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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 8, 2023
INTER
PARFUMS INC.
(Exact name of Registrant as specified in its charter)
| Delaware | 0-16469 | 13-3275609 | ||
| (State or other jurisdiction
of incorporation or organization) |
Commission File Number | (I.R.S. Employer 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 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)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name
of each exchange on which registered |
||
| Common Stock, $.001 par value per share | IPAR | The Nasdaq Stock Market |
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. ☐
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Item 2.02. Results of Operations and Financial Condition.
Certain portions of our press release dated August 8, 2023, 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 two line title, and the 1st, 2nd (consisting of a table), 3rd , 8th, and 9th paragraphs relating to results of operations for the second quarter of 2023 and the and 4th paragraph relating to year to date distribution and travel retail business |
| ● | The 17th through 20th paragraphs relating to the conference call to be held on August 9, 2023 |
| ● | The unaudited consolidated statements of income and consolidated balance sheets |
Item 7.01. Regulation FD Disclosure.
Certain portions of our press release dated August 8, 2023, 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 10th through 13th paragraphs relating to 2023 guidance |
| ● | The 23rd paragraph relating to forward looking information |
| ● | The balance of such press release not otherwise incorporated by reference in Item 2.02 or Item 8.01 |
Item. 8.01 Other Events.
| ● | The 14th through 17th paragraphs relating to dividends and share buyback program |
Item 9.01 Financial Statements and Exhibits.
| 99.1 | Our press release dated August 8, 2023 |
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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 8, 2023
| Inter Parfums, Inc. | ||
| By: | /s/ Michel Atwood | |
| Michel Atwood | ||
| Chief Financial Officer | ||
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Exhibit 99.1
INTER PARFUMS, INC. REPORTS RECORD 2023 SECOND QUARTER RESULTS
Increases Earnings per Diluted Share Guidance from $4.25 to $4.55
NEW YORK – August 8, 2023: Inter Parfums, Inc. (NASDAQ GS: IPAR) (“Inter Parfums” or the “Company”) today reported its financial results for the second quarter and six months ended June 30, 2023.
| Second Quarter 2023 Financial Highlights | |||
| ($ in millions, except per share data) | 2023 | 2022 | % Change |
| Net Sales | $309 | $245 | 26% |
| Gross Margin | $188 | $154 | 23% |
| Gross Margin (as a percentage of net sales) | 60.9% | 62.8% | (190 bps) |
| Operating Income | $55 | $45 | 21% |
| Operating Margin | 17.8% | 18.6% | (80 bps) |
| Net Income (attributable to Inter Parfums, Inc.) | $35 | $28 | 27% |
| Earnings Per Diluted Share | $1.09 | $0.86 | 27% |
|
The average dollar/euro exchange rate for the current second quarter was 1.09 compared to 1.06 in the second quarter of 2022, while for the first half of 2023, the average dollar/euro exchange rate was 1.08 compared to 1.09 in the first half of 2022, leading to a positive 1.3% foreign exchange impact for the quarter and a negative 0.5% for the first half on Net Sales.
At comparable foreign currency exchange rates, consolidated second quarter net sales increased 25% from the second quarter of 2022. |
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Operational Commentary
“With our second quarter net sales increasing 26%, on top of the healthy 18% growth from the prior year period, we are taking full advantage of the positive trends and momentum in the fragrance market while growing our market share with our innovative programs,” said Jean Madar, Chairman & Chief Executive Officer of Inter Parfums.
“Through the first half of the year, our robust growth has been geographically spread across our 120-country distribution footprint and included signs of renewed life in the travel retail business.
“We have always taken a conservative approach to the reopening of the Chinese fragrance market, and we will continue to be cautious and patient as we are confident in China’s long term prospects. China’s potentially immense market has been showing signs of improvement, but not enough to really move the needle. We anticipate continued modest sales growth for the remainder of 2023 and into 2024.”
Mr. Madar continued, “We are also well on our way in strategizing and building out the products, promotions, advertising and launch schedule for the newest and upcoming licenses, Roberto Cavalli and Lacoste, while also maintaining focus on all the other iconic brands in our fragrance portfolio.
“As we look into the back half of 2023, we are confident in achieving another excellent year as supply chain disruptions and inflationary impacts on components are mostly behind us, and our brands continue to perform exceedingly well, in conjunction with the favorable growth catalysts in the fragrance market.”
| Inter Parfums, Inc. | Page 2 |
August 8, 2023
Financial Commentary
Michel Atwood, Chief Financial Officer of Inter Parfums, noted, “On a dollar basis, our second quarter operating income increased 21% to $55 million, and net income attributable to Inter Parfums, Inc. increased 27% to $35 million, or $1.09 per share compared to $0.86 per share in the prior year period.
