On December 3, 2018, the Company acquired 51% of City Time Distribucion, S.L.U, (“City Time”), the Company’s distributor in Spain, and simultaneously signed a joint venture agreement. The purchase price was $4.8 million, or 4.2 million Euros, net of cash acquired, and was funded with cash on hand. The results of City Time have been included in the consolidated financial statements since the date of acquisition within the International location of the Watch and Accessory Brands segment. Of the total purchase consideration, there was no material amounts allocated to assets acquired and liabilities assumed.

Pursuant to the joint venture agreement, the noncontrolling interest holder has the right to sell its interest in City Time to the Company on two specific dates in the future. The noncontrolling interest is not redeemable until such dates. The Company will adjust the carrying value of the redeemable interest to the redemption amount assuming the security was redeemable at the balance sheet date. At January 31, 2019, the Company concluded that the remeasurement adjustment is immaterial.

On October 1, 2018, the Company acquired MVMT Watches, Inc., owner of MVMT, for an initial payment of $100.0 million and two future contingent payments that combined could total up to an additional $100.0 million before tax benefits. The exact amount of the future payments will be determined by MVMT's future financial performance with no minimum required future payment. After giving effect to the closing adjustments, the purchase price was $108.4 million, net of cash acquired of $3.8 million. The acquisition was funded with cash on hand and adds a new brand with significant global growth potential to the Company’s portfolio.

The results of the MVMT brand have been included in the consolidated financial statements since the date of acquisition within the U.S. and International locations of the Watch and Accessory Brands segment. For the fiscal year ended January 31, 2019, consolidated operating income included $14.4 million of expenses primarily related to integration and transaction costs, as a result of the Company’s acquisition of MVMT.

The acquisition was accounted for in accordance with FASB Topic ASC 805-Business Combinations, which requires that the total cost of an acquisition be allocated to the tangible and intangible assets acquired and liabilities assumed based upon their respective fair values at the date of acquisition.

The following table summarizes the fair value of the assets acquired and liabilities assumed as of the October 1, 2018 acquisition date (in thousands):

Assets Acquired and Liabilities Assumed	Fair Value
Cash and cash equivalents	$	3,848
Trade receivables		370
Inventories		14,552
Prepaid expenses and other current assets		2,325
Property, plant and equipment		179
Other non-current assets		6,500
Goodwill		77,542
Trade name and other intangibles		28,928
Total assets acquired		134,244
Accounts payable		5,982
Accrued liabilities		9,018
Other non-current liabilities		7,064
Total liabilities assumed		22,064
Total purchase price	$	112,180

Inventories (as of October 1, 2018) included a step-up adjustment of $0.7 million, which is being amortized over 5 months. The components of Trade name and other intangibles (as of October 1, 2018) included a trade name of $24.7 million (amortized over 10 years), and customer relationships of $4.2 million (amortized over 10 years).

Other non-current assets and other non-current liabilities each included $6.5 million at the acquisition date related to escrow amounts established under the acquisition agreement, associated with certain contingencies that existed at the date of acquisition. In January 2019, $1.4 million of the escrow amount was settled. Upon settlement of all of the remaining contingencies, the excess funds in escrow, if any will be returned to the selling group. If the costs to settle the contingencies exceed the escrowed balances, the additional cost shall be borne by the Company.

The acquisition agreement also includes a contingent consideration arrangement based on the MVMT brand achieving certain revenue and EBITDA (as defined in the acquisition agreement) targets. In connection therewith, the Company recorded a non-current liability of $16.5 million as of the date of acquisition to reflect the estimated fair value of the contingent purchase price. $14.5 million is allocated to purchase price and $2.0 million to deferred compensation expense based on future employee service requirements.

