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Item 1. Financial Statements

2021-05-10 compared with 2020-11-09 · 334 added, 363 removed, 85 unchanged (89% of the section changed)

Financial Statements

our opinion, the accompanying unaudited consolidated financial statements contain all adjustments (consisting only of normal recurring

adjustments) necessary to present fairly our financial position, results of operations and cash flows for the interim periods

We have condensed such financial statements in accordance with the rules and regulations of the Securities and Exchange

Commission (“SEC”).

Therefore, such financial statements do not include all disclosures required by accounting principles

generally accepted in the United States of America.

In preparing these consolidated financial statements, the Company has evaluated

events and transactions for potential recognition or disclosure through the date the consolidated financial statements were issued

by filing with the SEC.

These financial statements should be read in conjunction with our audited financial statements for the

year ended December 31, 2019 included in our annual report filed on Form 10-K.

results of operations for the nine months ended September 30, 2020 are not necessarily indicative of the results to be expected

for the entire fiscal year.

PARFUMS, INC.

adjustments) necessary to present fairly our financial position, results of operations and cash flows for the interim periods presented.

We have condensed such financial statements in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”).

Therefore, such financial statements do not include all disclosures required by accounting principles generally accepted in the United

States of America.

In preparing these consolidated financial statements, the Company has evaluated events and transactions for potential

recognition or disclosure through the date the consolidated financial statements were issued by filing with the SEC.

These financial

statements should be read in conjunction with our audited financial statements for the year ended December 31, 2020 included in

our annual report filed on Form 10-K.

results of operations for the three months ended March 31, 2021 are not necessarily indicative of the results to be expected for the

entire fiscal year.

INTER PARFUMS, INC.

AND SUBSIDIARIES

1 unchanged sentence

thousands except share and per share data)

September 30,

and cash equivalents

receivable, net

Current assets:

taxes receivable

Cash and cash equivalents

Short-term investments

Accounts receivable, net

Receivables, other

Other current assets

Income taxes receivable

current assets

and leasehold improvements, net

licenses and other intangible assets, net

portion of long-term debt

portion of lease liabilities

payable – trade

taxes payable

Equipment and leasehold improvements, net

Right-of-use assets, net

Trademarks, licenses and other intangible assets, net

Deferred tax assets

LIABILITIES AND EQUITY

Current liabilities:

debt, less current portion

liabilities, less current portion

Parfums, Inc.

Current portion of long-term debt

Current portion of lease liabilities

Accounts payable – trade

Accrued expenses

Income taxes payable

Total current liabilities

Long–term debt, less current portion

Lease liabilities, less current portion

Inter Parfums, Inc.

shareholders’ equity:

3 unchanged sentences

authorized 100,000,000 shares;

outstanding 31,537,558 and 31,513,018 shares at September 30, 2020 and December 31, 2019, respectively

paid-in capital

other comprehensive loss

Treasury stock, at cost, 9,864,805 shares at September 30, 2020 and December 31, 2019

Inter Parfums, Inc.

outstanding 31,652,038 and 31,608,588 shares at March 31, 2021 and December 31, 2020, respectively

Additional paid-in capital

Retained earnings

Accumulated other comprehensive loss

Treasury stock, at cost, 9,864,805 shares at March 31, 2021 and December 31, 2020

Total Inter Parfums, Inc.

shareholders’ equity

Noncontrolling

liabilities and equity

Noncontrolling interest

Total liabilities and equity

notes to consolidated financial statements.

3 unchanged sentences

thousands except per share data)

September 30,

general and administrative expenses

from operations

expenses (income):

loss on foreign currency

before income taxes

income attributable to the noncontrolling interest

income attributable to Inter Parfums, Inc.

Cost of sales

Selling, general and administrative expenses

Impairment loss

Income from operations

Other expenses (income):

Interest expense

Gain on foreign currency

Interest income

Income before income taxes

Net income attributable to the noncontrolling interest

Net income attributable to Inter Parfums, Inc.

common shareholders:

average number of shares outstanding:

declared per share

Weighted average number of shares outstanding:

Dividends declared per share

notes to consolidated financial statements.

2 unchanged sentences

STATEMENTS OF COMPREHENSIVE INCOME

thousands except per share data)

September 30,

Comprehensive

Comprehensive income:

derivative instrument loss, net of tax

from OCI into earnings

adjustments, net of tax

Comprehensive

income (loss) attributable to the noncontrolling interests:

Other comprehensive income:

Net derivative instrument gain (loss), net of tax

Transfer from other comprehensive income into earnings

Translation adjustments, net of tax

Comprehensive income

derivative instrument loss, net of tax

adjustments, net of tax

Comprehensive

income (loss) attributable to the noncontrolling interests

Comprehensive

income attributable to Inter Parfums, Inc.

