-----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, PVoQ6MX1SWSoXa4kOMX8AC/uHiRibHhxMCgP8B63gbs62EnqbRHPxNJiGIsJMwOp quw+IIZ22iY1FNwDSDxj7g== 0000889812-98-002675.txt : 19981116 0000889812-98-002675.hdr.sgml : 19981116 ACCESSION NUMBER: 0000889812-98-002675 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980930 FILED AS OF DATE: 19981113 FILER: COMPANY DATA: COMPANY CONFORMED NAME: JEAN PHILIPPE FRAGRANCES INC CENTRAL INDEX KEY: 0000822663 STANDARD INDUSTRIAL CLASSIFICATION: PERFUMES, COSMETICS & OTHER TOILET PREPARATIONS [2844] IRS NUMBER: 133275609 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-16469 FILM NUMBER: 98748640 BUSINESS ADDRESS: STREET 1: 551 FIFTH AVE STE 1500 CITY: NEW YORK STATE: NY ZIP: 10176 BUSINESS PHONE: 2129832640 MAIL ADDRESS: STREET 1: 551 FIFTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10176 10-Q 1 QUARTERLY REPORT UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (MARK ONE) /X/ Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended September 30, 1998. OR / / Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from___________to __________. Commission File No. 0-16469 JEAN PHILIPPE FRAGRANCES, INC. (Exact name of registrant as specified in its charter) Delaware 13-3275609 -------- ---------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 551 Fifth Avenue, New York, New York 10176 -------------------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) Registrants telephone number, including area code: (212) 983-2640. Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days: Yes X No --- --- Indicate the number of shares outstanding of each of the issuers classes of common stock, as of the latest practicable date. At November 9, 1998 there were 8,469,281 shares of common stock, par value $.001 per share, outstanding. JEAN PHILIPPE FRAGRANCES, INC. AND SUBSIDIARIES INDEX Page Number Part I. Financial Information Item 1. Financial Statements 1 Consolidated Balance Sheets as of September 30, 1998 (unaudited) and December 31, 1997 (audited) 2 Consolidated Statements of Income for the Three Month and Nine Month Periods Ended September 30, 1998 (unaudited) and September 30, 1997 (unaudited) 3 Consolidated Statements of Cash Flows for the Nine Month Periods Ended September 30, 1998 (unaudited) and September 30, 1997 (unaudited) 4 Notes to Unaudited Financial Statements 5 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 6 Part II. Other Information Item 4. Submission of Matters to a Vote of Security Holders 12 Item 6. Exhibits and Reports on Form 8-K 13 Signatures 13 JEAN PHILIPPE FRAGRANCES, INC. AND SUBSIDIARIES Part I. Financial Information Item 1. Financial Statements In the opinion of management, the accompanying unaudited consolidated condensed financial statements contain all adjustments (consisting only of normal recurring adjustments) necessary to present fairly the financial position of the Company and its results of operations and cash flows for the interim periods presented. Such financial statements have been condensed in accordance with the rules and regulations of the Securities and Exchange Commission and therefore, do not include all disclosures required by generally accepted accounting principles. These financial statements should be read in conjunction with the Company's audited financial statements for the year ended December 31, 1997 included in the Company's annual report filed on Form 10-K. The results of operations for the nine months ended September 30, 1998 are not necessarily indicative of the results to be expected for the entire fiscal year. Page 1 JEAN PHILIPPE FRAGRANCES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS ASSETS
September 30, December 31, 1998 1997 ------------ ------------ Current assets: Cash and cash equivalents $ 18,614,527 $ 18,721,525 Accounts receivable, net 32,076,038 26,255,311 Inventories 24,100,997 21,707,497 Receivables, other 884,288 622,416 Other 432,279 469,982 Deferred tax benefit 1,423,488 1,114,508 ------------ ------------ Total current assets 77,531,617 68,891,239 Equipment and leasehold improvements, net 2,848,394 2,122,465 Other assets 1,101,114 1,274,721 Intangible assets, net 7,877,601 7,993,992 ------------ ------------ $ 89,358,726 $ 80,282,417 ============ ============ LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Loans payable, banks $ 6,629,004 $ 3,063,393 Accounts payable 18,323,174 17,573,570 Income taxes payable 4,114,867 3,411,629 ------------ ------------ Total current liabilities 29,067,045 24,048,592 ------------ ------------ Long-term debt, less current portion 304,982 424,349 ------------ ------------ Minority interests 6,984,342 5,615,564 ------------ ------------ Shareholders' equity: Common stock, $.001 par; authorized 30,000,000 shares; outstanding 8,549,081 and 8,862,781 shares at September 30, 1998 and December 31, 1997, respectively 8,549 8,863 Additional paid-in capital 20,729,692 20,685,873 Retained earnings 46,182,055 42,729,807 Foreign currency translation adjustment (795,523) (2,368,609) Treasury stock, at cost, 2,296,903 and 1,975,703 shares at September 30, 1998 and December 31, 1997, respectively (13,122,416) (10,862,022) ------------ ------------ 53,002,357 50,193,912 ------------ ------------ $ 89,358,726 $ 80,282,417 ============ ============