The estimated fair value of the contingent consideration was determined using a Monte Carlo simulation that includes key assumptions regarding MVMT’s projected financial performance during the earn-out period, volatilities, estimated discount rates, risk-free interest rate, and correlation. Each reporting period after the acquisition, the Company will revalue the contingent purchase price liability and record increases or decreases in the fair value of the liability in its Consolidated Statements of Operations. Changes in fair value will result from changes in actual and projected financial performance, discount rates, volatilities, and the other key assumptions. The inputs and assumptions are not observable in the market but reflect the assumptions the Company believes would be made by a market participant. The possible outcomes for the contingent consideration range from $0 to $100 million on an undiscounted basis.

As of the January 31, 2019 remeasurement date, the contingent purchase price liability has been accreted to $16.7 million. The $0.2 million increase in the liability is included as a reduction in operating income in the Consolidated Statement of Operations. Refer to Note 8 for further discussion of fair value measurements.

The Company recorded goodwill (as of October 1, 2018) of $77.5 million based on the amount by which the purchase price exceeded the fair value of the net assets acquired. As the structure of the acquisition allowed for a step up in basis for tax purposes, the full amount of the goodwill balance will be deductible for federal income tax purposes over 15 years.

MVMT’s operating results have been included in the Company’s Consolidated Financial Statements beginning October 1, 2018. Net sales of the acquired MVMT brand since the date of acquisition through January 31, 2019 were $39.8 million. The MVMT brand’s operating income since the date of acquisition was $0.6 million. These foregoing operating results exclude certain activity of the Company or its wholly owned subsidiaries in support of the MVMT brand.

The following table provides the Company’s unaudited pro forma net sales, net income and net income per basic and diluted common share as if the results of operations of the MVMT brand had been included in the Company’s operations commencing on February 1, 2017, based on available information relating to operations of the MVMT brand. This pro forma information is not necessarily indicative either of the combined results of operations that actually would have been realized by the Company had the MVMT brand acquisition been consummated at the beginning of the period for which the pro forma information is presented, or of future results.

	Fiscal Year Ended January 31,
	2019		2018 (1)
(In thousands, except per share data)	(Unaudited)
Net sales	$	712,587	$	639,319
Net income / (loss) attributable to Movado Croup, Inc. (1)	$	64,118	$	(21,519	)
Basic income per share:
Net income / (loss) per share attributable to Movado Group, Inc.	$	2.76	$	(0.93	)
Diluted income per share:
Net income / (loss) per share attributable to Movado Group, Inc.	$	2.72	$	(0.93	)


(1)	Includes non-recurring transaction costs of $7.0 million associated with the acquisition.

On July 3, 2017, the Company, through a wholly-owned U.K. subsidiary, acquired JLB Brands Ltd. (“JLB”), the owner of the Olivia Burton brand, one of the United Kingdom’s fastest growing fashion watch and jewelry brands, for $78.2 million, or £60.0 million in cash, subject to working capital and other closing adjustments. After giving effect to the closing adjustments, the purchase price was $79.0 million, or £60.7 million, net of cash acquired of $5.9 million, or £4.5 million. The acquisition was funded with cash on hand of the Company’s non-U.S. subsidiaries, and no debt was assumed in the acquisition. The acquisition adds a new brand with significant global growth potential to the Company’s portfolio.

The results of JLB’s operations have been included in the consolidated financial statements since the date of acquisition within the International location of the Watch and Accessory Brands segment. In the Watch and Accessory Brands segment, for the fiscal year ended January 31, 2019 and 2018, operating income included $2.9 million and $6.8 million, respectively, of expenses primarily related to transaction costs and adjustments in acquisition accounting, as a result of the Company’s purchase of JLB.

