1 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 ------------------------ FORM 10-Q ------------------------ [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JULY 31, 1998 [ ] 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 0-22378 MOVADO GROUP, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) <TABLE> <S> <C> NEW YORK 13-2595932 (STATE OR OTHER JURISDICTION (IRS EMPLOYER OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.) 125 CHUBB AVENUE, LYNDHURST, NEW JERSEY 07071 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE) </TABLE> REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (201) 460-4800 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 the past 90 days. Yes [X] No [ ] Indicate the number of shares outstanding of each of the Issuer's classes of Common Stock, as of the latest practicable date. As of August 31, 1998 the Registrant had 3,533,529 shares of Class A Common Stock, par value $0.01 per share, outstanding and 9,387,361 shares of Common Stock, par value $0.01 per share, outstanding. - -------------------------------------------------------------------------------- - --------------------------------------------------------------------------------
2 MOVADO GROUP, INC. INDEX TO QUARTERLY REPORT ON FORM 10-Q JULY 31, 1998 <TABLE> <CAPTION> Page ---- <S> <C> Part I Financial Information Item 1. Consolidated Balance Sheets at July 31, 1998, January 31, 1998 and July 31, 1997 3 Consolidated Statements of Income for the six months ended July 31, 1998 and 1997 and the three months ended July 31, 1998 and 1997 4 Consolidated Statements of Cash Flows for the six months ended July 31, 1998 and 1997 5 Notes to Consolidated Financial Statements 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 7 Part II Other Information Item 4. Submission of Matters to a Vote of Security Holders 12 Item 6. Exhibits and Reports on Form 8-K 13 Signatures 14 Exhibit Index 15 </TABLE> 2
3 PART 1 - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS MOVADO GROUP, INC. CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share amounts) (Unaudited) <TABLE> JULY 31, JANUARY 31, JULY 31, 1998 1998 1997 --------- --------- --------- <S> <C> <C> <C> ASSETS Current assets: Cash $ 4,767 $ 10,874 $ 1,493 Trade receivables, net 98,766 92,386 89,549 Inventories 118,885 98,183 105,819 Other 23,511 18,206 22,698 --------- --------- --------- Total current assets 245,929 219,649 219,559 --------- --------- --------- Plant, property and equipment, net 22,546 18,909 16,738 Other assets 11,658 10,511 10,005 --------- --------- --------- $ 280,133 $ 249,069 $ 246,302 ========= ========= ========= LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Loans payable to banks $ 36,055 $ -- $ 47,605 Current portion of long-term debt 5,000 10,000 5,000 Accounts payable 27,039 25,286 21,822 Accrued liabilities 13,349 16,920 18,543 Deferred and current taxes payable 8,944 10,340 6,615 --------- --------- --------- Total current liabilities 90,387 62,546 99,585 --------- --------- --------- Long-term debt 35,000 35,000 40,000 Deferred and non-current foreign income taxes 3,798 3,460 3,368 Other liabilities 2,460 2,530 2,944 Shareholders' equity: Preferred Stock, $0.01 par value, 5,000,000 shares authorized; no shares issued -- -- -- Common Stock, $0.01 par value, 20,000,000 shares authorized; 9,386,611, 9,317,007 and 6,508,618, shares issued, respectively 94 93 65 Class A Common Stock, $0.01 par value, 10,000,000 shares authorized; 3,533,529, 3,556,793 and 4,810,495 shares issued and outstanding, respectively 35 36 48 Capital in excess of par value 64,792 64,475 34,451 Retained earnings 89,213 86,194 72,934 Accumulated other comprehensive income (5,521) (5,137) (6,965) Treasury Stock, 16,819, 17,251 and 17,251 shares (125) (128) (128) at cost, respectively --------- --------- --------- 148,488 145,533 100,405 --------- --------- --------- $ 280,133 $ 249,069 $ 246,302 ========= ========= ========= </TABLE> SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 3
4 MOVADO GROUP, INC. CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per share amounts) (Unaudited) <TABLE> <CAPTION> SIX MONTHS ENDED JULY 31, THREE MONTHS ENDED JULY 31, ------------------------- --------------------------- 1998 1997 1998 1997 -------- -------- -------- -------- <S> <C> <C> <C> <C> Net sales $110,584 $ 91,912 $ 68,934 $ 56,994 Costs and expenses: Cost of sales 46,305 39,785 29,369 24,768 Selling, general and administrative 57,173 47,050 33,663 27,717 -------- -------- -------- -------- Operating income 7,106 5,077 5,902 4,509 -------- -------- -------- -------- Net interest expense 2,516 2,283 1,504 1,368 -------- -------- -------- -------- Income before income taxes 4,590 2,794 4,398 3,141 Provision for income taxes 1,056 699 1,012 786 -------- -------- -------- -------- Net income $ 3,534 $ 2,095 $ 3,386 $ 2,355 ======== ======== ======== ======== Basic net income per share $ 0.27 $ 0.19 $ 0.26 $ 0.21 ======== ======== ======== ======== Diluted net income per share $ 0.26 $ 0.18 $ 0.25 $ 0.20 ======== ======== ======== ======== Dividends declared per share $ 0.04 $ 0.04 $ 0.02 $ 0.02 ======== ======== ======== ======== Average shares outstanding 12,885 11,302 12,896 11,302 Dilutive effect of stock options 676 386 704 458 -------- -------- -------- -------- Average shares outstanding assuming dilution 13,561 11,688 13,600 11,760 ======== ======== ======== ======== </TABLE> SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 4