“Our second quarter consolidated operating margin was strong at 17.8% but down 80 basis points, as a percentage of net sales. While we registered scale benefits from sales growth, price increases and favorable brand and channel mix, this was offset by a one-time conservative inventory reserve of $7 million related to certain underperforming brands within our European operations, for which we had built inventory during the pandemic to protect service levels. Excluding this one-time charge, both gross margins and operating margins would have expanded compared to the prior year period.”
Full-Year 2023 Guidance
Mr. Atwood continued, “As we reported in our second quarter 2023 net sales release on July 24th, we continue to look for full-year 2023 net sales to approximate $1.3 million, or growth of 20% from full-year 2022.
“Today, we are also raising our 2023 earnings per diluted share guidance from $4.25 to $4.55, or growth of 20% from $3.78 for full-year 2022.
“It is important to note that only modest sales from China are included in our full-year 2023 guidance. Additionally, our sales guidance does not yet include initial sales of the newly acquired fragrance licenses, Roberto Cavalli, as we expect to start shipping in November/December 2023, and Lacoste fragrances, which are expected to start shipping in 2024.
“Our current 2023 guidance assumes that the dollar/euro average exchange rate remains at current levels.”
Dividend
The Company’s regular quarterly cash dividend of $0.625 per share will be paid on September 30, 2023, to shareholders of record on September 15, 2023.
Share Buyback Program
In the first half of 2023, the Company initiated a share repurchase program. Over the course of the first half of 2023, the Company repurchased 85,060 shares at a cost of $11.3 million. These shares are classified as treasury shares on the accompanying balance sheet.
The Company plans to continue repurchasing shares throughout 2023.
Second Quarter 2023 Conference Call
Management will host a conference call to discuss financial results and business developments beginning at 11:00 am ET on Wednesday, August 9, 2023.
Interested parties may participate in the live call by dialing (877) 423-9820 (toll-free) or (201) 493-6749 (international).
Participants are asked to dial-in 10 minutes before the conference call is scheduled to begin.
A live audio webcast will also be available in the “Events” tab within the Investor Relations section of the Company’s website at www.interparfumsinc.com, or by clicking here. The conference call will be available for webcast replay for approximately 90 days following the live event.
| Inter Parfums, Inc. | Page 3 |
August 8, 2023
About Inter Parfums, Inc.
Operating in the global fragrance business since 1982, Inter Parfums, Inc. produces and distributes a wide array of prestige fragrance and fragrance-related products under license agreements with brand owners. The Company manages its business in two operating segments, European based operations, through its 72% owned subsidiary, Interparfums SA, and United States based operations.
The portfolio of prestige brands includes Abercrombie & Fitch, Anna Sui, Boucheron, Coach, Donna Karan, DKNY, Ferragamo, Graff, GUESS, Hollister, Jimmy Choo, Karl Lagerfeld, Kate Spade, MCM, Moncler, Montblanc, Oscar de la Renta, Roberto Cavalli, Ungaro, and Van Cleef & Arpels, whose products are distributed in over 120 countries around the world through an extensive and diverse network of distributors. Inter Parfums, Inc. is also the registered owner of several trademarks including Lanvin and Rochas.
