JEAN PHILIPPE FRAGRANCES INC
10-Q, 1995-11-14
DRUGS, PROPRIETARIES & DRUGGISTS' SUNDRIES
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                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549

                                   FORM 10-Q
( MARK ONE )

/X/    Quarterly  Report  pursuant  to  Section  13 or 15(d)  of the  Securities
       Exchange Act of 1934 for the quarterly period ended September 30, 1995.

                                                    OR

/ /    Transition Report pursuant to Section 13 or 15(d) of the Securities
       Exchange Act of 1934 for the transition period from ___________ to
       ________.


                          Commission File No. 0-16469

                        JEAN PHILIPPE FRAGRANCES, INC.
           ( Exact name of registrant as specified in its charter )


              Delaware                                      13-3275609
   (State or other jurisdiction of                      ( I.R.S. Employer
    incorporation or organization)                      Identification No.)


                 551 Fifth Avenue, New York, New York   10176
         (Address of Principal Executive Offices)          (Zip Code)

Registrants telephone number, including area code:    (212) 983-2640.

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or such shorter period that the registrant was required
to file such reports),  and (2) has been subject to such filing requirements for
the past 90 days: Yes X No

Indicate  the number of shares  outstanding  of each of the  issuers  classes of
common stock, as of the latest practicable date.

At November 10, 1995 there were  10,003,981  shares of common  stock,  par value
$.001 per share, outstanding.


                JEAN PHILIPPE FRAGRANCES, INC. AND SUBSIDIARIES

                                     INDEX

                                                                 Page Number

Part I.   Financial Information

       Item I.   Financial Statements                                 1

                 Consolidated Balance Sheets as
                 of September 30, 1995 (unaudited)
                 and December 31, 1994 (audited)                      2

                 Consolidated Statements of
                 Income for the Three Month and
                 Nine Month Periods Ended
                 September 30, 1995 (unaudited) and
                 September 30, 1994 (unaudited)                       3

                 Consolidated Statements of
                 Cash Flows for the Nine
                 Month Periods Ended
                 September 30, 1995 (unaudited) and
                 September 30, 1994 (unaudited)                       4

                 Notes to Unaudited Financial
                 Statements                                           5

       Item 2.   Management's Discussion and
                 Analysis of Financial Condition
                 and Results of Operations                            7

Part II.   Other Information

       Item 1.   Legal Proceedings                                   11

       Item 4.   Submission of Matters to a Vote of
                 Security Holders                                    11

       Item 5.   Other Information                                   12

       Item 6.   Exhibits and Reports on Form 8-K                    13

Signatures                                                           13



                JEAN PHILIPPE FRAGRANCES, INC. AND SUBSIDIARIES


Part I.       Financial Information

Item I.       Financial Statements

       In the opinion of  management  the  accompanying  unaudited  consolidated
condensed  financial  statements  contain all  adjustments  (consisting  only of
normal recurring adjustments) necessary to present fairly the financial position
of the  Company  and its  results of  operations  and cash flows for the interim
periods presented.  Such financial  statements have been condensed in accordance
with the rules and  regulations of the  Securities  and Exchange  Commission and
therefore,  do not  include  all  disclosures  required  by  generally  accepted
accounting principles.  These financial statements should be read in conjunction
with the Company's audited financial  statements for the year ended December 31,
1994 included in the Company's annual report filed on Form 10-K.

       The results of  operations  for the nine months ended  September 30, 1995
are not  necessarily  indicative  of the results to be  expected  for the entire
fiscal year.


                                    Page 1

                JEAN PHILIPPE FRAGRANCES, INC. AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEETS
  
                                    ASSETS

                                              September 30,       December 31,
                                                  1995               1994
                                              ------------        -----------
Current assets:
     Cash and cash equivalents                 $ 5,629,959        $ 5,275,142
     Accounts receivable, net                   26,532,179         19,875,844
     Inventories                30,102,984         24,640,795
     Receivables, other                            642,489          1,936,618
     Other                         1,576,601          1,785,755
     Deferred tax benefit                          917,382            992,730
                                              ------------        -----------
          Total current assets                  65,401,594         54,506,884

