Movado Group to repatriate $150 mn under AJCA provision
16 Dec '05
1 min read
Leading watch maker Movado Group Inc announced that it intends to repatriate approximately $150 million in undistributed foreign earnings under the provisions of the American Jobs Creation Act (AJCA) of 2004.
The Company anticipates repatriating approximately $150 million depending upon year-end cash balances and the exchange rate at the time of repatriation.
Assuming the Company repatriates $150 million, a one-time charge will be recorded in the fourth quarter ending January 31, 2006 for the related tax expense, which is currently estimated to be $8.0 million, or approximately $0.31 per diluted share.
The repatriation will consist of proceeds from existing off-shore year-end cash and proceeds drawn from the Company's new Swiss credit facility.
The repatriation provision of the AJCA requires that funds be invested in qualified investments in the United States.
The investments include: advertising and marketing expenditures, infrastructure and capital investments, including retail store expansion and renovation, headquarters expansion, information technology replacements and upgrades, employee hiring and training, and compensation and benefits for non-executive employees.
Movado Group Inc designs, manufactures, and distributes Movado, Ebel, Concord, ESQ, Coach, Tommy Hilfiger and Hugo Boss watches worldwide, and operates Movado boutiques and company stores in the United States.
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