FOR IMMEDIATE RELEASE

 

INTER PARFUMS, INC. REPORTS 2018 FIRST QUARTER RESULTS

 

Net Sales and Diluted EPS Increase by 20.1% and 18.6%, Respectively

 

New York, New York, May 8, 2018: Inter Parfums, Inc. (NASDAQ GS: IPAR) today reported results for the first quarter ended March 31, 2018. 

 

First Quarter 2018 Compared to First Quarter 2017:

·     Net sales were $171.8 million, up 20.1% from $143.1 million; at comparable foreign currency exchange rates, net sales increased 13.1%;

·     Sales by European based operations rose 24.9% to $149.5 million from $119.7 million;

·     Sales by U.S. based operations declined 4.6% to $22.3 million from $23.4 million;

·     Gross margin was 61.5% of net sales compared to 63.0%;

·     S,G&A expense as a percentage of net sales was 43.8% compared to 44.7%;

·     Operating income increased 16.2% to $30.4 million as compared to $26.2 million;

·     Operating margin was 17.7% compared to 18.3%;

·     The effective income tax rate was 30.5% compared to 32.8 %;  

·     Net income attributable to Inter Parfums, Inc. increased to $15.9 million, up 19.0% from $13.4 million; and,

·     Net income attributable to Inter Parfums, Inc. per diluted share rose 18.6% to $0.51 from $0.43.

 

Jean Madar, Chairman & CEO of Inter Parfums, Inc. noted, “All regions in which we operate achieved sales growth, with our three largest markets, North America, Western Europe and Asia producing comparable quarter gains of 19%, 10% and 34%, respectively.  The performance of smaller markets was also quite good, with sales growth of 33%, 15% and 18%, in the Middle East, Central and South America, and Eastern Europe, respectively.”  

 

Commenting on the performance of the larger brands within European based operations, Mr. Madar continued, “Montblanc and Coach brand fragrances drove top line growth with sales gains of 33% and 242%, respectively.  With last year’s first quarter sales up 57% attributable in great part to new product launches, Jimmy Choo fragrances declined 28% in the current first quarter. We expect better comparisons in future quarters with the introduction of Jimmy Choo Man Blue and Jimmy Choo Fever later in the year.  The strength of the euro magnified the sales performances of Lanvin and Rochas, whose sales were down slightly in local currency, but in dollars, were up 10% and 14%, respectively.” 

 

On the subject of launches, Mr. Madar continued, “We would characterize 2018 as a year focused on complementary initiatives, including the two noted above for the Jimmy Choo brand.  Thus far this year, we have already debuted Lanvin’s Modern Princess Eau Sensuelle and Coach Floral.  In addition, we have another brand extension for the Lanvin Éclat fragrance family, and debuting later this year, Coach Platinum, a flanker for the very successful signature men’s scent.  With regard to Rochas, our goal is to expand the brand’s market by opening distribution in Asia and South America.”

 

 

 

Moving on to U.S. based operations, Mr. Madar noted, “While comparable quarter sales gains by Anna Sui and Oscar de la Renta fragrance were achieved in the first quarter, we expect much better sales comparisons by U.S. based operations in later quarters as we unveil new products for many of our other brands and commence sales of GUESS brand fragrances in the second quarter.”

 

Russell Greenberg, Executive Vice President and CFO of Inter Parfums, Inc., pointed out, “In the current first quarter, changes in foreign currency exchange rates had the expected impact on our top and bottom lines, as the average U.S. dollar/euro exchange rate was 1.23, as compared to 1.065 in the first quarter of 2017.  The weakness of the dollar had a favorable impact on our net sales while gross margins were negatively affected, because over 45% of net sales of our European operations are denominated in dollars, while almost all costs of our European operations are incurred in euro.  Gross profit margin for European operations was 63.0% of sales for the first quarter of 2018, as compared to 65.5% for the corresponding period of the prior year.  With the exception of the lower tax rate noted earlier, there were no other unusual operating or non-operating fluctuations for the quarter.” 

