What changed in this filing

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Item 1. Financial Statements

2023-05-08 compared with 2022-11-09 · 360 added, 443 removed, 115 unchanged (87% of the section changed)

Financial Statements

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

9 unchanged sentences

year ended December 31, 2022, included in our annual report filed on Form 10-K.

results of operations for the nine months ended September 30, 2022, are not necessarily indicative of the results to be expected

results of operations for the three months ended March 31, 2023, are not necessarily indicative of the results to be expected

for the entire fiscal year.

PARFUMS, INC.

INTER PARFUMS,

AND SUBSIDIARIES

1 unchanged sentence

thousands except share and per share data)

and cash equivalents

receivable, net

Current assets:

taxes receivable

current assets

equipment and leasehold improvements, net

licenses and other intangible assets, net

Cash and cash equivalents

Short-term investments

Accounts receivable, net

Receivables, other

Other current assets

Income taxes receivable

Total current assets

Property, equipment and leasehold improvements, net

Right-of-use assets, net

Trademarks, licenses and other intangible assets, net

Deferred tax assets

LIABILITIES AND EQUITY

portion of long-term debt

portion of lease liabilities

payable – trade

taxes payable

Current liabilities:

debt, less current portion

liabilities, less current portion

Parfums, Inc.

Loans payable - banks

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:

stock, $ .001 par;

authorized 1,000,000 shares;

stock, $ .001 par;

Preferred stock, $ .001 par;

authorized 1,000,000 shares;

stock, $ .001

authorized 100,000,000

outstanding 32,012,950 and 31,967,300

shares at September 30, 2022 and December 31, 2021, respectively

paid-in capital

other comprehensive loss

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

Inter Parfums, Inc.

shares at March 31, 2023 and December 31, 2022, respectively

Additional paid-in capital

Retained earnings

Accumulated other comprehensive loss

Treasury stock, at cost, 9,907,865 and 9,864,805 shares at March 31, 2023 and December 31, 2022, respectively

Total Inter Parfums, Inc.

shareholders’ equity

Noncontrolling

liabilities and equity

Noncontrolling interest

Total liabilities and equity

notes to consolidated financial statements.

PARFUMS, INC.

INTER PARFUMS,

AND SUBSIDIARIES

2 unchanged sentences

Three Months Ended

September 30,

Nine Months Ended

September 30,

Cost of sales

Selling, general

and administrative expenses

from operations

Selling, general and administrative expenses

Income from operations

Other expenses (income):

Interest expense

(Gain) loss on

foreign currency

Interest and investment

(income) expense

Loss (gain) on foreign currency

Interest and investment (income) loss

Nonoperating Income (Expense)

before income taxes

income attributable to the noncontrolling interest

income attributable to Inter Parfums, Inc.

Income before income taxes

Net income attributable to the noncontrolling interest

Net income attributable to Inter Parfums, Inc.

Earnings per share:

income attributable to Inter Parfums, Inc.

Net income attributable to Inter Parfums, Inc.

common shareholders:

average number of shares outstanding:

Dividends declared

Weighted average number of shares outstanding:

Dividends declared per share

notes to consolidated financial statements.

PARFUMS, INC.

INTER PARFUMS,

AND SUBSIDIARIES

1 unchanged sentence

Three Months Ended

September 30,

Nine Months Ended

September 30,

Comprehensive

Comprehensive income:

derivative instrument gain (loss), net of tax

from OCI into earnings

adjustments, net of tax

Comprehensive

income attributable to the noncontrolling interests:

comprehensive income (loss):

derivative instrument gain (loss), net of tax

adjustments, net of tax

Comprehensive

income attributable to the noncontrolling interests

Comprehensive

income attributable to Inter Parfums, Inc.