Equipment and leasehold improvements, net        1,358,200          1,201,739

Other assets                                     1,262,967            584,437

Deferred tax benefit                               754,397            731,905

Intangible assets, net                          11,785,352         12,427,031
                                              ------------        -----------
                                               $80,562,510        $69,451,996
                                              ============        ===========

                     LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
     Loans payable, banks                      $11,975,460        $ 6,680,524
     Current portion of long-term debt             204,499            187,266
     Accounts payable                           16,810,337         14,646,998
     Income taxes payable                        1,558,620          1,764,892
                                               -----------        -----------
          Total current liabilities             30,578,916         23,279,680
                                               -----------        -----------

Long-term debt, less current portion               768,484            862,601
                                               -----------        -----------

Minority interests                               1,007,344            796,153
                                               -----------        -----------
                                      
Shareholders' equity:
     Common stock, $.001 par; authorized
       30,000,000 shares; outstanding 
       10,003,981 and 10,242,786 shares 
       at September 30, 1995 and 
       December 31, 1994, respectively              10,004             10,243
     Additional paid-in capital                 20,510,060         20,407,574

     Retained earnings                          28,847,952         23,527,569
     Foreign currency translation adjustment       979,982            568,176
     Treasury stock, at cost, 735,503 and
       486,198 shares in 1995 and 1994,
       respectively                             (2,140,232)                 0
                                               -----------        -----------

                                                48,207,766         44,513,562
                                               -----------        -----------
 
                                               $80,562,510        $69,451,996
                                               ===========        ===========

See notes to financial statements.

                                    Page 2



                JEAN PHILIPPE FRAGRANCES, INC. AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF INCOME

                               Three Months Ended         Nine Months Ended
                                  September 30,             September 30,
                                1995         1994         1995         1994
                             -----------  -----------  -----------  -----------
                             (unaudited)  (unaudited)  (unaudited)  (unaudited)


Net sales                    $25,479,596  $22,108,443  $69,244,113  $52,064,840

Cost of sales                 13,514,405   11,281,658   35,361,205   27,448,500
                             -----------  -----------  -----------  -----------
Gross margin                  11,965,181   10,826,785   35,882,908   24,616,340

Selling, general and
  administrative               8,496,998    6,663,257   24,323,086   15,998,134
                             -----------  -----------  -----------  -----------
Income from operations         3,468,183    4,163,528    9,559,822    8,618,206

Other charges (income):
  Interest                       296,639      236,878      826,565      527,932
  Loss (gain) on foreign
    currency                     (87,506)     117,580      171,142      204,111
  Interest and dividend
    (income)                     (66,002)     (27,494)    (191,554)    (129,360)
  (Gain) on sale of stock of
    subsidiary                   (12,183)                  (32,064)    (112,955)
                             -----------  -----------  -----------  -----------

                                 130,948      326,964      774,089      489,728
                             -----------  -----------  -----------  -----------

Income before income taxes     3,337,235    3,836,564    8,785,733    8,128,478

Income taxes                   1,238,022    1,556,274    3,367,745    3,269,654
                             -----------  -----------  -----------  -----------
Net income before minority
  interest                     2,099,213    2,280,290    5,417,988    4,858,824

Minority interest in net
  income of consolidated
  subsidiary                      27,421       21,901       97,605 56,688
                             -----------  -----------  -----------  -----------

Net income                    $2,071,792   $2,258,389    5,320,383    4,802,136
                             ===========   ==========   ==========   ==========

Net income per common and
  common equivalent share          $0.20        $0.22        $0.51        $0.46
                             ===========   ==========   ==========   ==========


Number of common and common
  equivalent shares
  outstanding                 10,561,214   10,470,431   10,482,994   10,460,867
                             ===========   ==========   ==========   ==========

See notes to financial statements.

                                    Page 3

                JEAN PHILIPPE FRAGRANCES, INC. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
 

                                                        Nine months ended
                                                           September 30,
                                                         1995         1994
                                                     -----------  -----------

Operating activities:
     Net income                                      $ 5,320,383  $ 4,802,136
     Adjustments to reconcile net income to
       net cash (used in) operating activities:
 Depreciation and amortization                 1,022,884      661,285
         Gain on sale of stock of subsidiary              32,064     (112,955)
         Minority interest in net income                  97,605       56,688
     Increase (decrease) in cash from changes in:
         Accounts receivable                          (5,736,355)  (7,906,596)
         Inventories                                  (4,512,189)  (8,275,428)
 Other assets                                    979,753   (1,596,567)
 Deferred tax benefit                            126,856
         Accounts payable                                963,339    8,687,618
 Income taxes payable                           (176,272)  (1,003,069)
                                                     -----------  -----------

