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 Actof
      1934 for the quarterly period ended September 30,
  2009.
 
 OR
 
  ̈
              Transition
      Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of1934
      for the transition period from ___________to
  ________.
 
 Commission
File No. 0-16469
 
 INTER
PARFUMS, INC.
 (Exact
name of registrant as specified in its charter)
 
 Delaware
                  
                  13-3275609(State
      or other jurisdiction of
                  
                  (I.R.S.
      Employerincorporation
      or organization)
                  
                  Identification
      No.)
 
 551 Fifth Avenue, New York, New
      York
                  
                  10176(Address
      of Principal Executive Offices)
                  
                  (Zip
      Code)
 
 (212)
      983-2640(Registrants
      telephone number, including area
code)
 
 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 xNo  ̈
 
 Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files).  Yes  ̈ No
 ̈
 
 Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting company. See
definition of “large accelerated filer,” “accelerated filer” and “smaller
reporting company”  in Rule 12b-2 of the Exchange Act).
 
 Large
      accelerated Filer  ̈
              Accelerated
      filer xNon-accelerated
      filer  ̈
      (Do not check if a smaller reporting company)
              Smaller
      reporting company  ̈
 
 Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).  Yes  ̈ No
x
 
 Indicate
the number of shares outstanding of each of the issuer’s classes of common
stock, as of the latest practicable date.
 
 At
November 6, 2009, there were 30,079,589 shares of common stock, par value $.001
per share, outstanding.
  INTER
PARFUMS, INC. AND SUBSIDIARIES
 
 INDEX
 
 Page NumberPart
      I.
                                                  Financial
      Information
                                                  1Item
      1.
                                                  Financial
      StatementsConsolidated
      Balance Sheets as of September 30, 2009 (unaudited) and December 31,
      2008
                                                  2Consolidated
      Statements of Income for the Three and Nine Month Periods Ended September
      30, 2009 (unaudited) and September 30, 2008 (unaudited)
                                                  3Consolidated
      Statements of Changes in Equity for the Nine Months Ended September 30,
      2009 (unaudited) and September 30, 2008 (unaudited)
                                                  4Consolidated
      Statements of Cash Flows for the Nine Months Ended September 30, 2009
      (unaudited) and September 30, 2008 (unaudited)
                                                  5Notes
      to Consolidated Financial Statements
                                                  6Item
      2.
                                                  Management's
      Discussion and Analysis of Financial Condition and Results of
      Operations
                                                  15Item
      3.
                                                  Quantitative
      and Qualitative Disclosures About Market Risk
                                                  29Item
      4.
                                                  Controls
      and Procedures
                                                  30Part II.
                                                  Other
      Information
                                                  31Item
      6.
                                                  Exhibits
                                                  31Signatures
                                                  31
  INTER
PARFUMS, INC. AND SUBSIDIARIES
  Part
I. Financial Information
 
 Item
1. Financial Statements
 
 In our opinion, the accompanying
unaudited consolidated financial statements contain all adjustments (consisting
only of normal recurring adjustments) necessary to present fairly our financial
position, results of operations and cash flows for the interim periods
presented.  We have condensed such financial statements in accordance
with the rules and regulations of the Securities and Exchange
Commission.  Therefore, such financial statements do not include all
disclosures required by accounting principles generally accepted in the United
States of America.  These financial statements should be read in
conjunction with our audited financial statements for the year ended
December 31, 2008 included in our annual report filed on Form
10-K.
 
 The results of operations for the nine
months ended September 30, 2009 are not necessarily indicative of the results to
be expected for the entire fiscal year.
  Page
1
 INTER
PARFUMS, INC. AND SUBSIDIARIES
  CONSOLIDATED
BALANCE SHEETS
 (In
thousands except share and per share data)
 
 September 30,
                                    2009
                                  
                                  
                                  December 31,
                                    2008(unaudited)ASSETSCurrent
      assets:Cash
      and cash equivalents
                                  
                                  $
                                  57,710
                                  
                                  
                                  $
                                  42,404Accounts
      receivable, net
                                  
                                  
                                  127,296
                                  
                                  
                                  
                                  120,507Inventories
                                  
                                  
                                  95,998
                                  
                                  
                                  
                                  123,633Receivables,
      other
                                  
                                  
                                  4,791
                                  
                                  
                                  
                                  2,904Other
      current assets
                                  
                                  
                                  9,392
                                  
                                  
                                  
                                  10,034Income
      tax receivable
                                  
                                  
                                  46
                                  
                                  
                                  
                                  1,631Deferred
      tax assets
                                  
                                  
                                  4,880
                                  
                                  
                                  
                                  3,388Total
      current assets
                                  
                                  
                                  300,113
                                  
                                  
                                  
                                  304,501Equipment
      and leasehold improvements, net
                                  
                                  
                                  9,197
                                  
                                  
                                  
                                  7,670Goodwill
                                  
                                  
                                  5,747
                                  
                                  
                                  
                                  5,470Trademarks,
      licenses and other intangible assets, net
                                  
                                  
                                  105,375
                                  
                                  
                                  
                                  104,922Other
      assets
                                  
                                  
                                  1,003
                                  
                                  
                                  
                                  2,574Total
      assets
                                  
                                  $
                                  421,435
                                  
                                  
                                  $
                                  425,137LIABILITIES
      AND EQUITYCurrent
      liabilities:Loans
      payable – banks
                                  
                                  $
                                  10,029
                                  
                                  
                                  $
                                  13,981Current
      portion of long-term debt
                                  
                                  
                                  11,870
                                  
                                  
                                  
                                  13,352Accounts
      payable - trade
                                  
                                  
                                  40,275
                                  
                                  
                                  
                                  66,236Accrued
      expenses
                                  
                                  
                                  40,063
                                  
                                  
                                  
                                  35,368Income
      taxes payable
                                  
                                  
                                  1,723
                                  
                                  
                                  
                                  442Dividends
      payable
                                  
                                  
                                  992
                                  
                                  
                                  
                                  996Total
      current liabilities
                                  
                                  
                                  104,952
                                  
                                  
                                  
                                  130,375Long-term
      debt, less current portion
                                  
                                  
                                  20,231
                                  
                                  
                                  
                                  27,691Deferred
      tax liability
                                  
                                  
                                  11,013
                                  
                                  
                                  
                                  11,562Equity:Inter
      Parfums, Inc. shareholders’ equity:Preferred
      stock, $.001 par; authorized1,000,000
      shares; none issuedCommon
      stock, $.001 par; authorized 100,000,000 shares;outstanding
      30,066,239 and 30,168,939 shares atSeptember
      30, 2009 and December 31, 2008, respectively
                                  
                                  
                                  30
                                  
                                  
                                  
                                  30Additional
      paid-in capital
                                  
                                  
                                  42,478
                                  
                                  
                                  
                                  41,950Retained
      earnings
                                  
                                  
                                  182,111
                                  
                                  
                                  
                                  168,025Accumulated
      other comprehensive income
                                  
                                  
                                  35,602
                                  
                                  
                                  
                                  25,515Treasury
      stock, at cost, 10,074,479 and 9,966,379 commonshares
      at September 30, 2009 and December 31, 2008,
      respectively
                                  
                                  
                                  (31,950
                                  )
                                  
                                  
                                  (31,319
                                  )Total
      Inter Parfums, Inc. shareholders’ equity
                                  
                                  
                                  228,271
                                  
                                  
                                  
                                  204,201Noncontrolling
      interest
                                  
                                  
                                  56,968
                                  
                                  
                                  
                                  51,308Total
      equity
                                  
                                  
                                  285,239
                                  
                                  
                                  
                                  255,509Total
      liabilities and equity
                                  
                                  $
                                  421,435
                                  
                                  
                                  $
                                  425,137
 
 See
notes to consolidated financial statements.
  Page
2
 INTER
PARFUMS, INC. AND SUBSIDIARIES
  CONSOLIDATED
STATEMENTS OF INCOME
 (In
thousands except per share data)
 (Unaudited)
 
 Three Months Ended
                      September 30,
                    
                    
                    Nine Months Ended
                      September 30,2009
                    
                    
                    2008
                    
                    
                    2009
                    
                    
                    2008Net
      sales
                    
                    $
                    117,542
                    
                    
                    $
                    123,531
                    
                    
                    $
                    296,555
                    
                    
                    $
                    345,772Cost
      of sales
                    
                    
                    50,462
                    
                    
                    
                    56,206
                    
                    
                    
                    125,709
                    
                    
                    
                    148,385Gross
      margin
                    
                    
                    67,080
                    
                    
                    
                    67,325
                    
                    
                    
                    170,846
                    
                    
                    
                    197,387Selling,
      general and administrative
                    
                    
                    53,169
                    
                    
                    
                    56,039
                    
                    
                    
                    139,812
                    
                    
                    
                    160,124Income
      from operations
                    
                    
                    13,911
                    
                    
                    
                    11,286
                    
                    
                    
                    31,034
                    
                    
                    
                    37,263Other
      expenses (income):Interest
      expense
                    
                    
                    482
                    
                    
                    
                    1,418
                    
                    
                    
                    2,192
                    
                    
                    
                    2,865(Gain)
      loss on foreign currency
                    
                    
                    (854
                    )
                    
                    
                    77
                    
                    
                    
                    (4,796
                    )
                    
                    
                    262Interest
      income
                    
                    
                    (135
                    )
                    
                    
                    (446
                    )
                    
                    
                    (745
                    )
                    
                    
                    (1,611
                    )(507
                    )
                    
                    
                    1,049
                    
                    
                    
                    (3,349
                    )
                    
                    
                    1,516Income
      before income taxes
                    
                    
                    14,418
                    
                    
                    
                    10,237
                    
                    
                    
                    34,383
                    
                    
                    
                    35,747Income
      taxes
                    
                    
                    4,807
                    
                    
                    
                    2,358
                    
                    
                    
                    11,763
                    
                    
                    
                    12,241Net
      income
                    
                    
                    9,611
                    
                    
                    
                    7,879
                    
                    
                    
                    22,620
                    
                    
                    
                    23,506Less:  Net
      income attributable to the noncontrolling interest
                    
                    
                    2,349
                    
                    
                    
                    1,691
                    
                    
                    
                    5,704
                    
                    
                    
                    4,838Net
      income attributable to Inter Parfums, Inc.
                    
