~ Q2 Includes Charge Associated with Previously Announced Expense Reduction Plan ~
~ Company Reiterates Full Year Guidance ~
PARAMUS, N.J., Sept. 4 /PRNewswire-FirstCall/ -- Movado Group, Inc.
(NYSE: MOV), today announced second quarter and six-month results for the
period ended July 31, 2008. For the second quarter, adjusted diluted earnings
per share were $0.39 compared with $0.45 in fiscal 2008 (see attached table
for reconciliation of GAAP to non-GAAP measures). On a GAAP basis, diluted
earnings per share were $0.32 and included a $2.2 million pre-tax charge
related to the Company's previously announced expense reduction plan.
Second Quarter Fiscal 2009
-- Net sales in the second quarter of fiscal 2009 were $129.7 million.
Fiscal 2008 net sales of $139.5 million included $8.3 million of excess
discontinued product. Excluding the sales of discontinued product, net sales
decreased 1.1%.
-- Gross profit was $83.9 million, or 64.7% of sales, compared to $83.3
million, or 59.8% of sales last year. Excluding excess discontinued product
sales in the second quarter of fiscal 2008, year-ago adjusted gross profit was
$83.4 million, or 63.6% of sales. On a comparable basis, gross margin in the
second quarter of fiscal 2009 expanded 110 basis points.
-- Operating profit was $11.1 million and included a $2.2 million charge
related to the implementation of the Company's expense reduction plan.
Excluding this charge, adjusted operating profit was $13.3 million versus
$16.3 million in the year-ago period.
-- Income tax expense of $2.7 million reflects a 24.6% tax rate in the
second quarter compared to income tax expense of $4.1 million, or a 24.9% tax
rate, recorded last year.
-- Net income in the quarter was $8.1 million. Excluding the after-tax
effect of the aforementioned charge, adjusted net income was $9.8 million
compared to net income of $12.3 million in the prior year period.
First Half Fiscal 2009
-- Net sales were $231.0 million. Year-ago net sales of $240.8 million
included $11.0 million of excess discontinued product. Excluding the sales of
discontinued product, net sales increased 0.5%.
-- Gross profit was $148.9 million, or 64.5% of sales, compared to $145.0
million, or 60.2% of sales last year. Excluding excess discontinued product
sales in the year-ago period, adjusted gross profit was $145.4 million, or
63.3% of sales. On a comparable basis, gross margin in the first half of
fiscal 2009 expanded 120 basis points.
-- Operating profit was $12.8 million. Excluding the aforementioned
charge recorded in the second quarter of fiscal 2009, adjusted operating
profit was $14.9 million versus $19.1 million in the year-ago period.
-- Income tax expense of $3.2 million reflects a 25.4% tax rate for the
year-to-date period compared to income tax expense of $4.8 million, or a 24.2%
tax rate, recorded last year.
-- Net income was $9.4 million. Excluding the after-tax effect of the
charge recorded in the second quarter of fiscal 2009, adjusted net income was
$11.0 million, or $0.42 per diluted share, compared to net income of $14.7
million, or $0.54 per diluted share, in the prior year period.
Efraim Grinberg, President and Chief Executive Officer, commented, 'While
our second quarter results reflect the continued challenging macroeconomic
environment, the decisive actions we've taken to reduce expenses and improve
productivity are designed to position our company to emerge quickly and even
stronger than before, as the economy recovers. At the same time, we continue
to gain market share with a combination of strong product innovation and a
powerful presence at the point-of-sale, along with consistent marketing
support and advertising investment across our spectrum of brands.'
Mr. Grinberg continued, 'Our business is well positioned as we enter the
second half of the year and we remain on track to achieve our financial
objectives and strategic initiatives.