5 MOVADO GROUP, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (Unaudited) <TABLE> <CAPTION> SIX MONTHS ENDED JULY 31, ------------------------- 1998 1997 -------- -------- <S> <C> <C> Cash flows from operating activities: Net income $ 3,534 $ 2,095 Adjustments to reconcile net income to net cash used in operating activities: Depreciation and amortization 1,810 1,989 Deferred and non-current foreign income taxes 681 117 Provision for losses on accounts receivable 491 221 Changes in current assets and liabilities: Trade receivables (7,234) (14,966) Inventories (21,174) (21,259) Other current assets (5,838) (8,585) Accounts payable 2,514 (3,052) Accrued liabilities (3,511) 5,588 Deferred and current taxes payable (1,665) 197 Increase in other non-current assets (932) (1,669) Increase(decrease) in other non-current liabilities 105 (22) -------- -------- Net cash used in operating activities (31,219) (39,346) -------- -------- Cash flows used for investing activities: Capital expenditures (5,140) (2,586) Goodwill, trademarks and other intangibles (374) (800) -------- -------- Net cash used in investing activities (5,514) (3,386) -------- -------- Cash flows from financing activities: Net proceeds from debt facilities 31,055 40,056 Principal payments under capital leases (166) (135) Exercise of stock options 310 -- Dividends paid (515) (455) -------- -------- Net cash provided by financing activities 30,684 39,466 -------- -------- Effect of exchange rate changes on cash (58) (126) -------- -------- Net decrease in cash (6,107) (3,392) Cash at beginning of period 10,874 4,885 -------- -------- Cash at end of period $ 4,767 $ 1,493 ======== ======== </TABLE> SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 5
6 MOVADO GROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS BASIS OF PRESENTATION The accompanying unaudited consolidated financial statements have been prepared by Movado Group, Inc. (the "Company") in a manner consistent with that used in the preparation of the financial statements included in the Company's fiscal 1998 Annual Report filed on form 10-K. In the opinion of management, the accompanying financial statements reflect all adjustments, consisting of only normal and recurring adjustments, necessary for a fair presentation of the financial position and results of operations for the periods presented. These consolidated financial statements should be read in conjunction with the aforementioned annual report. NOTE 1 - INVENTORIES Inventories consist of the following (in thousands): <TABLE> <CAPTION> JULY 31, JANUARY 31, JULY 31, 1998 1998 1997 -------- -------- -------- <S> <C> <C> <C> Finished goods $ 73,888 $ 61,960 $ 66,678 Work-in-process and component parts 44,997 36,223 39,141 -------- -------- -------- $118,885 $ 98,183 $105,819 ======== ======== ======== </TABLE> NOTE 2 - SUPPLEMENTAL CASH FLOW INFORMATION The following is provided as supplemental information to the consolidated statements of cash flows (in thousands): <TABLE> <CAPTION> SIX MONTHS ENDED JULY 31, -------------------- 1998 1997 ------ ------ <S> <C> <C> Cash paid during the period for: Interest $3,241 $2,539 Income taxes 2,164 505 </TABLE> NOTE 3 - COMPREHENSIVE INCOME As of February 1, 1998, the Company adopted Statement of Financial Accounting Standards No. 130, (SFAS 130), "Reporting Comprehensive Income". SFAS 130 establishes standards for the reporting and display of comprehensive income and its components in a full set of general-purpose financial statements. Under SFAS 130, foreign currency translation adjustments, which had been reported separately in shareholders' equity prior to adoption, are included in other comprehensive income. No provision has 6
7 been made for taxes on foreign subsidiaries' undistributed earnings, because it is management's intention to permanently reinvest the earnings of foreign subsidiaries within the business of those companies. Amounts in prior year financial statements have been reclassified to conform to SFAS 130. The components of comprehensive income (loss) are as follows (in thousands): <TABLE> <CAPTION> SIX MONTHS ENDED JULY 31, THREE MONTHS ENDED JULY 31, 1998 1997 1998 1997 ------- ------- ------- ------- <S> <C> <C> <C> <C> Net income $ 3,534 $ 2,095 $ 3,386 $ 2,355 Foreign currency translation adjustment (384) (5,109) 864 (2,132) ------- ------- ------- ------- Comprehensive income/(loss) $ 3,150 $(3,014) $ 4,250 $ 223 ======= ======= ======= ======= </TABLE> NOTE 4 - SUBSEQUENT