<PAGE>
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, 1998.
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 9, 1998 there were 8,469,281 shares of common stock, par value
$.001 per share, outstanding.
<PAGE>
JEAN PHILIPPE FRAGRANCES, INC. AND SUBSIDIARIES
INDEX
Page Number
Part I. Financial Information
Item 1. Financial Statements 1
Consolidated Balance Sheets as
of September 30, 1998 (unaudited)
and December 31, 1997 (audited) 2
Consolidated Statements of
Income for the Three Month and
Nine Month Periods Ended
September 30, 1998 (unaudited) and
September 30, 1997 (unaudited) 3
Consolidated Statements of
Cash Flows for the Nine
Month Periods Ended
September 30, 1998 (unaudited) and
September 30, 1997 (unaudited) 4
Notes to Unaudited Financial
Statements 5
Item 2. Management's Discussion and
Analysis of Financial Condition
and Results of Operations 6
Part II. Other Information
Item 4. Submission of Matters to a Vote of
Security Holders 12
Item 6. Exhibits and Reports on Form 8-K 13
Signatures 13
<PAGE>
JEAN PHILIPPE FRAGRANCES, INC. AND SUBSIDIARIES
Part I. Financial Information
Item 1. 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, 1997 included in the Company's annual report
filed on Form 10-K.
The results of operations for the nine months ended September 30, 1998
are not necessarily indicative of the results to be expected for the entire
fiscal year.
Page 1
<PAGE>
JEAN PHILIPPE FRAGRANCES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
September 30, December 31,
1998 1997
------------ ------------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 18,614,527 $ 18,721,525
Accounts receivable, net 32,076,038 26,255,311
Inventories 24,100,997 21,707,497
Receivables, other 884,288 622,416
Other 432,279 469,982
Deferred tax benefit 1,423,488 1,114,508
------------ ------------
Total current assets 77,531,617 68,891,239
Equipment and leasehold improvements, net 2,848,394 2,122,465
Other assets 1,101,114 1,274,721
Intangible assets, net 7,877,601 7,993,992
------------ ------------
$ 89,358,726 $ 80,282,417
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Loans payable, banks $ 6,629,004 $ 3,063,393
Accounts payable 18,323,174 17,573,570
Income taxes payable 4,114,867 3,411,629
------------ ------------
Total current liabilities 29,067,045 24,048,592
------------ ------------
Long-term debt, less current portion 304,982 424,349
------------ ------------
Minority interests 6,984,342 5,615,564
------------ ------------
Shareholders' equity:
Common stock, $.001 par; authorized
30,000,000 shares; outstanding 8,549,081
and 8,862,781 shares at September 30, 1998 and
December 31, 1997, respectively 8,549 8,863
Additional paid-in capital 20,729,692 20,685,873
Retained earnings 46,182,055 42,729,807
Foreign currency translation adjustment (795,523) (2,368,609)
Treasury stock, at cost, 2,296,903 and
1,975,703 shares at September 30, 1998 and
December 31, 1997, respectively (13,122,416) (10,862,022)
------------ ------------
53,002,357 50,193,912
------------ ------------
$ 89,358,726 $ 80,282,417
============ ============
</TABLE>
See notes to financial statements.