           Net cash (used in) operating activites     (1,881,932)  (4,736,888)
                                                     -----------  -----------
Investing activities:
     Purchase of equipment and leasehold
       improvements                                     (489,667)    (543,335)
     Cash portion of trademark and license
       acquisitions                                      (65,413)  (8,873,193)
 
           Net cash (used in) investing activities      (555,080)  (9,416,528)
                                                     -----------  -----------
Financing activities:
     Increase in loan payable, bank                    4,944,936    5,331,511
     Proceeds from issuance of long-term debt                         457,966
     Repayment of long-term debt                        (189,200)    (253,280)
     Proceeds from sale of stock of subsidiary            67,200      211,935
     Proceeds from exercise of options and warrants      102,247      278,354
     Purchase of treasury stock                       (2,140,332)            
                                                     -----------  -----------
           Net cash provided by financing activities   2,784,951    6,026,486
                                                     -----------  -----------

Effect of exchange rate changes on cash                    6,878        5,450
                                                     -----------  -----------
Increase (decrease) in cash and cash equivalents         354,817   (8,121,480)

Cash and cash equivalents at beginning of period       5,275,142    9,920,414
                                                     -----------  -----------

Cash and cash equivalents at end of period            $5,629,959   $1,798,934

                                                     ===========  ===========
Supplemental disclosure of cash flows information:

     Cash paid during the period for:
       Interest                                         $826,000     $528,000
       Income taxes                                    3,907,000    3,531,000

See notes to financial statements.
                                    
                                    Page 4


                JEAN PHILIPPE FRAGRANCES, INC. AND SUBSIDIARIES
                    Notes to Unaudited Financial Statements


1.     Significant Accounting Policies:

       The  accounting  policies  followed  by the  Company are set forth in the
       notes to the  Company's  financial  statements  included in its Form 10-K
       which was filed with the Securities and Exchange  Commission for the year
       ended December 31, 1994.


2.     Earnings Per Share:

       Net  income  per  common  and  common  equivalent  share  is based on the
       weighted   average  number  of  common  and  common   equivalent   shares
       outstanding during each period.  Common equivalent shares,  which consist
       of unissued  shares  under  options  and  warrants,  are  included in the
       computation when the results are dilutive.


3.     Inventories:

       Inventories consist of the following:

                                             September 30,   December 31, 
                                                 1995           1994
                                             ------------    -----------

       Raw Materials and component parts      $12,070,836    $10,537,381
       Finished goods                          18,032,148     14,103,414
                                             ------------    -----------
                                              $30,102,984     24,640,795
                                             ============    ===========

                                     Page 5


                JEAN PHILIPPE FRAGRANCES, INC. AND SUBSIDIARIES
                    Notes to Unaudited Financial Statements



4.     Subsequent events:

       On October 25, 1995, the Company took occupancy of its new 145,000 square
       foot  distribution  center at 60 Stults Road in Dayton,  NJ. The premises
       have  been  leased by the  Company  for an eight  year  term and  require
       monthly rental  payments of $57,000,  aggregating  $684,000 per annum. In
       connection therewith, the Company anticipates spending approximately $1.0
       million in equipment and  improvements  and incurring  moving expenses of
       approximately $100,000 in the fourth quarter of 1995.

       In November 1995, the Company's majority owned subsidiary, Inter Parfums,

       S.A.  agreed to sell to the  public in France  308,000  shares of capital
       stock at FF 130 per share, which will raise net proceeds of FF 38,000,000
       (or US $7.6 million).  In connection  with such  offering,  Inter Parfums
       Holding ("Holding"),  a wholly-owned subsidiary of the Company and direct
       parent of Inter Parfums,  will exercise its right to convert a portion of
       its  convertible  debt  into  250,000  shares of  capital  stock of Inter
       Parfums at FF 80 per share. Other nonaffiliated security holders of Inter
       Parfums will also exercise similar conversion rights.

