Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2023 | Nov. 07, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2023 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2023 | |
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, $.001 par value per share | |
Trading Symbol | IPAR | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 31,980,805 |
CONSOLIDATED BALANCE SHEETS (Un
CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 79,764 | $ 104,713 |
Short-term investments | 103,745 | 150,833 |
Accounts receivable, net | 288,085 | 197,584 |
Inventories | 364,270 | 289,984 |
Receivables, other | 13,645 | 28,803 |
Other current assets | 26,847 | 15,650 |
Income taxes receivable | 498 | 157 |
Total current assets | 876,854 | 787,724 |
Property, equipment and leasehold improvements, net | 163,002 | 166,722 |
Right-of-use assets, net | 29,359 | 27,964 |
Trademarks, licenses and other intangible assets, net | 286,697 | 290,853 |
Deferred tax assets | 16,063 | 11,159 |
Other assets | 22,422 | 24,120 |
Total assets | 1,394,397 | 1,308,542 |
Current liabilities: | ||
Loans payable - banks | 4,501 | |
Current portion of long-term debt | 41,768 | 28,547 |
Current portion of lease liabilities | 5,687 | 5,296 |
Accounts payable – trade | 87,161 | 88,388 |
Accrued expenses | 200,065 | 213,621 |
Income taxes payable | 23,913 | 8,715 |
Total current liabilities | 363,095 | 344,567 |
Long–term debt, less current portion | 128,983 | 151,494 |
Lease liabilities, less current portion | 25,452 | 24,335 |
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 31,980,805 and 31,967,300 shares at September 30, 2023 and December 31, 2022, respectively | 32 | 32 |
Additional paid-in capital | 95,752 | 90,186 |
Retained earnings | 703,091 | 620,095 |
Accumulated other comprehensive loss | (59,802) | (56,056) |
Treasury stock, at cost, 9,949,865 and 9,864,805 shares at September 30, 2023 and December 31, 2022, respectively | (48,764) | (37,475) |
Total Inter Parfums, Inc. shareholders’ equity | 690,309 | 616,782 |
Noncontrolling interest | 186,558 | 171,364 |
Total equity | 876,867 | 788,146 |
Total liabilities and equity | $ 1,394,397 | $ 1,308,542 |
CONSOLIDATED BALANCE SHEETS (_2
CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Sep. 30, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares, outstanding | 31,980,805 | 31,967,300 |
Treasury stock, shares | 9,949,865 | 9,864,805 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Income Statement [Abstract] | ||||
Net sales | $ 367,969 | $ 280,462 | $ 988,936 | $ 775,865 |
Cost of sales | 132,962 | 98,562 | 362,568 | 281,525 |
Gross margin | 235,007 | 181,900 | 626,368 | 494,340 |
Selling, general and administrative expenses | 147,805 | 117,424 | 393,866 | 323,249 |
Income from operations | 87,202 | 64,476 | 232,502 | 171,091 |
Other expenses (income): | ||||
Interest expense | 2,397 | 682 | 7,030 | 2,589 |
(Gain) loss on foreign currency | (669) | 273 | (656) | (2,245) |
Interest and investment income | (1,062) | (3,343) | (8,421) | (2,341) |
Other (income) expense | (77) | 346 | (125) | (98) |
Nonoperating expense (income) | 589 | (2,042) | (2,172) | (2,095) |
Income before income taxes | 86,613 | 66,518 | 234,674 | 173,186 |
Income taxes | 20,493 | 13,221 | 55,128 | 39,078 |
Net income | 66,120 | 53,297 | 179,546 | 134,108 |
Less: Net income attributable to the noncontrolling interest | 12,906 | 11,874 | 37,312 | 29,769 |
Net income attributable to Inter Parfums, Inc. | $ 53,214 | $ 41,423 | $ 142,234 | $ 104,339 |
Net income attributable to Inter Parfums, Inc. common shareholders: | ||||
Basic | $ 1.66 | $ 1.30 | $ 4.44 | $ 3.28 |
Diluted | $ 1.66 | $ 1.30 | $ 4.42 | $ 3.26 |
Weighted average number of shares outstanding: | ||||
Basic | 31,976 | 31,860 | 32,000 | 31,848 |
Diluted | 32,124 | 31,968 | 32,149 | 31,977 |
Dividends declared per share | $ 0.625 | $ 0.50 | $ 1.875 | $ 1.50 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Comprehensive income: | ||||
Net income | $ 66,120 | $ 53,297 | $ 179,546 | $ 134,108 |
Other comprehensive income: | ||||
Net derivative instrument (loss) gain, net of tax | (363) | 1,315 | (4,606) | (173) |
Transfer from OCI into earnings | 1,709 | 992 | ||
Translation adjustments, net of tax | (15,692) | (32,944) | (2,657) | (79,015) |
Comprehensive income | 50,065 | 21,668 | 173,992 | 55,912 |
Comprehensive income attributable to the noncontrolling interests: | ||||
Net income | 12,906 | 11,874 | 37,312 | 29,769 |
Net derivative instrument (loss) gain, net of tax | (100) | 362 | (327) | (49) |
Translation adjustments, net of tax | (4,892) | (10,012) | (1,481) | (24,174) |
Comprehensive income attributable to the noncontrolling interests | 7,914 | 2,224 | 35,504 | 5,546 |
Comprehensive income attributable to Inter Parfums, Inc. | $ 42,151 | $ 19,444 | $ 138,488 | $ 50,366 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Unaudited) - USD ($) $ in Thousands | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | AOCI Attributable to Parent [Member] | Treasury Stock, Common [Member] | Noncontrolling Interest [Member] | Total |
