FOR IMMEDIATE RELEASE

 INTER PARFUMS, INC. REPORTS SECOND QUARTER RESULTS

New York, New York, August 9, 2006 - Inter Parfums, Inc. (NasdaqGS: IPAR) today reported second quarter 2006 results.  European operations, which are conducted in France, primarily represent the sale of prestige brand name fragrances and United States operations, which primarily represented the sale of mass-market products, now include our specialty retail products.

Second Quarter 2006 Compared to Second Quarter 2005:

Net sales for the six months ended June 30, 2006 increased nearly 7% to $141.2 million from $132.4 million in the first half of 2005; in constant dollars, net sales were up 10% for the period.  Net income for the first half of both 2006 and 2005 was $7.6 million or $0.37 per diluted share.

Jean Madar, Chairman & CEO of Inter Parfums noted, "As we reported last month, sales growth was achieved by each of our six largest prestige brands.  European based product sales increased 14% in the current second quarter compared to the corresponding period in 2005.  Much of the increase was fueled by the initial launch of Burberry London for women.  Paul Smith fragrances also performed well, notably the original Paul Smith fragrance, Paul Smith Extreme, and Paul Smith Floral.  Lanvin sales continue to grow and we are quite pleased with the initial reaction to our new Nickel men's fragrance, Eau Maximum, particularly in France where the brand has a strong following."

He continued, "With respect to our United States based operations, second quarter net sales were up 17% over the second quarter of 2005. These sales gains are primarily due to shipments to Gap and Banana Republic of their existing lines of fragrance and personal care products.  The Banana Republic Discover Collection, a line of five fragrances, is expected to hit Banana Republic stores in September 2006.  The collection consists of three scents for women and two for men, each named after a luxurious, natural material that is both emotional and authentic.  A separate line of fragrance and personal care products is also in the works for Gap's North American stores.  That line is expected to launch in 2007."

Discussing prestige launches scheduled in the second half of the year, Mr. Madar noted that, Burberry London, a new women's fragrance has recently launched and the men's counterpart of this new fragrance family is scheduled for launch later this year.  Rumeur, our first new Lanvin fragrance for women, is scheduled to launch in fourth quarter, followed by a wider geographic rollout over the early months of 2007.  The new men's fragrance, S.T. Dupont Noir, has been well received in Eastern Europe and the Middle East.  Paul Smith Story, a new men's fragrance, will debut in the U.S. and the U.K. in September.  Plans call for the fragrance rollout in Spain, Italy and Japan in early 2007, followed by Latin America and China in mid-2007."

He further noted, "We believe that our specialty retail programs of 2007 will play a major part in our anticipated growth.  We have and we intend to continue to make necessary staff additions to accommodate our growth.  Our New York offices are undergoing renovation, including a 2,000 square foot expansion.  We have also made major MIS upgrades that, among other things, have enhanced our inventory management capabilities."

Mr. Greenberg went on to say, "Our financial position remains strong.  At June 30 2006, working capital aggregated $148 million and we had a working capital ratio of 2.7 to 1.  Cash and cash equivalents and short-term investments aggregated $59 million.  From the close of the first quarter to the close of the second, inventories increased 21% as we gear up for new product launches and the sales build-up indicated by our 2006 net sales guidance of approximately $301 million.  We continue to believe net income for the year will be approximately $16.9 million or $0.83 per diluted share." 

The Company again pointed out that effective January 1, 2006, it has adopted SFAS 123(R) "Share-Based Payment," a new accounting pronouncement requiring the expensing of stock based compensation.  Earnings guidance for 2006 includes an after tax charge of approximately $0.6 million or $0.03 per diluted share to reflect the impact of SFAS 123(R).  Inter Parfums indicated that its guidance assumes the dollar remains at current levels. 

 Quarterly Dividend

The Company's regular quarterly cash dividend of $0.04 per share will be payable on October 13, 2006 to shareholders of record on September 29, 2006.

 Conference Call

The management of Inter Parfums will host a conference call at 11 am EDT on Thursday, August 10, 2006, to discuss second quarter results and other recent developments.  Interested parties may participate by calling 706-679-3037, approximately 10 minutes before the start of the call.  This conference call will also be distributed live over the Internet via the Investor Relations section of the Company's web site at www.interparfumsinc.com.  To listen to the live call, please go to the web site in advance to register, and if needed, 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 the web site.  We suggest listeners use Microsoft Explorer as their browser.

Inter Parfums develops, manufactures and distributes prestige perfumes and cosmetics as the exclusive worldwide licensee for Burberry, Lanvin, Paul Smith, S.T. Dupont, Christian Lacroix, Celine, Diane von Furstenberg and Quiksilver/Roxy and has controlling interest in Nickel S.A., a men's skin care company.  Its entry into the specialty retail market was accomplished with an exclusive agreement with Gap Inc., under which it is designing and manufacturing personal care products for Gap's and Banana Republic's North American stores.  Inter Parfums is also a producer and supplier of mass market fragrances, cosmetics and personal care products.  The Company's products are sold in over 120 countries worldwide.

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, 2005, and the reports Inter Parfums files from time to time with the Securities and Exchange Commission. Inter Parfums does not intend to and undertakes no duty to update the information contained in this press release.

