x
|
Quarterly
Report pursuant to Section 13 or 15(d) of the Securities Exchange Act
of
1934 for the quarterly period ended September 30,
2009.
|
¨
|
Transition
Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934
for the transition period from ___________to
________.
|
Delaware
|
13-3275609
|
|
(State
or other jurisdiction of
|
(I.R.S.
Employer
|
|
incorporation
or organization)
|
|
Identification
No.)
|
551 Fifth Avenue, New York, New
York
|
10176
|
|
(Address
of Principal Executive Offices)
|
(Zip
Code)
|
(212)
983-2640
|
(Registrants
telephone number, including area
code)
|
Large
accelerated Filer ¨
|
Accelerated
filer x
|
Non-accelerated
filer ¨
(Do not check if a smaller reporting company)
|
Smaller
reporting company ¨
|
Page Number
|
|||
Part I. |
Financial
Information
|
1
|
|
Item
1.
|
Financial
Statements
|
||
Consolidated
Balance Sheets as of September 30, 2009 (unaudited) and December 31,
2008
|
2
|
||
Consolidated
Statements of Income for the Three and Nine Month Periods Ended September
30, 2009 (unaudited) and September 30, 2008 (unaudited)
|
3
|
||
Consolidated
Statements of Changes in Equity for the Nine Months Ended September 30,
2009 (unaudited) and September 30, 2008 (unaudited)
|
4
|
||
Consolidated
Statements of Cash Flows for the Nine Months Ended September 30, 2009
(unaudited) and September 30, 2008 (unaudited)
|
5
|
||
Notes
to Consolidated Financial Statements
|
6
|
||
Item
2.
|
Management's
Discussion and Analysis of Financial Condition and Results of
Operations
|
15
|
|
Item
3.
|
Quantitative
and Qualitative Disclosures About Market Risk
|
29
|
|
Item
4.
|
Controls
and Procedures
|
30
|
|
Part II. |
Other
Information
|
31
|
|
Item
6.
|
Exhibits
|
31
|
|
|
|||
Signatures |
31
|
September 30,
2009
|
December 31,
2008
|
|||||||
(unaudited)
|
||||||||
ASSETS
|
||||||||
Current
assets:
|
||||||||
Cash
and cash equivalents
|
$ | 57,710 | $ | 42,404 | ||||
Accounts
receivable, net
|
127,296 | 120,507 | ||||||
Inventories
|
95,998 | 123,633 | ||||||
Receivables,
other
|
4,791 | 2,904 | ||||||
Other
current assets
|
9,392 | 10,034 | ||||||
Income
tax receivable
|
46 | 1,631 | ||||||
Deferred
tax assets
|
4,880 | 3,388 | ||||||
Total
current assets
|
300,113 | 304,501 | ||||||
Equipment
and leasehold improvements, net
|
9,197 | 7,670 | ||||||
Goodwill
|
5,747 | 5,470 | ||||||
Trademarks,
licenses and other intangible assets, net
|
105,375 | 104,922 | ||||||
Other
assets
|
1,003 | 2,574 | ||||||
Total
assets
|
$ | 421,435 | $ | 425,137 | ||||
LIABILITIES
AND EQUITY
|
||||||||
Current
liabilities:
|
||||||||
Loans
payable – banks
|
$ | 10,029 | $ | 13,981 | ||||
Current
portion of long-term debt
|
11,870 | 13,352 | ||||||
Accounts
payable - trade
|
40,275 | 66,236 | ||||||
Accrued
expenses
|
40,063 | 35,368 | ||||||
Income
taxes payable
|
1,723 | 442 | ||||||
Dividends
payable
|
992 | 996 | ||||||
Total
current liabilities
|
104,952 | 130,375 | ||||||
Long-term
debt, less current portion
|
20,231 | 27,691 | ||||||
Deferred
tax liability
|
11,013 | 11,562 | ||||||
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
30,066,239 and 30,168,939 shares at September
30, 2009 and December 31, 2008, respectively
|
30 | 30 | ||||||
Additional
paid-in capital
|
42,478 | 41,950 | ||||||
Retained
earnings
|
182,111 | 168,025 | ||||||
Accumulated
other comprehensive income
|
35,602 | 25,515 | ||||||
Treasury
stock, at cost, 10,074,479 and 9,966,379 common shares
