Inter Parfums, Inc. Reports Third Quarter Results

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 relationship with 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.”


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 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.



(In thousands except per share data)

        Three Months EndedSeptember 30,         Nine Months EndedSeptember 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  




Net income attributable to

Inter Parfums, Inc.








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  


(In thousands except share and per share data)

        September 30,


December 31,

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
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
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

Copyright Business Wire 2010

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