Movado Dividend Who Decides Board or Bank #Movado $MOV

Movado Luno 2

Image by NVinacco via Flickr

Movado Group (NYSE:MOV) reported Q4 and year-end results. The situation is much improved. Cash is more plentiful. Debt has been paid down. The board of directors has decided to declare a dividend, subject to their review of quarterly results.

Standard board of director stuff. The question becomes who really is deciding on this supposed dividend? The earnings release does refer to another amendment to the amended and restated loan and security agreement. Here is the quote.

“Effective April 5, 2011, the Company amended its Amended and Restated Loan and Security Agreement dated as of July 17, 2009 with Bank of America, N.A. and Bank Leumi USA to reflect more favorable current market rate conditions and to modify certain covenants related to the payment of dividends.”

So if an investor wanted to connect the dots you would want to know just what the covenant actually says. A dividend investor depends on income and the stability thereof. When the board declares a dividend are their hands tied in some fashion? If so how have the banks tied up Movado.

Movado sells some remarkable time pieces. The instruments are meant for precision as much as they are fashion pieces. That is called corporate branding. The earnings release does not support the corporate brand and many investors would argue the earnings release is Reg FD challenged.

Disclosure: “George Gutowski” writes from a “Caveat Emptor Perspective”. I hold no positions in stocks mentioned in this post. I have no plans to initiate new positions within the next 72 hours.

Movado Strange Case of Double Negative

Movado Luno

Image by NVinacco via Flickr

Movado (MOV) released Q3 numbers along with the usual executive nattering about how well they are doing.

Efraim Grinberg, Chairman and Chief Executive Officer, stated, “We have begun executing our multi-year strategic plan and gained traction in our initiatives during the third quarter.”  

Rick Cote, President and Chief Operating Officer, stated, “We are pleased with our results in the third quarter and year-to-date periods.”

But they also report  “On a GAAP basis, income from continuing operations in the third quarter of fiscal 2011 was $16.9 million, or $0.68 per diluted share, which included a liability reversal of $4.3 million, or $0.17 per diluted share, related to a previously recorded liability for a retirement agreement with the Company’s former Chairman. ” 

Liability reversal? They did not allude to any previously reported news. They just threw in the little tidbit and expect investors to suck it up and carry on. At $0.17 per diluted share management could have explained a little bit more. Avoiding the discussion just makes investors suspicious. Transparency is not well served.

Disclosure: George Gutowski writes from a caveat emptor perspective. I hold no positions in stocks mentioned in this post. 

Movado Updates Guidance

Movado Group (MOV) issued a press release to up date the three year strategic plan. The press release had a “Come to Jesus” flavour as the executives pounded their pulpits and told everyone how well they were going to do. No comment about macro economic issues or competitive issues which should figure prominently in any strategic plan.

Efraim Grinberg, Chairman and Chief Executive Officer, stated, “We strongly believe that our multi-year strategic plan will allow us to efficiently leverage our great brands and assets…”

Rick Cote, President and Chief Operating Officer, stated, “We are confident that our initiatives will enable us to drive solid, consistent growth as well as leverage our powerful brand portfolio.

Why exclude substantive information from the press release and save juicy stuff for an analyst conference call, where only the cheer leaders can ask questions.

Disclosure: No position in stocks mentioned in this post.