Form 8-K INTER PARFUMS INC For: Aug 09

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of Earliest Event Reported):

August 9, 2016

 

Inter Parfums, Inc.

(Exact name of registrant as specified in its charter)

 

Delaware		0-16469		13-3275609
(State or other jurisdiction of		Commission		(I.R.S. Employer
incorporation or organization)		File Number		Identification No.)

 

551 Fifth Avenue, New York, New York 10176

(Address of Principal Executive Offices)

 

212. 983.2640

(Registrant's Telephone number, including area code)

 

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions (see General Instruction A.2 below):

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting Material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

   

Item 2.02. Results of Operations and Financial Condition.
 

Certain portions of our press release dated August 9, 2016, a copy of which is annexed hereto as Exhibit no. 99.1, are incorporated by reference in this report, and are filed pursuant to this Item 2.02. They are as follows:

 

·

The 1st, 2nd, 4th  6th and 7th paragraphs, all relating to income and expense for the second quarter and the six months ended June 30, 2016

 

	·	Portions of the 3rd and 8th paragraphs, all relating to income and expense for the second quarter and the six months ended June 30, 2016
	·	The 9th paragraph relating to balance sheet items

 

·

The 12th paragraph relating to the conference call to be held on August 10, 2016

 

·

The unaudited consolidated statements of income and consolidated balance sheets

 

Item 7.01. Regulation FD Disclosure.

 

Certain portions of our press release dated August 9, 2016, a copy of which is annexed hereto as Exhibit no. 99.1, are incorporated by reference in this report, and are filed pursuant to this Item 7.01 and Regulation FD. They are as follows:

 

	·	The last sentence of the 3rd paragraph  relating to the Lanvin new product launch
	·	The 5th paragraph relating to new product launches
	·	Portions of the 8th paragraph relating to anticipated effective tax rate for 2016
	·	The 10th paragraph relating to 2016 guidance

 

·

The 14th paragraph relating to forward looking information

 

·

The balance of such press release not otherwise incorporated by reference in Item 2.02 or Item 8.01

 

Item 8.01. Other Events.
 

Certain portions of our press release dated August 9, 2016, a copy of which is annexed hereto as Exhibit no. 99.1, are incorporated by reference in this report, and are filed pursuant to this Item 8.01. They are as follows:

 

·

The 11th paragraph relating to payment of quarterly dividends

  

Item 9.01 Financial Statements and Exhibits.

 

99.1 Our press release dated August 9, 2016.

 

  

SIGNATURES

 

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

 

Dated: August 9, 2016

 

	Inter Parfums, Inc.
	By:	/s/ Russell Greenberg
	Russell Greenberg, Executive Vice President

 

 

Exhibit 99.1

 

 

 

INTER PARFUMS, INC. REPORTS 2016 SECOND QUARTER RESULTS

 

NET SALES UP 14.8%

 

NET INCOME ATTRIBUTABLE TO INTER PARFUMS, INC. UP 34.0%

 

 

New York, New York, August 9, 2016: Inter Parfums, Inc. (NASDAQ GS: IPAR) today reported results for the second quarter ended June 30, 2016.

 

Second Quarter 2016 Compared to Second Quarter 2015:

·

Net sales were $117.2 million, up 14.8% from $102.0 million; at comparable foreign currency exchange rates, net sales increased 14.2%;

·

Net sales by European based operations rose 14.8% to $88.6 million compared to $77.1 million and net sales by U.S. based operations increased 14.8% to $28.6 million compared to $24.9 million;

·

Gross margin was 63.5% of net sales compared to 59.1%;

·

S,G&A expenses as a percentage of net sales was 53.7% compared to 51.1%;

·

Operating income increased 39.0% to $11.5 million from $8.2 million;

·

Operating margin rose to 9.8% compared to 8.1%; and,

·

Net income attributable to Inter Parfums, Inc. increased 34.0% to $5.8 million or $0.19 per diluted share compared to $4.4 million or $0.14 per diluted share.