Other comprehensive income:

Net derivative instrument gain (loss), net of tax

Transfer from OCI into earnings

Translation adjustments, net of tax

Comprehensive income

Comprehensive income attributable to the noncontrolling interests:

Other comprehensive income:

Net derivative instrument gain (loss), net of tax

Translation adjustments, net of tax

Comprehensive income attributable to the noncontrolling interests

Comprehensive income attributable to Inter Parfums, Inc.

notes to consolidated financial statements.

PARFUMS, INC.

INTER PARFUMS,

AND SUBSIDIARIES

STATEMENTS OF CHANGES IN EQUITY

Nine months ended

September 30,

stock, beginning and end of period

Additional paid-in

capital, beginning of period

Shares issued upon exercise of

stock options

Three months ended

Common stock, beginning and end of period

Additional paid-in capital, beginning of period

Shares issued upon exercise of stock options

Share-based compensation

Purchase of subsidiary shares

Shares issued for license acquisition

subsidiary shares purchased

Additional paid-in

capital, end of period

Additional paid-in capital, end of period

Retained earnings, beginning of period

Share-based compensation

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

derivative instrument loss, net of tax

other comprehensive loss, end of period

stock, beginning and 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 of period

Shares repurchased

Treasury stock, end of period

Noncontrolling interest, beginning of period

Foreign currency

translation adjustment, net of tax

Net derivative

instrument loss, net of tax

Share-based compensation

Purchase of subsidiary shares

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

Noncontrolling interest, end of period

notes to consolidated financial statements.

PARFUMS, INC.

INTER PARFUMS,

AND SUBSIDIARIES

STATEMENTS OF CASH FLOWS

Nine months ended

September 30,

flows from operating activities:

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

and amortization

for doubtful accounts

stock compensation

Share of income

of equity investment

lease expense

tax provision (benefit)

in fair value of derivatives

lease liabilities

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 property, equipment and leasehold improvements

for intangible assets acquired

cash used in investing activities

flows from financing activities:

from issuance of long-term debt

of long-term debt

from exercise of options

of subsidiary shares from noncontrolling interest

paid to noncontrolling interest

cash provided by (used in) financing activities

of exchange rate changes on cash

increase (decrease) in cash and cash equivalents

and cash equivalents - beginning of period

and cash equivalents - end of period

disclosure of cash flow information:

notes to consolidated financial statements.

INTER PARFUMS, INC.

AND SUBSIDIARIES

Three months ended

Cash flows from operating activities:

Adjustments to reconcile net income to net cash

provided by (used in) operating activities:

Depreciation and amortization

Provision for doubtful accounts

Noncash stock compensation

Share of income of equity investment

Noncash lease expense

Deferred tax provision

Change in fair value of derivatives

Accounts receivable

Operating lease liabilities

Accounts payable and accrued expenses

Income taxes, net

Net cash used in operating activities

Cash flows from investing activities:

Purchases of short-term investments

Proceeds from sale of short-term investments

Purchases of property, equipment and leasehold improvements

Payment for intangible assets acquired

Net cash provided by (used in) investing activities

Cash flows from financing activities:

Proceeds from issuance of long-term debt

Repayment of long-term debt

Proceeds from exercise of options

Dividends paid

Dividends paid to noncontrolling interest

Purchase of treasury stock

Net cash used in financing activities

Effect of exchange rate changes on cash

Net increase (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.

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.

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

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 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 the second half of 2023.

despite recent business improvement, the impact of the COVID-19 pandemic might continue to have adverse effects on our results

of our operations, financial position and cash flows through at least the first half of 2023.

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.

INTER PARFUMS, INC.

INTER PARFUMS,

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

dollars at the October 1, 2021 exchange rate.

(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.

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.

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, 2022.

of COVID-19 Pandemic:

Our business has continued to significantly

improve throughout 2022 and the first quarter of 2023 after the disastrous effects of the COVID-19 Pandemic starting in early 2020,

as retail stores reopened, and consumers increased online purchasing.

The introduction of variants of COVID-19 in various parts

of the world continues to cause the temporary re-implementation of governmental restrictions to prevent further spread of the virus.