                    $
                    7,262
                    
                    
                    $
                    6,188
                    
                    
                    $
                    16,916
                    
                    
                    $
                    18,668Earnings
      per share:Net
      income attributable to Inter Parfums, Inc. common
      shareholders:Basic
                    
                    $
                    0.24
                    
                    
                    $
                    0.20
                    
                    
                    $
                    0.56
                    
                    
                    $
                    0.61Diluted
                    
                    $
                    0.24
                    
                    
                    $
                    0.20
                    
                    
                    $
                    0.56
                    
                    
                    $
                    0.60Weighted
      average number of shares outstanding:Basic
                    
                    
                    30,061
                    
                    
                    
                    30,632
                    
                    
                    
                    30,097
                    
                    
                    
                    30,660Diluted
                    
                    
                    30,065
                    
                    
                    
                    30,886
                    
                    
                    
                    30,098
                    
                    
                    
                    30,869Dividends
      declared per share
                    
                    $
                    0.033
                    
                    
                    $
                    0.033
                    
                    
                    $
                    0.099
                    
                    
                    $
                    0.099
 
 See
notes to consolidated financial statements.
  Page
3
 INTER
PARFUMS, INC. AND SUBSIDIARIES
  CONSOLIDATED
STATEMENTS OF CHANGES IN EQUITY
 (In
thousands)
 
 Inter Parfums, Inc. shareholdersAccumulatedAdditional
                    
                    
                    
                    
                    
                    otherCommon
                    
                    
                    paid-in
                    
                    
                    Retained
                    
                    
                    comprehensive
                    
                    
                    Treasury
                    
                    
                    Noncontrollingstock
                    
                    
                    Capital
                    
                    
                    earnings
                    
                    
                    income
                    
                    
                    stock
                    
                    
                    interest
                    
                    
                    TotalBalance
      – January 1, 2008
                    
                    $
                    31
                    
                    
                    $
                    40,023
                    
                    
                    $
                    147,995
                    
                    
                    $
                    30,955
                    
                    
                    $
                    (26,344
                    )
                    
                    $
                    53,925
                    
                    
                    $
                    246,585Comprehensive
      income:Net
      income
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    18,668
                    
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    4,838
                    
                    
                    
                    23,506Foreign
      currency translation adjustment
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    (5,436
                    )
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    (5,436
                    )Net
      derivative instrument gain, net of tax
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    (140
                    )
                    
                    
                    —
                    
                    
                    
                    (53
                    )
                    
                    
                    (193
                    )Purchase
      of subsidiary shares from noncontrolling interests
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    (8,623
                    )
                    
                    
                    (8,623
                    )Sale
      of subsidiary shares to noncontrolling interests
                    
                    
                    —
                    
                    
                    
                    215
                    
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    1,700
                    
                    
                    
                    1,915Foreign
      currency translation adjustment
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    (1,307
                    )
                    
                    
                    (1,307
                    )Dividends
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    (3,043
                    )
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    (1,735
                    )
                    
                    
                    (4,778
                    )Purchased
      treasury stock
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    (2,206
                    )
                    
                    
                    —
                    
                    
                    
                    (2,206
                    )Shares
      issued upon exercise of stock options
                    
                    
                    —
                    
                    
                    
                    479
                    
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    479Stock
      compensation
                    
                    
                    —
                    
                    
                    
                    335
                    
                    
                    
                    243
                    
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    105
                    
                    
                    
                    683Balance
      – September 30, 2008
                    
                    $
                    31
                    
                    
                    $
                    41,052
                    
                    
                    $
                    163,863
                    
                    
                    $
                    25,379
                    
                    
                    $
                    (28,550
                    )
                    
                    $
                    48,850
                    
                    
                    $
                    250,625Balance
      – January 1, 2009
                    
                    $
                    30
                    
                    
                    $
                    41,950
                    
                    
                    $
                    168,025
                    
                    
                    $
                    25,515
                    
                    
                    $
                    (31,319
                    )
                    
                    $
                    51,308
                    
                    
                    $
                    255,509Comprehensive
      income:Net
      income
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    16,916
                    
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    5,704
                    
                    
                    
                    22,620Foreign
      currency translation adjustment
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    13,251
                    
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    13,251Net
      derivative instrument gain, net of tax
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    (3,164
                    )
                    
                    
                    —
                    
                    
                    
                    (1,084
                    )
                    
                    
                    (4,248
                    )Sale
      of subsidiary shares to noncontrolling interests
                    
                    
                    
                    
                    
                    
                    (53
                    )
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    2,677
                    
                    
                    
                    2,624Dividends
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    (2,979
                    )
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    (1,716
                    )
                    
                    
                    (4,695
                    )Purchased
      treasury stock
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    (631
                    )
                    
                    
                    —
                    
                    
                    
                    (631
                    )Shares
      issued upon exercise of stock options
                    
                    
                    —
                    
                    
                    
                    200
                    
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    200Stock
      compensation
                    
                    
                    —
                    
                    
                    
                    381
                    
                    
                    
                    149
                    
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    79
                    
                    
                    
                    609Balance
      – September 30, 2009
                    
                    $
                    30
                    
                    
                    $
                    42,478
                    
                    
                    $
                    182,111
                    
                    
                    $
                    35,602
                    
                    
                    $
                    (31,950
                    )
                    
                    $
                    56,968
                    
                    
                    $
                    285,239
 
 See
notes to consolidated financial statements.
  Page
4
 INTER
PARFUMS, INC. AND SUBSIDIARIES
  CONSOLIDATED
STATEMENTS OF CASH FLOWS
 (In
thousands)
 (Unaudited)
 
 Nine months ended
                    September 30,2009
                  
                  
                  2008Cash
      flows from operating activities:Net
      income
                  
                  $
                  22,620
                  
                  
                  $
                  23,506Adjustments
      to reconcile net income to net cash provided by (used in) operating
      activities:Depreciation
      and amortization
                  
                  
                  7,758
                  
                  
                  
                  7,666Provision
      for doubtful accounts
                  
                  
                  947
                  
                  
                  
                  323Noncash
      stock compensation
                  
                  
                  724
                  
                  
                  
                  868Deferred
      tax (benefit)
                  
                  
                  (2,385
                  )
                  
                  
                  (709
                  )Change
      in fair value of derivatives
                  
                  
                  (713
                  )
                  
                  
                  —Changes
      in:Accounts
      receivable
                  
                  
                  (1,880
                  )
                  
                  
                  (27,707
                  )Inventories
                  
                  
                  30,891
                  
                  
                  
                  (32,239
                  )Other
      assets
                  
                  
                  (4,694
                  )
                  
                  
                  2,601Accounts
      payable and accrued expenses
                  
                  
                  (24,530
                  )
                  
                  
                  (10,966
                  )Income
      taxes payable, net
                  
                  
                  4,851
                  
                  
                  
                  (4,452
                  )Net
      cash provided by (used in) operating activities
                  
                  
                  33,589
                  
                  
                  
                  (41,109
                  )Cash
      flows from investing activities:Purchases
      of short-term investments
                  
                  
                  —
                  
                  
                  
                  (5,312
                  )Proceeds
      from sale of  short-term investments
                  
                  
                  —
                  
                  
                  
                  5,312Purchases
      of equipment and leasehold improvements
                  
                  
                  (3,758
                  )
                  
                  
                  (2,301
                  )Payment
      for intangible assets acquired
                  
                  
                  (622
                  )
                  
                  
                  (1,015
                  )Payment
      for purchase of subsidiary shares from noncontrolling
    interest
                  
                  
                  —
                  
                  
                  
                  (18,405
                  )Proceeds
      from sale of subsidiary shares to noncontrolling interest
                  
                  
                  2,608
                  
                  
                  
                  2,094Net
      cash used in investing activities
                  
                  
                  (1,772
                  )
                  
                  
                  (19,627
                  )Cash
      flows from financing activities:Proceeds
      (repayments) of loans payable – bank, net
                  
                  
                  (4,025
                  )
                  
                  
                  20,572Repayment
      of long-term debt
                  
                  
                  (10,360
                  )
                  
                  
                  (12,637
                  )Proceeds
      from exercise of options including tax benefits
                  
                  
                  200
                  
                  
                  
                  479Dividends
      paid
                  
                  
                  (2,979
                  )
                  
                  
                  (3,058
                  )Dividends
      paid to noncontrolling interest
                  
                  
                  (1,716
                  )
                  
                  
                  (1,735
                  )Purchase
      of treasury stock
                  
                  
                  (631
                  )
                  
                  
                  (2,206
                  )Net
      cash provided by (used in) financing activities
                  
                  
                  (19,511
                  )
                  
                  
                  1,415Effect
      of exchange rate changes on cash
                  
                  
                  3,000
                  
                  
                  
                  1,268Net
      increase (decrease) in cash and cash equivalents
                  
                  
                  15,306
                  
                  
                  
                  (58,053
                  )Cash
      and cash equivalents - beginning of period
                  
                  
                  42,404
                  
                  
                  
                  90,034Cash
      and cash equivalents - end of period
                  
                  $
                  57,710
                  
                  
                  $
                  31,981Supplemental
      disclosure of cash flow information:Cash
      paid for:Interest
                  
                  $
                  2,000
                  
                  
                  $
                  2,866Income
      taxes
                  
                  
                  9,746
                  
                  
                  
                  12,346
 
 See
notes to consolidated financial statements
  Page
5
 INTER
PARFUMS, INC. AND SUBSIDIARIES
 
 Notes
to Consolidated Financial Statements
 
 1.
              Significant Accounting
      Policies:
 
 The
accounting policies we follow are set forth in the notes to our financial
statements included in our Form 10-K which was filed with the Securities and
Exchange Commission for the year ended December 31, 2008. We also discuss
such policies in Part I, Item 2, Management’s Discussion and Analysis of
Financial Condition and Results of Operations, included in this Form
10-Q.
 
 2.
              Recently Issued
      Accounting Pronouncements:
 
 In
December 2007, the FASB issued Accounting Standards Codification (“ASC”) topic
810-10-65-1 (formerly SFAS No. 160, “Noncontrolling Interests in Consolidated
Financial Statements”). ASC topic 810-10-65-1 establishes requirements for
ownership interests in subsidiaries held by parties other than the Company
(sometimes called “minority interests”) be clearly identified, presented, and
disclosed in the consolidated statement of financial position within equity, but
separate from the parent’s equity. All changes in the parent’s ownership
interests are required to be accounted for consistently as equity transactions
and any noncontrolling equity investments in deconsolidated subsidiaries must be
measured initially at fair value. ASC topic 810-10-65-1 is effective, on a
prospective basis, for fiscal years beginning after December  15, 2008. The
adoption by the Company of ASC topic 810-10-65-1 did not have a material impact
on its consolidated financial statements. However, presentation and disclosure
requirements of ASC topic 810-10-65-1 were retrospectively applied to the
Company’s consolidated financial statements.
 
 In May
2009, the FASB issued ASC topic 855 (formerly SFAS No. 165, “Subsequent
Events”). ASC topic 855 provides guidance on management’s assessment of
subsequent events and incorporates this guidance into accounting literature. ASC
topic 855 is effective prospectively for interim and annual periods ending after
June 15, 2009.
 
 In June
2009, the FASB issued ASC topic 810 (formerly SFAS No. 167, “Amendments to FASB
Interpretation No. 46(R)”). ASC topic 810 amends the consolidation guidance
applicable to variable interest entities and affects the overall consolidation
analysis.  ASC topic 810 is effective for fiscal years beginning after
November 15, 2009. We do not believe that the adoption of ASC topic 810 will
have a material impact on our consolidated financial statements.
 
 In June
2009, the FASB issued ASC topic 105 (formerly SFAS No. 168, “The FASB Accounting
Standards Codification and the Hierarchy of Generally Accepted Accounting
Principles”).  ASC 105 contains guidance which reduces the U.S. GAAP
hierarchy to two levels, one that is authoritative and one that is
not.  ASC topic 105 is effective for financial statements issued for
interim and annual periods ending after September 15, 2009. The adoption of this
pronouncement did not have a material impact on our consolidated financial
statements.
 