Comprehensive income attributable to the noncontrolling interests:

Other comprehensive income:

Net derivative instrument gain (loss), net of tax

Translation adjustments, net of tax

Comprehensive loss attributable to the noncontrolling interests

Comprehensive income attributable to Inter Parfums, Inc.

notes to consolidated financial statements.

2 unchanged sentences

STATEMENTS OF CHANGES IN EQUITY

September 30,

stock, beginning of period

issued upon exercise of stock options

stock, end of period

paid-in capital, beginning of period

issued upon exercise of stock options

of subsidiary shares from noncontrolling interest

of subsidiary shares purchased

paid-in capital, end of period

earnings, beginning of period

earnings, end of period

other comprehensive loss, beginning of period

currency translation adjustment, net of tax

from other comprehensive income into earnings

derivative instrument loss, net of tax

other comprehensive loss, end of period

stock, beginning and end of period

Noncontrolling

interest, beginning of period

currency translation adjustment, net of tax

derivative instrument loss, net of tax

of subsidiary shares from noncontrolling interest

of subsidiary shares purchased

Noncontrolling

interest, end of period

Common stock, beginning and end of period

Additional paid-in capital, beginning of period

Shares issued upon exercise of stock options

Share-based compensation

Transfer of subsidiary shares purchased

Additional paid-in capital, end of period

Retained earnings, beginning of period

Share-based compensation (adjustment)

Retained earnings, end of period

Accumulated other comprehensive loss, beginning of period

Foreign currency translation adjustment, net of tax

Transfer from other comprehensive income into earnings

Net derivative instrument gain (loss), net of tax

Accumulated other comprehensive loss, end of period

Treasury stock, beginning and end of period

Noncontrolling interest, beginning of period

Foreign currency translation adjustment, net of tax

Net derivative instrument gain (loss), net of tax

Share-based compensation (adjustment)

Transfer of subsidiary shares purchased

Noncontrolling interest, end of period

notes to consolidated financial statements.

2 unchanged sentences

STATEMENTS OF CASH FLOWS

September 30,

flows from operating activities:

to reconcile net income to net cash provided by (used in) operating activities:

and amortization

for doubtful accounts

based compensation

tax (benefit)

in fair value of derivatives

payable and accrued expenses

cash provided by (used in) operating activities

flows from investing activities:

of short-term investments

from sale of short-term investments

of equity investment

of equipment and leasehold improvements

for intangible assets acquired

cash provided by (used in) investing activities

flows from financing activities:

of long-term debt

from issuance of long-term debt

from exercise of stock options

of subsidiary shares from noncontrolling interest

paid to noncontrolling interest

cash used in financing activities

of exchange rate changes on cash

decrease in cash and cash equivalents

and cash equivalents - beginning of period

and cash equivalents - end of period

disclosure of cash flow information:

Cash flows from operating activities:

Adjustments to reconcile net income to net cash used in operating activities:

Depreciation and amortization

Provision for doubtful accounts

Noncash stock compensation

Share of income of equity investment

Impairment loss

Lease expense

Deferred tax provision (benefit)

Change in fair value of derivatives

Accounts receivable

Accounts payable and accrued expenses

Income taxes, net

Net cash provided by (used in) operating activities

Cash flows from investing activities:

Purchases of short-term investments

Purchases of equipment and leasehold improvements

Payment for intangible assets acquired

Net cash used in investing activities

Cash flows from financing activities:

Repayment of long-term debt

Proceeds from exercise of options

Dividends paid

Dividends paid to noncontrolling interest

Net cash used in financing activities

Effect of exchange rate changes on cash

Net decrease in cash and cash equivalents

Cash and cash equivalents - beginning of period

Cash and cash equivalents - end of period

Supplemental disclosure of cash flow information:

Cash paid for:

notes to consolidated financial statements.

PARFUMS, INC.

INTER PARFUMS, INC.

AND SUBSIDIARIES

1 unchanged sentence

Accounting Policies:

accounting policies we follow are set forth in the notes to our consolidated financial statements included in our Form 10-K, which

was filed with the Securities and Exchange Commission for the year ended December 31, 2019.

accounting policies we follow are set forth in the notes to our consolidated financial statements included in our Form 10-K, which was

filed with the Securities and Exchange Commission for the year ended December 31, 2020.

of COVID-19 Pandemic:

novel strain of coronavirus (“COVID-19”) surfaced in late 2019 and has spread around the world, including to the United

States and France.

novel strain of coronavirus (“COVID-19”) surfaced in late 2019 and has spread around the world, including to the United States

In March 2020, the World Health Organization declared COVID-19 a pandemic.