Beginning Balance at Dec. 31, 2021 | $ 32 | $ 87,132 | $ 560,663 | $ (38,432) | $ (37,475) | $ 166,412 | $ 596,040 |
Net income | 104,339 | 29,769 | 134,108 | ||||
Shares issued upon exercise of stock options | 1,816 | ||||||
Dividends | (47,782) | (16,056) | |||||
Foreign currency translation adjustment, net of tax | (54,841) | (24,174) | |||||
Share-based compensation | 1,017 | 1,664 | (353) | ||||
Purchase of subsidiary shares | (4,305) | (152) | |||||
Transfer from other comprehensive income into earnings | 992 | ||||||
Net derivative instrument gain (loss), net of tax | (124) | (49) | 173 | ||||
Shares repurchased | |||||||
Purchase of subsidiary shares | 55 | ||||||
Ending Balance at Sep. 30, 2022 | 32 | 85,660 | 618,884 | (92,405) | (37,475) | 155,452 | 730,148 |
Beginning Balance at Dec. 31, 2022 | 32 | 90,186 | 620,095 | (56,056) | (37,475) | 171,364 | 788,146 |
Net income | 142,234 | 37,312 | 179,546 | ||||
Shares issued upon exercise of stock options | 5,523 | ||||||
Dividends | (60,058) | (20,301) | |||||
Foreign currency translation adjustment, net of tax | (1,176) | (1,481) | |||||
Share-based compensation | 935 | 820 | 133 | ||||
Purchase of subsidiary shares | (892) | (142) | |||||
Transfer from other comprehensive income into earnings | 1,709 | ||||||
Net derivative instrument gain (loss), net of tax | (4,279) | (327) | 4,606 | ||||
Shares repurchased | (11,289) | ||||||
Purchase of subsidiary shares | |||||||
Ending Balance at Sep. 30, 2023 | $ 32 | $ 95,752 | $ 703,091 | $ (59,802) | $ (48,764) | $ 697,321 | $ 876,867 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Cash flows from operating activities: | ||
Net income | $ 179,546 | $ 134,108 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 12,781 | 10,936 |
Provision for doubtful accounts | (560) | 2,004 |
Noncash stock compensation | 1,887 | 2,353 |
Share of income of equity investment | (125) | (98) |
Noncash lease expense | 4,163 | 4,074 |
Deferred tax benefit | (5,075) | (3,658) |
Change in fair value of derivatives | 740 | 1,348 |
Changes in: | ||
Accounts receivable | (96,076) | (89,605) |
Inventories | (76,786) | (109,377) |
Other assets | 3,077 | 2,615 |
Operating lease liabilities | (4,044) | (3,887) |
Accounts payable and accrued expenses | (10,919) | 26,406 |
Income taxes, net | 15,669 | 14,606 |
Net cash provided by (used in) operating activities | 24,278 | (8,175) |
Cash flows from investing activities: | ||
Purchases of short-term investments | (145,427) | (2,862) |
Proceeds from sale of short-term investments | 192,568 | 5,346 |
Purchases of property, equipment and leasehold improvements | (4,574) | (32,615) |
Payment for intangible assets acquired | (2,063) | (3,757) |
Net cash provided by (used in) investing activities | 40,504 | (33,888) |
Cash flows from financing activities: | ||
Proceeds from loans payable, bank | 4,501 | |
Proceeds from issuance of long-term debt | 13,680 | |
Repayment of long-term debt | (22,527) | (14,210) |
Proceeds from exercise of options | 5,523 | 1,816 |
Purchase of subsidiary shares from noncontrolling interest | (4,402) | |
Dividends paid | (60,058) | (47,782) |
Dividends paid to noncontrolling interest | (20,301) | (16,056) |
Purchase of treasury stock | (11,289) | |
Net cash used in financing activities | (90,471) | (80,634) |
Effect of exchange rate changes on cash | 740 | (4,413) |
Net decrease in cash and cash equivalents | (24,949) | (127,110) |
Cash and cash equivalents - beginning of period | 104,713 | 168,387 |
Cash and cash equivalents - end of period | 79,764 | 41,227 |
Cash paid for: | ||
Interest | 4,659 | 2,091 |
Income taxes | $ 44,693 | $ 27,718 |
Significant Accounting Policies
Significant Accounting Policies: | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies: | 1. Significant Accounting Policies: The accounting policies we follow are set forth in the notes to our consolidated financial statements included in our Form 10-K, which was filed with the Securities and Exchange Commission for the year ended December 31, 2022. |
Impact of COVID-19 Pandemic_
Impact of COVID-19 Pandemic: | 9 Months Ended |
Sep. 30, 2023 | |
Unusual or Infrequent Items, or Both [Abstract] | |
Impact of COVID-19 Pandemic: | 2. Impact of COVID-19 Pandemic: Our business has continued to significantly improve throughout 2022 and the first three quarters of 2023 after the disastrous effects of the COVID-19 Pandemic starting in early 2020, as retail stores reopened, and consumers increased online purchasing. While the COVID-19 Pandemic had significantly restricted international travel, the travel retail business has picked up. Lastly, we experienced significant strains on our supply chain causing disruptions affecting the procurement of components, the ability to transport goods, and related cost increases. These disruptions came at a time when demand for our product lines has never been stronger or more sustained. We have addressed this issue since the beginning of 2021, by ordering well in advance of need and in larger quantities. Since 2021, we have strived to carry more inventory overall, source the same components from multiple suppliers and when possible, manufacture products closer to where they are sold. The supply chain bottlenecks have been improving and while lead times remain longer than pre-COVID, we do not expect significant disruptions going forward. |