       This  transaction is scheduled to close on November 16, 1995. As a result
       of such offering and related debt to equity conversions,  the interest of
       the Company in Inter  Parfums,  as held by Holding,  will be reduced from
       90% to 77%.  Further,  the Company's share of the offering and conversion
       proceeds in excess of the carrying amount of the portion of the Company's
       investment sold of approximately $3.5 million will be reflected as a gain
       in the  consolidated  income  statement  in the  fourth  quarter of 1995.
       Deferred  taxes have not been provided  because  application of available
       tax saving strategies would eliminate taxes on this transaction.


                                    Page 6


                JEAN PHILIPPE FRAGRANCES, INC. AND SUBSIDIARIES

Item 2:   MANAGEMENT'S DISCUSSION AND ANALYSIS OF 
          FINANCIAL CONDITION AND RESULTS OF
          OPERATIONS

The  Company's   long-term   business  strategy  of  building  core  volume  and
profitability,  developing  products  in  new  categories,  exploring  strategic
acquisition opportunities, and pursuing expansion in international markets, have
resulted  in  another  record for  quarterly  growth in sales.  Current  quarter
earnings,  however,  reflect the difficulties in the current retail  environment
and  obstacles   encountered  in  bringing  our  newly  acquired  lines  to  the
profitability levels originally anticipated.

       Three Months Ended September 30, 1995 Compared to
       September 30, 1994

Net sales increased 15% to $25.5 million,  as compared to $22.1 million in 1994.
This  increase  reflects  continued  growth  of our  core  Alternative  Designer
Fragrance lines and the fragrance lines of our foreign subsidiary.  Sales in our
color  cosmetics  lines during the three months ended  September 30, 1995,  have
been below original  expectations as a result of the difficulties in the current
retail environment as well as a greater than expected level of returns resulting
from the  required  change  in the  Uniform  Product  Code  (UPC)  from  that of
Chesebrough-Ponds  to the Jean  Philippe UPC.  Sales  generated by the Company's
domestic   operations   increased  15%  and  sales  by  the  Company's   foreign
subsidiaries increased 15%; at comparable foreign currency exchange rates, sales
by the Company's foreign subsidiaries increased 6%.

The Company  continues to focus its sales efforts on  development of new product
categories for sale to our expanding  customer base. Our Romantic Illusions line

of  Alternative  Designer  Fragrances,  introduced  in August 1995,  has enjoyed
initial  success.  The  Company has either  shipped,  or has orders in house for
shipment in the fourth quarter, product for such nationally recognized chains as
Walmart,  Revco, Rite Aid, CVS, and Ames Department Stores. The next new product
the  Company will  bring to market will be the relaunch of the Aziza(Registered)
hypo  allergenic  eye  cosmetic  line  scheduled  for  initial  distribution  in
February 1996. With efficient product  development  and  a strong national sales
force, the  Company  can  now  offer all  customers  its  growing collection  of
fragrance, personal care and color cosmetics products.

                                    Page 7


                JEAN PHILIPPE FRAGRANCES, INC. AND SUBSIDIARIES

Gross  profit  margin for 1995 was 47% of sales as compared to 49% in 1994.  The
decline in gross margin for the three month  period is  primarily  the result of
incremental  closeout sales of discontinued or returned products at prices below
our normal margins.  While in the ordinary course of business the Company closes
out such  inventory,  management  has taken an  increased  initiative  to reduce
overall inventory levels.  These efforts,  which are expected to continue in the
fourth  quarter of 1995,  are being  executed to improve the Company's cash flow
and in preparation of moving to our new  distribution  center in Dayton NJ. (See
Note 4 of Notes to  Unaudited  Financial  Statements).  The  Company's  business
lines,  excluding Cutex, generated a 44% gross margin in 1995 and 46% in 1994 as
a result of such increased closeout sales.

Selling,  general and  administrative  expenses  represented 33% of net sales in
1995 as  compared  to 30% in 1994.  The  increase  is  primarily  the  result of
promotion and  advertising  expenses  required for certain new product lines and
reflect the fact that sales in our color cosmetics lines during the three months
ended September 30, 1995, have been below original  expectations.  Management is
taking the steps it deems necessary in an effort to bring these product lines to
an acceptable profitability level. In addition, most licensed product lines call
for  royalties  to be paid  based  on sales  volume  and  some  require  minimum
advertising expenditures.

