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Perfumania Holdings Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: September 12, 2011 04:52PM

Perfumania Holdings Inc. (PERF) filed Quarterly Report for the period ended 2011-07-30. Perfumania Holdings Inc. has a market cap of $147.96 million; its shares were traded at around $16.5 with and P/S ratio of 0.31.



Highlight of Business Operations:

Members of senior management and a principal shareholder of the Company have had preliminary discussions with Parlux Fragrances, Inc. (“Parlux”) regarding the possible terms of a business combination between the Company and Parlux. Based upon these preliminary discussions, representatives of the Company and Parlux may continue to engage in discussions regarding a potential combination of the two companies; however they are under no obligation to do so. There can be no assurance that any agreement between the Company and Parlux regarding a potential business combination will ever be reached, or if such an agreement is reached, that such a transaction will be consummated. Parlux is one of the Company's largest trading partners. Information about the Company's purchases from, and amounts owed to, Parlux is provided in Note 10 to the financial statements included in Item 1 of this Form 10-Q. At June 30, 2011, Parlux had assets of $114.5 million, and its sales and net loss for the quarter ended June 30, 2011 were $22.9 million and $2.9 million, respectively. Its current market capitalization is approximately $68 million. Further information about Parlux may be found in its filings with the Securities and Exchange Commission at www.sec.gov/edgar/searchedgar/companysearch.html. The Company expects that, if any such transaction were to occur, the consideration provided to the Parlux shareholders would consist of both cash and Company common stock, and that it expects to finance the cash portion through further borrowing and, possibly, the issuance of equity. The Company's management has not yet quantified the possible impact of any such business combination on the Company's capital needs or results of operations.

Net sales increased 5.6% from $98.1 million in the thirteen weeks ended July 31, 2010 to $103.6 million in the thirteen weeks ended July 30, 2011. The increase in sales was primarily due to an increase in retail sales of $7.2 million.

Retail sales increased by 10.0% from $71.7 million in the thirteen weeks ended July 31, 2010 to $78.9 million in the thirteen weeks ended July 30, 2011. The increase was due to an increase in Perfumania's retail sales of $6.4 million and an increase in SOW's consignment sales of $0.8 million.

Net sales increased 4.2% from $200.9 million in the twenty-six weeks ended July 31, 2010 to $209.4 million in the twenty-six weeks ended July 30, 2011. The increase in sales was primarily due to an increase in retail sales of $13.7 million offset by a decrease in wholesale sales of $5.2 million.

Retail sales increased by 9.9% from $137.6 million in the twenty-six weeks ended July 31, 2010 to $151.2 million in the twenty-six weeks ended July 30, 2011. The increase was due to an increase in Perfumania's retail sales of $12.2 million and an increase in SOW's consignment sales of $1.5 million.

Net cash provided by operating activities during the twenty-six weeks ended July 30, 2011 was approximately $13.1 million, compared with approximately $26.3 million used in operating activities during the twenty-six weeks ended July 31, 2010. The $39.4 million increase in cash flows from operating activities during the twenty-six weeks ended July 30, 2011 compared with the prior year s comparable period resulted primarily from an increase in accounts payable due to the timing of repayments to our vendors, a decrease in inventory levels during the twenty-six weeks ended July 30, 2011 due to a reduction in inventory purchases and a reduction in our net loss. The seasonality of our operations may lead to significant fluctuations in certain asset and liability accounts between fiscal year-end and subsequent interim periods.

Read the The complete Report



Stocks Discussed: PERF,
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