 

Mr. Greenberg also pointed out, “We closed the first quarter with working capital of $401 million, including approximately $251 million in cash, cash equivalents and short-term investments, a working capital ratio of almost 3.4 to 1 and $56.0 million of long-term debt, including current maturities, incurred in connection with the 2015 Rochas brand acquisition.”

 

Affirms 2018 Guidance

Mr. Greenberg concluded, “As we reported last month, we expect 2018 net sales to approximate $665 million and net income per diluted share attributable to Inter Parfums, Inc. to come in at $1.59.  Guidance assumes the dollar remains at current levels.”  

 

Dividend

The Company’s regular quarterly cash dividend of $0.21 per share is payable on July 13, 2018 to shareholders of record on June 29, 2018.

 

Conference Call

Management will conduct a conference call to discuss financial results and business developments at 11:00 am ET on Wednesday, May 9, 2018.  Interested parties may participate in the call by dialing (201) 493-6749; please call in 10 minutes before the conference call is scheduled to begin and ask for the Inter Parfums call.  The conference call will also be broadcast live over the Internet.  To listen to the live call, please go to www.interparfumsinc.com and click on the Investor Relations section.

 

Founded more than 30 years ago, Inter Parfums, Inc. is a premier fragrance company with a diverse portfolio of prestige brands that includes Abercrombie & Fitch, Agent Provocateur, Anna Sui, bebe, Boucheron, Coach, Dunhill, Graff, GUESS, Hollister, Jimmy Choo, Karl Lagerfeld, Lanvin, Montblanc, Oscar de la Renta, Paul Smith, Repetto, Rochas, S.T. Dupont and Van Cleef & Arpels.  The fragrance products developed, produced and distributed by Inter Parfums are sold in more than 100 countries throughout the world.

 


 

 

 

Statements in this release which are not historical in nature are forward-looking statements. Although we believe that our plans, intentions and expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such plans, intentions or expectations will be achieved.  In some cases you can identify forward-looking statements by forward-looking words such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "should," "will," and "would," or similar words.  You should not rely on forward-looking statements, because actual events or results may differ materially from those indicated by these forward-looking statements as a result of a number of important factors.  These factors include, but are not limited to, the risks and uncertainties discussed under the headings “Forward Looking Statements” and "Risk Factors" in Inter Parfums' annual report on Form 10-K for the fiscal year ended December 31, 2017 and the reports Inter Parfums files from time to time with the Securities and Exchange Commission.  Inter Parfums does not intend to and undertakes no duty to update the information contained in this press release.

 

 

Contact at Inter Parfums, Inc.                        -or-      Investor Relations Counsel

Russell Greenberg, Exec. VP & CFO                        The Equity Group Inc.

(212) 983-2640                                               Fred Buonocore (212) 836-9607/fbuonocore@equityny.com

rgreenberg@interparfumsinc.com                 Linda Latman (212) 836-9609/llatman@equityny.com

www.interparfumsinc.com                             www.theequitygroup.com

 

 

 

See Accompanying Tables


 

 

 

CONSOLIDATED STATEMENTS OF INCOME

(In thousands except per share data)

(Unaudited)

 

 

 

Three months ended
March 31,

 

 

2018

 

2017

 

 

 

 

 

 

 

 

 

 

Net sales

 

$              171,767

 

$              143,058

 

 

 

 

 

Cost of sales

 

                  66,138

 

                  52,988

 

 

 

 

 

Gross margin

 

                105,629

 

                  90,070

 

 

 

 

 

Selling, general and administrative expenses

 

                  75,231

 

                  63,899

 

 

 

 

 

Income from operations

 

                  30,398

 

                  26,171

 

 

 

 

 

Other expenses (income):

 

 

 

 

        Interest expense

 

                        462

 

                        271

        Loss on foreign currency

 

                        206

 

                        156

        Interest income

 

                   (1,745)

 

                   (1,272)

 

 

 

 

 

 

 

                   (1,077)

 

                      (845)

 

 

 

 

 

Income before income taxes

 

                  31,475

 

                  27,016

 

 

 

 

 

Income taxes

 

                    9,613

 

                    8,849

 

 

 

 

 

Net income

 

                  21,862

 

                  18,167

 

 

 

 

 

Less: Net income attributable to the noncontrolling interest

 

                    5,953

 

                    4,794

 

 

 

 

 

Net income attributable to Inter Parfums, Inc.

