Back to GetFilings.com

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

( MARK ONE )

/X/     Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act
          of 1934 for the quarterly period ended September 30, 2003.

OR

/ /       Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of
          1934 for the transition period from ___________to ________.

Commission File No. 0-16469

INTER PARFUMS, INC.
(Exact name of registrant as specified in its charter)

Delaware                                                                         13-3275609
(State or other jurisdiction of                                          (I.R.S. Employer
incorporation or organization)                                         Identification No.)

551 Fifth Avenue, New York, New York 10176
(Address of Principal Executive Offices) (Zip Code)

(212) 983-2640
(Registrants telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days: Yes _X_ No ___

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes ___ No _X_

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

At November 7, 2003 there were 19,152,186 shares of common stock, par value $.001 per share, outstanding.

INDEX

Part I. Financial Information

Item 1. Financial Statements

In our opinion, the accompanying unaudited consolidated condensed financial statements contain all adjustments (consisting only of normal recurring adjustments) necessary to present fairly our financial position, results of operations and cash flows for the interim periods presented. We have condensed such financial statements in accordance with the rules and regulations of the Securities and Exchange Commission. Therefore, such financial statements do not include all disclosures required by accounting principles generally accepted in the United States of America. These financial statements should be read in conjunction with our audited financial statements for the year ended December 31, 2002 included in our annual report filed on Form 10-K.

The results of operations for the nine months ended September 30, 2003 are not necessarily indicative of the results to be expected for the entire fiscal year.

See notes to financial statements.

See notes to financial statements.

See notes to financial statements

.

Notes to Unaudited Financial Statements

1. Significant Accounting Policies:

The accounting policies we follow are set forth in the notes to our financial statements included in our Form 10-K which was filed with the Securities and Exchange Commission for the year ended December 31, 2002. We also discuss such policies in Part I, Item 2, Management's Discussion and Analysis of Financial Condition and Results of Operations, included in this Form 10-Q.

2. Comprehensive Income:

3. Geographic Areas:

Segment information related to domestic and foreign operations is as follows:

4. Earnings Per Share:

We computed basic earnings per share using the weighted average number of shares outstanding during each period. We computed diluted earnings per share using the weighted average number of shares outstanding during each period, plus the incremental shares outstanding assuming the exercise of dilutive stock options.

5. Inventories:

Inventories consist of the following:

6. Stock- based Compensation:

The Company accounts for stock-based employee compensation under Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees" and related interpretations ("APB 25"). The Company has adopted the disclosure-only provisions of SFAS No. 123, "Accounting for Stock-Based Compensation" and SFAS No. 148, "Accounting for Stock-Based Compensation - Transition and Disclosure", which was released in December 2002 as an amendment of SFAS No. 123.

The Company applies APB No. 25 and related interpretations in accounting for its stock option incentive plans. The following table illustrates the effect on net income and earnings per share if the fair value based method had been applied to all awards.

6. Stock-based Compensation (continued):

The weighted average fair values of the options granted during 2003 and 2002 are estimated as $2.07 and $2.30 per share, respectively, on the date of grant using the Black-Scholes option pricing model with the following assumptions: dividend yield 1.0% in 2003 and 0.8% in 2002; volatility of 50% in both 2003 and 2002; risk-free interest rates at the date of grant, 1.70% in 2003 and 3.11% in 2002; and an expected life of the option of two years.

7. Shareholders Equity:

In April 2003, the Chief Executive Officer exercised 67,500 outstanding stock options of the Company's common stock. The aggregate exercise price of $232,475 was paid by him tendering to the Company 33,692 shares of the Company's common stock, previously owned by him, valued at $6.90 per share, the fair market value on the date of exercise. All shares issued pursuant to the option exercises were issued from treasury stock of the Company. In addition, the Chief Executive Officer tendered an additional 9,298 shares for payment of withholding taxes resulting from the option exercises. As a result of this transaction, the Company expects to receive a tax benefit of approximately $80,000, which has been reflected as an increase to additional paid-in capital in the Company's financial statements.

In October 2003, each of the Chief Executive Officer and the President exercised 42,000 and 94,300 outstanding stock options, respectively, of the Company's common stock. The exercise prices of $107,352 for the Chief Executive Officer and $241,031 for the President were paid by each of them tendering to the Company 8,158 and 18,316 shares, respectively, of the Company's common stock, previously owned by them, valued at $13.16 per share, the fair market value on the date of exercise. All shares issued pursuant to these option exercises were issued from our treasury stock. In addition, the Chief Executive Officer tendered an additional 9,307 shares for payment of withholding taxes resulting from his option exercise. As a result of this transaction, the Company expects to receive a tax benefit of approximately $460,000, which will be reflected as an increase to additional paid-in capital in the accompanying financial statements.

Item 2: MANAGEMENTS'S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Introduction

We are a leading manufacturer and distributor of fragrances, cosmetics and health and beauty aids. We combine innovation and creativity to produce quality products for our customers around the world.

We operate in the fragrance and cosmetic industry, specializing in prestige perfumes and cosmetics and mass market perfumes, cosmetics and health and beauty aids:

•  Prestige products -- for each prestige brand, owned or licensed by us, we create an original concept for our perfume and cosmetic lines consistent with world market trends;

   

•  Mass market products -- we design, market and distribute inexpensive fragrances and personal care products including alternative designer fragrances, mass market cosmetics and health and beauty aids.