at September 30, 2009 and December 31, 2008,
respectively
|
(31,950 | ) | (31,319 | ) | ||||
Total
Inter Parfums, Inc. shareholders’ equity
|
228,271 | 204,201 | ||||||
Noncontrolling
interest
|
56,968 | 51,308 | ||||||
Total
equity
|
285,239 | 255,509 | ||||||
Total
liabilities and equity
|
$ | 421,435 | $ | 425,137 |
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Net
sales
|
$ | 117,542 | $ | 123,531 | $ | 296,555 | $ | 345,772 | ||||||||
Cost
of sales
|
50,462 | 56,206 | 125,709 | 148,385 | ||||||||||||
Gross
margin
|
67,080 | 67,325 | 170,846 | 197,387 | ||||||||||||
Selling,
general and administrative
|
53,169 | 56,039 | 139,812 | 160,124 | ||||||||||||
Income
from operations
|
13,911 | 11,286 | 31,034 | 37,263 | ||||||||||||
Other
expenses (income):
|
||||||||||||||||
Interest
expense
|
482 | 1,418 | 2,192 | 2,865 | ||||||||||||
(Gain)
loss on foreign currency
|
(854 | ) | 77 | (4,796 | ) | 262 | ||||||||||
Interest
income
|
(135 | ) | (446 | ) | (745 | ) | (1,611 | ) | ||||||||
(507 | ) | 1,049 | (3,349 | ) | 1,516 | |||||||||||
Income
before income taxes
|
14,418 | 10,237 | 34,383 | 35,747 | ||||||||||||
Income
taxes
|
4,807 | 2,358 | 11,763 | 12,241 | ||||||||||||
Net
income
|
9,611 | 7,879 | 22,620 | 23,506 | ||||||||||||
Less: Net
income attributable to the noncontrolling interest
|
2,349 | 1,691 | 5,704 | 4,838 | ||||||||||||
Net
income attributable to Inter Parfums, Inc.
|
$ | 7,262 | $ | 6,188 | $ | 16,916 | $ | 18,668 | ||||||||
Earnings
per share:
|
||||||||||||||||
Net
income attributable to Inter Parfums, Inc. common
shareholders:
|
||||||||||||||||
Basic
|
$ | 0.24 | $ | 0.20 | $ | 0.56 | $ | 0.61 | ||||||||
Diluted
|
$ | 0.24 | $ | 0.20 | $ | 0.56 | $ | 0.60 | ||||||||
Weighted
average number of shares outstanding:
|
||||||||||||||||
Basic
|
30,061 | 30,632 | 30,097 | 30,660 | ||||||||||||
Diluted
|
30,065 | 30,886 | 30,098 | 30,869 | ||||||||||||
Dividends
declared per share
|
$ | 0.033 | $ | 0.033 | $ | 0.099 | $ | 0.099 |
Inter Parfums, Inc. shareholders
|
||||||||||||||||||||||||||||
Accumulated
|
||||||||||||||||||||||||||||
Additional
|
other
|
|||||||||||||||||||||||||||
Common
|
paid-in
|
Retained
|
comprehensive
|
Treasury
|
Noncontrolling
|
|||||||||||||||||||||||
stock
|
Capital
|
earnings
|
income
|
stock
|
interest
|
Total
|
||||||||||||||||||||||
Balance
– January 1, 2008
|
$ | 31 | $ | 40,023 | $ | 147,995 | $ | 30,955 | $ | (26,344 | ) | $ | 53,925 | $ | 246,585 | |||||||||||||
Comprehensive
income:
|
||||||||||||||||||||||||||||
Net
income
|
— | — | 18,668 | — | — | 4,838 | 23,506 | |||||||||||||||||||||
Foreign
currency translation adjustment
|
— | — | — | (5,436 | ) | — | — | (5,436 | ) | |||||||||||||||||||
Net
derivative instrument gain, net of tax
|
— | — | — | (140 | ) | — | (53 | ) | (193 | ) | ||||||||||||||||||
Purchase
of subsidiary shares from noncontrolling interests
|
— | — | — | — | — | (8,623 | ) | (8,623 | ) | |||||||||||||||||||
Sale
of subsidiary shares to noncontrolling interests
|
— | 215 | — | — | — | 1,700 | 1,915 | |||||||||||||||||||||
Foreign
currency translation adjustment
|
— | — | — | — | — | (1,307 | ) | (1,307 | ) | |||||||||||||||||||
Dividends
|
— | — | (3,043 | ) | — | — | (1,735 | ) | (4,778 | ) | ||||||||||||||||||
Purchased
treasury stock
|
— | — | — | — | (2,206 | ) | — | (2,206 | ) | |||||||||||||||||||
Shares
issued upon exercise of stock options
|
— | 479 | — | — | — | — | 479 | |||||||||||||||||||||
Stock
