inc. (NYSE: MOV) today announced record second
quarter and six-month results for the periods ended July 31, 2021,
with robust growth in second quarter net sales, operating income
and earnings per share as compared to the comparable quarter of
fiscal 2021. Current period results also surpassed fiscal 2020
second quarter results, which were not negatively impacted by the
pandemic.
Efraim Grinberg, Chairman and Chief Executive Officer, stated,
“We reported a record second quarter performance finishing a strong
first half for Movado Group and reflecting the successful
implementation of our strategy to maximize the power of our watch
and jewelry brands by accelerating our omni-channel presence while
maintaining financial and operational discipline. I am proud of the
efforts, dedication and commitment of our team who have continued
to work effectively under the challenging pandemic-induced
conditions to allow the company to produce these exceptional
results.”
“During the second quarter we generated a 96% increase in net
sales, a 540 basis point expansion in gross margin and a $26.1
million increase in adjusted operating income as compared to the
second quarter last year,” Mr. Grinberg continued. “Sales were
extremely strong in many areas of the business with our Movado
brand leading the way. Our Movado.com ecommerce revenue grew by
over 70% compared to the second quarter of fiscal 2021. We also had
very strong growth in our U.S. wholesale and our Movado Company
Stores against the second quarter of both fiscal 2021 and
pre-pandemic fiscal 2020. Our overall performance was driven by
design innovation across our brands supported by powerful marketing
programs. We delivered strong cash flow during the quarter which
brought our cash balance to close to $200 million after repaying
all outstanding debt. We continue to prioritize capital allocation
activities that support our growth and return value to our
shareholders. During the quarter, we purchased over 300,000 common
shares and today, the Board approved a quarterly dividend of $0.20
per share.”
“Overall, we remain excited about our opportunities as we begin
the second half of the year, yet are cautious as we weigh the
uncertainty stemming from COVID-19 variants.”
Due to the significant impact of COVID-19 on prior year
figures, this release will include certain comparisons to fiscal
2020 to provide additional context.
Fiscal 2022 Second Quarter Highlights
(See table below for GAAP and Non-GAAP measures)
- Delivered topline growth with an increase of 96.4% over second
quarter fiscal 2021. Total net sales increased 10.2% as compared to
pre-pandemic second quarter fiscal 2020 with a 28.5% increase in
U.S. net sales partially offset by a 3.2% decrease in International
net sales;
- Drove gross margin expansion of 540 basis points from prior
year period to 56.6% and 250 basis points from second quarter
fiscal 2020;
- Generated second quarter adjusted operating income of $25.5
million as compared to an adjusted operating loss of $0.6 million
last year and adjusted operating income of $10.3 million in the
second quarter of fiscal 2020;
- Delivered adjusted diluted earnings per share of $0.85 as
compared to ($0.07) and $0.36 in the second quarter of fiscal 2021
and 2020, respectively; and
- Maintained strong balance sheet at quarter end, including cash
of $199.7 million, a 5.7% increase in inventory and a $48.3 million
reduction in debt from prior year quarter end.
Non-GAAP Items (See attached table for
GAAP and Non-GAAP measures)
Second quarter fiscal 2022 results of operations included the
following items:
- a $0.7 million pre-tax charge, or $0.6 million after tax,
representing $0.03 per diluted share, associated with the
amortization of acquired intangible assets related to the
acquisition of Olivia Burton; and
- a $0.1 million pre-tax and after-tax charge, representing $0.00
per diluted share, associated with the amortization of acquired
intangible assets and deferred compensation related to the
acquisition of MVMT.
Second quarter fiscal 2021 results of operations included the
following items:
- a $0.7 million pre-tax charge, or $0.5 million after tax,
representing $0.02 per diluted share, of operating expenses
associated with the amortization of acquired intangible assets
related to the acquisition of Olivia Burton;
- a $0.3 million pre-tax charge, or $0.2 million after tax,
representing $0.01 per diluted share, of operating expenses
associated with the amortization of acquired intangible assets and
deferred compensation related to the acquisition of MVMT;
- a $7.4 million pre-tax charge, or $5.0 million after tax,
representing $0.22 per diluted share, of operating expenses related
to corporate initiatives primarily in response to the COVID-19
pandemic; and
- a $1.3 million pre-tax gain, or $0.8 million after tax,
representing $0.04 per diluted share, of other non-operating income
associated with the sale of a non-operating asset in
Switzerland.