The COVID-19 pandemic has disrupted

our business operations and caused a significant unfavorable impact on our results of operations.

response to the COVID-19 pandemic various national, state, and local governments where we, our suppliers, and our customers operate

initially issued decrees prohibiting certain businesses from continuing to operate and certain classes of workers from reporting

More recently, those governments have set guidelines in allowing businesses to reopen and employees to return to offices.

Beginning in March 2020, we implemented travel restrictions and we are following social distancing practices.

Our teams were set

up to work from home and carry on business as efficiently as possible.

In all jurisdictions in which we operate we are following

guidance from authorities and health officials in allowing our teams to gradually return to our offices, including, requiring

personnel to wear masks and other protective clothing as appropriate, and implementing additional cleaning and sanitization routines

at our offices and distribution centers as the health and safety of our employees is paramount.

The COVID-19 pandemic disrupted our business operations

and caused a significant unfavorable impact on our results of operations in 2020.

response to the COVID-19 pandemic various national, state, and local governments where we, our suppliers, and our customers operate initially

issued decrees prohibiting certain businesses from continuing to operate and certain classes of workers from reporting to work.

jurisdictions in which we operate we have been following guidance from authorities and health officials in allowing our teams to gradually

return to our offices, including, requiring personnel to wear masks and implementing additional cleaning and sanitization routines at

our offices and distribution centers.

effects of the COVID-19 pandemic on the beauty industry began in early March 2020.

Retail store closings, event cancellations

and a shutdown of international air travel brought our sales to a virtual standstill.

The duration and intensity of this global

health emergency and its related disruptions are uncertain.

Since March 2020, retail stores in many jurisdictions around the world

began reopening and business has improved considerably.

However, limited traffic in reopened stores and the virtual shutdown of

international air traffic have and is expected to continue to have an unfavorable impact our business.

have faced significant challenges in 2020 and we anticipate that these challenges will continue for at least the remainder of

2020 due to uncertain market conditions.

Business has significantly improved during the three months ended September 30, 2020,

as compared to the prior quarter as retail stores began reopening and consumers have increased their on-line purchasing.

this trend to continue, however, we do not see a resurgence anytime soon in travel retail as air traffic continues to suffer due

in part to governmental restrictions on international air travel.

In addition, the recent resurgence of COVID-19 cases in various

parts of the world, including the United Kingdom, Ireland and other countries in Europe, has caused the re-implementation

of government restrictions to prevent further spread of the virus.

These restrictions include the temporary closure of businesses

deemed “non-essential”, travel bans and restrictions, social distancing and quarantines.

Lastly, the COVID-19 pandemic has led to high levels of

unemployment and deteriorating economic conditions in many countries where our products are sold, forcing many consumers to limit

discretionary purchases.

We believe that the impact of the COVID-19 pandemic will continue to have a material adverse effect on

our results of our operations, financial position and cash flows through at least the end of this year and into 2021.

PARFUMS, INC.

Retail store closings, event cancellations and a shutdown

of international air travel brought our sales to a virtual standstill.

Business significantly improved during the second half of 2020

and into the first quarter of 2021 as retail stores reopened and consumers increased their on-line purchasing and we expect this trend

However, international travel has remained largely curtailed globally due to both government restrictions and consumer health

In addition, the recent resurgence and introduction of variants of COVID-19 cases in various parts of the world have caused

the temporary re-implementation of government restrictions to prevent further spread of the virus in certain jurisdictions.

despite recent business improvement, the impact of the COVID-19 pandemic may have a material adverse effect on our results of our operations,

financial position and cash flows through at least the end of 2021.

Acquisition - Future Headquarters in Paris

April 2021, our majority owned Paris-based subsidiary, Interparfums SA, completed the acquisition of its future headquarters at 10 rue

de Solférino in the 7th arrondissement of Paris from the property developer, Apsys.

This is an office complex combining three

buildings connected by two inner courtyards, which consists of approximately 40,000 total sq.

€ 125 million (approximately $ 149 million) purchase price for this building, is in line with market values, includes the complete

renovation of the site and is financed by a 10 -year € 120 million (approximately $ 143 million) bank loan to take advantage of low

current interest rates.

INTER PARFUMS, INC.

