FORT LAUDERDALE, Fla., Feb. 14 /PRNewswire-FirstCall/ --
Parlux Fragrances, Inc. (Nasdaq: PARL) announced today its results for the
quarter ended December 31, 2001.
Net sales for the quarter were $16,280,479 compared to $20,149,871 for the
comparable quarter of the prior year, a decrease of 19%. The decrease was
attributable to the post September 11 economic environment which negatively
impacted sales to domestic department stores and international distributors.
Sell-through of retailer gift set inventories purchased in preparation for the
holiday season was lower than expected and we have recorded provisions for
anticipated higher returns.
Net loss for the quarter was $6,155,393 ($0.62 per share) compared to net
income of $701,746 ($0.07 per share) for the comparable prior year period.
This reflects the effect of lower sales and decreased margins combined with a
$7,273,123 non-cash charge to operating income for the impairment of
intangibles in connection with the impending cash sales of two brands, which
are currently being negotiated.
For the nine-month period ended December 31, 2001, net sales were
$53,335,238 compared to $54,060,433, a decrease of 1%, as lower sales in the
current quarter offset the 9% increase in net sales achieved during the first
six months of the fiscal year. The net loss of $6,458,906 ($0.65 per share)
compared to net income of $3,305,483 ($0.32 per share) for the comparable year
period. The loss was entirely due to the impairment of intangibles of
$7,273,123, as noted above, and a non-cash charge for an unrealized loss on an
investment of $2,858,447.
Commenting on the results, Mr. Ilia Lekach, Chairman and Chief Executive
Officer said, "Our third quarter performance reflects the problems experienced
by domestic department stores and international customers. The market for
luxury products was hard hit by the post September 11 economy, which in turn,
created a more cautious consumer of gift items. Our launch of OP Woman
products was successful but not enough to offset the negative impact of the
overall depressed economy."
Mr. Lekach added, "We see indications of an improving economy and are
experiencing an increase in orders. Assuming this trend continues, we
anticipate generating a profit in our next quarter. We believe that our new
product introductions in Spring and Fall will be favorably received. We have
trimmed operating expenses and lower interest rates should contribute to our
return to profitability. The planned sales of two of our brand names have
generated a non-cash charge of over $7 million to earnings but we expect they
will generate cash of over $3.5 million and an income tax benefit of
$2.7 million. This will enable us to reduce our outstanding borrowings while
increasing our working capital and our tangible net worth."
Parlux Fragrances, Inc. is a manufacturer and international distributor of
prestige fragrances and holds the licenses to manufacture and distribute the
designer fragrance brands of Perry Ellis, Fred Hayman Beverly Hills, Ocean
Pacific (OP), and JOCKEY. The Company also owns, manufactures and distributes
its own fragrance brand, Animale Parfums.
The Company may periodically release forward-looking statements pursuant
to the safe-harbor provisions of the Private Securities Litigation Reform Act
of 1995. Such forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause actual results, performance or
achievements of the Company or its industry to be materially different from
any future results, performance or achievements expressed or implied by such
forward-looking statements. These risks and uncertainties include, among
others, future trends in sales and the Company's ability to introduce new
products in a cost-effective manner. Readers are cautioned not to place undue
reliance on these forward-looking statements, which speak only as of the date
thereof. The Company undertakes no obligation to publicly release the result
of any revisions to these forward-looking statements that may be made to
reflect events or circumstances after the date hereof or to reflect the
occurrence of unanticipated events.
(See table that follows)
PARLUX FRAGRANCES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended December 31, 2001 2000
Net sales $ 16,280,479 $20,149,871
Cost of goods sold 8,549,871 8,258,666
Gross margin 7,730,608 11,891,205
Operating expenses
Advertising and promotional 6,107,067 6,045,486
Selling and distribution 1,679,982 1,751,721
General and administrative, net of licensing
fees of $162,500 in both 2001 and 2000 1,340,677 1,347,825
Depreciation and amortization 525,492 591,536
Royalties 473,601 624,218
Impairment loss on intangibles 7,273,123 ------
Total operating expenses 17,399,942 10,360,786
Operating income (loss) (9,669,334) 1,530,419
Interest expense and exchange gains, net 258,719 398,571
Income (loss) before taxes (9,928,053) 1,131,848
Income taxes provision (benefit) (3,772,660) 430,102
Net income (loss) ($6,155,393) $701,746
Fully diluted earnings (loss) per share ($0.62) $0.07
Weighted average shares outstanding 9,976,146 10,091,240
Nine Months Ended December 31, 2001 2000
Net sales $53,335,238 $54,060,433
Cost of goods sold 25,125,493 21,330,369
Gross margin 28,209,745 32,730,064
Operating expenses
Advertising and promotional 14,648,105 14,035,016
Selling and distribution 5,029,688 4,918,009
General and administrative,
net of licensing fees of
$487,500 in both 2001 and 2000 3,450,398 4,260,934
Depreciation and amortization 1,583,958 1,709,637
Royalties 1,578,840 1,622,345
Impairment loss on intangibles 7,273,123 -----
Total operating expenses 33,564,112 26,545,941
Operating income (loss) (5,354,367) 6,184,123
Interest expense and exchange gains, net 787,277 852,699
Other-than-temporary decline in value
of investment in affiliate 2,858,447 -----
Income (loss) before taxes (9,000,091) 5,331,424
Income taxes provision (benefit) (2,541,185) 2,025,941
Net income (loss) ($6,458,906) $3,305,483
Fully diluted earnings (loss) per share ($0.65) $0.32
Weighted average shares outstanding 9,973,046 10,409,751
SOURCE Parlux Fragrances, Inc.
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Related links:
http://www.parlux.com
Company News On-Call:
http://www.prnewswire.com/gh/cnoc/comp/674987.html
CONTACT:
Ilia Lekach, ext. 116, or Frank A.
Buttacavoli, ext. 117, both of Parlux Fragrances, Inc.,
+1-954-316-9008
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