-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JCMS42ZCDPZAvVEbZf9GUUm81C94vTrONbstcpivW2Sn2p84sOi5EYwK0JNU4bsf tiHdyW+2cbhgPvEEi0X3Og== 0001042910-99-001023.txt : 19990816 0001042910-99-001023.hdr.sgml : 19990816 ACCESSION NUMBER: 0001042910-99-001023 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19990630 FILED AS OF DATE: 19990813 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PARLUX FRAGRANCES INC CENTRAL INDEX KEY: 0000802356 STANDARD INDUSTRIAL CLASSIFICATION: PERFUMES, COSMETICS & OTHER TOILET PREPARATIONS [2844] IRS NUMBER: 222562955 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-15491 FILM NUMBER: 99686531 BUSINESS ADDRESS: STREET 1: 3725 S W 30TH AVE CITY: FT LAUDERDALE STATE: FL ZIP: 33312 BUSINESS PHONE: 3059467700 MAIL ADDRESS: STREET 1: 3725 S W 30TH AVENUE CITY: FT LAUDERDALE STATE: FL ZIP: 33312 10-Q 1 QUARTERLY REPORT SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 ----------------------------- FORM 10-Q ( Mark One ) [ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 ( d ) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended: June 30, 1999 ------------- Or______ [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15( d ) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______________________ to _____________________ Commission file number: 0-15491 ------- PARLUX FRAGRANCES, INC. - -------------------------------------------------------------------------------- ( Exact name of registrant as specified in its charter ) DELAWARE 22-2562955 - -------------------------------------------------------------------------------- (State or other jurisdiction of incorporation or organization) (IRS employer identification no.) 3725 S.W. 30th Avenue, Ft. Lauderdale, FL 33312 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip code) Registrant's telephone number, including area code 954-316-9008 ------------------------- - -------------------------------------------------------------------------------- Former name, former address and former fiscal year, if changed since last report Indicate with an "X" 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 for such shorter period that the registrant was required to file such reports ), and ( 2 ) has been subject to such filing requirements for the past 90 days. Yes X No --- --- APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS: Indicate with an "X" whether the registrant has filed all documents and reports required to be filed by Section 12, 13, or 15( d ) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes No --- --- APPLICABLE ONLY TO CORPORATE ISSUERS: As of August 11, 1999, 13,096,722 shares of the issuer's common stock were outstanding. PART I. FINANCIAL INFORMATION --------------------- Item 1. Financial Statements --------------------- See pages 7 to 10. Item 2. Management's Discussion and Analysis of Financial Condition and Results - -------------------------------------------------------------------------------- of Operations ------------- The Company may periodically release forward-looking statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements, including those in this Form 10-Q, involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements of the Company or its industry to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These risks and uncertainties include, among others, collectability of trade receivables from related parties, future trends in sales and the Company's ability to introduce new products in a cost-effective manner. Readers are cautioned not to place undue reliance on these forward statements, which speak only as of the date thereof. The Company undertakes no obligation to publicly release the result of any revisions to those forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. The following is management's discussion and analysis of certain significant factors which have affected the Registrant's ( the Company's ) financial position and operating results during the periods included in the accompanying financial statements and notes. This discussion and analysis should be read in conjunction with such financial statements and notes. Recent Developments - ------------------- During the fiscal year ended March 31, 1999, the Company sold approximately $22.5 million to a related party, Perfumania Inc. ("Perfumania"), a publicly held company trading on NASDAQ ("PRFM"), which owns and operates approximately 280 discount fragrance stores in the U.S. and perfumania.com, a wholly-owned subsidiary of Perfumania, retailing fragrances on the Internet. At March 31, 1999, the Company had trade receivables of $18.3 million from Perfumania. The report of Perfumania's independent certified public accountants that accompanied its audited financial statements as of January 30, 1999 and for the year then ended expressed substantial doubt about Perfumania's ability to continue as a going concern. Perfumania incurred net losses of approximately $18,900,000 for its fiscal year 1999 and $4,100,000 (unaudited) for its thirteen-week period ended May 1, 1999. Also, Perfumania had a working capital deficit of approximately $3,800,000 and $5,600,000 (unaudited) at January 30, 1999 and May 1, 1999, respectively. In addition, Perfumania was in violation of certain debt covenants contained in its bank line of credit agreement at both January 30, 1999 and May 1, 1999. The bank has subsequently waived these debt violations for a 2 period of 90 days through September 30, 1999; however, there is no assurance that Perfumania will be in compliance with the debt covenants at the end of the waiver period. During the fiscal years ended March 31, 1999 and 1998, the Company sold a total of approximately $44.6 million to Perfumania, and received payments of approximately $49.1 million during the same two-year period. During the period from April 1, 1999 through June 30, 1999, the Company collected $5.2 million or approximately 30% of the total of its outstanding receivable at March 31, 1999, and sold an additional $8.3 million in merchandise to Perfumania, leaving a trade receivable balance at June 30, 1999 of $21.4 million, in line with historical and anticipated seasonal payment patterns. The Company has developed a plan to reduce the balance due from Perfumania. Management's plan initially consists of converting $8 million into a short-term note receivable due the earlier of the completion of perfumania.com's proposed public offering in which Perfumania would generate sufficient funds to pay down the short-term note, or May 31, 2000. Management anticipates that this short-term note receivable transaction will be consummated prior to August 31, 1999. In addition, on July 1, 1999, Perfumania and the Company's Board of Directors approved the transfer of 1,512,406 shares of Perfumania treasury stock to the Company in consideration for a partial