 There are
no other new accounting pronouncements issued but not yet adopted that would
have a material effect on our consolidated financial
statements.
  Page
6
 INTER
PARFUMS, INC. AND SUBSIDIARIES
 
 Notes
to Consolidated Financial Statements
 
 3.
              Inventories:
 
 Inventories consist of the
following:
 
 (In thousands)
                          
                          September 30,
                              2009
                          
                          
                          December 31,
                              2008Raw
      materials and component parts
                          
                          $
                          24,060
                          
                          
                          $
                          37,248Finished
      goods
                          
                          
                          71,938
                          
                          
                          
                          86,385$
                          95,998
                          
                          
                          $
                          123,633
 
 4.
              Fair Value
      Measurement:
 
 The
carrying amount of cash and cash equivalents, short-term investments, accounts
receivable, other receivables, accounts payable and accrued expenses
approximates fair value due to the short terms to maturity of these instruments.
The carrying amount of loans payable approximates fair value as the interest
rates on the Company’s indebtedness approximate current market rates. 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.
  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 quotes obtained from financial
institutions.
  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
hierarchy. The fair value hierarchy has three levels based on the reliability of
the inputs used to determine fair value.
  (In thousands)
                                  
                                  
                                  
                                  
                                  Fair Value Measurements at September 30, 2009Quoted Prices in
                                  
                                  
                                  Significant Other
                                  
                                  
                                  SignificantActive Markets for
                                  
                                  
                                  Observable
                                  
                                  
                                  UnobservableIdentical Assets
                                  
                                  
                                  Inputs
                                  
                                  
                                  InputsTotal
                                  
                                  
                                  (Level 1)
                                  
                                  
                                  (Level 2)
                                  
                                  
                                  (Level 3)Assets:Money
      market funds
                                  
                                  $
                                  20,591
                                  
                                  
                                  $
                                  20,591
                                  
                                  
                                  $
                                  —
                                  
                                  
                                  $
                                  —Foreign
      currency forward exchange contracts accounted for using hedge
      accounting
                                  
                                  
                                  2,310
                                  
                                  
                                  
                                  —
                                  
                                  
                                  
                                  2,310
                                  
                                  
                                  
                                  —Foreign
      currency forward exchange contracts not accounted for using hedge
      accounting
                                  
                                  
                                  3,138
                                  
                                  
                                  
                                  —
                                  
                                  
                                  
                                  3,138
                                  
                                  
                                  
                                  —$
                                  26,039
                                  
                                  
                                  $
                                  20,591
                                  
                                  
                                  $
                                  5,448
                                  
                                  
                                  $
                                  —Liabilities:Interest
      rate swaps
                                  
                                  $
                                  920
                                  
                                  
                                  $
                                  —
                                  
                                  
                                  $
                                  920
                                  
                                  
                                  $
                                  —
  Page
7
 INTER
PARFUMS, INC. AND SUBSIDIARIES
  Notes
to Consolidated Financial Statements
 
 (In thousands)
                                        
                                        
                                        
                                        
                                        Fair Value Measurements at December 31, 2008Quoted Prices in
                                        
                                        
                                        Significant Other
                                        
                                        
                                        SignificantActive Markets for
                                        
                                        
                                        Observable
                                        
                                        
                                        UnobservableIdentical Assets
                                        
                                        
                                        Inputs
                                        
                                        
                                        InputsTotal
                                        
                                        
                                        (Level 1)
                                        
                                        
                                        (Level 2)
                                        
                                        
                                        (Level 3)Assets:Money
      market funds
                                        
                                        $
                                        19,816
                                        
                                        
                                        $
                                        19,816
                                        
                                        
                                        $
                                        —
                                        
                                        
                                        $
                                        —Foreign
      currency forward exchange contracts accounted for using hedge
      accounting
                                        
                                        
                                        8,162
                                        
                                        
                                        
                                        —
                                        
                                        
                                        
                                        8,162
                                        
                                        
                                        
                                        —$
                                        27,978
                                        
                                        
                                        $
                                        19,816
                                        
                                        
                                        $
                                        8,162
                                        
                                        
                                        $
                                        —Liabilities:Foreign
      currency forward exchange contracts not accounted for using hedge
      accounting
                                        
                                        $
                                        1,429
                                        
                                        
                                        $
                                        —
                                        
                                        
                                        $
                                        1,429
                                        
                                        
                                        $
                                        —Interest
      rate swaps
                                        
                                        
                                        811
                                        
                                        
                                        
                                        —
                                        
                                        
                                        
                                        811
                                        
                                        
                                        
                                        —$
                                        2,240
                                        
                                        
                                        $
                                        —
                                        
                                        
                                        $
                                        2,240
                                        
                                        
                                        $
                                        —
  The
following tables present gains and losses in derivatives designated as hedges
and the location of those gains and losses in the financial statements (in
thousands):
 
 Derivatives in
                                            Cash Flow
                                            Hedging
                                            Relationships
                                          
                                          Amount of Gain

                                            (Loss) Recognized
                                            in OCI on
                                            Derivative
                                            (Effective Portion)
                                          
                                          Location of Gain
                                            (Loss) Reclassified
                                            from Accumulated
                                            OCI into Income
                                            (Effective Portion)
                                          
                                          Amount of Gain

                                            (Loss) Reclassifiedfrom Accumulated
                                            OCI into Income
                                            (Effective Portion)
                                          
                                          Location of Gain
                                            (Loss)
                                            Recognized in
                                            Income on
                                            Derivative
                                            (Effective
                                            Portion)
                                          
                                          Amount of Gain

                                            (Loss) Recognized
                                            in Income on
                                            Derivative
                                            (Effective Portion)(A)Nine months ended
                                            September 30,
                                          
                                          
                                          
                                          Nine months ended

                                            September 30,
                                          
                                          
                                          
                                          Nine months ended

                                            September 30,2009
                                          
                                          
                                          2008
                                          
                                          
                                          
                                          2009
                                          
                                          
                                          2008
                                          
                                          
                                          
                                          2009
                                          
                                          
                                          2008Foreign
      exchange contracts
                                          
                                          $
                                          1,857
                                          
                                          
                                          
                                          —
                                          
                                          Gain
      (loss) onforeign
      currency
                                          
                                          $
                                          4,725
                                          
                                          
                                          
                                          —
                                          
                                          Gain
      (loss) onforeign
      currency
                                          
                                          $
                                          713
                                          
                                          
                                          
                                          —
 
 (A) The
amount of gain (loss) recognized in income represents $713 related to the amount
excluded from the assessment of hedge effectiveness.
  Derivatives in
                                  CashFlow
                                  Hedging
                                  Relationships
                                
                                Amount of Gain
                                  (Loss) Recognized
                                  in OCI on
                                  Derivative
                                  (Effective Portion)
                                
                                Location of Gain
                                  (Loss) Reclassified
                                  from Accumulated
                                  OCI into Income
                                  (Effective Portion)
                                
                                Amount of Gain
                                  (Loss) Reclassified
                                  from Accumulated
                                  OCI into Income
                                  (Effective Portion)
                                
                                Location of Gain
                                  (Loss)
                                  Recognized in
                                  Income on
                                  Derivative
                                  (Effective
                                  Portion)
                                
                                Amount of Gain
                                  (Loss) Recognized
                                  in Income on
                                  Derivative
                                  (Effective Portion)
                                  (A)Three months ended
                                
                                
                                
                                Three months ended
                                
                                
                                
                                Three months endedSeptember 30,
                                
                                
                                
                                September 30,
                                
                                
                                
                                September 30,2009
                                
                                
                                2008
                                
                                
                                
                                2009
                                
                                
                                2008
                                
                                
                                
                                2009
                                
                                
                                2008Foreign
      exchange
                                
                                
                                
                                
                                
                                
                                Gain
      (loss) on
                                
                                
                                
                                
                                
                                
                                Gain
      (loss) oncontracts
                                
                                $
                                2,295
                                
                                
                                
                                —
                                
                                foreign
      currency
                                
                                $
                                1,534
                                
                                
                                
                                —
                                
                                foreign
      currency
                                
                                $
                                11
                                
                                
                                
                                —
  (A) The
amount of gain (loss) recognized in income represents $11 related to the amount
excluded from the assessment of hedge effectiveness.
  Page
8
 INTER
PARFUMS, INC. AND SUBSIDIARIES
  Notes to Consolidated Financial
Statements
  The
following tables present gains and losses in derivatives not designated as
hedges and the location of those gains and losses in the financial statements
(in thousands):
  Derivatives not
                                    Designated as Hedging
                                    Instruments
                                  
                                  Location of Gain (Loss)
                                    Recognized in Income on
                                    Derivative
                                  
                                  Nine months
                                    ended
                                    September 30,
                                    2009
                                  
                                  
                                  Nine months
                                    ended
                                    September 30,
                                    2008Interest
      rate swaps
                                  
                                  Interest
      (expense)
                                  
                                  $
                                  (62
                                  )
                                  
                                  $
                                  (26
                                  )Foreign
      exchange contracts
                                  
                                  Gain
      (loss) on foreign currency
                                  
                                  $
                                  29
                                  
                                  
                                  $
                                  (209
                                  )
  Derivatives not
                  Designated as Hedging
                  Instruments
                
                Location of Gain (Loss)
                  Recognized in Income on
                  Derivative
                
                Three months
                  ended
                  September 30,
                  2009
                
                
                Three months
                  ended
                  September 30,
                  2008Interest
      rate swaps
                
                Interest
      (expense)
                
                $
                43
                
                
                $
                (394
                )Foreign
      exchange contracts
                
                Gain
      (loss) on foreign currency
                
                $
                5
                
                
                $
                (541
                )
  All
derivative instruments are reported as either assets or liabilities on the
balance sheet measured at fair value. The valuation of interest rate swaps
resulted in a liability which is included in accrued expenses on the
accompanying balance sheet as of September 30, 2009. The valuation of foreign
currency forward exchange contracts accounted for using hedge accounting and not
accounted for using hedge accounting resulted in assets which are included in
other current assets on the accompanying balance sheet as of September 30, 2009.
Generally, increases or decreases in the fair value of derivative instruments
will be recognized as gains or losses in earnings in the period of change. If
the derivative instrument is designated and qualifies as a cash flow hedge, the
changes in fair value of the derivative instrument will be recorded as a
separate component of shareholders’ equity.
  The
Company enters into foreign currency forward exchange contracts to hedge
exposure related to receivables denominated in a foreign currency and 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 as defined by ASC topic 815-10-10 (formerly SFAS No. 133)
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 or
when the underlying forecasted transaction occurs, hedge accounting is
discontinued and gains and losses accumulated in other comprehensive income are
reclassified to earnings. If it is probable that the forecasted transaction
will no longer occur, then any gains or losses accumulated in other
comprehensive income are reclassified to current-period earnings. As of
September 30, 2009, cash-flow hedges were highly effective, in all material
respects.
  Page
9
 INTER
PARFUMS, INC. AND SUBSIDIARIES
  Notes to Consolidated Financial
Statements
 As a
result of the dramatic strengthening of the U.S. dollar, during our fourth
quarter ended December 31, 2008, we entered into foreign currency forward
exchange contracts to hedge approximately 80% of our 2009 sales expected to be
invoiced in U.S. dollars. At September 30, 2009, we had foreign currency
contracts in the form of forward exchange contracts in the amount of
approximately U.S. $42.4 million and GB pounds 6.6 million which all
have maturities of less than one year.
 
 5.
              Goodwill and Other
      Intangible Assets:
 
 The
Company reviews goodwill and trademarks with indefinite lives for impairment at
least annually, and whenever events or changes in circumstances indicate that
the carrying amount may not be recoverable. The following table presents our
assets and liabilities that are measured at fair value on a nonrecurring basis
and are categorized using the fair value hierarchy.
 
 (In
      thousands)
                                  
                                  
                                  
                                  
                                  Fair Value Measurements at September 30, 2009Quoted Prices in
                                  
                                  
                                  Significant Other
                                  
                                  
                                  SignificantActive Markets for
                                  
                                  
                                  Observable
                                  
                                  
                                  UnobservableIdentical Assets
                                  
                                  
                                  Inputs
                                  
                                  
                                  InputsTotal
                                  
                                  
                                  (Level 1)
                                  
                                  
                                  (Level 2)
                                  
                                  
                                  (Level 3)Description:Trademark
      - Nickel
                                  
                                  $
                                  2,839
                                  
                                  
                                  $
                                  —
                                  
                                  
                                  $
                                  —
                                  
                                  
                                  $
                                  2,839Goodwill
                                  
                                  $
                                  5,747
                                  
                                  
                                  $
                                  —
                                  
                                  
                                  $
                                  —
                                  
                                  
                                  $
                                  5,747
 
 The
      goodwill and trademarks referred to above, relates to our Nickel skin care
      business which is primarily a component of our European operations. Nickel
      brand product sales, which performed in line with our budgets during the
      three month period ended September 30, 2009, had performed below our
      expectations in the past, and as a result, we have been reviewing goodwill
      and trademarks with indefinite lives relating to Nickel for impairment on
      a quarterly basis. We have measured fair value of goodwill as a multiple
      of sales applied to the average of 2008 actual sales and projected sales
      for 2009 and 2010. The sales multiple was based on a third party financial
      institution study of sales multiples for all transactions in the skin
      care, perfume and cosmetic sectors during the past four years. There was
      no change to the carrying amount of the goodwill during the nine month
      period ended September 30, 2009 other than for the effect of foreign
      currency translation rates. For indefinite-lived intangible assets, if the
      carrying value of an indefinite-lived intangible asset exceeds its fair
      value, as generally estimated using discounted future net cash flow
      projections and discounted terminal values, the carrying value of the
      asset is reduced to its fair value. During the three month period ended
      September 30, 2009, no impairment charges were recorded. For the
      nine month period ended September 30, 2009, an impairment charge relating
      to the Nickel trademark in the amount of $0.26 million was
      recorded.
 
