Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2019 | Nov. 05, 2019 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2019 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2019 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 0-16469 | |
Entity Registrant Name | INTER PARFUMS INC | |
Entity Central Index Key | 0000822663 | |
Entity Tax Identification Number | 13-3275609 | |
Entity Incorporation, State or Country Code | DE | |
Entity Address, Address Line One | 551 Fifth Avenue | |
Entity Address, City or Town | New York | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 10176 | |
City Area Code | (212) | |
Local Phone Number | 983-2640 | |
Title of 12(b) Security | Common Stock, $.001 par value per share | |
Trading Symbol | IPAR | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 31,464,568 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 138,457 | $ 193,136 |
Short-term investments | 53,244 | 67,870 |
Accounts receivable, net | 173,839 | 136,420 |
Inventories | 167,114 | 160,978 |
Receivables, other | 1,669 | 2,112 |
Other current assets | 8,544 | 8,076 |
Income taxes receivable | 481 | 810 |
Total current assets | 543,348 | 569,402 |
Equipment and leasehold improvements, net | 11,235 | 9,839 |
Right-of-use assets, net | 29,509 | |
Trademarks, licenses and other intangible assets, net | 197,323 | 204,325 |
Deferred tax assets | 12,838 | 9,299 |
Other assets | 6,175 | 6,302 |
Total assets | 800,428 | 799,167 |
Current liabilities: | ||
Current portion of long-term debt | 17,449 | 23,155 |
Current portion of lease liabilities | 5,877 | |
Accounts payable – trade | 44,477 | 58,328 |
Accrued expenses | 81,179 | 92,468 |
Income taxes payable | 10,272 | 4,396 |
Dividends payable | 8,652 | 8,630 |
Total current liabilities | 167,906 | 186,977 |
Long–term debt, less current portion | 10,606 | 22,906 |
Lease liabilities, less current portion | 25,221 | |
Deferred tax liability | 3,275 | 3,538 |
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 31,464,568 and 31,382,127 shares at September 30, 2019 and December 31, 2018, respectively | 31 | 31 |
Additional paid-in capital | 68,636 | 69,970 |
Retained earnings | 476,477 | 448,731 |
Accumulated other comprehensive loss | (50,408) | (33,650) |
Treasury stock, at cost, 9,864,805 shares at September 30, 2019 and December 31, 2018 | (37,475) | (37,475) |
Total Inter Parfums, Inc. shareholders' equity | 457,261 | 447,607 |
Noncontrolling interest | 136,159 | 138,139 |
Total equity | 593,420 | 585,746 |
Total liabilities and equity | $ 800,428 | $ 799,167 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, authorized | 1,000,000 | 1,000,000 |
Preferred stock, issued | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, authorized | 100,000,000 | 100,000,000 |
Common stock, outstanding | 31,464,568 | 31,382,127 |
Treasury stock | 9,864,805 | 9,864,805 |
Consolidated Statements of Inco
Consolidated Statements of Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Statement [Abstract] | ||||
Net sales | $ 191,227 | $ 177,213 | $ 535,712 | $ 498,347 |
Cost of sales | 76,790 | 68,066 | 204,459 | 187,917 |
Gross margin | 114,437 | 109,147 | 331,253 | 310,430 |
Selling, general and administrative expenses | 77,793 | 74,169 | 238,860 | 226,286 |
Income from operations | 36,644 | 34,978 | 92,393 | 84,144 |
Other expenses (income): | ||||
Interest expense | 384 | 523 | 1,214 | 1,553 |
(Gain) loss on foreign currency | 121 | 1,109 | 818 | (185) |
Interest income | (562) | (847) | (2,886) | (3,321) |
Other expenses (income) | (57) | 785 | (854) | (1,953) |
Income before income taxes | 36,701 | 34,193 | 93,247 | 86,097 |
Income taxes | 10,043 | 9,767 | 26,012 | 25,550 |
Net income | 26,658 | 24,426 | 67,235 | 60,547 |
Less: Net income attributable to the noncontrolling interest | 5,810 | 5,488 | 15,176 | 14,801 |
Net income attributable to Inter Parfums, Inc. | $ 20,848 | $ 18,938 | $ 52,059 | $ 45,746 |
Net income attributable to Inter Parfums, Inc. common shareholders: | ||||
Basic | $ 0.66 | $ 0.60 | $ 1.66 | $ 1.46 |
Diluted | $ 0.66 | $ 0.60 | $ 1.64 | $ 1.45 |
Weighted average number of shares outstanding: | ||||
Basic | 31,452 | 31,326 | 31,444 | 31,297 |
Diluted | 31,676 | 31,587 | 31,681 | 31,502 |
Dividends declared per share | $ 0.28 | $ 0.21 | $ 0.83 | $ 0.63 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Comprehensive income: | ||||
Net income | $ 26,658 | $ 24,426 | $ 67,235 | $ 60,547 |
Other comprehensive income: | ||||
Net derivative instrument (loss), net of tax | (406) | (6) | (123) | (49) |
Transfer from OCI into earnings | (17) | (136) | 4 | |
Translation adjustments, net of tax | (20,277) | (2,964) | (23,271) | (17,287) |
Comprehensive income | 5,975 | 21,439 | 43,705 | 43,215 |
Comprehensive income (loss) attributable to the noncontrolling interests: | ||||
Net income | 5,810 | 5,488 | 15,176 | 14,801 |
Other comprehensive income (loss): | ||||
Net derivative instrument (loss), net of tax | (109) | (6) | (70) | (12) |
Translation adjustments, net of tax | (5,938) | (704) | (6,702) | (4,729) |
Comprehensive income (loss) attributable to the noncontrolling interests | (237) | 4,778 | 8,404 | 10,060 |