AND SUBSIDIARIES

to Consolidated Financial Statements

Origines-parfums

June 2020, the Company, through its 73% owned French subsidiary, Interparfums SA, and Divabox SAS (“Divabox”), owner

of the Origines-parfums e-commerce platform for beauty products, signed a strategic agreement and equity investment pursuant to

which we acquired 25% of Divabox capital for $14 million, through a capital increase.

The difference between the purchase price

and the fair value of net assets acquired of $8.8 million has been allocated to goodwill, pending final purchase price allocation.

The investment is being accounted for under the equity method

and is included in other assets on the accompanying balance sheet as of September 30, 2020.

In connection

with the acquisition, the Company entered into a $13.4 million, three-year term loan payable in three equal annual installments

bearing interest at 0.85% above the EURIBOR 3-month rate.

The loan requires the maintenance of certain financial covenants, tested

annually, including a maximum leverage ratio.

June 2020, the Company entered into an exclusive, 5-year worldwide license agreement with a potential 5-year extension with Moncler

for the creation, development and distribution of fragrances under the Moncler brand.

Our rights under this license are subject

to certain minimum advertising expenditures and royalty payments as are customary in our industry.

January 2020, we renewed our license agreement with S.T.

Dupont for the creation, development and distribution of fragrance products

January 2021, we renewed our license agreement with Anna Sui Corp.

for the creation, development and distribution of fragrance products

through December 31, 2026, without any material changes in terms and conditions.

Our initial 11-year license agreement with

Dupont was signed in June 1997, and had previously been extended through December 31, 2019.

The agreement will be extended

annually in September of each year upon mutual consent.

Our initial 10-year license agreement with Anna

was signed in 2011.

The renewal agreement also allows for an additional 5-year term through 2031 at the option of the Company.

Effective January 1, 2021, we

entered into a new license agreement modifying our Rochas fashion business model.

The new agreement calls for a reduction in royalties

to be received.

As a result, we have taken $ 2.4 million impairment charge on our Rochas fashion trademark.

The new license also

contains an option for the licensee to buy-out the Rochas fashion trademarks in June 2025 at its then fair market value.

Accounting Pronouncements:

June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326):

Measurement of Credit Losses

on Financial Instruments,” as updated in 2019 and 2020, which require a financial asset measured at amortized cost basis

to be presented at the net amount expected to be collected.

The new rules eliminate the probable initial recognition threshold

and, instead, reflect an entity’s current estimate of all expected credit losses.

The new rules are effective for the Company

in the first quarter of 2020 and there was no material impact on our consolidated financial statements.

are no other recent accounting pronouncements issued but not yet adopted that would have a material effect on our consolidated

financial statements.

PARFUMS, INC.

are no recent accounting pronouncements issued but not yet adopted that would have a material effect on our consolidated financial

consist of the following:

(In thousands)

December 31, 2020

Raw materials and component parts

Finished goods

INTER PARFUMS, INC.

AND SUBSIDIARIES

to Consolidated Financial Statements

consist of the following:

materials and component parts

Value Measurement:

1 unchanged sentence

using the fair value hierarchy.

The fair value hierarchy has three levels based on the reliability of the inputs used to determine

Value Measurements at

September 30,

Prices in Active Markets for Identical Assets

Other Observable Inputs

Unobservable Inputs

currency forward exchange contracts not accounted for using hedge accounting

Value Measurements at

Prices in Active Markets for Identical Assets

Other Observable Inputs

Unobservable Inputs

currency forward exchange contracts accounted for using hedge accounting

currency forward exchange contracts not accounted for using hedge accounting

PARFUMS, INC.

The fair value hierarchy has three levels based on the reliability of the inputs used to determine fair

Fair Value Measurements at March 31, 2021

Quoted Prices in

Significant Other

Active Markets for

Identical Assets

Short-term investments

Foreign currency forward exchange contracts accounted for using hedge accounting

Foreign currency forward exchange contracts not accounted for using hedge accounting

Fair Value Measurements at December 31, 2020

Quoted Prices in

Significant Other

Active Markets for

Identical Assets

Short-term investments

Foreign currency forward exchange contracts not accounted for using hedge accounting

carrying amount of cash and cash equivalents including money market funds, short-term investments, accounts receivable, other receivables,

accounts payable and accrued expenses approximates fair value due to the short terms to maturity of these instruments.

The carrying amount

of loans payable approximates fair value as the interest rates on the Company’s indebtedness approximate current market rates.

currency forward exchange contracts are valued based on quotations from financial institutions and the value of interest rate swaps are

the discounted net present value of the swaps using third party quotes from financial institutions.

