FOR IMMEDIATE RELEASE

 

INTER PARFUMS, INC. REPORTS RECORD SECOND QUARTER RESULTS

 

2012 SECOND QUARTER EPS UP 25%

 

New York, New York, August 8, 2012: Inter Parfums, Inc. (NASDAQ GS: IPAR) today reported record results for the second quarter ended June 30, 2012.

 

Second Quarter 2012 Compared to Second Quarter 2011:

·   Net sales increased 20% to $145.6 million from $121.1 million; at comparable foreign currency exchange rates, net sales rose 29% for the period;

·   European-based operations generated sales of $125.6 million, up 18% from $106.5 million;

·   Sales by U.S.-based operations were $20.0 million, up 37% from $14.6 million;

·   Gross margin was 60.8% compared to 61.6%;

·   S, G & A expense as a percentage of sales was 52.1% compared to 52.6%;

·   Operating margins were 8.7% of net sales compared to 9% of net sales;

·   Net income attributable to Inter Parfums, Inc. rose 20% to $6.0 million compared to $5.0 million; and,

·   Basic and diluted earnings per share were $0.20 or 25% ahead of 2011’s $0.16.

 

Through the first half of 2012, net sales were $310.9 million or 22% ahead of $254.4 million in the first half of 2011.  At comparable foreign currency exchange rates, net sales rose approximately 27%.  Net income attributable to Inter Parfums, Inc. increased 21% to $21.5 million or $0.70 per basic and diluted share compared to $17.8 million or $0.58 per basic and diluted share. 

 

Russell Greenberg, Executive Vice President & Chief Financial Officer of Inter Parfums pointed out, “With strong performances across our prestige brand portfolio, we achieved an 18% increase in European-based sales.  U.S.-based operations achieved 37% sales growth, with the inclusion of Anna Sui fragrance sales since the start of the year accounting for much of that gain.  The strength of the U.S. dollar also had a significant effect on reported sales as the dollar/euro exchange rate for the three months ended June 30, 2012 was 1.28 compared to 1.44 for the corresponding period of 2011.”

 

Mr. Greenberg also pointed out, “Similarly, the average dollar/euro exchange rate normally benefits our gross margin as over 40% of our European-based operations net sales are denominated in dollars, while our costs are incurred in euro.  However, current second quarter sales had a high proportion of value sets, which carry a much higher cost of goods than single unit merchandise, thus mitigating any gross margin gains obtained from currency fluctuation.  Promotion and advertising included in S, G & A aggregated $30.4 million or 21% of net sales for the three months ended June 30, 2012 compared to $22.5 million or 19% of net sales for the corresponding 2011 period.”

 

He continued, “Based upon results year-to-date, assuming that the dollar remains at current levels, we stand by our recently updated 2012 guidance calling for net sales of approximately $632.0 million, with resulting net income attributable to Inter Parfums, Inc. of approximately $35.9 million or $1.17 per diluted share.”

 


 

Reviewing the second quarter, Jean Madar, Chairman & Chief Executive Officer noted, “The growth in European-based sales was all the more gratifying given the absence of major new product launches.  As we reported, in local currency second quarter sales of Burberry products increased by 34%.  Lanvin sales rose by 13%, Montblanc by 72% and Jimmy Choo by 13%.  Year-to-date growth by our smaller brands has been very encouraging, especially for Boucheron and S.T. Dupont where new product launches for Jaïpur Bracelet and 58 Avenue Montaigne, respectively, were on a relatively small scale.  We have Montblanc Legend for women and a Lanvin brand extension called Jeanne Lanvin Couture also debuting this year.”

 

On the subject of U.S.-based operations, Mr. Madar again pointed out, “In addition to the inclusion of Anna Sui fragrances, second quarter sales benefitted from the introduction of Miss Madison by Brooks Brothers, Wishes & Dreams for bebe, and a new men’s scent, Wildblue for Banana Republic.  Continued sales of our first Nine West fragrance, Love Fury, and ongoing international distribution of the U.S. specialty retail brands in our portfolio also drove second quarter growth.”

