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Item 1. Financial Statements

2022-08-09 compared with 2022-05-10 · 273 added, 274 removed, 224 unchanged (71% of the section changed)

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, 2021, included in our annual report filed on Form 10-K.

results of operations for the three months ended March 31, 2022, are not necessarily indicative of the results to be expected

for the entire fiscal year.

PARFUMS, INC.

Financial Statements

In 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 presented.

We have condensed such financial

statements in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”).

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

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, 2021, included

in our annual report filed on Form 10-K.

The results of operations for the six months

ended June 30, 2022, are not necessarily indicative of the results to be expected for the entire fiscal year.

INTER PARFUMS, INC.

AND SUBSIDIARIES

BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS

(In thousands except share and per share

27 unchanged sentences

authorized 100,000,000 shares;

outstanding 31,843,845 and 31,830,420 shares at March 31, 2022 and December 31, 2021,

outstanding 31,845,965 and 31,830,420 shares at June 30, 2022 and December 31, 2021, respectively

Additional paid-in capital

1 unchanged sentence

Accumulated other comprehensive loss

Treasury stock, at cost, 9,864,805 shares at March 31, 2022 and December 31, 2021

Treasury stock, at cost, 9,864,805 shares at June 30, 2022 and December 31, 2021

Total Inter Parfums, Inc.

3 unchanged sentences

See notes to consolidated financial statements.

PARFUMS, INC.

INTER PARFUMS, INC.

AND SUBSIDIARIES

STATEMENTS OF INCOME

CONSOLIDATED STATEMENTS OF INCOME

(In thousands except per share data)

Three Months Ended

Six Months Ended

Cost of sales

4 unchanged sentences

Interest expense

Gain on foreign currency

(Gain) loss on foreign currency

Interest and investment (income) loss

Other (income) expense

Income before income taxes

Net income attributable to the noncontrolling interest

attributable to the noncontrolling interest

Net income attributable to Inter Parfums, Inc.

5 unchanged sentences

See notes to consolidated financial statements.

PARFUMS, INC.

INTER PARFUMS, INC.

AND SUBSIDIARIES

STATEMENTS OF COMPREHENSIVE INCOME

CONSOLIDATED STATEMENTS OF COMPREHENSIVE

(In thousands)

Three Months Ended

Six Months Ended

Comprehensive income:

3 unchanged sentences

Translation adjustments, net of tax

Comprehensive income

Comprehensive income (loss) attributable to the noncontrolling interests:

Comprehensive income (loss)

Comprehensive income attributable to the noncontrolling interests:

Other comprehensive income (loss):

4 unchanged sentences

See notes to consolidated financial statements.

PARFUMS, INC.

INTER PARFUMS, INC.

AND SUBSIDIARIES

STATEMENTS OF CHANGES IN EQUITY

Three months ended

CONSOLIDATED STATEMENTS OF CHANGES

(In thousands)

( Unaudited )

Six months ended

Common stock, beginning and end of period

2 unchanged sentences

Share-based compensation

Purchase of subsidiary shares

Transfer of subsidiary shares purchased

Additional paid-in capital, end of period

Retained earnings, beginning of period

Share-based compensation (adjustment)

Share-based compensation

Retained earnings, end of period

9 unchanged sentences

Share-based compensation (adjustment)

Purchase of subsidiary shares

Transfer of subsidiary shares purchased

Noncontrolling interest, end of period

notes to consolidated financial statements.

PARFUMS, INC.

See notes to consolidated financial statements.

INTER PARFUMS, INC.

AND SUBSIDIARIES

STATEMENTS OF CASH FLOWS

Three months ended

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

Six months ended

Cash flows from operating activities:

6 unchanged sentences

Noncash lease expense

Deferred tax provision

Deferred tax provision (benefit)

Change in fair value of derivatives

11 unchanged sentences

Cash flows from financing activities:

Proceeds from issuance of long-term debt

Repayment of long-term debt

Proceeds from exercise of options

Purchase of subsidiary shares from noncontrolling interest

Dividends paid

Dividends paid to noncontrolling interest

Net cash used in financing activities

Net cash provided by (used in) financing activities

Effect of exchange rate changes on cash

Net decrease in cash and cash equivalents

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents - beginning of period

2 unchanged sentences

Cash paid for:

notes to consolidated financial statements.