reduction of the outstanding trade receivable balance in the amount of approximately $4.5 million. The transfer price was based on a per share price of $2.98, which approximates 90% of the closing price of Perfumania's common stock for the previous 20 business days. In connection with the transfer of the shares, the parties are currently negotiating a registration rights agreement whereby the Company would be able to demand registration of the shares with the Securities and Exchange Commission at any time after February 29, 2000. As indicated in various public press releases, Perfumania has reported both aggregate and comparative store sales increases for each of the months during the period February 1999 through July 1999. Based on the factors described above, management believes that the receivable from Perfumania is fully collectible. During the period of July 1, 1999 through August 10, 1999, the Company received additional cash payments of $2.7 million. Results of Operations - --------------------- Comparison of the three-month period ended June 30, 1999 with the three-month - ------------------------------------------------------------------------------ period ended June 30, 1998. - --------------------------- During the quarter ended June 30, 1999, net sales declined 2% to $14,929,833 as compared to $15,307,610 for the same period for the prior year. The decline is primarily due to continuing international economic difficulties, which resulted in a 39% decrease in international gross sales to $3,839,844 in the current period as compared to $6,328,049 in the prior year period. The Company's primary brand, Perry Ellis, continues to show strength with total gross sales of all Perry Ellis brands increasing 3% compared to the same period in the prior year from $10,518,386 to $10,813,515. 3 Sales to unrelated customers decreased 27% to $6,623,323 in the current period, compared to $9,084,467 in the same period in the prior year, reflecting the reduction in international sales mentioned above. Sales to related parties increased 33% to $8,306,510 in the current quarter compared to $6,223,143 in the same period in the prior fiscal year. Cost of goods sold increased as a percentage of net sales from 41% for the quarter ended June 30, 1998 to 45% for the current quarter. The increase was mainly attributable to the increase in the percentage of net sales to related parties as compared to total net sales, coupled with the sale of certain closeout merchandise to international customers at below cost. Cost of goods sold on sales to unrelated customers and related parties approximated 45% and 44%, respectively, during the quarter ended June 30, 1999, as compared to 36% and 48%, respectively, in the prior year comparable quarter. Operating expenses decreased by 12% compared to the prior fiscal year from $7,882,831 to $6,952,254, decreasing as a percentage of net sales from 52% to 47%. Advertising and promotional expenses decreased 20% to $3,454,120 compared to $4,309,402 in the prior year period, reflecting a decrease in print advertising and promotional expenses in connection with the launch of Fred Hayman's "Hollywood for Women" which occurred in the same quarter in the prior year. Selling and distribution costs decreased 6% to $1,377,162 in the current fiscal period as compared to $1,458,425 in the same period of the prior fiscal year, decreasing as a percentage of net sales from 10% to 9%. General and administrative expenses decreased by 7% compared to the prior year period from $1,000,421 to $930,229, decreasing as a percentage of net sales from 7% to 6%. The above decreases reflect the full period's effect of the Company's restructuring during the quarter ended March 31, 1998, which were fully implemented during the quarter ended June 30, 1998. Depreciation and amortization remained relatively constant at 4% of net sales. Royalties increased to $570,513 for the current period compared to $481,039 in the prior year, and increased as a percentage of sales from 3% to 4%, primarily due to the increase in sales of Perry Ellis brand products as a percentage of total sales. As a result of the above, the Company had operating income of $1,327,007 or 9% of net sales for the three-month period ended June 30, 1999, compared to $1,169,756 or 8% of net sales for the comparable period in the prior year. Net interest expense decreased to $232,775 in the current fiscal year as compared to $504,459 in the same period in the prior year, reflecting the continued reduction in bank borrowings due to positive cash flow over the last 15-month period. Income before taxes for the current fiscal year was $1,094,232, or 7% of net sales compared to $673,835 or 4% of net sales in the same period in the prior year. Giving effect to the tax provision, net income amounted to $678,424 or 5% of net sales for the current quarter ended June 30, 1999, as compared to $417,778 or 3% of net sales for the same quarter in the prior fiscal year. 4 Liquidity and Capital Resources - ------------------------------- Working capital decreased to $38,126,000 as of June 30, 1999, compared to $38,616,032 at March 31, 1999, reflecting the current period's net income, offset by the purchase of approximately $949,000 in treasury stock as discussed below. See "Recent Developments" for discussion of trade receivables from related parties. In December 1998, the Company completed the third phase of its common stock buy-back program involving 1,250,000 shares. In January 1999, the Board of Directors (the "Board") authorized the repurchase of an additional 2,000,000 shares. As of June 30, 1999, the Company has repurchased under all phases a total of 4,108,981 shares at a cost of $9,042,614. The accompanying consolidated balance sheets also include an additional 39,000 shares of treasury stock purchased at a cost of $133,472 prior to fiscal 1996. In May 1997, the Company entered into a three-year loan and Security Agreement (the Credit Agreement) with General Electric Capital Corporation (GECC). Under the Credit Agreement, the Company is able to borrow, on a revolving basis, depending on the availability of a borrowing base, up to $25,000,000 at an interest rate of LIBOR plus 2.50% or .75% in excess of the Wall Street Journal prime rate, at the Company's option. Proceeds from the Credit Agreement were used, in part, to repay the Company's previous $10,000,000 credit facility with Finova Capital Corporation and Merrill Lynch Financial Services, Inc. Substantially all of the domestic assets of the Company collateralize this borrowing. The Credit Agreement contains customary events of default and covenants which prohibit, among other things, incurring additional indebtedness in excess of a specified amount, paying dividends, creating liens, and engaging in mergers and acquisitions without the prior consent of GECC. The Credit