Second Quarter Fiscal 2022 (See
attached table for GAAP and Non-GAAP measures)
- Net sales increased 96.4% to $173.9 million compared to $88.5
million in the second quarter of fiscal 2021. The increase in net
sales reflected growth in online retail (both in the Company’s
owned and wholesale customers’ websites), in Movado Company Stores
and in wholesale customers’ brick and mortar stores due to the
partial recovery from the COVID-19 pandemic. Net sales on a
constant dollar basis increased 90.5%. U.S. net sales increased
145.9% as compared to the second quarter of last year and increased
28.5% as compared to pre-pandemic second quarter fiscal 2020.
International net sales increased 64.4% as compared to the second
quarter of last year and decreased 3.2% as compared to pre-pandemic
second quarter of fiscal 2020.
- Gross profit was $98.5 million, or 56.6% of sales, compared to
$45.4 million, or 51.2% of sales, in the second quarter last year.
The increase in gross margin percentage was primarily the result of
favorable changes in channel and product mix and favorable foreign
currency exchange rates partially offset by an increase in certain
fixed costs to support the increase in net sales.
- Operating expenses were $73.8 million compared to $54.3 million
in the prior year period. Adjusted operating expenses were $73.0
million for the second quarter fiscal 2022 and $45.9 million in the
second quarter of fiscal 2021. In both periods, the adjusted
operating expenses exclude charges mentioned above in the Non-GAAP
Items section. The increase in adjusted operating expenses was
primarily due to higher marketing expenses and performance-based
compensation and an increase in certain operating expenses to
support the increase in net sales. The Company continues to
minimize all non-essential operating expenses. As a percent of
sales, adjusted operating expenses decreased to 42.0% of sales from
51.9% in the prior year period primarily due to improved sales
leverage.
- Operating income was $24.6 million compared to an operating
loss of $8.9 million in the second quarter of fiscal 2021. Adjusted
operating income for the second quarter of fiscal 2022 was $25.5
million compared to an adjusted operating loss of $0.6 million for
the prior year quarter. In both periods, the adjusted operating
income/loss excludes the charges listed above in the Non-GAAP Items
section.
- The Company recorded a tax provision of $5.3 million compared
to a tax benefit of $1.6 million in the second quarter of fiscal
2021. The Company recorded an adjusted tax provision in the second
quarter of fiscal 2022 of $5.5 million compared to an adjusted tax
provision of $0.6 million for the second quarter of fiscal
2021.
- Net income was $19.4 million, or $0.82 per diluted share,
compared to a net loss of $6.6 million, or ($0.28) per diluted
share, in the second quarter of fiscal 2021. Adjusted net income
for the fiscal 2022 period was $20.1 million, or $0.85 per diluted
share, which excludes the second quarter fiscal 2022 net charges
listed above in the Non-GAAP Items section after the associated tax
effects. This compares to an adjusted net loss in the second
quarter of fiscal 2021 of $1.7 million, or ($0.07) per diluted
share, which excludes the second quarter fiscal 2021 net charges
listed above in the Non-GAAP Items section after the associated tax
effects.
First Half Fiscal 2022 (See attached
table for GAAP and Non-GAAP measures)
- Net sales for the first six months of fiscal 2022 were $308.7
million compared to $158.2 million in the first six months of
fiscal 2021, an increase of 95.1%. The increase in net sales
reflected growth in online retail (both in the Company’s owned and
wholesale customers’ websites), in Movado Company Stores and in
wholesale customers’ brick and mortar stores due to the partial
recovery from the COVID-19 pandemic. Net sales on a constant dollar
basis increased 89.0%. U.S. net sales increased 139.1% as compared
to the first half of last year and increased 20.1% as compared to
pre-pandemic first half of fiscal 2020. International net sales
increased 65.7% as compared to the first half of last year and
decreased 11.8% as compared to pre-pandemic first half of fiscal
2020.