Comprehensive income attributable to Inter Parfums, Inc. | $ 6,212 | $ 16,661 | $ 35,301 | $ 33,155 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Equity (Unaudited) - USD ($) $ in Thousands | Common stock | Additional paid in-capital | Retained earnings | Accumulate other comprehensive loss | Treasury stock | Noncontrolling interest | Total |
Balance, beginning at Dec. 31, 2017 | $ 31 | $ 66,004 | $ 422,570 | $ (17,832) | $ (37,475) | $ 137,339 | |
Shares issued upon exercise of stock options | 2,384 | ||||||
Share based compensation | 849 | 495 | 262 | ||||
Purchase of subsidiary shares from noncontrolling interest | (572) | (236) | |||||
Net income | 45,746 | 14,801 | 60,547 | ||||
Dividends | (19,726) | (8,706) | |||||
Foreign currency translation adjustment, net of tax | (12,558) | (4,729) | (17,287) | ||||
Transfer from other comprehensive income into earnings | 4 | ||||||
Net derivative instrument (loss), net of tax | (37) | (12) | |||||
Balance, ending at Sep. 30, 2018 | 31 | 68,665 | 449,085 | (30,423) | (37,475) | 138,719 | 588,602 |
Balance, beginning at Dec. 31, 2018 | 31 | 69,970 | 448,731 | (33,650) | (37,475) | 138,139 | 585,746 |
Shares issued upon exercise of stock options | 2,781 | ||||||
Share based compensation | 1,052 | 1,637 | 190 | ||||
Purchase of subsidiary shares from noncontrolling interest | (5,167) | (920) | |||||
Net income | 52,059 | 15,176 | 67,235 | ||||
Dividends | (25,950) | (9,654) | |||||
Foreign currency translation adjustment, net of tax | (16,569) | (6,702) | (23,271) | ||||
Transfer from other comprehensive income into earnings | (136) | ||||||
Net derivative instrument (loss), net of tax | (53) | (70) | |||||
Balance, ending at Sep. 30, 2019 | $ 31 | $ 68,636 | $ 476,477 | $ (50,408) | $ (37,475) | $ 136,159 | $ 593,420 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Cash flows from operating activities: | ||
Net income | $ 67,235 | $ 60,547 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 6,329 | 8,274 |
Provision for doubtful accounts | 748 | 483 |
Lease expense | 1,046 | |
Share based compensation | 2,735 | 1,567 |
Deferred tax (benefit) | (4,183) | (1,785) |
Change in fair value of derivatives | (1,377) | (16) |
Changes in: | ||
Accounts receivable | (43,657) | (51,894) |
Inventories | (12,222) | (28,513) |
Other assets | (1,447) | 53 |
Accounts payable and accrued expenses | (15,973) | (5,154) |
Income taxes, net | 7,469 | 12,684 |
Net cash provided by (used in) operating activities | 6,703 | (3,754) |
Cash flows from investing activities: | ||
Purchases of short-term investments | (27,694) | (10,018) |
Proceeds from sale of short-term investments | 39,355 | |
Purchases of equipment and leasehold improvements | (4,727) | (2,873) |
Payment for intangible assets acquired | (5,519) | (8,259) |
Net cash provided by (used in) investing activities | 1,415 | (21,150) |
Cash flows from financing activities: | ||
Repayments of long-term debt | (16,795) | (17,881) |
Proceeds from exercise of stock options | 2,781 | 2,384 |
Purchase of subsidiary shares from noncontrolling interest | (6,087) | (808) |
Dividends paid | (25,928) | (19,707) |
Dividends paid to noncontrolling interest | (9,654) | (8,706) |
Net cash (used in) financing activities | (55,683) | (44,718) |
Effect of exchange rate changes on cash | (7,114) | (5,168) |
Net decrease in cash and cash equivalents | (54,679) | (74,790) |
Cash and cash equivalents - beginning of period | 193,136 | 208,343 |
Cash and cash equivalents - end of period | 138,457 | 133,553 |
Cash paid for: | ||
Interest | 1,391 | 1,220 |
Income taxes | $ 20,888 | $ 18,792 |
Significant Accounting Policies
Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | 1. Significant Accounting Policies The accounting policies we follow are set forth in the notes to our financial statements included in our Form 10-K, which was filed with the Securities and Exchange Commission for the year ended December 31, 2018. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Accounting Pronouncements | 2. Recent Accounting Pronouncements In August 2017, the Financial Accounting Standards Board ("FASB") issued an Accounting Standards Update ("ASU") to improve accounting for hedging activities. The objective of the ASU is to improve the financial reporting of hedging relationships in order to better portray the economic results of an entity's risk management activities in its financial statements and to make certain targeted improvements to simplify the application of hedge accounting guidance. This ASU is effective for annual and interim periods beginning after December 15, 2018 and early adoption is permitted. We have evaluated the standard and determined that there has been no material impact on our consolidated financial statements. In February 2016, the FASB issued an ASU which requires lessees to recognize lease assets and lease liabilities arising from operating leases on the balance sheet. This ASU is effective for annual and interim reporting periods beginning after December 15, 2018. The standard requires entities to recognize a lease liability to cover lease payments and a lease asset representing its right to use the underlying asset for the lease term. The Company has adopted the standard on January 1, 2019 using the modified retrospective method in the year of adoption with certain transition practical expedients with no restatement of prior period amounts. Upon adoption, the Company recognized right-of-use assets of $ 31.8 32.4 There are no other recent accounting pronouncements issued but not yet adopted that would have a material effect on our consolidated financial statements. |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2019 | |
