PARL Parlux Fragrances, Inc. (MM)

FORT LAUDERDALE, Fla., April 13 /PRNewswire-FirstCall/ -- Parlux Fragrances, Inc. (NASDAQ:PARL) announced today its results for the three months ended December 31, 2006. Net sales from continuing operations were $43,416,309, compared to $37,808,090 in the same period of the prior year, an increase of 15%. Net loss from continuing operations was $(5,463,157) compared to income of $1,524,009 in the same period of the prior year. Operating expenses not directly attributable to Perry Ellis brand activity, as well as interest expense, were not allocated to discontinued operations, and as such, are included in continuing operations. Net income for the current quarter was $17,938,864 compared to $5,996,089 in the same period of the prior year. Earnings per share on a diluted basis were $0.98 compared to prior-year earnings of $0.28 per share. The current period includes a pretax gain of $34,277,316 from the sale of the Perry Ellis fragrance brand which gain, as well as activity directly relating to the Perry Ellis brand, have been classified as discontinued operations for all periods presented. For the nine-month period ended December 31, 2006, net sales from continuing operations were $98,785,112 compared to $72,374,428 in the prior period, an increase of 36%. Net loss from continuing operations was $(22,233,088) compared to a loss of $(852,331) in the same period of the prior year. Operating expenses not directly attributable to Perry Ellis brand activity, as well as interest expense, were not allocated to discontinued operations, and as such, are included in continuing operations. Net income for the period was $7,467,217 ($0.41 per share on a diluted basis) compared to net income of $14,247,583 ($0.79 per share on a diluted basis) in the same period of the prior year. The current period includes the gain from the sale of the Perry Ellis fragrance brand and a $1,774,624 gain from the sale of our investment in E Com Ventures, Inc. The current period loss includes 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 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, Neil J. Katz, Interim CEO said, "With the filing of our December 31, 2006 Form 10-Q, we will be up to date in complying with our reporting responsibilities. We are grateful to our shareholders for their patience and look forward to focusing our energies to improve future results." Update on Nasdaq Listing As previously reported, the Company requested a brief extension from Nasdaq until April 16, 2007 to file this Form 10-Q, which was granted on April 9, 2007. There can be no assurance that the Company can achieve full compliance with all of the Nasdaq requirements. However, with the filing of this Quarterly Report on Form 10-Q, the Company believes it should be compliant and current with all of its filings. About Parlux Fragrances, Inc. 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 GUESS?, XOXO, Ocean Pacific (OP), Maria Sharapova, Andy Roddick, babyGund, and Fred Hayman Beverly Hills. Certain Information Regarding Forward-Looking Statements This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, regarding, among other things, our plans, strategies and prospects, both business and financial. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements of Parlux 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 Parlux's ability to introduce new products in a cost-effective manner, general economic conditions and continued compliance with the covenants in our credit facility. Additional risk factors are set forth in the Company's periodic reports filed with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date thereof. Parlux 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. PARLUX FRAGRANCES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Three Months Ended December 31, 2006 2005 Net sales: Unrelated customers $29,738,731 $27,715,231 Related parties 13,677,578 10,092,859 43,416,309 37,808,090 Cost of goods sold: Unrelated customers 18,078,930 11,801,532 Related parties 7,242,803 4,341,300 25,321,733 16,142,832 Gross margin 18,094,576 21,665,258 Operating expenses 26,312,768 19,026,092 Operating (loss) income from continuing operations (8,218,192) 2,639,166 Interest expense, net (590,902) (199,429) Foreign exchange (loss) gain (2,448) 18,341 (Loss) Income from continuing operations before income taxes (8,811,542) 2,458,078 Income tax benefit (provision) 3,348,385 (934,069) Net (loss) income from continuing operations (5,463,157) 1,524,009 Discontinued operations: Income from operations of Perry Ellis fragrance brand, including a gain of $34,277,316 on sale of the brand in 2006 37,745,195 7,213,033 Income tax provision related to Perry Ellis brand activity (14,343,174) (2,740,953) Income from discontinued operations 23,402,021 4,472,080 Net income $17,938,864 $5,996,089 Diluted earnings (loss) per common share: Continuing operations ($0.30) $0.07 Discontinued operations $1.28 $0.21 Total $0.98 $0.28 Weighted average shares outstanding: 18,270,745 21,078,419 Nine Months Ended December 31, 2006 2005 Net sales: Unrelated customers $65,377,336 $50,138,487 Related parties 33,407,776 22,235,941 98,785,112 72,374,428 Cost of goods sold: Unrelated customers 37,216,966 20,349,402 Related parties 17,443,561 9,728,496 54,660,527 30,077,898 Gross margin 44,124,585 42,296,530 Operating expenses, including share- based compensation expense of $16,201,950 in 2006 73,668,482 43,457,434 Gain on sale of property held for sale 494,465 -- Operating (loss) income from continuing operations (29,049,432) (1,160,904) Interest expense, net (2,125,124) (232,165) Gain on sale of investment in affiliate 1,774,624 -- Foreign exchange (loss) gain 11,883 18,341 (Loss) Income from continuing operations before income taxes (29,388,049) (1,374,728) Income tax benefit 7,154,961 522,397 Net loss from continuing operations (22,233,088) (852,331) Discontinued operations: Income from operations of Perry Ellis fragrance brand activity, including a gain of $34,277,316 on sale of the brand in 2006 47,903,718 24,357,700 Income tax provision related to Perry Ellis brand (18,203,413) (9,254,786) Income from discontinued operations 29,700,305 15,099,914 Net income $7,467,217 $14,247,583 Diluted earnings (loss) per common share: Continuing operations ($1.23) ($0.05) Discontinued operations $1.64 $0.84 Total $0.41 $0.79 Weighed average shares outstanding 18,135,154 17,907,158 DATASOURCE: Parlux Fragrances, Inc. CONTACT: Neil J. Katz, CEO, Parlux Fragrances, Inc., +1-954-316-9008, Ext. 8116 Web site: http://www.parlux.com/ Company News On-Call: http://www.prnewswire.com/comp/674987.html

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