FOR IMMEDIATE RELEASE

 

INTER PARFUMS, INC. REPORTS THIRD QUARTER RESULTS

 

New York, New York, November 7, 2012: Inter Parfums, Inc. (NASDAQ GS: IPAR) today reported results for the third quarter ended September 30, 2012.

 

Third Quarter 2012 Compared to Third Quarter 2011:

·   Net sales decreased 3.2% to $166.3 million from $171.7 million; at comparable foreign currency exchange rates, net sales rose 2.0%;

·   European-based operations generated sales of $148.6 million, down 4% from $154.7 million;

·   Sales by U.S.-based operations were $17.7 million, up 4% from $17.0 million;

·   Gross margin was 60.8% compared to 62.5%;

·   S, G & A expense as a percentage of sales was 47.5% compared to 50.0%;

·   Operating margin was 13.3% of net sales compared to 12.6% of net sales;

·   Net income attributable to Inter Parfums, Inc. was $10.0 million compared to $10.4 million; and,

·   Basic and diluted earnings per share were $0.33 compared to $0.34.

 

Through the first nine months of 2012, net sales were $477.2 million or 12.0% ahead of $426.1 million in the same period of 2011.  At comparable foreign currency exchange rates, net sales rose approximately 16.9%.  Net income attributable to Inter Parfums, Inc. increased 11.8% to $31.5 million or $1.03 per basic and diluted share from $28.2 million or $0.92 per basic and diluted share. 

 

Russell Greenberg, Executive Vice President & Chief Financial Officer pointed out, “The strength of the U.S. dollar has had a significant effect on sales and gross margin as the average dollar/euro exchange rate for the three and nine months ended September 30, 2012 was 1.25 and 1.28, respectively, as compared to 1.41 for both corresponding periods of the prior year.  Over 40% of European-based net sales are denominated in dollars, while corresponding costs are incurred in euro.  Thus, while a stronger U.S. dollar has a positive effect on gross margin during the current third quarter, gross margin declined slightly due to product mix and the sale of certain slow moving goods at a discount.  On the other hand, S, G & A as a percent of net sales decreased primarily due to reduced promotional and advertising spending as last year’s third quarter included the largest product launch in our history for Burberry Body.  Also notable, foreign currency losses aggregated $1.4 million for the current third quarter as compared to a gain of $1.2 million in the corresponding period of the prior year.”

 

Mr. Greenberg continued, “Our business generated cash flow from operating activities of more than $20 million year-to-date.  We entered the final quarter of year with over $240 million in working capital including nearly $26 million in cash and cash equivalents; and we have no long-term debt.  With this strong balance sheet and the anticipated $230 million cash infusion from the buy out of the Burberry license, we will be in an excellent position to continue to build upon our existing brands and invest in new ones to drive the future growth of our business.”

 

Jean Madar, Chairman & CEO of Inter Parfums, commented, “As previously reported, in local currency, several key brands within our European-based operations achieved strong growth in the third quarter.  Notably, Lanvin fragrance sales rose 12%, Montblanc fragrance sales rose 67%, and Jimmy Choo fragrance sales were 44% ahead of the same period last year.  However, last year’s third quarter net sales included the global launch of Burberry Body, making for a difficult year-over-year sales comparison.  With respect  to U.S.-based operations, the 2012 third quarter was favorably impacted by the inclusion of Anna Sui fragrance sales, international distribution of U.S. specialty retail brands, and fragrance launches for namesake stores earlier in the year."

 

Mr. Madar continued, “We plan to announce our initial guidance for 2013 on November 21, 2012.  Our expectations for the coming year will factor in our previously announced transition agreement with Burberry, a process slated for completion by March 31, 2013.  We also have new product launch plans in the works for many of our brands including Jimmy Choo, Lanvin, Van Cleef & Arpels, Boucheron and our first Repetto fragrance in July for European-based operations, plus new product introductions for the Anna Sui and bebe brands for U.S.-based operations.  Beyond 2013, we are enthusiastic about the business opportunity resulting from our new releationship with the the iconic Karl Lagerfeld brand, under the 20-year license agreement we entered into last month.  The first new fragrance launch from the brand is scheduled for 2014.” 

 

Dividend

The Company’s regular quarterly cash dividend of $0.08 per share will be payable on January 15, 2013 to shareholders of record on December 31, 2012.