 

Contact at


 

 Inter Parfums, Inc. 
Russell Greenberg, Exec. VP & CFO
(212) 983-2640/rgreenberg@interparfumsinc.com
www.interparfumsinc.com

or


 		 Investor Relations Counsel
The Equity Group Inc.
Linda Latman  (212)836-9609/llatman@equityny.com
Lena Cati (212) 836-9611/lcati@equityny.com
www.theequitygroup.com

 

 

 

 

 Inter Parfums, Inc.
CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)
(In thousands, except per share data)
   

Three Months Ended
June 30,

  

Six Months Ended
June 30,

 

 

2006

 

2005

 

2006

 

2005

 

 

 

 

 

 

 

 

 

Net sales

 

$             70,285

 

$               61,343

 

$           141,185

 

$             132,430

 

 

 

 

 

 

 

 

 

Cost of sales

 
30,615

 

26,748

 
61,219

 
                 57,258

 

 

 

 

 

 

 

 

 

Gross margin

 

39,670

 

34,595

 

 79,966

 

                 75,172

 

 

 

 

 

 

 

 

 

Selling, general and administrative

 

33,337

 

27,598

 

64,400

 

                 59,162

 

 

 

 

 

 

 

 

 

Income from operations

 

6,333

 

                   6,997

 

15,566

 

                 16,010

 

 

 

 

 

 

 

 

 

Other expenses (income):

 

 

 

 

 

 

 

 

        Interest expense

 

 318

 

                      384

 

519

 

                      599

        (Gain) loss on foreign currency

 

 (220)

 

                     (75)

 

 (381)

 

4

        Interest and dividend (income)

 

(501)

 

(448)

 

(1,015)

 

(694)

        Loss (gain) on subsidiary's issuance of
stock

 

                        
 61

 

                        
14

 


(12)

 

                        
14
 

 

 

 

 

 

 

 

 
 

 

(342)

 

                   (125)

 

  (889)

 

                     (77)
 

 

 

 

 

 

 

 

 

Income before income taxes and

 

 

 

 

 

 

 

 

   minority interest

 

6,675

 

                   7,122

 

               16,455

 

                 16,087

 

 

 

 

 

 

 

 

 

Income taxes

 
2,293

 

                   2,819

 

                 5,635

 

                   5,975

 

 

 

 

 

 

 

 

 

Income before minority interest

 

4,382

 

                   4,303

 

               10,820

 

                 10,112
 

 

 

 

 

 

 

 

 

Minority interest in net income
of consolidated subsidiary

 

                   
1,190

 

                   
1,089

 

                 
3,208

 

                   
2,494
 

 

 

 

 

 

 

 

 

Net income

 

$              3,192

 

$                 3,214

 

$               7,612

 

$                 7,618

 

 

 

 

 

 

 

 

 

Net income per share:

 

 

 

 

 

 

 

 

            Basic

 

               $0.16

 

               $0.16

 

               $0.38

 

               $0.38
            Diluted

 

               $0.16

 

               $0.16

 

               $0.37

 

               $0.37
 

 

 

 

 

 

 

 

 

Weighted average number of shares outstanding:

 

 

 

 

 

 

 

 

            Basic

 

20,315

 

                 20,179

 

               20,291

 

                 19,940
            Diluted

 

20,564

 

                 20,478

 

               20,554

 

                 20,449

 

Inter Parfums, Inc.
CONSOLIDATED BALANCE SHEETS

(In thousands except share and per share data)

ASSETS

 

 

June 30,
2006

 

December 31,
2005

 

 

(Unaudited)

 

 

Current assets:

 

 

 

 

        Cash and cash equivalents

 

$           44,197

 

$            42,132

        Short-term investments

 

             14,600

 

                  17,400

        Account receivable, net

 

             94,104

 

                  82,231

        Inventories

 

             70,983

 

                  48,631

        Receivables, other

 

               4,223

 

                    2,119

        Other current assets

 

               5,561

 

                    4,213

        Income tax receivable

 

                  104

 

                       104

        Deferred tax assets

 

               3,819

 

                    3,011

 

 

 

 

 

                Total current assets

 

           237,591

 

                199,841

 

 

 

 

 

Equipment and leasehold improvements, net

 

               6,842

 

                    5,835

 

 

 

 

 

Trademarks, licenses and other intangible assets, net

 

             30,765

 

                  30,136

 

 

 

 

 

Goodwill

 

               4,810

 

                    4,476

 

 

 

 

 

Other assets

 

                  600

 

                       622
 

 

 

 

 
 

 

$         280,608

 

$            240,910

 

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:

 

 

 

 

        Loans payable - banks

 

$             9,331

 

$                 989

        Current portion of long-term debt

 

 4,068

 

3,775

        Accounts payable

 

48,386

 

40,359

        Accrued expenses

 

26,588

 

21,555

        Income taxes payable

 

471

 

1,269

        Dividends payable

 

813

 

 810

 

 

 

 

 

                Total current liabilities

 

89,657

 

 68,757

 

 

 

 

 

Long-term debt, less current portion

 

8,136

 

 9,437

 

 

 

 

 

Deferred tax liability

 

2,036

 

 1,783

 

 

 

 

 

Put option

 

 1,177

 

 743

 

 

 

 

 

Minority interest

 

37,627

 

32,463

 

 

 

 

 

Shareholders' equity:

 

 

 

 

Preferred stock, $0.001 par value. Authorized 1,000,000 shares; none
 issued

 

 

 

  

Common stock, $0.001 par value. Authorized 100,000,000 shares;
 outstanding 20,317,810 and 20,252,310 shares at June 30, 2006 and
 December 31, 2005, respectively

 



20

 

 

20

Additional paid-in capital

 

37,214

 

36,640

Retained earnings

 

119,036

 

112,802

Accumulated other comprehensive income

 

11,014

 

3,574

Treasury stock, at cost 6,302,768 common shares at June 30, 2006 and
 December 31, 2005

 


(25,309)

 


(25,309)

 

 

141,975

 

127,727

 

 

$         280,608

 

$              240,910