Recent Agreements_
Recent Agreements: | 9 Months Ended |
Sep. 30, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Recent Agreements: | 3. Recent Agreements: Roberto Cavalli In July 2023, we closed a transaction agreement with Roberto Cavalli, whereby an exclusive and worldwide license was granted for the production and distribution of Roberto Cavalli brand perfumes and fragrance related products. Our rights under this license are subject to certain minimum advertising expenditures and royalty payments as are customary in our industry. The license became effective in July 2023 and will last for 6.5 years. Lacoste In December 2022, we closed a transaction agreement with Lacoste, whereby an exclusive and worldwide license was granted for the production and distribution of Lacoste brand perfumes and cosmetics. Our rights under this license are subject to certain minimum advertising expenditures and royalty payments as are customary in our industry. The license becomes effective in January 2024 and will last for 15 years. Dunhill The Dunhill fragrance license has expired on September 30, 2023 and will not be renewed. The Company has now entered the twelve month sell-off period during which it will maintain the right to sell-off remaining Dunhill fragrance inventory, which is customary in the fragrance industry. All usable components have been converted to finished goods, and any remaining components will be destroyed. Donna Karan and DKNY In September 2021, we entered into a long-term global licensing agreement for the creation, development and distribution of fragrances and fragrance related products under the Donna Karan and DKNY brands. Our rights under this license are subject to certain minimum advertising expenditures and royalty payments as are customary in our industry. With this agreement, we have gained several well-established and valuable fragrance franchises, most notably Donna Karan Cashmere Mist Be Delicious In connection with the grant of license, we issued 65,342 shares of Inter Parfums, Inc. common stock to the licensor valued at $5.0 million. The exclusive license became effective July 1, 2022, and we are planning to launch new fragrances under these brands in 2024. Rochas Fashion Effective January 1, 2021, we entered into a new license agreement modifying our Rochas fashion business model. The new agreement calls for a reduction in royalties to be received. As a result, in the first quarter of 2021, we took a $2.4 million impairment charge on our Rochas fashion trademark. In the fourth quarter of 2022, we again took a $6.8 million impairment charge on the Rochas fashion trademark after an independent expert concluded that the valuation of the trademark was $11.3 million. The new license also contains an option for the licensee to buy-out the Rochas fashion trademarks in June 2025 at its then fair market value. Land and Building Acquisition - Headquarters in Paris In April 2021, Interparfums SA, our 72 The purchase price included the complete renovation of the site. As of September 30, 2023, $ 148.1 million 3 60.7 87.4 7 50 1.2 The acquisition was financed by a 10 120 million 127.1 million one-month Euribor plus 0.75% 80 million 2 1.1 |
Recent Accounting Pronouncement
Recent Accounting Pronouncements: | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Accounting Pronouncements: | 4. Recent Accounting Pronouncements: There are no 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, 2023 | |
Inventory Disclosure [Abstract] | |
Inventories: | 5. Inventories: Inventories consist of the following: (In thousands) September 30, 2023 December 31, 2022 Raw materials and component parts $ 151,344 $ 146,772 Finished goods 212,926 143,212 Inventories $ 364,270 $ 289,984 |
Fair Value Measurement_