Forward Looking Information

Statements in this document, which are not historical in nature, are forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results to be materially different from projected results. Given these risks, uncertainties and other factors, persons are cautioned not to place undue reliance on the forward-looking statements.

Such factors include effectiveness of sales and marketing efforts and product acceptance by consumers, dependence upon management, competition, currency fluctuation and international tariff and trade barriers, governmental regulation and possible liability for improper comparative advertising or "Trade Dress".

Related Party Transactions

We operate under various license agreements, including two licenses that are with affiliates of our strategic partner, LV Capital USA, Inc. ("LV Capital"), a wholly owned subsidiary of LVMH Moët Hennessy Louis Vuitton S.A. In May 2000 we entered into an exclusive worldwide license for prestige fragrances for the Celine brand, and in March 1999 we entered into an exclusive worldwide license for Christian Lacroix fragrances. Both licenses are subject to certain minimum sales requirements, advertising expenditures and royalty payments as are customary in our industry.

Three and Nine Months Ended September 30, 2003 as Compared to the Three and Nine Months Ended September 30, 2002

Net sales for the three months ended September 30, 2003 increased 54% to a record $57.4 million, as compared to $37.4 million for the corresponding period of the prior year. At comparable foreign currency exchange rates, net sales increased 44% for the period.

Net sales for the nine months ended September 30, 2003 increased 46% to a record $136.4 million, as compared to $93.2 million for the corresponding period of the prior year. At comparable foreign currency exchange rates, net sales increased 34% for the period.

Prestige product sales were up 83% (68% in constant dollars) for the three months ended September 30, 2003 and 63% (45% in constant dollars) for the nine months ended September 30, 2003, as compared to the 2002 period. The strong growth achieved in the latter half of 2002 continued into 2003. For the three months ended September 30, 2003 our growth is primarily attributable to the initial launches of the women's fragrance line Burberry Brit into a number of major markets including the United Kingdom, the United States, Spain, France and Italy. Launches of Burberry Brit are continuing in the coming months in the rest of Europe, Asia, South America and the Middle East. We have high expectations for this new women's line which should play a strategic role in the future development of the Burberry fragrance business.

In addition, during the three months ended September 30, 2003 we unveiled our completely new beauty line, consisting of both fragrance and cosmetics, under the Diane von Furstenberg label. In terms of fashion industry recognition, Diane is a rising star, who has been instrumental in the early success we are enjoying in the reception of her beauty line. The official launch, which occurred in mid-September at Henri Bendel in New York City, was followed by the addition of certain Saks Fifth Avenue, Nordstrom and Fred Segal locations. Total United States distribution is to be initially limited to 35 of the finest specialty stores in the country.

Our mass-market product sales were off 5% for the three months ended September 30, 2003, but were up 10% for the nine months ended September 30, 2003 as compared to the corresponding periods in 2002. Through June 2003 we continued to see growth in our fragrances lines as a result of our May 2002 acquisition of certain fragrance brands from Tristar Corporation ("Tristar"). Tristar was one of our most significant competitors in mass-market fragrances and the brands acquired are being sold in the same distribution channels as that of our other mass-market fragrance lines. As we have passed the one-year anniversary of this acquisition, we are consolidating certain fragrance lines to reduce duplication and improve overall efficiency. New product line extensions and an expanding distribution network continue to benefit sales volume in our Intimate health and beauty aids and our Aziza cosmetics lines.

We have put together our calendar of 2004 prestige launches, which includes new fragrance lines for ST Dupont, Christian Lacroix, Paul Smith and Celine; and we are also actively pursuing other new business opportunities. However, we cannot assure you that any new license or acquisitions will be consummated.

Gross profit margins were 49% for both the three and nine-month periods ended September 30, 2003, as compared to 44% and 46% for the three and nine-month periods ended September 30, 2002. Throughout 2003 prestige product sales growth out paced mass market sales growth and in the current third quarter, prestige product sales represented 75% of net sales, which is the primary reason for the gains in gross margin.

Selling, general and administrative expenses aggregated $19.9 million for the three months ended September 30, 2003, as compared to $11.4 million for the corresponding period of the prior year. Selling, general and administrative expenses aggregated $47.9 million for the nine months ended September 30, 2003, as compared to $30.5 million for the corresponding period of the prior year. As a percentage of sales, selling, general and administrative expenses were 35% for both the three and nine month periods ended September 30, 2003, as compared to 31% and 33%, respectively, for the 2002 periods.

Promotion and advertising are prerequisites for sales of prestige products, which account for over 75% of our net sales. Accordingly, we develop a comprehensive marketing and promotional program to support our growing portfolio of prestige fragrance and cosmetic brands and to build upon each brand's awareness. In addition, recent increases in certain fixed costs, such as insurance, rent and wages, are expected to cause a slight rise in selling, general and administrative expenses as a percentage of sales throughout 2003.