INTER PARFUMS, INC.

See notes to consolidated financial statements.

PARFUMS, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Significant Accounting Policies:

The 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, 2021.

Impact of COVID-19 Pandemic:

A novel strain of coronavirus

(“COVID-19”) surfaced in late 2019 and in March 2020, the World Health Organization declared COVID-19 a pandemic.

response, various national, state, and local governments issued decrees prohibiting certain businesses from operating and certain

classes of workers from reporting to work.

Retail store closings, event

cancellations and a shutdown of international air travel brought our sales to a virtual standstill and caused a significant unfavorable

impact on our results of operations in 2020.

Business significantly improved

in the second half of 2020 and continued to improve throughout 2021 and thus far in 2022, as retail stores reopened, and consumers

increased online purchasing.

While we expect this trend to continue, the introduction of variants of COVID-19 in various parts

of the world has caused the temporary re-implementation of governmental restrictions to prevent further spread of the virus.

addition, international air travel remains curtailed in many jurisdictions due to both governmental restrictions and consumer health

While COVID-19 has significantly restricted international travel, in the near-term, we continue to believe that global

travel retail will once again be a growth opportunity for the long-term.

Lastly, the improved economy has put significant strains

on our supply chain causing disruptions affecting the procurement of components, the ability to transport goods, and related cost

These disruptions have come at a time when demand for our product lines has never been stronger or more sustained.

have been addressing this issue since the beginning of 2021 by ordering well in advance of need and in larger quantities.

2021, we have strived to carry more inventory overall, source the same components from multiple suppliers and when possible, manufacture

products closer to where they are sold.

We do not expect the supply chain bottlenecks to begin lifting until later in 2022.

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 2022.

Recent Agreements:

Salvatore Ferragamo

In October 2021, we closed on

a transaction agreement with Salvatore Ferragamo S.p.A., whereby an exclusive and worldwide license was granted for the production

and distribution of Ferragamo brand perfumes.

Our rights under this license are subject to certain minimum advertising expenditures

and royalty payments as are customary in our industry.

The license became effective in October 2021 and will last for 10 years

with a 5-year optional term, subject to certain conditions.

With respect to the management

and coordination of activities related to the license agreement, the Company operates through a wholly-owned Italian subsidiary

based in Florence, that was acquired from Salvatore Ferragamo

on October 1, 2021.

The acquisition together with the license agreement was accounted for as an asset acquisition.

to Consolidated Financial Statements

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, 2021.

of COVID-19 Pandemic:

novel strain of coronavirus (“COVID-19”) surfaced in late 2019 and in March 2020, the World Health Organization declared

COVID-19 a pandemic.

In response, various national, state, and local governments issued decrees prohibiting certain businesses

from operating and certain classes of workers from reporting to work.

store closings, event cancellations and a shutdown of international air travel brought our sales to a virtual standstill and caused

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

significantly improved in the second half of 2020 and continued to improve throughout 2021 and thus far in 2022, as retail stores

reopened, and consumers increased online purchasing.

While we expect this trend to continue, the introduction of variants of COVID-19

in various parts of the world has caused the temporary re-implementation of governmental restrictions to prevent further spread

of the virus.

In addition, international air travel remains curtailed in many jurisdictions due to both governmental restrictions

and consumer health concerns.

While COVID-19 has significantly restricted international travel, the travel retail business is

beginning to pick up.

We remain confident that travel retail will once again be a source of growth over the long-term.

the improved economy has put significant strains on our supply chain causing disruptions affecting the procurement of components,

the ability to transport goods, and related cost increases.

These disruptions have come at a time when demand for our product

lines has never been stronger or more sustained.

We have been addressing this issue since the beginning of 2021, by ordering well

in advance of need and in larger quantities.

Since 2021, we have strived to carry more inventory overall, source the same components

from multiple suppliers and when possible, manufacture products closer to where they are sold.

We do not expect the supply chain

bottlenecks to begin lifting until later in 2022.

Therefore, 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

October 2021, we closed on a transaction agreement with Salvatore Ferragamo S.p.A., whereby an exclusive and worldwide license

was granted for the production and distribution of Ferragamo brand perfumes.