Forward-Looking Statements
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, 2022 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 Information
| Inter Parfums, Inc. | or | The Equity Group Inc. |
| Michel Atwood | Investor Relations Counsel |
| Chief Financial Officer | Karin Daly (212) 836-9623 / kdaly@equityny.com |
| (212) 983-2640 | Linda Latman (212) 836-9609 / llatman@equityny.com |
| www.interparfumsinc.com | www.theequitygroup.com |
See Accompanying Tables
| Inter Parfums, Inc. | Page 4 |
August 8, 2023
CONSOLIDATED BALANCE SHEETS
(In thousands except share and per share data)
(Unaudited)
| ASSETS | ||||||||
| June 30, 2023 |
December 31, 2022 |
|||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 74,311 | $ | 104,713 | ||||
| Short-term investments | 112,449 | 150,833 | ||||||
| Accounts receivable, net | 236,554 | 197,584 | ||||||
| Inventories | 360,018 | 289,984 | ||||||
| Receivables, other | 14,730 | 28,803 | ||||||
| Other current assets | 24,993 | 15,650 | ||||||
| Income taxes receivable | 386 | 157 | ||||||
| Total current assets | 823,441 | 787,724 | ||||||
| Property, equipment and leasehold improvements, net | 168,264 | 166,722 | ||||||
| Right-of-use assets, net | 28,005 | 27,964 | ||||||
| Trademarks, licenses and other intangible assets, net | 292,319 | 290,853 | ||||||
| Deferred tax assets | 14,333 | 11,159 | ||||||
| Other assets | 25,302 | 24,120 | ||||||
| Total assets | $ | 1,351,664 | $ | 1,308,542 | ||||
| LIABILITIES AND EQUITY | ||||||||
| Current liabilities: | ||||||||
| Loans payable - banks | $ | 4,958 | $ | — | ||||
| Current portion of long-term debt | 29,080 | 28,547 | ||||||
| Current portion of lease liabilities | 5,236 | 5,296 | ||||||
| Accounts payable – trade | 91,040 | 88,388 | ||||||
| Accrued expenses | 194,036 | 213,621 | ||||||
| Income taxes payable | 17,324 | 8,715 | ||||||
| Total current liabilities | 341,674 | 344,567 | ||||||
| Long–term debt, less current portion | 138,565 | 151,494 | ||||||
| Lease liabilities, less current portion | 24,491 | 24,335 | ||||||
| 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 31,975,670 and 31,967,300 shares at June 30, 2023 and December 31, 2022, respectively | 32 | 32 | ||||||
| Additional paid-in capital | 95,984 | 90,186 | ||||||
| Retained earnings | 669,688 | 620,095 | ||||||
| Accumulated other comprehensive loss | (48,739 | ) | (56,056 | ) | ||||
| Treasury stock, at cost, 9,949,865 and 9,864,805 shares at June 30, 2023 and December 31, 2022, respectively | (48,764 | ) | (37,475 | ) | ||||
| Total Inter Parfums, Inc. shareholders’ equity | 668,201 | 616,782 | ||||||
| Noncontrolling interest | 178,733 | 171,364 | ||||||
| Total equity | 846,934 | 788,146 | ||||||
| Total liabilities and equity | $ | 1,351,664 | $ | 1,308,542 | ||||
| Inter Parfums, Inc. | Page 5 |
August 8, 2023
CONSOLIDATED STATEMENTS OF INCOME
(In thousands except per share data)
(Unaudited)
| Three Months Ended June 30, |
Six Months Ended June 30, |
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| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Net sales | $ | 309,244 | $ | 244,725 | $ | 620,967 | $ | 495,403 | ||||||||
| Cost of sales | 120,840 | 90,943 | 229,606 | 182,963 | ||||||||||||
| Gross margin | 188,404 | 153,782 | 391,361 | 312,440 | ||||||||||||
| Selling, general and administrative expenses | 133,383 | 108,385 | 246,061 | 205,825 | ||||||||||||
| Income from operations | 55,021 | 45,397 | 145,300 | 106,615 | ||||||||||||
| Other expenses (income): | ||||||||||||||||
| Interest expense | 2,276 | 1,023 | 4,633 | 1,907 | ||||||||||||
| (Gain) loss on foreign currency | (746 | ) | (279 | ) | 13 | (2,518 | ) | |||||||||
| Interest and investment (income) loss | (1,977 | ) | (464 | ) | (7,359 | ) | 1,002 | |||||||||
| Other income | (7 | ) | (328 | ) | (48 | ) | (444 | ) | ||||||||
| (454 | ) | (48 | ) | (2,761 | ) | (53 | ) | |||||||||
| Income before income taxes | 55,475 | 45,445 | 148,061 | 106,668 | ||||||||||||
| Income taxes | 12,957 | 10,925 | 34,635 | 25,857 | ||||||||||||
| Net income | 42,518 | 34,520 | 113,426 | 80,811 | ||||||||||||
| Less: Net income attributable to the noncontrolling interest | 7,566 | 6,903 | 24,406 | 17,895 | ||||||||||||
| Net income attributable to Inter Parfums, Inc. |
$ | 34,952 | $ | 27,617 | $ | 89,020 | $ | 62,916 | ||||||||
| Earnings per share: | ||||||||||||||||
| Net income attributable to Inter Parfums, Inc. common shareholders: | ||||||||||||||||
| Basic | $ | 1.09 | $ | 0.87 | $ | 2.78 | $ | 1.98 | ||||||||
| Diluted | $ | 1.09 | $ | 0.86 | $ | 2.77 | $ | 1.97 | ||||||||
| Weighted average number of shares outstanding: | ||||||||||||||||
| Basic | 32,006 | 31,845 | 32,012 | 31,843 | ||||||||||||
| Diluted | 32,162 | 31,952 | 32,161 | 31,981 | ||||||||||||
| Dividends declared per share | $ | 0.625 | $ | 0.50 | $ | 1.30 | $ | 1.00 | ||||||||