Interest expense was $56,000 and $223,000 for the three and nine months ended September 30, 2003, as compared to $90,000 and $340,000 for the corresponding periods of the prior year. We use the credit lines available to us, as needed, to finance our working capital needs.

We reported a gain on foreign currency of $489,000 and $344,000, for the three and nine months ended September 30, 2003, as compared to a loss of $16,000 and $74,000 for the corresponding periods of the prior year. Occasionally, we enter into foreign currency forward exchange contracts to manage exposure related to certain foreign currency commitments.

Our effective income tax rate was 35% for both the three months ended September 30, 2003 and September 30, 2002. Our effective income tax rate was 35% for the nine months ended September 30, 2003, as compared to 36% for the corresponding period of the prior year. The small decline in our effective tax rate is the result of slightly lower foreign tax rates.

Net income increased 74% to $4.7 million for the three months ended September 30, 2003, as compared to $2.7 million for the corresponding period of the prior year. Net income increased 53% to $10.1 million for the nine months ended September 30, 2003, as compared to $6.6 million for the corresponding period of the prior year.

Diluted earnings per share increased 64% to $0.23 for the three months ended September 30, 2003, as compared to $0.14 for the corresponding period of the prior year. Diluted earnings per share increased 55% to $0.51 for the nine months ended September 30, 2003, as compared to $0.33 for the corresponding period of the prior year.

Weighted average shares outstanding aggregated 19.0 million for both the three and nine-month periods ended September 30, 2003, as compared to 18.8 million for both the three and nine-month periods ended September 30, 2002. On a diluted basis, average shares outstanding were 20.2 million and 20.0 million for the three and nine-month periods ended September 30, 2003, respectively, as compared to 19.9 million and 20.0 million for the three and nine-month periods ended September 30, 2002, respectively.

Liquidity and Capital Resources

Profitable operating results continue to strengthen our financial position. At September 30, 2003, working capital aggregated $103 million and we had a working capital ratio of almost 3 to 1. Cash and cash equivalents aggregated $42 million and our net book value was $5.03 per outstanding share as of September 30, 2003. Furthermore, we had no long-term debt.

Our short-term financing requirements are expected to be met by available cash at September 30, 2003, cash generated by operations and short-term credit lines provided by domestic and foreign banks. Since December 2002, we have increased our short-term borrowings by approximately $4.5 million in order to finance our sales growth. The principal credit facilities for 2003 are a $12.0 million unsecured revolving line of credit provided by a domestic commercial bank and approximately $12.0 million in credit lines provided by a consortium of international financial institutions.

Cash used in operating activities aggregated $0.7 million for the nine months ended September 30, 2003 as compared to cash provided by operating activities of $2.0 million for the corresponding period of the prior year. Accounts receivable and inventories were up 52% and 16%, respectively, as compared to December 31, 2002. These increases are very reasonable considering the 54% sales increase for the three months ended September 30, 2003 and the inventory buildup needed to support our higher sales base. Cash provided by operating activities continues to be the primary source of funds to finance operating needs and investments in new ventures.

Commencing in March 2002, our Board of Directors authorized our first cash dividend of $.06 per share, approximately $1.1 million per annum, payable $.015 per share quarterly. In March 2003, our Board of Directors increased the cash dividend to $.08 per share, approximately $1.5 million per annum, payable $.02 per share on a quarterly basis. This increased cash dividend represents a small part of our cash position and is not expected to have any significant impact on our financial position.

We believe that funds generated from operations, supplemented by our present cash position and available credit facilities, will provide us with sufficient resources to meet all present and reasonably foreseeable future operating needs.

Inflation rates in the U.S. and foreign countries in which we operate have not had a significant impact on operating results for the three months ended September 30, 2003.

Discussion of Critical Accounting Policies

We make estimates and assumptions in the preparation of our financial statements in conformity with accounting principles generally accepted in the United States of America. Actual results could differ significantly from those estimates under different assumptions and conditions. We believe that the following discussion addresses our most critical accounting policies, which are those that are most important to the portrayal of our financial condition and results of operations and which require our management's most difficult and subjective judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. The following is a brief discussion of the more critical accounting policies that we employ.

Revenue Recognition

We sell our products to department stores, perfumeries, mass market retailers, supermarkets and domestic and international wholesalers and distributors. Sales of such products by domestic subsidiaries are denominated in U.S. dollars and sales of such products by foreign subsidiaries

are primarily denominated in either Euros or U.S. dollars. Accounts receivable reflect the granting of credit to these customers. We generally grant credit based upon analysis of the

customer's financial position and previously established buying patterns. We do not generally bill customers for shipping and handling costs and, accordingly, classify such costs as selling and administrative expenses. Revenues are recognized when merchandise is shipped and the risk of loss passes to the customer. Net sales are comprised of gross revenues less returns and trade discounts and allowances.

We do not generally allow customers to return their unsold products. However, on a case-by-case basis we occasionally allow customer returns. We regularly review and revise, as deemed necessary, our estimate of reserves for future sales returns based primarily upon historic trends and relevant current data. We record estimated reserves for sales returns as a reduction of sales, cost of sales and accounts receivable. Returned products are recorded as inventories and are valued based on estimated realizable value. The physical condition and marketability of returned products are the major factors we consider in estimating realizable value. Actual returns, as well as estimated realizable values of returned products, may differ significantly, either favorably or unfavorably, from estimates if factors such as economic conditions, inventory levels or competitive conditions differ from expectations.

