UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

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

 

Date of Report (Date of Earliest Event Reported):

August 11, 2014

 

Inter Parfums, Inc.

(Exact name of registrant as specified in its charter)

 

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

 

551 Fifth Avenue, New York, New York 10176

(Address of Principal Executive Offices)

 

212. 983.2640

(Registrant's Telephone number, including area code)

 

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

 

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

 

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

 

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

 

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

 

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

 

 
 

 

Item 2.02. Results of Operations and Financial Condition.
 

Certain portions of our press release dated August 11, 2014, a copy of which is annexed hereto as Exhibit no. 99.1, are incorporated by reference in this report, and are filed pursuant to this Item 2.02. They are as follows:

 

·The 1st, 2nd, 5th and 6th paragraphs, all relating to income and expense for the second quarter and the six months ended June 30, 2014

 

·Portions of the 3rd paragraph relating to sales of European operations

 

·Portions of the 4th paragraph relating to sales of United States operations

 

·The 7th paragraph relating to balance sheet items

 

·The 10th paragraph relating to the conference call to be held on August 12, 2014

 

·The unaudited consolidated statements of income and consolidated balance sheets

 

Item 7.01. Regulation FD Disclosure.

 

Certain portions of our press release dated August 11, 2014, a copy of which is annexed hereto as Exhibit no. 99.1, are incorporated by reference in this report, and are filed pursuant to this Item 7.01 and Regulation FD. They are as follows:

 

·Portions of the 3rd paragraph relating to new product launches of European operations

 

·Portions of the 4th paragraph relating to new product launches of United States operations

 

·The 8th paragraph relating to 2014 guidance

 

·The 12th and 13th paragraphs relating to forward looking information

 

·The entire 14th paragraph and portions of the 2nd paragraph and relating to Regulation G, Conditions of Use of Non-GAAP Financial Measures

 

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

 

Item 8.01. Other Events.
 

Certain portions of our press release dated August 11, 2014, a copy of which is annexed hereto as Exhibit no. 99.1, are incorporated by reference in this report, and are filed pursuant to this Item 8.01. They are as follows:

 

·The 9th paragraph relating to payment of quarterly dividends

 

2
 

 

Item 9.01 Financial Statements and Exhibits.

 

99.1 Our press release dated August 11, 2014.

 

SIGNATURES

 

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

 

Dated: August 11, 2014

 

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

 

3

 

 


 

FOR IMMEDIATE RELEASE

 

INTER PARFUMS, INC. REPORTS 2014 SECOND QUARTER RESULTS

 

New York, New York, August 11, 2014: Inter Parfums, Inc. (NASDAQ GS: IPAR) today reported results for the second quarter ended June 30, 2014.

 

Second Quarter 2014 Compared to Second Quarter 2013:

·Net sales of ongoing brands (excluding Burberry brand sales) increased 22.1% to $118.2 million from $96.8 million; at comparable foreign currency exchange rates, net sales of ongoing brands increased 20.0%;
·Reported net sales of $118.2 million were up 0.6% compared with $117.5 million in the 2013 second quarter when Burberry brand sales were included;
·European-based operations generated sales of ongoing brands of $94.7 million, up 31.2% from $72.1 million;
·Sales by U.S.-based operations were $23.5 million, compared to $24.7 million;
·Gross margin was 57.6% of net sales, up from 54.1%;
·S, G & A expense as a percentage of net sales was 46.8% compared to 47.4%;
·Operating margin was 10.9% of net sales compared to 6.7% of net sales;
·Net income attributable to Inter Parfums, Inc. was $6.1 million compared to $3.8 million; and,
·Basic and diluted earnings per share were $0.20 compared to $0.12.

 

Jean Madar, Chairman & CEO of Inter Parfums commented, “With respect to European-based operations, new product launches and the continuing success of several established scents produced the 31.2% increase in second quarter sales of ongoing brands. Montblanc fits both categories as brand sales were up 88% due to the spring launch of Emblem coupled with the strong performance of the brand’s Legend fragrances. One of the highlights of 2014 was the debut of the Karl Lagerfeld fragrance duo which contributed approximately $4 million in incremental sales for the quarter. In addition, sales of existing collections by S.T. Dupont and Paul Smith, the Repetto signature scent, and Lanvin’s Eclat d’Arpège exceeded those of last year’s second quarter. Together these gains more than offset the 6% comparable quarter decline in Jimmy Choo brand sales; as previously noted, in last year’s second quarter, Jimmy Choo brand sales rose more than 40% driven by the launch of Flash. Later this fall, Jimmy Choo Man is unveiling, and with better than expected pre-orders, we anticipate that this new scent will be a catalyst for growth in brand sales.”