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

health concerns.

While COVID-19 had significantly restricted international travel, the travel retail business has picked up.

we have experienced 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 the second half of 2023.

Therefore, despite recent business improvement, the impact of the COVID-19 pandemic

might continue to have adverse effects on our results of our operations, financial position and cash flows through at least the

first half of 2023.

December 2022, we closed a transaction agreement with Lacoste, whereby an exclusive and worldwide license was granted for the

production and distribution of Lacoste brand perfumes and cosmetics.

Our rights under this license are subject to certain minimum

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

The license becomes effective in January 2024

and will last for 15 years.

April 2022, we announced that the Dunhill fragrance license will expire on September 30, 2023 and will not be renewed.

will continue to produce and sell Dunhill fragrances until the license expires and will maintain the right to sell-off remaining

Dunhill fragrance inventory for a limited time as is customary in the fragrance industry.

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 gained 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 became effective July 1, 2022, and we are planning to launch

new fragrances under these brands in 2024.

Land and Building Acquisition

- Future Headquarters in Paris

In 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.

The 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 September 30, 2022, $ 135.5 million of the purchase price, including approximately $ 4.1 million of acquisition

costs, is included in property, equipment and leasehold improvements on the accompanying balance sheet as of September 30, 2022.

The purchase price has been allocated approximately $ 55.9 million to land and $ 79.6 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 $ 3.4 million of cash held in

escrow is included in property, equipment and leasehold improvements on the accompanying balance sheet as of September 30, 2022.

INTER PARFUMS, INC.

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 2024.

INTER PARFUMS,

AND SUBSIDIARIES

Notes to Consolidated

Financial Statements

The acquisition was financed

by a 10 -year € 120 million (approximately $ 117 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:

to Consolidated Financial Statements

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, in the first quarter of 2021, we took a $2.4 million impairment charge

on our Rochas fashion trademark.

In the fourth quarter of 2022, we again took a $6.8 million impairment charge on the Rochas fashion

trademark after an independent expert concluded that the valuation of the trademark was $11.3 million.

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.

and Building Acquisition - New Headquarters in Paris

April 2021, Interparfums SA, our 72 % owned French subsidiary, completed the acquisition of its new 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 included the complete renovation of the site.

As of March 31, 2023, $ 151 million of the purchase price, including

approximately $ 4.5 million of acquisition costs, is included in property, equipment and leasehold improvements on the accompanying

balance sheet.

The purchase price has been allocated approximately $ 62.3 million to land and $ 88.7 million to the building.

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 $ 1.8 million

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

of March 31, 2023.

acquisition was financed by a 10 -year € 120 million (approximately $ 130.5 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.

The swap effectively exchanges the variable interest rate to a fixed rate of approximately 1.1 %.

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)

September 30,

Raw materials and component parts

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.

INTER PARFUMS, INC.

INTER PARFUMS,

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Fair Value Measurements at September 30, 2022

to Consolidated Financial Statements

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

Fair Value Measurements at March 31, 2023

Quoted Prices in

4 unchanged sentences

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

Foreign currency forward exchange contracts not accounted for using hedge accounting

Foreign currency forward exchange contracts accounted for using hedge accounting

Fair Value Measurements at December 31, 2022

4 unchanged sentences

Short-term investments

Foreign currency forward exchange contracts

accounted for using hedge accounting

Foreign currency forward exchange contracts not

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

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.

INTER PARFUMS, INC.

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.

INTER PARFUMS,

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

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.

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

In 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

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.

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 nine months ended September 30, 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 other assets on the accompanying balance sheets.

The valuation of foreign currency forward exchange contracts at September 30,

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

At September 30, 2022, we had

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

$ 90.0 million, GB

£ 2.0 million and JPY ¥ 50.0 million, which all have maturities of less than one year.

INTER PARFUMS, INC.

to Consolidated Financial Statements

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.

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.