Our rights under this license are subject to certain

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

The license became effective in October

2021 and will last for 10 years with a 5-year optional term, subject to certain conditions.

respect to the management and coordination of activities related to the license agreement, the Company operates through a wholly-owned

Italian subsidiary based in Florence, that was acquired

from Salvatore Ferragamo on October 1, 2021.

The acquisition together with the license agreement was accounted for as an asset

PARFUMS, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

The following table summarizes

the estimated fair values of the assets acquired and liabilities assumed on October 1, 2021.

All amounts have been translated to

to Consolidated Financial Statements

following table summarizes the estimated fair values of the assets acquired and liabilities assumed on October 1, 2021.

have been translated to U.S.

dollars at the October 1, 2021 exchange rate .

following table summarizes the estimated fair values of the assets acquired and liabilities assumed

(In thousands)

Trademarks and licenses

Assets acquired

Liabilities assumed

Total Consideration

Emanuel Ungaro

In October 2021, we also entered

into a 10-year exclusive global licensing agreement with a 5-year optional term subject to certain conditions, with Emanuel Ungaro

Italia S.r.l, for the creation, development and distribution of fragrances and fragrance-related products, under the Emanuel Ungaro

Our rights under this license are subject to certain minimum advertising expenditures and royalty payments as are customary

in our industry.

Donna Karan and DKNY

In September 2021, we entered

into a long-term global licensing agreement for the creation, development and distribution of fragrances and fragrance-related

products under the Donna Karan and DKNY brands.

consideration

October 2021, we also entered into a 10-year exclusive global licensing agreement with a 5-year optional term subject to certain

conditions, with Emanuel Ungaro Italia S.r.l, for the creation, development and distribution of fragrances and fragrance related

products, under the Emanuel Ungaro brand.

Our rights under this license are subject to certain minimum advertising expenditures

and royalty payments as are customary in our industry.

With this agreement, we are gaining several well-established and valuable

fragrance franchises, most notably Donna Karan Cashmere Mist and DKNY Be Delicious , as well as a significant loyal

consumer base around the world.

Karan and DKNY

September 2021, we entered into a long-term global licensing agreement for the creation, development and distribution of fragrances

and fragrance related products under the Donna Karan and DKNY brands.

Our rights under this license are subject to certain minimum

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

With this agreement, we are gaining several well-established

and valuable fragrance franchises, most notably Donna Karan Cashmere Mist and DKNY Be Delicious , as well as a significant

loyal consumer base around the world.

In connection with the grant of license, we issued 65,342 shares of Inter Parfums, Inc.

stock valued at $ 5.0 million to the licensor.

The exclusive license is effective July 1, 2022, and we are planning to launch new

fragrances under these brands in 2023.

Land and Building Acquisition

- Future Headquarters in Paris

In April 2021, Interparfums SA,

our 73 % owned French subsidiary, completed the acquisition of its future headquarters at 10 rue de Solférino in the 7th

arrondissement of Paris from the property developer.

This is an office complex combining three buildings connected by two inner

courtyards, and consists of approximately 40,000 total sq.

common stock valued at $ 5 .0 million to the licensor.

The exclusive license became effective July 1, 2022, and we are planning

to launch new fragrances under these brands in 2023.

and Building Acquisition - Future Headquarters in Paris

April 2021, Interparfums SA, our 73 % owned French Subsidiary, completed the acquisition of its headquarters at 10 rue de Solférino

in the 7th arrondissement of Paris from the property developer.

This is an office complex combining three buildings connected

by two inner courtyards, and consists of approximately 40,000 total sq.

purchase price includes the complete renovation of the site and includes the purchase of several apartments in the surrounding

area to be used as additional office space.

As of June 30, 2022, $ 142.7 million of the purchase price, including approximately

$ 4.4 million of acquisition costs, is included in property, equipment and leasehold improvements on the accompanying balance sheet

as of June 30, 2022.

The purchase price has been allocated approximately $ 59.5 million to land and $ 83.2 million to the building.

The building, which was delivered on February 28, 2022, includes the building structure, development of the property, façade

waterproofing, general and technical installations and interior fittings that will be depreciated over a range of 7 to 50 years.

The Company has elected to depreciate the building cost based on the useful lives of its components.

