Inter Parfums : Reports 2014 Fourth Quarter and Full Year Results

Inter Parfums, Inc. (NASDAQ GS:IPAR) today reported results for the fourth quarter and year ended December 31, 2014.

Fourth Quarter 2014 Compared to Fourth Quarter 2013:

• Net sales increased 18.6% to $125.1 million from $105.5 million; at comparable foreign currency exchange rates, net sales increased 25%;
• European-based operations generated net sales of $93.6 million, up 19.3% from $78.4 million;
• Sales by U.S.-based operations were $31.5 million, up 16.4% from $27.1 million;
• Gross margin was 59.4% of net sales compared to 57.3%;
• Operating income increased to $4.4 million compared to an operating loss of $10.8 million;
• S,G&A expense as a percentage of net sales was 55.9% compared to 67.6%;
• Net income attributable to Inter Parfums, Inc. was $3.3 million or $0.11 per diluted share versus a net loss attributable to Inter Parfums, Inc. of $4.2 million or $0.13 per diluted share.

Net sales for 2014 increased 15.3% to $499.3 million compared to 2013’s net sales of ongoing brands of $433.0 million. In 2013, reported net sales of $563.6 million included $130.3 million of Burberry brand sales recorded in the first half of the year. In 2014, net income attributable to Inter Parfums, Inc. was $29.4 million or $0.95 per diluted share as compared to $39.2 million or $1.27 per diluted share in 2013. Of note, the 2013 first quarter was exceptionally profitable as Inter Parfums continued to operate certain aspects of the Burberry fragrance business including distribution, but incurred essentially no associated advertising and promotion expense.

Jean Madar, Chairman & CEO of Inter Parfums, Inc. noted, “Despite increasingly strong currency headwinds toward the end of the year, we generated impressive sales growth in 2014, thanks to a steady stream of product launches, the contribution of our new brands, and the staying power of several of our best sellers. In fact, in 2014 ongoing brand sales were ahead in all regions; in particular, our three largest markets; Western Europe, North America and Asia had sales growth of 14.4%, 13.6% and 9.2%, respectively.”

He continued, “We are enthusiastic about the outlook for our business with new product introductions scheduled throughout the year. Extraordinary, our first new scent for the Oscar de la Renta brand is launching in May. We also have Icon for Dunhill, which recently launched at Harrod’s in London and has been generating impressive sales volume, plus new fragrances for the Montblanc, Lanvin, Jimmy Choo, Van Cleef & Arpels and Anna Sui brands will be added as the year unfolds.. We are already at work developing programs for our newest brand partners, Abercrombie & Fitch and Hollister, for a 2016 debut. In addition, we continue to look for catalysts to accelerate our growth including new brand partnerships, acquisitions, and related opportunities.”

Russell Greenberg, Executive Vice President and CFO of Inter Parfums, Inc. pointed out, “While selling, general and administrative expenses decreased 7% in 2014 as compared to 2013, we have continued to commit considerable resources to advertising and promotional spending that supports our brand portfolio and global distribution. In that regard, promotion and advertising as a percentage of sales rose to 17.4% in 2014, up from 16.7% in 2013. We generated cash flows from operating activities of $36.6 million in 2014, and we closed the year with working capital of $382.9 million including approximately $280 million in cash, cash equivalents and short-term investments, and no long-term debt.”

2015 Guidance

Mr. Greenberg stated, “We are pleased that our 2014 net income attributable to Inter Parfums, Inc. came in at $0.95 per diluted share, the high end of our earnings guidance. As noted earlier, the outlook for our business remains strong and we have an ambitious new product launch schedule in the works for 2015. However, thus far this year, the dollar has continued to strengthen against the euro, further tempering our 2015 net sales guidance to approximately $470 million. On the other hand, earnings are positively affected by a strong dollar, because approximately 40% of net sales of our European operations are denominated in U.S. dollars, while almost all costs of our European operations are incurred in euro. We are increasing our net income per share guidance range to $0.98 to $1.00 per diluted share, from our previous guidance of $0.95 to $0.98 per diluted share. Guidance for 2015 assumes the dollar remains at current levels.

Increasing Dividend Payout

Our Board of Directors authorized an 8% increase in the annual dividend to $0.52 per share. The next quarterly cash dividend of $0.13 per share will be paid on April 15, 2015 to shareholders of record on March 31, 2015.

Conference Call

Management will conduct a conference call to discuss financial results and business developments at 11:00 AM ET on Thursday, March 12, 2015. 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. We suggest listeners use Microsoft Explorer as their browser.

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 Abercrombie & Fitch, Agent Provocateur, Anna Sui, Balmain, Banana Republic, bebe, Boucheron, Dunhill, Gap, Hollister, Jimmy Choo, Karl Lagerfeld, Lanvin, Montblanc, Oscar de la Renta, Paul Smith, Repetto, Shanghai Tang, S.T. Dupont and Van Cleef & Arpels. 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.

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, 2014 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.