 6.
              Shareholders’
      Equity:
 
 As of
December 31, 2008, the Company’s board of directors authorized the repurchase of
up to 1,031,863 shares of the Company’s common stock. During the nine month
period ended September 30, 2009, the Company repurchased 108,100 shares of
its common stock at an average price of $5.84 per common share.
  Page
10
 INTER
PARFUMS, INC. AND SUBSIDIARIES
  Notes to Consolidated Financial
Statements
 7.
              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 month periods ended September 30, 2009 and 2008 aggregated $0.05
million and $0.02 million, respectively.
 
 Compensation
cost is recognized on a straight-line basis over the requisite service period
for the entire award. It is generally the Company’s policy to issue new shares
upon exercise of stock options. The following table sets forth information with
respect to nonvested options for the nine month period ended September 30,
2009:
  Number of Shares
                      
                      
                      Weighted Average Grant
                        Date Fair ValueNonvested
      options – beginning of period
                      
                      
                      490,263
                      
                      
                      $
                      3.81Nonvested
      options granted
                      
                      
                      4,000
                      
                      
                      $
                      1.92Nonvested
      options vested or forfeited
                      
                      
                      (18,990
                      )
                      
                      $
                      3.73Nonvested
      options – end of period
                      
                      
                      475,273
                      
                      
                      $
                      3.79
 
 Share-based
payment expense decreased income before income taxes by $0.22 million and $0.72
million for the three and nine month periods ended September 30, 2009,
respectively, as compared to $0.28 million and $0.87 million for the
corresponding periods of the prior year.  Share-based payment expense
decreased income attributable to Inter Parfums, Inc. by $0.13 million and $0.41
million for the three and nine month periods ended September 30, 2009,
respectively, as compared to $0.15 million and $0.48 million for the
corresponding periods of the prior year.  The following table
summarizes stock option information for the nine month period ended September
30, 2009:
 
 Number of Shares
                      
                      
                      Weighted Average
                          Exercise PriceOptions
      outstanding - beginning of period
                      
                      
                      1,138,375
                      
                      
                      $
                      11.23Options
      granted
                      
                      
                      4,000
                      
                      
                      
                      6.15Options
      exercised
                      
                      
                      (5,400
                      )
                      
                      
                      10.11Options
      forfeited or expired
                      
                      
                      (57,000
                      )
                      
                      
                      15.02Options
      outstanding - end of period
                      
                      
                      1,079,975
                      
                      
                      $
                      11.02Options
      exercisable at September 30, 2009
                      
                      
                      604,703
                      
                      
                      $
                      10.76Options
      available for future grants
                      
                      
                      1,266,369
 
 As of
September 30, 2009, the weighted average remaining contractual life of options
outstanding is 2.39 years (1.04 years for options exercisable).  The
aggregate intrinsic value of options outstanding and options exercisable is $1.6
million and $1.0 million, respectively and unrecognized compensation cost
related to stock options outstanding on Inter Parfums, Inc. stock aggregated
$1.4 million. The amount of unrecognized compensation cost related to stock
options outstanding of our majority-owned subsidiary, Inter Parfums S.A., was
€0.2 million. Options under Inter Parfums, S.A. plans vest over a four-year
period and no options were granted by Inter Parfums, S.A. during the nine month
periods ended September 30, 2009 and 2008.
  Page
11
 INTER
PARFUMS, INC. AND SUBSIDIARIES
  Notes to Consolidated Financial
Statements
 Cash
proceeds, tax benefits and intrinsic value related to stock options exercised
during the nine month periods ended September 30, 2009 and September 30, 2008
were as follows:
  (In thousands)
                          
                          September 30,
                              2009
                          
                          
                          September 30,
                              2008Cash
      proceeds from stock options exercised
                          
                          $
                          55
                          
                          
                          $
                          272Tax
      benefits
                          
                          
                          145
                          
                          
                          
                          207Intrinsic
      value of stock options exercised
                          
                          
                          11
                          
                          
                          
                          136
 
 The
weighted average fair values of the options granted by Inter Parfums, Inc.
during the nine months ended September 30, 2009 and 2008 were $1.92 and $3.69
per share, respectively, on the date of grant using the Black-Scholes option
pricing model to calculate the fair value of options granted. The assumptions
used in the Black-Scholes pricing model for the periods ended September 30,
2009 and 2008 are set forth in the following table:
 
 September 30,
                        2009
                    
                    
                    September 30,
                        2008Weighted-average
      expected stock-price volatility
                    
                    
                    46
                    %
                    
                    
                    39
                    %Weighted-average
      expected option life
                    
                    3.75
      years
                    
                    
                    4.5
      yearsWeighted-average
      risk-free interest rate
                    
                    
                    1.74
                    %
                    
                    
                    2.7
                    %Weighted-average
      dividend yield
                    
                    
                    2.20
                    %
                    
                    
                    1.20
                    %
 
 Expected
volatility is estimated based on historic volatility of the Company’s common
stock. The Company uses the simplified method in developing its estimate of the
expected term of the option as historic data regarding employee exercise
behavior is incomplete for the new vesting parameters recently instituted by the
Company. 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 in place at the time of stock-based award
grant would continue with no anticipated increases.
 
 8.
              Earnings Per
      Share:
 
 Basic
earnings per share is computed using the weighted average number of shares
outstanding during each period. Diluted earnings per share is computed using the
weighted average number of shares outstanding during each period, plus the
incremental shares outstanding assuming the exercise of dilutive stock options
and warrants using the treasury stock method. The following table sets forth the
computation of basic and diluted earnings per share:
 
 Three months ended
                          September 30,
                        
                        
                        Nine months ended
                          September 30,(In thousands)
                        
                        2009
                        
                        
                        2008
                        
                        
                        2009
                        
                        
                        2008Numerator:Net
      income attributable to Inter Parfums, Inc.
                        
                        $
                        7,262
                        
                        
                        $
                        6,188
                        
                        
                        $
                        16,916
                        
                        
                        $
                        18,668Effect
      of dilutive securities of consolidated subsidiary
                        
                        
                        —
                        
                        
                        
                        (35
                        )
                        
                        
                        (18
                        )
                        
                        
                        (122
                        )$
                        7,262
                        
                        
                        $
                        6,153
                        
                        
                        $
                        16,898
                        
                        
                        $
                        18,546Denominator:Weighted
      average shares
                        
                        
                        30,061
                        
                        
                        
                        30,632
                        
                        
                        
                        30,097
                        
                        
                        
                        30,660Effect
      of dilutive securities:Stock
      options and warrants
                        
                        
                        4
                        
                        
                        
                        254
                        
                        
                        
                        1
                        
                        
                        
                        20930,065
                        
                        
                        
                        30,886
                        
                        
                        
                        30,098
                        
                        
                        
                        30,869
  Page
12
 INTER
PARFUMS, INC. AND SUBSIDIARIES
  Notes to Consolidated Financial
Statements
 Not
included in the above computations is the effect of antidilutive potential
common shares which consist of outstanding options to purchase 1.0 million and
1.1 million shares of common stock for the three and nine month periods ended
September 30, 2009, and 0.3 million and 0.4 million shares of common stock for
the three and nine month periods ended September 30, 2008, respectively, as well
as outstanding warrants to purchase 300,000 shares of common stock for both the
three and nine month periods ended September 30, 2009 and 150,000 shares of
common stock for both the three and nine month periods ended September 30,
2008.
 
 9.
                Comprehensive Income
      (Loss):
 
 Three months ended
                                September 30,
                              
                              
                              Nine months ended
                                September 30,(In thousands)
                              
                              2009
                              
                              
                              2008
                              
                              
                              2009
                              
                              
                              2008Comprehensive
      income (loss):Net
      income
                              
                              $
                              9,611
                              
                              
                              $
                              7,879
                              
                              
                              $
                              22,620
                              
                              
                              $
                              23,506Other
      comprehensive income, net of tax:Foreign
      currency translation adjustment
                              
                              
                              9,049
                              
                              
                              
                              (17,134
                              )
                              
                              
                              13,251
                              
                              
                              
                              (5,436
                              )Change
      in fair value of derivatives
                              
                              
                              (1,148
                              )
                              
                              
                              (7
                              )
                              
                              
                              (1,919
                              )
                              
                              
                              (193
                              )Net
      gains reclassified into earningsfrom
      equity
                              
                              
                              (751
                              )
                              
                              
                              —
                              
                              
                              
                              (2,329
                              )
                              
                              
                              —Comprehensive
      income (loss):
                              
                              
                              16,761
                              
                              
                              
                              (9,262
                              )
                              
                              
                              31,623
                              
                              
                              
                              17,877Less
      comprehensive income (loss) attributable to the noncontrolling
      interest
                              
                              
                              1,832
                              
                              
                              
                              1,684
                              
                              
                              
                              4,620
                              
                              
                              
                              4,785Comprehensive
      income (loss) attributable to Inter Parfums, Inc.
                              
                              $
                              14,929
                              
                              
                              $
                              (10,946
                              )
                              
                              $
                              27,003
                              
                              
                              $
                              13,092
 
 10.
                Net Income
      Attributable to Inter Parfums, Inc. and Transfers From the Noncontrolling
      Interest:
 
 Three months ended
                              September 30,
                            
                            
                            Nine months ended
                              September 30,(In thousands)
                            
                            2009
                            
                            
                            2008
                            
                            
                            2009
                            
                            
                            2008Net
      income attributable to Inter Parfums, Inc.
                            
                            $
                            7,262
                            
                            
                            $
                            6,188
                            
                            
                            $
                            16,916
                            
                            
                            $
                            18,668Increase
      (decrease) in Inter Parfums, Inc.’s additional paid-in capital for
      subsidiary share transactions
                            
                            
                            (36
                            )
                            
                            
                            18
                            
                            
                            
                            (53
                            )
                            
                            
                            215Change
      from net income attributable to Inter Parfums, Inc. and transfers from
      noncontrolling interest
                            
                            $
                            7,226
                            
                            
                            $
                            6,206
                            
                            
                            $
                            16,863
                            
                            
                            $
                            18,883
 
 11.
              Segment and Geographic
      Areas:
 
 We
      manufacture and distribute one product line, fragrances and fragrance
      related products and we manage our business in two segments, European
      based operations and United States based operations. The European assets
      are primarily located, and operations are primarily conducted, in France.
      European operations primarily represent the sale of prestige brand name
      fragrances and United States operations primarily represent the sale of
      specialty retail and mass market fragrances. Information on the Company’s
      operations by geographical areas is as
follows:
  Page
13
 INTER
PARFUMS, INC. AND SUBSIDIARIES
  Notes to Consolidated Financial
Statements
 Three months ended
                            September 30,
                          
                          
                          Nine months ended
                            September 30,(In thousands)
                          
                          2009
                          
                          
                          2008
                          
                          
                          2009
                          
                          
                          2008Net
      sales:United
      States
                          
                          $
                          13,541
                          
                          
                          $
                          14,714
                          
                          
                          $
                          31,150
                          
                          
                          $
                          42,467Europe
                          
                          
                          104,001
                          
                          
                          
                          109,479
                          
                          
                          
                          265,405
                          
                          
                          
                          304,983Eliminations
      of intercompany sales
                          
                          
                          —
                          
                          
                          
                          (662
                          )
                          
                          
                          —
                          
                          
                          
                          (1,678
                          )$
                          117,542
                          
                          
                          $
                          123,531
                          
                          
                          $
                          296,555
                          
                          
                          $
                          345,772Net
      income (loss) attributable to Inter Parfums, Inc.:United
      States
                          
                          $
                          288
                          
                          
                          $
                          189
                          
                          
                          $
                          (1,057
                          )
                          
                          $
                          412Europe
                          
                          
                          6,969
                          
                          
                          
                          5,980
                          
                          
                          
                          17,941
                          
                          
                          
                          18,252Eliminations
      of intercompany profits
                          
                          
                          5
                          
                          
                          
                          19
                          
                          
                          
                          32
                          
                          
                          
                          4$
                          7,262
                          
                          
                          $
                          6,188
                          
                          
                          $
                          16,916
                          
                          
                          $
                          18,668
 
 September 30,
                          
                          
                          December 31,2009
                          
                          
                          2008Total
      Assets:United
      States
                          
                          $
                          49,693
                          
                          
                          $
                          56,320Europe
                          
                          
                          380,924
                          
                          
                          
                          380,058Eliminations
      of investment in subsidiary
                          
                          
                          (9,182
                          )
                          
                          
                          (11,241
                          )$
                          421,435
                          
                          
                          $
                          425,137
 
 12.
              Entry Into Definitive
      Agreements:
 
 In
October 2009, we entered into an exclusive worldwide license agreement with J
Choo Limited for the creation, development and distribution of fragrances under
the Jimmy Choo brand. Our rights under such license agreement, which runs
through 2022, are subject to certain minimum sales, advertising expenditures and
royalty payments as are customary in our industry. A member of the Company’s
board of directors is also a member of the board of directors of Jimmy Choo
Limited.
 