Approximately $ 5.1 million

of cash held in escrow is included in property, equipment and leasehold improvements on the accompanying balance sheet as of June

PARFUMS, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

The purchase price

includes the complete renovation of the site.

As of March 31, 2022, $ 138.4 million of the purchase price, including approximately

$ 3.4 million of acquisition costs, is included in property, equipment and leasehold improvements on the accompanying balance sheet as of March 31,

The purchase price has been allocated approximately $ 63.6 million to land and $ 74.8 million to the building.

The building,

which was delivered on February 28, 2022, includes the building structure, development of the property, façade waterproofing,

general and technical installations and interior fittings that will be depreciated over a range of 7 to 50 years.

The Company has

elected to depreciate the building cost based on the useful lives of its components.

Approximately $ 5.4 million of cash held in escrow is also included in property, equipment and leasehold improvements on the accompanying balance sheet as of March

The acquisition was financed

by a 10 -year € 120 million (approximately $ 133 million) bank loan which bears interest at one-month Euribor plus 0.75% .

Approximately

€ 80 million of the variable rate debt was swapped for variable interest rate debt with a maximum rate of 2% per annum.

Recent Accounting Pronouncements:

There are no recent accounting

pronouncements issued but not yet adopted that would have a material effect on our consolidated financial statements.

Inventories consist

of the following:

acquisition was financed by a 10 -year € 120 million (approximately $ 125 million) bank loan which bears interest at one-month

Euribor plus 0.75% .

Approximately € 80 million of the variable rate debt was swapped for variable interest rate debt with

a maximum rate of 2% per annum.

Accounting Pronouncements:

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)

1 unchanged sentence

Finished goods

Fair Value Measurement:

The following tables present

our financial assets and liabilities that are measured at fair value on a recurring basis and are categorized using the fair value

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

Fair Value Measurements at

March 31, 2022

Value Measurement:

following tables present our financial assets and liabilities that are measured at fair value on a recurring basis and are categorized

using the fair value hierarchy.

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

PARFUMS, INC.

AND SUBSIDIARIES

to Consolidated Financial Statements

Fair Value Measurements at June 30, 2022

Quoted Prices in

Significant Other

Active Markets for

Identical Assets

Significant Other

Short-term investments

Foreign currency forward exchange contracts not accounted for using hedge

Foreign currency forward exchange contracts accounted for using hedge accounting

Interest rate swaps

Foreign currency forward exchange contracts accounted for

using hedge accounting

Foreign currency forward exchange contracts not accounted for

using hedge accounting

Total liabilities

PARFUMS, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Fair Value Measurements at December 31, 2021

Quoted Prices in

Significant Other

Active Markets for

Identical Assets

Significant Other

Short-term investments

3 unchanged sentences

Total liabilities

The carrying amount of cash and

cash equivalents including money market funds, short-term investments, accounts receivable, other receivables, cash held in escrow,

accounts payable and accrued expenses approximate 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.

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.

Foreign 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.

Derivative Financial Instruments:

The 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.

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.

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

receivables, cash held in escrow, accounts payable and accrued expenses approximate fair value due to the short terms to maturity

of these instruments.

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

current market rates.

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.

PARFUMS, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

In connection with the April

2021 acquisition of the office building complex in Paris, € 120 million (approximately $ 133 million) of the purchase price

was financed through a 10 -year term loan.

The Company entered into interest rate swap contracts related to € 80 million of

the loan, effectively exchanging the variable interest rate to a fixed rate of approximately 1.1%.

This derivative instrument is

recorded at fair value and changes in fair value are reflected in the accompanying consolidated statements of income.

Gains and losses in derivatives

designated as hedges are accumulated in other comprehensive income 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 the three months ended March 31, 2022 and 2021.

All derivative instruments are

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

The valuation of interest rate swaps is included

in long-term debt on the accompanying balance sheets.

The valuation of foreign currency forward exchange contracts at March 31,

2022, resulted in a net liability and is included in accrued expenses on the accompanying balance sheet.

At March 31, 2022, we had foreign

currency contracts in the form of forward exchange contracts in the amount of approximately U.S.

$ 153.0 million, GB £ 1.0 million

and JPY ¥ 150.0 million, which all have maturities of less than one year.