Inventory Disclosure [Abstract] | |
Inventories | 3. Inventories Inventories consist of the following: Schedule of inventories (In thousands) September 30, December 31, Raw materials and component parts $ 67,836 $ 67,508 Finished goods 99,278 93,470 Inventories $ 167,114 $ 160,978 |
Fair Value Measurement
Fair Value Measurement | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement | 4. Fair Value Measurement Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] Significant Other Observable Inputs (Level 2) [Member] Significant Unobservable Inputs (Level 3) [Member] Fair Value, Measurements, Recurring [Member] Schedule of fair value, assets measured on recurring basis Fair Value Measurements at Quoted Prices in Significant Other Significant Total (Level 1) (Level 2) (Level 3) Assets: Short-term investments $ 53,244 $ — $ 53,244 $ — Foreign currency forward exchange contracts accounted for using hedge accounting Total Assets Liabilities: Interest rate swap $ 65 $ — $ 65 $ — Foreign currency forward exchange contracts accounted for using hedge accounting 147 — 147 Foreign currency forward exchange contracts not accounted for using hedge accounting 1,183 — 1,183 — Total Liabilities $ 1,395 $ — $ 1,395 $ — Fair Value Measurements at Quoted Prices in Significant Other Significant Total (Level 1) (Level 2) (Level 3) Assets: Short-term investments $ 67,870 $ — $ 67,870 $ — Foreign currency forward exchange contracts accounted for using hedge accounting 179 — 179 — Total Assets $ 68,049 $ — $ 68,049 $ — Liabilities: Foreign currency forward exchange contracts not accounted for using hedge accounting $ 45 $ — $ 45 $ — Interest rate swap 207 — 207 — Total Liabilities $ 252 $ — $ 252 $ — The carrying amount of cash and cash equivalents including money market funds, accounts receivable, other receivables, and accounts payable and accrued expenses approximates fair value due to the short terms to maturity of these instruments. The carrying amount of loans payable approximates fair value as the interest rates on the Company's indebtedness approximate current market rates. The fair value of the Company's long-term debt was estimated based on the current rates offered to companies for debt with the same remaining maturities and is approximately equal to its carrying value. Foreign currency forward exchange contracts are valued based on quotations from financial institutions and the value of interest rate swaps are the discounted net present value of the swaps using third party quotes obtained from financial institutions. |
Derivative Financial Instrument
Derivative Financial Instruments | 9 Months Ended |
Sep. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | 5. Derivative Financial Instruments The Company enters into foreign currency forward exchange contracts to hedge exposure related to receivables denominated in a foreign currency and occasionally to manage risks related to future sales expected to be denominated in a foreign currency. Before entering into a derivative transaction for hedging purposes, it is determined that a high degree of initial effectiveness exists between the change in value of the hedged item and the change in the value of the derivative instrument from movement in exchange rates. High effectiveness means that the change in the cash flows of the derivative instrument will effectively offset the change in the cash flows of the hedged item. The effectiveness of each hedged item is measured throughout the hedged period and is based on the dollar offset methodology and excludes the portion of the fair value of the foreign currency forward exchange contract attributable to the change in spot-forward difference which is reported in current period earnings. Any hedge ineffectiveness is also recognized as a gain or loss on foreign currency in the income statement. For hedge contracts that are no longer deemed highly effective, hedge accounting is discontinued and gains and losses accumulated in other comprehensive income are reclassified to earnings. If it is probable that the forecasted transaction will no longer occur, then any gains or losses accumulated in other comprehensive income are reclassified to current period earnings. Gains and losses in derivatives designated as hedges are accumulated in other comprehensive income (loss) and gains and losses in derivatives not designated as hedges are included in (gain) loss on foreign currency on the accompanying income statements. Such gains and losses were immaterial for both nine month periods ended September 30, 2019 and 2018. For the nine months ended September 30, 2019 and 2018, interest expense was reduced by a gain of $ 0.1 0.3 All derivative instruments are reported as either assets or liabilities on the balance sheet measured at fair value. The valuation of interest rate swaps resulted in a liability which is included in long-term debt on the accompanying balance sheets. The valuation of foreign currency forward exchange contracts at September 30, 2019, resulted in a liability and is included in accrued expenses assets on the accompanying balance sheet. At September 30, 2019, we had foreign currency contracts in the form of forward exchange contracts in the amount of approximately U.S. $ 39.5 million, GB £ 7.3 million and JPY ¥ 140.0 million which all have maturities of less than one year. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Leases | 6. Leases The Company leases its offices and warehouses, vehicles, and certain office equipment, substantially all of which are classified as operating leases. The Company currently has no material financing leases. The Company determines if an arrangement is a lease at inception. Operating lease assets and obligations are recognized at the lease commencement date based on the present value of lease payments over the lease term. In determining lease asset value, the Company considers fixed or variable payment terms, prepayments, incentives, and options to extend or terminate, depending on the lease. Renewal, termination or purchase options affect the lease term used for determining lease asset value only if the option is reasonably certain to be exercised. The Company generally uses its incremental borrowing rate based on information available at the lease commencement date for the location in which the lease is held in determining the present value of lease payments. As of September 30, 2019, the weighted average remaining lease term was 6.6 2.9 1.7 4.9 4.5 $ 33.9 Maturities of lease liabilities subsequent to September 30, 2019 are as follows: (In thousands) Schedule of maturities of lease liabilities 2019 $ 1,656 2020 5,747 2021 5,055 2022 4,530 2023 3,903 Thereafter 13,463 34,354 Less imputed interest (based on 2.7%weighted-average discount rate) (3,256 ) $ 31,098 |
Share Based Payments
Share Based Payments | 9 Months Ended |
Sep. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Share Based Payments | 7. Share Based Payments The Company maintains stock option programs for key employees, executives and directors. The plans, all of which have been approved by shareholder vote, provide for the granting of both nonqualified and incentive options. Options granted under the plans typically have a six four five 0.07 0.05 The following table sets forth information with respect to nonvested options for the nine month period ended September 30, 2019: Schedule of nonvested share activity Number of Shares Weighted Average Grant Date Fair Value Nonvested options – beginning of period 485,360 $ 10.72 Nonvested options granted 6,000 $ 14.83 Nonvested options vested or forfeited (29,740 ) $ 9.68 Nonvested options – end of period 461,620 $ 10.84 Share based payment expense decreased income before income taxes by $ 0.8 2.7 0.5 1.6 0.5 1.7 0.3 1.0 The following table summarizes stock option information as of September 30, 2019: Schedule of stock options, activity Shares Weighted Average Exercise Price Outstanding at January 1, 2019 776,171 $ 41.33 Options granted 6,000 66.46 Options forfeited (21,450 ) 44.79 Options exercised (82,441 ) 33.74 Outstanding at September 30, 2019 678,280 $ 42.37 Options exercisable 216,660 $ 30.99 Options available for future grants 752,255 As of September 30, 2019, the weighted average remaining contractual life of options outstanding is 3.41 years 1.93 years 18.7 8.4 3.9 Cash proceeds, tax benefits and intrinsic value related to stock options exercised during the nine months ended September 30, 2019 and 2018 were as follows: Schedule of cash proceeds received from share-based payment awards (In thousands) September 30, September 30, Cash proceeds from stock options exercised $ 2,781 $ 2,384 Tax benefits 400 417 Intrinsic value of stock options exercised 2,752 2,307 The weighted average fair values of the options granted by Inter Parfums, Inc. during the nine months ended September 30, 2019 and 2018 were $14.83 $10.73 The assumptions used in the Black-Scholes pricing model for the periods ended September 30, 2019 and 2018 are set forth in the following table: Schedule of valuation assumptions in Black-Scholes pricing September 30, September 30, Weighted average expected stock-price volatility 27 % 28 % Weighted average expected option life 5 5 Weighted average risk-free interest rate 2.5 % 2.5 % Weighted average dividend yield 2.0 % 2.0 % Expected volatility is estimated based on historic volatility of the Company's common stock. The expected term of the option is estimated based on historic data. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of the grant of the option and the dividend yield reflects the assumption that the dividend payout as authorized by the Board of Directors would increase as the earnings of the Company and its stock price increases. In September 2016, Interparfums SA, our 73% owned French subsidiary, approved a plan to grant an aggregate of 15,100 shares of its stock to employees with no performance condition requirement, and an aggregate of 133,000 shares to officers and managers, subject to certain corporate performance conditions. The corporate performance conditions were met and therefore in September 2019, 172,851 3.9 In December 2018, Interparfums SA approved an additional plan to grant an aggregate of 26,600 133,000 Interparfums SA Subsidiary [Member] The fair value of the grant has been determined based on the quoted stock price of Interparfums SA shares as reported by the NYSE Euronext on the date of grant. The estimated number of shares to be distributed of 142,379 4.4 Similar to the September 2016 plan, in order to avoid dilution of the Company's ownership of Interparfums SA, all shares distributed or to be distributed pursuant to these plans will be pre-existing shares of Interparfums SA, purchased in the open market by Interparfums SA. During the nine months ended September 30, 2019, the Company acquired 131,613 5.8 All share purchases and issuances have been classified as equity transactions on the accompanying balance sheet. |
Net Income Attributable to Inte
Net Income Attributable to Inter Parfums, Inc. Common Shareholders | 9 Months Ended |
Sep. 30, 2019 | |
Net Income Attributable To Inter Parfums Inc. Common Shareholders [Abstract] | |
Net Income Attributable to Inter Parfums, Inc. Common Shareholders | 8. Net Income Attributable to Inter Parfums, Inc. Common Shareholders Net income attributable to Inter Parfums, Inc. per common share ("basic EPS") is computed by dividing net income attributable to Inter Parfums, Inc. by the weighted average number of shares outstanding. Net income attributable to Inter Parfums, Inc. per share assuming dilution ("diluted EPS"), is computed using the weighted average number of shares outstanding, plus the incremental shares outstanding assuming the exercise of dilutive stock options using the treasury stock method. The reconciliation between the numerators and denominators of the basic and diluted EPS computations is as follows: Schedule of earnings per share, basic and diluted Three months ended Nine months ended September 30, September 30, (In thousands) 2019 2018 2019 2018 Numerator: Net income attributable to Inter Parfums, Inc. $ 20,848 $ 18,938 $ 52,059 $ 45,746 Denominator: Weighted average shares 31,452 31,326 31,444 31,297 Effect of dilutive securities: Stock options 224 261 237 205 Denominator for diluted earnings per share 31,676 31,587 31,681 31,502 Earnings per share: Net income attributable to Inter Parfums, Inc. common shareholders: Basic $ 0.66 $ 0.60 $ 1.66 $ 1.46 Diluted 0.66 0.60 1.64 1.45 Not included in the above computations are the effect of antidilutive potential common shares which consist of outstanding options to purchase 0.18 million shares of common stock for both the three and nine months ended September 30, 2019, as compared to .12 |
Segment and Geographic Areas
Segment and Geographic Areas | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Segment and Geographic Areas | 9. Segment and Geographic Areas The Company manufactures and distributes one product line, fragrances and fragrance related products. The Company manages its business in two segments, European based operations and United States based operations. The European assets are located, and operations are primarily conducted, in France. Both European operations and United States operations primarily represent the sale of prestige brand name fragrances. Information on our operations by geographical areas is as follows: United States [Member] Europe [Member] Eliminations [Member] Schedule of information on operations by geographical areas Three months ended Nine months ended (In thousands) 2019 2018 2019 2018 Net sales: United States $ 48,331 $ 40,189 $ 124,677 $ 97,841 Europe 143,637 137,800 413,063 402,952 Eliminations (741 ) (776 ) (2,028 ) (2,446 ) $ 191,227 $ 177,213 $ 535,712 $ 498,347 Net income attributable to Inter Parfums, Inc.: United States $ 5,802 $ 4,686 $ 12,475 $ 7,164 Europe 15,046 14,252 39,594 38,582 $ 20,848 $ 18,938 $ 52,059 $ 45,746 September 30, December 31, 2019 2018 Total Assets: United States $ 165,861 $ 133,406 Europe 649,664 686,123 Eliminations of investment in subsidiary (15,097 ) (20,362 ) $ 800,428 $ 799,167 |
Recent Agreements
Recent Agreements | 9 Months Ended |
Sep. 30, 2019 | |
Recent Agreements | |
Recent Agreements | 10. Recent Agreements Oscar de la Renta: In September 2019, the Company and Oscar de la Renta entered into an amended license agreement extending their partnership through December 31, 2031, and added an additional five-year extension option through December 31, 2036. The original license agreement, signed in October 2013, would have expired on December 31, 2025. Kate Spade New York: In June 2019, the Company entered into an exclusive, 11-year worldwide license agreement with Kate Spade New York for the creation, development and distribution of fragrances under the Kate Spade brand. This license takes effect on January 1, 2020, and our rights under such license are subject to certain minimum advertising expenditures and royalty payments as are customary in our industry. |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Inventory Disclosure [Abstract] | |
