Parlux Fragrances, Inc. (NASDAQ: PARL) announced today its results
for the three months ended June 30, 2008. Net sales were
$23,304,180, compared to $31,380,468 in the same period of the
prior year, a decrease of 26%. The decline in sales was due to the
inability to fill customer orders timely as increased demand for
certain key products exceeded forecasted production. Additionally,
unanticipated delays in obtaining critical components, particularly
plastics and glass, restricted our production capabilities, further
delaying shipments. Net loss was $4,882,831, or ($0.24) per share,
compared to a loss of $97,628 in the same period of the prior year.
The higher loss was due to a combination of the lower sales, due to
the inventory shortages, and increased spending to support growth
and sell-through, particularly in the U.S. department store market
segment.
Mr. Neil J. Katz, Chairman and CEO, noted that "Our shortfall in
sales this quarter was due to our inability to ship approximately
$8 million in orders due to unavailable inventory. We had
strategically reduced inventory levels during our last fiscal year
expecting that our suppliers could timely replenish components,
which they were not able to do. This problem was compounded by our
strong sales performance in our fourth quarter of fiscal 2008 for
certain key products. We, however, expect to recover the sales
shortfall over the next quarter." Mr. Katz added, "Our sales
shortfall is not an indication of the demand for our products and
U.S. department store retail sell-through, which remains strong and
far ahead of last fiscal year despite the difficult retail
environment. Our promotional spending during the first quarter
increased sell-through of our Paris Hilton and GUESS? brands, which
we believe will result in higher orders for the important upcoming
holiday season. The inventory shortage will not affect the initial
orders for Jessica Simpson's 'Fancy,' which recently commenced
shipping, nor for our new Paris Hilton fragrance 'Fairy Dust' which
will ship in September." Mr. Katz concluded, "In spite of our first
quarter production difficulties, it is our expectation that sales
for the current quarter and sales and profit for the full fiscal
year will significantly exceed those of the prior year comparable
periods."
Conference Call
Due to shareholder interest, the Company will host a conference
call on Friday, August 8, 2008 at 9:00 a.m. (EDT) to discuss the
Company's quarterly results and to provide additional outlook on
the next quarter. To participate, please call: Participant Toll
Free: 866-542-4239 or Participant International: 416-641-6107. A
replay of the conference call will also be available from Friday,
August 8, 2008, after 12:00 p.m., until midnight Friday, August 22,
2008. To access the rebroadcast, Digital Replay Toll Free:
800-408-3053 or Digital Replay International: 416-695-5800 (Digital
Pin: 3266744).
About Parlux
Parlux Fragrances, Inc. is a manufacturer and international
distributor of prestige products. It holds licenses for Paris
Hilton, Jessica Simpson, GUESS?, Nicole Miller, Natori, Queen
Latifah, XOXO, Ocean Pacific (OP), Maria Sharapova, Andy Roddick,
babyGund, and Fred Hayman Beverly Hills designer fragrances, as
well as Paris Hilton watches, cosmetics, sunglasses, handbags and
other small leather accessories.
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' ability
to successfully introduce, acquire, or launch new brands, licenses,
or 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.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended June 30,
---------------------------
2008 2007
------------ ------------
Net sales:
Unrelated customers $ 21,471,294 $ 12,568,507
Related parties 1,832,886 18,811,961
------------ ------------
23,304,180 31,380,468
------------ ------------
Cost of goods sold:
Unrelated customers 11,157,230 5,865,105
Related parties 543,038 9,544,581
------------ ------------
11,700,268 15,409,686
------------ ------------
Operating expenses:
Advertising and promotional 9,642,900 7,000,320
Selling and distribution 4,130,076 2,578,050
Royalties 2,626,485 2,712,341
General and administrative 2,559,499 2,705,189
Depreciation and amortization 625,691 606,903
------------ ------------
Total operating expenses 19,584,651 15,602,803
------------ ------------
Operating (loss) income from
continuing operations (7,980,739) 367,979
Interest income (expense), net 108,213 (446,669)
Foreign exchange loss (3,008) (1,332)
------------ ------------
Loss from continuing operations before
income taxes (7,875,534) (80,022)
Income tax benefit 2,992,703 30,409
------------ ------------
Loss from continuing operations (4,882,831) (49,613)
============ ============
Discontinued operations:
Loss from operations of Perry Ellis
fragrance brand - (77,443)
Income tax benefit related to Perry Ellis
brand - 29,428
------------ ------------
Loss from discontinued operations - (48,015)
------------ ------------
Net loss $ (4,882,831) $ (97,628)
============ ============
Diluted loss per common share:
Continuing operations $ (0.24) $ (0.00)
------------ ------------
Discontinued operations $ (0.00) $ (0.00)
------------ ------------
Total $ (0.24) $ (0.00)
============ ============
Weighted average diluted shares outstanding 20,638,154 18,108,154
============ ============
FOR: Parlux Fragrances, Inc. (954) 316-9008 CONTACT: Neil J.
Katz Ext. 8116 Raymond J. Balsys Ext. 8106 Web site:
http://www.parlux.com
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