- Gross profit was $172.7 million, or 55.9% of sales, compared to
$77.2 million, or 48.8% of sales in the same period last year.
Adjusted gross profit was the same as gross profit for the first
half of fiscal 2022. Adjusted gross profit for the first six months
of fiscal 2021, which excludes $3.5 million in corporate initiative
charges related to the impact to the business of the COVID-19
pandemic, was $80.8 million, or 51.0% of net sales. The increase in
adjusted gross margin percentage was primarily the result of
favorable changes in channel and product mix, leveraging certain
fixed costs as a result of higher sales and favorable foreign
currency exchange rates.
- Operating expenses were $134.8 million as compared to $268.3
million in the first six months of last fiscal year. For the first
six months of fiscal 2022, adjusted operating expenses were $133.1
million, which excludes $1.4 million of expenses associated with
the amortization of acquired intangible assets related to Olivia
Burton and $0.2 million in adjustments associated with the
amortization of acquired intangible assets and deferred
compensation related to the MVMT acquisition. For the first six
months of fiscal 2021, adjusted operating expenses were $99.0
million, which excludes $155.9 million in adjustments related to
the impairment of goodwill and certain intangible assets, $11.1
million in corporate initiative charges related to the impact to
the business from the COVID-19 pandemic, $1.4 million of expenses
associated with the amortization of acquired intangible assets
related to Olivia Burton and $1.0 million in adjustments associated
with the amortization of acquired intangible assets and deferred
compensation related to the MVMT acquisition. The increase in
adjusted operating expenses was primarily due to higher marketing
expenses and performance-based compensation and an increase in
certain operating expenses to support the increase in net sales.
The Company continues to minimize all operating expenses. As a
percent of sales, adjusted operating expenses decreased to 43.1% of
sales from 62.6% in the prior year period primarily due to improved
sales leverage.
- Operating income was $37.9 million compared to operating loss
of $191.1 million in the first six months of fiscal 2021. Adjusted
operating income for the first six months of fiscal 2022 was $39.6
million which excludes the fiscal 2022 charges listed in the
immediately preceding bullets compared to the first six months of
fiscal 2021’s operating loss of $18.2 million, which excludes the
fiscal 2021 charges listed in the immediately preceding
bullets.
- The Company recorded a tax provision in the first six months of
fiscal 2022 of $8.6 million as compared to a benefit of $33.9
million in the first six months of last year. The first six months
of fiscal 2022 included a benefit of $0.3 million primarily
associated with the amortization of acquired intangible assets
related to Olivia Burton and MVMT. The first six months of fiscal
2021 included a benefit of $0.3 million associated with the
amortization of acquired intangible assets related to Olivia
Burton, a $0.4 million benefit related to the amortization of
acquired intangible assets and deferred compensation related to
MVMT, a $24.9 million benefit related to the tax deductible portion
of the impairment of goodwill and certain intangible assets, and a
$4.6 million benefit related to corporate initiatives taken in
response to the COVID-19 pandemic, partially offset by a $0.5
million provision for tax associated with the sale of a
non-operating asset in Switzerland.
- Net income was $28.8 million, or $1.21 per diluted share,
compared to a net loss of $156.6 million, or ($6.75) per diluted
share, in the first six months of last year. In the first half of
fiscal 2022, adjusted net income was $30.2 million, or $1.27 per
diluted share, which excludes the fiscal 2022 charges listed above
after the associated tax effects, as described in the immediately
preceding bullets. For the first half of fiscal 2021, adjusted net
loss was $14.7 million, or ($0.63) per diluted share, which
excludes the fiscal 2021 charges listed above after the associated
tax effects, as described in the immediately preceding
bullets.
Fiscal 2022 Outlook
The Company is increasing its outlook and currently expects
fiscal 2022 net sales in a range of approximately $680 million to
$695 million, gross profit of approximately 55.5% to 56.0% of net
sales, operating profit in a range of 13.0% to 13.5% of net sales
and diluted earnings per share of approximately $2.75 to $2.90.