Schedule of inventories | Schedule of inventories (In thousands) September 30, December 31, Raw materials and component parts $ 67,836 $ 67,508 Finished goods 99,278 93,470 Inventories $ 167,114 $ 160,978 |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair value, assets measured on recurring basis | Schedule of fair value, assets measured on recurring basis Fair Value Measurements at Quoted Prices in Significant Other Significant Total (Level 1) (Level 2) (Level 3) Assets: Short-term investments $ 53,244 $ — $ 53,244 $ — Foreign currency forward exchange contracts accounted for using hedge accounting Total Assets Liabilities: Interest rate swap $ 65 $ — $ 65 $ — Foreign currency forward exchange contracts accounted for using hedge accounting 147 — 147 Foreign currency forward exchange contracts not accounted for using hedge accounting 1,183 — 1,183 — Total Liabilities $ 1,395 $ — $ 1,395 $ — Fair Value Measurements at Quoted Prices in Significant Other Significant Total (Level 1) (Level 2) (Level 3) Assets: Short-term investments $ 67,870 $ — $ 67,870 $ — Foreign currency forward exchange contracts accounted for using hedge accounting 179 — 179 — Total Assets $ 68,049 $ — $ 68,049 $ — Liabilities: Foreign currency forward exchange contracts not accounted for using hedge accounting $ 45 $ — $ 45 $ — Interest rate swap 207 — 207 — Total Liabilities $ 252 $ — $ 252 $ — |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Schedule of maturities of lease liabilities | Schedule of maturities of lease liabilities 2019 $ 1,656 2020 5,747 2021 5,055 2022 4,530 2023 3,903 Thereafter 13,463 34,354 Less imputed interest (based on 2.7%weighted-average discount rate) (3,256 ) $ 31,098 |
Share Based Payments (Tables)
Share Based Payments (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of nonvested share activity | Schedule of nonvested share activity Number of Shares Weighted Average Grant Date Fair Value Nonvested options – beginning of period 485,360 $ 10.72 Nonvested options granted 6,000 $ 14.83 Nonvested options vested or forfeited (29,740 ) $ 9.68 Nonvested options – end of period 461,620 $ 10.84 |
Schedule of stock options, activity | Schedule of stock options, activity Shares Weighted Average Exercise Price Outstanding at January 1, 2019 776,171 $ 41.33 Options granted 6,000 66.46 Options forfeited (21,450 ) 44.79 Options exercised (82,441 ) 33.74 Outstanding at September 30, 2019 678,280 $ 42.37 Options exercisable 216,660 $ 30.99 Options available for future grants 752,255 |
Schedule of cash proceeds received from share-based payment awards | Schedule of cash proceeds received from share-based payment awards (In thousands) September 30, September 30, Cash proceeds from stock options exercised $ 2,781 $ 2,384 Tax benefits 400 417 Intrinsic value of stock options exercised 2,752 2,307 |
Schedule of valuation assumptions in Black-Scholes pricing | Schedule of valuation assumptions in Black-Scholes pricing September 30, September 30, Weighted average expected stock-price volatility 27 % 28 % Weighted average expected option life 5 5 Weighted average risk-free interest rate 2.5 % 2.5 % Weighted average dividend yield 2.0 % 2.0 % |
Net Income Attributable to In_2
Net Income Attributable to Inter Parfums, Inc. Common Shareholders (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Net Income Attributable To Inter Parfums Inc. Common Shareholders [Abstract] | |
Net Income Attributable to Inter Parfums, Inc. Common Shareholders | Schedule of earnings per share, basic and diluted Three months ended Nine months ended September 30, September 30, (In thousands) 2019 2018 2019 2018 Numerator: Net income attributable to Inter Parfums, Inc. $ 20,848 $ 18,938 $ 52,059 $ 45,746 Denominator: Weighted average shares 31,452 31,326 31,444 31,297 Effect of dilutive securities: Stock options 224 261 237 205 Denominator for diluted earnings per share 31,676 31,587 31,681 31,502 Earnings per share: Net income attributable to Inter Parfums, Inc. common shareholders: Basic $ 0.66 $ 0.60 $ 1.66 $ 1.46 Diluted 0.66 0.60 1.64 1.45 |
Segment and Geographic Areas (T
Segment and Geographic Areas (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Schedule of information on operations by geographical areas | Schedule of information on operations by geographical areas Three months ended Nine months ended (In thousands) 2019 2018 2019 2018 Net sales: United States $ 48,331 $ 40,189 $ 124,677 $ 97,841 Europe 143,637 137,800 413,063 402,952 Eliminations (741 ) (776 ) (2,028 ) (2,446 ) $ 191,227 $ 177,213 $ 535,712 $ 498,347 Net income attributable to Inter Parfums, Inc.: United States $ 5,802 $ 4,686 $ 12,475 $ 7,164 Europe 15,046 14,252 39,594 38,582 $ 20,848 $ 18,938 $ 52,059 $ 45,746 September 30, December 31, 2019 2018 Total Assets: United States $ 165,861 $ 133,406 Europe 649,664 686,123 Eliminations of investment in subsidiary (15,097 ) (20,362 ) $ 800,428 $ 799,167 |
Recent Accounting Pronounceme_2
Recent Accounting Pronouncements (Details Narrative) $ in Thousands | Sep. 30, 2019USD ($) |
Accounting Changes and Error Corrections [Abstract] | |
Right-of-use assets | $ 31,800 |