Fair Value Measurement: | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement: | 6. Fair Value Measurement: The following tables present our financial assets and liabilities that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy. The fair value hierarchy has three levels based on the reliability of the inputs used to determine fair value. Fair Value Measurements at September 30, 2023 Quoted Prices in Significant Other Significant Active Markets for Observable Unobservable Identical Assets Inputs Inputs Total (Level 1) (Level 2) (Level 3) Assets: Short-term investments $ 103,745 $ 10,177 $ 92,776 $ 792 Interest rate swaps 6,274 — 6,274 — Total asset $ 110,019 $ 10,177 $ 99,050 $ 792 Liabilities: Foreign currency forward exchange contracts not accounted for using hedge accounting $ 791 $ — $ 791 $ — Foreign currency forward exchange contracts accounted for using hedge accounting 489 — 489 — Total liabilities $ 1,280 $ — $ 1,280 $ — Fair Value Measurements at December 31, 2022 Quoted Prices in Significant Other Significant Active Markets for Observable Unobservable Identical Assets Inputs Inputs Total (Level 1) (Level 2) (Level 3) Assets: Short-term investments $ 150,833 $ 19,861 $ 130,174 $ 798 Interest rate swaps 6,758 — 6,758 — Foreign currency forward exchange contracts accounted for using hedge accounting 1,189 — 1,189 — Total asset $ 158,780 $ 19,861 $ 138,121 $ 798 Liabilities: Foreign currency forward exchange contracts not accounted for using hedge accounting 68 — 68 — Total liabilities $ 68 $ — $ 68 $ — The carrying amount of cash and cash equivalents including money market funds, short-term investments, accounts receivable, other receivables, cash held in escrow, accounts payable and accrued expenses approximate 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 from financial institutions. |
Derivative Financial Instrument
Derivative Financial Instruments: | 9 Months Ended |
Sep. 30, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments: | 7. 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. In December 2022, to finance the acquisition of the Lacoste trademark, the Company entered into a € 50 53 4 2 In connection with the April 2021 acquisition of the office building complex in Paris, € 120 127.1 10 80 1.1 Gains and losses in derivatives designated as hedges are accumulated in other comprehensive income 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 the three and nine months ended September 30, 2023 and 2022. All derivative instruments are reported as either assets or liabilities on the balance sheet measured at fair value. The valuation of interest rate swaps is included in other assets on the accompanying balance sheets. The valuation of foreign currency forward exchange contracts at September 30, 2023 resulted in a net asset and is included in other current assets on the accompanying balance sheet. At September 30, 2023, we had foreign currency contracts in the form of forward exchange contracts in the amount of approximately U.S. $ 58.0 2.0 one |
Leases_
Leases: | 9 Months Ended |
Sep. 30, 2023 | |
Leases [Abstract] | |
Leases: | 8. 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, 2023, the weighted average remaining lease term was 5.4 3.0 1.5 million 4.5 million 1.2 4.3 4.0 3.9 million 5.7 0.5 |
Share-Based Payments_
Share-Based Payments: | 9 Months Ended |
Sep. 30, 2023 | |
Equity: | |
Share-Based Payments: | 9. Share-Based Payments: The Company maintains a stock option program 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-year term and vest over a four five 0.10 million 0.11 million The following table sets forth information with respect to nonvested options for the nine months ended September 30, 2023: Number of Shares Weighted Average Grant-Date Fair Value Nonvested options – beginning of period 168,730 $ 16.31 Nonvested options granted — — Nonvested options vested or forfeited (27,625 ) $ 13.91 Nonvested options – end of period 141,105 $ 16.78 Share-based payment expense decreased income before income taxes by $ 0.62 1.89 0.47 2.35 0.41 million 1.27 million 0.34 million 1.52 million The following table summarizes stock option information as of September 30, 2023: Shares Weighted Average Exercise Price Outstanding at January 1, 2023 441,580 $ 67.30 Options forfeited (20,025 ) 72.22 Options exercised (98,565 ) 56.03 Outstanding at September 30, 2023 322,990 $ 70.43 Options exercisable 181,885 $ 61.44 Options available for future grants 579,000 As of September 30, 2023, the weighted average remaining contractual life of options outstanding is 2.15 0.34 20.64 million 13.26 million 1.7 Cash proceeds, tax benefits and intrinsic value related to stock options exercised during the nine months ended September 30, 2023 and 2022 were as follows: (In thousands) September 30, September 30, Cash proceeds from stock options exercised $ 5,523 $ 1,816 Tax benefits 900 320 Intrinsic value of stock options exercised 6,135 2,105 There were no 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 continues to increase. In December 2018, Interparfums SA approved a plan to grant an aggregate of 26,600 133,000 211,955 4.8 In March 2022, Interparfums SA approved an additional plan to grant an aggregate of 88,400 The fair value of the grant had 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 92,998 4.2 million Similar to the December 2018 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. As of September 30, 2023 the Company acquired 87,609 4.1 million 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, 2023 | |
Earnings per share: | |