INTER PARFUMS, INC.

AND SUBSIDIARIES

to Consolidated Financial Statements

carrying amount of cash and cash equivalents including money market funds, accounts receivable, other receivables, and accounts

payable and accrued expenses approximates fair value due to the short terms to maturity of these instruments.

The carrying amount

of loans payable approximates fair value as the interest rates on the Company’s indebtedness approximate current market

The fair value of the Company’s long-term debt was estimated based on the current rates offered to companies for

debt with the same remaining maturities and is approximately equal to its carrying value.

currency forward exchange contracts are valued based on quotations from financial institutions and the value of interest rate

swaps are the discounted net present value of the swaps using third party quotes obtained from financial institutions.

Financial Instruments:

Company enters into foreign currency forward exchange contracts to hedge exposure related to receivables denominated in a foreign

currency and occasionally to manage risks related to future sales expected to be denominated in a foreign currency.

Before entering

into a derivative transaction for hedging purposes, it is determined that a high degree of initial effectiveness exists between

the change in value of the hedged item and the change in the value of the derivative instrument from movement in exchange rates.

High effectiveness means that the change in the cash flows of the derivative instrument will effectively offset the change in

the cash flows of the hedged item.

The effectiveness of each hedged item is measured throughout the hedged period and is based

on the dollar offset methodology and excludes the portion of the fair value of the foreign currency forward exchange contract

attributable to the change in spot-forward difference which is reported in current period earnings.

Any hedge ineffectiveness

is also recognized as a gain or loss on foreign currency in the income statement.

For hedge contracts that are no longer deemed

highly effective, hedge accounting is discontinued and gains and losses accumulated in other comprehensive income are reclassified

If it is probable that the forecasted transaction will no longer occur, then any gains or losses accumulated

in other comprehensive income are reclassified to current-period earnings.

Company enters into foreign currency forward exchange contracts to hedge exposure related to receivables denominated in a foreign currency

and occasionally to manage risks related to future sales expected to be denominated in a foreign currency.

Before entering into a derivative

transaction for hedging purposes, it is determined that a high degree of initial effectiveness exists between the change in value of

the hedged item and the change in the value of the derivative instrument from movement in exchange rates.

High effectiveness means that

the change in the cash flows of the derivative instrument will effectively offset the change in the cash flows of the hedged item.

effectiveness of each hedged item is measured throughout the hedged period and is based on the dollar offset methodology and excludes

the portion of the fair value of the foreign currency forward exchange contract attributable to the change in spot-forward difference

which is reported in current period earnings.

Any hedge ineffectiveness is also recognized as a gain or loss on foreign currency in the

income statement.

For hedge contracts that are no longer deemed highly effective, hedge accounting is discontinued and gains and losses

accumulated in other comprehensive income are reclassified to earnings.

If it is probable that the forecasted transaction will no

longer occur, then any gains or losses accumulated in other comprehensive income are reclassified to current-period earnings.

and losses in derivatives designated as hedges are accumulated in other comprehensive income (loss) and gains and losses in derivatives

not designated as hedges are included in (gain) loss on foreign currency on the accompanying income statements.

Such gains and

losses were immaterial for both nine month periods ended September 30, 2020 and 2019.

Such gains and losses

were immaterial for both three month periods ended March 31, 2021 and 2020.

derivative instruments are reported as either assets or liabilities on the balance sheet measured at fair value.

The valuation

of interest rate swaps resulted in a liability which is included in long-term debt on the accompanying balance sheets.

The valuation

of foreign currency forward exchange contracts at September 30, 2020 resulted in an asset and is included in other current assets

on the accompanying balance sheet.

September 30, 2020, we had foreign currency contracts in the form of forward exchange contracts of approximately U.S.

The valuation of foreign

currency forward exchange contracts at March 31, 2021, resulted in a liability and is included in accrued expenses on the accompanying

balance sheet.

March 31, 2021, we had foreign currency contracts in the form of forward exchange contracts in the amount of approximately U.S.

$ 78.5 million

and GB £

4.0 million which all have maturities of less than one year.

PARFUMS, INC.

and GB £ 2.7 million which all have maturities of less than one year.

Company leases its offices and warehouses, vehicles, and certain office equipment, substantially all of which are classified as operating

The Company currently has no material financing leases.

The Company determines if an arrangement is a lease at inception.

lease assets and obligations are recognized at the lease commencement date based on the present value of lease payments over the lease

determining lease asset value, the Company considers fixed or variable payment terms, prepayments, incentives, and options to extend

or terminate, depending on the lease.