Promotional Allowances

We have various performance-based arrangements with retailers to reimburse them for all or a portion of their promotional activities related to our products. These arrangements primarily allow customers to take deductions against amounts owed to us for product purchases.

Estimated accruals for promotions and co-operative advertising programs are recorded in the period in which the related revenue is recognized. We review and revise the estimated accruals for the projected costs for these promotions. Actual costs incurred may differ significantly, either favorably or unfavorably, from estimates if factors such as the level and success of the retailers' programs or other conditions differ from our expectations.

Inventories

Inventories are stated at the lower of cost or market value. Cost is principally determined by the first-in, first-out method. We record adjustments to the cost of inventories based upon our sales forecast and the physical condition of the inventories. These adjustments are estimates, which could vary significantly, either favorably or unfavorably, from actual requirements if future economic conditions or competitive conditions differ from our expectations.

Equipment

Equipment, which includes tools and molds, is recorded at cost and is depreciated on a straight-line basis over the estimated useful lives of such assets. Changes in circumstances such as technological advances, changes to our business model or changes in our capital spending strategy can result in the actual useful lives differing from our estimates. In those cases where we determine that the useful life of equipment should be shortened, we would depreciate the net book value in excess of the salvage value, over its revised remaining useful life, thereby increasing depreciation expense. Factors such as changes in the planned use of equipment could result in shortened useful lives.

Other Long-Lived Assets

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of any such asset may not be recoverable. If the sum of the undiscounted cash flows (excluding interest) is less than the carrying value, we recognize an impairment loss, measured as the amount by which the carrying value exceeds the fair value of the asset. The estimate of undiscounted cash flow is based upon, among other things, certain assumptions about expected future operating performance. Our estimates of undiscounted cash flow may differ from actual cash flow due to, among other things, economic conditions, changes to our business model or changes in consumer acceptance of our products. In those cases where we determine that the useful life of other long-lived assets should be shortened, we would depreciate the net book value in excess of the salvage value (after testing for impairment as described above), over the revised remaining useful life of such asset thereby increasing amortization expense.

Item 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

General

We address certain financial exposures through a controlled program of risk management that primarily consists of the use of derivative financial instruments. We primarily enter into foreign currency forward exchange contracts in order to reduce the effects of fluctuating foreign currency exchange rates. We do not engage in the trading of foreign currency forward exchange contracts or interest rate swaps.

Foreign Exchange Risk Management

We periodically enter into foreign currency forward exchange contracts to hedge exposure related to receivables denominated in a foreign currency and to manage risks related to future sales expected to be denominated in a foreign currency. We enter into these exchange contracts for periods consistent with our identified exposures. The purpose of the hedging activities is to minimize the effect of foreign exchange rate movements on the receivables and cash flows of Inter Parfums, S.A., our French subsidiary, whose functional currency is the Euro. All foreign currency contracts are denominated in currencies of major industrial countries and are with large financial institutions, which are rated as strong investment grade.

All derivative instruments are required to be reflected as either assets or liabilities in the balance sheet measured at fair value. Generally, increases or decreases in fair value of derivative instruments will be recognized as gains or losses in earnings in the period of change. If the derivative is designated and qualifies as a cash flow hedge, the changes in fair value of the derivative instrument will be recorded in other comprehensive income.

Before entering into a derivative transaction for hedging purposes, we determine that the change in the value of the derivative will effectively offset the change in the fair value of the hedged item from a movement in foreign currency rates. Then, we measure the effectiveness of each hedge throughout the hedged period. Any hedge ineffectiveness is recognized in the income statement.

We believe that our risk of loss as the result of nonperformance by any of such financial institutions is remote and in any event would not be material. The contracts have varying maturities with none exceeding one year. Costs associated with entering into such contracts have not been material to our financial results. At September 30, 2003, we had foreign currency contracts in the form of forward exchange contracts in the amount of approximately U.S. $20.0 million and GB Pounds 8.0 million.

Item 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our Chief Executive Officer and Chief Financial Officer have reviewed and evaluated the effectiveness of our disclosure controls and procedures (as defined in the Securities Exchange Act of 1934 Rule 13a-14(c)) as of the end of the period covered by this quarterly report on Form 10-Q (the "Evaluation Date"). Based on their review and evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of the Evaluation Date, our Company's disclosure controls and procedures were adequate and effective to ensure that material information relating to our Company and its consolidated subsidiaries would be made known to them by others within those entities, so that such material information is recorded, processed and reported in a timely manner, particularly during the period in which this quarterly report on Form 10-Q was being prepared, and that no changes were required at this time.

Changes in Internal Controls

There were no significant changes in our Company's internal controls or in other factors that could significantly affect our internal controls after the Evaluation Date, or any significant deficiencies or material weaknesses in such internal controls requiring corrective actions. As a result, no corrective actions were taken.

Part II. Other Information

Items 1, 3 and 4 are omitted as they are either not applicable or have been included in Part I.