Assuming no changes to the current tax rules, the Company
anticipates a 25% effective tax rate for the fiscal year. This
updated outlook does not contemplate significant additional
COVID-19 related retail closures which can adversely impact
results. The outlook excludes approximately $3.0 million of
amortization of acquired intangible assets and deferred
compensation for fiscal 2022 related to the Olivia Burton and MVMT
brands. The Company's outlook assumes no further significant
fluctuations from prevailing foreign currency exchange rates.
Quarterly Dividend and Share Repurchase
Program
The Company also announced today that on August 26, 2021, the
Board of Directors approved the payment on September 22, 2021 of a
cash dividend in the amount of $0.20 for each share of the
Company’s outstanding common stock and class A common stock held by
shareholders of record as of the close of business on September 8,
2021.
During the second quarter of fiscal 2022, the Company
repurchased approximately 322,800 shares under its share repurchase
program. As of July 31, 2021, the Company had $15.0 million
remaining under the $25.0 million share repurchase
authorization.
Conference Call
The Company’s management will host a conference call and audio
webcast to discuss its results today, August 26, 2021 at 9:00 a.m.
Eastern Time. The conference call may be accessed by dialing (877)
407-0784. Additionally, a live webcast of the call can be accessed
at www.movadogroup.com. The webcast will be archived on the
Company’s website approximately one hour after the conclusion of
the call. Additionally, a telephonic re-play of the call will be
available at 12:00 p.m. ET on August 26, 2021 until 11:59 p.m. ET
on September 9, 2021 and can be accessed by dialing (844) 512-2921
and entering replay pin number 13722542.
Movado Group, Inc. designs, sources, and distributes MOVADO®,
MVMT®, OLIVIA BURTON®, EBEL®, CONCORD®, COACH®, TOMMY HILFIGER®,
HUGO BOSS®, LACOSTE®, and SCUDERIA FERRARI® watches worldwide, and
operates Movado company stores in the United States and Canada.
In this release, the Company presents certain financial measures
that are not calculated according to generally accepted accounting
principles in the United States (“GAAP”). Specifically, the Company
is presenting adjusted gross profit, adjusted gross margin,
adjusted operating expenses and adjusted operating income, which
are gross profit, gross margin, operating expenses and operating
income, respectively, under GAAP, adjusted to eliminate the
amortization of acquisition accounting adjustments related to the
Olivia Burton and MVMT acquisitions, corporate initiatives and the
impairment of goodwill and certain intangible assets. The Company
is also presenting adjusted tax provision, which is the tax
provision under GAAP, adjusted to eliminate the impact of charges
for the Olivia Burton and MVMT acquisitions, corporate initiatives,
the impairment of goodwill and certain intangible assets and the
gain on the sale of a non-operating asset. The Company believes
these adjusted measures are useful because they give investors
information about the Company’s financial performance without the
effect of certain items that the Company believes are not
characteristic of its usual operations. The Company is also
presenting adjusted net income, adjusted earnings per share and
adjusted effective tax rate, which are net income, earnings per
share and effective tax rate, respectively, under GAAP, adjusted to
eliminate the after-tax impact of amortization of acquisition
accounting adjustments related to the Olivia Burton and MVMT
acquisitions, corporate initiatives, the impairment of goodwill and
certain intangibles and the gain on the sale of a non-operating
asset. The Company believes that adjusted net income, adjusted
earnings per share and adjusted effective tax rate are useful
measures of performance because they give investors information
about the Company’s financial performance without the effect of
certain items that the Company believes are not characteristic of
its usual operations. Additionally, the Company is presenting
constant currency information to provide a framework to assess how
its business performed excluding the effects of foreign currency
exchange rate fluctuations in the current period. Comparisons of
financial results on a constant dollar basis are calculated by
translating each foreign currency at the same U.S. dollar exchange
rate as in effect for the prior-year period for both periods being
compared. The Company believes this information is useful to
investors to facilitate comparisons of operating results. These
non-GAAP financial measures are designed to complement the GAAP
financial information presented in this release. The non-GAAP
financial measures presented should not be considered in isolation
from or as a substitute for the comparable GAAP financial measures,
and the methods of their calculation may differ substantially from
similarly titled measures used by other companies.
