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 | ||
|
|
|
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 |
|
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, |
|
|
|
(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 |
|
|