FOR IMMEDIATE RELEASE

 

INTER PARFUMS, INC. REPORTS RECORD THIRD QUARTER RESULTS

 

Year-to-Date Diluted EPS up 37.4% on 22.4% Increase in Net Sales

 

Affirms Current 2011 Guidance

 

New York, New York, November 9, 2011: Inter Parfums, Inc. (NASDAQ GS: IPAR) today reported results for the third quarter ended September 30, 2011.

 

Third Quarter 2011 Compared to Third Quarter 2010:

·   Net sales increased 42.1% to $171.7 million from $120.9 million; at comparable foreign currency exchange rates, net sales rose 36%;

·   European-based operations generated sales of $154.7 million, up 41.7% from $109.2 million;

·   Sales by U.S.-based operations were $17.0 million, up 45.9% from $11.7 million;

·   Gross margin was 63% compared to 59%;

·   S, G & A expense as a percentage of sales was 51% compared to 45%;

·   Operating margins were 12.6% of net sales compared to 13.7% of net sales;

·   Net income attributable to Inter Parfums, Inc. rose 24.5% to $10.4 million from $8.4 million; and,

·   Basic and diluted earnings per share increased 21.4% to $0.34 from $0.28.

 

Through the first nine months of 2011, net sales were $426.1 million or 22.4% ahead of $348.0 million in the same period of 2010.  At comparable foreign currency exchange rates, net sales rose approximately 18%.  Net income attributable to Inter Parfums, Inc. increased 38.5% to $28.2 million or $0.92 per basic and diluted share from $20.4 million or $0.67 per basic and diluted share. 

 

Jean Madar, Chairman & CEO of Inter Parfums, noted, “Spurred by the global launch of Burberry Body, Burberry fragrance sales were up 29% in local currency for the quarter.  Our European-based operations also benefited from the continued strong momentum of the Jimmy Choo and Montblanc fragrance launches and the commencement in January 2011 of European-based product distribution in the U.S. by Interparfums Luxury Brands, a subsidiary of Inter Parfums, S.A.  With respect to U.S.-based operations, the comparable quarter sales increase was driven by a strong performance in international distribution of our specialty retail products.  Of special note, Banana Republic, Gap and bebe product lines are performing especially well in overseas markets.  Also during the third quarter, we launched Too Too by Betsey Johnson and bebe Gold.”

 

Discussing factors impacting third quarter profitability, Russell Greenberg, Executive Vice President & Chief Financial Officer pointed out, “The gross margin improvement was primarily due to booking wholesale rather than ex-factory sales by Interparfums Luxury Brands, which was offset slightly by a weaker dollar compared to last year.  Product mix and promotional sales accounted for the remaining fluctuations in gross margin.  The significant increase in S, G & A expense in both dollars and as a percentage of sales was, as we had forecast, due to increased advertising and promotional expenditures overall, but especially in connection with the global launch of Burberry Body.  In addition, as was the case in the first half of the year, we are responsible for 100% of the cost of advertising support for prestige fragrance brands distributed in the U.S.; last year such expenses were shared with our former U.S. distributor.  Our effective income tax rate was 40.5% in the current third quarter versus 32.5% for the corresponding period of 2010 reflecting an agreement in principle with the French Tax Authority on the consequences of a tax audit, which covered both income and non-income tax items.  As a result, as of September 30, 2011, we increased income tax expense by $1.7 million and reduced a reserve for contingency related to non-income tax items recorded in 2010 by $1.3 million.”

 

Mr. Greenberg noted, “The accounts receivable balance at September 30, 2011 is up 42% from the June 30, 2011 balance, which corresponds to the 42% sequential quarterly increase in net sales.  We closed the third quarter with inventories of $182.3 million or about $6.0 million more than at the start of the quarter and $72.0 million more than at the start of the year, which reflects the needed inventory build to support anticipated sales growth and new licensing activities in both European operations and U.S. operations.”

 

Affirms 2011 Guidance & Announces Planned Release Date for 2012 Guidance

Mr. Greenberg concluded, “As we recently reported, we now expect 2011 sales to approximate $570.0 million resulting in net income attributable to Inter Parfums, Inc. of approximately $32.5 million or $1.05 per diluted share.  Guidance assumes the dollar remains at current levels.  We also plan to announce our initial guidance for 2012 on November 16, 2011.”

 

Dividend

The Company’s regular quarterly cash dividend of $0.08 per share will be payable on January 13, 2012 to shareholders of record on December 30, 2011.

 

Conference Call

Management will conduct a conference call to discuss financial results and business developments at 11:00 AM ET on Thursday, November 10, 2011.  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.