Renewal, termination or purchase options affect the lease term used for determining lease asset

value only if the option is reasonably certain to be exercised.

The Company generally uses its incremental borrowing rate based on information

available at the lease commencement date for the location in which the lease is held in determining the present value of lease payments.

INTER PARFUMS, INC.

AND SUBSIDIARIES

to Consolidated Financial Statements

Company leases its offices and warehouses, vehicles, and certain office equipment, substantially all of which are classified as

operating leases.

The Company currently has no material financing leases.

The Company determines if an arrangement is a lease

at inception.

Operating lease assets and obligations are recognized at the lease commencement date based on the present value

of lease payments over the lease term.

determining lease asset value, the Company considers fixed or variable payment terms, prepayments, incentives, and options to

extend or terminate, depending on the lease.

Renewal, termination or purchase options affect the lease term used for determining

lease asset value only if the option is reasonably certain to be exercised.

The Company generally uses its incremental borrowing

rate based on information available at the lease commencement date for the location in which the lease is held in determining

the present value of lease payments.

of September 30, 2020, the weighted average remaining lease term was 6.0 years and the weighted average discount rate used to

determine the operating lease liability was 2.6 %.

Rental expense related to operating leases was $ 1.4 million and $ 4.7 million

for the three and nine months ended September 30, 2020, respectively, as compared to $ 1.7 million and $ 4.9 million for the corresponding

periods of the prior year.

Operating lease payments included in operating cash flows totaled $ 4.3 million and $ 4.5 million for

the nine months ended September 30, 2020 and 2019, respectively.

Noncash additions to operating lease assets totaled $ 1.0 million

and $ 33.9 million for the nine months ended September 30, 2020 and 2019, respectively.

Based Payments:

Company maintains stock option programs for key employees, executives and directors.

The plans, all of which have been approved

by shareholder vote, provide for the granting of both nonqualified and incentive options.

Options granted under the plans typically

have a six-year term and vest over a four to five-year period.

The fair value of shares vested for the nine months ended September

30, 2020 and 2019 aggregated $ 0.09 million and $ 0.07 million, respectively.

Compensation cost is recognized on a straight-line

basis over the requisite service period for the entire award.

It is generally our policy to issue new shares upon exercise of

stock options.

following table sets forth information with respect to nonvested options for the nine month period ended September 30, 2020:

Average Grant

Date Fair Value

options – beginning of period

of March 31, 2021, the weighted average remaining lease term was 5.1 years and the weighted average discount rate used to determine the

operating lease liability was 3.1 %.

Rental expense related to operating leases was $ 1.4 million and $ 1.8 million for the periods ending

March 31, 2021 and 2020, respectively.

Operating lease payments included in operating cash flows totaled $ 1.5 million and $ 1.6 million

for the three months ended March 31, 2021 and 2020, respectively, and noncash additions to operating lease assets totaled $ 0.0 million

and $ 0.7 million for the three months ended March 31, 2021 and 2020, respectively.

Company maintains a stock option program for key employees, executives and directors.

The plans, all of which have been approved by shareholder

vote, provide for the granting of both nonqualified and incentive options.

Options granted under the plans typically have a six-year

term and vest over a four to five-year period.

The fair value of shares vested during the three months ended March 31, 2021 and 2020

aggregated $ 0.09 million and $ 0.08 million, respectively.

Compensation cost, net of forfeitures, is recognized on a straight-line basis

over the requisite service period for the entire award.

Forfeitures are estimated based on historic trends.

It is generally our policy

to issue new shares upon exercise of stock options.

following table sets forth information with respect to nonvested options for the three month period ended March 31, 2021:

Number of Shares

Weighted Average Grant-Date Fair Value

Nonvested options – beginning of period

Nonvested options granted

Nonvested options vested or forfeited

Nonvested options – end of period

payment expense decreased income before income taxes by $ 0.73 million and $ 0.12 million for the three months ended March 31, 2021 and

2020, respectively, and decreased net income attributable to Inter Parfums, Inc.

by $ 0.49 million and $ 0.18 million for the three months

ended March 31, 2021 and 2020.

following table summarizes stock option information as of March 31, 2021:

Weighted Average Exercise Price

Outstanding at January 1, 2021

Options granted

options vested or forfeited

options – end of period

based payment expense decreased income before income taxes by $ 0.62 million and $ 1.81 million for the three and nine months ended

September 30, 2020, respectively, as compared to $ 0.8 million and $ 2.7 million for the corresponding periods of the prior year.