The Company leases its offices

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

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.

In determining lease asset value,

the Company considers fixed or variable payment terms, prepayments, incentives, and options to extend or terminate, depending on

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.

As of March 31, 2022, the weighted

average remaining lease term was 6.7 years and the weighted average discount rate used to determine the operating lease liability

Rental expense related to operating leases was $ 1.8 million and $ 1.4 million for the three months ended March 31,

2022 and 2021, respectively.

Operating lease payments included in operating cash flows totaled $ 1.7 million and $ 1.5 million for

the three months ended March 31, 2022 and 2021, respectively, and there were no noncash additions to operating lease assets for

the three months ended March 31, 2022 and 2021.

to Consolidated Financial Statements

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.

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.

connection with the April 2021 acquisition of the office building complex in Paris, € 120 million of the purchase price was

financed through a 10 -year term loan.

The Company entered into interest rate swap contracts related to € 80 million of the

loan, effectively exchanging the variable interest rate to a variable rate not to exceed 2 %.

This derivative instrument is recorded

at fair value and changes in fair value are reflected in the accompanying consolidated statements of income.

and losses in derivatives designated as hedges are accumulated in other comprehensive income 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 the six months ended June 30, 2022 and 2021.

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

The valuation

of interest rate swaps is included in other assets on the accompanying balance sheets.

The valuation of foreign currency forward

exchange contracts at June 30, 2022, resulted in a net liability and is included in accrued expenses on the accompanying balance

June 30, 2022, we had foreign currency contracts in the form of forward exchange contracts in the amount of approximately U.S.

$ 103.0 million and GB £ 3.0 million, which all have maturities of less than one year.

PARFUMS, INC.

1 unchanged sentence

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 June 30, 2022, the weighted average remaining lease term was 6.3 years and the weighted average discount rate used to determine

the operating lease liability was 2.6 %.

Rental expense related to operating leases was $ 1.3 million and $ 3.1 million for the three

and six months ended June 30, 2022, respectively, as compared to $ 3.1 million and $ 4.9 million for the corresponding periods of

the prior year.

Operating lease payments included in operating cash flows totaled $ 2.8 million and $ 4.6 million for the six months

ended June 30, 2022 and 2021, respectively, and noncash additions to operating lease assets totaled $ 0.5 million and $ 13.8 million

for the six months ended June 30, 2022 and 2021, respectively.

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

3 unchanged sentences

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

The fair value of shares vested during the six months ended June

30, 2022 and 2021 aggregated $ 0.10 million and $ 0.09 million, respectively.

3 unchanged sentences

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 months ended March 31, 2022:

following table sets forth information with respect to nonvested options for the six months ended June 30, 2022:

Number of Shares

4 unchanged sentences

Nonvested options – end of period

payment expense decreased income before income taxes by $ 0.65 million and $ 0.73 million for the three months ended March 31, 2022

and 2021, respectively, and decreased income attributable to Inter Parfums, Inc.

by $ 0.44 million and $ 0.49 million for the three

months ended March 31, 2022 and 2021, respectively.

following table summarizes stock option information as of March 31, 2022:

PARFUMS, INC.

AND SUBSIDIARIES

to Consolidated Financial Statements

payment expense decreased income before income taxes by $ 1.22 million and $ 1.88 million for the three and six months ended June

30, 2022, respectively, as compared to $ 0.72 million and $ 1.45 million for the corresponding periods of the prior year.

payment expense decreased income attributable to Inter Parfums, Inc.

by $ 0.74 million and $ 1.18 million for the three and six

months ended June 30, 2022, respectively, as compared to $ 0.46 million and $ 0.94 million for the corresponding periods of the

following table summarizes stock option information as of June 30, 2022:

Weighted Average Exercise Price

2 unchanged sentences

Options exercised

Outstanding at March 31, 2022

Outstanding at June 30, 2022

Options exercisable

Options available for future grants

of March 31, 2022, the weighted average remaining contractual life of options outstanding is 2.51 years ( 2.12 years for options

of June 30, 2022, the weighted average remaining contractual life of options outstanding is 2.26 years ( 1.87 years for options

exercisable);

the aggregate intrinsic value of options outstanding and options exercisable is $ 15.5 million and $ 11.1 million ,

respectively;

the aggregate intrinsic value of options outstanding and options exercisable is $ 7.8 million and $ 6.4 million, respectively;

and unrecognized compensation cost related to stock options outstanding aggregated $ 2.2 million.