Net Income Attributable to Inter Parfums, Inc. Common Shareholders: | 10. 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: Three months ended Nine months ended (In thousands) September 30, September 30, 2023 2022 2023 2022 Numerator: Net income attributable to Inter Parfums, Inc. $ 53,214 $ 41,423 $ 142,234 $ 104,339 Denominator: Weighted average shares 31,976 31,860 32,000 31,848 Effect of dilutive securities: Stock options 148 108 149 129 Denominator for diluted earnings per share 32,124 31,968 32,149 31,977 Earnings per share: Net income attributable to Inter Parfums, Inc. common shareholders: Basic $ 1.66 $ 1.30 $ 4.44 $ 3.28 Diluted 1.66 1.30 4.42 3.26 There were no 0.15 million |
Segment and Geographic Areas_
Segment and Geographic Areas: | 9 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
Segment and Geographic Areas: | 11. 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: (In thousands) Three months ended Nine months ended 2023 2022 2023 2022 Net sales: United States $ 134,469 $ 82,183 $ 327,359 $ 229,129 Europe 233,500 198,318 661,577 546,787 Eliminations — (39 ) — (51 ) $ 367,969 $ 280,462 $ 988,936 $ 775,865 Net income attributable to Inter Parfums, Inc.: United States $ 20,157 $ 10,881 $ 46,067 $ 27,386 Europe 33,057 30,542 96,167 76,953 $ 53,214 $ 41,423 $ 142,234 $ 104,339 September 30, December 31, 2023 2022 Total Assets: United States $ 340,375 $ 278,090 Europe 1,083,843 1,052,004 Eliminations (29,821 ) (21,552 ) $ 1,394,397 $ 1,308,542 |
Inventories_ (Tables)
Inventories: (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Inventory Disclosure [Abstract] | |
Inventories consist of the following: | Inventories consist of the following: (In thousands) September 30, 2023 December 31, 2022 Raw materials and component parts $ 151,344 $ 146,772 Finished goods 212,926 143,212 Inventories $ 364,270 $ 289,984 |
Fair Value Measurement_ (Tables
Fair Value Measurement: (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
The following tables present our financial assets and liabilities that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy. The fair value hierarchy has three levels based on the reliability of the inputs used to determine fair value. | The following tables present our financial assets and liabilities that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy. The fair value hierarchy has three levels based on the reliability of the inputs used to determine fair value. Fair Value Measurements at September 30, 2023 Quoted Prices in Significant Other Significant Active Markets for Observable Unobservable Identical Assets Inputs Inputs Total (Level 1) (Level 2) (Level 3) Assets: Short-term investments $ 103,745 $ 10,177 $ 92,776 $ 792 Interest rate swaps 6,274 — 6,274 — Total asset $ 110,019 $ 10,177 $ 99,050 $ 792 Liabilities: Foreign currency forward exchange contracts not accounted for using hedge accounting $ 791 $ — $ 791 $ — Foreign currency forward exchange contracts accounted for using hedge accounting 489 — 489 — Total liabilities $ 1,280 $ — $ 1,280 $ — Fair Value Measurements at December 31, 2022 Quoted Prices in Significant Other Significant Active Markets for Observable Unobservable Identical Assets Inputs Inputs Total (Level 1) (Level 2) (Level 3) Assets: Short-term investments $ 150,833 $ 19,861 $ 130,174 $ 798 Interest rate swaps 6,758 — 6,758 — Foreign currency forward exchange contracts accounted for using hedge accounting 1,189 — 1,189 — Total asset $ 158,780 $ 19,861 $ 138,121 $ 798 Liabilities: Foreign currency forward exchange contracts not accounted for using hedge accounting 68 — 68 — Total liabilities $ 68 $ — $ 68 $ — |
Share-Based Payments_ (Tables)
Share-Based Payments: (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Equity: | |
The following table sets forth information with respect to nonvested options for the nine months ended September 30, 2023: | The following table sets forth information with respect to nonvested options for the nine months ended September 30, 2023: Number of Shares Weighted Average Grant-Date Fair Value Nonvested options – beginning of period 168,730 $ 16.31 Nonvested options granted — — Nonvested options vested or forfeited (27,625 ) $ 13.91 Nonvested options – end of period 141,105 $ 16.78 |
The following table summarizes stock option information as of September 30, 2023: | The following table summarizes stock option information as of September 30, 2023: Shares Weighted Average Exercise Price Outstanding at January 1, 2023 441,580 $ 67.30 Options forfeited (20,025 ) 72.22 Options exercised (98,565 ) 56.03 Outstanding at September 30, 2023 322,990 $ 70.43 Options exercisable 181,885 $ 61.44 Options available for future grants 579,000 |
Cash proceeds, tax benefits and intrinsic value related to stock options exercised during the nine months ended September 30, 2023 and 2022 were as follows: | Cash proceeds, tax benefits and intrinsic value related to stock options exercised during the nine months ended September 30, 2023 and 2022 were as follows: (In thousands) September 30, September 30, Cash proceeds from stock options exercised $ 5,523 $ 1,816 Tax benefits 900 320 Intrinsic value of stock options exercised 6,135 2,105 |