 

$                15,909

 

$                13,373

 

 

 

 

 

Net income attributable to Inter Parfums, Inc. common shareholders:

 

 

 

 

            Basic

 

$                   0.51

 

$                   0.43

            Diluted

 

$                   0.51

 

$                   0.43

 

 

 

 

 

Weighted average number of shares outstanding:

 

 

 

 

            Basic

 

                  31,267

 

                  31,145

            Diluted

 

                  31,429

 

                  31,254

 

 

 

 

 

 

 

 

 

 

Dividends declared per share

 

$                    0.21

 

$                    0.17

 

 

 

 

 

 

 

 


 

 

 

CONSOLIDATED BALANCE SHEETS

(In thousands except share and per share data)

(Unaudited)

 

ASSETS

 

 

March 31,

2018

 

December 31,
2017

Current assets:

 

 

 

 

        Cash and cash equivalents

 

$               168,929

 

$               208,343

        Short-term investments

 

                   81,813

 

                   69,899

        Accounts receivable, net

 

                 166,077

 

                 120,749

        Inventories

 

                 141,253

 

                 137,058

        Receivables, other

 

                     2,672

 

                     2,405

        Other current assets

 

                     8,347

 

                     7,356

        Income taxes receivable

 

                     2,114

 

                     3,468

 

 

 

 

 

                          Total current assets

 

                 571,205

 

                 549,278

 

 

 

 

 

Equipment and leasehold improvements, net

 

                   10,160

 

                   10,330

 

 

 

 

 

Trademarks, licenses and other intangible assets, net

 

                 205,489

 

                 200,495

Deferred tax assets

 

                   10,113

 

                     9,658

 

 

 

 

 

Other assets

 

                     8,139

 

                     8,011

 

 

 

 

 

Total assets

 

$               805,106

 

$               777,772

 

LIABILITIES AND EQUITY

 

 

 

 

 

Current liabilities:

 

 

 

 

        Current portion of long-term debt

 

$                 24,991

 

$                 24,372

        Accounts payable – trade

 

                   58,740

 

                   52,609

        Accrued expenses

 

                   72,876

 

                   81,843

        Income taxes payable

 

                     6,762

 

                     1,722

        Dividends payable

 

                     6,569

 

                     6,561

 

 

 

 

 

                          Total current liabilities

 

                 169,938

 

                 167,107

 

 

 

 

 

Long–term debt, less current portion

 

                  31,011

 

                  36,207

 

 

 

 

 

Deferred tax liability

 

                     3,881

 

                     3,821

 

 

 

 

 

Equity:

 

 

 

 

Inter Parfums, Inc. shareholders’ equity:

 

 

 

 

Preferred stock, $.001 par; authorized
1,000,000 shares; none issued

 

 

                           --

 

 

                           --

Common stock, $.001 par; authorized 100,000,000 shares;
outstanding 31,282,333 and 31,241,548 shares at

March 31, 2018 and December 31, 2017, respectively

 

 

 

                          31

 

 

 

                          31

Additional paid-in capital

 

                   67,288

 

                   66,004

Retained earnings

 

                 432,065

 

                 422,570

Accumulated other comprehensive loss

 

                    (8,426)

 

                  (17,832)

Treasury stock, at cost, 9,864,805 shares at March 31, 2018 and December 31, 2017

 

 

                  (37,475)

 

 

                  (37,475)

 

 

 

 

 

                          Total Inter Parfums, Inc. shareholders’ equity

 

                 453,483

 

                 433,298

 

 

 

 

 

Noncontrolling interest

 

                 146,793

 

                 137,339

 

 

 

 

 

                          Total equity

 

                 600,276

 

                 570,637

 

 

 

 

 

Total liabilities and equity

 

$               805,106

 

$               777,772