Page 2
<PAGE>
JEAN PHILIPPE FRAGRANCES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1998 1997 1998 1997
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net sales $ 22,504,625 $ 24,464,337 $ 67,403,931 $ 67,280,600
Cost of sales 12,420,087 14,199,642 36,162,149 36,718,593
------------ ------------ ------------ ------------
Gross margin 10,084,538 10,264,695 31,241,782 30,562,007
Selling, general and administrative 8,029,956 7,012,297 24,419,462 23,468,585
Loss on divestiture of license 1,300,000
------------ ------------ ------------ ------------
Income from operations 2,054,582 3,252,398 6,822,320 5,793,422
------------ ------------ ------------ ------------
Other charges (income):
Interest 113,474 190,608 350,730 524,696
Loss on foreign currency 13,980 252,232 110,907 313,655
Interest and dividend (income) (157,100) (180,105) (583,263) (526,639)
Loss on sale of stock of subsidiary, net 281 36,119
------------ ------------ ------------ ------------
(29,365) 262,735 (85,507) 311,712
------------ ------------ ------------ ------------
Income before income taxes 2,083,947 2,989,663 6,907,827 5,481,710
Income taxes 776,112 1,112,551 2,751,518 1,837,786
------------ ------------ ------------ ------------
Net income before minority interest 1,307,835 1,877,112 4,156,309 3,643,924
Minority interest in net income
of consolidated subsidiary 235,688 242,228 704,061 562,651
------------ ------------ ------------ ------------
Net income $ 1,072,147 $ 1,634,884 $ 3,452,248 $ 3,081,273
============ ============ ============ ============
Net income per common share:
Basic $ 0.12 $ 0.18 $ 0.39 $ 0.33
Diluted $ 0.12 $ 0.18 $ 0.38 $ 0.33
============ ============ ============ ============
Number of common shares outstanding:
Basic 8,724,076 9,142,955 8,784,828 9,423,607
Diluted 8,946,954 9,283,661 9,040,959 9,478,117
============ ============ ============ ============
</TABLE>
See notes to financial statements.
Page 3
<PAGE>
JEAN PHILIPPE FRAGRANCES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Nine months ended
September 30,
1998 1997
------------ ------------
<S> <C> <C>
Operating activities:
Net income $ 3,452,248 $ 3,081,273
Adjustments to reconcile net income to
net cash provided by (used in) operating activities:
Depreciation and amortization 984,351 923,709
Loss on divestiture of license 854,728
Loss on sale of stock of subsidiary 36,119
Minority interest in net income 704,061 562,651
Increase (decrease) in cash from changes in:
Accounts receivable (4,157,911) (6,093,310)
Inventories (1,416,995) (578,320)
Other assets 52,568 (181,689)
Deferred tax benefit (244,005) 146,081
Accounts payable (339,640) 2,642,234
Income taxes payable 477,348 1,250,028
------------ ------------
Net cash provided by (used in) operating activites (451,856) 2,607,385
------------ ------------
Investing activities:
Purchase of equipment and leasehold improvements (1,164,001) (619,827)
Trademark and license acquisitions (22,788) (1,003,235)
Proceeds from sale of equipment 50,000
------------ ------------
Net cash (used in) investing activities (1,186,789) (1,573,062)
------------ ------------
Financing activities:
Increase in loan payable, bank 3,167,976 1,774,573
Proceeds from sale of stock of subsidiary 58,589
Proceeds from exercise of options and warrants 43,827
Purchase of treasury stock (2,260,716) (4,224,321)
------------ ------------
Net cash provided by (used in) financing activities 1,009,676 (2,449,748)
------------ ------------
Effect of exchange rate changes on cash 521,971 (938,171)
------------ ------------
(Decrease) in cash and cash equivalents (106,998) (2,353,596)
Cash and cash equivalents at beginning of period 18,721,525 20,205,391
------------ ------------
Cash and cash equivalents at end of period $ 18,614,527 $ 17,851,795
============ ============
Supplemental disclosure of cash flows information:
Cash paid during the period for:
Interest $ 360,000 $ 570,000
Income taxes 1,909,000 563,000
</TABLE>
See notes to financial statements.
Page 4
<PAGE>
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, 1997.
2. Earnings Per Share:
The Company adopted SFAS No. 128 "Earnings Per Share" in the period
ended December 31, 1997 and has retroactively applied the effects for
all periods presented herein. Accordingly, the presentation of per
share information includes calculations of basic and diluted income per
share. The impact on the per share amounts previously reported was not
significant.
Basic earnings per share are computed using the weighted average number
of shares outstanding during each period. Diluted earnings per share
are computed using the weighted average number of shares outstanding
during each period, plus the incremental shares outstanding assuming
the exercise of dilutive stock options.