Item 2. Changes in Securities and Use of Proceeds

The information contained in note 7 at page 7 relating to the exercise of outstanding stock options is incorporated by reference herein. The transactions were exempt from the registration requirements of Section 5 of the Securities Act under Sections 4(2) and 4(6) of the Securities Act. The option holders agreed to purchase the common stock for investment and not for resale to the public.

Item 5. Other Information

In accordance with Section 10A(i)(2) of the Securities Exchange Act of 1934, as added by Section 202 of the Sarbanes-Oxley Act of 2002, our Company is responsible for disclosing the "non-audit services" to be performed by our auditors that were approved by our Company's Audit Committee during the quarterly period covered by this report. Non-audit services are defined in the law as services other than those provided in connection with an audit or a review of the financial statements of the Company.

During the quarterly period covered by this report, the Audit Committee did not authorize any non-audit services to be performed by our auditors.

Item 6. Exhibits and Reports on Form 8-K.

(a) Exhibits:

The following documents are filed herewith:

(b) We furnished the following Current Reports on Form 8-K:

(1) Date of event - October 9, 2003, reporting Items 7 and 12, and

(2) Date of event - November 5, 2003, reporting Items 7 and 12.

                                                                                                      SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized on the 12 day of November 2003.

                                                                                                          INTER PARFUMS,INC.

                                                                                                    By: /s/Russell Greenberg
                                                                                                         Executive Vice President and
                                                                                                         Chief Financial Officer

Exhibit 31

CERTIFICATIONS

I, Jean Madar, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Inter Parfums, Inc.

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a) Designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under our supervision to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 12, 2003

/s/ Jean Madar
Jean Madar
Chief Executive Officer

CERTIFICATIONS

I, Russell Greenberg, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Inter Parfums, Inc.

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a) Designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under our supervision to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 12, 2003

/s/ Russell Greenberg
Russell Greenberg
Chief Financial Officer

Exhibit 32

CERTIFICATION

Each of the undersigned hereby certifies, in accordance with 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, in his capacity as an officer of Inter Parfums, Inc., that the Quarterly Report of Inter Parfums, Inc. on Form 10-Q for the period ended September 30, 2003, fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 and that the information contained in such report fairly presents, in all material respects, the financial condition and results of operation of Inter Parfums, Inc.

Date: November 12, 2003                                                                                       By: /s/Jean Madar
                                                                                                                                     Jean Madar
                                                                                                                                     Chief Executive Officer

Date: November 12, 2003                                                                                        By: /s/Russell Greenberg
                                                                                                                                      Russell Greenberg
                                                                                                                                      Executive Vice President,
                                                                                                                                      Chief Financial Officer and
                                                                                                                                      Principal Accounting Officer

A signed original of this written statement required by Section 906 has been provided to Inter Parfums, Inc. and will be retained by Inter Parfums, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

Exhibit 10.97

HSBC

August 8, 2003

Jean Philippe Fragrances, LLC.
551 Fifth Avenue
New York, N.Y. 10176

Attention Russell Greenberg, Chief Financial Officer/Executive Vice President

Ladies and Gentlemen:

We are pleased to confirm that we are extending to you a line of credit of up to an aggregate amount of $12,000,000 outstanding at any one time, which line may be used by your company for direct borrowings and acceptance and sight letters of credit exposure for working capital purposes provided, however, the outstanding amount as to which our Bank is liable, directly or contingently, on behalf of your company in respect of letter of credit and acceptance financings cannot in the aggregate at any one time exceed $2,500,000 and $2,500,000 respectively. This line is subject to the provisions set forth herein and in the other documents entered into in connection with this facility.

Borrowings under this line of credit shall be evidenced by a Demand Grid Note, a copy of which is enclosed. Under this facility borrowings may be made from time to time and shall be repayable on demand, but may be prepaid in whole or in part with accrued interest to the date of prepayment. Any amounts outstanding shall bear interest, payable monthly in arrears, at a variable rate per annum equal to 0% above our Bank's Reference Rate established from time to time, all as more fully set forth in the Demand Grid Note.

Or, at your option, you may borrow under a LIBOR Pricing Revolving Note up to the maximum amount of $12,000,000 in $100,000 increments, provided however, the amount outstanding under LIBOR Pricing Revolving Notes is no less than $500,000, with advances priced at your option of one month, two months, three months or six months LIBOR plus 1.75% for each LIBOR rate advance and subject to the terms of the LIBOR Pricing Revolving Note; a copy of the LIBOR Pricing Revolving Note is attached herewith. Please note that the advances under the LIBOR Pricing Revolving Note may be prepaid, but only subject to the terms and conditions set forth in that note.

Each letter of credit issued for your account shall be issued only pursuant to our standard form of application for commercial letter of credit (the "Application"), as executed by you from time to time. You shall pay a fee of 1/8 of 1% when we issue any letter of credit for your account and each time we amend any such letter of credit. In addition, you shall pay a fee of l/8 of 1% of the face amount of any sight draft presented to us in accordance with the terms of any letter of credit we issue for your account. Such fee shall be payable when such draft is presented to us and honored by us, all as more fully set forth in the Application. Any amounts due to us from you under the Application shall bear interest payable on demand at a variable rate per annum equal to the rate from time to time in effect under the Demand Grid Note. At our option such amounts may be deemed additional advances evidenced by and repayable in accordance with the Demand Grid Note.] In place of the foregoing demand reimbursement obligation, we may from time to time accept your time drafts of up to 180 days presented to us by you. When such time draft is accepted by us it will be discounted from its date of maturity at a rate per annum equal to 2% plus our acceptance rate for commercial drafts or bills of exchange of comparable amounts and maturities.

