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Inter Parfums, Inc. Reports 2021 First Quarter Results

Net Sales Increase 37% Versus 2020 and 11% Ahead of 2019

EPS up 172% from 2020 and 45% from 2019

Inter Parfums, Inc. (NASDAQ GS: IPAR) today reported results for the first quarter ended March 31, 2021. The average dollar/euro ratio for the current first quarter was 1.20 compared to 1.10 in the first quarter of 2020 and 1.14 in the first quarter of 2019.

($ in millions, except per share data)

2021

2021 v 2020

2020

2019

2021 v 2019

Net Sales

$198.5

 

37%

 

$144.8

 

$178.2

 

11%

Gross Margin

63.1%

 

160 bps

 

61.5%

 

61.6%

 

150 bps

Operating Income

$48.0

 

170%

 

$17.8

 

$33.3

 

44%

Operating Margin

24%

 

1200 bps

 

12%

 

19%

 

500 bps

Net Income (attributable to IP)

$27.7

 

175%

 

$10.1

 

$18.9

 

47%

Diluted EPS

$0.87

 

172%

 

$0.32

 

$0.60

 

45%

Jean Madar, Chairman & CEO of Inter Parfums, Inc. noted, “Comparisons with the first quarter of last year are not especially meaningful because of the outbreak of the COVID-19 virus and concurrent closures and restrictions imposed worldwide. As shown above, 2021 first quarter sales well exceeded those of the pre-pandemic first quarter of 2019 as did all profitability measures. Our business has been especially strong in regions where lockdowns have been lifted, stores have reopened and life has returned to near pre-pandemic standards, most notably North America and Asia, where our sales rose 56% and 34%, respectively. On the other hand, Western Europe has not regained its footing and restrictions and closures have again been imposed in connection with the third wave of COVID-19 infections. We’ve also seen business bounce back in the Middle East, Eastern Europe and Central and South America, growing 32%, 125% and 22%, respectively.”

He continued, “We continue to believe that our business model, financial resources, distribution network, and talented staff could support a substantially larger business. To accelerate our pace of growth, we have been actively pursuing prospective license agreements with brands who are seeking a new partner to jumpstart their fragrance franchise. While there can be no assurance that any agreements will be finalized, adding valued brands to our portfolio is a top corporate priority.”

Mr. Madar concluded, “The rollout of products launched in the first quarter is continuing, including Alibi for Oscar de la Renta, Bella Vita for GUESS, our MCM debut scent, and Canyon Escape for Hollister. Brand extensions dominate our new product pipeline for the remainder of the year including flankers for Montblanc Explorer, Coach Dreams, Jimmy Choo Urban Hero, the Oscar de la Renta Bella family, the Hollister Wave collection, and the Anna Sui Fantasia pillar. Entirely new fragrances are planned for the coming quarters as well, including a Lanvin women’s line, a new duo for Abercrombie & Fitch, Dunhill’s Driven collection for men, and a men’s grooming collection for GUESS.”

Russell Greenberg, Executive Vice President and CFO, pointed out, “The 37% increase in first quarter sales, while welcome, was not anticipated. As a result, our promotion and advertising expenditures were well below what we would typically spend in a quarter generating close to $200 million in net sales. As we resume more normalized operations, S,G&A expenses should likewise normalize, especially promotional and advertising expenses which should approach historical levels of 21% of net sales.”

Mr. Greenberg concluded, “We closed the first quarter with working capital of $461 million, including approximately $294 million in cash, cash equivalents and short-term investments, a working capital ratio of more than 4 to 1 and only $9.2 million of long-term debt. Also noteworthy, cash provided by operating activities aggregated $32.5 million for the current first quarter, as compared to cash used in operating activities of $25.1 million in the same period last year.”

Affirms 2021 Guidance

The Company affirmed its 2021 guidance calling for net sales of approximately $700 million, resulting in diluted net income per share of $1.65. Guidance assumes that the average dollar/euro average exchange rate remains at current levels and that there is no significant resurgence of the COVID-19 pandemic.

Dividend

The Company’s regular quarterly cash dividend of $0.25 per share will be paid on June 30, 2021 to shareholders of record on June 15, 2021.

Conference Call

Management will conduct a conference call to discuss financial results and business developments at 11:00 am ET on Tuesday, May 11, 2021. 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.

Founded in 1982, Inter Parfums, Inc. develops, manufactures and distributes prestige perfumes and cosmetics as the exclusive worldwide licensee for Abercrombie & Fitch, Anna Sui, Boucheron, Coach, Dunhill, Graff, GUESS, Hollister, Jimmy Choo, Karl Lagerfeld, Kate Spade New York, MCM, Moncler, Montblanc, Oscar de la Renta, Paul Smith, Repetto, S.T. Dupont and Van Cleef & Arpels. Inter Parfums is also the owner of Lanvin fragrances and the Rochas brand. Through its global distribution network, the Company’s products are sold in over 120 countries.

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, 2020 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.