3. Inventories:
Inventories consist of the following:
September 30, December 31,
1998 1997
----------- -----------
Raw materials and component parts $ 9,500,475 $10,566,904
Finished goods 14,600,522 11,140,593
----------- -----------
$24,100,997 $21,707,497
=========== ===========
Page 5
<PAGE>
JEAN PHILIPPE FRAGRANCES, INC. AND SUBSIDIARIES
Item 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
Jean Philippe Fragrances, Inc. together with its French subsidiary, Groupe
Inter Parfums, are manufacturers and distributors of fragrances, cosmetics
and personal care products. The Company's dedication to innovation and
diversity, and its commitment to creating quality products are the catalysts
behind new product introductions and product line expansion.
The Company, produces and distributes, world wide, a variety of fragrance,
personal care and cosmetic products including:
* Alternative Designer Fragrances and personal care products.
* International moderately priced fragrances.
* Brand name and licensed fragrances.
* Mass market cosmetics.
The Company's business strategy of building core volume and profitability,
developing products in new categories, exploring strategic acquisition
opportunities, and pursuing expansion in international markets remains as
management's primary long-term focus. The Company is determined to remain a
diversified fragrance and personal care products company. Growth
opportunities exist in each of the Company's product lines and management's
goal is to develop them to achieve competitive superiority and, thereby
maximize shareholder value.
Three and Nine Months Ended September 30, 1998 Compared to the
Three and Nine Months Ended September 30, 1997
Net sales for the three months ended September 30, 1998 was $22.5 million,
as compared to $24.5 million for the corresponding period of the prior year.
Net sales for the nine months ended September 30, 1998 was $67.4 million, as
compared to $67.3 million for the corresponding period of the prior year. On
April 30, 1997, the Company divested its Cutex nail and lip products license
and net sales for the nine months ended September 30, 1997 includes $3.3
million of Cutex product sales.
Page 6
<PAGE>
JEAN PHILIPPE FRAGRANCES, INC. AND SUBSIDIARIES
Excluding the effect of Cutex product sales, net sales generated by the
Company's domestic operations decreased 33% for the three months ended
September 30, 1998 and 14% for the nine months ended September 30, 1998, as
compared to the corresponding periods of the prior year. The primary factor
contributing to this decline is a result of the economic turmoil in Russia.
For the three months ended September 30, 1998, the Company had no net sales
from Russian Territories, as compared to net sales of approximately $3.5
million for the three months ended September 30, 1997. Excluding such sales
the decline was only 3% for the three months ended September 30, 1998.
Further, no assurances can be given that the economic turmoil will abate in
the foreseeable future, and thus management is uncertain as to whether the
Russian market will again become viable in the near future. However, the
Company does not have any material exposure with respect to accounts
receivable from its Russian Territory customers.
In addition, the overall market for Alternative Designer Fragrances has
become extremely competitive, very price sensitive and customers are
reducing their overall inventory levels. This trend is expected to continue
into the fourth quarter of 1998 and is affecting the entire industry. In an
attempt to combat the negative impact of this industry-wide trend, the
Company is in the process of developing a line of moderately priced
fragrances which are not Alternative Designer Fragrances. Utilizing prestige
and upscale concepts in bottle design and packaging, the Company is creating
a line of unique and high quality fragrances to be sold domestically and
internationally, in existing and new distribution channels, at mass market
prices. Although management of the Company believes that this new concept of
moderately priced fragrances will not affect its other core fragrance
businesses, no assurances can be given the new line will be successful. The
Company expects to launch its new line in December 1998.
A third factor contributing to the sales decline was the inability of Jean
Philippe do Brasil, Ltda., a wholly-owned limited liability company ("Jean
Philippe Brasil"), to effectively penetrate the Brazilian marketplace. As
previously reported, sales generated by the Company's Brazilian subsidiary,
Jean Philippe Brasil, were $2.0 million in 1997 as compared to $3.0 million
in 1996, and this trend has continued for the nine months ended September
30, 1998, with net sales decreasing to $0.6 million from $1.0 million for
the nine months ended September 30, 1997. Management believes such decline
reflected the Brazilian consumers' fear of a possible currency devaluation
brought on by the Asian crisis. In addition, as previously reported, Jean
Philippe Brasil underwent an organizational change during 1997, whereby it
terminated its contract with its exclusive sales representative. However,
Jean Philippe Brasil was not able to effectively penetrate the Brazilian
marketplace as a direct seller.