Lease liabilities | $ 32,400 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Inventory Disclosure [Abstract] | ||
Raw materials and component parts | $ 67,836 | $ 67,508 |
Finished goods | 99,278 | 93,470 |
Inventories | $ 167,114 | $ 160,978 |
Fair Value Measurement (Details
Fair Value Measurement (Details) - Fair Value, Measurements, Recurring [Member] - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Assets: | ||
Short-term investments | $ 53,244 | $ 67,870 |
Foreign currency forward exchange contracts accounted for using hedge accounting | 179 | |
Total Assets | 68,049 | |
Liabilities: | ||
Interest rate swap | 65 | 207 |
Foreign currency forward exchange contracts accounted for using hedge accounting | 147 | |
Foreign currency forward exchange contracts not accounted for using hedge accounting | 1,183 | 45 |
Total Liabilities | 1,395 | 252 |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||
Assets: | ||
Short-term investments | ||
Foreign currency forward exchange contracts accounted for using hedge accounting | ||
Total Assets | ||
Liabilities: | ||
Interest rate swap | ||
Foreign currency forward exchange contracts accounted for using hedge accounting | ||
Foreign currency forward exchange contracts not accounted for using hedge accounting | ||
Total Liabilities | ||
Significant Other Observable Inputs (Level 2) [Member] | ||
Assets: | ||
Short-term investments | 53,244 | 67,870 |
Foreign currency forward exchange contracts accounted for using hedge accounting | 179 | |
Total Assets | 68,049 | |
Liabilities: | ||
Interest rate swap | 65 | 207 |
Foreign currency forward exchange contracts accounted for using hedge accounting | 147 | |
Foreign currency forward exchange contracts not accounted for using hedge accounting | 1,183 | 45 |
Total Liabilities | 1,395 | 252 |
Significant Unobservable Inputs (Level 3) [Member] | ||
Assets: | ||
Short-term investments | ||
Foreign currency forward exchange contracts accounted for using hedge accounting | ||
Total Assets | ||
Liabilities: | ||
Interest rate swap | ||
Foreign currency forward exchange contracts not accounted for using hedge accounting | ||
Total Liabilities |
Derivative Financial Instrume_2
Derivative Financial Instruments (Details Narrative) ¥ in Thousands, £ in Thousands, $ in Thousands | 9 Months Ended | |||
Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2019GBP (£) | Sep. 30, 2019JPY (¥) | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Derivative, gain (loss) on derivative, net, total | $ 100 | $ 300 | ||
Foreign Exchange Contract [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Foreign Currency Contracts, Liability, Fair Value Disclosure | $ 39,500 | |||
Foreign Exchange Contract [Member] | G B P [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Foreign Currency Contracts, Liability, Fair Value Disclosure | £ | £ 7,300 | |||
Foreign Exchange Contract [Member] | J P Y [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Foreign Currency Contracts, Liability, Fair Value Disclosure | ¥ | ¥ 140,000 |
Leases (Details)
Leases (Details) $ in Thousands | Sep. 30, 2019USD ($) |
Leases [Abstract] | |
2019 | $ 1,656 |
2020 | 5,747 |
2021 | 5,055 |
2022 | 4,530 |
2022 | 3,903 |
Thereafter | 13,463 |
Gross total | 34,354 |
Less imputed interest (based on 2.7 % weighted-average discount rate) | (3,256) |
Net Total | $ 31,098 |
Leases (Details Narrative)
Leases (Details Narrative) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019USD ($) | Sep. 30, 2019USD ($) | |
Leases [Abstract] | ||
Weighted average remaining lease term | 6 years 7 months 6 days | 6 years 7 months 6 days |
Operating lease, weighted average discount rate | 2.90% | 2.90% |
Operating lease of related expenses | $ 1,700 | $ 4,900 |
Operating lease payments | 4,500 | |
Noncash additions to operating lease assets | $ 33,900 | $ 33,900 |
Share Based Payments (Details)
Share Based Payments (Details) - $ / shares | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Share-based Payment Arrangement [Abstract] | ||
Number of Shares, Nonvested options - beginning of period | 485,360 | |
Weighted Average Grant Date Fair Value, Nonvested options - beginning of period | $ 10.72 | |
Number of Shares, Nonvested options granted | 6,000 | |
Weighted Average Grant Date Fair Value, Nonvested options granted | $ 14.83 | $ 10.73 |
Number of Shares, Nonvested options vested or forfeited | (29,740) | |
Weighted Average Grant Date Fair Value, Nonvested options vested or forfeited | $ 9.68 | |
Number of Shares, Nonvested options - end of period | 461,620 | |
Weighted Average Grant Date Fair Value, Nonvested options - end of period | $ 10.84 |
Share Based Payments (Details 1
Share Based Payments (Details 1) | 9 Months Ended |
Sep. 30, 2019$ / sharesshares | |
Share-based Payment Arrangement [Abstract] | |
Shares, Outstanding at beginning | 776,171 |
Weighted Average Exercise Price, Outstanding at beginning | $ / shares | $ 41.33 |
Shares, Options granted | 6,000 |
Weighted Average Exercise Price, Options granted | $ / shares | $ 66.46 |
Shares, Options forfeited | (21,450) |
Weighted Average Exercise Price, Options forfeited | $ / shares | $ 44.79 |
