Q3’06 Diluted EPS of $0.23, Up 28% Compared to
Q3’05’s $0.18
New York, New York, November 8, 2006 - Inter Parfums, Inc.
(NasdaqGS: IPAR) today reported record third quarter 2006 results. European operations, which are conducted in
Third Quarter 2006 Compared to Third Quarter 2005:
Through the first
nine months of 2006 net sales, increased to $230.9 million, up 11% from $207.9
million one year earlier; at comparable foreign currency exchange rates, net
sales were also up 11%. Year-to-date net
income was $12.3 million or $0.60 per diluted share as compared to $11.4
million or $0.56 per diluted share in the first nine months of 2005.
Jean Madar,
Chairman & CEO of Inter Parfums noted, “The current third quarter
demonstrates a number of our special strengths.
One of these is our ability to take an established fragrance brand to
the next level. That was especially the
case with Lanvin, with comparable quarter sales up 56% (in local currency) due
primarily to the launch of Rumeur and the continued strength of Éclat
d’Arpège. The Lanvin model will be
adapted in the new year for Van Cleef & Arpels fragrance, where we plan to
build upon its approximately $20 million sales base by promoting the two
strongest families, First and Tsar, and create an entirely new
line for launch in 2008.”
He went on to
say, “Another Inter Parfums strength is our ability to continue to grow the
largest brand in the portfolio, Burberry, which achieved a 5% gain in
comparable quarter sales. The successful
introduction and rollout of Burberry
Mr.
Madar continued, “We have also proven that we can establish and grow fragrance
franchises for brands where there were none.
That is best exemplified with Paul Smith, where we’ve gone from a
license signing in 1999 to four fragrance families today. We look forward to similar success with the
recent addition of the Quiksilver/Roxy license and the first new Roxy fragrance
launch in 2007.”
With
respect to our entry into the growing specialty retail market, Mr. Madar
stated, “The Banana Republic Discover
Collection, a line of five fragrances, was launched at Banana Republic’s North
American stores in September 2006. The
collection consists of three scents for women and two for men, each named after
a luxurious, natural material that is both emotional and authentic. In addition, a full line of bath and body
products as well as home fragrance products were created to complement the
fragrance selection. A separate line of
fragrance and personal care products is also in the works for Gap’s North
American stores. That line is expected
to launch in 2007.”
Discussing selling, general and administrative
expenses, Russell Greenberg, Executive Vice President & CFO, noted, “Promotion and advertising included in
S, G & A aggregated $13.1 million and $35.1
million in the current third quarter and nine month period, respectively, as
compared to $12.7 million and $31.7 million, for the respective periods of
2005. Royalty expense included in S, G
& A aggregated $10.4 million and $23.4 million for the 2006 three and
nine-month periods, respectively, as compared to $8.8 million and $23.6
million, respectively, for the corresponding periods of 2005.”
Mr. Greenberg went on to say, “Our financial position remains strong. At September 30, 2006, working capital aggregated $127 million and we had a working capital ratio of 2 to 1. Cash and cash equivalents and short-term investments aggregated $54 million. As we continue to prepare ourselves for new product launches, geographic roll-outs, and overall higher sales levels, we closed the quarter with inventory levels of $70.9 million, or about the same amount as the start of the quarter. Assuming the dollar remains at current levels, we look forward to achieving our previously reported 2006 guidance of approximately $305 to $306 million in sales and net income of approximately $16.9 million or $0.83 per diluted share.”
The Company again pointed out that effective January 1, 2006, it has adopted SFAS 123(R) “Share-Based Payment,” a new accounting pronouncement requiring the expensing of stock based compensation. Earnings guidance for 2006 includes an after tax charge of approximately $0.6 million or $0.03 per diluted share to reflect the impact of SFAS 123(R).
Quarterly Dividend
The Company’s regular quarterly cash dividend of $0.04 per share will be payable on January 15, 2007 to shareholders of record on December 29, 2006.
Conference Call
The management of Inter Parfums will host a conference call at 11 am ET on Thursday, November 9, 2006, to discuss third 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 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. We suggest listeners use Microsoft Explorer as their browser.