Page 7
<PAGE>
JEAN PHILIPPE FRAGRANCES, INC. AND SUBSIDIARIES
In view of the less than optimistic Brazilian consumer confidence level,
heavily regulated Brazilian environment, and the inability, to date, to
increase sales in Brazil to an acceptable level, the Company has determined
it is in its best interest to close its Jean Philippe Brasil subsidiary.
Such closing is not expected to have a material adverse effect on the
Company's results from operations. In addition, the Company has entered into
a distribution agreement with a well known Brazilian fragrance distributor
and such agreement included the purchase of all existing inventory.
Sales generated by the Company's French subsidiary, Groupe Inter Parfums,
continued to post strong sales growth with an increase of 14% for the three
months ended September 30, 1998 and 20% for the nine months ended September
30, 1998, as compared to the corresponding periods of the prior year. At
comparable foreign currency exchange rates, sales by Groupe Inter Parfums
increased 11% and 24% for the three and nine month periods ended September
30, 1998, respectively. Such increase is primarily the result of expanded
distribution of the Burberrys fragrance line as well Groupe Inter Parfums
introduction of "I Love You" by Molyneux. Sales growth by Groupe Inter Parfums
is expected to continue at the rate of approximately 12% to 15% in the fourth
quarter as they continue the launch of their new S.T. Dupont fragrance line
during the fourth quarter of 1998.
Gross profit margins increased to 45% and 46% of net sales for the three and
nine month periods ended September 30, 1998, respectively, as compared to
42% and 45% for the three and nine month periods ended September 30, 1997,
respectively. The Company's program of "Product Value Analysis" has allowed
the Company to better its original target of a 44% to 45% gross profit
margin. These cost saving techniques are also utilized in all new product
introductions. In addition, the nine month period ended September 30, 1997
includes approximately $3.3 million of net sales of higher margin Cutex
brand products.
Selling, general and administrative expenses were $8.0 million for the three
months ended September 30, 1998, as compared to $7.0 million for the
corresponding period of the prior year and aggregated 36% and 29% of net
sales for the three and nine month periods, respectively. Selling, general
and administrative expenses were $24.4 million or 36% of net sales for the
nine months ended September 30, 1998, as compared to $23.5 million or 35% of
net sales for the corresponding period of the prior year.
In support of the tremendous success of the Burberrys fragrance line, Groupe
Inter Parfums continues to spend heavily on advertising and media. For the
three and nine month periods ended September 30, 1998, such expenditures
aggregated $1.0 million and $2.8 million, respectively.
Page 8
<PAGE>
JEAN PHILIPPE FRAGRANCES, INC. AND SUBSIDIARIES
In connection with the April 30, 1997 restructuring of the Company's
domestic operations, which coincided with the divestiture of the Company's
Cutex license, the Company reduced its domestic work force by approximately
20%. As a result of both the work force reduction and the divestiture of the
Cutex license, domestic selling, general and administrative expenses
declined to $8.7 million for the nine months ended September 30, 1998 as
compared to $10.3 million for the corresponding period of the prior year.
However, as a result of the decline in domestic net sales, discussed above,
such expenses increased as a percentage of net sales to 36% in 1998, as
compared to 33% in 1997.
In the first quarter of 1997, the Company took a pre-tax charge against
earnings of $1.3 million to write-off intangible assets and other expenses
relating to the divestiture of the Cutex license. Management is confident
that such charge is sufficient to cover all potential obligations relating
to the Cutex business.