 

Discussing the Company’s European based operations, Jean Madar, Chairman & CEO of Inter Parfums, Inc., stated, “Once again, Montblanc, our largest brand, drove our top line growth with brand sales of $26.3 million, up 32% from last year’s second quarter. This growth was primarily due to strong sales of the newly launched Legend Spirit line and the ongoing success of the original Legend line. Our second largest brand, Jimmy Choo, also had a strong second quarter with brand sales up 43% to $22 million, reflecting wider distribution of Illicit, which debuted last year, and the steady performance of Jimmy Choo Man, which launched in 2014. Rochas fragrances contributed $8.9 million to second quarter sales resulting from sales of legacy scents in the brand’s core markets of Spain and France. Lanvin fragrance sales declined 19% to $12.4 million due primarily to the economic slowdown in two of its primary markets, Russia and China. We hope to counter this trend with a new Lanvin women's line Modern Princess, launching in selected markets this fall and internationally in 2017.

 

“Our U.S. based operations delivered solid growth in the second quarter,” continued Mr. Madar. “The launches of our first new Abercrombie & Fitch men’s scent, First Instinct, and the Hollister duo, Wave, began in late spring and were major contributors to our second quarter sales growth. In addition, Dunhill fragrances continue to be consistent top performers, achieving an increase of 23% in brand sales for the period.”

 

Regarding sales drivers in the second half of the year, Mr. Madar pointed to the debut of the first Coach scent for women, a signature scent aptly named Coach, and the continued rollout of the new Abercrombie & Fitch and Hollister scents, plus the launch of Icon Elite by Dunhill.

 

Mr. Madar went on to say, “Thus far this year, our two largest markets were also our two fastest growing markets with sales in Western Europe and North America up 44.6% and 10.5%, respectively. Despite negative market conditions in China, our overall sales in Asia, our third largest market, are slightly ahead of the first half of last year.”

 

 

Discussing factors affecting second quarter profitability, Russell Greenberg, Executive Vice President and CFO of Inter Parfums, Inc., stated, “The improvement in our blended gross profit margin was attributable to both our European and U.S. operations. For European operations, gross profit margin was 67% as compared to 63% in last year’s second quarter with the increase primarily the result of increased product sales through our own distribution subsidiaries directly to retailers. In addition to increased Montblanc and Jimmy Choo brand sales to retailers through our United States distribution subsidiary, a significant portion of Rochas brand sales were to retailers through our own distribution in France and Spain. For U.S. operations, gross profit margin was 53% as compared to 47% in last year’s second quarter, due primarily to the shift in product mix favoring higher margin prestige product sales. For both European and U.S. operations, the increase in selling, general and administrative expense, both in dollars and as a percent of sales, was primarily due to higher promotional and advertising expenses, which reflects our commitment to supporting new product launches, and sustaining the sales momentum of our best sellers.”

 

He continued, “Below the operating line, the main noteworthy second quarter comparison would be the $661,000 foreign currency gain in the current period versus the $80,000 foreign currency loss in the same period one year earlier. Our effective income tax rate was 36% as compared to 34%, however, we expect our effective rate, excluding the previously reported pending settlement with the French Tax Authorities, to be approximately 35% for the full year ending December 31, 2016.”

 

Mr. Greenberg also pointed out, “Our balance sheet remains very strong. We closed the quarter with working capital of $338 million including $232 million in cash, cash equivalents and short-term investments. Our long-term debt, a five-year term loan aggregated $89.9 million at mid-year.”

 

2016 Guidance Affirmed

Mr. Greenberg concluded by saying, “We continue to expect 2016 net sales to be in the range of $500 million to $510 million. Excluding the impact of the previously reported tax settlement, we are on track to meet our net income attributable to Inter Parfums, Inc. goal of between $1.05 and $1.10 per diluted share; inclusive of the tax settlement, we expect net income attributable to Inter Parfums, Inc. to come in between $1.01 and $1.06 per diluted share.” Guidance assumes the dollar remains at current levels.