Net Income Attributable to In_2
Net Income Attributable to Inter Parfums, Inc. Common Shareholders: (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Earnings per share: | |
The reconciliation between the numerators and denominators of the basic and diluted EPS computations is as follows: | The reconciliation between the numerators and denominators of the basic and diluted EPS computations is as follows: Three months ended Nine months ended (In thousands) September 30, September 30, 2023 2022 2023 2022 Numerator: Net income attributable to Inter Parfums, Inc. $ 53,214 $ 41,423 $ 142,234 $ 104,339 Denominator: Weighted average shares 31,976 31,860 32,000 31,848 Effect of dilutive securities: Stock options 148 108 149 129 Denominator for diluted earnings per share 32,124 31,968 32,149 31,977 Earnings per share: Net income attributable to Inter Parfums, Inc. common shareholders: Basic $ 1.66 $ 1.30 $ 4.44 $ 3.28 Diluted 1.66 1.30 4.42 3.26 |
Segment and Geographic Areas_ (
Segment and Geographic Areas: (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
Information on our operations by geographical areas is as follows: | Information on our operations by geographical areas is as follows: (In thousands) Three months ended Nine months ended 2023 2022 2023 2022 Net sales: United States $ 134,469 $ 82,183 $ 327,359 $ 229,129 Europe 233,500 198,318 661,577 546,787 Eliminations — (39 ) — (51 ) $ 367,969 $ 280,462 $ 988,936 $ 775,865 Net income attributable to Inter Parfums, Inc.: United States $ 20,157 $ 10,881 $ 46,067 $ 27,386 Europe 33,057 30,542 96,167 76,953 $ 53,214 $ 41,423 $ 142,234 $ 104,339 September 30, December 31, 2023 2022 Total Assets: United States $ 340,375 $ 278,090 Europe 1,083,843 1,052,004 Eliminations (29,821 ) (21,552 ) $ 1,394,397 $ 1,308,542 |
Recent Agreements_ (Details Nar
Recent Agreements: (Details Narrative) | 9 Months Ended | |||
Sep. 30, 2023 USD ($) | Sep. 30, 2023 EUR (€) | Dec. 31, 2022 | Apr. 30, 2021 | |
Business Acquisition [Line Items] | ||||
Purchase price, period cost | $ 148,100,000 | |||
Acquisition costs, period cost | 3,000,000 | |||
Cash held in escrow is included in other assets | $ 1,200,000 | |||
Long-term debt, term | 10 years | 10 years | 4 years | 10 years |
Long-term line of credit | $ 127,100,000 | € 120,000,000 | ||
Description of debt instrument interest rate terms | one-month Euribor plus 0.75% | |||
Debt instrument, face amount | € | € 80,000,000 | |||
Variable interest rate | 2% | 2% | ||
Fixed interest rate | 1.10% | 1.10% | ||
Minimum [Member] | ||||
Business Acquisition [Line Items] | ||||
Depreciated over a range | 7 years | 7 years | ||
Maximum [Member] | ||||
Business Acquisition [Line Items] | ||||
Depreciated over a range | 50 years | 50 years | ||
Land [Member] | ||||
Business Acquisition [Line Items] | ||||
Purchase price, period cost | $ 60,700,000 | |||
Building [Member] | ||||
Business Acquisition [Line Items] | ||||
Purchase price, period cost | $ 87,400,000 | |||
Interparfums SA [Member] | ||||
Business Acquisition [Line Items] | ||||
Ownership percentage | 72% | |||
Roberto Cavalli [Member] | ||||
Business Acquisition [Line Items] | ||||
Description of recent agreement | The license became effective in July 2023 and will last for 6.5 years. | |||
Lacoste [Member] | ||||
Business Acquisition [Line Items] | ||||
Description of recent agreement | The license becomes effective in January 2024 and will last for 15 years. | |||
Donna Karan and DKNY [Member] | ||||
Business Acquisition [Line Items] | ||||
Description of recent agreement | In connection with the grant of license, we issued 65,342 shares of Inter Parfums, Inc. common stock to the licensor valued at $5.0 million. The exclusive license became effective July 1, 2022, and we are planning to launch new fragrances under these brands in 2024. | |||
Rochas Fashion [Member] | ||||
Business Acquisition [Line Items] | ||||
Description of recent agreement | we entered into a new license agreement modifying our Rochas fashion business model. The new agreement calls for a reduction in royalties to be received. As a result, in the first quarter of 2021, we took a $2.4 million impairment charge on our Rochas fashion trademark. In the fourth quarter of 2022, we again took a $6.8 million impairment charge on the Rochas fashion trademark after an independent expert concluded that the valuation of the trademark was $11.3 million. The new license also contains an option for the licensee to buy-out the Rochas fashion trademarks in June 2025 at its then fair market value. |
Inventories consist of the foll
Inventories consist of the following: (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Inventory Disclosure [Abstract] | ||