 13.
              Subsequent
      Events:
 
 We evaluated subsequent events
      through November 9, 2009, the date this Quarterly report was filed with
      the Securities and Exchange
Commission.
  Page
14
 INTER
PARFUMS, INC. AND SUBSIDIARIES
  Item
      2:
              MANAGEMENT’S
      DISCUSSION AND ANALYSIS OFFINANCIAL
      CONDITION AND RESULTS OF OPERATIONS
 
 Forward
Looking Information
 
 Statements
in this report which are not historical in nature are forward-looking
statements. Although we believe that our plans, intentions and expectations
reflected in such forward-looking statements are reasonable, we can give no
assurance that such plans, intentions or expectations will be achieved. In some
cases you can identify forward-looking statements by forward-looking words such
as "anticipate," "believe," "could," "estimate," "expect," "intend," "may,"
"should," "will" and "would" or similar words. You should not rely on
forward-looking statements because actual events or results may differ
materially from those indicated by these forward-looking statements as a result
of a number of important factors. These factors include, but are not limited to,
the risks and uncertainties discussed under the headings “Forward Looking
Statements” and "Risk Factors" in Inter Parfums' annual report on Form 10-K for
the fiscal year ended December 31, 2008 and the reports Inter Parfums files from
time to time with the Securities and Exchange Commission. Inter Parfums does not
intend to and undertakes no duty to update the information contained in this
report.
  Overview
 
 We
operate in the fragrance business, and manufacture, market and distribute a wide
array of fragrances and fragrance related products. We manage our business in
two segments, European based operations and United States based operations. Our
prestige fragrance products are produced and marketed by our European operations
through our 75% owned subsidiary in Paris, Inter Parfums, S.A., which is also a
publicly traded company as 25% of Inter Parfums, S.A. shares trade on the
Euronext. Prestige cosmetics and prestige skin care products currently represent
less than 3% of consolidated net sales.
 
 We
produce and distribute our prestige products primarily under license agreements
with brand owners and European based prestige product sales represented 89% and
88% of net sales for the nine months ended September 30, 2009 and 2008,
respectively. We have built a portfolio of brands, which include Burberry, Lanvin, Van Cleef &
Arpels, Jimmy Choo, Paul Smith, S.T. Dupontand Nickel whose products are
distributed in over 120 countries around the world. Burberry is our most
significant license; sales of Burberry products represented 58% and 56% of net
sales for the nine months ended September 30, 2009 and 2008,
respectively.
 
 In
September 2009, by mutual consent as a result of unsatisfactory commercial
development, we agreed to an early termination of our license agreement with
Quiksilver. The termination will take effect on June 30, 2010 and is not
expected to have any material effect on our consolidated financial
statements.
 
 Our
specialty retail and mass-market fragrance and fragrance related products are
marketed through our United States operations and represented 11% and 12% of net
sales for the nine months ended September 30, 2009 and 2008, respectively. These
products are sold under trademarks owned by us or pursuant to license or other
agreements with the owners of the Gap, Banana Republic, New York &
Company, Brooks Brothers, bebeandJordache
trademarks.
  Page
15
 INTER
PARFUMS, INC. AND SUBSIDIARIES
 
 Historically,
seasonality has not been a major factor for our Company. However, with the
commencement of operations in 2007 of our four majority-owned European
distribution subsidiaries and direct to retailer shipments of our specialty
retail product lines, sales are more concentrated in the second half of the
year.
  We grow
our business in two distinct ways. First, we grow by adding new brands to our
portfolio, either through new licenses or out-right acquisitions of brands.
Second, we grow through the introduction of new products and supporting new and
established products through advertising, merchandising and sampling as well as
phasing out existing products that no longer meet the needs of our
consumers. The economics of developing, producing, launching and supporting
products influence our sales and operating performance each year.  Our
introduction of new products may have some cannibalizing effect on sales of
existing products, which we take into account in our business
planning.
 
 Our
business is not capital intensive, and it is important to note that we do not
own manufacturing facilities. We act as a general contractor and source our
needed components from our suppliers. These components are received at one of
our distribution centers and then, based upon production needs, the components
are sent to one of several third party fillers which manufacture the finished
good for us and ship it back to our distribution center.
 
 As with
any business, many aspects of our operations are subject to influences outside
our control.  These factors include the effect of the current
financial crisis and therefore the potential for further deterioration in
consumer spending and consumer debt levels, as well as the continued
availability of favorable credit sources and capital market conditions in
general. The recent economic challenges and uncertainties in a number of
countries where we do business, including the United States, have impacted our
business. This financial crisis is global in scale and has negatively
affected consumer demand, which is having an adverse impact on our distributors
and our retail customers. These events have led distributors and retailers to
carry less inventory than usual and have resulted in changes in their ordering
patterns for the products that we sell.  Although some signs of a recovery
have become apparent with improving sales trends, the impact of this financial
crisis has been challenging for us thus far this year and is expected to
continue to be challenging for the remainder of 2009.
  We have
reviewed our plans and have taken actions to mitigate the impact of these
conditions. We have adjusted, and we are continuing to adjust our
advertising and promotional budgets to align our spending with anticipated
sales. In addition, we have implemented cost saving initiatives to right size
our staff in an effort to maintain long-term profitable growth. As part of
our strategy, we plan to continue to make investments behind fast-growing
markets and channels to grow market share. While our business strategies
are designed to strengthen our Company over the long-term, we believe the
uncertainty about future market conditions, consumer spending patterns and the
financial strength of some of our customers could negatively affect our net
sales and operating results.
 
 In
addition to the ongoing global financial crisis, our reported net sales in
comparison to the corresponding periods of the prior year have been negatively
impacted by changes in foreign currency exchange rates. A strong U.S. dollar has
an adverse impact on our net sales, as a substantial portion of sales of our
European operations are denominated in euro.
  Page
16
 INTER
PARFUMS, INC. AND SUBSIDIARIES
 
 Recent
Important Events
 
 Jimmy
Choo
 
 In
October 2009, we entered into an exclusive worldwide license agreement with J
Choo Limited for the creation, development and distribution of fragrances under
the Jimmy Choo brand. Our rights under such license agreement, which runs
through 2022, are subject to certain minimum sales, advertising expenditures and
royalty payments as are customary in our industry. Plans call for our first
Jimmy Choo fragrance launch in late 2010 or in 2011.
 
 bebe
Stores, Inc.
 
 In July
2008, we entered into an exclusive six year worldwide agreement with bebe
Stores, Inc. under which we design, manufacture and supply fragrance, bath and
body products and color cosmetics for company-owned bebe stores in the United
States and Canada as well as select specialty and department stores
worldwide.
 
 Gap
and Banana Republic International
 
 In April
2008, we expanded our current relationship with Gap Inc. with the signing of a
licensing agreement for international distribution of personal care products
through Gap and Banana Republic stores as well as select specialty and
department stores outside the United States, including duty-free and other
travel related retailers. The agreement is effective through December 31,
2011.
 
 Discussion
of Critical Accounting Policies
 
 We make
estimates and assumptions in the preparation of our financial statements in
conformity with accounting principles generally accepted in the United States of
America. Actual results could differ significantly from those estimates under
different assumptions and conditions. We believe the following discussion
addresses our most critical accounting policies, which are those that are most
important to the portrayal of our financial condition and results of operations.
These accounting policies generally require our management’s most difficult and
subjective judgments, often as a result of the need to make estimates about the
effect of matters that are inherently uncertain.
 
 The
judgments used by management in applying critical accounting policies could
be affected by a further and prolonged general deterioration in the economic
environment, which could negatively influence future financial results and
availability of continued financing. Specifically, subsequent evaluations of our
accounts receivables, inventories, and deferred tax assets in light of the
factors then prevailing, could result in significant changes in our allowance
and reserve accounts in future periods which in turn could generate significant
additional charges. Similarly, the valuation of certain intangible assets could
be negatively impacted by prolonged and severely depressed market conditions
thus leading to the recognition of impairment losses. The following is a brief
discussion of the more critical accounting policies that we
employ.
  Page
17
 INTER
PARFUMS, INC. AND SUBSIDIARIES
 
 Revenue
Recognition
 
 We sell
our products to department stores, perfumeries, specialty retailers, mass-market
retailers, supermarkets and domestic and international wholesalers and
distributors. Sales of such products by our domestic subsidiaries are
denominated in U.S. dollars and sales of such products by our foreign
subsidiaries are primarily denominated in either Euros or U.S. dollars. Accounts
receivable reflect the granting of credit to these customers. We generally grant
credit based upon our analysis of the customer’s financial position as well as
previously established buying patterns. We recognize revenues when merchandise
is shipped and the risk of loss passes to the customer. Net sales are comprised
of gross revenues less returns, trade discounts and allowances.
 
 Sales
Returns
 
 Generally,
we do not permit customers to return their unsold products. However, on a
case-by-case basis we occasionally allow customer returns. We regularly review
and revise, as deemed necessary, our estimate of reserves for future sales
returns based primarily upon historic trends and relevant current data. We
record estimated reserves for sales returns as a reduction of sales, cost of
sales and accounts receivable. Returned products are recorded as inventories and
are valued based upon estimated realizable value. The physical condition and
marketability of returned products are the major factors we consider in
estimating realizable value. Actual returns, as well as estimated realizable
values of returned products, may differ significantly, either favorably or
unfavorably, from our estimates, if factors such as economic conditions,
inventory levels or competitive conditions differ from our
expectations.
 
 Promotional
Allowances
 
 We have
various performance-based arrangements with certain retailers. These
arrangements primarily allow customers to take deductions against amounts owed
to us for product purchases. The costs that our Company incurs for
performance-based arrangements, shelf replacement costs and slotting fees are
netted against revenues on our Company’s consolidated statement of income.
Estimated accruals for promotions and advertising programs are recorded in the
period in which the related revenue is recognized. We review and revise the
estimated accruals for the projected costs for these promotions. Actual costs
incurred may differ significantly, either favorably or unfavorably, from
estimates if factors such as the level and success of the retailers’ programs or
other conditions differ from our expectations.
 
 Inventories
 
 Inventories
are stated at the lower of cost or market value. Cost is principally determined
by the first-in, first-out method. We record adjustments to the cost of
inventories based upon our sales forecast and the physical condition of the
inventories. These adjustments are estimates, which could vary significantly,
either favorably or unfavorably, from actual requirements if future economic
conditions or competitive conditions differ from our
expectations.
  Page
18
 INTER
PARFUMS, INC. AND SUBSIDIARIES





Equipment
and Other Long-Lived Assets





Equipment,
which includes tools and molds, is recorded at cost and is depreciated on a
straight-line basis over the estimated useful lives of such assets. Changes in
circumstances such as technological advances, changes to our business model or
changes in our capital spending strategy can result in the actual useful lives
differing from our estimates. In those cases where we determine that the useful
life of equipment should be shortened, we would depreciate the net book value in
excess of the salvage value, over its revised remaining useful life, thereby
increasing depreciation expense. Factors such as changes in the planned use of
equipment, or market acceptance of products, could result in shortened useful
lives.





