8-K
INTERPARFUMS INC (IPAR)
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): November 8, 2021
Inter Parfums, Inc.**
(Exact name of Registrant as specified in its charter)
| Delaware | 0-16469 | 13-3275609 |
|---|---|---|
| (State or other jurisdiction of<br><br>incorporation or organization) | Commission File Number | (I.R.S. Employer<br><br>Identification No.) |
551 Fifth Avenue, New York, New York10176
(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 280.14a-12) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 280.14d-2(b)) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 280.13e-4(c)) |
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§280.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which<br><br>registered |
|---|---|---|
| Common Stock, $.001 par value per share | IPAR | The Nasdaq Stock Market |
Item 2.02. Results of Operations and Financial Condition.
Certain portions of our press release dated November 8, 2021, a copy of which is annexed hereto as Exhibit no. 99.1, are incorporated by reference herein, and are filed pursuant to this Item 2.02. They are as follows:
| ● | The 1^st^ through 5^th^, 7^th^ and 8^th^ paragraphs relating to results of operations for the third quarter of 2021 |
|---|---|
| ● | The 10^th^ paragraph relating to balance sheet items and cash provided by operating activities |
| --- | --- |
| ● | The 12^th^ paragraph relating to the conference call to be held on November 8, 2021 |
| --- | --- |
| ● | The unaudited consolidated statements of income and consolidated balance sheets |
| --- | --- |
Item 7.01. Regulation FD Disclosure.
Certain portions of our press release dated November 8, 2021, a copy of which is annexed hereto as Exhibit no. 99.1, are incorporated by reference herein, and are filed pursuant to this Item 7.01 and Regulation FD. They are as follows:
| ● | The 6^th^ paragraph relating to our plans for new product launches, brand flankers and catalysts for growth |
|---|---|
| ● | The 9^th^ paragraph relating to guidance |
| --- | --- |
| ● | The 13^th^ paragraph relating to forward looking information |
| --- | --- |
| ● | The balance of such press release not otherwise incorporated by reference in Item 2.02 or 8.01 |
| --- | --- |
Item 8.01 Other Events
| ● | The 11^th^ paragraph relating to our cash dividend |
|---|
Item 9.01 Financial Statements and Exhibits
.
| 99.1 | Our press release dated November 8, 2021 |
|---|
1
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: November 8, 2021
| Inter Parfums, Inc. | |
|---|---|
| By: | /s/ Russell Greenberg |
| Russell Greenberg, | |
| Executive Vice President and | |
| Chief Financial Officer |
2
Exhibit99.1
FORIMMEDIATE RELEASE
INTERPARFUMS, INC. REPORTS 2021 THIRD QUARTER RESULTS
Comparedto 2019, 37% Increase in Sales and 82% Increase in EPS
NewYork, New York, November 8, 2021**:** Inter Parfums, Inc. (NASDAQ GS: IPAR) today reported results for the third quarter ended September 30, 2021.
Third Quarter Highlights:
| ($ in millions, except per share data) | 2021 | 2020 | 2019 | 2021 v 2019 |
|---|---|---|---|---|
| Net<br> Sales | $263 | $161 | $191 | 37% |
| Gross<br> Margin | 64% | 61% | 60% | 400<br> bps |
| Operating<br> Income | $68 | $31 | $37 | 85% |
| Operating<br> Margin | 26% | 20% | 19% | 700<br> bps |
| Net<br> Income attributable to IP | $38 | $17 | $21 | 84% |
| Diluted<br> EPS | $1.20 | $0.52 | $0.66 | 82% |
In light of the near cessation of business in the second quarter of 2020, the Company is comparing its current nine month results with those of 2019. For the first nine months of 2021, net sales rose 25% to $669 million from $536 million in the same period of 2019. Year-to-date net income attributable to Inter Parfums, Inc. rose 70% to $89 million compared to 2019’s $52 million. For the nine months ended September 30, 2021 and 2019, diluted earnings per share were $2.79 and $1.64, respectively, for an increase of 70%.
Jean Madar, Chairman & CEO of Inter Parfums, Inc. noted, “As we reported last month, our largest brands, notably Montblanc, Jimmy Choo, Coach, GUESS and Lanvin performed exceptionally well in the current third quarter turning in gains of 26%, 40%, 98%, 27%, and 37%, respectively, as compared to 2019’s third quarter. Year-to-date, these brands generated sales increases of 11%, 39%, 56%, 44% and 12%, respectively, versus the first nine months of 2019.”
Discussing year-to-date growth in the Company’s major markets, Mr. Madar stated, “North America, our largest market, leads the way with sales up 140% and 67% compared to the same period in 2020 and 2019, respectively. Gains were also achieved in Western Europe where sales rose 38% and 6% from the first nine months of 2020 and 2019, respectively. Thus far this year, sales in Asia are running 72% and 10% ahead of 2020 and 2019. Other markets including the Middle East, Central and South America and Eastern Europe achieved substantial sales gains over 2020 and only the Middle East did not surpass 2019 sales levels.”