In December 2022, to finance the acquisition

of the Lacoste trademark, the Company entered into a € 50 million ($ 54.4 million) 4 -year term loan with a variable interest

This variable rate debt was swapped for variable interest rate debt with a maximum rate of 2 % per annum.

This swap is a hedged

derivative instrument and is therefore recorded at fair value and changes in fair value are reflected in other comprehensive income.

connection with the April 2021 acquisition of the office building complex in Paris, € 120 million (approximately $ 130.5 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 %.

derivative instrument is recorded at fair value and changes in fair value are reflected in the accompanying consolidated statements

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, 2023 and 2022.

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, 2023, resulted in a net asset and is included in other current assets on the accompanying balance

March 31, 2023, we had foreign currency contracts in the form of forward exchange contracts in the amount of approximately U.S.

$ 37 million which all have maturities of less than one year.

INTER PARFUMS,

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

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 September 30, 2022, 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 $ 1.2 million and $ 4.3 million for the three and nine months

ended September 30, 2022, respectively, as compared to $ 1.9 million and $ 6.8 million for the corresponding periods of the prior

Operating lease payments included in operating cash flows totaled $ 3.9 million and $ 6.2 million for the nine months ended

September 30, 2022 and 2021, respectively, and noncash additions to operating lease assets totaled $ 0.5 million and $ 14.0 million

for the nine months ended September 30, 2022 and 2021, respectively.

Share-Based Payments:

The 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 nine months ended September 30, 2022 and 2021

aggregated $ 0.11 million and $ 0.09 million, respectively.

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

basis over the requisite service period for the entire award.

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 March 31, 2023, the weighted average remaining lease term was 5.5 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 $ 1.8 million for the three

months ended March 31, 2023 and 2022, respectively.

Operating lease payments included in operating cash flows totaled $ 1.3

million and $ 1.7 million for the three months ended March 31, 2023 and 2022, respectively, and there were no noncash additions

to operating lease assets for the three months ended March 31, 2023 and 2022.

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, 2023 and 2022 aggregated $ 0.09 million and $ 0.10 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.

The following table sets forth

information with respect to nonvested options for the nine months ended September 30, 2022:

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, 2023:

Number of Shares

5 unchanged sentences

Nonvested options – end of period

INTER PARFUMS, INC.

payment expense decreased income before income taxes by $ 0.63 million and $ 0.65 million for the three months ended March 31, 2023

and 2022, respectively, and decreased income attributable to Inter Parfums, Inc.

by $ 0.43 million and $ 0.44 million for the three

months ended March 31, 2023 and 2022, respectively.

INTER PARFUMS,

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Share-based payment expense decreased

income before income taxes by $ 0.47 million and $ 2.35 million for the three and nine months ended September 30, 2022, respectively,

as compared to $ 0.71 million and $ 2.16 million for the corresponding periods of the prior year.

Share-based payment expense decreased

income attributable to Inter Parfums, Inc.

by $ 0.34 million and $ 1.52 million for the three and nine months ended September 30,

2022, respectively, as compared to $ 0.48 million and $ 1.42 million for the corresponding periods of the prior year.

The following table summarizes

stock option information as of September 30, 2022:

Weighted Average Exercise Price

to Consolidated Financial Statements

following table summarizes stock option information as of March 31, 2023:

Weighted Average

Exercise Price

Outstanding at January 1, 2023

1 unchanged sentence

Options exercised

Outstanding at September 30, 2022

Outstanding at March 31, 2023

Options exercisable

Options available for future grants

As of September 30, 2022, the

weighted average remaining contractual life of options outstanding is 2.12 years ( 1.76 years for options exercisable);

the aggregate

intrinsic value of options outstanding and options exercisable is $ 7.8 million and $ 5.9 million, respectively;

and unrecognized

compensation cost related to stock options outstanding aggregated $ 1.9 million.