We
evaluate goodwill and indefinite-lived intangible assets for impairment at least
annually during the fourth quarter, or more frequently when events occur or
circumstances change, such as an unexpected decline in sales, that would more
likely than not (i) reduce the fair value of the reporting unit below its fair
value or (ii) indicate that the carrying value of an indefinite-lived intangible
asset may not be recoverable.  Impairment of goodwill is evaluated
using a two step process. The first step involves a comparison of the estimated
fair value of the reporting unit to the carrying value of that unit. If the
carrying value of the reporting unit exceeds the fair value of the reporting
unit, the second step of the process involves comparison of the implied fair
value of goodwill (based on industry purchase and sale transaction data) with
its carrying value. If the carrying value of the reporting unit’s goodwill
exceeds the implied fair value of that goodwill, an impairment loss is
recognized as an amount equal to the excess. For indefinite-lived intangible
assets, the evaluation requires a comparison of the estimated fair value of the
asset to the carrying value of the asset. If the carrying value of an
indefinite-lived intangible asset exceeds its fair value, impairment is
recorded.





Goodwill
relates to our Nickel skin care business, which is primarily a component of our
European operations. Testing goodwill for impairment requires us to estimate the
fair value of the reporting unit using significant estimates and assumptions.
The assumptions we make will impact the outcome and ultimate results of the
testing. In making our assumptions and estimates, we use industry accepted
valuation models and set criteria that are reviewed and approved by management
and, in certain instances, we engage third party valuation specialists to advise
us. The first step of our goodwill impairment evaluation has given rise to
potential impairment indicators and, as a result of continued sales declines, we
test for impairment of goodwill on a quarterly basis. We have measured fair
value of goodwill as a multiple of sales applied to the average of 2008 actual
sales and projected sales for 2009 and 2010, which we believe is representative
of the current state of the reporting unit. We expect Nickel brand sales to
decline approximately 5% in 2009 as the global economic crisis continues, and we
expect Nickel brand sales to increase 5% in 2010 as the result of new product
launches in combination with an expected economic recovery. In estimating future
sales, we use our internal budgets developed based on recent sales data for
existing products and planned timing of new product launches. The sales multiple
is based on a third party financial institution study of sales multiples for all
transactions in the skin care, perfume and cosmetic sectors during the past four
years. At current exchange rates, if average sales for the reporting unit
decreased 10% we would incur a goodwill impairment charge of $1.0
million.


Page
19


INTER
PARFUMS, INC. AND SUBSIDIARIES





To
determine fair value of indefinite-lived intangible assets, we use an income
approach, including the relief-from-royalty method. This method assumes that, in
lieu of ownership, a third party would be willing to pay a royalty in order to
obtain the rights to use the comparable asset. The relief-from-royalty
calculations require us to make a number of assumptions and estimates concerning
future sales levels, market royalty rates, future tax rates and discount rates.
We use this method to determine if an impairment charge is required relating to
our Nickel brand trademarks. During the three month period ended June 30, 2009,
an impairment charge relating to the Nickel trademark in the amount of $0.26
million was recorded. No additional impairment during the three months ended
September 30, 2009 was needed. We assumed a market royalty rate of 6% and a
discount rate of 9.5%. The following table presents the impact a change in the
following significant assumptions would have had on our impairment charge
recognized at June 30, 2009 assuming all other assumptions remained
constant:





In thousands
                  
                  
                  
                  
                  Increase (decrease)Change
                  
                  
                  to impairment chargeWeighted
      average cost of capital
                  
                  
                  +10%
                  
                  
                  $
                  (181)Weighted
      average cost of capital
                  
                  
                  -10%
                  
                  
                  $
                  226Future
      sales levels
                  
                  
                  +10%
                  
                  
                  $
                  264Future
      sales levels
                  
                  
                  -10%
                  
                  
                  $
                  (264)





The fair
values used in our evaluations are also estimated based upon discounted future
cash flow projections using a weighted average cost of capital of 9.5%. The cash
flow projections are based upon a number of assumptions, including, future sales
levels and future cost of goods and operating expense levels, as well as
economic conditions, changes to our business model or changes in consumer
acceptance of our products which are more subjective in nature. We believe that
the assumptions that we have made in projecting future cash flows for the
evaluations described above are reasonable and currently no impairment
indicators exist for our indefinite-lived assets other than the Nickel
trademarks referred to above. However, if future actual results do not meet our
expectations, we may be required to record an impairment charge, the amount of
which could be material to our results of operations.





Intangible
assets subject to amortization are evaluated for impairment testing whenever
events or changes in circumstances indicate that the carrying amount of an
amortizable intangible asset may not be recoverable. If impairment indicators
exist for an amortizable intangible asset, the undiscounted future cash flows
associated with the expected service potential of the asset are compared to the
carrying value of the asset. If our projection of undiscounted future cash flows
is in excess of the carrying value of the intangible asset, no impairment charge
is recorded. If our projection of undiscounted future cash flows is less than
the carrying value of the intangible asset, an impairment charge would be
recorded to reduce the intangible asset to its fair value. The cash flow
projections are based upon a number of assumptions, including future sales
levels and future cost of goods and operating expense levels, as well as
economic conditions, changes to our business model or changes in consumer
acceptance of our products which are more subjective in nature. We believe that
the assumptions we have made in projecting future cash flows for the evaluations
described above are reasonable and currently no impairment indicators exist for
our intangible assets subject to amortization. In those cases where we determine
that the useful life of long-lived assets should be shortened, we would
depreciate the net book value in excess of the salvage value (after testing for
impairment as described above), over the revised remaining useful life of such
asset thereby increasing amortization expense.


Page
20


INTER
PARFUMS, INC. AND SUBSIDIARIES





In
determining the useful life of our Lanvin brand names and trademarks, we applied
the provisions of ASC topic 350-30-35-3 (formerly paragraph 11 of SFAS 142). The
only factor that prevented us from determining that the Lanvin brand names and
trademarks were indefinite life intangible assets was Item c. “Any legal,
regulatory, or contractual provisions that may limit the useful life”. The
existence of a repurchase option in 2025 may limit the useful life of the Lanvin
brand names and trademarks to the company. However, this limitation would only
take effect if the repurchase option were to be exercised and the repurchase
price was paid. If the repurchase option is not exercised, then the Lanvin brand
names and trademarks are expected to continue to contribute directly to the
future cash flows of our company and their useful life would be considered to be
indefinite.





With respect to the application of ASC
topic 350-30-35-8 (formerly paragraph 13 of SFAS 142), the Lanvin brand names
and trademarks would only have a finite life to our company if the repurchase
option were exercised, and in applying ASC topic 350-30-35-8 we assumed that the
repurchase option is exercised. When exercised, Lanvin has an obligation to pay
the exercise price and the company would be required to convey the Lanvin brand
names and trademarks back to Lanvin. The exercise price to be received (Residual
Value) is well in excess of the carrying value of the Lanvin brand names and
trademarks, therefore no amortization is required.





Derivatives





We
account for derivative financial instruments in accordance with ASC topic 815
(formerly SFAS No. 133, “Accounting for Derivative Instruments and Hedging
Activities,” as amended), which establish accounting and reporting standards for
derivative instruments, including certain derivative instruments embedded in
other contracts, and for hedging activities.  This topic also requires the
recognition of all derivative instruments as either assets or liabilities on the
balance sheet and that they are measured at fair value.




We
currently use derivative financial instruments to hedge certain anticipated
transactions and interest rates, as well as receivables denominated in foreign
currencies.  We do not utilize derivatives for trading or speculative
purposes.  Hedge effectiveness is documented, assessed and monitored by
employees who are qualified to make such assessments and monitor the
instruments.  Variables that are external to us such as social, political
and economic risks may have an impact on our hedging program and the results
thereof.





Income
Taxes





Deferred
income taxes are recognized for the tax consequences of temporary differences by
applying enacted statutory tax rates applicable to future years to the
difference between the financial statement carrying amounts and the tax bases of
existing assets and liabilities. Tax benefits recognized are reduced by a
valuation allowance where it is more likely than not that the benefits may not
be realized.


Page
21


INTER
PARFUMS, INC. AND SUBSIDIARIES





Results
of Operations





Three
and Nine Months Ended September 30, 2009 as Compared to the Three and Nine
Months Ended September 30, 2008





Net sales
                      
                      Three months ended
                        September 30,
                      
                      
                      Nine months ended
                        September 30,(In millions)
                      
                      2009
                      
                      
                      %
                        Change
                      
                      
                      2008
                      
                      
                      2009
                      
                      
                      %
                        Change
                      
                      
                      2008European
      based product sales
                      
                      $
                      104.0
                      
                      
                      
                      (4)%
                      
                      
                      $
                      108.8
                      
                      
                      $
                      265.4
                      
                      
                      
                      (13)%
                      
                      
                      $
                      303.3United
      States based product sales
                      
                      
                      13.5
                      
                      
                      
                      (8)%
                      
                      
                      
                      14.7
                      
                      
                      
                      31.2
                      
                      
                      
                      (27)%
                      
                      
                      
                      42.5Total
      net sales
                      
                      $
                      117.5
                      
                      
                      
                      (5)%
                      
                      
                      $
                      123.5
                      
                      
                      $
                      296.6
                      
                      
                      
                      (14)%
                      
                      
                      $
                      345.8





Net sales for the three months ended
September 30, 2009 decreased 5% to $117.5 million, as compared to $123.5 million
for the corresponding period of the prior year. At comparable foreign currency
exchange rates, net sales decreased 6% for the period. Net sales for the nine
months ended September 30, 2009 decreased 14% to $296.6 million, as compared to
$345.8 million for the corresponding period of the prior year. At comparable
foreign currency exchange rates, net sales decreased 11% for the period. The
strength of the U.S. dollar relative to the euro during the first nine months of
2009 gave rise to the difference between constant dollar and reported net
sales.





European based prestige product sales
decreased 4% for the three months ended September 30, 2009 and 13% for the
nine months ended September 30, 2009, as compared to the corresponding periods
of the prior year. During the three month period ended September 30, 2009 we
began to see a small recovery from the worldwide decline in consumer spending
and the corresponding destocking of fragrance inventories by distributors and
retailers experienced during the first half of the year. Our 4% decline in net
sales for European operations and 5% decline in total sales are modest and
consistent if not less than several of our peers. As was the case in the first
half of 2009, the third quarter bar was set quite high last year when third
quarter sales by European-based operations were 23% ahead of the same period one
year earlier with much of the gain due to the rollout of Burberry The Beat for
women.  Nonetheless, in local currency, Burberry fragrance sales were
19% ahead for the current third quarter with sales of €48.0 million, compared to
€40.3 million in the third quarter of 2008. For the first nine months of the
2009 Burberry fragrance sales were €125.7 million, as compared to and €128.0
million for the corresponding periods of the prior year. Lanvin, our second
largest prestige brand, has proven somewhat resilient to the economic downturn
with year-to-date sales virtually unchanged from last year in local currency.
Quarterly fluctuations are the result of the timing the sell-in period of new
product launches. For example, Jeanne Lanvin debuted in the
fall of 2008, and Lanvin
L’Homme Sport debuted this spring.





Despite the challenging economic
environment in many parts of the world, certain territories continue to perform
at satisfactory levels, notably, Western Europe, Asia and the Middle
East.


Page
22


INTER
PARFUMS, INC. AND SUBSIDIARIES





There has
been an active new product launch schedule throughout the year for
European-based operations which began in January with the global rollout of the
men’s version of Burberry The
Beat. Also during the first quarter, we launched our Quiksilver signature
fragrance for men. During the second quarter of 2009 we introduced an ST Dupont
Rose,a fragrance for
women and a Lanvin L’Homme
Sport line, with tennis star, Rafael Nadal as its spokesperson. Paul
Smith Man debuted in
August and a limited edition, high-end women’s fragrance line for the Van Cleef
& Arpels brand called Collection Extraordinaire was
launched in September.