EVENT On August 3, 1998, the Company began to repurchase its common stock under its Corporate Repurchase Program. Through September 3, 1998 the Company has repurchased approximately 80,000 shares at an average cost of $20.11 per share. NOTE 5 - ACCOUNTING PRONOUNCEMENT The Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 133 "Accounting for Derivative Instruments and Hedging Activities" (SFAS 133) in June 1998. SFAS 133 requires all derivatives to be recorded on the balance sheet at fair value and establishes new accounting practices for hedge instruments. SFAS 133 is required for the fiscal years beginning after June 15, 1999. Management of the Company is currently analyzing the effect SFAS 133 will have on the Company's statement of position and results of operations. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations RESULTS OF OPERATIONS FORWARD LOOKING STATEMENTS Statements included under Management's Discussion and Analysis of Financial Condition and Results of Operations, in this report, as well as statements in future filings by the Company with the Securities and Exchange Commission ("SEC"), in the Company's press releases and oral statements made by or with the approval of an authorized executive officer of the Company, which are not historical in nature, are intended to be, and are hereby identified as, "forward looking statements" for purposes of the safe harbor provided by Section 21E of the Securities Exchange Act of 1934. The Company cautions readers that forward looking statements include, without limitation, those relating to the Company's future business prospects, revenues, working capital, liquidity, capital needs, plans for future operations, effective tax rates, margins, interest costs, and income, as well as assumptions relating to the foregoing. Forward looking statements are subject to certain risks and uncertainties, some of which cannot be predicted or quantified. Actual results and future events could differ materially from those indicated in the forward 7
8 looking statements due to several important factors herein identified, among others, and other risks and factors identified from time to time in the Company's reports filed with the SEC including, without limitation, the following: general economic and business conditions which may impact disposable income of consumers, competitive products and pricing, ability to enforce intellectual property rights, seasonality, availability of alternative sources of supply in the case of loss of any significant supplier, the Company's dependence on key officers, continued availability to the Company of financing and credit on favorable terms, and success of hedging strategies in respect of currency exchange rate fluctuations. Six months ended July 31, 1998 compared to six months ended July 31, 1997. Net Sales. Net sales increased 20.3% to $110.6 million from $91.9 million for the six months ended July 31, 1998 and July 31, 1997, respectively. The increase was attributable to a 20.8% increase in domestic sales and a 18.4% increase in international sales. The domestic sales increase was primarily due to a 15.5% increase in the Concord, Movado and ESQ brands, initial shipments of the new Coach watch line and a 25.2% increase in retail operations primarily from the opening of two Movado Boutiques in fiscal 1999. The increase in international sales is attributable to a 30% increase in the Concord and Movado brands. International sales increases primarily occurred in the Caribbean, Middle East and Far East. Gross Margins. The Company's gross margin for the six months ended July 31, 1998 was $64.3 million (58.1% of net sales) as compared to $52.1 million (56.7% of net sales) for the comparable prior year period. The increase in gross margin as a percentage of sales relates to the continued increase in the proportion of the Company's manufactured brands - Concord, Movado and ESQ, as well as the initial launch of the Coach watch line, which has margins similar to the Company's other manufactured brands. The Company's margin also benefited from a decline in the value of the Swiss franc against the U.S. dollar which reduces the Company's production costs. Operating Expenses. Operating expenses increased for the six months ended July 31, 1998 to 51.7% of net sales from 51.2% of net sales for the comparable prior year period. The increase in operating expenses occurred primarily in advertising, selling and general and administrative expense categories. The increase in advertising and marketing expenses primarily relates to the introduction of the Coach watch line and the opening of the first two Movado Boutiques. The increase in selling expenses is primarily attributable to selling costs related to the Coach watch line and expenses for the Movado Boutiques. The increase in general and administrative expenses primarily relates to increases in information systems costs. Interest Expense. Net interest expense, which consists primarily of