See Accompanying Tables

CONSOLIDATED STATEMENTS OF INCOME

(In thousands except per share data)

(Unaudited)

 

 

 

Three months ended

March 31,

 

 

2021

 

2020

 

 

 

 

 

 

 

 

 

 

Net sales

 

$

198,528

 

 

$

144,824

 

 

 

 

 

 

Cost of sales

 

 

73,280

 

 

 

55,783

 

 

 

 

 

 

Gross margin

 

 

125,248

 

 

 

89,041

 

 

 

 

 

 

Selling, general and administrative expenses

 

 

74,896

 

 

 

71,262

 

 

 

 

 

 

Impairment loss

 

 

2,393

 

 

 

--

 

 

 

 

 

 

Income from operations

 

 

47,959

 

 

 

17,779

 

 

 

 

 

 

Other expenses (income):

 

 

 

 

Interest expense

 

 

377

 

 

 

1,001

 

Gain on foreign currency

 

 

(1,866

)

 

 

(954

)

Interest income

 

 

(386

)

 

 

(1,007

)

Other income

 

 

(192

)

 

 

--

 

 

 

 

 

 

 

 

 

(2,067

)

 

 

(960

)

 

 

 

 

 

Income before income taxes

 

 

50,026

 

 

 

18,739

 

 

 

 

 

 

Income taxes

 

 

13,400

 

 

 

5,440

 

 

 

 

 

 

Net income

 

 

36,626

 

 

 

13,299

 

 

 

 

 

 

Less: Net income attributable to the noncontrolling interest

 

 

8,964

 

 

 

3,240

 

 

 

 

 

 

Net income attributable to Inter Parfums, Inc.

 

$

27,662

 

 

$

10,059

 

 

 

 

 

 

Net income attributable to Inter Parfums, Inc. common shareholders:

 

 

 

 

Basic

 

$

0.87

 

 

$

0.32

 

Diluted

 

$

0.87

 

 

$

0.32

 

 

 

 

 

 

Weighted average number of shares outstanding:

 

 

 

 

Basic

 

 

31,631

 

 

 

31,530

 

Diluted

 

 

31,772

 

 

 

31,708

 

 

 

 

 

 

 

 

 

 

 

Dividends declared per share

 

$

0.25

 

 

$

0.33

 

CONSOLIDATED BALANCE SHEETS

(In thousands except share and per share data)

(Unaudited)

 

ASSETS

 

 

March 31,

2021

 

December 31,

2020

Current assets:

 

 

 

 

Cash and cash equivalents

 

$ 143,313

 

$ 169,681

Short-term investments

 

150,545

 

126,627

Accounts receivable, net

 

149,940

 

124,057

Inventories

 

148,685

 

158,822

Receivables, other

 

1,650

 

1,815

Other current assets

 

18,579

 

16,912

Income taxes receivable

 

404

 

2,806

 

 

 

 

 

Total current assets

 

613,116

 

600,720

 

 

 

 

 

Equipment and leasehold improvements, net

 

18,865

 

19,580

 

 

 

 

 

Right-of-use assets, net

 

22,807

 

24,734

Trademarks, licenses and other intangible assets, net

 

202,247

 

214,108

Deferred tax assets

 

7,669

 

8,041

 

 

 

 

 

Other assets

 

23,011

 

22,962

 

 

 

 

 

Total assets

 

$ 887,715

 

$ 890,145

 

LIABILITIES AND EQUITY

Current liabilities:

 

 

 

 

Current portion of long-term debt

 

$ 1,071

 

$ 14,570

Current portion of lease liabilities

 

4,983

 

5,133

Accounts payable – trade

 

44,680

 

35,576

Accrued expenses

 

88,600

 

95,629

Income taxes payable

 

12,774

 

5,297

 

 

 

 

 

Total current liabilities

 

152,108

 

156,205

 

 

 

 

 

Long–term debt, less current portion

 

9,173

 

10,136

 

 

 

 

 

Lease liabilities, less current portion

 

19,771

 

21,354

 

 

 

 

 

Equity:

 

 

 

 

Inter Parfums, Inc. shareholders’ equity:

 

 

 

 

Preferred stock, $.001 par; authorized 1,000,000 shares; none issued

 

-- 

 

-- 

Common stock, $.001 par; authorized 100,000,000 shares;

 

 

 

 

outstanding 31,652,038 and 31,608,588 shares at

 

 

March 31, 2021 and December 31, 2020, respectively

32

32

Additional paid-in capital

 

77,566

 

75,708

Retained earnings

 

523,600

 

503,567

Accumulated other comprehensive loss

 

(23,611)

 

(5,997)

Treasury stock, at cost, 9,864,805 shares at March 31, 2021 and December 31, 2020

(37,475)

(37,475)

 

 

 

 

 

Total Inter Parfums, Inc. shareholders’ equity

 

540,112

 

535,835

 

 

 

 

 

Noncontrolling interest

 

166,551

 

166,615

 

 

 

 

 

Total equity

 

706,663

 

702,450

 

 

 

 

 

Total liabilities and equity

 

$ 887,715

 

$ 890,145

 

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