Interest expense declined to $0.1 million and $0.4 million for the three and
nine month periods ended September 30, 1998, respectively, as compared to
$0.2 million and $0.5 million for the three and nine month periods ended
September 30, 1997. The Company uses its available credit lines, as needed,
to finance its working capital needs.
The Company's effective income tax rate was 37% and 40% for the three and
nine month periods ended September 30, 1998, respectively, as compared to
37% and 34% for the corresponding periods of the prior year. The effective
tax rate for the three months ended September 30, 1998 reflects the tax
benefit to be realized as a result of the Company's decision to close its
Brazilian subsidiary. The 1997 periods benefitted from reductions of
valuation reserves on deferred tax assets relating to the utilization of net
operating loss carry forwards. No such benefit was available for the 1998
periods. In addition, corporate income tax rates in France have increased
from 36% to approximately 43% over the last two years.
Net income was to $1.1 million or $0.12 per diluted share for the three
months ended September 30, 1998, as compared to $1.6 million or $0.18 per
diluted share for the corresponding period of the prior year.
Net income was $3.5 million or $0.38 per diluted share for the nine months
ended September 30, 1998, as compared to $3.1 million or $0.33 per diluted
share for the corresponding period of the prior year. Results for the nine
months ended September 30, 1997 include a nonrecurring charge of $800,000,
on an after tax basis, relating to the divestiture of the Cutex license.
Excluding the nonrecurring charge, net income was $3.9 million or $0.41 per
diluted share for the nine months ended September 30, 1997.
Page 9
<PAGE>
JEAN PHILIPPE FRAGRANCES, INC. AND SUBSIDIARIES
The weighted average shares outstanding were 8.7 million and 8.8 million for
the three and nine month periods ended September 30, 1998, as compared to
9.1 million and 9.4 million for the three and nine month periods ended
September 30, 1997, respectively. On a diluted basis, average shares
outstanding were 8.9 million and 9.0 million for the three and nine month
periods ended September 30, 1998, respectively, as compared to 9.3 million
and 9.5 million for the corresponding periods of the prior year. Such
decline is the result of the Company's ongoing stock repurchase program.
Liquidity and Capital Resources
As a result of continued profitable operating results, the Company's
financial position remains very strong. At September 30, 1998, working
capital aggregated $48 million and the Company had cash and cash equivalents
on hand of $19 million. Net book value aggregated $6.20 per outstanding
share as of September 30, 1998.
The 1995 initial public offering in France of approximately 21% of the
common stock of the Groupe Inter Parfums, has proven to be extremely
successful. In addition to the strength such stock sale provided to the
financial position of Groupe Inter Parfums, the proceeds of the offering
have enabled Groupe Inter Parfums to control its growth and invest for the
future without incurring any significant increase in debt. Long-term debt of
Groupe Inter Parfums stood at $0.3 million as of September 30, 1998.
As a result of continued growth in both sales and earnings of Groupe Inter
Parfums, in January 1998, the Company exercised its rights to convert the
remaining portion of its convertible debt, approximately $4.4 million, into
318,326 additional shares of Groupe Inter Parfums bringing the total shares
outstanding to 2,209,000. The conversion price was approximately $14 per
share while Groupe Inter Parfums stock is presently trading at approximately
$30 per share. The effect of this conversion increases the Company's
ownership percentage from 76.4% to 79.3%.
Page 10
<PAGE>
JEAN PHILIPPE FRAGRANCES, INC. AND SUBSIDIARIES
The Board of Directors authorized the repurchase of an additional 500,000
shares of the Company's common stock, bringing the total shares authorized
to be repurchased under the current repurchase program to 2.5 million
shares. Shares of Jean Philippe Fragrances are presently trading at
approximately $5.50 per share, which is below the net asset value per share
of $6.20. In addition, the Company's investment in its publically traded
French subsidiary, Groupe Inter Parfums, has a market value which alone
represents approximately $6.15 per share. During the nine month period ended
September 30, 1998, the Company continued repurchasing its common stock
pursuant to the authorized repurchase plan and as of September 30, 1998,
1,810,705 shares of common stock have been purchased at an average price per
share of $7.25.