 

Inter Parfums, Inc. develops, manufactures and distributes prestige perfumes and cosmetics as the exclusive worldwide licensee for Burberry, Van Cleef & Arpels, Jimmy Choo, Paul Smith, Montblanc, S.T. Dupont and Boucheron.  Inter Parfums, Inc. also owns Lanvin Perfumes and Nickel, a men's skin care company.  It also produces personal care products for specialty retailers under exclusive agreements for Gap, Banana Republic, Brooks Brothers, bebe, Betsey Johnson, Nine West and Lane Bryant brands.  In addition, Inter Parfums produces and supplies mass market fragrances and fragrance related products. Inter Parfums, Inc.'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, 2010 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
September 30,

 

Nine Months Ended
September 30,

 

 

2011

 

2010

 

2011

 

2010

 

 

 

 

 

 

 

 

 

Net sales

 

$           171,706

 

$           120,853

 

$           426,132

 

$          347,991

 

 

 

 

 

 

 

 

 

Cost of sales

 

                63,123

 

                49,578

 

             155,973

 

             140,271

 

 

 

 

 

 

 

 

 

Gross margin

 

             108,583

 

                71,275

 

             270,159

 

             207,720

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

                87,038

 

                54,692

 

             212,226

 

             163,630

 

 

 

 

 

 

 

 

 

Income from operations

 

                21,545

 

                16,583

 

                57,933

 

               44,090

 

 

 

 

 

 

 

 

 

Other expenses (income):

 

 

 

 

 

 

 

 

        Interest expense

 

                     687

 

                     529

 

                  1,517

 

                 1,627

        (Gain) loss on foreign currency

 

                 (1,239)

 

                    (461)

 

                 (1,091)

 

                 2,435

        Interest income

 

                    (241)

 

                    (382)

 

                    (947)

 

                  (977)

 

 

 

 

 

 

 

 

 

 

 

                    (793)

 

                    (314)

 

                    (521)

 

                 3,085

 

 

 

 

 

 

 

 

 

Income before income taxes

 

                22,338

 

                16,897

 

                58,454

 

               41,005

 

 

 

 

 

 

 

 

 

Income taxes

 

                  9,054

 

                  5,488

 

                21,402

 

               13,663

 

 

 

 

 

 

 

 

 

Net income

 

                13,284

 

                11,409

 

                37,052

 

               27,342

 

 

 

 

 

 

 

 

 

         Less:  Net income attributable to the noncontrolling interest

 

 

                  2,851

 

 

                  2,961

 

 

                  8,867

 

 

                 6,988

 

 

 

 

 

 

 

 

 

Net income attributable to

Inter Parfums, Inc.

 

 

$             10,433

 

 

$                8,448

 

 

$             28,185

 

 

$             20,354

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

           Basic

 

               $0.34

 

                $0.28

 

               $0.92

 

               $0.67

           Diluted

 

               $0.34

 

                $0.28

 

               $0.92

 

               $0.67

 

 

 

 

 

 

 

 

 

Weighted average number of shares outstanding:

 

 

 

 

 

 

 

 

           Basic

 

                30,539

 

                30,443

 

                30,506

 

             30,332

           Diluted

 

                30,698

 

                30,564

 

                30,676

 

             30,441

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends declared per share

 

               $0.08

 

              $0.065

 

             $0.24

 

             $0.195

 

 


 

 

CONSOLIDATED BALANCE SHEETS

(In thousands except share and per share data)

(Unaudited)

 

ASSETS

 

 

September 30,

2011

 

December 31,
2010

Current assets:

 

 

 

 

        Cash and cash equivalents

 

$                 23,185

 

$                 37,548

        Short-term investments

 

                     6,752

 

                   49,391

        Accounts receivable, net

 

                 167,630

 

                   97,593

        Inventories

 

                 182,300

 

                 109,840

        Receivables, other

 

                     2,300

 

                     3,688

        Other current assets

 

                     2,036

 

                     4,635

        Deferred tax assets

 

                     7,421

 

                     7,230

 

 

 

 

 

                            Total current assets

 

                 391,624

 

                 309,925

 

 

 

 

 

Equipment and leasehold improvements, net

 

                   14,485

 

                   11,207

 

 

 

 

 

Goodwill

 

                     3,691

 

                     3,654

 

 

 

 

 

Trademarks, licenses and other intangible assets, net

 

                 110,760

 

                 111,402

 

 

 

 

 

Other assets

 

                     1,505

 

                     1,917

 

 

 

 

 

Total assets

 

$              522,065

 

$              438,105

 

LIABILITIES AND EQUITY

Current liabilities:

 

 

 

 

        Loans payable – banks

 

$                 20,377

 

$                   5,250

        Current portion of long-term debt

 

                     7,578

 

                   11,090

        Accounts payable - trade

 

                   94,112

 

                   52,694

        Accrued expenses

 

                   54,932

 

                   47,413

        Income taxes payable

 

                     3,658

 

                     7,905

        Dividends payable

 

                     2,443

 

                     1,979

 

 

 

 

 

                            Total current liabilities

 

                 183,100

 

                 126,331

 

 

 

 

 

Long-term debt, less current portion

 

                              -

 

                     5,039

 

 

 

 

 

Deferred tax liability

 

                     6,315

 

                     6,789

 

 

 

 

 

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 30,539,381 and 30,445,881 shares at

September 30, 2011 and December 31, 2010, respectively

 

 

 

                           31

 

 

 

                           30

Additional paid-in capital

 

                   50,566

 

                   48,887

Retained earnings

 

                 226,450

 

                 205,453

Accumulated other comprehensive income

 

                   16,742

 

                   14,757

Treasury stock, at cost, 10,009,492 common shares at September 30, 2011 and December 31, 2010

 

 

                  (34,151)

 

 

                  (34,151)

 

 

 

 

 

                    Total Inter Parfums, Inc. shareholders’ equity

 

                 259,638

 

                 234,976

 

 

 

 

 

Noncontrolling interest

 

                   73,012

 

                   64,970

 

 

 

 

 

                            Total equity

 

                 332,650

 

                 299,946

 

 

 

 

 

Total liabilities and equity

 

$              522,065

 

$              438,105