FOR IMMEDIATE RELEASE

 

INTER PARFUMS, INC. REPORTS RECORD FIRST QUARTER RESULTS
27% INCREASE IN DILUTED EPS ON A 20% INCREASE IN NET SALES

Company Raises 2007 Guidance

 

New York, New York, May 9, 2007: Inter Parfums, Inc. (NASDAQ GS: IPAR) today reported record results for the first quarter ended March 31, 2007.

 

First Quarter 2007 Compared to First Quarter 2006:

 

Jean Madar, Chairman of the Board and Chief Executive Officer, noted, “European-based operations achieved 20% top line growth in the absence of a major new prestige product launch. This was accomplished as Burberry fragrance posted a 19% sales increase for the period.  In addition, sales of Van Cleef & Arpels fragrances, which were modest during the first quarter, are included since the license went effective January 1, 2007.”

 

He continued, “As we reported last month, during the first quarter of 2007 we began operations of our four newly established majority-owned European distribution subsidiaries. Shipments to these subsidiaries are not recognized as sales until that merchandise is sold by the distribution subsidiary.  For the first quarter of 2007, we estimate that sales were depressed by approximately $4 million to $6 million, because our distribution subsidiaries were not fully operational until mid-quarter, and distributors generally build-up inventory following the holiday season as well as in preparation for the new product launches.”

 

He went on to say with respect to U.S.-based operations, “Net sales were up 19% for the first quarter.  In early 2006, we began shipping Gap, Gap Outlet, Banana Republic and Banana Republic Factory Stores their existing fragrance and personal care products.  In August 2006 we launched the Banana Republic Discover Collection, a family of five fragrances which debuted in Banana Republic’s North American stores in September.  In May 2007, over 150 Gap Body stores unveiled the more than 70 new bath and body products created for them, which will be followed by the new Gap eau de toilette line in the third quarter of 2007.  The current schedule calls for the new products to begin to rollout to the Gap stores in late summer, and continue throughout the remainder of the year.”

 

Russell Greenberg, Executive Vice President & CFO, pointed out, “Promotion and advertising included in S, G & A expenses approximated $12.5 million (14.7% of net sales) and $9.6 million (13.5% of net sales) for the current and prior year first quarter, respectively.  Royalty expense included in S, G & A expenses aggregated $9.6 million (11.3% of net sales) in the current first quarter and $7.3 million (10.3% of net sales) for the prior year period.  The remaining increase in S, G & A expense as a percentage of sales is primarily the result of operating expenses related to our newly established majority-owned European distribution subsidiaries.”

 

Mr. Madar continued to review upcoming activities, “We are quite excited about our new venture with New York & Company.  The infrastructure that we put in place since our entrée into the specialty retail arena is sufficient to support this initiative and potential growth opportunity.  By the end of this year or early next, the new bath and body products should be in New York & Company’s 600 or so stores.  As previously announced, we have four women’s prestige fragrances launching this year.  The first was Christian Lacroix C’est La Fête, which will be followed by S.T. Dupont Blanc and a new Paul Smith line.  We are especially excited about our first ever Roxy fragrance in the fall of this year.”

 

Raises 2007 Guidance

Based upon a number of factors, including the strength of the first quarter, the Company’s new product launch schedule and foreign currency exchange rates, management has raised its 2007 guidance initially published in November 2006.  Management currently anticipates 2007 net sales, net income and diluted earnings per share of approximately $375 million, $21.3 million and $1.03, respectively.  This guidance excludes any contribution from the new venture with New York & Company and assumes the dollar remains at current levels.

 

Quarterly Dividend

The Company’s regular quarterly cash dividend of $.05 per share will be payable on July 13, 2007 to shareholders of record on June 29, 2007.

 

Conference Call

The management of Inter Parfums will host a conference call at 11:00 am EDT on May 10, 2007, to discuss first quarter results and other recent developments.  Interested parties may participate by calling 706-679-3037, approximately 10 minutes before the start of the call.  This conference call will also be distributed live over the Internet via the Investor Relations section of the Company’s web site at http://www.interparfumsinc.com/.  To listen to the live call, please go to the web site in advance to register, and if needed, download and install any necessary audio software.  If you are unable to listen live, the conference call will be archived and can be accessed for approximately 90 days at the web site. 

 

Inter Parfums develops, manufactures and distributes prestige perfumes and cosmetics as the exclusive worldwide licensee for Burberry, Lanvin, Paul Smith, S.T. Dupont, Christian Lacroix, Quiksilver/Roxy, and Van Cleef & Arpels and has controlling interest in Nickel S.A., a men’s skin care company.  It also produces personal care products for specialty retailers under exclusive agreements with Gap Inc. and New York & Company.  In addition, Inter Parfums produces and supplies mass market fragrances and fragrances related products.  The Company’s products are sold in over 120 countries worldwide.