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 variations of such words 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 general economic and business conditions
which may impact disposable income of consumers in the United
States and the other significant markets (including Europe) where
the Company’s products are sold, uncertainty regarding such
economic and business conditions, trends in consumer debt levels
and bad debt write-offs, general uncertainty related to possible
terrorist attacks, natural disasters, pandemics, including the
effect of the COVID-19 pandemic and other diseases on travel and
traffic in the Company’s retail stores and the stores of its
wholesale customers, supply disruptions and delivery delays from
the Company’s suppliers as a result of the COVID-19 pandemic,
adverse impact on the Company’s wholesale customers and customer
traffic in the Company’s stores as a result of increased
uncertainty and economic disruption caused by the COVID-19
pandemic, uncertainty relating to the availability and efficacy of
vaccines and treatments for COVID-19, the impact of the United
Kingdom’s exit from the European Union, defaults on or downgrades
of sovereign debt and the impact of any of those events on consumer
spending, changes in consumer preferences and popularity of
particular designs, new product development and introduction,
decrease in mall traffic and increase in e-commerce, the ability of
the Company to successfully implement its business strategies,
competitive products and pricing, the impact of “smart” watches and
other wearable tech products on the traditional watch market,
seasonality, availability of alternative sources of supply in the
case of the loss of any significant supplier or any supplier’s
inability to fulfill the Company’s orders, the loss of or curtailed
sales to significant customers, the Company’s dependence on key
employees and officers, the ability to successfully integrate the
operations of acquired businesses without disruption to other
business activities, the possible impairment of acquired intangible
assets including goodwill if the carrying value of any reporting
unit were to exceed its fair value, volatility in reported earnings
resulting from changes in the estimated fair value of contingent
acquisition consideration, the continuation of the Company’s major
warehouse and distribution centers, the continuation of licensing
arrangements with third parties, losses possible from pending or
future litigation and administrative proceedings, the ability to
secure and protect trademarks, patents and other intellectual
property rights, the ability to lease new stores on suitable terms
in desired markets and to complete construction on a timely basis,
the ability of the Company to successfully manage its expenses on a
continuing basis, information systems failure or breaches of
network security, complex and quickly-evolving regulations
regarding privacy and data protection, the continued availability
to the Company of financing and credit on favorable terms, business
disruptions, and general risks associated with doing business
outside the United States including, without limitation, import
duties, tariffs (including retaliatory tariffs), quotas, political
and economic stability, changes to existing laws or regulations,
and success of hedging strategies with respect to currency exchange
rate fluctuations, 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. The Company assumes no duty to update its
forward looking statements and this release shall not be construed
to indicate the assumption by the Company of any duty to update its
outlook in the future.
(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,
2021
2020
2021
2020
Net sales
$ 173,874
$ 88,538
$ 308,672
$ 158,204
Cost of sales
75,421
43,182
136,017
80,955
Gross profit
98,453
45,356
172,655
77,249
Operating expenses
73,820
54,272
134,766
112,409
Impairment of goodwill and intangible assets
-
-
-
155,919
Total operating expenses
73,820
54,272
134,766
268,328
Operating income/(loss)
24,633
(8,916)
37,889
(191,079)
Other income
257
8
357
23
Gain on sale of a non-operating asset
-
1,317
-
1,317
Interest expense
(174)
(590)
(449)
(861)
Income/(loss) before income taxes
24,716
(8,181)
37,797
(190,600)
Provision/(benefit) for income taxes
5,315
(1,559)
8,645
(33,889)
Net income/(loss)
19,401
(6,622)
29,152
(156,711)
Less: Net income/(loss) attributable to noncontrolling
interests
(9)
(7)
333
(103)
Net income/(loss) attributable to Movado Group, Inc.
$ 19,410
$ (6,615)
$ 28,819
$
(156,608)
Diluted Income Per Share Information Net
income/(loss) attributable to Movado Group, Inc.
