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Parlux Fragrances Inc. (PARL) filed Quarterly Report for the period ended 2011-12-31.
Parlux Fragrances Inc. has a market cap of $107.8 million; its shares were traded at around $5.24 with a P/E ratio of 259.5 and P/S ratio of 0.9.
This is the annual revenues and earnings per share of PARL over the last 10 years. For detailed 10-year financial data and charts, go to 10-Year Financials of PARL.
Highlight of Business Operations:
For the three-months ended December 31, 2011, net sales to unrelated customers, which represented 59% of our total net sales decreased 3% to $18.7 million, as compared to $19.3 million for the same prior year period. The decrease in net sales was primarily due to a decrease in sales in our domestic market. Net sales to the U.S. department store sector decreased 17% to $10.3 million for the three-months ended December 31, 2011, as compared to $12.4 million for the same prior year period, while net sales to international distributors increased 22% to $8.4 million from $6.9 million for the same prior year period. The decrease in net sales in our domestic market was primarily due to increased returns of holiday promotional gift sets and a decrease in gross sales of our Paris Hilton brand fragrances, partially offset by an increase in gross sales of our Rihanna brand fragrances and of our new Vince Camuto Women, brand fragrance. The increase in net sales to international distributors was primarily due to gross sales from our Rihanna brand fragrances, of approximately $3.7 million for the three-months ended December 31, 2011. International distributors have no rights to return merchandise.For the three-months ended December 31, 2011, sales to related parties increased 11% to $13.2 million, as compared to $11.9 million for the same prior year period. The increase for the three-months ended December 31, 2011, is primarily due to an increase in gross sales to Jacavi Beauty Supply, LLC (“Jacavi”) a fragrance distributor, also classified as a related party. For the nine-months ended December 31, 2011, net sales to related parties decreased 4% to $39.8 million, as compared to $41.5 million for the same prior year period. The decrease for the nine-months ended December 31, 2011, was primarily due to a decrease in gross sales of our Paris Hilton brand fragrances to Perfumania, Inc., a wholly-owned subsidiary of Perfumania, which resulted in gross sales of $6.7 million and $25.1 million for the three and nine-months ended December 31, 2011, as compared to $8.5 million and $30.1 million in the same prior year periods. In addition to our sales to Perfumania, we had net sales of $3.7 million and $6.7 million for the three and nine-months ended December 31, 2011, to Jacavi, as compared to $0.7 million and $3.7 million for the three and nine-month same prior year periods. Management confers with our related parties on a periodic basis to establish current and future sales ordering schedules. See “Liquidity and Capital Resources” and Note G to the accompanying unaudited Condensed Consolidated Financial Statements for further discussion of related parties.
During the three-months ended December 31, 2011, total operating expenses increased 16% to $21.4 million from $18.5 million in the same prior year period, increasing as a percentage of net sales to 67% from 59%. During the nine-months ended December 31, 2011, total operating expenses increased 18% to $58.1 million from $49.3 million in the same prior year period, increasing as a percentage of net sales to 58% from 52%. However, during the three and nine-months ended December 31, 2011, we incurred $1.0 million and $1.5 million, respectively, in onetime expenses relating to the proposed Merger. Therefore, certain individual components of our operating expenses discussed below experienced more significant changes than others.
For the three-months ended December 31, 2011, royalties increased 12% to $2.9 million, as compared to $2.6 million for the same prior year period, increasing as a percentage of net sales to 9% from 8%. For the nine-months ended December 31, 2011, royalties increased 3% to $8.3 million, as compared to $8.1 million for the same prior year period, decreasing as a percentage of net sales to 8% from 9%. For the three and nine-months ended December 31, 2011, the increase in royalties, was primarily due to higher sales for certain brands, which resulted in contractual minimum royalty requirements being achieved, coupled with certain minimum payment requirements under contractual obligations. During the same prior year periods, the assignment of the worldwide exclusive licensing rights for the production and distribution of Paris Hilton sunglasses and the sublicensed international rights for the handbags continued to absorb a portion of the minimum royalty. We generated no sublicensing revenue in the three and nine-months ended December 31, 2011, as compared to $0.1 million and $0.3 million, respectively, for the same prior year periods, which has been recorded as a reduction in royalty expense.
For the three-months ended December 31, 2011, general and administrative expenses increased 59% to $3.0 million, as compared to $1.9 million for the same prior year period, increasing as a percentage of net sales to 9% from 6%. For the nine-months ended December 31, 2011, general and administrative expenses increased 27% to $7.6 million, as compared to $6.0 million for the same prior year period, increasing as a percentage of net sales to 8% from 6%. The increase in general and administrative expenses for the three and nine-months ended December 31, 2011, was primarily due to onetime expenses of $1.0 million and $1.5 million, respectively, resulting from an increase in legal and other professional fees relating to the proposed Merger. In the same prior year periods, there was a decrease in personnel and the related benefits and insurance expenses.
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