On the subject of plans for 2022, Mr. Madar continued, “In the coming year, an extensive new product pipeline is in the works. Our debuting scents for Moncler, Moncler Pour Homme and Moncler Pour Femme will rollout in early 2022 to thousands of doors, accompanied by a full-scale advertising and promotional campaign. We’ve recently previewed the scents in several hundred doors and the sell-through has been overwhelmingly positive. New men’s fragrance pillars are debuting for Coach, GUESS and Boucheron.”
| Inter Parfums, Inc. News Release | Page 2 |
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November 8, 2021
He continued, “Over the years, we’ve gotten excellent mileage from brand extensions and that’s what we are looking for in 2022 when we introduce flankers for Montblanc Legend, the Coach women’s signature scent, Jimmy Choo’s I Want Choo, GUESS Bella Vita, and Lanvin Éclat d’ Arpège. Of course, two of the leading growth catalysts arise from our newly signed license for Ferragamo, which went effective on October 1, 2021, and the addition of the Donna Karan and DKNY fragrance brands that commences next July.”
Russell Greenberg, Executive Vice President and CFO noted, “In many respects, the third quarter was exceptional. The intensity and duration of our sales rebound was far better than we could have anticipated and for that reason, we raised 2021 guidance three times. Since we postponed most of the 2020 product launches until 2021, we had sufficient inventory, despite supply chain disruptions, to meet strong demand and achieve outstanding top line growth. While the weakness in the dollar relative to the euro would normally depress gross margin, product mix changed that equation. Our current third quarter had a larger proportion of sales of high margin new products that more than offset the negative currency effect.”
He went on to say, “Since sales exceeded expectations throughout 2021, our year-to-date promotion and advertising expense included in selling, general and administrative only aggregated 14.2% of net sales, well below 17.3% in 2019. This enabled us to achieve a year-to-date operating margin of nearly 24%.”
Guidance
Mr. Greenberg pointed out, “The holiday season started earlier this year as our customers placed much of their requirements for delivery in the third rather than the fourth quarter to lessen the effect of supply chain issues. As previously reported, for the full year, we have budgeted 21% of net sales for promotion and advertising expense, or approximately $170.1 million based upon on current guidance, implying $95 million in the fourth quarter. The big push in promotion and advertising is now underway and will continue throughout the fourth quarter with major campaigns throughout the world to support retail sell-through during the holiday season for our leading brands and recent product launches. By making this monumental investment in advertising and promotion encompassing print and broadcast media as well as online advertising and billboards, we expect large scale reorders in the coming year accompanied by a significant gain in market share. As a reminder, we expect 2021 net sales of approximately $810 million, resulting in diluted net income per share of $2.35. Guidance assumes that the average dollar/euro average exchange rate remains at current levels and there is no significant resurgence of the COVID-19 pandemic. We are planning to release initial 2022 guidance later this month.”
Mr. Greenberg continued, “We closed the third quarter with working capital of $491 million, including approximately $324 million in cash, cash equivalents and short-term investments, and a working capital ratio of 3.3 to 1. The $126.6 million of long-term debt relates to the Interparfums SA headquarters acquisition, which was financed by a 10-year €120 million (approximately $139 million) bank loan. Cash provided by operating activities aggregated $101.3 million for the nine months ended September 30, 2021, as compared to cash used in operating activities of $20.2 million for the corresponding period of the prior year.”
| Inter Parfums, Inc. News Release | Page 3 |
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November 8, 2021
Dividend
The Company’s regular quarterly cash dividend of $0.25 per share will be paid on December 31, 2021 to shareholders of record on December 15, 2021.
ConferenceCall
Management will conduct a conference call to discuss financial results and business developments at 11:00 AM ET on Tuesday, November 9, 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. 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.
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, Ferragamo Graff, GUESS, Hollister, Jimmy Choo, Karl Lagerfeld, Kate Spade, MCM, Moncler, Montblanc, Oscar de la Renta, 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.