Shares, Options exercised | (82,441) |
Weighted Average Exercise Price, Options exercised | $ / shares | $ 33.74 |
Shares, Outstanding at ending | 678,280 |
Weighted Average Exercise Price, Outstanding at ending | $ / shares | $ 42.37 |
Shares, Options exercisable | 216,660 |
Weighted Average Exercise Price, Options exercisable | $ / shares | $ 30.99 |
Shares, Options available for future grants | 752,255 |
Share Based Payments (Details 2
Share Based Payments (Details 2) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Share-based Payment Arrangement [Abstract] | ||
Cash proceeds from stock options exercised | $ 2,781 | $ 2,384 |
Tax benefits | 400 | 417 |
Intrinsic value of stock options exercised | $ 2,752 | $ 2,307 |
Share Based Payments (Details 3
Share Based Payments (Details 3) | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Share-based Payment Arrangement [Abstract] | ||
Weighted average expected stock-price volatility | 27.00% | 28.00% |
Weighted average expected option life | 5 years | 5 years |
Weighted average risk-free interest rate | 2.50% | 2.50% |
Weighted average dividend yield | 2.00% | 2.00% |
Share Based Payments (Details N
Share Based Payments (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Dec. 31, 2018 | Sep. 30, 2016 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Expiration period | 6 years | |||||
Allocated share-based compensation expense | $ 800 | $ 500 | $ 2,700 | $ 1,600 | ||
Allocated share-based compensation expense, effect on net income attributable to parent | 500 | $ 300 | $ 1,700 | $ 1,000 | ||
Weighted average remaining contractual life of options exercisable | 3 years 4 months 28 days | |||||
Weighted average remaining contractual life of options exercisable | 1 year 11 months 4 days | |||||
Aggregate intrinsic value of options outstanding | 18,700 | $ 18,700 | ||||
Aggregate intrinsic value of options exercisable | 8,400 | 8,400 | ||||
Unrecognized compensation cost related to stock options | $ 3,900 | $ 3,900 | ||||
Weighted average grant date fair value | $ 14.83 | $ 10.73 | ||||
Compensation cost | $ 3,900 | |||||
Shares acquired | 131,613 | |||||
Aggregate cost of shares acquired | $ 5,800 | |||||
Interparfums SA Subsidiary [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Ownership percentage | 73.00% | |||||
Aggregate number of shares plan for grant | 26,600 | |||||
Number of shares authorized | 142,379 | 172,851 | ||||
Compensation cost | $ 4,400 | |||||
Interparfums SA Subsidiary [Member] | Employees [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Aggregate number of shares plan for grant | 15,100 | |||||
Interparfums SA Subsidiary [Member] | Officers And Managers [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Aggregate shares plan for grant to officers and managers | 133,000 | 133,000 | ||||
Equity Option [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Fair value of shares vested | $ 70 | $ 50 | ||||
Equity Option [Member] | Minimum [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting period | 4 years | |||||
Equity Option [Member] | Maximum [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting period | 5 years |
Net Income Attributable to In_3
Net Income Attributable to Inter Parfums, Inc. Common Shareholders (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Numerator: | ||||
Net income attributable to Inter Parfums, Inc. | $ 20,848 | $ 18,938 | $ 52,059 | $ 45,746 |
Denominator: | ||||
Weighted average shares | 31,452 | 31,326 | 31,444 | 31,297 |
Effect of dilutive securities: | ||||
Stock options | 224 | 261 | 237 | 205 |
Denominator for diluted earnings per share | 31,676 | 31,587 | 31,681 | 31,502 |
Net income attributable to Inter Parfums, Inc. common shareholders: | ||||
Basic | $ 0.66 | $ 0.60 | $ 1.66 | $ 1.46 |
Diluted | $ 0.66 | $ 0.60 | $ 1.64 | $ 1.45 |
Net Income Attributable to In_4
Net Income Attributable to Inter Parfums, Inc. Common Shareholders (Details Narrative) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Net Income Attributable To Inter Parfums Inc. Common Shareholders [Abstract] | ||||
Antidilutive securities excluded from computation of earnings per share, amount | 180 | 120 | 180 | 120 |
Segment and Geographic Areas (D
Segment and Geographic Areas (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Net sales | $ 191,227 | $ 177,213 | $ 535,712 | $ 498,347 | |
Net income attributable to Inter Parfums, Inc.: | 20,848 | 18,938 | 52,059 | 45,746 | |
Total Assets: | 800,428 | 800,428 | $ 799,167 | ||
United States [Member] | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Net sales | 48,331 | 40,189 | 124,677 | 97,841 | |
Net income attributable to Inter Parfums, Inc.: | 5,802 | 4,686 | 12,475 | 7,164 | |
Total Assets: | 165,861 | 165,861 | 133,406 | ||
Europe [Member] | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Net sales | 143,637 | 137,800 | 413,063 | 402,952 | |
Net income attributable to Inter Parfums, Inc.: | 15,046 | 14,252 | 39,594 | 38,582 | |
Total Assets: | 649,664 | 649,664 | 686,123 | ||
Eliminations [Member] | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Net sales | (741) | $ (776) | (2,028) | $ (2,446) | |
Total Assets: | $ (15,097) | $ (15,097) | $ (20,362) |