PARFUMS, INC.

AND SUBSIDIARIES

to Consolidated Financial Statements

proceeds, tax benefits and intrinsic value related to stock options exercised during the three months ended March 31, 2022 and

proceeds, tax benefits and intrinsic value related to stock options exercised during the six months ended June 30, 2022 and 2021

were as follows:

3 unchanged sentences

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

during the three months ended March 31, 2021 were $11.35

during the six months ended June 30, 2021 were $11.35

per share on the date of grant using the Black-Scholes option pricing model to calculate the fair value of options granted.

were no options granted during the three months ended March 31, 2022.

The assumptions used in the Black-Scholes pricing model

for the period ended March 31, 2021 is set forth in the following table:

were no options granted during the six months ended June 30, 2022.

The assumptions used in the Black-Scholes pricing model for

the period ended June 30, 2021 is set forth in the following table:

Weighted average expected stock-price volatility

2 unchanged sentences

Weighted average dividend yield

PARFUMS, INC.

AND SUBSIDIARIES

to Consolidated Financial Statements

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

4 unchanged sentences

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.

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

December 2018, Interparfums SA 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, 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.

The corporate performance conditions were met and therefore in June 2022, 211,955 shares, adjusted for stock splits, were distributed.

The aggregate cost of the grant of approximately $ 4.8 million was recognized as compensation cost on a straight-line basis over

the requisite three-year service period.

March 2022, Interparfums SA approved an additional plan to grant an aggregate of 88,400 shares to all Interparfums SA employees

and corporate officers having more than six months of employment at grant date, subject to certain corporate performance conditions.

The shares, subject to adjustment for stock splits, will be distributed in June 2025 and will follow the same guidelines as the

December 2018 plan.

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.

As of March 31, 2022, the number of shares to be distributed, after forfeited shares, was 172,343

resulting from modifications and stock splits.

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

shares at the Interparfums SA level.

The revised cost of the grant was approximately $4.4 million .

The estimated number of shares to be distributed of 67,372 has been determined taking into account

employee turnover.

The aggregate cost of the grant of approximately $ 3.4 million will be recognized as compensation cost on a

straight-line basis over the requisite three and a quarter year service period.

to the December 2018 plan, in order to avoid dilution of the Company’s ownership of Interparfums SA, all shares distributed

or to be distributed pursuant to these plans will be pre-existing shares of Interparfums SA, purchased in the open market by Interparfums

During the six months ended June 30, 2022, the Company acquired 63,281 shares at an aggregate cost of $ 3.1 million.

share purchases and issuances have been classified as equity transactions on the accompanying balance sheet.

PARFUMS, INC.

AND SUBSIDIARIES

to Consolidated Financial Statements

Income Attributable to Inter Parfums, Inc.

7 unchanged sentences

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

PARFUMS, INC.

AND SUBSIDIARIES

to Consolidated Financial Statements

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

Three months ended

Six months ended

(In thousands)

Net income attributable to Inter

Parfums, Inc.

attributable to Inter Parfums, Inc.

Weighted average shares

3 unchanged sentences

Earnings per share:

Net income attributable to Inter

Parfums, Inc.

common shareholders:

Net income attributable to Inter Parfums, Inc.

shareholders:

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

to purchase 0.35 million shares of common stock for the three months ended March 31, 2021.

There were no antidilutive potential

common shares outstanding for the three months ended March 31, 2022.

PARFUMS, INC.

to purchase 0.15 million shares of common stock for both three and six months ended June 30, 2022, as compared to 0.18 and 0.26

million shares of common stock for the three and six months ended June 30, 2021, respectively.

INTER PARFUMS, INC.

AND SUBSIDIARIES

to Consolidated Financial Statements

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.

Information on our operations by geographical areas is as follows:

Notes to Consolidated Financial Statements

Segment and Geographic Areas:

The 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

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:

(In thousands)

Three months ended

Six months ended

United States

3 unchanged sentences

United States

Reclassifications:

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

period presentation.

PARFUMS, INC.

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