Interest  expense  increased  to  $297,000 in 1995 from  $237,000  in 1994.  The
Company  uses its  available  credit  lines,  as needed,  to finance its working
capital needs.

In the 1995  period,  the  Company  had a foreign  currency  gain of  $88,000 as
compared to a loss of $118,000  for the 1994 period.  The  Company,  on occasion
enters  into  foreign  currency  forward  exchange  contracts  as  a  hedge  for
short-term intercompany borrowings.

The  Company's  effective  income tax rate was 37% in 1995 and 41% in 1994.  The
decline in the  effective  rate for the period is the result of an adjustment of
the 1994 tax  accrual to reflect the actual tax owed  according  to the 1994 tax
returns filed in September 1995.

Net income  decreased 8% to $2.1 million in 1995, as compared to $2.3 million in
1994. Earnings per share for 1995 was $0.20, as compared to $0.22 for 1994.


The weighted  average  number of shares  outstanding  was 10,561,214 in 1995 and
10,470,431 in 1994.


                                    Page 8


                JEAN PHILIPPE FRAGRANCES, INC. AND SUBSIDIARIES

       Nine Months Ended September 30, 1995 Compared to
       September 30, 1994

Net sales increased 33% to $69.2 million,  as compared to $52.1 million in 1994.
This increase reflects the Company's ability to integrate new product lines with
existing product offerings. Sales generated by the Company's domestic operations
increased  35%.  Such growth is partially  the result of our  recently  acquired
Cutex  nail care and lip color  product,  line which did not exist for the first
seven months of 1994, and the continued growth of our core Alternative  Designer
Fragrance lines and the fragrance lines of our foreign subsidiary.

Sales by the Company's foreign subsidiaries increased 30%; at comparable foreign
currency exchange rates, sales by the Company's foreign  subsidiaries  increased
21%. Such increase reflects new product  introductions  under the Ombre Rose and
Burberrys labels.

Gross profit margin for 1995  increased to 49% of sales from 47% in 1994.  Sales
of Cutex  products have to enabled the Company to improve  overall gross margin.
However, as discussed below, such sales require additional selling expenditures.
The Company's business lines,  excluding Cutex,  generated a 46% gross margin in
both 1995 and 1994.

Selling,  general and  administrative  expenses  represented 35% of net sales in
1995 as  compared  to 31% in 1994.  The  increase  is  primarily  the  result of
promotion and  advertising  expenses  required for certain new product lines. In
addition,  most  licensed  product  lines call for royalties to be paid based on
sales volume and some require minimum advertising expenditures.

Interest  expense  increased  to  $827,000 in 1995 from  $528,000  in 1994.  The
Company  uses its  available  credit  lines,  as needed,  to finance its working
capital needs.

As a result of the precipitous decline of the U.S. dollar relative to the French
franc,  which began in the third quarter of 1994, the Company incurred losses on
foreign currency aggregating $171,000 in 1995 and $204,000 in 1994. The Company,
on occasion enters into foreign currency  forward exchange  contracts as a hedge
for short-term intercompany borrowings.

The Company  recognized a net gain on sale of stock of a subsidiary  aggregating
$32,000 in 1995 and $113,000 in 1994. The 1995 gain resulted from the conversion
of debt  into  common  stock of a  consolidated  subsidiary  and the  1994  gain
resulted  from the sale of common  stock of the  consolidated  subsidiary.  Such
issuances  of  shares  has  been  accounted  for as a gain on sale of stock of a
subsidiary and is not part of a broader corporate reorganization contemplated by
the Company. Although additional shares may be issued in the future, the Company

has no plans to spin-off its subsidiary nor to repurchase the shares  previously
issued (See Note 4 of Notes to Unaudited Financial Statements).

                                    Page 9


                JEAN PHILIPPE FRAGRANCES, INC. AND SUBSIDIARIES

The Company's effective income tax rate was 38% in 1995 and 40% in 1994.

Net income for the nine months ended  September  30, 1995  increased 11% to $5.3
million compared to $4.8 million for the corresponding period of the prior year.
Results  include  a net gain from the sale of common  stock of a  subsidiary  of
$32,000 in 1995 and $113,000 in 1994.  Excluding such gain, net income increased
13% and earnings per share  increased  11% to $0.50 per share  compared to $0.45
per share for the corresponding period of the prior year.