Agreement also contains certain financial covenants relating to net worth, interest coverage and other financial ratios. As of March 31, 1999, the Company was not in compliance with financial covenants relating to "Earnings Before Interest, Taxes, Depreciation and Amortization" (EBITDA), minimum fixed charge coverage ratio, maximum accounts receivable from related parties and employees, minimum unrelated customer net sales, as well as a restricted payment covenant concerning the amount of treasury stock which can be purchased by the Company. GECC has waived the violations of these debt covenants for the year ended March 31, 1999 and through June 30, 1999, and has amended the Credit Agreement to reflect changes in certain covenants going forward. Management believes that, based on current circumstances, the Company will be able to meet the revised covenants and funds from operations and the Credit Agreement will be sufficient to meet the Company's operating needs. Year 2000 ("Y2K") Issues - ------------------------ As of June 30, 1999, the Company's management information system hardware consists of an IBM AS 400, coupled with networked personal computer workstations. The Company has upgraded its JD Edwards software to the latest release, which is Y2K 5 compliant. JD Edwards is releasing its final Y2K upgrade during August 1999 which the Company anticipates implementing by September 30, 1999. In connection therewith, a hardware upgrade has been completed on its 9406 processor from a model 310 to a model 620, which more than doubles the commercial processing workload (CPW) to support the new release and other business applications. In addition, the upgrade of the Company's Pitney Bowes shipping system should be completed by October 31, 1999. The new upgrade will interface fully with the AS400 and JD Edwards software. The costs incurred in connection with the upgrades, including outside consultants, amounted to approximately $300,000. The Company continues to devote the necessary internal resources to resolve all significant Y2K issues in a timely manner. Internal modifications to all personnel computer operating systems have been completed. Testing of electronic data interchange (EDI) modifications with all major customers has also been completed. Verification of Y2K compliance with major suppliers continues. Management believes that any such processing issues will be resolved. Nevertheless, if the Company, its customers or suppliers are unable to resolve such processing issues, it could result in material financial risks such as the inability to produce and distribute the Company's products. Contingency plans for order processing are already in place. Impact of Currency Exchange - --------------------------- The Company has completed the centralization of manufacturing in the United States and closed its French operations which will minimize the currency exchange impact in the future. Item 3. Quantitative and Qualitative Disclosures About Market Risks - -------------------------------------------------------------------- During the quarter ended June 30, 1999, there have been no material changes in the information about the Company's market risks as of March 31, 1999, as set forth in Item 7A of the 1999 Form 10-K. PART II. OTHER INFORMATION ----------------- Item 1. Legal Proceedings ----------------- There are no legal proceedings of any significance. Item 6. Exhibits and Reports on Form 8-K -------------------------------- (a) Exhibit No. Description ----------- ----------- 4.25 Amendment No. 2, dated July 14, 1999 to Credit Agreement, dated May 23, 1997, between the Company and General Electric Capital Corporation. (b) There were no filings on Form 8-K during the period. 6 PARLUX FRAGRANCES, INC. AND SUBSIDIARIES ---------------------------------------- CONSOLIDATED BALANCE SHEETS ---------------------------
June 30, March 31, ASSETS 1999 1999 - ------------------------------------------------- --------------------- ---------------------- (unaudited) CURRENT ASSETS: Cash and cash equivalents $274,649 $184,148 Receivables, net of allowance for doubtful accounts, sales returns and advertising allowances of approximately $2,538,000 and $2,113,000, respectively 7,419,422 7,649,397 Trade receivables from related parties 21,379,591 18,258,213 Inventories, net 23,182,204 20,947,256 Prepaid expenses and other current assets 8,421,983 9,596,478 Income tax receivable 140,000 140,000 --------------------- ---------------------- TOTAL CURRENT ASSETS 60,817,849 56,775,492 Equipment and leasehold improvements, net 2,034,312 1,692,732 Trademarks, licenses and goodwill, net 23,560,095 23,926,073 Other 108,964 112,949 --------------------- ---------------------- TOTAL ASSETS $86,521,220 $82,507,246 ===================== ====================== LIABILITIES AND STOCKHOLDERS' EQUITY - ------------------------------------------------- CURRENT LIABILITIES: Borrowings, current portion $11,296,889 $10,885,068 Accounts payable 8,935,155 5,314,770 Accrued expenses 1,827,879 1,722,681 Income taxes payable 631,926 236,941 --------------------- ---------------------- TOTAL CURRENT LIABILITIES 22,691,849 18,159,460 Borrowings, less current portion 3,314,895 3,561,313 Deferred tax liability 505,783 505,783 --------------------- ---------------------- TOTAL LIABILITIES 26,512,527 22,226,556 --------------------- ---------------------- COMMITMENTS AND CONTINGENCIES -- -- --------------------- ---------------------- STOCKHOLDERS' EQUITY : Preferred stock, $0.01 par value, 5,000,000 shares authorized, 0 shares issued and outstanding at June 30 and March 31, 1999 -- -- Common stock, $0.01 par value, 30,000,000 shares authorized, 17,462,478 and 17,462,478 shares issued at June 30 and March 31, 1999, respectively 174,625 174,625 Additional paid-in capital 73,030,586 73,030,586 Accumulated deficit (3,667,525) (4,345,949) Accumulated other comprehensive income (352,907) (351,505) --------------------- ---------------------- 69,184,779 68,507,757 Less - 4,147,981 and 3,655,031 shares of common stock in treasury, at cost, at June 30 and March 31, 1999, respectively (9,176,086) (8,227,067) --------------------- ---------------------- TOTAL STOCKHOLDERS' EQUITY 60,008,693 60,280,690 --------------------- ---------------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $86,521,220 $82,507,246 ===================== ======================
See notes to consolidated financial statements. 7 PARLUX FRAGRANCES, INC. AND SUBSIDIARIES ---------------------------------------- CONSOLIDATED STATEMENTS OF INCOME ---------------------------------
