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8-K - 8-K - INTER PARFUMS INCs108068_8k.htm

 

Exhibit 99.1

 

 (INTERPARFUMS, INC. LOGO)

 

FOR IMMEDIATE RELEASE

 

INTER PARFUMS, INC. REPORTS 2017 THIRD QUARTER RESULTS

 

RAISES 2017 EARNINGS GUIDANCE AND 

INCREASES DIVIDEND 24%

 

New York, New York, November 8, 2017: Inter Parfums, Inc. (NASDAQ GS: IPAR) today reported results for the third quarter ended September 30, 2017.

 

Third Quarter 2017 Compared to Third Quarter 2016: 

Net sales were $169.5 million, up 7.6% from $157.6 million; at comparable foreign currency exchange rates, net sales increased 5.2%;

Net sales by European based operations rose 9.1% to $134.6 million from $123.4 million;

Net sales by U.S. based operations were $34.9 million, up 2% compared to $34.2 million;

Gross margin was 61.0% compared to 60.2%;

S,G&A expenses as a percentage of net sales were 41.5% compared to 39.7%;

Operating income increased 2.7% to $33.2 million from $32.3 million;

Net income attributable to Inter Parfums, Inc. increased 5.2% to $17.1 million compared $16.2 million; and,

Net income attributable to Inter Parfums, Inc. per diluted share rose 5.8% to $0.55 from $0.52.

 

Discussing European based operations, Jean Madar, Chairman & CEO of Inter Parfums stated, “Product sales of our largest brand, Montblanc, rose 13% in the third quarter bringing year-to-date sales just short of $100 million. Through the first nine months of this year, however, Montblanc brand sales were just 5% ahead of the same period last year, when the hugely successful Legend Spirit debuted producing a 23% comparable period sales increase. Our second largest brand, Jimmy Choo, generated three and nine month sales increases of 3% and 24%, respectively, as compared to the corresponding periods of the prior year due to two recent extensions, Jimmy Choo L’Eau for women and Jimmy Choo Man Ice, as well as from solid sales of the brand’s established collections. Lanvin brand sales, although down 8% for the 2017 third quarter, are up 14% year-to-date, resulting from gains in the brand’s best performing product line, Éclat d’Arpège, coupled with the international launch of Modern Princess.”

 

He continued, “Our newest brands are proving to be exceptional additions to our fragrance portfolio. Sales of the new Coach scent for men, combined with the strong performance of the Coach signature scent for women, which debuted in the second half of last year, produced the 34% increase in third quarter brand sales. As we reported, third quarter Rochas brand sales were 33% ahead of last year’s third quarter. Beyond the traditional Rochas markets in France and Spain and the very welcome recurring sales of Eau de Rochas in those markets, we have been reviving the nearly century old brand’s luster and expanded its reach to 15 markets with the launch of Mademoiselle Rochas, with additional sales destinations in the works for this year and next.”

 

On the subject of U.S. based operations, Mr. Madar continued, “Icon Racing by Dunhill and Fantasia by Anna Sui began shipping in September which along with improved sales of Oscar de la Renta legacy fragrances contributed to the increase in third quarter sales. Offsetting much of these gains, however, were lower comparable quarter sales of Abercrombie & Fitch and Hollister fragrances, which launched First Instinct, and Wave, respectively, in last year’s second quarter.”

 

 

 

 

Inter Parfums, Inc. News Release Page 2

November 8, 2017

 

Mr. Madar pointed out, “All of the regions in which we do business have shown improvement over last year. Through the first nine months of the year, sales within our three largest markets, North America, Western Europe, and Asia are up 15%, 6% and 14%, respectively, compared to the same period one year earlier. Ranked by size, our next three markets, Central and South America, the Middle East, and Eastern Europe, achieved sales growth of 21%, 23% and 42%, respectively.”

 

Discussing profitability factors, Mr. Greenberg stated, “For European operations, gross profit margin was 65% in the current third quarter compared to 64% in the same period last year. The negative impact of a weaker dollar on gross margin was mitigated by increased gross margin from higher product sales made directly to retailers through our own distribution subsidiaries. Of special note, increased sales of Rochas brand fragrances was a major contributor as its sales are concentrated in France and Spain, both of which are countries where we distribute directly to retailers. For U.S. operations, gross profit margin was 47% for both the current and the prior year’s third quarter. While advertising and promotion expenses increased 26% from last year’s third quarter in support of new product launches and best sellers, overall selling, general and administrative expenses as a percent of sales inched up 180 basis points.”

 

Mr. Greenberg also pointed out, “We closed the quarter with working capital of $377 million, including approximately $231 million in cash, cash equivalents and short-term investments, a working capital ratio of 3.4 to 1 and $65.6 million of long-term debt, including current maturities, incurred in connection with the 2015 Rochas brand acquisition.”

