Efraim Grinberg, President and Chief Executive Officer, stated, "We are operating in the most challenging economic environment that I have seen in my 30 years in the watch industry. Fiscal 2009 was extremely difficult as we experienced the dual impact on our business of weak consumer spending and increasingly aggressive curtailment of retailers' replenishment orders, particularly in January, which resulted in our recording a loss for the fourth quarter. We believe our retail customers will continue to focus on lowering their inventory levels during the first half of this year. Accordingly, we expect lower sales throughout the first half of fiscal 2010 with an improvement during the second half of the year as retailers start to replenish inventory in preparation for the holiday selling season. Our greatest assets continue to be our strong brands and we believe that strong brands like Movado Group's will be well positioned to rebound when we begin to exit the recessionary environment."__

Rick Cote, Executive Vice President and Chief Operating Officer, stated, "We continue to take decisive actions to improve our cost structure, preserve cash, maintain a strong balance sheet and appropriately fund our business for future growth. Through the various expense reduction programs we are implementing across our global operations, we expect to realize a combined $50 million to $60 million in annualized cost savings, the majority of which should be realized in fiscal 2010. Additionally, recognizing the severity of the current environment and the importance of cash, we have eliminated our quarterly dividend. Given our reported fourth quarter fiscal 2009 financial results, we are not in compliance with one of the financial covenants in our current credit agreements. We are in negotiations with our lenders to establish a new $110 million three year asset-based loan facility and, in the meantime, have executed a commitment letter for a $50 million three year asset-based credit facility. With that said, we also expect that our cash on hand and the cash from conversion of working capital should be sufficient to finance our ongoing business."

Full Fiscal Year 2009 Performance

Fiscal 2009 adjusted net income was $14.2 million, or $0.55 per fully diluted share, compared to adjusted net income of $46.6 million, or $1.71 per fully diluted share in fiscal 2008 (see attached table for a reconciliation of GAAP to non-GAAP measures). Fiscal 2009 net income was $2.3 million, or $0.09 per fully diluted share, compared to net income of $60.8 million, or $2.23 per fully diluted share in fiscal 2008. The Company's full year fiscal 2009 net income included the following one-time items: (i) a pre-tax charge of $11.1 million, or $0.30 per diluted share, resulting from the Company's previously announced expense reduction plans, (ii) a pre-tax, non-cash impairment charge of $4.5 million, or $0.11 per diluted share, related to five Movado boutiques, which the Company continues to operate; and (iii) the tax impact of a non-cash tax provision recorded in the fourth quarter of fiscal 2009 for the future repatriation of $30 million in funds from the Company's international operations. This was mostly offset by the tax benefit of the utilization of a Swiss net operating loss carryforward (NOL) acquired with the Ebel brand in fiscal 2005, which was recorded in the third quarter of fiscal 2009.

Net sales in fiscal 2009 decreased 17.6% from last year to $460.9 million. Year-ago net sales included $31.2 million of excess discontinued product sales and a one-time accrual of $15.0 million for product returns associated with the Company's closure of approximately 1,400 wholesale doors selling the Movado brand in the United States. Adjusting for these items recorded in fiscal 2008, net sales for fiscal 2009 decreased 15.2%.

Gross margin in fiscal 2009 was 62.4% of sales compared to 60.2% last year. Adjusting for the aforementioned items recorded in fiscal 2008, gross margin in the year-ago period was 64.0% of sales. Gross profit in fiscal 2009 was $287.6 million versus $336.7 million last year. Year-ago adjusted gross profit was $347.7 million.

Adjusting for the previously mentioned items recorded in both fiscal 2009 and fiscal 2008, operating profit in fiscal 2009 was $19.0 million compared to $61.8 million in fiscal 2008 (see attached table for a reconciliation of GAAP to non-GAAP measures). Without adjustments, operating profit in fiscal 2009 was $3.4 million compared to $50.8 million in fiscal 2008.

Fourth Quarter Performance

The Company recorded a fourth quarter adjusted net loss of $10.5 million, or $0.42 per fully diluted share, compared to adjusted net income of $10.8 million, or $0.40 per fully diluted share in fiscal 2008 (see attached table for a reconciliation of GAAP to non-GAAP measures). Fourth quarter fiscal 2009 net loss was $22.8 million, or a loss of $0.92 per fully diluted share, compared to net income of $19.6 million, or $0.72 per fully diluted share in fiscal 2008. The Company's fiscal 2009 fourth quarter results included the following one-time items: (i) a pre-tax charge of $5.5 million, or $0.15 per diluted share, resulting from the Company's previously announced expense reduction plans, (ii) a non-cash impairment charge of $4.5 million, or $0.12 per diluted share, related to the aforementioned Movado Boutiques, which the Company continues to operate; and (iii) a $7.4 million non-cash tax provision, or $0.30 per diluted share, primarily related to the future repatriation of $30 million in funds from the Company's international operations.

Net sales for the fourth quarter of fiscal 2009 decreased 32.2% from last year to $94.0 million. Year-ago net sales included the aforementioned one-time accrual of $15.0 million and $8.9 million of excess discontinued product sales. Adjusting for these items recorded in the fourth quarter of fiscal 2008, net sales for the fourth quarter of fiscal 2009 decreased 35.0%.

Gross margin in the fourth quarter of fiscal 2009 was 55.9% of sales compared to 59.0% last year. In light of the challenging economic environment, the unusual deterioration in gross margin was primarily due to fluctuations in currency, the heightened promotional activity in the Company's Movado Boutiques, and the impact of the overall mix of business. Adjusting for the aforementioned items recorded in the fourth quarter of fiscal 2008, gross margin in the year-ago period was 64.3% of sales.