The weighted  average  number of shares  outstanding  was 10,482,994 in 1995 and
10,460,867 in 1994.


       Liquidity and Capital Resources

The Company's financial position continues to show solid strength as a result of
profitable  operating results. At September 30, 1995, working capital aggregated
$34.8  million and the Company had cash and cash  equivalents  aggregating  $5.6
million. The Company's Board of Directors has authorized the repurchase of up to
500,000  shares of the  Company's  common  stock and as of  September  30, 1995,
249,305 shares had been purchased at an average price per share of $8.58.

The  Company's  short-term  financing  requirements  are  expected  to be met by
available  cash  at  September  30,  1995,  cash  generated  by  operations  and
short-term  credit lines provided by domestic and foreign  banks.  The principal
credit facility for 1995 is a $12.0 million  unsecured  revolving line of credit
provided by a domestic commercial bank.  Borrowings under the domestic revolving
line of credit are due on demand and bear  interest at the bank's prime  lending
rate.

Management  of the  Company  believes  that  funds  generated  from  operations,
supplemented by its available credit facilities, will provide it with sufficient
resources to meet all present and reasonably foreseeable future operating needs.

Operating  activities  used $1.9  million of net cash for the nine months  ended
September  30,  1995 as  compared  to $4.7  million  for the nine  months  ended
September  30,  1994.  As the  Company  continues  to monitor  and  improve  its
procedures  with respect to collection of  outstanding  receivables  and closely
monitor  inventory levels,  the Company expects to see continued  improvement in
cash flow. Current inventory levels reflect the necessary  quantities to support
the upcoming selling season and new product introductions.


                                    Page 10


                JEAN PHILIPPE FRAGRANCES, INC. AND SUBSIDIARIES

On October 25, 1995,  the Company took  occupancy of its new 145,000 square foot
distribution  center at 60 Stults  Road in Dayton  NJ.  The  premises  have been
leased by the Company for an eight year term and require monthly rental payments
of $57,000, aggregating $684,000 per annum. In connection therewith, the Company
anticipates  spending  approximately  $1.0 million in equipment and improvements
and incurring moving expenses of approximately $100,000 in the fourth quarter of
1995.

See Note 4. of Notes to Unaudited Financial Statements with respect to an
overseas public offering of capital stock of the Company's French subsidiary,
Inter Parfums, S.A.

Inflation rates in the U.S. and foreign  countries in which the Company operates
have not had a  significant  impact on  operating  results for the period  ended
September 30, 1995.


Part II.      Other Information

Item 1.       Legal Proceedings

The  Company  previously  reported  that the Town of Kearney  had  commenced  an
administrative  proceeding  against the fee owner and managing agent of a public
warehouse located at 100 Central Avenue,  South Kearney,  NJ (the "South Kearney
Warehouse"),  where the  Company is one of several  lessees.  Since the  Company
relocated its warehouse  facility  within the time frame provided by the Town of
Kearney,  such administrative  proceeding no longer has any applicability to the
Company.

Items 2 and 3.

These items are omitted as they are either not  applicable or have been included
in Part I.

Item 4.       Submission of Matters to a Vote of Security Holders

(a) The  Annual  Meeting  of  Stockholders  (the  "Meeting")  of  Jean  Philippe
Fragrances,  Inc. (the "Corporation"),  was held on July 21, 1995 at 10:00 a.m.,
local time, at the offices of Jean Philippe Fragrances,  Inc., 551 Fifth Avenue,
New York, New York 10176.

(b) The following individuals were nominated for election as members of the
Board of  Directors  to hold  office  for a term of one (1) year  until the next
annual  meeting of  stockholders  and until  their  successors  are  elected and
qualify: Jean Madar, Philippe Benacin, Russell A. Greenberg,  Francois Heilbronn
and Joseph A. Caccamo.

                                    Page 11


                JEAN PHILIPPE FRAGRANCES, INC. AND SUBSIDIARIES


A vote was taken  and the  results  were as  follows:  9,326,943  votes for Jean
Madar, 55,898 withheld;  9,326,943 votes for Philippe Benacin,  55,898 withheld;
9,326,943 votes for Francois  Heilbronn,  55,898  withheld;  9,326,943 votes for
Russell Greenberg,  55,898 withheld;  and 9,326,943 votes for Joseph A. Caccamo,
55,898  withheld.  A plurality of the votes having been cast in favor of each of
the above-named Directors, they were duly elected to serve a one (1) year term.