 

Raises 2017 Earnings Guidance  

Mr. Greenberg noted, “Last month we raised our 2017 sales guidance range to between $575 million and $580 million from our previous guidance range of $560 million to $570 million. We have likewise now raised our full year 2017 guidance for net income attributable to Inter Parfums, Inc. to between $1.27 and $1.29 per diluted share; our prior guidance had been in the range of $1.25 to $1.27 per diluted share. As previously reported, we have scheduled November 13, 2017, after the close of the market, for the release of our initial 2018 guidance.” Guidance assumes the dollar remains at current levels.

 

Dividend Increase 

The Board of Directors of Inter Parfums, Inc. authorized a 24% increase in the annual dividend to $0.84 per share. The next quarterly cash dividend of $0.21 per share is payable on January 15, 2018 to shareholders of record on December 29, 2017.

 

Conference Call 

Management will conduct a conference call to discuss financial results and business developments at 11:00 am ET, on Thursday, November 9, 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.

 

 

 

 

Inter Parfums, Inc. News Release Page 3

November 8, 2017

 

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 Page 4

November 8, 2017

 

CONSOLIDATED STATEMENTS OF INCOME 

(In thousands except per share data) 

(Unaudited)

 

   Three Months Ended
September 30,
   Nine Months Ended
September 30,
 
   2017   2016   2017   2016 
                 
Net sales  $169,531   $157,622   $441,725   $386,301 
                     
Cost of sales   66,059    62,790    164,240    145,723 
                     
Gross margin   103,472    94,832    277,485    240,578 
                     
Selling, general and administrative expenses   70,309    62,529    203,676    179,285 
                     
Income from operations   33,163    32,303    73,809    61,293 
                     
Other expenses (income):                    
Interest expense   495    515    1,494    2,181 
Loss on foreign currency   335    334    1,308    388 
Interest income   (615)   (765)   (2,788)   (2,722)
                     
    215    84    14    (153)
                     
Income before income taxes   32,948    32,219    73,795    61,446 
                     
Income taxes   10,845    10,740    24,314    22,790 
                     
Net income   22,103    21,479    49,481    38,656 
                     
         Less:  Net income attributable to the noncontrolling interest   5,026    5,240    12,287    9,252 
                     
Net income attributable to Inter Parfums, Inc.
  $17,077   $16,239   $37,194   $29,404 
                     
Earnings per share:                    
                     
Net income attributable to Inter Parfums, Inc. common shareholders:                    
   Basic  $0.55   $0.52   $1.19   $0.95 
   Diluted  $0.55   $0.52   $1.19   $0.94 
                     
Weighted average number of shares outstanding:                    
   Basic   31,175    31,080    31,163    31,058 
   Diluted   31,307    31,171    31,281    31,138 
                     
Dividends declared per share  $0.17   $0.15   $0.51   $0.45 
 

 

 

Inter Parfums, Inc. News Release Page 5

November 8, 2017

 

CONSOLIDATED BALANCE SHEETS 

(In thousands except share and per share data) 

(Unaudited)

 

ASSETS
   September 30,
2017
   December 31,
2016
 
Current assets:          
Cash and cash equivalents  $108,367   $161,828 
Short-term investments   122,402    94,202 
Accounts receivable, net   159,434    104,819 
Inventories   134,280    96,977 
Receivables, other   1,341    7,433 
Other current assets   8,885    6,240 
Income tax receivable   548    626 
Total current assets   535,257    472,125 
Equipment and leasehold improvements, net   10,321    10,076 
Trademarks, licenses and other intangible assets, net   200,841    183,868 
Deferred tax assets   11,071    8,090 
Other assets   8,183    8,250 
Total assets  $765,673   $682,409 
           
LIABILITIES AND EQUITY          
Current liabilities:          
Current portion of long-term debt  $24,016   $21,498 
Accounts payable – trade   54,449    49,507 
Accrued expenses   63,113    62,609 
Income taxes payable   10,970    3,331 
Dividends payable   5,301    5,293 
Total current liabilities   157,849    142,238 
Long-term debt, less current portion   41,554    53,064 
Deferred tax liability   3,741    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 31,182,458 and 31,138,318 shares at

September 30, 2017 and December 31, 2016, respectively 

   31    31 
Additional paid-in capital   64,645    63,103 
Retained earnings   424,545    402,714 
Accumulated other comprehensive loss   (23,061)   (57,982)
Treasury stock, at cost, 9,864,805 common shares at September 30, 2017 and December 31, 2016, respectively   (37,475)   (37,475)
Total Inter Parfums, Inc. shareholders’ equity   428,685    370,391 
Noncontrolling interest   133,844    113,267 
Total equity   562,529    483,658 
Total liabilities and equity  $765,673   $682,409