Share based payment expense decreased income attributable to Inter Parfums, Inc.

by $ 0.43 million and $ 1.29 million for the three

and nine months ended September 30, 2020, respectively, as compared to $ 0.5 million and $ 1.7 million for the corresponding periods

of the prior year.

PARFUMS, INC.

Options forfeited

Options exercised

Outstanding at March 31, 2021

Options exercisable

Options available for future grants

INTER PARFUMS, INC.

AND SUBSIDIARIES

to Consolidated Financial Statements

following table summarizes stock option information as of September 30, 2020:

Average Exercise Price

at January 1, 2020

at September 30, 2020

available for future grants

of September 30, 2020, the weighted average remaining contractual life of options outstanding is 3.29 years ( 1.90 years for options

exercisable), the aggregate intrinsic value of options outstanding and options exercisable is $ 2.4 million and $ 1.9 million, respectively,

and unrecognized compensation cost related to stock options outstanding aggregated $ 4.8 million.

proceeds, tax benefits and intrinsic value related to stock options exercised during the nine months ended September 30, 2020

and 2019 were as follows:

proceeds from stock options exercised

value of stock options exercised

of March 31, 2021, the weighted average remaining contractual life of options outstanding is 3.19 years ( 2.49 years for options exercisable);

the aggregate intrinsic value of options outstanding and options exercisable is $ 11.5 million and $ 8.3 million, respectively;

and unrecognized

compensation cost related to stock options outstanding aggregated $ 4.1 million.

proceeds, tax benefits and intrinsic value related to stock options exercised during the three months ended March 31, 2021 and March

31, 2020 were as follows:

(In thousands)

Cash proceeds from stock options exercised

Intrinsic value of stock options exercised

weighted average fair values of the options granted by Inter Parfums, Inc.

during the nine months ended September 30, 2020 and

2019 were $ 12.16 and $ 14.83 per share, respectively, on the date of grant using the Black-Scholes option pricing model to calculate

the fair value of options granted.

assumptions used in the Black-Scholes pricing model for the periods ended September 30, 2020 and 2019 are set forth in the

following table:

average expected stock-price volatility

average expected option life

average risk-free interest rate

average dividend yield

during the three months ended March 31, 2021 and 2020 were

$ 11.35 and $ 12.16 per share, respectively, on the date of grant using the Black-Scholes option pricing model to calculate the fair value

of options granted.

The assumptions used in the Black-Scholes pricing model for the periods ended March 31, 2021 and 2020 are set

forth in the following table:

Weighted average expected stock-price volatility

Weighted average expected option life

Weighted average risk-free interest rate

Weighted average dividend yield

volatility is estimated based on historic volatility of the Company’s common stock.

2 unchanged sentences

The risk-free rate is based on the U.S.

Treasury yield curve in effect at the time of the grant of the

option and the dividend yield was based on the assumption that the dividend payout as authorized by the Board of Directors would

increase as the earnings of the Company and its stock price continue to increase.

PARFUMS, INC.

AND SUBSIDIARIES

to Consolidated Financial Statements

December 2018, Interparfums SA, our 73 % owned French subsidiary, approved a plan to grant an aggregate of 26,600 shares of its

stock to employees with no performance conditions, and an aggregate of 133,000 shares to officers and managers, subject to certain

Treasury yield curve in effect at the time of the grant of the option

and the dividend yield reflects the assumption that the dividend payout as authorized by the Board of Directors would increase as the

earnings of the Company and its stock price continue to increase.

December 2018, Interparfums SA, our 73 % owned French subsidiary, approved a plan to grant an aggregate of 26,600 shares of its stock

to employees with no performance condition requirement, and an aggregate of 133,000 shares to officers and managers, subject to certain

corporate performance conditions.

The shares, subject to adjustment for stock splits, are expected to be distributed in June 2022.

In order to avoid dilution of the Company’s ownership of Interparfums SA, all shares to be distributed pursuant to the plan

will be pre-existing shares of Interparfums SA purchased in the open market by Interparfums SA in prior years.

The shares, subject to adjustment for stock splits, will be distributed in June 2022.

In order to avoid

dilution of the Company’s ownership of Interparfums SA, all shares to be distributed pursuant to the plan will be pre-existing

shares of Interparfums SA, purchased in the open market by Interparfums SA in prior years.