| Contact at Inter Parfums, Inc. -or- | Investor Relations Counsel |
|---|---|
| Russell Greenberg, Exec. VP & CFO | The Equity Group Inc. |
| --- | --- |
| (212) 983-2640 | Devin Sullivan (212) 836-9608/dsullivan@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 |
|---|
November 8, 2021
CONSOLIDATEDSTATEMENTS OF INCOME
(In thousands except per share data)
(Unaudited)
| Three Months Ended<br> September 30, | Nine Months Ended<br> September 30, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2021 | 2020 | 2021 | 2020 | |||||||||
| Net sales | $ | 262,696 | $ | 160,637 | $ | 668,797 | $ | 354,967 | ||||
| Cost of sales | 95,269 | 63,439 | 243,772 | 141,883 | ||||||||
| Gross margin | 167,427 | 97,198 | 425,025 | 213,084 | ||||||||
| Selling, general and administrative expenses | 99,788 | 65,841 | 262,379 | 169,471 | ||||||||
| Impairment loss | — | — | 2,393 | — | ||||||||
| Income from operations | 67,639 | 31,357 | 160,253 | 43,613 | ||||||||
| Other expenses (income): | ||||||||||||
| Interest expense | 1,697 | 148 | 3,344 | 1,510 | ||||||||
| (Gain) loss on foreign currency | (613 | ) | 891 | (2,169 | ) | (76 | ) | |||||
| Interest income | (233 | ) | (393 | ) | (1,388 | ) | (2,154 | ) | ||||
| Other income expense | (36 | ) | — | (135 | ) | — | ||||||
| 815 | 646 | (348 | ) | (720 | ) | |||||||
| Income before income taxes | 66,824 | 30,711 | 160,601 | 44,333 | ||||||||
| Income taxes | 16,997 | 8,859 | 45,112 | 12,165 | ||||||||
| Net income | 49,827 | 21,852 | 115,489 | 32,168 | ||||||||
| Less: Net income attributable to the noncontrolling interest | 11,511 | 5,314 | 26,854 | 8,688 | ||||||||
| Net income attributable to Inter Parfums, Inc. | $ | 38,316 | $ | 16,538 | $ | 88,635 | $ | 23,480 | ||||
| Earnings per share: | ||||||||||||
| Net income attributable to Inter Parfums, Inc. common shareholders: | ||||||||||||
| Basic | $ | 1.21 | $ | 0.52 | $ | 2.80 | $ | 0.74 | ||||
| Diluted | $ | 1.20 | $ | 0.52 | $ | 2.79 | $ | 0.74 | ||||
| Weighted average number of shares outstanding: | ||||||||||||
| Basic | 31,659 | 31,533 | 31,648 | 31,531 | ||||||||
| Diluted | 31,807 | 31,619 | 31,793 | 31,651 | ||||||||
| Dividends declared per share | $ | 0.25 | — | $ | 0.75 | $ | 0.33 | |||||
| Inter Parfums, Inc. News Release | Page 5 | |||||||||||
| --- | --- |
November 8, 2021
CONSOLIDATED BALANCE SHEETS
(In thousands except share and per share data)
(Unaudited)
| ASSETS | |||||
|---|---|---|---|---|---|
| December 31,<br> 2020 | |||||
| Current assets: | |||||
| Cash and cash equivalents | 174,848 | $ | 169,681 | ||
| Short-term investments | 149,192 | 126,627 | |||
| Accounts receivable, net | 193,868 | 124,057 | |||
| Inventories | 156,025 | 158,822 | |||
| Receivables, other | 3,951 | 1,815 | |||
| Other current assets | 24,626 | 16,912 | |||
| Income taxes receivable | 1,448 | 2,806 | |||
| Total current assets | 703,958 | 600,720 | |||
| Buildings, equipment and leasehold improvements, net | 142,823 | 19,580 | |||
| Right-of-use assets, net | 31,428 | 24,734 | |||
| Trademarks, licenses and other intangible assets, net | 203,961 | 214,108 | |||
| Deferred tax assets | 6,916 | 8,041 | |||
| Other assets | 37,465 | 22,962 | |||
| Total assets | 1,126,551 | $ | 890,145 | ||
| LIABILITIES AND EQUITY | |||||
| Current liabilities: | |||||
| Current portion of long-term debt | 15,025 | $ | 14,570 | ||
| Current portion of lease liabilities | 6,128 | 5,133 | |||
| Accounts payable – trade | 46,874 | 35,576 | |||
| Accrued expenses | 117,775 | 95,629 | |||
| Income taxes payable | 26,547 | 5,297 | |||
| Total current liabilities | 212,349 | 156,205 | |||
| Long–term debt, less current portion | 126,636 | 10,136 | |||
| Lease liabilities, less current portion | 27,771 | 21,354 | |||
| Equity: | |||||
| Inter Parfums, Inc. shareholders’ equity: | |||||
| Preferred stock, .001 par;<br> authorized 1,000,000 shares; none issued | — | — | |||
| Common<br>stock, .001 par; authorized 100,000,000 shares; outstanding 31,722,300 and 31,608,588 shares at September 30, 2021 and December<br>31, 2020, respectively | 32 | 32 | |||
| Additional paid-in capital | 83,070 | 75,708 | |||
| Retained earnings | 569,354 | 503,567 | |||
| Accumulated other comprehensive loss | (29,322 | ) | (5,997 | ) | |
| Treasury stock, at cost, 9,864,805 shares at September 30, 2021 and December 31, 2020 | (37,475 | ) | (37,475 | ) | |
| Total Inter Parfums, Inc. shareholders’ equity | 585,659 | 535,835 | |||
| Noncontrolling interest | 174,136 | 166,615 | |||
| Total equity | 759,795 | 702,450 | |||
| Total liabilities and equity | 1,126,551 | $ | 890,145 |
All values are in US Dollars.