Attached files

file filename
8-K - 8-K - INTER PARFUMS INCs107043_8k.htm

 

Exhibit 99.1

 

 

 

FOR IMMEDIATE RELEASE

 

INTER PARFUMS, INC. REPORTS 2017 SECOND QUARTER RESULTS

 

Net Income Increases 15.7% on 10.2% Increase in Net Sales

 

New York, New York, August 7, 2017: Inter Parfums, Inc. (NASDAQ GS: IPAR) today reported results for the second quarter ended June 30, 2017.

 

Second Quarter 2017 Compared to Second Quarter 2016:

Net sales were $129.1 million, up 10.2% from $117.2 million; at comparable foreign currency exchange rates, net sales increased 11.3%;

Net sales by European based operations rose 20.5% to $106.7 million from $88.6 million;

Net sales by U.S. based operations were $22.4 million compared to $28.6 million;

Gross margin was 65.0% compared to 63.6%;

S,G&A expenses as a percentage of net sales were 53.8% compared to 53.7%;

Operating income increased 26.3% to $14.5 million from $11.5 million;

Operating margin rose to 11.2% compared to 9.8%; and

Net income attributable to Inter Parfums, Inc. increased 15.7% to $6.7 million or $0.22 per diluted share from $5.8 million or $0.19 per diluted share.

 

Discussing the 20.5% sales increase in European based operations, Jean Madar, Chairman & CEO of Inter Parfums, Inc., stated, “Our three largest brands performed exceptionally well during the second quarter. In the absence of a new product launch, there was a 15% increase in Montblanc fragrance sales driven by the men’s Legend and Lady Emblem fragrance lines. Similarly, there was a 15% increase in Jimmy Choo brand sales, with two recent extensions, Jimmy Choo L’Eau and Jimmy Choo Man Ice, layering new sales upon the brand’s older, more established fragrances. Lanvin, our third largest brand, grew sales by 22%, spurred by the rollout of Modern Princess and a welcome upturn in brand sales in Russia and China, where Lanvin is an especially desirable prestige label.”

 

He continued, “The launch of Mademoiselle Rochas has been especially gratifying with sales expanding beyond the brand’s entrenched markets, France and Spain. Coach is showing exceptional promise, with sales of the women’s signature scent benefitting from wider distribution, adding approximately $9.0 million in incremental sales for the quarter. We also expanded and refreshed the Van Cleef & Arpels Collection Extraordinaire with Bois Doré and Rêve de Cashmere during the second quarter.”

 

He went on to say, “In the second half of the year, we have Coach for Men, debuting in the fall with actor James Franco as our advertising model, and we will launch Montblanc Legend Night around holiday time. As planned, we have a new duo for Karl Lagerfeld called Les Parfums Matières debuting in the second half, but have moved the brand extension for Lanvin’s Éclat d’Arpège to 2018.”

 

 

 

Inter Parfums, Inc. News Release

August 7, 2017

Page 2

 

Discussing U.S. based operations, Mr. Madar noted, “In last year’s second quarter, the launch of our first ever Abercrombie & Fitch men’s scent, First Instinct and the Hollister fragrance duo, Wave, drove the nearly 15% increase in sales by U.S. based operations, setting a high bar for this year’s quarterly comparison. With the planned introduction of Icon Racing by Dunhill and Fantasia by Anna Sui, both in September, we look forward to more favorable quarterly comparisons.”

 

Mr. Madar concluded, “Sales growth by region thus far this year is especially encouraging. Sales in our three largest markets, Western Europe, North America and Asia are up 3.8%, 25.3% and 19.9%, respectively, compared to the first half of 2016. Ranked by size, our next three markets, the Middle East, Central and South America and Eastern Europe, achieved sales growth of 30.9%, 15.6% and 93.9%, respectively.”

 

Russell Greenberg, Executive Vice President and CFO of Inter Parfums, Inc., stated, “The increase in gross margin was attributable to a higher proportion of European based sales, and to a lesser extent, the stronger dollar to euro exchange rate during the period, offset somewhat by the reduction in sales of higher margin Abercrombie & Fitch and Hollister prestige products by U.S. based operations. While advertising and promotion increased 22.3% from last year’s second quarter, there was little change in overall selling, general and administrative expenses as a percent of sales.”

 

He continued, “The second quarter swing item was below the operating income line, namely the $817,000 loss on foreign currency this period versus a $661,000 gain in last year’s second quarter. Also of note, our effective tax rate was 33% in the current second quarter versus 36% in last year’s second quarter.”

 

Mr. Greenberg also pointed out, “We closed the quarter with working capital of $358 million, including approximately $241 million in cash, cash equivalents and short-term investments, a working capital ratio of 3.4 to 1 and $69.1 million of long-term debt including current maturities incurred in connection with the 2015 Rochas brand acquisition.”

 

Affirms 2017 Guidance

Mr. Greenberg noted, “Our year-to-date performance, coupled with better than previously anticipated sales of Jimmy Choo, Lanvin, Rochas, and Coach brand products, motivated the recent increase in our 2017 guidance. As we reported late last month, we are looking for 2017 sales to be in the range of $560 million to $570 million resulting in net income attributable to Inter Parfums, Inc. of $1.25 to $1.27 per diluted share.” Guidance assumes the dollar remains at current levels.