Three months ended June 30, ------------------------------------ (unaudited) 1999 1998 ---------------- ---------------- Net sales: Unrelated customers $6,623,323 $9,084,467 Related parties 8,306,510 6,223,143 ---------------- ---------------- 14,929,833 15,307,610 Cost of goods sold 6,650,572 6,255,023 ---------------- ---------------- Gross margin 8,279,261 9,052,587 ---------------- ---------------- Operating expenses: Advertising and promotional 3,454,120 4,309,402 Selling and distribution 1,377,162 1,458,425 General and administrative, net of licensing fees of $150,000 and $133,333 in 1999 and 1998, respectively 930,229 1,000,421 Depreciation and amortization 620,230 633,544 Royalties 570,513 481,039 ---------------- ---------------- Total operating expenses 6,952,254 7,882,831 ---------------- ---------------- Operating income 1,327,007 1,169,756 Interest expense and bank charges, net 232,775 504,459 Exchange gain -- (8,538) ---------------- ---------------- Income before income taxes 1,094,232 673,835 Income taxes provision 415,808 256,057 ---------------- ---------------- . Net income $678,424 $417,778 ================ ================ Income per common share: Basic $0.05 $0.03 ================ ================ Diluted $0.05 $0.03 ================ ================
See notes to consolidated financial statements. 8 PARLUX FRAGRANCES, INC. AND SUBSIDIARIES ---------------------------------------- CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY ----------------------------------------------------------
COMMON STOCK RETAINED ---------------------------- ADDITIONAL EARNINGS NUMBER PAR PAID-IN (ACCUMULATED ISSUED VALUE CAPITAL DEFICIT) ----------- ----------- ----------- ------------ BALANCE at April 1, 1997 17,447,478 $ 174,475 $73,007,949 $ 2,922,519 Comprehensive loss: Net loss -- -- -- (8,686,923) Foreign currency translation adjustment Total comprehensive loss Purchase of 2,069,700 shares of treasury stock, at cost ----------- ----------- ----------- ----------- BALANCE at March 31, 1998 17,447,478 174,475 73,007,949 (5,764,404) Comprehensive income: Net income -- -- -- 1,418,455 Foreign currency translation adjustment -- -- -- -- Total comprehensive income Issuance of common stock upon exercise of employee options 15,000 150 22,637 -- Purchase of 1,165,276 shares of treasury stock, at cost -- -- -- -- ----------- ----------- ----------- ----------- BALANCE at March 31, 1999 17,462,478 174,625 73,030,586 (4,345,949) Comprehensive income: Net income -- -- -- 678,424 Foreign currency translation adjustment -- -- -- -- Total comprehensive income Purchase of 492,950 shares of treasury stock, at cost -- -- -- -- ----------- ----------- ----------- ----------- BALANCE at June 30, 1999 (unaudited) 17,462,478 $ 174,625 $73,030,586 $(3,667,525) =========== =========== =========== ===========
ACCUMULATED OTHER COMPREHENSIVE TREASURY INCOME (LOSS) (1) STOCK TOTAL ----------------- ------------ ------------- BALANCE at April 1, 1997 ($ 103,562) ($ 1,882,646) $ 74,118,735 Comprehensive loss: Net loss -- -- (8,686,923) Foreign currency translation adjustment (251,769) (251,769) ------------ Total comprehensive loss (8,938,692) ------------ Purchase of 2,069,700 shares of treasury stock, at cost (4,011,604) (4,011,604) ------------ ------------ ------------ BALANCE at March 31, 1998 (355,331) (5,894,250) 61,168,439 Comprehensive income: Net income -- -- 1,418,455 Foreign currency translation adjustment 3,826 -- 3,826 ------------ Total comprehensive income 1,422,281 ------------ Issuance of common stock upon exercise of employee options -- -- 22,787 Purchase of 1,165,276 shares of treasury stock, at cost -- (2,332,817) (2,332,817) ------------ ------------ ------------ BALANCE at March 31, 1999 (351,505) (8,227,067) 60,280,690 Comprehensive income: Net income -- -- 678,424 Foreign currency translation adjustment (1,402) -- (1,402) ------------ Total comprehensive income 677,022 ------------ Purchase of 492,950 shares of treasury stock, at cost -- (949,019) (949,019) ------------ ------------ ------------ BALANCE at June 30, 1999 (unaudited) $ (352,907) $ (9,176,086) $ 60,008,693 ============ ============ ============
(1) Accumulated other comprehensive income (loss) includes foreign currency translation adjustments. See notes to consolidated financial statements. 9 PARLUX FRAGRANCES, INC. AND SUBSIDIARIES ---------------------------------------- CONSOLIDATED STATEMENTS OF CASH FLOWS -------------------------------------
Three months ended June 30, ----------------------------------- (Unaudited) 1999 1998 ------------ ------------ Cash flows from operating activities: Net income $ 678,424 $ 417,778 ----------- ----------- Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 620,230 633,543 Provision for doubtful accounts 101,869 30,000 Reserve for potential inventory obsolescence 909,498 258,687 Changes in assets and liabilities net of effect of sold brands: Decrease in trade receivables - customers 128,107 2,660,626 Increase in trade receivables - related parties (3,121,378) (3,153,148) Increase in inventories (3,144,446) (1,970,891) Decrease in prepaid expenses and other current assets 1,174,495 237,261 Decrease in other non-current assets 3,984 205,038 Increase in accounts payable 3,620,385 205,832 Increase (decrease) in accrued expenses 105,198 (161,172) Increase in income taxes payable 394,985 136 ----------- ----------- Total adjustments 792,927 (1,054,088) ----------- ----------- Net cash provided by (used in) operating activities 1,471,351 (636,310) ----------- ----------- Cash flows from investing activities: Purchases of equipment and leasehold improvements (568,312) (11,420) Purchase of trademarks (27,520) (11,002) Cash received from brand licensing: Bal a Versailles -- 200,000 ----------- ----------- Net cash (used in) provided by investing activities (595,832) 177,578 ----------- ----------- Cash flows from financing activities: Proceeds - note payable to GE Capital 396,768 1,138,233 Payments - note payable to Fred Hayman Beverly Hills (144,731) (134,639) Payments - note payable to Lyon Credit Corp. (43,998) (39,408) Payments - note payable to Bankers Capital Leasing (29,689) -- Payments - note payable to International Finance Bank -- (105,545) Payments - other notes payable (12,947) (8,004) Proceeds - note payable to Popular Bank 11,070 Purchases of treasury stock (949,019) (437,512) Proceeds from issuance of common stock -- 7,188 ----------- ----------- Net cash (used in) provided by financing activities (783,616) 431,383 ----------- ----------- Effect of exchange rate changes on cash (1,402) (8,300) ----------- ----------- Net increase (decrease) in cash and cash equivalents 90,501 (35,649) Cash and cash equivalents, beginning of period 184,148 205,760 ----------- ----------- Cash and cash equivalents, end of period $ 274,649 $ 170,111 =========== ===========