With
respect to our United States specialty retail and mass-market products, net
sales for the three and nine months ended September 30, 2009 declined 8% and
27%, respectively, to $13.5 million and $31.2 million, respectively, as compared
to $14.7 million and $42.5 million for the corresponding periods of the prior
year. In 2008, we expanded our relationship with Gap Inc. with the signing of a
license agreement for international distribution of personal care products
through Gap and Banana Republic stores as well as select specialty and
department stores outside the United States, including duty-free and other
travel related retailers. In early 2008, United States specialty retail product
sales were climbing as a steady domestic business combined with a new and
vibrant international business to drive sales growth. However, beginning in the
fourth quarter of 2008, United States specialty retail product sales came under
pressure. Our United States operations continue to feel the effects of the
global financial crisis discussed above.





We
disclosed in our last quarterly report, that new product launches together with
existing distribution should stem the sales decline for our U.S. operations, and
that was most certainly the case. In April 2009, Close, a new Gap fragrance was
launched at approximately 550 Gap stores and roughly 175 Gap Body stores
nationwide. International distribution is in process and is expected to reach
5,000 doors by 2009 year end. In August 2009, new fragrances, Republic of Menand Republic of Women, were
launched at Banana Republic stores in North America with international
distribution following shortly thereafter.





In
November 2008, we shipped the Brooks Brothers New York collection for men
and women to Brooks Brothers U.S. stores and international distribution is now
underway. In addition, a new fragrance, Black Fleece, launched in the
fall of 2009. Our signature bebe fragrance was unveiled at 212 bebe stores in
the U.S. in August 2009, and over 300 Dillard stores in September 2009.
Worldwide distribution began late in the third quarter of 2009. We also have
plans to introduce a new fragrance for New York & Company during the fourth
quarter of 2009.





Sales of
our mass-market fragrance products have been in a decline for several years. The
current global economic crisis has affected both our domestic and international
customers. Credit availability has been curtailed and has resulted in continued
sales declines. We have no plans to discontinue sales to this market, which
aggregated approximately $4.2 million and $11.6 million for the three and nine
months ended September 30, 2009, respectively, as compared to $5.6 million and
$15.4 million for the corresponding periods of the prior year.





In
addition, we are actively pursuing other new business opportunities. However, we
cannot assure that any new licenses, acquisitions or specialty retail agreements
will be consummated.


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23


INTER
PARFUMS, INC. AND SUBSIDIARIES





Gross margin
                  
                  Three months ended
                    September 30,
                  
                  
                  Nine months ended
                    September 30,(In millions)
                  
                  2009
                  
                  
                  2008
                  
                  
                  2009
                  
                  
                  2008Net
      sales
                  
                  $
                  117.5
                  
                  
                  $
                  123.5
                  
                  
                  $
                  296.6
                  
                  
                  $
                  345.8Cost
      of sales
                  
                  
                  50.4
                  
                  
                  
                  56.2
                  
                  
                  
                  125.7
                  
                  
                  
                  148.4Gross
      margin
                  
                  $
                  67.1
                  
                  
                  $
                  67.3
                  
                  
                  $
                  170.9
                  
                  
                  $
                  197.4Gross
      margin as a percent of net sales
                  
                  
                  57
                  %
                  
                  
                  55
                  %
                  
                  
                  58
                  %
                  
                  
                  57
                  %





Gross
profit margin was 57% and 58% for the three and nine month periods ended
September 30, 2009, respectively, as compared to 55% and 57% for the
corresponding periods of the prior year. For the three and nine months ended
September 30, 2009, gross margins included a benefit of approximately 193 basis
points and 105 basis points, respectively, as a result of cash flow hedging
activities entered into in late 2008 to take advantage of the effect a strong
U.S. dollar relative to the euro has on our European based product sales to
United States customers. Sales to these customers are denominated in dollars
while our costs are incurred in euro. Additional fluctuations in gross margin
results from product sales mix within individual lines of Company products. As
reported in last years third quarter report, third quarter 2008 European based
product sales included an unusually high level of gift sets which generate a
lower gross margin than regular product.





Generally,
we do not bill customers for shipping and handling costs and such costs, which
aggregated $1.3 million and $3.7 million for the three and nine month periods
ended September 30, 2009, respectively, as compared to $1.8 million and
$4.9 million for the corresponding periods of the prior year, are included in
selling, general and administrative expenses in the consolidated statements of
income. As such, our Company’s gross profit may not be comparable to other
companies which may include these expenses as a component of cost of goods
sold.





Selling, general and administrative
                    expenses
                  
                  Three months ended
                    September 30,
                  
                  
                  Nine months ended
                    September 30,(In
      millions)
                  
                  2009
                  
                  
                  2008
                  
                  
                  2009
                  
                  
                  2008Selling,
      general and administrative expenses
                  
                  $
                  53.2
                  
                  
                  $
                  56.0
                  
                  
                  $
                  139.8
                  
                  
                  $
                  160.1Selling,
      general and administrative expenses as a percent of net
    sales
                  
                  
                  45
                  %
                  
                  
                  45
                  %
                  
                  
                  47
                  %
                  
                  
                  46
                  %





Selling, general and administrative
expenses decreased 5% and 13% for the three and nine month periods ended
September 30, 2009, respectively, as compared to the corresponding periods of
the prior year. As a percentage of sales, selling, general and administrative
expenses were 45% and 47% of sales for the three and nine month periods ended
September 30, 2009, respectively, as compared to 45% and 46% for the
corresponding periods of the prior year.





Promotion and advertising included in
selling, general and administrative expenses aggregated $18.4 million and $46.3
million for the three and nine month periods ended September 30, 2009,
respectively, as compared to $19.7 million and $54.8 million for the
corresponding periods of the prior year.


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24


INTER
PARFUMS, INC. AND SUBSIDIARIES





Promotion and advertising represented
15.6% of net sales for the nine months ended September 30, 2009, as
compared to 15.9% of sales for the corresponding period of the prior year.
Advertising expenditures in 2008 were high in support of the launch of Burberry,
The Beatfor women. As
we anticipated lower sales volume in 2009 as compared to 2008, advertising
expenditures were curtailed slightly. Royalty expense, included in selling,
general and administrative expenses, aggregated $10.1 million and $26.5 million
for the three and nine-month periods ended September 30, 2009, respectively, as
compared to $9.8 million and $29.9 million for the corresponding periods of the
prior year. The increase in royalty expense for the three-month period ended
September 30, 2009 was a function of product sales mix.





Income
from operations increased 23% to $13.9 million for the three months ended
September 30, 2009, as compared to $11.3 million for the corresponding
period of the prior year. Income from operations was $31.0 million for the nine
month period ended September 30, 2009, as compared to $37.3 million for the
corresponding period of the prior year. Operating margins were 11.8% and 10.5%
of net sales for the three and nine month periods ended September 30, 2009,
respectively, as compared to 9.1% and 10.8% for the corresponding periods of the
prior year.





Interest
expense aggregated $0.5 million and $2.2 million for the three and nine month
periods ended September 30, 2009, respectively, as compared to $1.4 million and
$2.9 million for the corresponding periods of the prior year.We use the
credit lines available to us, as needed, to finance our working capital needs.
Loans payable – banks and long-term debt including current maturities aggregated
$42.1 million as of September 30, 2009, as compared to $73.2 million as of
September 30, 2008. In addition, due to the changes in fair value of interest
rate swaps, interest expense for the three months ended September 30, 2008
includes a charge of $0.4 million, as compared to a small benefit ($0.04
million) recorded for the three months ended September 30, 2009.





Foreign
currency gains aggregated $0.9 million and $4.8 million for the three and
nine-month ended September 30, 2009, respectively, as compared to losses of $0.1
million and $0.3 million for the corresponding periods of the prior
year.  We enter into foreign currency forward exchange contracts to
manage exposure related to certain foreign currency commitments. As a result of
the dramatic strengthening of the U.S. dollar during our fourth quarter ended
December 31, 2008, we entered into foreign currency forward exchange
contracts to hedge approximately 80% of our 2009 sales expected to be invoiced
in U.S. dollars. As a result, for the three and nine months ended September 30,
2009, the Company recorded a gain of $1.5 million and $5.4 million,
respectively, including amounts reclassified from Other Comprehensive Income
into earnings relating to these contracts.





Our
effective income tax rate was 33% and 34% for the three and nine months ended
September 30, 2009, respectively, as compared to 23% and 34% for the
corresponding periods of the prior year. Our effective tax rate generally
approximates 35%. The effective tax rate differs from statutory rates primarily
due to the effect of state and local taxes and tax rates in foreign
jurisdictions which has declined slightly in 2009 as a result of the 2008
formation by Inter Parfums, SA, our 75% owned French subsidiary, of IP Suisse,
who receives a favorable tax rate on a portion of Inter Parfums, S.A. taxable
income. As of September 30, 2008, Nickel S.A., a wholly-owned subsidiary of
Inter Parfums, S.A. was merged into Inter Parfums, S.A.  As a result
of the merger, the Company recognized the utilization of certain foreign
operating loss carryforwards for which valuation allowances had previously been
recorded. As a result, the tax provision in 2008 has been reduced by a benefit
of approximately $0.7 million. No significant changes in tax rates were
experienced nor were any expected in jurisdictions where we
operate.


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25


INTER
PARFUMS, INC. AND SUBSIDIARIES





Net income and earnings per share
                    (In thousands except per share data)
                  
                  Three Months Ended
                    September 30,
                  
                  
                  Nine Months Ended
                    September 30,2009
                  
                  
                  2008
                  
                  
                  2009
                  
                  
                  2008Net
      income
                  
                  $
                  9,611
                  
                  
                  $
                  7,879
                  
                  
                  $
                  22,620
                  
                  
                  $
                  23,506Less:   Net
      income attributable to the noncontrolling interest
                  
                  
                  2,349
                  
                  
                  
                  1,691
                  
                  
                  
                  5,704
                  
                  
                  
                  4,838Net
      income attributable toInter
      Parfums, Inc.
                  
                  $
                  7,262
                  
                  
                  $
                  6,188
                  
                  
                  $
                  16,916
                  
                  
                  $
                  18,668Earnings
      per share:Net
      income attributable to Inter Parfums, Inc. common
      shareholders:Basic
                  
                  $
                  0.24
                  
                  
                  $
                  0.20
                  
                  
                  $
                  0.56
                  
                  
                  $
                  0.61Diluted
                  
                  $
                  0.24
                  
                  
                  $
                  0.20
                  
                  
                  $
                  0.56
                  
                  
                  $
                  0.60Weighted
      average number of shares outstanding:Basic
                  
                  
                  30,097
                  
                  
                  
                  30,632
                  
                  
                  
                  30,061
                  
                  
                  
                  30,660Diluted
                  
                  
                  30,098
                  
                  
                  
                  30,886
                  
                  
                  
                  30,065
                  
                  
                  
                  30,869





Net
income increased 22% to $9.6 million for the three months ended
September 30, 2009, as compared to $7.9 million for the corresponding
period of the prior year. Net income decreased 4% to $22.6 million for the nine
months ended September 30, 2009, as compared to $23.5 million for the
corresponding period of the prior year.





Net
income attributable to the noncontrolling interest aggregated 24% and 25% of net
income for the three and nine months ended September 30, 2009, respectively, as
compared to 21% for both the corresponding periods of the prior year. In 2008,
losses from our 51% owned European distribution subsidiaries offset profits from
our other 75% owned European subsidiaries.





Net
income attributable to Inter Parfums, Inc. increased 17% to $7.3 million for the
three months ended September 30, 2009, as compared to $6.2 million for the
corresponding period of the prior year. Net income attributable to Inter
Parfums, Inc. decreased 9% to $17.0 million for the nine months ended September
30, 2009, as compared to $18.7 million for the corresponding period of the prior
year. Increased gross margins and foreign currency exchange gains from hedging
activities, contributed to the growth in net income attributable to Inter
Parfums, Inc. for the period.