Raw materials and component parts | $ 151,344 | $ 146,772 |
Finished goods | 212,926 | 143,212 |
Inventories | $ 364,270 | $ 289,984 |
The following tables present ou
The following tables present our financial assets and liabilities that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy. The fair value hierarchy has three levels based on the reliability of the inputs use (Details) - Fair Value, Recurring [Member] - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Assets: | ||
Short-term investments | $ 103,745 | $ 150,833 |
Interest rate swaps | 6,274 | 6,758 |
Total asset | 110,019 | 158,780 |
Liabilities: | ||
Foreign currency forward exchange contracts accounted for using hedge accounting | 791 | 1,189 |
Foreign currency forward exchange contracts not accounted for using hedge accounting | 489 | 68 |
Total liabilities | 1,280 | 68 |
Fair Value, Inputs, Level 1 [Member] | ||
Assets: | ||
Short-term investments | 10,177 | 19,861 |
Interest rate swaps | ||
Total asset | 10,177 | 19,861 |
Liabilities: | ||
Foreign currency forward exchange contracts accounted for using hedge accounting | ||
Foreign currency forward exchange contracts not accounted for using hedge accounting | ||
Total liabilities | ||
Fair Value, Inputs, Level 2 [Member] | ||
Assets: | ||
Short-term investments | 92,776 | 130,174 |
Interest rate swaps | 6,274 | 6,758 |
Total asset | 99,050 | 138,121 |
Liabilities: | ||
Foreign currency forward exchange contracts accounted for using hedge accounting | 791 | 1,189 |
Foreign currency forward exchange contracts not accounted for using hedge accounting | 489 | 68 |
Total liabilities | 1,280 | 68 |
Fair Value, Inputs, Level 3 [Member] | ||
Assets: | ||
Short-term investments | 792 | 798 |
Interest rate swaps | ||
Total asset | 792 | 798 |
Liabilities: | ||
Foreign currency forward exchange contracts accounted for using hedge accounting | ||
Foreign currency forward exchange contracts not accounted for using hedge accounting | ||
Total liabilities |
Derivative Financial Instrume_2
Derivative Financial Instruments: (Details Narrative) € in Millions, £ in Millions, $ in Millions | 9 Months Ended | |||||
Sep. 30, 2023 USD ($) | Sep. 30, 2023 GBP (£) | Dec. 31, 2022 USD ($) | Dec. 31, 2022 EUR (€) | Apr. 30, 2021 USD ($) | Apr. 30, 2021 EUR (€) | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||||
Loan amount | $ | $ 53 | $ 127.1 | ||||
Long-term debt, term | 10 years | 10 years | 4 years | 4 years | 10 years | 10 years |
Derivative swap interest rate | 2% | 2% | 1.10% | 1.10% | ||
Foreign Exchange Contract [Member] | ||||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||||
Forward exchange contracts | $ | $ 58 | |||||
Maturity of foreign currency | 1 year | |||||
Euro Member Countries, Euro | ||||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||||
Loan amount | € | € 50 | € 120 | ||||
Euro Member Countries, Euro | Interest Rate Swap [Member] | ||||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||||
Loan amount | € | € 80 | |||||
United Kingdom, Pounds | Foreign Exchange Contract [Member] | ||||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||||
Loan amount | £ | £ 2 |
Leases_ (Details Narrative)
Leases: (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Leases [Abstract] | ||||
Operating lease, weighted average remaining lease term | 5 years 4 months 24 days | 5 years 4 months 24 days | ||
Operating lease, weighted average discount rate, percent | 3% | 3% | ||
Operating leases, rent expense, net | $ 1,500,000 | $ 1,200,000 | $ 4,500,000 | $ 4,300,000 |
Operating lease, payments | 4,000,000 | 3,900,000 | ||
Noncash additions to operating lease assets | $ 5,700,000 | $ 500,000 |
The following table sets forth
The following table sets forth information with respect to nonvested options for the nine months ended September 30, 2023: (Details) | 9 Months Ended |
Sep. 30, 2023 $ / shares shares | |
Equity: | |
Nonvested options beginning of period | shares | 168,730 |
Weighted average grant date fair value, beginning of year | $ / shares | $ 16.31 |
Nonvested options granted | shares | |
Weighted average grant date fair value, nonvested options granted | $ / shares | |
Nonvested options vested or forfeited | shares | (27,625) |
Weighted average grant date fair value, nonvested options vested or forfeited | $ / shares | $ 13.91 |
Nonvested options end of period | shares | 141,105 |
Weighted average grant date fair value, nonvested options end of period | $ / shares | $ 16.78 |
The following table summarizes
The following table summarizes stock option information as of September 30, 2023: (Details) | 9 Months Ended |
Sep. 30, 2023 $ / shares shares | |
Equity: | |
Options shares under option - beginning of year | 441,580 |
Weighted average exercise price shares under option - beginning of year | $ / shares | $ 67.30 |
Options forfeited | (20,025) |
Weighted average exercise price options forfeited | $ / shares | $ 72.22 |
Options exercised | (98,565) |