March 2020, due to the potential impact on future net sales and operating results resulting from the COVID-19 pandemic, the estimated

1 unchanged sentence

As the Company had already purchased

shares in contemplation of the higher anticipated distribution, shares purchased in excess of the reduced anticipated distribution

were transferred to treasury shares at the Interparfums SA level.

fair value of the grant had been determined based on the quoted stock price of Interparfums SA shares as reported by the NYSE

Euronext on the date of grant.

The original cost of the grant was approximately $ 4.4 million, and the March 2020 revaluation resulted

in a reduction of the cost, to approximately $2.5 million.

As a result, a $ 0.3 million reduction of cost, net, was recorded for

the three months ended March 31, 2020.

shares in contemplation of the higher anticipated distribution, shares purchased in excess of the reduced anticipated distribution were

transferred to treasury shares at Interparfums SA level.

INTER PARFUMS, INC.

AND SUBSIDIARIES

to Consolidated Financial Statements

fair value of the grant had been determined based on the quoted stock price of Interparfums SA shares as reported by the NYSE Euronext

on the date of grant.

The original cost of the grant was approximately $4.4 million, and the March 2020 revaluation resulted in a reduction

of the cost, to approximately $2.5 million.

June 2020, the performance conditions were modified effecting 96 employees.

As of September 30, 2020, the number of shares to

be distributed, after forfeited shares, increased to 120,943 .

The increase in shares anticipated to be distributed were transferred

from treasury shares at the Interparfums SA level.

The original cost of the grant was approximately $ 4.4 million, and the modification

resulted in a revised cost of approximately $ 3.8 million.

As of March 31, 2021, the number of shares to be distributed,

after forfeited shares, increased to 158,707 .

The increase in shares anticipated to be distributed were transferred from treasury shares

at the Interparfums SA level.

The original cost of the grant was approximately $ 4.4 million, and the modification resulted in a revised

cost of approximately $ 4.6 million.

Income Attributable to Inter Parfums, Inc.

5 unchanged sentences

Net income attributable to Inter Parfums, Inc.

per share assuming dilution (“diluted EPS”), is computed using the weighted average number of shares outstanding,

plus the incremental shares outstanding assuming the exercise of dilutive stock options using the treasury stock method.

The reconciliation

between the numerators and denominators of the basic and diluted EPS computations is as follows:

income attributable to Inter Parfums, Inc.

average shares

of dilutive securities:

for diluted earnings per share

income attributable to Inter Parfums, Inc.

shareholders:

PARFUMS, INC.

share assuming dilution (“diluted EPS”), is computed using the weighted average number of shares outstanding, plus the incremental

shares outstanding assuming the exercise of dilutive stock options using the treasury stock method.

reconciliation between the numerators and denominators of the basic and diluted EPS computations is as follows:

Three months ended

(In thousands, except per share data)

Net income attributable to Inter Parfums, Inc.

Weighted average shares

Effect of dilutive securities:

Stock options

Denominator for diluted earnings per share

Earnings per share:

Net income attributable to Inter Parfums, Inc.

common shareholders:

included in the above computations is the effect of antidilutive potential common shares which consist of outstanding options to purchase

0.35 and 0.37 million shares of common stock for the three months ended March 31, 2021 and 2020, respectively.

INTER PARFUMS, INC.

AND SUBSIDIARIES

to Consolidated Financial Statements

included in the above computations are the effect of antidilutive potential common shares which consist of outstanding options

to purchase 0.52 and 0.47 million shares of common stock for both the three and nine months ended September 30, 2020, as compared

to 0.18 million shares of common stock for the three and nine months ended September 30, 2019.

and Geographic Areas:

Company manufactures and distributes one product line, fragrances and fragrance related products.

The Company manages its business

in two segments, European based operations and United States based operations.

The European assets are located, and operations

are primarily conducted, in France.

Both European operations and United States operations primarily represent the sale of prestige

brand name fragrances.

The Company manages its business in

two segments, European based operations and United States based operations.

The European assets are located, and operations are primarily

conducted, in France.

Both European operations and United States operations primarily represent the sale of prestige brand name fragrances.

on our operations by geographical areas is as follows:

September 30,

income attributable to Inter Parfums, Inc.:

(In thousands)

Three months ended

United States

Net income attributable to Inter Parfums, Inc.:

United States

Total Assets:

United States

Eliminations of investment in subsidiary

Reclassifications:

prior year’s amounts in the accompanying consolidated statements of cash flows have been reclassified to conform to current

period presentation.

PARFUMS, INC.

prior year’s amounts in the accompanying consolidated statements of cash flows have been reclassified to conform to current period

presentation.

INTER PARFUMS, INC.

AND SUBSIDIARIES

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements