Movado Group Earnings 2020-10-31

Balance Sheet	Income Statement	Cash Flow
Assets, Equity	Rev, G Profit, Net Income	Ops, Inv, Fin

mov-10q_20201031.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended October 31, 2020


☐	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		13-2595932
(State or Other Jurisdiction of Incorporation or Organization)		(IRS Employer Identification No.)

650 From Road, Ste. 375 Paramus, New Jersey		07652-3556
(Address of Principal Executive Offices)		(Zip Code)

(201) 267-8000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading

Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.01 per share

MOV

New York Stock Exchange

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 ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,’’ “accelerated filer,’’ “smaller reporting company,’’ and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☒	Non-accelerated filer	☐
Smaller reporting company	☐	Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares outstanding of the registrant’s Common Stock and Class A Common Stock as of November 19, 2020 were 16,585,236 and 6,608,548 respectively.

MOVADO GROUP, INC.

Index to Quarterly Report on Form 10-Q

October 31, 2020

			Page
Part I	Financial Information (Unaudited)
	Item 1.	Consolidated Balance Sheets at October 31, 2020, January 31, 2020 and October 31, 2019	3
		Consolidated Statements of Operations for the three and nine months ended October 31, 2020 and October 31, 2019	4
		Consolidated Statements of Comprehensive Income (Loss) for the three and nine months ended October 31, 2020 and October 31, 2019	5
		Consolidated Statements of Cash Flows for the nine months ended October 31, 2020 and October 31, 2019	6
		Notes to Consolidated Financial Statements	7
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	39
	Item 4.	Controls and Procedures	40
Part II	Other Information
	Item 1.	Legal Proceedings	41
	Item 1A.	Risk Factors	41
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	42
	Item 6.	Exhibits	43
Signature			44

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

MOVADO GROUP, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share amounts)

(Unaudited)

	October 31,			January 31,			October 31,
	2020			2020			2019
ASSETS
Current assets:
Cash and cash equivalents	$	163,218		$	185,872		$	116,025
Trade receivables, net		103,506			78,388			136,272
Inventories		176,841			171,406			201,164
Other current assets		28,028			28,888			30,737
Total current assets		471,593			464,554			484,198
Property, plant and equipment, net		24,002			29,238			29,275
Operating lease right-of-use assets		77,932			89,523			88,126
Deferred and non-current income taxes		54,748			25,403			28,191
Goodwill		—			136,366			135,280
Other intangibles, net		17,123			42,359			43,532
Other non-current assets		56,380			59,865			58,453
Total assets	$	701,778		$	847,308		$	867,055
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	35,562		$	35,488		$	33,757
Accrued liabilities		59,612			44,210			62,499
Accrued payroll and benefits		12,693			6,302			9,353
Current operating lease liabilities		14,210			15,083			14,579
Income taxes payable		11,275			8,217			17,243
Total current liabilities		133,352			109,300			137,431
Loans payable to bank		37,266			51,910			50,685
Deferred and non-current income taxes payable		20,893			25,419			26,370
Non-current operating lease liabilities		71,658			81,877			80,682
Other non-current liabilities		45,179			48,393			47,943
Total liabilities		308,348			316,899			343,111
Commitments and contingencies (Note 12)
Redeemable noncontrolling interest		2,772			3,165			3,263
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; 28,077,806, 27,859,328 and 27,856,954 shares issued and outstanding, respectively		281			279			279
Class A Common Stock, $0.01 par value, 30,000,000 shares authorized; 6,608,548, 6,603,645 and 6,603,645 shares issued and outstanding, respectively		65			65			65
Capital in excess of par value		212,730			208,473			206,725
Retained earnings		313,696			455,479			456,579
Accumulated other comprehensive income		85,879			85,050			79,825
Treasury Stock, 11,492,591, 11,443,308 and 11,442,625 shares, respectively, at cost		(223,306	)		(222,809	)		(222,792	)
Total Movado Group, Inc. shareholders' equity		389,345			526,537			520,681
Noncontrolling interest		1,313			707			—
Total equity		390,658			527,244			520,681
Total liabilities, redeemable noncontrolling interest and equity	$	701,778		$	847,308		$	867,055

See Notes to Consolidated Financial Statements

MOVADO GROUP, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)

	Three Months Ended October 31,						Nine Months Ended October 31,
	2020			2019			2020			2019
Net sales	$	169,863		$	205,618		$	328,067		$	509,983
Cost of sales		77,410			95,549			158,365			235,702
Gross profit		92,453			110,069			169,702			274,281
Selling, general and administrative		69,386			87,431			181,795			237,893
Impairment of goodwill and intangible assets (Note 7)		—			—			155,919			—
Total operating expenses		69,386			87,431			337,714			237,893
Operating income/(loss)		23,067			22,638			(168,012	)		36,388
Non-operating income/(expense):
Gain on sale of a non-operating asset		—			—			1,317			—
Change in contingent consideration (Note 11)		—			—			—			13,627
Interest expense		(608	)		(240	)		(1,469	)		(689	)
Interest income		8			18			31			63
Income/(loss) before income taxes		22,467			22,416			(168,133	)		49,389
Provision/(benefit) for income taxes (Note 13)		7,524			4,955			(26,365	)		10,543
Net income/(loss)		14,943			17,461			(141,768	)		38,846
Less: Net income/(loss) attributable to noncontrolling interests		118			(304	)		15			(349	)
Net income/(loss) attributable to Movado Group, Inc.	$	14,825		$	17,765		$	(141,783	)	$	39,195