interest on the Company's 6.56% Senior Notes ("Senior Notes") and borrowings against its working capital and revolving lines of credit, was $2.5 million for the six months ended July 31, 1998 as compared to $2.3 million for the comparable prior year period. The higher interest expense is mainly due to increased average interest rates offset in part by reduced average borrowings under the Senior Notes and other credit facilities. Average interest rates in fiscal 1998 were lower due to favorable terms with local Swiss banks. The average interest rate has been adversely affected by the shift to U.S. borrowings at higher rates, offset by lower hedging costs of these funds. Income Taxes. The Company recorded a provision for taxes of $1.1 million for the six months ended July 31, 1998. Taxes were provided at a 23% effective rate which the Company believes will approximate the effective annual rate for fiscal 1999; however, there can be no assurance of this as it is dependent on a number of factors including: mix of foreign to domestic earnings, local statutory tax rates and utilization of net operating losses. The 23% effective rate differs from the United States statutory rate due to the mix 8
9 of earnings between the Company's U.S. and international operations, the most significant of which are located in Switzerland. The Company's international operations are generally subject to tax rates that are significantly lower than U.S. statutory rates. At July 31, 1997, the Company recorded a provision for income taxes of $699,000. Taxes were provided at a 25% effective rate at July 31, 1997. Three months ended July 31, 1998 compared to three months ended July 31, 1997. Net Sales. Net sales increased 20.9% to $68.9 million from $57.0 million for the three months ended July 31, 1998 and July 31, 1997, respectively. The increase was attributable to a 23.1% increase in domestic sales and a 12.5% increase in international sales. The domestic sales increase was primarily due to increases in the Concord, and Movado brands, initial shipments of the new Coach watch line and a 32.9% increase in retail operations which is primarily attributable to the opening of two Movado Boutiques in fiscal 1999. Gross Margins. The Company's gross margin for the three months ended July 31, 1998 was $39.6 million (57.4% of net sales) as compared to $32.2 million (56.5% of net sales) for the comparable prior year period. The increase in gross margin as a percentage of sales relates to the continued increase in the proportion of the Company's manufactured brands - Concord and Movado, as well as the initial launch of the Coach watch line, which has margins similar to the Company's other manufactured brands. The Company's margin also benefited from a decline in the value of the Swiss franc against the U.S. dollar which reduces the Company's production costs. Operating Expenses. Operating expenses increased 21.5% for the three months ended July 31, 1998 to 48.8% of net sales from 48.6% of net sales for the comparable prior year period. The increase in operating expenses occurred primarily in advertising, selling and general and administrative expense categories. The increase in advertising and marketing expenses primarily relates to the introduction of the Coach watch line and the opening of the first two Movado Boutiques. The increase in selling expenses is primarily attributable to selling costs related to the Coach watch line and expenses for the Movado Boutiques. The increase in general and administrative expenses primarily relates to increases in information systems costs. Interest Expense. Net interest expense, which consists primarily of interest on the Company's 6.56% Senior Notes and borrowings against its working capital and revolving lines of credit, was $1.5 million and $1.4 million for the three months ended July 31, 1998 and 1997, respectively. The higher interest expense is predominantly due to increased average interest rates offset in part by reduced average borrowings under the Senior Notes and other credit facilities. Average interest rates in fiscal 1998 were lower due to favorable terms with local Swiss banks. The average interest rate has been adversely affected by the shift to U.S. borrowings at higher rates, offset by lower hedging costs of these funds. Income Taxes. The Company recorded a provision for income taxes of $1.0 million for three months ended July 31, 1998. Taxes were provided at a 23% effective rate which the Company believes will approximate the effective annual rate for fiscal 1999; however, there can be no assurance of this as it is dependent on a number of factors including: mix of foreign to domestic earnings, local statutory tax rates and utilization of net operating losses. The 23% effective rate differs from the United States statutory rate due to the mix of earnings between the Company's U.S. and international operations, the most significant of which are located in Switzerland. The Company's international operations are generally subject to tax 9