 

Dividend

The Company’s regular quarterly cash dividend of $0.17 per share will be paid on October 13, 2017 to shareholders of record on September 29, 2017.

 

Conference Call

Management will conduct a conference call to discuss financial results and business developments at 11:00 AM ET on Tuesday, August 8, 2017. Interested parties may participate in the call by dialing (201) 493-6749; 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. 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.

 

 

 

Inter Parfums, Inc. News Release

August 7, 2017

Page 3

 

Founded more than 30 years ago, Inter Parfums, Inc. is a premier fragrance company with a diverse portfolio of prestige brands that includes Abercrombie & Fitch, Agent Provocateur, Anna Sui, bebe, Boucheron, Coach, Dunhill, Hollister, Jimmy Choo, Karl Lagerfeld, Lanvin, Montblanc, Oscar de la Renta, Paul Smith, Repetto, Rochas, Shanghai Tang, S.T. Dupont and Van Cleef & Arpels. The fragrance products developed, produced and distributed by Inter Parfums are sold in more than 100 countries throughout the world.

 

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, 2016 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   Fred Buonocore (212) 836-9607/fbuonocore@equityny.com
rgreenberg@interparfumsinc.com   Linda Latman (212) 836-9609/llatman@equityny.com
www.interparfumsinc.com   www.theequitygroup.com

 

See Accompanying Tables

 

 

 

Inter Parfums, Inc. News Release

August 7, 2017

Page 4

 

 

CONSOLIDATED STATEMENTS OF INCOME

(In thousands except per share data)

(Unaudited)

 

   Three Months Ended
June 30,
   Six Months Ended
June 30,
 
   2017   2016   2017   2016 
                 
Net sales  $129,136   $117,157   $272,194   $228,679 
                     
Cost of sales   45,193    42,729    98,181    82,933 
                     
Gross margin   83,943    74,428    174,013    145,746 
                     
Selling, general and administrative expenses   69,468    62,969    133,367    116,757 
                     
Income from operations   14,475    11,459    40,646    28,989 
                     
Other expenses (income):                    
Interest expense   727    693    999    1,666 
(Gain) loss on foreign currency   817    (661)   973    53 
Interest income   (900)   (602)   (2,173)   (1,956)
                     
    644    (570)   (201)   (237)
                     
Income before income taxes   13,831    12,029    40,847    29,226 
                     
Income taxes   4,620    4,300    13,469    12,049 
                     
Net income   9,211    7,729    27,378    17,177 
                     
Less: Net income attributable to the noncontrolling interest   2,467    1,898    7,261    4,012 
                     
Net income attributable to Inter Parfums, Inc.
  $6,744   $5,831   $20,117   $13,165 
                     
Earnings per share:                    
                     
Net income attributable to Inter Parfums, Inc. common shareholders:                    
Basic  $0.22   $0.19   $0.65   $0.42 
Diluted  $0.22   $0.19   $0.64   $0.42 
                     
Weighted average number of shares outstanding:                    
Basic   31,169    31,055    31,157    31,047 
Diluted   31,281    31,160    31,268    31,137 
                     
Dividends declared per share  $0.17   $0.15   $0.34   $0.30 

 

 

 

Inter Parfums, Inc. News Release

August 7, 2017

Page 5

 

CONSOLIDATED BALANCE SHEETS

(In thousands except share and per share data)

(Unaudited)

 

ASSETS
   June 30,
2017
   December 31,
2016
 
Current assets:          
Cash and cash equivalents  $116,772   $161,828 
Short-term investments   123,805    94,202 
Accounts receivable, net   119,364    104,819 
Inventories   136,909    96,977 
Receivables, other   1,810    7,433 
Other current assets   10,246    6,240 
Income tax receivable   765    626 
Total current assets   509,671    472,125 
Equipment and leasehold improvements, net   10,370    10,076 
Trademarks, licenses and other intangible assets, net   195,596    183,868 
Deferred tax assets   8,649    8,090 
Other assets   8,184    8,250 
Total assets  $732,470   $682,409 
           
LIABILITIES AND EQUITY          
Current liabilities:          
Current portion of long-term debt  $23,262   $21,498 
Accounts payable – trade   67,456    49,507 
Accrued expenses   52,397    62,609 
Income taxes payable   3,489    3,331 
Dividends payable   5,299    5,293 
Total current liabilities   151,903    142,238 
Long-term debt, less current portion   45,881    53,064 
Deferred tax liability   4,286    3,449 
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 31,171,908 and 31,138,318 shares at June 30, 2017 and December 31, 2016, respectively    31    31 
Additional paid-in capital   64,196    63,103 
Retained earnings   412,580    402,714 
Accumulated other comprehensive loss   (33,406)   (57,982)
Treasury stock, at cost, 9,864,805 common shares at June 30, 2017 and December 31, 2016, respectively   (37,475)   (37,475)
Total Inter Parfums, Inc. shareholders’ equity   405,926    370,391 
Noncontrolling interest   124,474    113,267 
Total equity   530,400    483,658 
Total liabilities and equity  $732,470   $682,409