Diluted
earnings per share were $0.24 and $0.20 for the three months ended
September 30, 2009 and 2008, respectively, and diluted earnings per share
were $0.56 and $0.60 for the nine month periods ended September 30, 2009 and
2008, respectively. Weighted average shares outstanding aggregated 30.1 million
for both the three and nine months ended September 30, 2009, respectively,
as compared to 30.6 million and 30.7 million for the corresponding periods of
the prior year. On a diluted basis, average shares outstanding were 30.1 million
for both the three and nine months ended September 30, 2009, as compared to
30.9 million for both the three and nine months ended September 30, 2008,
respectively. The decline in shares outstanding is primarily the result of
shares repurchased pursuant to Board of Directors
authorizations.


Page
26


INTER
PARFUMS, INC. AND SUBSIDIARIES





Liquidity
and Capital Resources





Our
financial position remains strong. At September 30, 2009, working capital
aggregated $195 million and we had a working capital ratio of almost 2.9 to 1.
Cash and cash equivalents aggregated $58 million.





Cash
provided by (used in) operating activities aggregated $33.6 million and ($41.1)
million for the nine months ended September 30, 2009 and 2008, respectively.
Working capital items provided $5 million in cash from operations in 2009 as
compared to a use of $73 million in 2008. As of December 31, 2007 and
continuing through September 30, 2008, we had a significant buildup of inventory
to support a very aggressive launch schedule including Burberry, The Beatand new fragrance
families for each of Lanvin, Van Cleef & Arpels, ST Dupont and Nickel. In
terms of cash flows, for the nine month period ended September 30, 2009,
inventories decreased $30.9 million. The global economic crisis has resulted in
lower sales levels. Our inventory levels have been steadily declining since
third quarter 2008 as we have made modifications to our sales projections to
take into account the difficult environment. In terms of cash flow, accounts
receivable increased $1.9 million for the nine months ended September 30, 2009,
as extended payment terms to certain international distributors prevented
further declines in accounts receivable during the period. In addition, in the
2009 period, accounts payable and accrued expenses decreased $24.5 million as
our vendor obligations for the year end inventory buildup became
due.





Cash
flows used in investing activities in 2009 reflects payments of approximately
$3.8 million for capital items. Our business is not capital intensive as we do
not own any manufacturing facilities. We typically spend between $2.0 million
and $3.0 million per year on tools and molds, depending on our new product
development calendar. The balance of capital expenditures is for office
fixtures, computer equipment and industrial equipment needed at our distribution
centers.  Capital expenditures in 2009 are expected to be in the range
of $4.0 million to $4.5 million, considering our 2009 launch
schedule.





Our
short-term financing requirements are expected to be met by available cash on
hand at September 30, 2009, cash generated by operations and short-term credit
lines provided by domestic and foreign banks. The principal credit facilities
for 2009 consist of a $15.0 million unsecured revolving line of credit provided
by a domestic commercial bank and approximately $45.0 million in credit lines
provided by a consortium of international financial institutions. As of
September 30, 2009, short-term borrowings aggregated $10.0
million.





In 2007,
we financed the acquisition of the worldwide rights to the Lanvin brand names
and international trademarks and the license for the Van Cleef & Arpels
brand and related trademarks by entering into five-year credit agreements. The
long-term credit facilities provide for principal and interest to be repaid in
20 quarterly installments. As of September 30, 2009, total long-term debt
including current maturities aggregated $32.1 million.


Page
27


INTER
PARFUMS, INC. AND SUBSIDIARIES





As of
December 31, 2008, the Company’s Board of Directors authorized the repurchase of
up to 1,031,863 shares of the Company’s common stock and through September 30,
2009, the Company repurchased 108,100 shares of its common stock at an average
price of $5.84 per common share.




In
December 2008, our Board of Directors authorized a continuation of our cash
dividend of $0.133 per share, aggregating approximately $4.0 million per annum,
payable $.033 per share on a quarterly basis. Our next cash dividend for 2009
will be paid on January 15, 2010 to shareholders of record on December 31, 2009.
Dividends paid, including dividends paid once per year to minority shareholders
of Inter Parfums, S.A., aggregated $4.7 million and $4.8 million for the nine
months ended September 30, 2009 and 2008, respectively. The cash dividend for
2009 represents a small part of our cash position and is not expected to have
any significant impact on our financial position.





We believe that funds provided by or
used in operations can be supplemented by our present cash position and
available credit facilities, so that they will provide us with sufficient
resources to meet all present and reasonably foreseeable future operating
needs.





Inflation
rates in the U.S. and foreign countries in which we operate did not have a
significant impact on operating results for the nine months ended September 30,
2009.





Contractual
Obligations





The
following table sets for a schedule of our contractual obligations as of
December 31, 2008 over the periods indicated in the table, as well as our total
contractual obligations ($ in thousands).





Contractual Obligations
                    
                    Payments due by periodTotal
                    
                    
                    Less than
                      1 year
                    
                    
                    Years
                      2-3
                    
                    
                    Years
                      4-5
                    
                    
                    More than
                      5 yearsLong-Term
      Debt (2)
                    
                    $
                    41,000
                    
                    
                    $
                    13,400
                    
                    
                    $
                    23,000
                    
                    
                    $
                    4,600Capital
      Lease ObligationsOperating
      Leases
                    
                    $
                    27,100
                    
                    
                    $
                    7,100
                    
                    
                    $
                    13,000
                    
                    
                    $
                    4,300
                    
                    
                    $
                    2,700Purchase
      obligations(1)
                    
                    $
                    1,306,500
                    
                    
                    $
                    137,700
                    
                    
                    $
                    293,400
                    
                    
                    $
                    313,900
                    
                    
                    $
                    561,500Other
      Long-Term Liabilities Reflected on the Registrant's Balance Sheet under
      GAAPTotal
                    
                    $
                    1,374,600
                    
                    
                    $
                    158,200
                    
                    
                    $
                    329,400
                    
                    
                    $
                    322,800
                    
                    
                    $
                    564,200





(1)
            Consists
      of purchase commitments for advertising and promotional items, minimum
      royalty guarantees, including fixed or minimum obligations, and estimates
      of such obligations subject to variable price provisions. Future
      advertising commitments were estimated based on planned future sales for
      the license terms that were in effect at December 31, 2008, without
      consideration for potential renewal periods and do not reflect the fact
      that our distributors share our advertising
  obligations.





(2)
            Interest
      due on the Company’s long-term debt is payable $1.10 million, $0.70
      million, $0.40 million and $0.07 million in 2009, 2010, 2011 and 2012,
      respectively.


Page
28


INTER
PARFUMS, INC. AND SUBSIDIARIES





Item
      3:
            QUANTITATIVE
      AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK





General





We
address certain financial exposures through a controlled program of risk
management that primarily consists of the use of derivative financial
instruments. Our French subsidiary primarily enters into foreign currency
forward exchange contracts in order to reduce the effects of fluctuating foreign
currency exchange rates.  We do not engage in the trading of foreign
currency forward exchange contracts or interest rate swaps.





Foreign
Exchange Risk Management





We
periodically enter into foreign currency forward exchange contracts to hedge
exposure related to receivables denominated in a foreign currency and to manage
risks related to future sales expected to be denominated in a foreign currency.
We enter into these exchange contracts for periods consistent with our
identified exposures. The purpose of the hedging activities is to minimize the
effect of foreign exchange rate movements on the receivables and cash flows of
Inter Parfums, S.A., our French subsidiary, whose functional currency is the
Euro. All foreign currency contracts are denominated in currencies of majorindustrialcountriesand are with largefinancial institutions,
which are ratedasstronginvestmentgrade.





All
derivative instruments are required to be reflected as either assets or
liabilities in the balance sheet measured at fair value. Generally, increases or
decreases in fair value of derivative instruments will be recognized as gains or
losses in earnings in the period of change.  If the derivative is
designated and qualifies as a cash flow hedge, the changes in fair value of the
derivative instrument will be recorded in other comprehensive
income.





Before
entering into a derivative transaction for hedging purposes, we determine that
the change in the value of the derivative will effectively offset the change in
the fair value of the hedged item from a movement in foreign currency rates.
Then, we measure the effectiveness of each hedge throughout the hedged
period.  Any hedge ineffectiveness is recognized in the income
statement.





As a
result of the dramatic strengthening of the U.S. dollar during our fourth
quarter ended December 31, 2008, we entered into foreign currency forward
exchange contracts to hedge approximately 80% of our 2009 sales expected to be
invoiced in U.S. dollars. Hedge effectiveness 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.
At September 30, 2009, we had foreign currency contracts in the form of forward
exchange contracts in the amount of approximately U.S. $42.5 million and GB
pounds 6.6 million which have varying maturities of less than one year. We
believe that our risk of loss as the result of nonperformance by any of such
financial institutions is remote.


Page
29


INTER
PARFUMS, INC. AND SUBSIDIARIES





Interest Rate Risk
Management





We
mitigate interest rate risk by continually monitoring interest rates, and then
determining whether fixed interest rates should be swapped for floating rate
debt, or if floating rate debt should be swapped for fixed rate debt. We have
entered into two (2) interest rate swaps to reduce exposure to rising variable
interest rates. The first swap, entered into in 2004, effectively exchanged the
variable interest rate of 0.6% above the three month EURIBOR to a variable rate
based on the 12 month EURIBOR rate with a floor of 3.25% and a ceiling of 3.85%.
As of December 31, 2008, the remaining balance owed pursuant to this facility
was €1.6 million, which has been paid in full as of September 30, 2009. The
second swap entered into in September 2007 on €22 million of debt, effectively
exchanged the variable interest rate of 0.6% above the three month EURIBOR to a
fixed rate of 4.42%. The remaining balance owed pursuant to this facility is
€13.2 million. These derivative instruments are recorded at fair value and
changes in fair value are reflected in the accompanying consolidated statements
of income.





Item
      4.
            CONTROLS
      AND PROCEDURES





Evaluation
of Disclosure Controls and Procedures





Our Chief
Executive Officer and Chief Financial Officer have reviewed and evaluated the
effectiveness of our disclosure controls and procedures (as defined in the
Securities Exchange Act of 1934 Rule 13a-15(e)) as of the end of the period
covered by this quarterly report on Form 10-Q (the “Evaluation
Date”).  Based on their review and evaluation, our Chief Executive
Officer and Chief Financial Officer have concluded that as of the Evaluation
Date our Company's disclosure controls and procedures were
effective.





Changes
in Internal Controls





There has
been no change in our internal control over financial reporting (as defined in
Rule 13a-15(f) of the Securities Exchange Act of 1934) that occurred during the
quarterly period covered by this report on Form 10-Q that has materially
affected, or is reasonably likely to materially affect, the Company's internal
control over financial reporting.


Page
30


INTER
PARFUMS, INC. AND SUBSIDIARIES





Part
II.  Other Information





Items 1, Legal Proceedings,1A,Risk Factors, 2, Unregistered Sales of Equity
Securities and Use of Proceeds, 3, Defaults Upon Senior Securities, 4, Submission of Matters to a Vote of
Security Holders and 5,
Other Information, are omitted as they are either not applicable or have
been included in Part
I.





Item
6.    Exhibits.





The following documents are filed
herewith:





Exhibit
                    No.
                  
                  Description
                  
                  Sequentially
                    Numbered Page in
                    Report10.138
                  
                  Licence
      Agreement between J Choo Limited and Inter Parfums, S.A. signed on
      September 29, 2009 (Certain confidential information in this Exhibit
      10.138 was omitted and filed separately with the Securities and Exchange
      Commission with a request for confidential treatment by Inter Parfums,
      Inc).
                  
                  3531.1
                  
                  Certification
      Required by Rule 13a-14 of Chief Executive Officer
                  
                  25131.2
                  
                  Certification
      Required by Rule 13a-14 of Chief Financial Officer
                  
                  25232.1
                  
                  Certification
      Required by Section 906 of the Sarbanes-Oxley Act by Chief Executive
      Officer
                  
                  25332.1
                  
                  Certification
      Required by Section 906 of the Sarbanes-Oxley Act by Chief Executive
      Officer
                  
                  254





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 6th
day of November 2009.





INTER
      PARFUMS, INC.By:
              /s/ Russell GreenbergExecutive
      Vice President andChief
      Financial Officer


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31