10 rates that are significantly lower than U.S. statutory rates. At July 31, 1997, the Company recorded a provision for income taxes of $786,000. Taxes were provided at 25% effective tax rate. Liquidity and Capital Resources The Company's liquidity needs have been, and are expected to remain, primarily a function of its seasonal working capital requirements which have increased due to significant growth in domestic sales over the two previous years. The Company's business is not capital intensive and liquidity needs for capital investments have not been significant in relation to the Company's overall financing requirements. The Company has met its liquidity needs primarily through funds from operations and bank borrowings under working capital lines of credit with its domestic banks. The Company expects that its future requirements for capital will relate not only to working capital requirements for the expected continued growth of its existing brands, but also funding new lines of business including the Company's new Coach watch line which was launched in Spring 1998 and the Movado Boutiques. In addition, the Company is required to make a $5 million sinking fund payment on February 1, 1999 in connection with its Senior Notes. The Company's revolving credit and working capital lines with its domestic bank group provide for a three year $90.0 million unsecured revolving line of credit, pursuant to an Amended and Restated Credit Agreement, dated as of July 23, 1997, among the Company, the Chase Manhattan Bank, as agent, Fleet Bank N.A. as co-agent, and other banks signatory thereto ("Restated Bank Credit Agreement"), and $31.6 million of uncommitted working capital lines of credit. The Restated Bank Credit Agreement contains certain financial covenants and limits the amount of additional debt outstanding to $20 million. At July 31, 1998, the Company had $41.1 million in outstanding balances under the Restated Bank Credit Agreement, $5.0 million of which is included in Long-term debt. In March 1998, the Company's Board of Directors authorized the repurchase of 400,000 shares of the Company's Common Stock. As of July 31, 1998, no shares were repurchased under this program. The Company's debt to total capitalization ratio was 33.9% at July 31, 1998, as compared to 23.6% at January 31, 1998 and 48.0% at July 31, 1997. The increase in the debt to total capitalization from January 31, 1998 is primarily due to an increase in loans payable to banks to fund the Company's working capital increase and capital expenditures. The decrease in the debt to total capitalization ratio from July 31, 1997 is predominately due to the sale in a registered offering of an additional 1.5 million shares of common stock on October 21, 1997. The Company's net working capital, consisting primarily of trade receivables and inventories, amounted to $155.5 million at July 31, 1998, $157.1 million at January 31, 1998 and $120.0 million at July 31, 1997. The decrease in working capital from January 31, 1998 is primarily the result of an increase in liabilities, especially loans payable to banks, proceeds of which were used to purchase inventories which increased in anticipation of the upcoming selling season. The increase in the working capital from July 31, 1997 is primarily the result of a decrease in loans payable to banks. Accounts receivable at July 31, 1998 were $98.8 million as compared to $92.4 million at January 31, 1998 and $89.5 million at July 31, 1997. The increase in the receivables was primarily the result of growth in the Company's business. Inventories at July 31, 1998 were $118.9 million as compared to $98.2 million at January 31, 1998 and $105.8 million at July 31, 1997. The increase in inventories from January 31, 1998 and July 31, 1997 10
11 primarily relates to the anticipation of the upcoming selling season, the Company's new Coach watch line and new product lines for the Movado Boutiques. The Company's fiscal 1999 year-to-date capital expenditures approximated $5.1 million as of July 31, 1998 and $2.6 million as of July 31, 1997. Expenditures in fiscal 1999 primarily related to improvements in the Company's management and sales management information systems. The Company expects that its capital expenditures in fiscal 1999 will exceed the average levels experienced annually over the last three fiscal years due to planned continued improvements in management information systems, including retail information systems and expansion of its outlet store network as well as the introduction of the Movado Boutiques. Year 2000 The Company is actively addressing its information technology infrastructure, including hardware and software to ensure Year 2000 compliance in all areas of operations including relationships with vendors and customers. The Company is implementing a new computer system which is designed to be Year 2000 compliant. The Company does not expect that costs associated with Year 2000 issues will have material adverse impact on the Company's consolidated financial position or results or operations, unless the Company or third parties upon which it relies are unable to address these issues in a timely manner. In order to assure that this does not occur, the Company plans to devote all resources required to resolve any significant Year 2000 issues in a timely manner. 11