The Company's short-term financing requirements are expected to be met by
available cash at September 30, 1998, cash generated by operations and
short-term credit lines provided by domestic and foreign banks. The
principal credit facilities for 1998 are a $12.0 million unsecured revolving
line of credit provided by a domestic commercial bank and $12.0 million in
credit lines provided by a consortium of international financial
institutions.
A buildup of inventory in preparation of fourth quarter new product
introductions along with an increase in accounts receivable, resulting from
extended payment terms to certain customers, required a use of cash from
operating activities for the nine months ended September 30, 1998.
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.
The Company has substantially completed all projects to address "Year 2000"
compliance with respect to its internal information systems. As such,
management believes that "Year 2000" transition will not have a material
adverse effect on future results.
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 nine
months ended September 30, 1998.
Page 11
<PAGE>
JEAN PHILIPPE FRAGRANCES, INC. AND SUBSIDIARIES
Part II. Other Information
Items 1, 2, 3 and 5 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 10 at 10:00
a.m., local time, at the offices of the Corporation, 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 Greenberg,
Francois Heilbronn, Joseph A. Caccamo, Jean Levy and Robert
Bensoussan-Torres.
The results of the voting were as follows: 8,172,744 votes for
Jean Madar, 12,620 withheld; 8,182,984 votes for Philippe Benacin, 12,380
withheld; 8,183,984 votes for Russell Greenberg, 11,380 withheld; 8,183,984
votes for Francois Heilbronn, 11,380 withheld; 8,183,984 votes for Joseph A.
Caccamo, 11,380 withheld; 8,183,984 votes for Jean Levy, 11,380 withheld;
and 8,183,984 votes for Robert Bensoussan-Torres, 11,380 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 1998 Stock Option Plan. The results of the voting were as follows:
6,739,242 votes for the resolution,
1,046,882 votes against and
409,240 votes abstained.
A majority of the outstanding shares were cast for resolution no. 2,
and the resolution was duly passed.
Page 12
<PAGE>
JEAN PHILIPPE FRAGRANCES, INC. AND SUBSIDIARIES
(c) (ii) The final item of business was the proposal to ratify the
appointment of Richard A. Eisner & Company LLP, the independent certified
public accountants of the Corporation, for the current fiscal year. The
results of the voting were as follows:
8,183,147 votes for the resolution,
2,330 votes against and
9,887 votes abstained.
A majority of the votes cast at the meeting have voted for the
resolution, and the resolution was duly passed.
Item 6. Exhibits and Reports on Form 8-K
(b) A Current Report on Form 8-K, date of report, October 6, 1998,
was filed, reporting items Item 5 and Item 7.
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 12th day of November
1998.
JEAN PHILIPPE FRAGRANCES, INC.
By: /s/ Russell Greenberg
---------------------------------
Russell Greenberg,
Executive Vice President and
Chief Financial Officer
Page 13
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 18,614,527
<SECURITIES> 0
<RECEIVABLES> 32,076,038
<ALLOWANCES> 0
<INVENTORY> 24,100,997
<CURRENT-ASSETS> 77,531,617
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 89,358,726
<CURRENT-LIABILITIES> 29,067,045
<BONDS> 0
0
0
<COMMON> 7,615,825
<OTHER-SE> 45,386,532
<TOTAL-LIABILITY-AND-EQUITY> 89,358,726
<SALES> 67,403,931
<TOTAL-REVENUES> 67,403,931
<CGS> 36,162,149
<TOTAL-COSTS> 60,581,611
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 85,507
<INTEREST-EXPENSE> 350,730
<INCOME-PRETAX> 6,907,827
<INCOME-TAX> 2,751,518
<INCOME-CONTINUING> 4,156,309
<DISCONTINUED> 0
<EXTRAORDINARY> 704,061
<CHANGES> 0
<NET-INCOME> 3,452,248
<EPS-PRIMARY> 0.39
<EPS-DILUTED> 0.38
</TABLE>