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, Diane von Furstenberg, Quiksilver/Roxy, and Van
Cleef & Arpels and has controlling interest in Nickel S.A., a men’s skin
care company. Its entry into the
specialty retail market was accomplished with an exclusive agreement with Gap
Inc., under which it is designing and manufacturing personal care products for
Gap’s and Banana Republic’s North American stores. Inter Parfums is also a producer and supplier
of mass market fragrances, cosmetics and personal care 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,
2005, 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)
Inter Parfums, Inc.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In thousands, except per
share data)
|
|
|
Three Months Ended |
|
Nine Months Ended |
||||
|
|
|
2006 |
|
2005 |
|
2006 |
|
2005 |
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$ 89,690 |
|
$ 75,446 |
|
$ 230,876 |
|
$ 207,875 |
|
|
|
|
|
|
|
|
|
|
Cost of
sales
|
|
41,002 |
|
33,089 |
|
102,221 |
|
90,346 |
|
|
|
|
|
|
|
|
|
|
Gross
margin
|
|
48,688 |
|
42,357 |
|
128,655 |
|
117,529 |
|
|
|
|
|
|
|
|
|
|
Selling,
general and administrative
|
|
39,263 |
|
35,124 |
|
103,664 |
|
94,286 |
|
|
|
|
|
|
|
|
|
|
Income
from operations
|
|
9,425 |
|
7,233 |
|
24,991 |
|
23,243 |
|
|
|
|
|
|
|
|
|
|
|
Other expenses (income): |
|
|
|
|
|
|
|
|
|
Interest
expense |
|
311 |
|
92 |
|
830 |
|
692 |
|
(Gain)
on foreign currency |
|
(66) |
|
(107) |
|
(447) |
|
(104) |
|
Interest
and dividend (income) |
|
(282) |
|
(268) |
|
(1,297) |
|
(962) |
|
Loss on subsidiary’s issuance of stock |
|
(5) |
|
(26) |
|
(17) |
|
(11) |
|
|
|
|
|
|
|
|
|
|
|
|
|
(42) |
|
(309) |
|
(931) |
|
(385) |
|
|
|
|
|
|
|
|
|
|
Income
before income taxes and
|
|
|
|
|
|
|
|
|
minority
interest
|
|
9,467 |
|
7,542 |
|
25,922 |
|
23,628 |
|
|
|
|
|
|
|
|
|
|
Income taxes
|
|
3,192 |
|
2,545 |
|
8,827 |
|
8,520 |
|
|
|
|
|
|
|
|
|
|
Income
before minority interest
|
|
6,275 |
|
4,997 |
|
17,095 |
|
15,108 |
|
|
|
|
|
|
|
|
|
|
|
Minority interest in net
income |
|
1,630 |
|
1,243 |
|
4,838 |
|
3,737 |
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
$ 4,645 |
|
$ 3,754 |
|
$ 12,257 |
|
$ 11,371 |
|
|
|
|
|
|
|
|
|
|
|
Net income per share: |
|
|
|
|
|
|
|
|
Basic
|
|
$0.23 |
|
$0.19 |
|
$0.60 |
|
$0.57 |
Diluted
|
|
$0.23 |
|
$0.18 |
|
$0.60 |
|
$0.56 |
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of
shares outstanding: |
|
|
|
|
|
|
|
|
Basic
|
|
20,322 |
|
20,189 |
|
20,302 |
|
20,023 |
Diluted
|
|
20,546 |
|
20,556 |
|
20,551 |
|
20,485 |
Inter
Parfums, Inc. News Release Page
5
November 8, 2006
Inter Parfums,
Inc.
(In thousands except share
and per share data)
ASSETS
|
||||
|
|
|
Sept. 30, 2006 |
|
December 31, |
|
|
|
(Unaudited) |
|
|
|
Current assets: |
|
|
|
|
|
Cash
and cash equivalents |
|
$ 40,683 |
|
$ 42,132 |
|
Short-term
investments |
|
13,300 |
|
17,400 |