See notes to consolidated financial statements. 10 PARLUX FRAGRANCES, INC. AND SUBSIDIARIES ---------------------------------------- NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ------------------------------------------ A. Basis of Presentation The consolidated financial statements include the accounts of Parlux Fragrances, Inc. and subsidiaries (the "Company"). All material intercompany balances and transactions have been eliminated in consolidation. The accompanying unaudited consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC"). Certain information and note disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles have been omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information presented not misleading. The financial information presented herein, which is not necessarily indicative of results to be expected for the current fiscal year, reflects all adjustments which, in the opinion of management, are necessary for a fair presentation of the interim unaudited consolidated financial statements. It is suggested that these consolidated financial statements be read in conjunction with the financial statements and notes thereto included in the Company's March 31, 1999 Form 10-K as filed with the Securities and Exchange Commission on July 14, 1999. Certain reclassifications were made to the June 30, 1998 financial statements to conform with the presentation of the June 30, 1999 financial statements. B. Inventories Inventories are stated at the lower of cost ( first-in, first-out method ) or market. The components of inventories are as follows: June 30, 1999 March 31, 1999 ------------- -------------- Finished products $11,586,273 $10,609,272 Components and packaging material 8,018,833 7,033,339 Raw material 3,577,098 3,304,645 ----------- ----------- $23,182,204 $20,947,256 =========== =========== The cost of inventories includes product costs and handling charges, including allocation of the Company's applicable overhead in the amount of $2,380,000 and $2,830,000 at June 30, 1999 and March 31, 1999, respectively. The above amounts are net of reserves for potential inventory obsolescence of approximately $1,886,000 and $976,000 at June 30, 1999 and March 31, 1999, respectively. 11 C. Trademarks, Licenses and Goodwill Trademarks, licenses and goodwill are attributable to the following brands: June 30, 1999 March 31, 1999 ------------- -------------- Owned Brands: Alexandra de Markoff $ 11,191,171 $ 11,190,926 Fred Hayman Beverly Hills 2,766,001 2,753,027 Bal A Versailles 3,243,591 3,243,855 Animale 1,463,530 1,452,929 Other 243,430 243,431 Licensed Brands: Perry Ellis 7,961,352 7,957,567 Barishnikov 2,470,241 2,470,241 ------------ ------------ 29,339,496 29,311,976 Less: accumulated amortization (5,779,401) (5,385,903) ------------ ------------ $ 23,560,095 $ 23,926,073 ============ ============ On March 2, 1998, the Company entered into an exclusive agreement to license the Alexandra de Markoff (AdM) rights to Cosmetic Essence, Inc. for an annual fee of $500,000. The initial term of the agreement is ten years, automatically renewable for additional ten and five year terms. The annual fee reduces to $100,000 after the third renewal. As part of the Agreement, the Company sold the inventory, promotional material and molds relating to AdM which resulted in a loss of approximately $923,000 which was reflected in the consolidated statement of operations for the year ended March 31, 1998. At closing, the purchaser provided as consideration, $202,000 in cash and a $4,000,000 non-interest bearing receivable due in periodic installments based on the purchaser's use of the inventory, with any remaining balance due on January 1, 2000. In accordance with generally accepted accounting principles and based on the Company's current borrowing cost of 9.25%, the note was reduced to a present value of $3,659,753. On June 9, 1998, the Company entered into an exclusive agreement to license the Bal A Versailles (BAV) rights to Genesis International Marketing Corporation for an annual licensing fee of $100,000 during the initial year of the agreement, increasing to $150,000 for subsequent years for the remainder of the initial term, and to $200,000 each year thereafter. The initial term of the agreement is for ten years, automatically renewable every five years. As part of the agreement, the Company sold the inventory, promotional materials and molds relating to BAV for its approximate book value. At closing, the purchaser provided as consideration, $200,000 in cash and a $500,000 non-interest bearing note due in quarterly installments of $83,333 through December 1999. At June 30, 1999 and March 31, 1999, $2,048,463 and $2,413,990, respectively, relating to the AdM and BAV receivables are included in other current assets. 12 D. Borrowings - Banks and Others The composition of borrowings is as follows: June 30, 1999 March 31, 1999 ------------- -------------- Revolving credit facility payable to General Electric Capital Corporation, interest at LIBOR plus 2.50% or prime (7.75% at June 30, 1999) plus .75%, at the Company's option, net of restricted cash of $1,293,196 and $3,658,593, at June 30 and March 31, 1999, respectively $ 10,258,852 $ 9,862,084 Note payable to Fred Hayman Beverly Hills (FHBH), collateralized by the acquired licensed trademarks, interest at 7.25%, payable in equal monthly installments of $69,863, including interest, through June 2004 3,481,629 3,626,360 Note payable to Lyon Credit Corporation, collateralized by certain equipment, interest at 11%, payable in equal monthly installments of $19,142, including interest, through September 2001 455,631 499,629 Capital lease payable to Bankers Leasing, collateralized by certain computer hardware and software, payable in quarterly installments of $36,378, including interest, through January 2002 365,636 395,325 Other notes payable 50,036 62,983 ------------ ------------ 14,611,784 14,446,381 Less: long-term borrowings (3,314,895) (3,561,313) ------------ ------------ Short-term borrowings $ 11,296,889 $ 10,885,068 ============ ============ In May 1997, the Company entered into a Loan and Security Agreement ( the Credit Agreement ) with General Electric Capital Corporation (GECC), pursuant to which the Company is able to borrow, on a revolving basis for a three-year period, depending on the availability of a borrowing base, up to $25,000,000 at an interest rate of LIBOR plus 2.50% or .75% in excess of the Wall Street Journal prime rate, at the Company's option. Proceeds from the Credit Agreement were used, in part, to repay the Company's previous $10,000,000 credit facility with Finova Capital Corporation and Merrill Lynch Financial Services, Inc. At June 30, 1999, based on the borrowing base at that date, the credit line amounted to approximately $17,971,000, and accordingly, the Company had approximately $7,712,000 available under the credit line. Substantially all of the domestic assets of the Company collateralize this borrowing. The Credit Agreement contains customary events of default and covenants which prohibit, among other things, incurring