 

Mr. Madar closed by saying, “As previously reported, Burberry will buy out the brand’s beauty and fragrance license rights from us for €181 million (approximately $220 million at current exchange rates exclusive of receivables, inventories and other tangible assets) on December 31, 2012.  We have planned for this eventuality and face this new chapter in our history with confidence.  We expect to begin 2013 with nearly $250 million in cash and shareholders’ equity of approximately $375 million, placing us in an excellent financial position to support the growth of existing brands and further enhance our growth potential by seeking to add new brands to our portfolio either on a proprietary basis or as a licensee.  We remain confident that 2013 net sales can reach approximately $400 million, generating a better than 10% operating margin with the remaining brands in our portfolio. We expect to issue more precise 2013 guidance as the new year approaches and we have greater visibility on the timing of new product launches.  Our 2013 new product pipeline currently includes new market entrants for: Lanvin, Jimmy Choo, Van Cleef & Arpels, Balmain, Boucheron and Repetto.”

 

Dividend

The Company’s regular quarterly cash dividend of $0.08 per share will be payable on October 15, 2012 to shareholders of record on September 28, 2012.

 

Conference Call

Management will conduct a conference call to discuss financial results and business developments at 11:00 AM EDT on Thursday, August 9, 2012.  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.  Please go to the website at least 15 minutes early to register, and 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 Inter Parfums’ website. We suggest listeners use Microsoft Explorer as their browser.

 

 

In the nearly 30 years since its founding, Inter Parfums, Inc. has been selected as the fragrance and beauty partner for a growing list of prestige brands that include Burberry, Lanvin, Jimmy Choo, Van Cleef & Arpels, Montblanc, Paul Smith, Boucheron, S.T. Dupont, Balmain and Repetto.  Inter Parfums is also the fragrance and beauty partner for specialty retail and designer brands such as Gap, Banana Republic, Brooks Brothers, bebe, Betsey Johnson, Nine West and Anna Sui.  Inter Parfums is known for innovation, quality and its ability to capture the genetic code of each brand in the products it develops, manufactures and distributes 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, 2011 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

www.interparfumsinc.com                             www.theequitygroup.com

 

 

 

See Accompanying Tables

 

 


 

 

CONSOLIDATED STATEMENTS OF INCOME

(In thousands except per share data)

(Unaudited)

 

 

 

Three Months Ended
June 30,

 

Six Months Ended
June 30,

 

 

 

2012

 

2011

 

2012

 

2011

 

 

 

 

 

 

 

 

 

Net sales

 

$          145,555

 

$           121,063

 

$          310,923

 

$           254,426

 

 

 

 

 

 

 

 

 

Cost of sales

 

               57,099

 

                46,477

 

             116,389

 

                93,850

 

 

 

 

 

 

 

 

 

Gross margin

 

               88,456

 

                74,586

 

             194,534

 

             160,576

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

               75,828

 

                63,739

 

             150,152

 

             124,188

 

 

 

 

 

 

 

 

 

Income from operations

 

               12,628

 

                10,847

 

               44,382

 

                36,388

 

 

 

 

 

 

 

 

 

Other expenses (income):

 

 

 

 

 

 

 

 

        Interest expense

 

                    442

 

                     390

 

                     805

 

                     830

        Loss on foreign currency

 

                    931

 

                     567

 

                 1,178

 

                     148

        Interest income

 

                    (311)

 

                   (389)

 

                  (835)

 

                   (706)

 

 

 

 

 

 

 

 

 

 

 

                 1,062

 

                     568

 

                 1,148

 

                     272

 

 

 

 

 

 

 

 

 

Income before income taxes

 

               11,566

 

                10,279

 

               43,234

 

                36,116

 

 

 

 

 

 

 

 

 

Income taxes

 

                 4,085

 

                  3,851

 

               15,499

 

                12,348

 

 

 

 

 

 

 

 

 

Net income

 

                 7,481

 

                  6,428

 

               27,735

 

                23,768

 

 

 

 

 

 

 

 

 

         Less:  Net income attributable to the noncontrolling interest

 

 

                 1,473

 

 

                  1,435

 

 

                 6,230

 

 

                  6,016

 

 

 

 

 

 

 

 

 

Net income attributable to

Inter Parfums, Inc.