 

Dividend

The Company’s regular quarterly cash dividend of $0.15 per share will be paid on October 14, 2016 to shareholders of record on September 30, 2016.

 

Conference Call

Management will conduct a conference call to discuss financial results and business developments at 11:00 AM ET on Wednesday, August 10, 2016. 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. 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.

 

 

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, Balmain, Banana Republic, 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, 2015 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/[email protected]
[email protected]		Linda Latman (212) 836-9609/[email protected]
www.interparfumsinc.com		www.theequitygroup.com

 

 

 

 

See Accompanying Tables

 

 

CONSOLIDATED STATEMENTS OF INCOME

(In thousands except per share data)

(Unaudited)

 

		Three Months Ended June 30,								Six Months Ended June 30,
		2016				2015				2016				2015
Net sales		$	117,157			$	102,021			$	228,679			$	211,270
Cost of sales			42,729				41,696				82,933				83,335
Gross margin			74,428				60,325				145,746				127,935
Selling, general and administrative expenses			62,969				52,083				116,757				98,627
Income from operations			11,459				8,242				28,989				29,308
Other expenses (income):
Interest expense			693				613				1,666				771
(Gain) loss on foreign currency			(661	)			80				53				2,086
Interest income			(602	)			(776	)			(1,956	)			(1,972	)
			(570	)			(83	)			(237	)			885
Income before income taxes			12,029				8,325				29,226				28,423
Income taxes			4,300				2,805				12,049				9,598
Net income			7,729				5,520				17,177				18,825
Less:  Net income attributable to the noncontrolling interest			1,898				1,169				4,012				4,467
Net income attributable to Inter Parfums, Inc.		$	5,831			$	4,351			$	13,165			$	14,358
Earnings per share:
Net income attributable to Inter Parfums, Inc. common shareholders:
Basic		$	0.19			$	0.14			$	0.42			$	0.46
Diluted		$	0.19			$	0.14			$	0.42			$	0.46
Weighted average number of shares outstanding:
Basic			31,055				30,988				31,047				30,984
Diluted			31,138				31,107				31,121				31,089
Dividends declared per share		$	0.15			$	0.13			$	0.30			$	0.26

 

 

 

CONSOLIDATED BALANCE SHEETS

(In thousands except share and per share data)

(Unaudited)

 

ASSETS
		June 30, 2016				December 31, 2015
Current assets:
Cash and cash equivalents		$	115,850			$	176,967
Short-term investments			115,884				82,847
Accounts receivable, net			101,001				95,082
Inventories			124,254				98,346
Receivables, other			2,075				2,422
Other current assets			6,765				5,811
Income tax receivable			1,058				100
Deferred tax assets			8,079				7,182
Total current assets			474,966				468,757
Equipment and leasehold improvements, net			10,688				9,333
Trademarks, licenses and other intangible assets, net			202,515				201,335
Other assets			8,592				8,234
Total assets		$	696,761			$	687,659
LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt		$	22,734			$	22,163
Accounts payable – trade			60,672				50,636
Accrued expenses			42,605				46,890
Income taxes payable			6,441				7,359
Dividends payable			4,659				4,035
Total current liabilities			137,111				131,083
Long-term debt, less current portion			67,176				76,443
Deferred tax liability			3,724				3,746
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 31,058,965 and 31,037,915 shares at June 30, 2016 and December 31, 2015, respectively			31				31
Additional paid-in capital			62,818				62,030
Retained earnings			392,284				388,434
Accumulated other comprehensive loss			(42,421	)			(48,091	)
Treasury stock, at cost, 9,880,058 common shares at June 30, 2016 and December 31, 2015, respectively			(36,817	)			(36,817	)
Total Inter Parfums, Inc. shareholders’ equity			375,895				365,587
Noncontrolling interest			112,855				110,800
Total equity			488,750				476,387
Total liabilities and equity		$	696,761			$	687,659

 

 

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