IPAR- Profile March - INTER PARFUMS Inc.

Industry: Fragrances/Personal Care Products
NasdaqGS: IPAR
Recent Price:
$15.30
12-Month Range:
$13.75 - $ 24.80
Insider Ownership:
14.1 million shares
Avg. Daily Trading Vol.:
93,000 shares
Fiscal Year:
Dec. 31
Shares Outstanding:
30.6 million
Annual Cash Dividend:
$0.32
Market Cap:
$470 million
B U S IN E S S D E S C R I P T IO N
In the nearly 30 years since its founding, Inter Parfums, Inc. has been selected as the fragrance
and beauty partner for a growing list of prestige brands that include Burberry, Lanvin, Jimmy
Choo, Van Cleef & Arpels, Montblanc, Paul Smith, Boucheron, S.T. Dupont, Balmain and
Repetto. Inter Parfums is also the fragrance and beauty partner for specialty retail and designer
brands such as Gap, Banana Republic, Brooks Brothers, bebe, Betsey Johnson, Nine West and
Anna Sui. 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 120 countries
worldwide.
RECENT
NEWS
In December 2011, a 13-year license agreement was signed with
Repetto, the legendary name in the world of dance. Today the
brand encompasses fashion shoes and accessories. The first fragrance under the brand is scheduled for a 2013 introduction.
F INA N C IA L & I N V E S T M E N T H I G H L I G H T S
2011 vs. 2010:
⇒ Net sales increased 34% to a record $615.2 million from $460.4 million; in constant dollars, 2011 net sales
rose 28%.
⇒ European-based operations generated sales of $552.4 million, up 36% from $404.9 million.
⇒ U.S.-based operations generated sales of $62.8 million, up 13% compared to $55.5 million.
⇒ Net income attributable to IPAR increased 21% to $32.3 million from $26.6 million.
⇒ Diluted EPS attributable to IPAR rose 21% to $1.05 compared to $0.87.
2012 Guidance (guidance assumes the dollar remains at current levels):
⇒ For 2012, management anticipates net sales of approx. $625.0 million and net income attributable to IPAR of
$35.7 million or $1.16 per diluted share.
Strong Financial Position:
⇒ At 12/31/11, working capital was $205.7 million; the working capital ratio was 2.1 to 1; cash and cash
equivalents approximated $35.8 million; and IPAR had no long-term debt.
Other Investment Highlights:
⇒ Growing Portfolio of Well-Recognized Prestige Brands often targeted to different customers.
⇒ Preferred Partner: IPAR is sought out by brand owners because of its brand-building expertise and creative
product development that capture the essence of the brand, as well as its global distribution capabilities.
⇒ Number of Specialty Retail & U.S. Designer Partnerships Growing: Since the Gap and Banana Republic
agreements of July ’05, IPAR has entered into agreements to produce and sell products under the Brooks
Brothers, bebe, Betsey Johnson, Nine West and Anna Sui brands. In addition to direct sales to these retailers,
IPAR has expanded distribution internationally and domestically, under license agreements with several of
these brands.
⇒ Multi-Pronged Growth Strategy aimed at growing existing fragrance brands, extending existing brands into
new categories and adding new brands.
P R E S T I G E P RO D U C T S
Prestige fragrance products (90% of 2011 net sales) are primarily produced and marketed by IPAR’s 74%-owned,
publicly held, Paris-based subsidiary, Inter Parfums, SA (“IPAR SA”), whose remaining 26% of shares trade on
the NYSE-EuroNext Paris stock exchange. Within each brand are several fragrance families, versions for men
and women, as well as multiple sizes, formulations and ancillaries. While IPAR acts as general contractor in
the production process, its advertising and promotional programs are designed and executed internally.
In the United States, France, U.K., Germany, Italy and Spain, IPAR controls its brand distribution. For the
rest of the world, independent distributors sell the products into the appropriate channels, typically department
stores, perfumeries, duty-free shops and other upscale outlets. Distribution and advertising are focused in
geographic regions where the brand has strong recognition and a loyal following.
Burberry represented 50% of 2011 sales. The distinct fragrance families include:
Burberry (‘95), Burberry Week End (‘97), Burberry Touch (‘00), Burberry Brit (‘02-‘03),
Burberry London (‘06), Burberry The Beat (‘08), Burberry Sport (‘10), and a make-up line, Burberry Beauty (‘10) which is now sold in about 100 doors.
BURBERRY
Burberry Body, the largest fragrance launch in IPAR’s history, will eventually reach more
than 10,000 doors. An equally ambitious global ad campaign is underway.
