On December 3, 2018, the Company acquired 51% of City Time Distribucion, S.L. (“City Time”), the Company’s distributor in Spain, and simultaneously signed a joint venture agreement. The purchase price was 4.2 million Euros, or $4.8 million, 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 were 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 it was redeemable at the balance sheet date. At July 31, 2019, the Company concluded that the remeasurement adjustment is immaterial.

On October 1, 2018, the Company acquired MVMT Watches, Inc., owner of the MVMT brand, 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.

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 was 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).

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 was 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 (through 2023), volatilities, estimated discount rates, risk-free interest rate, and correlation. Each reporting period after the acquisition, the Company remeasures the fair value of the contingent purchase price liability and will 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 a result, changes in the estimated fair value of the contingent consideration over time may result in significant volatility in the Company’s reported earnings.

As of the July 31, 2019 remeasurement date, the contingent purchase price liability has been remeasured to $1.9 million. Of the $15.0 million decrease in the liability, $13.6 million is included in non-operating income (portion of contingent consideration allocated to purchase price) in the Consolidated Statements of Operations for the three and six months ended July 31, 2019, and $0.5 million and $0.9 million are reflected as a reduction of deferred compensation (portion of contingent consideration allocated to deferred compensation based on future service requirements) within other current assets and other non-current assets, respectively, in the Consolidated Balance Sheets. In connection with the remeasurement of the contingent consideration during the quarter ended July 31, 2019, the Company assessed the undiscounted cash flows associated with the long-lived assets pertaining to MVMT. Current estimates indicate that carrying amounts are expected to be recovered. Management considers its estimates to be reasonable, however, actual results could differ from these estimates. 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 goodwill is deductible for federal income tax purposes over 15 years.

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, 2018, 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.

	Three Months Ended July 31,				Six Months Ended July 31,
	2019		2018		2019		2018 (1)
(In thousands, except per share data)	(Unaudited)				(Unaudited)
Net sales	$	157,816	$	155,697	$	304,365	$	295,261
Net income		17,505	$	7,353	$	21,430	$	6,734

Basic income per share:
Net income per share attributable to Movado Group, Inc.	$	0.76	$	0.32	$	0.93	$	0.29

Diluted income per share:
Net income per share attributable to Movado Group, Inc.	$	0.75	$	0.31	$	0.92	$	0.29

The changes in the carrying amount of other intangible assets during the six months ended July 31, 2019 are as follows (in thousands):

	Trade names			Customer relationships			Other (1)			Total
Weighted Average Amortization Period (in years)	10			7			7
Balance, January 31, 2019	$	34,771		$	12,181		$	1,231		$	48,183
Additions		—			—			99			99
Amortization		(1,865	)		(1,001	)		(188	)		(3,054	)
Foreign exchange impact		(531	)		(648	)		(54	)		(1,233	)
Balance, July 31, 2019	$	32,375		$	10,532		$	1,088		$	43,995

Amortization expense for intangible assets was $1.5 million and $0.8 million for the three months ended July 31, 2019 and 2018 respectively, and $3.1 million and $1.7 million for the six months ended July 31, 2019 and 2018, respectively.