 

 

$               6,008

 

 

$                4,993

 

 

$             21,505

 

 

$             17,752

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

           Basic

 

               $0.20

 

                $0.16

 

               $0.70

 

               $0.58

           Diluted

 

               $0.20

 

                $0.16

 

               $0.70

 

               $0.58

 

 

 

 

 

 

 

 

 

Weighted average number of shares outstanding:

 

 

 

 

 

 

 

 

           Basic

 

               30,563

 

                30,506

 

               30,557

 

             30,490

           Diluted

 

               30,688

 

                30,695

 

               30,687

 

             30,664

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends declared per share

 

               $0.08

 

               $0.08

 

               $0.16

 

             $0.16

 

 


 

CONSOLIDATED BALANCE SHEETS

(In thousands except share and per share data)

(Unaudited)

 

 

ASSETS

 

 

June 30,

2012

 

December 31,
2011

Current assets:

 

 

 

 

        Cash and cash equivalents

 

$                23,130

 

$                35,856

        Accounts receivable, net

 

                139,327

 

                175,223

        Inventories

 

                175,753

 

                164,077

        Receivables, other

 

                     1,287

 

                     3,258

        Other current assets

 

                     5,847

 

                     4,258

        Income tax receivable

 

                     1,967

 

                     1,404

        Deferred tax assets

 

                     8,162

 

                     7,270

 

 

 

 

 

                            Total current assets

 

                355,473

 

                391,346

 

 

 

 

 

Equipment and leasehold improvements, net

 

                  16,102

 

                   14,525

 

 

 

 

 

Goodwill

 

                     2,693

 

                     2,763

 

 

 

 

 

Trademarks, licenses and other intangible assets, net

 

                101,969

 

                105,750

 

 

 

 

 

Other assets

 

                     2,024

 

                     1,650

 

 

 

 

 

Total assets

 

$              478,261

 

$              516,034

 

LIABILITIES AND EQUITY

Current liabilities:

 

 

 

 

        Loans payable – banks

 

$                  4,448

 

$                11,826

        Current portion of long-term debt

 

                     1,528

 

                     4,480

        Accounts payable, trade

 

                  74,931

 

                112,726

        Accrued expenses

 

                  43,200

 

                  52,042

        Income taxes payable

 

                     6,355

 

                     2,099

        Dividends payable

 

                     2,445

 

                     2,443

 

 

 

 

 

                            Total current liabilities

 

                132,907

 

                185,616

 

 

 

 

 

Deferred tax liability

 

                     5,653

 

                     6,068

 

 

 

 

 

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 30,567,181 and 30,541,506 shares at

June 30, 2012 and December 31, 2011, respectively

 

 

 

                          31

 

 

 

                          31

Additional paid-in capital

 

                  52,184

 

                  50,883

Retained earnings

 

                244,860

 

                228,164

Accumulated other comprehensive income

 

                     1,782

 

                     7,747

Treasury stock, at cost, 10,009,492 common shares at    June 30, 2012 and December 31, 2011

 

 

                  (34,151)

 

 

                  (34,151)

 

 

 

 

 

                    Total Inter Parfums, Inc. shareholders’ equity

 

                264,706

 

                252,674

 

 

 

 

 

Noncontrolling interest

 

                  74,995

 

                  71,676

 

 

 

 

 

                            Total equity

 

                339,701

 

                324,350

 

 

 

 

 

Total liabilities and equity

 

$              478,261

 

$              516,034