Basic income/(loss) per share:
Weighted basic average shares outstanding		23,285			23,117			23,223			23,124
Net income/(loss) per share attributable to Movado Group, Inc.	$	0.64		$	0.77		$	(6.11	)	$	1.69

Diluted income/(loss) per share:
Weighted diluted average shares outstanding		23,375			23,250			23,223			23,322
Net income/(loss) per share attributable to Movado Group, Inc.	$	0.63		$	0.76		$	(6.11	)	$	1.68

See Notes to Consolidated Financial Statements

MOVADO GROUP, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In thousands)

(Unaudited)

	Three Months Ended October 31,						Nine Months Ended October 31,
	2020			2019			2020			2019
Net income/(loss)	$	14,943		$	17,461		$	(141,768	)	$	38,846
Other comprehensive income/(loss):
Net unrealized gain/(loss) on investments, net of tax provision/(benefit) of $1, $(3), $(10) and $0, respectively		1			(8	)		(31	)		-
Amortization of prior service cost, net of tax provision of $4, $4, $12 and $11, respectively		14			13			42			39
Foreign currency translation adjustments		(245	)		5,614			818			(721	)
Total other comprehensive (loss)/income, net of taxes		(230	)		5,619			829			(682	)
Less:
Comprehensive income/(loss) attributable to noncontrolling interests:
Net income/(loss)		118			(304	)		15			(349	)
Foreign currency translation adjustments		(58	)		27			198			(109	)
Total comprehensive income/(loss) attributable to noncontrolling interests	$	60		$	(277	)

Price	24.03	EPS	2
Shares	23	P/E	10
MCap	560	P/FCF	-13
Net Debt	-117	EBIT	68
TEV	444	TEV/EBIT	7
TTM 2019-10-31, in MM, except price, ratios

10-Q	2020-10-31	Filed 2020-11-24
10-Q	2020-07-31	Filed 2020-08-27
10-Q	2020-04-30	Filed 2020-06-09
10-K	2020-01-31	Filed 2020-03-26
10-Q	2019-10-31	Filed 2019-11-26
10-Q	2019-07-31	Filed 2019-08-28
10-Q	2019-04-30	Filed 2019-05-30
10-K	2019-01-31	Filed 2019-03-28
10-Q	2018-10-31	Filed 2018-12-04
10-Q	2018-07-31	Filed 2018-08-29
10-Q	2018-04-30	Filed 2018-05-30
10-K	2018-01-31	Filed 2018-03-29
10-Q	2017-10-31	Filed 2017-11-21
10-Q	2017-07-31	Filed 2017-08-29
10-Q	2017-04-30	Filed 2017-05-25
10-K	2017-01-31	Filed 2017-03-20
10-Q	2016-10-31	Filed 2016-11-22
10-Q	2016-07-31	Filed 2016-08-25
10-Q	2016-04-30	Filed 2016-05-26
10-K	2016-01-31	Filed 2016-03-31
10-Q	2015-10-31	Filed 2015-11-24
10-Q	2015-07-31	Filed 2015-08-27
10-Q	2015-04-30	Filed 2015-05-27
10-K	2015-01-31	Filed 2015-03-31
10-Q	2014-10-31	Filed 2014-11-25
10-Q	2014-07-31	Filed 2014-08-26
10-Q	2014-04-30	Filed 2014-05-22
10-K	2014-01-31	Filed 2014-03-28
10-Q	2013-10-31	Filed 2013-11-26
10-Q	2013-07-31	Filed 2013-08-27
10-Q	2013-04-30	Filed 2013-05-29
10-K	2013-01-31	Filed 2013-03-26
10-Q	2012-10-31	Filed 2012-11-28
10-Q	2012-07-31	Filed 2012-08-28
10-Q	2012-04-30	Filed 2012-05-31
10-K	2012-01-31	Filed 2012-03-30
10-Q	2011-10-31	Filed 2011-12-01
10-Q	2011-07-31	Filed 2011-09-01
10-Q	2011-04-30	Filed 2011-06-02
10-K	2011-01-31	Filed 2011-04-07
10-Q	2010-10-31	Filed 2010-12-02
10-Q	2010-07-31	Filed 2010-09-02
10-Q	2010-04-30	Filed 2010-05-27
10-K	2010-01-31	Filed 2010-04-01

8-K	2020-11-24
8-K	2020-08-27
8-K	2020-08-20
8-K	2020-06-29
8-K	2020-06-25
8-K	2020-06-09
8-K	2020-06-09
8-K	2020-04-02
8-K	2020-03-26
8-K	2020-03-20
8-K	2020-01-06
8-K	2019-11-26
8-K	2019-08-28
8-K	2019-06-20
8-K	2019-05-30
8-K	2019-03-28
8-K	2018-12-04
8-K	2018-10-12
8-K	2018-10-09
8-K	2018-10-01
8-K	2018-08-29
8-K	2018-08-23
8-K	2018-08-15
8-K	2018-06-21
8-K	2018-05-30
8-K	2018-03-29

EX-10.1	mov-ex101_182.htm
EX-31.1	mov-ex311_8.htm
EX-31.2	mov-ex312_9.htm
EX-32.1	mov-ex321_6.htm
EX-32.2	mov-ex322_7.htm

MOV 10Q Quarterly Report

Movado Group Earnings 2020-10-31