$
0.82
$
(0.28)
$
1.21
$
(6.75)
Weighted diluted average shares outstanding
23,739
23,240
23,736
23,191
MOVADO GROUP, INC. GAAP AND NON-GAAP MEASURES (In
thousands, except for percentage data) (Unaudited)
As Reported Three Months Ended July
31,
% Change
2021
2020
Total net sales, as reported
$ 173,874
$ 88,538
96.4%
Total net sales, constant dollar basis
$ 168,640
$ 88,538
90.5%
As Reported Six Months Ended
July 31,
% Change
2021
2020
Total net sales, as reported
$ 308,672
$ 158,204
95.1%
Total net sales, constant dollar basis
$ 299,080
$ 158,204
89.0%
MOVADO GROUP, INC. GAAP AND NON-GAAP MEASURES (In
thousands, except per share data) (Unaudited)
Net Sales Gross Profit
OperatingIncome/(Loss)
Pre-taxIncome/(Loss) Provision/(Benefit)for Income
Taxes Net Income/(Loss)Attributable toMovado Group, Inc.
Diluted EPS Three Months Ended July 31, 2021
As Reported (GAAP)
$ 173,874
$ 98,453
$
24,633
$
24,716
$
5,315
$
19,410
$
0.82
Olivia Burton Costs (1)
-
-
726
726
138
588
0.03
MVMT Costs (2)
-
-
101
101
25
76
0.00
Adjusted Results (Non-GAAP)
$ 173,874
$ 98,453
$
25,460
$
25,543
$
5,478
$
20,074
$
0.85
Three Months Ended July 31, 2020 As
Reported (GAAP)
$ 88,538
$ 45,356
$
(8,916)
$
(8,181)
$
(1,559)
$
(6,615)
$
(0.28)
Olivia Burton Costs (1)
-
-
671
671
139
532
0.02
MVMT Costs (2)
-
-
284
284
108
176
0.01
Gain On Sale of a Non-Operating Asset (3)
-
-
-
(1,317)
(474)
(843)
(0.04)
Corporate Initiatives (4)
-
-
7,368
7,368
2,353
5,015
0.22
Adjusted Results (Non-GAAP)
$ 88,538
$ 45,356
$
(593)
$
(1,175)
$
567
$
(1,735)
$
(0.07)
Net Sales Gross Profit
OperatingIncome/(Loss)
Pre-taxIncome/(Loss) Provision/(Benefit)for Income
Taxes Net Income/(Loss)Attributable toMovado Group, Inc.
Diluted EPS Six Months Ended July 31, 2021 As
Reported (GAAP)
$ 308,672
$ 172,655
$
37,889
$
37,797
$
8,645
$
28,819
$
1.21
Olivia Burton Costs (1)
-
-
1,447
1,447
275
1,172
0.05
MVMT Costs (2)
-
-
232
232
58
174
0.01
Adjusted Results (Non-GAAP)
$ 308,672
$ 172,655
$
39,568
$
39,476
$
8,978
$
30,165
$
1.27
Six Months Ended July 31, 2020 As
Reported (GAAP)
$ 158,204
$ 77,249
$ (191,079)
$ (190,600)
$
(33,889)
$
(156,608)
$
(6.75)
Olivia Burton Costs (1)
-
-
1,356
1,356
258
1,098
0.05
MVMT Costs (2)
-
-
981
981
373
608
0.03
Goodwill and Intangible Asset Impairment (5)
-
-
155,919
155,919
24,867
131,052
5.65
Gain On Sale of a Non-Operating Asset (3)
-
-
-
(1,317)
(474)
(843)
(0.04)
Corporate Initiatives (4)
-
3,508
14,608
14,608
4,592
10,016
0.43
Adjusted Results (Non-GAAP)
$ 158,204
$ 80,757
$
(18,215)
$
(19,053)
$
(4,273)
$
(14,677)
$
(0.63)
(1)
Related to the amortization of
acquired intangible assets for Olivia Burton.