LANVIN
Known for luxury and elegance, the Lanvin fashion house, founded in 1889, expanded
into fragrances in the 1920s. Winner of a FIFI Hall of Fame award, Arpège (created in
1927), is still sold to its aficionados, as well as to new customers. Lanvin fragrances,
IPAR’s second largest brand include: Lanvin L’Homme (‘97), Eclat d’Arpège (‘02), Arpège
pour Homme (‘05), Rumeur (‘06), Rumeur 2 Rose (‘07), Jeanne Lanvin (‘08), Lanvin L’Homme
Sport (‘09), Marry Me! (‘10) and Avant Garde (‘12).
JIMMY CHOO
In October 2009, IPAR entered into a 12-year license agreement for the creation,
development and distribution of fragrances under the Jimmy Choo brand. Jimmy Choo encompasses a complete
luxury lifestyle accessory brand with women's shoes, handbags, small leather goods, and eyewear.
The first Jimmy Choo fragrance launched in select distribution in Q1’11, and broader distribution is underway.
A 10.5-year license was signed with Montblanc, effective July 1, 2010, when IPAR took
over the Montblanc fragrance business which includes: Présence (‘01), Présence D’une
Femme (‘02), Individuel (‘04), Femme Individuelle (‘04), Starwalker (‘05), Femme de Montblanc
(‘06) and Homme Exceptionnel (‘06). The 100+ year old brand is best known for fine writing instruments, and more recently, jewelry, watches, and other luxury accessories.
IPAR launched a men’s scent, Legend, in Q1’11 which has been a huge success. A women’s
scent comes to market in ‘12.
MONTBLANC
VAN CLEEF & ARPELS
IPAR is the exclusive worldwide fragrance licensee for the world renowned jewelry designer, Van Cleef & Arpels. After more than 35 years
on the market, one of VCA’s best-selling fragrances is First (‘76). Other legacy fragrances include: Van Cleef Pour Homme (‘78), Tsar (‘89), Van Cleef (‘94),
First Premier Bouquet (‘08). Under IPAR’s leadership, Feerie (‘08), Collection
Extraordinaire (‘09), Oriens (‘10), and Midnight in Paris (‘10) were launched.
PAUL SMITH
Paul Smith is one of the U.K.’s most famous designers. He is also well-known in Japan where
his designs are sold in over 200 stores. Since the introduction of the Paul Smith signature fragrance in 2000, the brand has grown to include Paul Smith (‘00), Paul Smith Extreme (‘02), Paul Smith
Story (‘06), Paul Smith Rose (‘07), Paul Smith Man (‘09), and Paul Smith Man 2 (‘10).
Optimistic, a collection for men and women, launched in ‘11.
S.T. DUPONT
For more than a century, S.T. Dupont has been known for high-end watches,
writing instruments, and lighters. S.T. Dupont fragrances include: S.T. Dupont
(‘98) S.T. Dupont Essence Pure (‘02), L’Eau de S.T. Dupont (‘04), S.T. Dupont Noir (‘06), S.T.
Dupont Passenger (’08), S.T. Dupont Rose (‘09), S.T. Dupont (‘09), Miss Dupont (’10) and S.T.
Dupont Passenger Cruise (‘11).
BOUCHERON
BALMAIN
In December 2010, IPAR and Boucheron signed a 15-year license agreement, which began in
2011. The 150+ year old brand, which is best known for ultra-luxury jewelry, has an established
fragrance collection. An established Boucheron fragrance is being reinvigorated for ‘12.
In July 2011, IPAR entered into a 12-year license agreement to create, produce and distribute
perfumes and ancillary products under the Balmain brand.
The Balmain couture house was founded in 1945 by Pierre Balmain. Effective January 1, 2012, IPAR took over the
production and distribution of existing Balmain fragrances. A new twist on a legacy Balmain fragrance will come to
market in ‘12.
S P E C I A LTY R E TA I L & M A S S M A R K E T
IPAR is the fragrance and beauty partner for a growing number of distinct specialty retail brands including
Gap, Banana Republic, Brooks Brothers, bebe, Betsey Johnson, Nine West, and Anna Sui. Generally,
products are created for direct sales to North American namesake stores. In some cases, the brands’ fragrances
are also sold domestically to department and specialty stores. IPAR’s global distribution network sells into the
brands’ overseas doors, plus specialty, department and duty-free stores.
Since the initial agreement of July 2005 between IPAR and
Gap, Inc., IPAR has been developing and producing
fragrance, personal care and home fragrance products for
Gap and Banana Republic stores in the U.S. and Canada. International distribution of these products has been
conducted over the past several years under license with Gap, Inc.