Your obligations under this line of credit shall be guaranteed by your Parent, Inter Parfums, Inc.

This facility may be utilized by you for the period ending July 31, 2004; provided, however, THE CONTINUING AVAILABILITY OF THIS FACILITY IS AT ALL TIMES SUBJECT TO OUR CONTINUING SATISFACTION, AS DETERMINED BY OUR BANK IN ITS SOLE AND ABSOLUTE DISCRETION, WITH THE BUSINESS, AFFAIRS AND FINANCIAL CONDITION OF YOUR COMPANIES AND OF EACH GUARANTOR AND TO YOUR COMPLIANCE, AND THAT OF EACH OTHER PARTY EXECUTING AND DELIVERING DOCUMENTS TO US HEREUNDER OR OTHERWISE IN CONNECTION WITH THIS FACILITY, WITH THE TERMS AND PROVISIONS OF THIS LETTER AND EACH OF THE DOCUMENTS REFERRED TO HEREIN. In addition, the continuing availability of this facility is subject to your furnishing us, (i) within 120 days after the close of your fiscal year, with your audited financial statements certified by your independent certified public accountants as of the end of such period, including a balance sheet and related income statements; and (ii) such other information, including interim financial statements, concerning your business, affairs or financial condition as we may from time to time request.

All payments of principal, interest and fees payable by you under this facility shall be made in immediately available funds at our office at 452 Fifth Avenue, New York, New York 10018 and may be charged to any account you maintain with us.

Our agreement to extend to you this facility, on the terms set forth herein, is further subject to our receipt in form satisfactory to us of (a) a certified copy of resolutions of your Board of Directors authorizing your execution, delivery and performance of this agreement (and the documents hereinafter referred to; (b) signature cards for your authorized signatories; (c) an executed copy of our Demand Grid Note signed by your duly authorized officer on your behalf; (d) executed copy of our standard form of Guarantee signed by Inter Parfums, Inc.

NO AMENDMENT, MODIFICATION OR WAIVER OF ANY PROVISION OF THIS AGREEMENT NOR CONSENT TO ANY DEPARTURE BY OUR BANK THEREFROM SHALL BE EFFECTIVE, IRRESPECTIVE OF ANY COURSE OF DEALING, UNLESS THE SAME SHALL BE IN WRITING AND SIGNED BY OUR BANK AND THEN SUCH WAIVER OR CONSENT SHALL BE EFFECTIVE ONLY IN THE SPECIFIC INSTANCE AND FOR THE SPECIFIC PURPOSE FOR WHICH GIVEN.

This agreement shall be governed by and construed in accordance with the laws of the State of New York. Please note that to the extent any of the terms or provisions of this agreement conflict with those contained in the Demand Grid Note or any of the above-mentioned documents, the terms and provisions of such Note and of such other documents shall govern.

YOU AND OUR BANK AGREE THAT ANY ACTION, SUIT OR PROCEEDING IN RESPECT OF OR ARISING OUT OF THIS AGREEMENT, THE NOTE OR ANY OTHER DOCUMENTS RELATING TO THIS FACILITY MAY BE INITIATED AND PROSECUTED IN THE STATE OR FEDERAL COURTS, AS THE CASE MAY BE, LOCATED IN NEW YORK COUNTY, NEW YORK.

YOU FURTHER AGREE THAT ANY ACTION, DISPUTE, PROCEEDING, CLAIM OR CONTROVERSY BETWEEN OR AMONG YOU AND US WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE ("DISPUTE" OR "DISPUTES") SHALL, AT OUR ELECTION, WHICH ELECTION MAY BE MADE AT ANY TIME PRIOR TO THE COMMENCEMENT OF A JUDICIAL PROCEEDING BY OUR BANK, OR IN THE EVENT OF A JUDICIAL PROCEEDING INSTITUTED BY YOU AT ANY TIME PRIOR TO THE LAST DAY TO ANSWER AND/OR RESPOND TO A SUMMONS AND/OR COMPLAINT MADE BY YOU, BE RESOLVED BY ARBITRATION IN NEW YORK, NEW YORK IN ACCORDANCE WITH THE PROVISIONS OF THIS PARAGRAPH AND SHALL, AT THE ELECTION OF OUR BANK, INCLUDE ALL DISPUTES ARISING OUT OF OR IN CONNECTION WITH (I) THIS AGREEMENT, THE DEMAND GRID NOTE, OR ANY OTHER RELATED AGREEMENTS OR INSTRUMENTS, (II) ALL PAST, PRESENT AND FUTURE AGREEMENTS INVOLVING THE PARTIES, (III) ANY TRANSACTION CONTEMPLATED HEREBY AND ALL PAST, PRESENT AND FUTURE TRANSACTIONS INVOLVING THE PARTIES AND (IV) ANY ASPECT OF THE PAST, PRESENT OR FUTURE RELATIONSHIP OF THE PARTIES. We may elect to require arbitration of any Dispute with us without thereby being required to arbitrate all Disputes between you and us. Any such Dispute shall be resolved by binding arbitration in accordance with Article 75 of the New York Civil Practice Law and Rules and the Commercial Arbitration Rules of the American Arbitration Association ("AAA"). In the event of any inconsistency between such Rules and these arbitration provisions, these provisions shall supersede such Rules. All statutes of limitations which would otherwise be applicable shall apply to any arbitration proceeding under this paragraph. In any arbitration proceeding subject to these provisions, the arbitration panel (the "arbitrator") is specifically empowered to decide (by documents only, or with a hearing, at the arbitrator's sole discretion) pre-hearing motions which are substantially similar to pre-hearing motions to dismiss and motions for summary adjudication. In any such arbitration proceeding, the arbitrator shall not have the power or authority to award punitive damages to any party.

