FORT LAUDERDALE, Fla., Aug. 28 /PRNewswire-FirstCall/ -- Parlux
Fragrances, Inc. (Nasdaq: PARL) announced today its results for the first
quarter ended June 30, 2006. Net sales increased to $40,784,065 as compared
to $33,817,329 in the prior-year period, an increase of 21%. Net loss for
the period was $14,120,958 ($0.78 per share) compared to net income of
$3,811,623 ($0.18 per share) for the prior-year period. The current period
loss was solely attributable to a non-cash, share-based compensation charge
in the amount of $16,201,950, relating to the modification of outstanding
warrants to effect the Company's June 16, 2006 stock split. This charge,
net of a deferred tax benefit of $1,058,034, negatively impacted earnings
for the current period by $0.84 per share.
The non-cash, share-based compensation charge, which was required by
Statement of Financial Accounting Standards No.123R "Share Based Payment"
effective for the Company on April 1, 2006, resulted from the modification
of fully vested warrants issued during the period from 1999 to 2002, to
effect the Company's June 16, 2006 stock split. The non-cash charge did not
have a negative effect on the Company's financial position as an increase
for the same amount was recorded directly to additional paid-in- capital
within stockholders' equity.
Commenting on the results, Mr. Ilia Lekach, Chairman and Chief
Executive Officer, said, "We regret that the determination of the non-cash
charge, which did not have negative effect on our stockholders' equity,
caused an additional delay in the filing of our quarterly report. The
complexities of this new accounting regulation, coupled with limited
available guidance, required an inordinate amount of research. Excluding
the non-cash charge, our operations would have been profitable."
Mr. Lekach continued, "Net sales to U.S. department stores in this
quarter increased 15% compared to the prior year, but were lower than
anticipated due to consolidation in that distribution segment. Net sales to
international distributors increased 81%. Reduced sales to related parties
and delays in establishing distribution channels for Paris Hilton handbags
and watches negatively impacted our total sales." Mr. Lekach added, "We
committed to advertising/promotional programs and gift with purchase
programs, which exceeded prior-year spending by approximately $4 million,
in anticipation of higher department store sales. Higher interest costs
were incurred due to increased production of inventory for anticipated new
product launches."
Mr. Lekach concluded, "Regarding the future, we are optimistic about
our upcoming GUESS? Gold and Paris Hilton Heiress fragrance launches and
look forward to the holiday season. Given a letter of intent for the sale
of our Perry Ellis fragrance business, further comments on future guidance
would not be meaningful."
Parlux Fragrances, Inc. is a manufacturer and international distributor
of prestige products. It holds licenses for Paris Hilton fragrances,
watches, cosmetics, sunglasses, handbags and other small leather
accessories in addition to licenses to manufacture and distribute the
designer fragrance brands of Perry Ellis, GUESS?, XOXO, Ocean Pacific (OP),
Maria Sharapova, Andy Roddick, babyGund, and Fred Hayman Beverly Hills.
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 below)
PARLUX FRAGRANCES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended June 30,
2006 2005
Net sales:
Unrelated customers $31,656,177 $19,402,059
Related parties 9,127,888 14,415,270
40,784,065 33,817,329
Cost of goods sold:
Unrelated customers 16,680,056 7,995,412
Related parties 4,539,973 6,398,070
21,220,029 14,393,482
Gross margin 19,564,036 19,423,847
Operating expenses:
Advertising and promotional 10,434,121 7,417,042
Selling and distribution 2,878,915 2,256,101
Royalties 2,033,254 1,546,516
General and administrative 1,910,306 1,617,124
Depreciation and amortization 477,030 488,909
Share-based compensation expense 16,201,950 --
Total operating expenses 33,935,576 13,325,692
Gain on sale of property held for sale 494,465 --
Operating (loss) income (13,877,075) 6,098,155
Interest (expense) income and foreign
exchange gains and losses, net (674,942) 49,626
(Loss) income before income taxes (14,552,017) 6,147,781
Income tax benefit (provision) 431,059 (2,336,158)
Net (loss) income ($14,120,958) $3,811,623
Diluted (loss) earnings per share $(0.78) $0.18
Weighted average diluted shares
outstanding 18,035,431 21,076,522
SOURCE Parlux Fragrances, Inc.
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Related links:
http://www.parlux.com
http://www.prnewswire.com/comp/674987.html /
CONTACT:
Ilia Lekach, ext. 8116, or Frank A.
Buttacavoli, ext. 8117, both of Parlux Fragrances, Inc.,
+1-954-316-9008
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