Inter Parfums, Inc. Reports Third Quarter Results
NEW YORK--(BUSINESS WIRE)-- Inter Parfums, Inc. (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 years 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 years 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 Companys regular quarterly cash dividend of $0.08 per share will be payable on January 15, 2013 to shareholders of record on December 31, 2012.
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 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.
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.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands except per share data)
Three Months Ended
Nine Months Ended
|Cost of sales||65,146||64,323||181,535||158,173|
|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):|
|(Gain) loss on foreign currency||1,405||(1,239||)||2,584||(1,091||)|
|Income before income taxes||20,335||22,338||63,570||58,454|
|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:|
|Weighted average number of shares outstanding:|
|Dividends declared per share||$||0.08||$||0.08||$||0.24||$||0.24|
CONSOLIDATED BALANCE SHEETS
(In thousands except share and per share data)
|Cash and cash equivalents||$||25,851||$||35,856|
|Accounts receivable, net||167,207||175,223|
|Other current assets||6,376||4,258|
|Income tax receivable||677||1,404|
|Deferred tax assets||9,641||7,270|
|Total current assets||372,536||391,346|
|Equipment and leasehold improvements, net||15,911||14,525|
|Trademarks, licenses and other intangible assets, net||103,162||105,750|
|LIABILITIES AND EQUITY|
|Loans payable banks||$||1,385||$||11,826|
|Current portion of long-term debt||--||4,480|
|Accounts payable, trade||69,644||112,726|
|Income taxes payable||8,670||2,099|
|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, $.001 par; authorized 100,000,000 shares;|
|outstanding 30,576,426 and 30,541,506 shares at|
|September 30, 2012 and December 31, 2011,|
|Additional paid-in capital||52,408||50,883|
|Accumulated other comprehensive income||7,854||7,747|
|Treasury stock, at cost, 10,009,492 common shares at|
|September 30, 2012 and December 31, 2011||(34,151)||(34,151)|
|Total Inter Parfums, Inc. shareholders equity||278,613||252,674|
|Total liabilities and equity||$||496,546||$||516,034|
Inter Parfums, Inc.
Russell Greenberg, 212-983-2640
Exec. VP & CFO
The Equity Group Inc.
Linda Latman, 212-836-9609
Fred Buonocore, 212-836-9607
Source: Inter Parfums, Inc.Copyright Business Wire 2012