additional indebtedness in excess of a specified amount, paying dividends, creating liens, and engaging in mergers and acquisitions without the prior consent of GECC. The Credit Agreement also contains certain financial covenants relating to net worth, interest coverage and other financial ratios. As of March 31, 1999, the Company was not in compliance with financial covenants relating to "Earnings 13 Before Interest, Taxes, Depreciation and Amortization" (EBITDA), minimum fixed charge coverage ratio, maximum accounts receivable from related parties and employees, minimum unrelated customer net sales, as well as a restricted payment covenant concerning the amount of treasury stock which can be purchased by the Company. GECC has waived the violations of these debt covenants for the year ended March 31, 1999 and through June 30, 1999, and has amended the Credit Agreement to reflect changes in certain covenants going forward. Management believes that, based on current circumstances, the Company will be able to meet the revised covenants and funds from operations and the Credit Agreement will be sufficient to meet the Company's operating needs. E. Related Parties Transactions As of March 31, 1999, the Company had loaned a total of $390,000 to its Chairman/CEO, which is included in accounts receivable. The loans are unsecured, bear interest at 10% per annum, were renewed and are due in one balloon payment on December 31, 1999. Interest payments are current through June 30, 1999. During April 1999, the Company advanced an additional $230,000 to the Chairman under the same terms and conditions for the previous loans, except that the new advance is collateralized by 100,000 shares of the Company's common stock owned by the Chairman. The Company had net sales of $8,306,510 and $6,223,143 during the three-month periods ended June 30, 1999 and June 30, 1998, respectively, to Perfumania, Inc. (Perfumania), a company in which the Company's Chairman and Chief Executive Officer has an ownership interest and holds identical management positions. Net amounts due from Perfumania totaled $21,379,591 and $18,258,213 at June 30, 1999 and March 31, 1999, respectively. Amounts due from related parties are non-interest bearing and are realizable in less than one year. The report of Perfumania's independent certified public accountants that accompanied its audited financial statements as of January 30, 1999 and for the year then ended expressed substantial doubt about Perfumania's ability to continue as a going concern. Perfumania incurred net losses of approximately $18,900,000 for its fiscal year 1999 and $4,100,000 (unaudited) for its thirteen-week period ended May 1, 1999. Also, Perfumania had a working capital deficit of approximately $3,800,000 and $5,600,000 (unaudited) at January 30, 1999 and May 1, 1999, respectively. In addition, Perfumania was in violation of certain debt covenants contained in its bank line of credit agreement at both January 30, 1999 and May 1, 1999. The bank has subsequently waived these debt violations for a period of 90 days through September 30, 1999; however, there is no assurance that Perfumania will be in compliance with the debt covenants at the end of the waiver period. During the fiscal years ended March 31, 1999 and 1998, the Company sold a total of approximately $44.6 million to Perfumania, and received payments of approximately $49.1 million during the same two-year period. During the period from April 1, 1999 through June 30, 1999, the Company collected $5.2 million or approximately 30% of the total of its outstanding receivable at March 31, 1999, and sold an additional $8.3 million 14 in merchandise to Perfumania, leaving a trade receivable balance at June 30, 1999 of $21.4 million, in line with historical and anticipated seasonal payment patterns. The Company has developed a plan to reduce the balance due from Perfumania. Management's plan initially consists of converting $8 million into a short-term note receivable due the earlier of the completion of perfumania.com's proposed public offering in which Perfumania would generate sufficient funds to pay down the short term note, or May 31, 2000. Management anticipates that this short-term note receivable transaction will be consummated prior to August 31, 1999. In addition, on July 1, 1999, Perfumania and the Company's Board of Directors approved the transfer of 1,512,406 shares of Perfumania treasury stock to the Company in consideration for a partial reduction of the outstanding trade receivable balance in the amount of approximately $4.5 million. The transfer price was based on a per share price of $2.98, which approximates 90% of the closing price of Perfumania's common stock for the previous 20 business days. In connection with the transfer of the shares, the parties are currently negotiating a registration rights agreement whereby the Company would be able to demand registration of the shares with the Securities and Exchange Commission at any time after February 29, 2000. As indicated in various public press releases, Perfumania has reported both aggregate and comparative store sales increases for each of the months during the period February 1999 through July 1999. Based on the factors described above, management believes that the receivable from Perfumania is fully collectible. During the period of July 1, 1999 through August 10, 1999, the Company received additional cash payments of $2.7 million. F. Basic and Diluted Earnings Per Common Share The following is the reconciliation of the numerators and denominators of the basic and diluted net income per common share calculations:
Three Months Ended June 30, --------------------------- 1999 1998 ---- ---- Net income $ 678,424 $ 417,778 ============ =========== Weighted average number of shares outstanding used in basic earnings per share calculation 13,599,459 14,871,902 ============ =========== Basic net income per common share $ 0.05 $ 0.03 ============ =========== Weighted average number of shares outstanding used in basic earnings per share calculation 13,599,459 14,871,902 Affect of dilutive securities: Stock options and warrants, net of treasury shares acquired 68,860 187,819 ------------ ----------- Weighted average number of shares outstanding used in diluted earnings per share calculation 13,668,139 15,059,721 ============ =========== Diluted net income per common share $ 0.05 $ 0.03 ============ =========== Antidilutive securities not included in diluted earnings per share computation: Options and warrants to purchase common stock 2,565,570 288,478 ============ =========== Exercise Price $1.88-$8.00 $2.19-$8.11 ============ ===========