compensation
|
— | 335 | 243 | — | — | 105 | 683 | |||||||||||||||||||||
Balance
– September 30, 2008
|
$ | 31 | $ | 41,052 | $ | 163,863 | $ | 25,379 | $ | (28,550 | ) | $ | 48,850 | $ | 250,625 | |||||||||||||
Balance
– January 1, 2009
|
$ | 30 | $ | 41,950 | $ | 168,025 | $ | 25,515 | $ | (31,319 | ) | $ | 51,308 | $ | 255,509 | |||||||||||||
Comprehensive
income:
|
||||||||||||||||||||||||||||
Net
income
|
— | — | 16,916 | — | — | 5,704 | 22,620 | |||||||||||||||||||||
Foreign
currency translation adjustment
|
— | — | — | 13,251 | — | — | 13,251 | |||||||||||||||||||||
Net
derivative instrument gain, net of tax
|
— | — | — | (3,164 | ) | — | (1,084 | ) | (4,248 | ) | ||||||||||||||||||
Sale
of subsidiary shares to noncontrolling interests
|
(53 | ) | 2,677 | 2,624 | ||||||||||||||||||||||||
Dividends
|
— | — | (2,979 | ) | — | — | (1,716 | ) | (4,695 | ) | ||||||||||||||||||
Purchased
treasury stock
|
— | — | — | — | (631 | ) | — | (631 | ) | |||||||||||||||||||
Shares
issued upon exercise of stock options
|
— | 200 | — | — | — | — | 200 | |||||||||||||||||||||
Stock
compensation
|
— | 381 | 149 | — | — | 79 | 609 | |||||||||||||||||||||
Balance
– September 30, 2009
|
$ | 30 | $ | 42,478 | $ | 182,111 | $ | 35,602 | $ | (31,950 | ) | $ | 56,968 | $ | 285,239 |
Nine months ended
September 30,
|
||||||||
2009
|
2008
|
|||||||
Cash
flows from operating activities:
|
||||||||
Net
income
|
$ | 22,620 | $ | 23,506 | ||||
Adjustments
to reconcile net income to net cash provided by (used in) operating
activities:
|
||||||||
Depreciation
and amortization
|
7,758 | 7,666 | ||||||
Provision
for doubtful accounts
|
947 | 323 | ||||||
Noncash
stock compensation
|
724 | 868 | ||||||
Deferred
tax (benefit)
|
(2,385 | ) | (709 | ) | ||||
Change
in fair value of derivatives
|
(713 | ) | — | |||||
Changes
in:
|
||||||||
Accounts
receivable
|
(1,880 | ) | (27,707 | ) | ||||
Inventories
|
30,891 | (32,239 | ) | |||||
Other
assets
|
(4,694 | ) | 2,601 | |||||
Accounts
payable and accrued expenses
|
(24,530 | ) | (10,966 | ) | ||||
Income
taxes payable, net
|
4,851 | (4,452 | ) | |||||
Net
cash provided by (used in) operating activities
|
33,589 | (41,109 | ) | |||||
Cash
flows from investing activities:
|
||||||||
Purchases
of short-term investments
|
— | (5,312 | ) | |||||
Proceeds
from sale of short-term investments
|
— | 5,312 | ||||||
Purchases
of equipment and leasehold improvements
|
(3,758 | ) | (2,301 | ) | ||||
Payment
for intangible assets acquired
|
(622 | ) | (1,015 | ) | ||||
Payment
for purchase of subsidiary shares from noncontrolling
interest
|
— | (18,405 | ) | |||||
Proceeds
from sale of subsidiary shares to noncontrolling interest
|
2,608 | 2,094 | ||||||
Net
cash used in investing activities
|
(1,772 | ) | (19,627 | ) | ||||
Cash
flows from financing activities:
|
||||||||
Proceeds
(repayments) of loans payable – bank, net
|
(4,025 | ) | 20,572 | |||||
Repayment
of long-term debt
|
(10,360 | ) | (12,637 | ) | ||||
Proceeds
from exercise of options including tax benefits
|
200 | 479 | ||||||
Dividends
paid
|
(2,979 | ) | (3,058 | ) | ||||
Dividends
paid to noncontrolling interest
|
(1,716 | ) | (1,735 | ) | ||||
Purchase
of treasury stock
|
(631 | ) | (2,206 | ) | ||||
Net
cash provided by (used in) financing activities
|
(19,511 | ) | 1,415 | |||||
Effect
of exchange rate changes on cash
|
3,000 | 1,268 | ||||||
Net
increase (decrease) in cash and cash equivalents
|