 

Mr. Madar continued, “The slight decline in U.S.-based sales was in great part attributable to the challenging comparison with last year’s second quarter when we commenced sales of Dunhill legacy fragrances. We expect brand momentum to build as Icon, our all new Dunhill scent, makes a selective debut late this year and rolls out more broadly in 2015. International distribution of Fatale and Fatale Pink for Agent Provocateur has been proceeding and we look forward to U.S. distribution later in the fall. While Anna Sui has been our leading brand in Asian markets, especially China, we will have another important name in that market when we introduce our inaugural fragrance collection for Shanghai Tang in China later this year, which is to be followed by a select international roll-out in 2015. While legacy Oscar de la Renta scents are included in 2014 sales, we believe our new women’s scent, which is scheduled to debut in 2015, will be an important catalyst for the brand.”

 

 
 

 

Inter Parfums, Inc. News Release Page 2
August 11, 2014  

 

Discussing first half sales by region, Mr. Madar also noted, “We are very pleased that growth occurred across nearly all geographic markets. Consolidated sales of ongoing brands in Western Europe and North America, our two largest markets, were up 28% and 19%, respectively. While Asian sales have been flat through the first half, sales in Central/South America are running nearly 52% ahead of 2013, and in the Middle East, they were up 30%. Although Eastern Europe represents a small portion of our business, conditions in Russia made that region the only down market through the first half of 2014.”

 

Russell Greenberg, Executive Vice President and CFO of Inter Parfums, Inc. stated, “As expected, gross margin in the second quarter of 2014 increased to 57.6% of sales. The increase was primarily attributable to the impact of the sale of our remaining Burberry inventory, at cost, during the second quarter of 2013. Additionally, selling, general and administrative expenses in the second quarter of 2014 were relatively unchanged as a percentage of sales from that in the 2013 period.”

 

Mr. Greenberg continued, “Our financial position remains very strong. We entered the second half with $409 million in working capital, including approximately $275 million in cash, cash equivalents and short-term investments and no long-term debt.”

 

2014 Guidance

Mr. Greenberg reaffirmed 2014 guidance stating, “We continue to expect net sales to come in at approximately $495 million, or 15% ahead of 2013 net sales of ongoing brands. Net income attributable to Inter Parfums, Inc. should be in the range of $0.93 to $0.95 per diluted share. Guidance assumes the dollar remains at current levels.”

 

Dividend

The Company’s regular quarterly cash dividend of $0.12 per share will be paid on October 15, 2014 to shareholders of record on September 30, 2014.

 

Conference Call

Management will conduct a conference call to discuss financial results and business developments at 11:00 AM ET on Tuesday, August 12, 2014. Interested parties may participate in the call by dialing (201) 493-6749; please call in 10 minutes before the conference call is scheduled to begin and ask for the Inter Parfums call. The conference call will also be broadcast live over the Internet. To listen to the live call, please go to www.interparfumsinc.com and click on the Investor Relations section. Please go to the website at least 15 minutes early to register, and download and install any necessary audio software. If you are unable to listen live, the conference call will be archived and can be accessed for approximately 90 days at Inter Parfums’ website.

 

In the more than 30 years since its founding, Inter Parfums, Inc. has been selected as the fragrance and beauty partner for a growing list of brands that include Lanvin, Montblanc, Jimmy Choo, Boucheron, Van Cleef & Arpels, Karl Lagerfeld, Paul Smith, S.T. Dupont, Balmain, Repetto, Agent Provocateur, Alfred Dunhill, Anna Sui, Shanghai Tang, Oscar de la Renta, Gap, Banana Republic, Brooks Brothers, bebe, and Betsey Johnson. Inter Parfums is known for innovation, quality and its ability to capture the genetic code of each brand in the products it develops, manufactures and distributes in over 100 countries worldwide.

 

 
 

 

Inter Parfums, Inc. News Release Page 3
August 11, 2014  

 

Statements in this release which are not historical in nature are forward-looking statements. Although we believe that our plans, intentions and expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such plans, intentions or expectations will be achieved. In some cases you can identify forward-looking statements by forward-looking words such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "should," "will," and "would," or similar words.

 

You should not rely on forward-looking statements because actual events or results may differ materially from those indicated by these forward-looking statements as a result of a number of important factors. These factors include, but are not limited to, the risks and uncertainties discussed under the headings “Forward Looking Statements” and "Risk Factors" in Inter Parfums' annual report on Form 10-K for the fiscal year ended December 31, 2013 and the reports Inter Parfums files from time to time with the Securities and Exchange Commission. Inter Parfums does not intend to and undertakes no duty to update the information contained in this press release.