Judgment upon the award rendered may be entered in any court having jurisdiction. Whenever an arbitration is required, the parties shall select an arbitrator in the manner provided in this paragraph. No provision of, nor the exercise of any rights under, this paragraph shall limit the right of any party (i) to foreclose against any real or personal property collateral through judicial foreclosure, by the exercise of a power of sale under a deed of trust, mortgage or other security agreement or instrument, pursuant to applicable provisions of the Uniform Commercial Code, or otherwise pursuant to applicable law, (ii) to exercise self help remedies including but not limited to setoff and repossession, or (iii) to request and obtain from a court having jurisdiction before, during or after the pendency of any arbitration, provisional or ancillary remedies and relief including but not limited to injunctive or mandatory relief or the appointment of a receiver. The institution and maintenance of an action or judicial proceeding for, or pursuit of, provisional or ancillary remedies or exercise of self help remedies shall not constitute a waiver of our right, even if we are the plaintiff, to submit the Dispute to arbitration if we would otherwise have such right. We may require arbitration of any Dispute(s) concerning the lawfulness, unconscionableness, propriety, or reasonableness of any exercise by us of our right to

take or dispose of any collateral or our exercise of any other right in connection with collateral including, without limitation, judicial foreclosure, exercising a power of sale under a deed of trust or mortgage, obtaining or executing a writ of attachment, taking or disposing of property with or without judicial process pursuant to Article 9 of the Uniform Commercial Code or otherwise as permitted by applicable law, notwithstanding any such exercise by us. Whenever an arbitration is required under this paragraph, the arbitrator shall be selected, except as otherwise herein provided, in accordance with the Commercial Arbitration Rules of the AAA. A single arbitrator shall decide any claim of $100,000 or less and he or she shall be an attorney with at least five years' experience. Where the claim of any party exceeds $100,000, the Dispute shall be decided by a majority vote of three arbitrators, at least two of whom shall be attorneys (at least one of whom shall have not less than five years' experience representing commercial banks). In the event of any Dispute governed by this paragraph, each of the parties shall, subject to the award of the arbitrator, pay an equal share of the arbitrator's fees. The arbitrator shall have the power to award recovery of all costs and fees (including attorneys' fees, administrative fees, arbitrator's fees, and court costs) to the prevailing party.

ANYTHING IN THIS AGREEMENT, THE NOTE OR ANY OTHER DOCUMENTS RELATING TO THIS FACILITY TO THE CONTRARY NOTWITHSTANDING, THE ENUMERATION IN THIS AGREEMENT, THE NOTE OR IN SUCH OTHER DOCUMENTS OF SPECIFIC OBLIGATIONS TO OUR BANK AND/OR CONDITIONS TO THE AVAILABILITY OF THIS FACILITY AND THE NOTE SHALL NOT BE CONSTRUED TO QUALIFY, DEFINE OR OTHERWISE LIMIT OUR RIGHT, POWER OR ABILITY, AT ANY TIME, UNDER APPLICABLE LAW, TO MAKE DEMAND FOR PAYMENT OF THE ENTIRE OUTSTANDING PRINCIPAL OF AND INTEREST DUE UNDER THIS FACILITY AND THE NOTE OR OUR RIGHT NOT TO MAKE ANY EXTENSION OF CREDIT UNDER THIS FACILITY AND YOU AGREE THAT YOUR BREACH OF OR DEFAULT UNDER ANY SUCH ENUMERATED OBLIGATIONS OR CONDITIONS IS NOT THE ONLY BASIS FOR DEMAND TO BE MADE OR FOR A REQUEST FOR AN EXTENSION OF CREDIT TO BE DENIED, AS YOUR OBLIGATION TO MAKE PAYMENT SHALL AT ALL TIMES REMAIN A DEMAND OBLIGATION. NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, THIS AGREEMENT DOES NOT CREATE A COMMITMENT OR OBLIGATION TO LEND BY THE BANK AND YOU ACKNOWLEDGE THAT THE BANK HAS NO OBLIGATION TO LEND.