15,306 | (58,053 | ) | |||||
Cash
and cash equivalents - beginning of period
|
42,404 | 90,034 | ||||||
Cash
and cash equivalents - end of period
|
$ | 57,710 | $ | 31,981 | ||||
Supplemental
disclosure of cash flow information:
|
||||||||
Cash
paid for:
|
||||||||
Interest
|
$ | 2,000 | $ | 2,866 | ||||
Income
taxes
|
9,746 | 12,346 |
1.
|
Significant Accounting
Policies:
|
2.
|
Recently Issued
Accounting Pronouncements:
|
3.
|
Inventories:
|
(In thousands)
|
September 30,
2009
|
December 31,
2008
|
||||||
Raw
materials and component parts
|
$ | 24,060 | $ | 37,248 | ||||
Finished
goods
|
71,938 | 86,385 | ||||||
$ | 95,998 | $ | 123,633 |
4.
|
Fair Value
Measurement:
|
(In thousands)
|
Fair Value Measurements at September 30, 2009
|
|||||||||||||||
Quoted Prices in
|
Significant Other
|
Significant
|
||||||||||||||
Active Markets for
|
Observable
|
Unobservable
|
||||||||||||||
Identical Assets
|
Inputs
|
Inputs
|
||||||||||||||
Total
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
|||||||||||||
Assets:
|
||||||||||||||||
Money
market funds
|
$ | 20,591 | $ | 20,591 | $ | — | $ | — | ||||||||
Foreign
currency forward exchange contracts accounted for using hedge
accounting
|
2,310 | — | 2,310 | — | ||||||||||||
Foreign
currency forward exchange contracts not accounted for using hedge
accounting
|
3,138 | — | 3,138 | — | ||||||||||||
$ | 26,039 | $ | 20,591 | $ | 5,448 | $ | — | |||||||||
Liabilities:
|
||||||||||||||||
Interest
rate swaps
|
$ | 920 | $ | — | $ | 920 | $ | — |
(In thousands)
|
Fair Value Measurements at December 31, 2008
|
|||||||||||||||
Quoted Prices in
|
Significant Other
|
Significant
|
||||||||||||||
Active Markets for
|
Observable
|
Unobservable
|
||||||||||||||
Identical Assets
|
Inputs
|
Inputs
|
||||||||||||||
Total
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
|||||||||||||
Assets:
|
||||||||||||||||
Money
market funds
|
$ | 19,816 | $ | 19,816 | $ | — | $ | — | ||||||||
Foreign
currency forward exchange contracts accounted for using hedge
accounting
|
8,162 | — | 8,162 | — | ||||||||||||
$ | 27,978 | $ | 19,816 | $ | 8,162 | $ | — | |||||||||
Liabilities:
|
||||||||||||||||
Foreign
currency forward exchange contracts not accounted for using hedge
accounting
|
$ | 1,429 | $ | — | $ | 1,429 | $ | — | ||||||||
Interest
rate swaps
|
811 | — | 811 | — | ||||||||||||
$ | 2,240 | $ | — | $ | 2,240 | $ | — |
Derivatives in
Cash Flow
Hedging
Relationships
|
Amount of Gain
(Loss) Recognized
in OCI on
Derivative
(Effective Portion)
|
Location of Gain
(Loss) Reclassified
from Accumulated
OCI into Income
(Effective Portion)
|
Amount of Gain
(Loss) Reclassified
from Accumulated OCI into Income
(Effective Portion)
|
Location of Gain
(Loss)
Recognized in
Income on
Derivative
(Effective
Portion)
|
Amount of Gain
(Loss) Recognized
in Income on
Derivative
(Effective Portion)
(A) |
|||||||||||||||||||||
Nine months ended
September 30,
|
Nine months ended
September 30,
|
Nine months ended
September 30,
|
||||||||||||||||||||||||
2009
|
2008
|
2009
|
2008 |
2009
|
2008
|
|||||||||||||||||||||
Foreign
exchange contracts
|
$ | 1,857 | — |
Gain
(loss) on foreign
currency
|
$ | 4,725 |
—
|
Gain
(loss) on foreign
currency
|
$ | 713 | — |
Derivatives in
Cash Flow
Hedging
Relationships
|
Amount of Gain
(Loss) Recognized
in OCI on
Derivative
(Effective Portion)
|
Location of Gain
(Loss) Reclassified
from Accumulated
OCI into Income
(Effective Portion)
|
Amount of Gain