 

Regulation G, “Conditions for Use of Non-GAAP Financial Measures,” prescribes the conditions for use of non-GAAP financial information in public disclosures. The Company believes that our presentation of the non-GAAP financial information included in this release constitutes important supplemental measures of operating performance, because it provides readers with more complete disclosure and facilitates a more accurate comparison of current results to historic results. 

 

Contact at Inter Parfums, Inc. -or- Investor Relations Counsel
Russell Greenberg, Exec. VP & CFO   The Equity Group Inc.
(212) 983-2640   Fred Buonocore (212) 836-9607/fbuonocore@equityny.com
rgreenberg@interparfumsinc.com   Linda Latman (212) 836-9609/llatman@equityny.com
www.interparfumsinc.com   www.theequitygroup.com

 

See Accompanying Tables

 

 
 

 

Inter Parfums, Inc. News Release Page 4
August 11, 2014  

 

CONSOLIDATED STATEMENTS OF INCOME

(In thousands except per share data)

(Unaudited)

 

   Three Months Ended
June 30,
   Six Months Ended
June 30,
 
   2014   2013   2014   2013 
                 
Net sales  $118,192   $117,485   $239,923   $331,296 
                     
Cost of sales   50,076    53,878    102,577    133,045 
                     
Gross margin   68,116    63,607    137,346    198,251 
                     
Selling, general and administrative expenses   55,265    55,708    107,073    123,376 
                     
Income from operations   12,851    7,899    30,273    74,875 
                     
Other expenses (income):                    
Interest expense   574    416    847    874 
(Gain) loss on foreign currency   122    (461)   72    982 
Interest income   (948)   (1,064)   (2,059)   (2,254)
                     
    (252)   (1,109)   (1,140)   (398)
                     
Income before income taxes   13,103    9,008    31,413    75,273 
                     
Income taxes   5,436    4,487    11,596    27,810 
                     
Net income   7,667    4,521    19,817    47,463 
                     
Less:  Net income attributable to the noncontrolling interest   1,558    706    4,814    11,952 
                     
Net income attributable to Inter Parfums, Inc.  $6,109   $3,815   $15,003   $35,511 
                     
Earnings per share:                    
                     
Net income attributable to Inter Parfums, Inc. common shareholders:                    
Basic  $0.20   $0.12   $0.49   $1.16 
Diluted  $0.20   $0.12   $0.48   $1.14 
                     
Weighted average number of shares outstanding:                    
Basic   30,938    30,748    30,919    30,717 
Diluted   31,069    30,953    31,063    30,900 
                     
Dividends declared per share  $0.12   $0.12   $0.24   $0.24 

 

 
 

 

Inter Parfums, Inc. News Release Page 5
August 11, 2014  

 

CONSOLIDATED BALANCE SHEETS

(In thousands except share and per share data)

(Unaudited)

 

   June 30,
2014
   December 31,
2013
 
ASSETS          
Current assets:          
Cash and cash equivalents  $60,151   $125,650 
Short-term investments   214,637    181,677 
Accounts receivable, net   96,118    79,932 
Inventories   125,530    117,347 
Receivables, other   1,718    2,418 
Other current assets   6,180    4,775 
Income tax receivable   870    6,435 
Deferred tax assets   5,274    7,257 
Total current assets   510,478    525,491 
Equipment and leasehold improvements, net   9,753    10,444 
Trademarks, licenses and other intangible assets, net   112,562    116,243 
Other assets   12,341    11,880 
Total assets  $645,134   $664,058 
           
LIABILITIES AND EQUITY          
Current liabilities:          
Loans payable – banks  $265   $6,104 
Accounts payable, trade   58,329    56,736 
Accrued expenses   37,046    58,333 
Income taxes payable   2,580    1,270 
Dividends payable   3,713    3,704 
Total current liabilities   101,933    126,147 
Deferred tax liability   2,584    2,555 
Equity:          
Inter Parfums, Inc. shareholders’ equity:          
Preferred stock, $.001 par; authorized 1,000,000 shares; none issued          
Common stock, $.001 par; authorized 100,000,000 shares; outstanding 30,938,648 and 30,863,421 shares at June 30, 2014 and December 31, 2013, respectively   31    31 
Additional paid-in capital   58,907    57,877 
Retained earnings   367,093    359,459 
Accumulated other comprehensive income   22,740    25,860 
Treasury stock, at cost, 9,924,500 and 9,940,977 common shares at June 30, 2014 and December 31, 2013 respectively   (36,266)   (36,016)
Total Inter Parfums, Inc. shareholders’ equity   412,505    407,211 
Noncontrolling interest   128,112    128,145 
Total equity   540,617    535,356 
Total liabilities and equity  $645,134   $664,058