(c) (i) The  second  item of  business  was the  resolution  to  adopt  the 1994
Nonemployee  Director  Supplemental Stock Option Plan. The results of the voting
were as follows:

       8,130,051 votes for the resolution,

       792,107 votes against and

       74,840 votes abstained.

A majority of the  outstanding  shares were cast for  resolution no. 2, and
the resolution was duly passed.

(c) (ii) The final item of business was the  proposal to ratify the  appointment
of Richard A. Eisner & Company, the independent  certified public accountants of
the Corporation,  for the current fiscal year. The results of the voting were as
follows:

       9,336,361 votes for the resolution,

       29,230 votes against and

       17,250 votes abstained.

A majority of the votes cast at the meeting have voted for the  resolution,
and the resolution was duly passed.

Item 5.       Other Matters

In November 1995, the Company's majority owned subsidiary,  Inter Parfums,  S.A.
agreed to sell to the public in France 308,000 shares of capital stock at FF 130
per share,  which will raise net proceeds of FF 38,000,000 (or US $7.6 million).
In  connection  with  such  offering,  Inter  Parfums  Holding  ("Holding"),   a
wholly-owned  subsidiary of the Company and direct parent of Inter Parfums, will
exercise  its right to convert a portion of its  convertible  debt into  250,000
shares of capital stock of Inter Parfums at FF 80 per share. Other nonaffiliated
security holders of Inter Parfums will also exercise similar conversion rights.

                                    Page 12


                JEAN PHILIPPE FRAGRANCES, INC. AND SUBSIDIARIES

This transaction is scheduled to close on November 16, 1995. As a result of such
offering and related debt to equity conversions,  the interest of the Company in
Inter Parfums, as held by Holding, will be reduced from 90% to 77%. Further, the
Company's  share of the  offering  and  conversion  proceeds  in  excess  of the

carrying amount of the portion of the Company's investment sold of approximately
$3.5 million will be reflected as a gain in the consolidated income statement in
the  fourth  quarter of 1995.  Deferred  taxes  have not been  provided  because
application of available tax saving  strategies  would  eliminate  taxes on this
transaction.


Item 6.       Exhibits and Reports on Form 8-K

None.



                                  SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized on the 14th day of November 1995.



                                   JEAN PHILIPPE FRAGRANCES, INC.


                            By:    /s/ Russell Greenberg
                                   -----------------------------------
                                   Russell Greenberg,
                                   Executive Vice President and
                                   Chief Financial Officer


                                    Page 13



<TABLE> <S> <C>


<ARTICLE> 5

       
<S>                             <C>
<PERIOD-TYPE>                   9-MOS
<FISCAL-YEAR-END>               DEC-31-1995
<PERIOD-START>                  JAN-01-1995
<PERIOD-END>                    SEP-30-1995
<CASH>                            5,629,959
<SECURITIES>                              0
<RECEIVABLES>                    26,532,179
<ALLOWANCES>                              0
<INVENTORY>                      30,102,924
<CURRENT-ASSETS>                 65,401,594
<PP&E>                            1,358,200
<DEPRECIATION>                            0
<TOTAL-ASSETS>                   80,562,510
<CURRENT-LIABILITIES>            30,578,916
<BONDS>                                   0
                     0
                               0
<COMMON>                         18,379,832
<OTHER-SE>                       29,827,934
<TOTAL-LIABILITY-AND-EQUITY>     80,562,510
<SALES>                          69,244,113
<TOTAL-REVENUES>                 69,244,113
<CGS>                            35,361,205
<TOTAL-COSTS>                    59,684,291
<OTHER-EXPENSES>                    774,089
<LOSS-PROVISION>                          0
<INTEREST-EXPENSE>                  826,565
<INCOME-PRETAX>                   8,785,733
<INCOME-TAX>                      3,364,745
<INCOME-CONTINUING>               5,417,988
<DISCONTINUED>                            0
<EXTRAORDINARY>                      97,605
<CHANGES>                                 0
<NET-INCOME>                      5,320,383
<EPS-PRIMARY>                           .51  
<EPS-DILUTED>                           .51  
        


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