(Loss) Reclassified
from Accumulated
OCI into Income
(Effective Portion)
|
Location of Gain
(Loss)
Recognized in
Income on
Derivative
(Effective
Portion)
|
Amount of Gain
(Loss) Recognized
in Income on
Derivative
(Effective Portion)
(A)
|
|||||||||||||||||||||
Three months ended
|
Three months ended
|
Three months ended
|
||||||||||||||||||||||||
September 30,
|
September 30,
|
September 30,
|
||||||||||||||||||||||||
2009
|
2008
|
2009
|
2008
|
2009
|
2008
|
|||||||||||||||||||||
Foreign
exchange
|
Gain
(loss) on
|
Gain
(loss) on
|
||||||||||||||||||||||||
contracts
|
$ | 2,295 | — |
foreign
currency
|
$ | 1,534 | — |
foreign
currency
|
$ | 11 | — |
Derivatives not
Designated as Hedging
Instruments
|
Location of Gain (Loss)
Recognized in Income on
Derivative
|
Nine months
ended
September 30,
2009
|
Nine months
ended
September 30,
2008
|
|||||||
Interest
rate swaps
|
Interest
(expense)
|
$ | (62 | ) | $ | (26 | ) | |||
Foreign
exchange contracts
|
Gain
(loss) on foreign currency
|
$ | 29 | $ | (209 | ) |
Derivatives not
Designated as Hedging
Instruments
|
Location of Gain (Loss)
Recognized in Income on
Derivative
|
Three months
ended
September 30,
2009
|
Three months
ended
September 30,
2008
|
|||||||
Interest
rate swaps
|
Interest
(expense)
|
$ | 43 | $ | (394 | ) | ||||
Foreign
exchange contracts
|
Gain
(loss) on foreign currency
|
$ | 5 | $ | (541 | ) |
5.
|
Goodwill and Other
Intangible Assets:
|
(In
thousands)
|
Fair Value Measurements at September 30, 2009
|
|||||||||||||||
Quoted Prices in
|
Significant Other
|
Significant
|
||||||||||||||
Active Markets for
|
Observable
|
Unobservable
|
||||||||||||||
Identical Assets
|
Inputs
|
Inputs
|
||||||||||||||
Total
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
|||||||||||||
Description:
|
||||||||||||||||
Trademark
- Nickel
|
$ | 2,839 | $ | — | $ | — | $ | 2,839 | ||||||||
|
||||||||||||||||
Goodwill
|
$ | 5,747 | $ | — | $ | — | $ | 5,747 |
|
The
goodwill and trademarks referred to above, relates to our Nickel skin care
business which is primarily a component of our European operations. Nickel
brand product sales, which performed in line with our budgets during the
three month period ended September 30, 2009, had performed below our
expectations in the past, and as a result, we have been reviewing goodwill
and trademarks with indefinite lives relating to Nickel for impairment on
a quarterly basis. We have measured fair value of goodwill as a multiple
of sales applied to the average of 2008 actual sales and projected sales
for 2009 and 2010. The sales multiple was based on a third party financial
institution study of sales multiples for all transactions in the skin
care, perfume and cosmetic sectors during the past four years. There was
no change to the carrying amount of the goodwill during the nine month
period ended September 30, 2009 other than for the effect of foreign
currency translation rates. For indefinite-lived intangible assets, if the
carrying value of an indefinite-lived intangible asset exceeds its fair
value, as generally estimated using discounted future net cash flow
projections and discounted terminal values, the carrying value of the
asset is reduced to its fair value. During the three month period ended
September 30, 2009, no impairment charges were recorded. For the
nine month period ended September 30, 2009, an impairment charge relating
to the Nickel trademark in the amount of $0.26 million was
recorded.