15 G. Cash Flow Information The Company considers temporary investments with an original maturity of three months or less to be cash equivalents. Supplemental disclosures of cash flow information are as follows: Three-months ended June 30, --------------------------- 1999 1998 ---- ---- Cash paid for: Interest $246,610 $ 503,695 Income taxes $ 20,823 $ 18,320 H. Income Taxes The provision for income taxes for the periods ended June 30, 1999 and 1998 reflects an effective tax rate of approximately 38%. I. License and Distribution Agreements As of June 30, 1999 and March 31, 1999, the Company held exclusive worldwide licenses to manufacture and sell fragrance and other related products under the trademarks for Perry Ellis, Baryshnikov, and Phantom. Under each of these arrangements, the Company must pay royalties at various dates and are subject to renewal. The Company believes that it is presently in compliance with all material obligations under the above agreements which require continuing obligations for advertising and royalty expense. As discussed above, the Company is required to pay royalties under the Perry Ellis ("Licensor") license agreement. The Licensor has asserted, through its legal counsel, that the Company is in default of the license agreement in that the sales of Perry Ellis brand products by an affiliate of the Company were not properly included in sales for the purposes of calculating royalties. For purposes of calculating such royalties, the Company has reported and paid royalties to the Licensor on sales of approximately $46 million from January 1, 1995 through June 30, 1999, based only on amounts invoiced to the affiliate. This matter is presently under investigation. Management believes that the effect of this matter will not have a material adverse effect on the Company's financial position or results of operations. * * * * * 16 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. PARLUX FRAGRANCES, INC. /s/ Ilia Lekach - ------------------------------------------------- Ilia Lekach, Chairman and Chief Executive Officer /s/ Frank A. Buttacavoli - ----------------------------------------- Frank A. Buttacavoli, Executive Vice President, Chief Financial Officer and Director Date: August 12, 1999 17 EX-4.25 2 SECOND MODIFICATION OF CREDIT AGREEMENT AND WAIVER EXHIBIT 4.25 SECOND MODIFICATION OF CREDIT AGREEMENT AND WAIVER THIS MODIFICATION is made as of this 14th day of July, 1999, by and among PARLUX, LTD., a New York corporation ("Borrower"), PARLUX FRAGRANCES, INC., a Delaware corporation ("Parent") and GENERAL ELECTRIC CAPITAL CORPORATION, a New York corporation as agent (the "Agent") and the lender signatory to this Modification (the "Lender"). Statement of Facts ------------------ Agent, Lender, Borrower and Parent are parties to that certain Credit Agreement, dated as of May 23, 1997, as modified and amended by that certain First Modification of Credit Agreement and Waiver dated as of July 9, 1998 (as may be further modified and amended from time to time, the "Credit Agreement"), pursuant to which Lender has agreed to make one or more loans from time to time to the Borrower in accordance with the terms and conditions thereof. Lender and Borrower desire to modify the Credit Agreement in certain respects in accordance with the terms and conditions set forth herein. NOW, THEREFORE, in consideration of the premises, the covenants and agreements contained herein, and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, Borrower, Parent, the Agent and Lender do hereby agree that all capitalized terms used herein shall have the meanings ascribed thereto in the Credit Agreement (except as otherwise expressly defined or limited herein) and do hereby further agree as follows: Statement of Terms ------------------ 1. Waiver. Each of the Agent and the Lender hereby waives any Default or Event of Default under the Credit Agreement which may have resulted from any failure on the Borrower's part to comply with the following covenants for the dates and time periods described below: (a) the Restricted Payment covenant set forth in Section 6.15 of the Credit Agreement during the Fiscal Months ending during the period from February 28, 1999 and March 31, 1999, through and including June 30, 1999; (b) the employee and officer loan covenant set forth in Section 6.2 (iii) of the Credit Agreement during the Fiscal Months ending August 31, 1998, September 30, 1998 October 31, 1998, November 30, 1998, December 31, 1998 and March 31, 1999, through and including June 30, 1999; (c) the minimum EBITDA covenant set forth in clause (a) of Schedule 6.11 to the Credit Agreement for each Fiscal Month ending September 30, 1998 through and including June 30, 1999, (d) the minimum Tangible Net Worth covenant set forth in clause (b) of Schedule 6.11 to the Credit Agreement for the fiscal Quarter ending June 30, 1999, (e) the minimum Fixed Charge Coverage Ratio covenant set forth in clause (c) of Schedule 6.11 to the Credit Agreement for the Fiscal Quarter ending June 30, 1999, (f) the minimum Current Ratio covenant set forth in clause (d) of Schedule 6.11 to the Credit Agreement for the Fiscal Quarter ending June 30, 1999, (g) the Maximum Perfumania Accounts covenant set forth in clause (e) of Schedule 6.11 to the Credit Agreement for each Fiscal Month ending during the period from August 31, 1998 through and including June 30, 1999, and (h) the Minimum Non-Perfumania/Non-Affiliates Sales covenant set forth in clause 1 (g) of Schedule 6.11 to the Credit Agreement for each Fiscal Month ending during the period from November 30, 1998 through and including June 30, 1999. The aforesaid waivers relate solely to the specific covenants, dates and time periods described above and nothing in this Section 1 is intended (or shall be construed) to constitute a waiver by the Agent or the Lender of any other Default or Event of Default which may now or hereafter exist under the Credit Agreement (including, without limitation, any future failure on Borrower's part to comply with Section 6.15, Section 6.02 or clauses (a), (b), (c), (d), (e) (g) of Schedule 6.11 to the Credit Agreement, as amended by this Modification). 