Weighted average exercise price options exercised | $ / shares | $ 56.03 |
Options shares under option - end of year | 322,990 |
Weighted average exercise price shares under option - end of year | $ / shares | $ 70.43 |
Options exercisable | 181,885 |
Weighted average exercise price options exercisable | $ / shares | $ 61.44 |
Options available for future grants | 579,000 |
Cash proceeds, tax benefits and
Cash proceeds, tax benefits and intrinsic value related to stock options exercised during the nine months ended September 30, 2023 and 2022 were as follows: (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Equity: | ||
Cash proceeds from stock options exercised | $ 5,523 | $ 1,816 |
Tax benefits | 900 | 320 |
Intrinsic value of stock options exercised | $ 6,135 | $ 2,105 |
Share-Based Payments_ (Details
Share-Based Payments: (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
Jun. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2018 | |
Subsidiary or Equity Method Investee [Line Items] | |||||||
Income before income taxes | $ 86,613,000 | $ 66,518,000 | $ 234,674,000 | $ 173,186,000 | |||
Share-based payment arrangement, expense | 410,000 | $ 340,000 | $ 1,270,000 | $ 1,520,000 | |||
Weighted average remaining contractual life of options outstanding (in years) | 2 years 1 month 24 days | ||||||
Weighted average remaining contractual life of options exercisable (in years) | 4 months 2 days | ||||||
Aggregate intrinsic value of options outstanding and options outstanding | 20,640,000 | $ 20,640,000 | |||||
Aggregate intrinsic value of options outstanding and options exercisable | 13,260,000 | 13,260,000 | |||||
Unrecognized compensation cost | $ 1,700,000 | $ 1,700,000 | |||||
Options granted | 0 | 0 | |||||
Adjusted for stock splits | 211,955 | ||||||
Recognized as compensation cost | $ 4,800,000 | ||||||
Interparfums SA Subsidiary [Member] | |||||||
Subsidiary or Equity Method Investee [Line Items] | |||||||
Recognized as compensation cost | $ 4,200,000 | ||||||
Interparfums SA Subsidiary [Member] | Employees [Member] | |||||||
Subsidiary or Equity Method Investee [Line Items] | |||||||
Aggregate shares to offices and managers | 87,609 | 87,609 | 88,400 | 26,600 | |||
Recognized as compensation cost | $ 4,100,000 | ||||||
Number of share distributed | 92,998 | ||||||
Interparfums SA Subsidiary [Member] | Officers and Managers [Member] | |||||||
Subsidiary or Equity Method Investee [Line Items] | |||||||
Aggregate shares to offices and managers | 133,000 | ||||||
Equity Option [Member] | |||||||
Subsidiary or Equity Method Investee [Line Items] | |||||||
Fair value of shares vested | $ 100,000 | $ 110,000 | |||||
Equity Option [Member] | Minimum [Member] | |||||||
Subsidiary or Equity Method Investee [Line Items] | |||||||
Options vesting period | 4 years | ||||||
Equity Option [Member] | Maximum [Member] | |||||||
Subsidiary or Equity Method Investee [Line Items] | |||||||
Options vesting period | 5 years |
The reconciliation between the
The reconciliation between the numerators and denominators of the basic and diluted EPS computations is as follows: (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Numerator: | ||||
Net income attributable to Inter Parfums, Inc. | $ 53,214 | $ 41,423 | $ 142,234 | $ 104,339 |
Denominator: | ||||
Weighted average shares | 31,976 | 31,860 | 32,000 | 31,848 |
Stock options | 148 | 108 | 149 | 129 |
Denominator for diluted earnings per share | 32,124 | 31,968 | 32,149 | 31,977 |
Net income attributable to Inter Parfums, Inc. common shareholders: | ||||
Basic | $ 1.66 | $ 1.30 | $ 4.44 | $ 3.28 |
Diluted | $ 1.66 | $ 1.30 | $ 4.42 | $ 3.26 |
Net Income Attributable to In_3
Net Income Attributable to Inter Parfums, Inc. Common Shareholders: (Details Narrative) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Earnings per share: | ||||
Antidilutive potential common shares outstanding | 0 | 150,000 | 0 | 150,000 |
Information on our operations b
Information on our operations by geographical areas is as follows: (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Net sales | $ 367,969 | $ 280,462 | $ 988,936 | $ 775,865 | |
Net income attributable to Inter Parfums, Inc. | 53,214 | 41,423 | 142,234 | 104,339 | |
Assets | 1,394,397 | 1,394,397 | $ 1,308,542 | ||
UNITED STATES | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Net sales | 134,469 | 82,183 | 327,359 | 229,129 | |
Net income attributable to Inter Parfums, Inc. | 20,157 | 10,881 | 46,067 | 27,386 | |
Assets | 340,375 | 340,375 | 278,090 | ||
Europe [Member] | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Net sales | 233,500 | 198,318 | 661,577 | 546,787 | |
Net income attributable to Inter Parfums, Inc. | 33,057 | 30,542 | 96,167 | 76,953 | |
Assets | 1,083,843 | 1,083,843 | 1,052,004 | ||
Eliminations [Member] | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Net sales | $ (39) | $ (51) | |||
Assets | $ (29,821) | $ (29,821) | $ (21,552) |