|
6.
|
Shareholders’
Equity:
|
7.
|
Share-Based
Payments:
|
Number of Shares
|
Weighted Average Grant
Date Fair Value
|
|||||||
Nonvested
options – beginning of period
|
490,263 | $ | 3.81 | |||||
Nonvested
options granted
|
4,000 | $ | 1.92 | |||||
Nonvested
options vested or forfeited
|
(18,990 | ) | $ | 3.73 | ||||
Nonvested
options – end of period
|
475,273 | $ | 3.79 |
Number of Shares
|
Weighted Average
Exercise Price
|
|||||||
Options
outstanding - beginning of period
|
1,138,375 | $ | 11.23 | |||||
Options
granted
|
4,000 | 6.15 | ||||||
Options
exercised
|
(5,400 | ) | 10.11 | |||||
Options
forfeited or expired
|
(57,000 | ) | 15.02 | |||||
Options
outstanding - end of period
|
1,079,975 | $ | 11.02 | |||||
Options
exercisable at September 30, 2009
|
604,703 | $ | 10.76 | |||||
Options
available for future grants
|
1,266,369 |
(In thousands)
|
September 30,
2009
|
September 30,
2008
|
||||||
Cash
proceeds from stock options exercised
|
$ | 55 | $ | 272 | ||||
Tax
benefits
|
145 | 207 | ||||||
Intrinsic
value of stock options exercised
|
11 | 136 |
September 30,
2009
|
September 30,
2008
|
|||||||
Weighted-average
expected stock-price volatility
|
46 | % | 39 | % | ||||
Weighted-average
expected option life
|
3.75
years
|
4.5
years
|
||||||
Weighted-average
risk-free interest rate
|
1.74 | % | 2.7 | % | ||||
Weighted-average
dividend yield
|
2.20 | % | 1.20 | % |
8.
|
Earnings Per
Share:
|
|
Three months ended
September 30,
|
Nine months ended
September 30,
|
||||||||||||||
(In thousands)
|
2009
|
2008
|
2009
|
2008
|
||||||||||||
Numerator:
|
||||||||||||||||
Net
income attributable to Inter Parfums, Inc.
|
$ | 7,262 | $ | 6,188 | $ | 16,916 | $ | 18,668 | ||||||||
Effect
of dilutive securities of consolidated subsidiary
|
— | (35 | ) | (18 | ) | (122 | ) | |||||||||
$ | 7,262 | $ | 6,153 | $ | 16,898 | $ | 18,546 | |||||||||
Denominator:
|
||||||||||||||||
Weighted
average shares
|
30,061 | 30,632 | 30,097 | 30,660 | ||||||||||||
Effect
of dilutive securities:
|
||||||||||||||||
Stock
options and warrants
|
4 | 254 | 1 | 209 | ||||||||||||
30,065 | 30,886 | 30,098 | 30,869 |
9.
|
Comprehensive Income
(Loss):
|
|
Three months ended
September 30,
|
Nine months ended
September 30,
|
||||||||||||||
(In thousands)
|
2009
|
2008
|
2009
|
2008
|
||||||||||||
Comprehensive
income (loss):
|
||||||||||||||||
Net
income
|
$ | 9,611 | $ | 7,879 | $ | 22,620 | $ | 23,506 | ||||||||
Other
comprehensive income, net of tax:
|
||||||||||||||||
Foreign
currency translation adjustment
|
9,049 | (17,134 | ) | 13,251 | (5,436 | ) | ||||||||||
Change
in fair value of derivatives
|
(1,148 | ) | (7 | ) | (1,919 | ) | (193 | ) | ||||||||
Net
gains reclassified into earnings from
equity
|
(751 | ) | — | (2,329 | ) | — | ||||||||||
Comprehensive
income (loss):
|
16,761 | (9,262 | ) | 31,623 | 17,877 | |||||||||||
Less
comprehensive income (loss) attributable to the noncontrolling
interest
|
1,832 | 1,684 | 4,620 | 4,785 | ||||||||||||
Comprehensive
income (loss) attributable to Inter Parfums, Inc.