EACH OF YOU AND WE HEREBY WAIVE TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY OR AGAINST IT ON ANY MATTERS WHATSOEVER, IN CONTRACT OR IN TORT, ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS AGREEMENT, THE NOTE OR ANY OTHER DOCUMENTS RELATING TO THIS FACILITY. YOU ALSO HEREBY WAIVE THE RIGHT TO INTERPOSE ANY DEFENSE BASED UPON ANY CLAIM OF LACHES OR SET-OFF OR COUNTERCLAIM OF ANY NATURE OR DESCRIPTION, ANY OBJECTION BASED ON FORUM NON CONVENIENS OR VENUE, AND ANY CLAIM FOR CONSEQUENTIAL, PUNITIVE OR SPECIAL DAMAGES.

If this agreement is acceptable to you, please sign and return to us one copy each of the enclosed copy of this letter and the other documents referred to above on or before September 2, 2003.

                                                                                                                                       Very truly yours,

                                                                                                                                        HSBC USA Bank

                                                                                                                                  By: /s/ Andrew Ross
                                                                                                                                        Title: First Vice President

Agreed to and accepted:

Jean Philippe Fragrances, LLC.

By: /s/ Russell Greenberg
Title: Executive Vice President

Exhibit 10.98

BURBERRY

Our Ref:

Date: 23.6.03

Inter Parfums S.A.
4-6 Rond Point Des Champs-Elysées
75008 Paris
France

For the attention of Philippe Benacin

Inter Parfums, S.A.
551 Fifth Avenue
New York
NY 10176 - 0198
USA

For the attention of Jean Madar

Dear Sirs

Licence Agreement between (1) Burberry Limited (formerly Burberrys Limited) ("Burberry") (2) Inter Parfums S.A. and (3) Inter Parfums, Inc (formerly Jean Philippe Fragrances, Inc.) (the "Licensee") dated 15 July 1993 (as amended) ("the Agreement")

We refer to the above Agreement which shall be amended as set out below.

The following clauses shall be included in the Agreement with immediate effect:

"The Licensee shall conform and comply with, and shall use all reasonable commercial efforts to procure that all its Approved Contractors agree to conform and comply with in all material respects, all relevant international and national conventions and all relevant laws, rules and regulations relating to the employment of labour (in particular without limitation child and forced labour) and employees' terms and conditions of employment and comply with and procure that all Approved Contractors agree to comply with general environmental responsibilities and best practices.

The Licensee warrants that it has conformed and complied with all relevant international and national conventions and all relevant laws, rules and regulations relating to the employment of labour (in particular without limitation child and forced labour) and employees' terms and conditions of employment. The Licensee further warrants that it has no actual knowledge that any of its Approved Contractors have not complied in all material respects with such conventions, laws, rules and regulations relating to the employment of labour (in particular without limitation child and forced labour) and employees' terms and conditions of employment.

Breach by the Licensee

In the event that the Licensee :

(a) commits a breach (which is not a material breach) of any of the above clauses which is capable of remedy and fails to remedy such breach within 30 days of being given notice by Burberry to do so; or

(b) commits a material breach of any of the above clauses, and fails to remedy such breach within 30 days of being given notice by Burberry to do so,

Burberry shall be entitled to terminate the Agreement forthwith on written notice.

Breach by an Approved Contractor

In the event that an Approved Contractor :

(a) commits a breach (which is not a material breach) of any of the above clauses which is capable of remedy, the Licensee shall use all reasonable commercial efforts to procure a remedy. If the Approved Contractor fails to remedy such breach within 30 days of the Licensee being given notice by Burberry to effect a remedy, the Licensee shall terminate its relationship with the Approved Contractor as it relates to Licensed Products after the Approved Contractor has completed any work in progress, or

(b) commits a material breach of any of the above clauses whether or not such breach is remediable, the Licensee shall forthwith terminate its relationship with the Approved Contractor as it relates to Licensed Products, and the Approved Contractor shall cease any work in progress. Notwithstanding anything to the contrary contained in this Agreement, in the event that an Approved Contractor commits a material breach as hereinabove provided, then in any such event, the Licensee's termination of such Approved Contractor shall be the sole remedy of Burberry for such material breach. For the avoidance of doubt, it is clearly understood that any such material breach by an Approved Contractor shall not constitute a breach on behalf of the Licensee, or provide any right to Burberry to terminate the Agreement."

In this letter all defined terms, where applicable, shall have the same meanings as in the Agreement unless otherwise defined in this letter. For the avoidance of doubt this letter shall take effect as an amendment to the Agreement but in all other respects the Agreement shall continue in full force and effect for its current term and this letter and the Agreement shall constitute the entire Agreement between the parties in respect of its subject matter.

Please acknowledge your acceptance of the terms of this letter by signing and returning all three copies of this letter. The terms of this letter shall not take effect until this letter has been signed by Burberry.

Yours faithfully

/s/ [unintelligible]
For and on behalf of
BURBERRY LIMITED

I for an on behalf of Inter Parfums S.A. acknowledge receipt of your letter and accept and agree to its terms as set out above.

/s/ Philippe Benacin
For and on behalf of
INTER PARFUMS S.A.

I for an on behalf of Inter Parfums, Inc acknowledge receipt of your letter and accept and agree to its terms as set out above.

/s/ Philippe Benacin
For and on behalf of
INTER PARFUMS, INC