 

Conference Call

Management will conduct a conference call to discuss financial results and business developments at 11:00 AM ET on Thursday, November 8, 2012.  Interested parties may participate in the call by dialing (201) 493-6744; 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, Karl Lagerfeld 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                    Fred Buonocore (212) 836-9607/fbuonocore@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
September 30,

 

Nine Months Ended
September 30,

 

 

2012

 

2011

 

2012

 

2011

 

 

 

 

 

 

 

 

 

Net sales

 

$ 166,264

 

$171,706

 

$           477,187

 

$ 426,132

 

 

 

 

 

 

 

 

 

Cost of sales

 

 65,146

 

64,323

 

             181,535

 

158,173

 

 

 

 

 

 

 

 

 

Gross margin

 

101,118

 

107,383

 

             295,652

 

 267,959

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

79,039

 

85,838

 

             229,190

 

 210,026

 

 

 

 

 

 

 

 

 

Income from operations

 

22,079

 

21,545

 

                66,462

 

57,933

 

 

 

 

 

 

 

 

 

Other expenses (income):

 

 

 

 

 

 

 

 

        Interest expense

 

391

 

687

 

                  1,195

 

1,517

        (Gain) loss on foreign currency

 

1,405

 

(1,239)

 

                  2,584

 

(1,091)

        Interest income

 

 (52)

 

 (241)

 

                    (887)

 

(947)

 

 

 

 

 

 

 

 

 

 

 

1,744

 

(793)

 

                  2,892

 

(521)

 

 

 

 

 

 

 

 

 

Income before income taxes

 

20,335

 

22,338

 

                63,570

 

58,454

 

 

 

 

 

 

 

 

 

Income taxes

 

7,158

 

9,054

 

                22,658

 

21,402

 

 

 

 

 

 

 

 

 

Net income

 

13,177

 

13,284

 

                40,912

 

37,052

 

 

 

 

 

 

 

 

 

         Less:  Net income attributable to the noncontrolling interest

 

                 3,159

 

 

2,851

 

 

                  9,389

 

 

8,867

 

 

 

 

 

 

 

 

 

Net income attributable to

Inter Parfums, Inc.

 

 

$ 10,018

 

 

$ 10,433

 

 

$             31,523

 

 

$ 28,185

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

           Basic

 

  $0.33

 

  $0.34

 

               $1.03

 

$0.92

           Diluted

 

  $0.33

 

   $0.34

 

               $1.03

 

   $0.92

 

 

 

 

 

 

 

 

 

Weighted average number of shares outstanding:

 

 

 

 

 

 

 

 

           Basic

 

30,570

 

30,539

 

                30,561

 

30,506

           Diluted

 

30,717

 

30,698

 

                30,697

 

30,676

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends declared per share

 

  $0.08

 

 $0.08

 

             $0.24

 

 $0.24

 


 

 

CONSOLIDATED BALANCE SHEETS

(In thousands except share and per share data)

(Unaudited)

ASSETS

 

 

September 30,

2012

 

December 31,
2011

Current assets:

 

 

 

 

        Cash and cash equivalents

 

$                 25,851

 

$                 35,856

        Accounts receivable, net

 

                 167,207

 

                 175,223

        Inventories

 

                 161,058

 

                 164,077

        Receivables, other

 

                     1,726

 

                     3,258

        Other current assets

 

                     6,376

 

                     4,258

        Income tax receivable

 

                         677

 

                     1,404

        Deferred tax assets

 

                     9,641

 

                     7,270

 

 

 

 

 

                            Total current assets

 

                 372,536

 

                 391,346

 

 

 

 

 

Equipment and leasehold improvements, net

 

                   15,911

 

                   14,525

 

 

 

 

 

Goodwill

 

                     2,761

 

                     2,763

 

 

 

 

 

Trademarks, licenses and other intangible assets, net

 

                 103,162

 

                 105,750

 

 

 

 

 

Other assets

 

                     2,176

 

                     1,650

 

 

 

 

 

Total assets

 

$              496,546

 

$              516,034

 

LIABILITIES AND EQUITY

Current liabilities:

 

 

 

 

        Loans payable – banks

 

$                   1,385

 

$                 11,826

        Current portion of long-term debt

 

                             --

 

                     4,480

        Accounts payable, trade

 

                   69,644

 

                 112,726

        Accrued expenses

 

                   49,860

 

                   52,042

        Income taxes payable

 

                     8,670

 

                     2,099

        Dividends payable

 

                     2,446

 

                     2,443

 

 

 

 

 

                            Total current liabilities

 

                 132,005

 

                 185,616

 

 

 

 

 

Deferred tax liability

 

                     5,605

 

                     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 30,576,426 and 30,541,506 shares at

September 30, 2012 and December 31, 2011, respectively

 

 

 

                           31

 

 

 

                           31

Additional paid-in capital

 

                   52,408

 

                   50,883

Retained earnings

 

                 252,471

 

                 228,164

Accumulated other comprehensive income

 

                     7,854

 

                     7,747

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

 

 

                  (34,151)

 

 

                  (34,151)

 

 

 

 

 

                    Total Inter Parfums, Inc. shareholders’ equity

 

                 278,613

 

                 252,674

 

 

 

 

 

Noncontrolling interest

 

                   80,323

 

                   71,676

 

 

 

 

 

                            Total equity

 

                 358,936

 

                 324,350

 

 

 

 

 

Total liabilities and equity

 

$              496,546

 

$              516,034