|
$ | 14,929 | $ | (10,946 | ) | $ | 27,003 | $ | 13,092 |
10.
|
Net Income
Attributable to Inter Parfums, Inc. and Transfers From the Noncontrolling
Interest:
|
|
Three months ended
September 30,
|
Nine months ended
September 30,
|
||||||||||||||
(In thousands)
|
2009
|
2008
|
2009
|
2008
|
||||||||||||
Net
income attributable to Inter Parfums, Inc.
|
$ | 7,262 | $ | 6,188 | $ | 16,916 | $ | 18,668 | ||||||||
Increase
(decrease) in Inter Parfums, Inc.’s additional paid-in capital for
subsidiary share transactions
|
(36 | ) | 18 | (53 | ) | 215 | ||||||||||
Change
from net income attributable to Inter Parfums, Inc. and transfers from
noncontrolling interest
|
$ | 7,226 | $ | 6,206 | $ | 16,863 | $ | 18,883 |
11.
|
Segment and Geographic
Areas:
|
|
We
manufacture and distribute one product line, fragrances and fragrance
related products and we manage our business in two segments, European
based operations and United States based operations. The European assets
are primarily located, and operations are primarily conducted, in France.
European operations primarily represent the sale of prestige brand name
fragrances and United States operations primarily represent the sale of
specialty retail and mass market fragrances. Information on the Company’s
operations by geographical areas is as
follows:
|
|
Three months ended
September 30,
|
Nine months ended
September 30,
|
||||||||||||||
(In thousands)
|
2009
|
2008
|
2009
|
2008
|
||||||||||||
Net
sales:
|
||||||||||||||||
United
States
|
$ | 13,541 | $ | 14,714 | $ | 31,150 | $ | 42,467 | ||||||||
Europe
|
104,001 | 109,479 | 265,405 | 304,983 | ||||||||||||
Eliminations
of intercompany sales
|
— | (662 | ) | — | (1,678 | ) | ||||||||||
$ | 117,542 | $ | 123,531 | $ | 296,555 | $ | 345,772 | |||||||||
Net
income (loss) attributable to Inter Parfums, Inc.:
|
||||||||||||||||
United
States
|
$ | 288 | $ | 189 | $ | (1,057 | ) | $ | 412 | |||||||
Europe
|
6,969 | 5,980 | 17,941 | 18,252 | ||||||||||||
Eliminations
of intercompany profits
|
5 | 19 | 32 | 4 | ||||||||||||
$ | 7,262 | $ | 6,188 | $ | 16,916 | $ | 18,668 |
September 30,
|
December 31,
|
|||||||
2009
|
2008
|
|||||||
Total
Assets:
|
||||||||
United
States
|
$ | 49,693 | $ | 56,320 | ||||
Europe
|
380,924 | 380,058 | ||||||
Eliminations
of investment in subsidiary
|
(9,182 | ) | (11,241 | ) | ||||
$ | 421,435 | $ | 425,137 |
12.
|
Entry Into Definitive
Agreements:
|
13.
|
Subsequent
Events:
|
|
We evaluated subsequent events
through November 9, 2009, the date this Quarterly report was filed with
the Securities and Exchange
Commission.
|
Item
2:
|
MANAGEMENT’S
DISCUSSION AND ANALYSIS OFFINANCIAL
CONDITION AND RESULTS OF OPERATIONS
|
In thousands
|
Increase (decrease)
|
|||||||
Change
|
to impairment charge
|
|||||||
Weighted
average cost of capital
|
+10%
|
$ |
(181)
|
|||||
Weighted
average cost of capital
|
-10%
|
$ |
226
|
|||||
Future
sales levels
|
|
+10%
|
$ |
264
|
||||
Future
sales levels
|
-10%
|
$ |
(264)
|