2. Amendment of Credit Agreement. Subject to the fulfillment of the conditions precedent to the effectiveness of this Modification which are set forth below, the Credit Agreement shall be amended as follows: A. Clauses (a), (b), (c), (e), (f) and (g) of Schedule 6.11 to the Credit Agreement shall be deleted in their entireties and the following new clauses (a), (b), (c), (e), (f) and (g) shall be substituted in lieu thereof: (a) Minimum EBITDA. Parent's EBITDA for each Fiscal Month (measured in each case, based on the consecutive 12-month period ending at the end of such Fiscal Month), shall not be less than the amount set forth below: Period Minimum EBITDA ------ -------------- Fiscal Month ending July 31, 1999 $5,335,000 Fiscal Month ending August 31, 1999 5,290,000 Fiscal Month ending September 30, 1999 5,990,000 Fiscal Month ending October 31, 1999 6,940,000 Fiscal Month ending November 30, 1999 8,030,000 Fiscal Month ending December 31, 1999 6,695,000 Fiscal Month ending January 31, 2000 5,325,000 Fiscal Month ending February 29, 2000 5,690,000 Fiscal Month ending March 31, 2000 6,230,000 (b) Minimum Tangible Net Worth. Parent's Tangible Net Worth as of the end of each Fiscal Quarter ending on or after September 30, 1999 shall not be less than the amount shown below for such period: 2 Fiscal Quarter Ending Minimum Tangible Net Worth --------------------- -------------------------- September 30, 1999 $35,500,000 December 31, 1999 36,000,000 March 31, 2000 36,000,000 (c) Minimum Fixed Charge Coverage Ratio. Parent shall have, at the end of each Fiscal Month set forth below (measured in each case, based on the consecutive 12-month period ending at the end of such Fiscal Month), a Fixed Charge Coverage Ratio of not less than the ratio set forth below for each such Fiscal Month: Minimum Fixed Charge Period Coverage Ratio ------ -------------- Fiscal Month ending July 31, 1999 0.9: 1.0 Fiscal Month ending August 31, 1999 0.9: 1.0 Fiscal Month ending September 30, 1999 and thereafter 1.0: 1.0 (e) Maximum Perfumania Accounts. The aggregate outstanding balance of the Perfumania Accounts as of the end of each Fiscal Month set forth below shall not exceed the amount shown below for such Fiscal Month: Fiscal Month Ending Minimum Perfumania Accounts ------------------- --------------------------- July 31, 1999 $24,600,000 August 31, 1999 24,600,000 September 30, 1999 25,300,000 October 31, 1999 25,300,000 November 30, 1999 23,600,000 December 31, 1999 16,500,000 January 31, 2000 16,000,000 February 28, 2000 16,000,000 March 31, 2000 15,500,000 (f) Maximum Capital Expenditures. Parent shall not make Capital Expenditures, as determined on a consolidated basis, that exceed $1,100,000 in aggregate amount in each of the Fiscal Years ending on or after March 31, 2000. (g) Non-Perfumania/Non-Affiliate Sales. Borrower's sales of Inventory to Persons other than Perfumania and Affiliates of Borrower (measured 3 in each case, based on the consecutive 12-month period ending at the end of such Fiscal Month), shall not be less than the amount set forth below: Minimum Sales to Persons Other than Period Perfumania and Affiliates ------ ------------------------- Fiscal Month ending July 31, 1999 $26,150,000 Fiscal Month ending August 31, 1999 26,850,000 Fiscal Month ending September 30, 1999 26,500,000 Fiscal Month ending October 31, 1999 27,350,000 Fiscal Month ending November 30, 1999 28,650,000 Fiscal Month ending December 31, 1999 27,970,000 Fiscal Month ending January 31, 2000 27,375,000 Fiscal Month ending February 29, 2000 27,795,000 Fiscal Month ending March 31, 2000 28,265,000 3. No Other Amendment or Waiver. Except for the amendments and waivers expressly set forth and referred to in Section 1 and Section 2 above, the Credit Agreement shall remain unchanged and in full force and effect. Nothing in this Modification is intended, or shall be construed, to constitute a novation or an accord and satisfaction of any of the Borrower's or Guarantor's indebtedness or other indebtedness to the Agent or any Lender under or in connection with the Credit Agreement (collectively, the "Obligations") or to modify, affect or impair the perfection or continuity of Agent's security interests in, security titles to or other liens on any collateral for the Obligations. 4. Representations and Warranties. To induce the Agent and the Lender to enter into this Modification, each Credit Party does hereby warrant, represent and covenant to the Agent and the Lender that: (a) each representation or warranty of such Credit Party set forth in the Credit Agreement is hereby restated and reaffirmed as true and correct on and as of the date hereof as if such representation or warranty were made on and as of the date hereof (except to the extent that any such representation or warranty expressly relates to a prior specific date or period), and no Default or Event of Default has occurred and is continuing as of this date under the Credit Agreement as amended by this Modification; and (b) each Credit Party has the power and is duly authorized to enter into, deliver and perform this Modification and this Modification is the 4 legal, valid and binding obligation of such Credit Party enforceable against it in accordance with its terms. 5. Conditions Precedent to Effectiveness of this Modification. The effectiveness of this Modification and the amendment and waiver provided in Section 1 and Section 2 above are subject to (i) the truth and accuracy in all material respects of the representations and warranties of each Credit Party contained in Section 4 above, (ii) the Agent's and Lender's receipt of one or more counterparts of this Modification duly executed and delivered by the Credit Parties, and (iii) Borrower's payment of the fees and expenses set forth in the letter agreement dated as of June 26, 1998 between Borrower and Lender. 6. Counterparts. This Modification may be executed in multiple counterparts, each of which shall be deemed to be an original and all of which when taken together shall constitute one and the same instrument. 7. Lender Expenses. Without limiting its obligations under the Credit Agreement, the Borrower agrees to pay on demand all of the Agent's and the Lender's reasonable attorneys' fees and expenses and all other reasonable out-of-pocket costs incurred by the Agent and the Lender in connection with its evaluation, negotiation, documentation or consummation of this Modification and the transactions contemplated hereby or thereby. 8. GOVERNING LAW. THIS MODIFICATION SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE WITHOUT REGARD TO THE PRINCIPLES THEREOF REGARDING CONFLICT OF LAWS. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 5 IN WITNESS WHEREOF, the parties hereto have caused this Modification to be duly executed and delivered as of the day and year specified at the beginning hereof. BORROWER: (CORPORATE SEAL) PARLUX, LTD. By: /s/ Frank A. Buttacavoli ------------------------------------- Executive Vice President, CFO GUARANTOR: (CORPORATE SEAL) PARLUX FRAGRANCES, INC. By: /s/ Frank A. Buttacavoli ----------------------------------------- Executive Vice President, CFO LENDER: GENERAL ELECTRIC CAPITAL CORPORATION, in its capacity as Agent and a Lender By: /s/ Claire L. Moore ----------------------------------------- Senior VP, Manager Commercial Finance 6 EX-27 3 FDS --
5 3-MOS MAR-31-2000 APR-01-1999 JUN-30-1999 274,649 0 31,337,501 (2,538,488) 23,182,204 60,817,849 7,269,171 (5,234,859) 86,521,220 22,691,849 0 0 0 174,625 59,834,068 86,521,220 14,929,833 14,929,833 6,650,572 6,650,572 6,842,254 110,000 232,775 1,094,232 415,808 678,424 0 0 0 678,424 .05 .05
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