12 PART II - OTHER INFORMATION ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS On June 11, 1998 the Company held its annual meeting of shareholders at the offices of Simpson, Thacher & Bartlett located at 425 Lexington Avenue, New York, New York. The following matters were voted upon at the meeting: (i) The election of the following directors, constituting the entire board of directors: Margaret Hayes Adame Michael Bush Efraim Grinberg Gedalio Grinberg Alan H. Howard Donald Oresman Leonard L. Silverstein (ii) A proposal to ratify the selection of PricewaterhouseCoopers, LLP as the Company's independent public accountants for the fiscal year ending January 31, 1999; and (iii) Approval of an amendment to the Company's 1996 Stock Incentive Plan to increase the number of shares of common stock available for issuance thereunder and to modify certain other terms thereof. With respect to the above referenced proposals that were voted on at the annual shareholders meeting, the following votes were tabulated. There were no broker nonvotes. Proposal (i) on election of directors: <TABLE> <CAPTION> Nominee For Against/Withheld Abstain ------- --- ---------------- ------- <S> <C> <C> <C> Margaret Hayes Adame ................................................... 28,388,442 67,287 -- Michael Bush ........................................................... 28,850,280 67,287 38,162 Efraim Grinberg ........................................................ 28,850,280 67,287 38,162 Gedalio Grinberg ....................................................... 28,850,280 67,287 38,162 Alan H. Howard ......................................................... 28,850,280 67,287 38,162 Donald Oresman ......................................................... 28,850,280 67,287 38,162 Leonard L. Silverstein ................................................. 28,850,280 67,287 38,162 Proposal (ii) on ratification of appointment of accountants ........... 28,953,531 196 2,002 Proposal (iii) on approval of amendment to Stock Incentive Plan........ 27,949,240 983,802 22,687 </TABLE> 12
13 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits 10.1 Lease dated August 5,1998 between Grand Canal Shops Mall Construction, LLC, as landlord and Movado Retail Group, Inc., as tenant for premises at Grand Canal Shops, Clark County, Nevada. 27.1 Financial Data Schedule for the six months ended July 31, 1998, submitted to the Securities and Exchange Commission in electronic format. 27.2 Restated Financial Data Schedule for the six months ended July 31, 1997, submitted to the Securities and Exchange Commission in electronic format. 27.3 Restated Financial Data Schedule for the nine months ended October 31, 1997, submitted to the Securities and Exchange Commission in electronic format. 27.4 Restated Financial Data Schedule for the six months ended July 31, 1996, submitted to the Securities and Exchange Commission in electronic format. 27.5 Restated Financial Data Schedule for the nine months ended October 31, 1996, submitted to the Securities and Exchange Commission in electronic format. (b) Reports on Form 8-K None 13
14 SIGNATURES Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. MOVADO GROUP, INC. (Registrant) Dated: September 14, 1998 By: /s/ Kenneth J. Adams -------------------------------- Kenneth J. Adams Senior Vice President and Chief Financial Officer (Chief Financial Officer) Dated: September 14, 1998 By: /s/ John J. Rooney -------------------------------- John J. Rooney Corporate Controller (Principal Accounting Officer) 14
15 EXHIBIT INDEX <TABLE> <CAPTION> EXHIBIT NUMBER DESCRIPTION ------- ----------- <S> <C> 10.1 Lease dated August 5,1998 between Grand Canal Shops Mall Construction, LLC, as landlord and Movado Retail Group, Inc., as tenant for premises at Grand Canal Shops, Clark County, Nevada. 27.1 Financial Data Schedule for the six months ended July 31, 1998, submitted to the Securities and Exchange Commission in electronic format. 27.2 Restated Financial Data Schedule for the six months ended July 31, 1997, submitted to the Securities and Exchange Commission in electronic format. 27.3 Restated Financial Data Schedule for the nine months ended October 31, 1997, submitted to the Securities and Exchange Commission in electronic format. 27.4 Restated Financial Data Schedule for the six months ended July 31, 1996, submitted to the Securities and Exchange Commission in electronic format. 27.5 Restated Financial Data Schedule for the nine months ended October 31, 1996, submitted to the Securities and Exchange Commission in electronic format. </TABLE> 15