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 launchedLegend Spirit line and the ongoing success of the originalLegend line. Our second largest brand, Jimmy Choo, also had a strong second quarter with brand sales up 43% to $22 million, reflecting wider distribution ofIllicit, which debuted last year, and the steady performance of Jimmy ChooMan,which launched in 2014.Rochas fragrances contributed $8.9 million to second quarter sales resulting from sales of legacy scentsin the brand’s core markets ofSpain 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 lineModern 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 ofour first new Abercrombie & Fitch men’s scent,First Instinct, and the Hollister duo,Wave,beganin late spring and weremajor 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 tothe debut of the first Coach scent for women, a signature scent aptly namedCoach, and the continued rollout of the new Abercrombie & Fitch and Hollister scents, plus the launch ofIcon 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.”
Inter Parfums, Inc. News Release August 9, 2016 | Page 2 |
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 ourEuropean 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 towww.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.
Inter Parfums, Inc. News Release August 9, 2016 | 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, 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/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 9, 2016 | Page 4 |
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 |
Inter Parfums, Inc. News Release August 9, 2016 | Page 5 |
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 |