 

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, 2006, 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                                                           Linda Latman  (212) 836- 9609/llatman@equityny.com

rgreenberg@interparfumsinc.com                                Lena Cati  (212) 836-9611/lcati@equityny.com

http://www.interparfumsinc.com/                                          http://www.theequitygroup.com/

 

(See Accompanying Tables)

Inter Parfums, Inc.

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(In thousands except per share data)

 

 

 

 

Three months ended
March 31,

 

 

2007

 

2006

 

 

 

 

 

 

 

 

 

 

Net sales

 

$                   85,120

 

$                   70,900

 

 

 

 

 

Cost of sales

 

                     33,187

 

                     30,604

 

 

 

 

 

Gross margin

 

                     51,933

 

                     40,296

 

 

 

 

 

Selling, general and administrative

 

                     40,141

 

                     31,063

 

 

 

 

 

Income from operations

 

                     11,792

 

                       9,233

 

 

 

 

 

Other expenses (income):

 

 

 

 

        Interest expense

 

                          582

 

                          201

        (Gain) loss on foreign currency

 

                          114

 

                         (161)

        Interest income

 

                         (799)

 

                         (514)

        (Gain) on subsidiary’s issuance of stock

 

                         (157)

 

                           (73)

 

 

 

 

 

 

 

                         (260)

 

                         (547)

 

 

 

 

 

Income before income taxes and minority interest

 

                     12,052

 

                       9,780

 

 

 

 

 

Income taxes

 

                       4,177

 

                       3,342

 

 

 

 

 

Income before minority interest

 

                       7,875

 

                       6,438

 

 

 

 

 

Minority interest in net income
of consolidated subsidiary

 

 

                       2,082

 

 

                       2,018

 

 

 

 

 

Net income

 

$                     5,793

 

$                     4,420

 

 

 

 

 

Net income per share:

 

 

 

 

        Basic

 

                 $0.28

 

                 $0.22

        Diluted

 

                 $0.28

 

                 $0.22

 

 

 

 

 

Weighted average number of shares outstanding:

 

 

 

 

        Basic

 

                     20,436

 

                     20,267

        Diluted

 

                     20,620

 

                     20,544

 

 

 

Inter Parfums, Inc.

CONSOLIDATED BALANCE SHEETS

(In thousands except share and per share data)

 

ASSETS

 

 

March 31,

2007

 

December 31,
2006

 

 

(unaudited)

 

 

Current assets:

 

 

 

 

        Cash and cash equivalents

 

$                   66,171

 

$                   58,247

        Short-term investments

 

                     13,100

 

                     12,800

        Accounts receivable, net

 

                     98,805

 

                   110,251

        Inventories

 

                     80,726

 

                     69,537

        Receivables, other

 

                       3,198

 

                       2,481

        Other current assets

 

                       5,335

 

                       6,137

        Income tax receivable

 

                          144

 

                          370

        Deferred tax assets

 

                       4,524

 

                       2,494

 

 

 

 

 

                Total current assets

 

                   272,003

 

                   262,317

 

 

 

 

 

Equipment and leasehold improvements, net

 

                       6,896

 

                       6,806

 

 

 

 

 

Trademarks, licenses and other intangible assets, net

 

                     57,678

 

                     58,342

 

 

 

 

 

Goodwill

 

                       5,032

 

                       4,978

 

 

 

 

 

Other assets

 

                          609

 

                          602

 

 

 

 

 

 

 

$                 342,218

 

$                 333,045

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities:

 

 

 

 

        Loans payable – banks

 

$                     8,184

 

$                     6,033

        Current portion of long-term debt

 

                       8,718

 

                       4,214

        Accounts payable - trade

 

                     55,759

 

                     58,748

        Accrued expenses

 

                     26,964

 

                     52,637

        Income taxes payable

 

                       4,454

 

                       1,325

        Dividends payable

 

                       1,021

 

                          813

 

 

 

 

 

                Total current liabilities

 

                   105,100

 

                   123,770

 

 

 

 

 

Long-term debt, less current portion

 

                     24,222

 

                       6,555

 

 

 

 

 

Deferred tax liability

 

                       2,230

 

                       2,111

 

 

 

 

 

Put option

 

                       1,276

 

                       1,262

 

 

 

 

 

Minority interest

 

                     47,642

 

                     44,075

 

 

 

 

 

Shareholders’ equity:

 

 

 

 

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

 

 

 

 

Common stock, $.001 par; authorized 100,000,000 shares;
outstanding 20,437,292 and 20,434,792 shares at

March 31, 2007 and December 31, 2006, respectively

 

 

 

                            20

 

 

 

                            20

Additional paid-in capital

 

                     38,171

 

                     38,096

Retained earnings

 

                   132,755

 

                   127,834

Accumulated other comprehensive income

 

                     16,650

 

                     15,170

Treasury stock, at cost, 6,247,886 common

    shares at March 31, 2007 and December 31, 2006

 

 

                   (25,848)

 

 

                   (25,848)

 

 

 

 

 

 

 

                   161,748

 

                   155,272

 

 

 

 

 

 

 

$                 342,218

 

$                 333,045