The acquisition was accounted for in accordance with ASC 805, which requires that the total cost of an acquisition be allocated to the tangible and intangible assets acquired and liabilities assumed based upon their respective fair values at the date of acquisition

The following table summarizes the fair value of the assets acquired and liabilities assumed as of the July 3, 2017 acquisition date (in thousands):

Assets Acquired and Liabilities Assumed	Fair Value
Cash and cash equivalents	$	5,909
Trade receivables, net		3,106
Inventories		4,164
Prepaid expenses and other current assets		913
Property, plant and equipment, net		131
Goodwill		55,322
Trade name and other intangibles		21,415
Total assets acquired		90,960
Accounts payable		608
Accrued liabilities		844
Income taxes payable		643
Deferred and non-current income taxes payable		3,965
Total liabilities assumed		6,060
Total purchase price	$	84,900

Inventories (as of July 3, 2017) included a step-up adjustment of $0.8 million, which was expensed over the sell-through cycle of three months. The components of Trade name and other intangibles (as of July 3, 2017) include a trade name of $12.8 million (amortized over 10 years), and customer relationships of $8.6 million (amortized over 6 years).

The Company recorded goodwill (as of July 3, 2017) of $55.3 million based on the amount by which the purchase price exceeded the fair value of the net assets acquired. Goodwill related to the acquisition of the Olivia Burton brand is not deductible for income tax purposes.

The operating results of JLB have been included in the Company’s Consolidated Financial Statements beginning July 3, 2017. Net sales and operating income of JLB since the date of acquisition through January 31, 2018 were $17.8 million and $5.3 million, respectively.

JLB’s operating results exclude sales recognized and expenses incurred by certain wholly-owned subsidiaries of the Company in support of the Olivia Burton brand.

The changes in the carrying amount of goodwill during the fiscal years ended January 31, 2019, 2018 and 2017 are as follows (in thousands):

	MVMT (1)		City Time(2)		JLB (3)			Total
Balance at January 31, 2017	$	—	$	—	$	—		$	—
Acquisition of JLB		—		—		55,322			55,322
Foreign exchange impact		—		—		4,947			4,947
Balance at January 31, 2018		—		—		60,269			60,269
Acquisition of MVMT		77,542		—		—			77,542
Acquisition of City Time		—		2,833		—			2,833
Foreign exchange impact		—		18		(4,629	)		(4,611	)
Balance at January 31, 2019	$	77,542	$	2,851		55,640			136,033

(1)	Goodwill associated with the MVMT brand is included in the United States location of the Watch and Accessory Brands segment.

(2)	Goodwill associated with City Time is included in the International location of the Watch and Accessory Brands segment.

(3)	Goodwill associated with JLB is included in the International location of the Watch and Accessory Brands segment.

At November 1, 2018, the Company evaluated goodwill for impairment. There were no indicators of impairment under this analysis and, accordingly, no impairment charge was recorded in fiscal 2019.

The changes in the carrying amount of other intangible assets during the fiscal years ended January 31, 2019, 2018 and 2017 are as follows (in thousands):

	Trade names			Customer relationships			Other (1)			Total
Balance at January 31, 2016	$	—		$	—		$	1,490		$	1,490
Amortization		—			—			(420	)		(420	)
Additions		—			—			328			328
Foreign exchange impact		—			—			235			235
Balance at January 31, 2017		—			—			1,633			1,633
Acquisition of JLB		12,797			8,618			—			21,415
Additions		—			—			556			556
Amortization		(781	)		(876	)		(434	)		(2,091	)
Foreign exchange impact		1,080			715			(184	)		1,611
Balance at January 31, 2018		13,096			8,457			1,571			23,124
Acquisition of MVMT		24,700			4,200			28			28,928
Acquisition of City-Time		—			1,672			—			1,672
Additions		—			—			492			492
Amortization		(2,126	)		(1,628	)		(597	)		(4,351	)
Foreign exchange impact		(899	)		(520	)		(263	)		(1,682	)
Balance at January 31, 2019	$	34,771		$	12,181		$	1,231		$	48,183

(1)	Other includes fees paid related to trademarks and non-compete agreement related to Olivia Burton brand.

Weighted average amortization periods over a straight-line basis are as follows:

The estimated future amortization expense during each of the next five fiscal years is as follows: