Net Income Increases
15.7% on 10.2% Increase in Net Sales
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.”
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.
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.
See Accompanying Tables
CONSOLIDATED STATEMENTS OF
INCOME
(In thousands except per share data)
(Unaudited)
Three Months EndedJune 30,
Six Months EndedJune 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
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;
authorized1,000,000 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 atJune 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
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170807005782/en/
Inter Parfums, Inc.Russell Greenberg, Exec. VP & CFO(212)
983-2640rgreenberg@interparfumsinc.comwww.interparfumsinc.com-or-Investor
Relations CounselThe Equity Group Inc.Fred Buonocore, (212)
836-9607 / fbuonocore@equityny.comLinda Latman, (212) 836-9609 /
llatman@equityny.comwww.theequitygroup.com
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