(2)
Related to the amortization of
acquired intangible assets, accounting adjustments and deferred
compensation of MVMT, where applicable.
(3)
Related to a gain on sale of a
non-operating asset in Switzerland.
(4)
Related to provision due to the
impact to the business of the COVID-19 pandemic, including
restructuring plan.
(5)
Related to the impairment of
goodwill and impairment of certain of MVMT's intangible assets.
MOVADO GROUP, INC. CONSOLIDATED BALANCE SHEETS (In
thousands) (Unaudited) July 31,
January 31, July 31,
2021
2021
2020
ASSETS Cash and
cash equivalents
$ 199,721
$ 223,811
$ 170,195
Trade receivables, net
89,710
76,931
60,128
Inventories
183,289
152,580
173,374
Other current assets
23,144
23,479
29,098
Income taxes receivable
8,602
24,850
758
Total current assets
504,466
501,651
433,553
Property, plant and equipment, net
19,656
22,349
25,888
Operating lease right-of-use assets
71,253
76,070
82,169
Deferred and non-current income taxes
41,579
42,507
59,747
Other intangibles, net
15,550
17,081
18,071
Other non-current assets
58,394
59,599
60,261
Total assets
$ 710,898
$ 719,257
$ 679,689
LIABILITIES AND EQUITY
Accounts payable
$
45,670
$ 28,187
$ 29,929
Accrued liabilities
50,329
51,124
45,509
Accrued payroll and benefits
13,864
18,047
12,431
Current operating lease liabilities
14,863
15,861
14,766
Income taxes payable
10,379
14,452
6,774
Total current liabilities
135,105
127,671
109,409
Loans payable to bank, non current
-
21,230
48,341
Deferred and non-current income taxes payable
20,185
21,895
20,743
Non-current operating lease liabilities
64,520
68,412
75,376
Other non-current liabilities
51,686
50,115
48,124
Redeemable noncontrolling interest
2,443
2,600
3,037
Shareholders' equity
434,567
425,264
373,671
Noncontrolling interest
2,392
2,070
988
Total equity
436,959
427,334
374,659
Total liabilities, redeemable noncontrolling interest and
equity
$ 710,898
$ 719,257
$ 679,689
MOVADO GROUP, INC. CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS (In thousands) (Unaudited)
Six Months Ended
July 31,
2021
2020
Cash flows from operating activities: Net income/(loss)
$ 28,819
$
(156,608)
Impairment of goodwill and intangible assets
-
155,919
Non-cash corporate initiatives
-
6,608
Depreciation and amortization
6,283
7,200
Other non-cash adjustments
5,696
(33,833)
Changes in working capital
(18,802)
9,630
Changes in non-current assets and liabilities
682
(292)
Net cash provided by/(used in) operating activities
22,678
(11,376)
Cash flows from investing activities: Capital
expenditures
(1,786)
(1,891)
Proceeds from sale of a non-operating asset
-
1,317
Tradenames and other intangibles
(133)
(51)
Net cash used in investing activities
(1,919)
(625)
Cash flows from financing activities: Repayment of
bank borrowings
(21,140)
(36,772)
Proceeds from bank borrowings
-
30,879
Dividends paid
(11,618)
-
Stock repurchase
(9,975)
-
Stock awards and options exercised and other changes
(1,030)
(474)
Debt issuance costs
-
(300)
Net cash used in financing activities
(43,763)
(6,667)
Effect of exchange rate changes on cash, cash equivalents,
and restricted cash
(1,096)
3,022
Net change in cash, cash equivalents, and restricted cash
(24,100)
(15,646)
Cash, cash equivalents, and restricted cash at beginning of period
224,423
186,438
Cash, cash equivalents, and restricted cash at end of
period
$ 200,323
$ 170,792
Reconciliation of cash, cash equivalents, and restricted
cash: Cash and cash equivalents
$ 199,721
$ 170,195
Restricted cash included in other non-current assets
602
597
Cash, cash equivalents, and restricted cash
$ 200,323
$ 170,792
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210826005236/en/
ICR, Inc. Rachel Schacter/Allison Malkin 203-682-8200
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