The Banana Republic Discover Collection debuted in ‘06 and included Albaster, Jade, Rosewood, Slate,
and Black Walnut and Cordovan and Malachite were added in ‘07. In addition to legacy fragrances
such as Classic and W (‘95), the Banana Republic collections also include Republic of Men and
Republic of Women (‘09), Wildbloom (‘11) and Wildbloom Vert (‘12).
Gap scents in distribution include: Close (‘09), Stay (‘10), Core (‘10), Deep (‘11), and Near (‘11).
International distribution began in ‘09. Gap Established 1969 scents for men and women are
debuting in Q1’12.
Brooks Brothers and IPAR entered into an agreement in 2007 covering fragrance and personal care products
sold at U.S. Brooks Brothers stores plus a licensing agreement for international distribution. Since 1818,
Brooks Brothers has shaped the American style of dress through fashion innovation,
fine quality, and personal service. Brooks Brothers product lines include: Brooks
Brothers New York (‘08), Black Fleece (‘09), Brooks Brothers Madison (‘10), and a trio of
scents Black Fleece Red, White, & Blue (‘10). Miss Madison is scheduled to launch in ‘12.
In 2008 IPAR inked an agreement covering fragrance and personal care products for bebe
stores. The brand’s signature look is hip, sophisticated and body-conscious.
The highly successful launch of the bebe signature fragrance began in 2009 at bebe stores and more than 300 Dillards.
bebe Sheer launched in ‘10, and bebe Gold launched in ‘11. Wishes & Dreams debuts in Spring ‘12.
International sales of bebe fragrance products have been especially strong.
IPAR has an exclusive agreement to design, manufacture and
sell Betsey Johnson fragrance, color cosmetics and related
products.
The first new fragrance collection, Betsey Johnson Too Too, launched in the fall of 2011 at Sephora and
namesake stores. International and broader domestic distribution starts in ‘12. A Too Too flanker is also in
the works.
IPAR signed an agreement to design, manufacture and sell Nine West
fragrances to its stores, plus other specialty and department stores
worldwide.
The first fragrance, Love Fury, launched in early ‘12 at 650 Macy’s stores and 282 Nine West stores in the U.S.
and internationally.
In June 2011, IPAR entered into a 10-year exclusive worldwide fragrance license agreement to create, produce and distribute perfumes and fragrance-related products under
the Anna Sui brand, commencing January 1, 2012. IPAR is now taking over production and distribution of the brand’s existing fragrance collections, and a new women’s
scent is planned for fall ‘12.
Mass Market includes several proprietary fragrance brands, a license for Jordache, and low-priced cosmetics and health &
beauty aids.
F INA N C IA L H I G H L I G H T S
Net Sales ($ in millions)
Y EA R ENDED D EC E MB ER 3 1 ,
($ in millions
2011
2010
Change
615.2
460.4
34%
Operating Income
66.9
56.4
19%
Net Income Attributable to IPAR
32.3
26.6
21%
Diluted EPS
1.05
0.87
21%
except for share data)
Sales
STRONG BALANCE SHEET: As of 12/31/11:
Working Capital
$205.7 Million
Current Ratio
2.1 to 1.0
Cash and Cash Equivalents
$35.8 Million
Long-Term Debt
0
Annual Dividend
$0.32 per share
Low Capex
Generally Less than 1.5% of Sales
Net Income Attributable to IPAR ($ in millions)
*Guidance assumes the dollar remains at current levels
This Profile may contain statements about future events and expectations that constitute forward-looking
statements. Forward-looking statements are based on Inter Parfums management’s beliefs, assumptions
and expectations of future events and economic performance, considering information currently available
to management. These statements are not statements of historical fact. Forward-looking statements involve risks and uncertainties that may cause actual results, performance or financial condition to differ
materially from the expectations expressed or implied in any forward-looking statement. Inter Parfums
does not undertake any obligation to update or revise forward-looking statements, whether as a result of
new information, future events or otherwise. Anyone receiving this Profile is encouraged to review all
filings made by the Company with the Securities and Exchange Commission. The information contained
herein is being provided for information purposes only and does not constitute an offer to sell or a solicitation of an offer to buy any securities. The Equity Group Inc. is retained by Inter Parfums to provide
investor relations services. The Equity Group, its officers or employees may have a position in the securities of the Company.
Contact
Russell Greenberg
Executive VP & CFO
Inter Parfums, Inc.
551 Fifth Avenue, 15th Fl.
New York, NY 10176
Linda Latman 212.836.9609
Lena Cati 212.836.9611
The Equity Group Inc.
www.theequitygroup.com
3/12