Cash proceeds, tax benefits and

intrinsic value related to stock options exercised during the nine months ended September 30, 2022 and 2021 were as follows:

of March 31, 2023, the weighted average remaining contractual life of options outstanding is 3.56 years ( 1.75 years for options

exercisable);

the aggregate intrinsic value of options outstanding and options exercisable is $ 24.3 million and $ 15.5 million,

respectively;

and unrecognized compensation cost related to stock options outstanding aggregated $ 2.4 million.

proceeds, tax benefits and intrinsic value related to stock options exercised during the three months ended March 31, 2023 and

2022 were as follows:

(In thousands)

September 30,

Cash proceeds from stock options exercised

Intrinsic value of stock options exercised

The weighted average fair values

of the options granted by Inter Parfums, Inc.

during the nine months ended September 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.

There were no options granted

during the nine months ended September 30, 2022.

The assumptions used in the Black-Scholes pricing model for the period ended September

30, 2021 is set forth in the following table:

September 30,

Weighted average expected stock-price volatility

Weighted average expected option life

Weighted average risk-free interest rate

Weighted average dividend yield

INTER PARFUMS, INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Expected volatility is estimated

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

The expected term of the option is estimated based on historic

were no options granted during the three months ended March 31, 2023 and March 31, 2022.

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

The expected term of the option is estimated

based on historic data.

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 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 continues to increase.

In 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 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.

In 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.

The 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 estimated number of shares to be distributed of 66,905 has been determined taking into account employee turnover.

The aggregate

cost of the grant of approximately $ 3.2 million will be recognized as compensation cost on a straight-line basis over the requisite

three and a quarter year service period.

Similar 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 SA.

the nine months ended September 30, 2022, the Company acquired 63,281 shares at an aggregate cost of $ 3.0 million.

All share purchases and issuances

have been classified as equity transactions on the accompanying balance sheet.

INTER PARFUMS, INC.

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 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 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.

INTER PARFUMS,

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Net Income Attributable to Inter Parfums, Inc.

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 Euronext

on the date of grant.

The estimated number of shares to be distributed of 85,107 has been determined taking into account employee

The aggregate cost of the grant of approximately $ 4.1 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 year ended December 31, 2022, the Company acquired 63,281 shares at an aggregate cost of $ 3 .0 million.

In the first quarter of 2023, the Company initiated a small share repurchase program, and over the course the course of the first quarter of 2023,

the Company repurchased 43,060

shares at a cost of $ 5.58

These shares are classified as treasury shares on the accompanying balance sheet.

The Company plans to continue

repurchasing shares throughout 2023.

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

Income Attributable to Inter Parfums, Inc.

Common Shareholders:

Net income attributable to

Inter Parfums, Inc.

per common share (“basic EPS”) is computed by dividing net income attributable to Inter

Parfums, Inc.

income attributable to Inter Parfums, Inc.

per common share (“basic EPS”) is computed by dividing net income attributable

to Inter Parfums, Inc.

by the weighted average number of shares outstanding.

Net income attributable to Inter Parfums, Inc.

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

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:

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

Three months ended

Nine months ended

(In thousands)

September 30,

Net income attributable to Inter Parfums, Inc.

6 unchanged sentences

common shareholders:

Not included in the above computations

are the effect of antidilutive potential common shares which consist of outstanding options to purchase 0.15 million shares of

common stock for both three and nine months ended September 30, 2022, as compared to 0.17 and 0.23 million shares of common stock

for the three and nine months ended September 30, 2021, respectively.

INTER PARFUMS, INC.

were no antidilutive potential common shares outstanding for the three months ended March 31, 2023 and March 31, 2022.

INTER PARFUMS,

AND SUBSIDIARIES

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:

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:

Information on the Company’s operations by segments is as follows:

(In thousands)

Three months ended

September 30,

Nine months ended

September 30,

United States

1 unchanged sentence

United States

September 30,

Total Assets:

United States

INTER PARFUMS, INC.

INTER PARFUMS,

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