See notes to financial statements. Page 2 JEAN PHILIPPE FRAGRANCES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended Nine Months Ended September 30, September 30, 1998 1997 1998 1997 ------------ ------------ ------------ ------------ Net sales $ 22,504,625 $ 24,464,337 $ 67,403,931 $ 67,280,600 Cost of sales 12,420,087 14,199,642 36,162,149 36,718,593 ------------ ------------ ------------ ------------ Gross margin 10,084,538 10,264,695 31,241,782 30,562,007 Selling, general and administrative 8,029,956 7,012,297 24,419,462 23,468,585 Loss on divestiture of license 1,300,000 ------------ ------------ ------------ ------------ Income from operations 2,054,582 3,252,398 6,822,320 5,793,422 ------------ ------------ ------------ ------------ Other charges (income): Interest 113,474 190,608 350,730 524,696 Loss on foreign currency 13,980 252,232 110,907 313,655 Interest and dividend (income) (157,100) (180,105) (583,263) (526,639) Loss on sale of stock of subsidiary, net 281 36,119 ------------ ------------ ------------ ------------ (29,365) 262,735 (85,507) 311,712 ------------ ------------ ------------ ------------ Income before income taxes 2,083,947 2,989,663 6,907,827 5,481,710 Income taxes 776,112 1,112,551 2,751,518 1,837,786 ------------ ------------ ------------ ------------ Net income before minority interest 1,307,835 1,877,112 4,156,309 3,643,924 Minority interest in net income of consolidated subsidiary 235,688 242,228 704,061 562,651 ------------ ------------ ------------ ------------ Net income $ 1,072,147 $ 1,634,884 $ 3,452,248 $ 3,081,273 ============ ============ ============ ============ Net income per common share: Basic $ 0.12 $ 0.18 $ 0.39 $ 0.33 Diluted $ 0.12 $ 0.18 $ 0.38 $ 0.33 ============ ============ ============ ============ Number of common shares outstanding: Basic 8,724,076 9,142,955 8,784,828 9,423,607 Diluted 8,946,954 9,283,661 9,040,959 9,478,117 ============ ============ ============ ============
See notes to financial statements. Page 3 JEAN PHILIPPE FRAGRANCES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine months ended September 30, 1998 1997 ------------ ------------ Operating activities: Net income $ 3,452,248 $ 3,081,273 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization 984,351 923,709 Loss on divestiture of license 854,728 Loss on sale of stock of subsidiary 36,119 Minority interest in net income 704,061 562,651 Increase (decrease) in cash from changes in: Accounts receivable (4,157,911) (6,093,310) Inventories (1,416,995) (578,320) Other assets 52,568 (181,689) Deferred tax benefit (244,005) 146,081 Accounts payable (339,640) 2,642,234 Income taxes payable 477,348 1,250,028 ------------ ------------ Net cash provided by (used in) operating activites (451,856) 2,607,385 ------------ ------------ Investing activities: Purchase of equipment and leasehold improvements (1,164,001) (619,827) Trademark and license acquisitions (22,788) (1,003,235) Proceeds from sale of equipment 50,000 ------------ ------------ Net cash (used in) investing activities (1,186,789) (1,573,062) ------------ ------------ Financing activities: Increase in loan payable, bank 3,167,976 1,774,573 Proceeds from sale of stock of subsidiary 58,589 Proceeds from exercise of options and warrants 43,827 Purchase of treasury stock (2,260,716) (4,224,321) ------------ ------------ Net cash provided by (used in) financing activities 1,009,676 (2,449,748) ------------ ------------ Effect of exchange rate changes on cash 521,971 (938,171) ------------ ------------ (Decrease) in cash and cash equivalents (106,998) (2,353,596) Cash and cash equivalents at beginning of period 18,721,525 20,205,391 ------------ ------------ Cash and cash equivalents at end of period $ 18,614,527 $ 17,851,795 ============ ============ Supplemental disclosure of cash flows information: Cash paid during the period for: Interest $ 360,000 $ 570,000 Income taxes 1,909,000 563,000
See notes to financial statements. Page 4 JEAN PHILIPPE FRAGRANCES, INC. AND SUBSIDIARIES Notes to Unaudited Financial Statements 1. Significant Accounting Policies: The accounting policies followed by the Company are set forth in the notes to the Company's financial statements included in its Form 10-K, which was filed with the Securities and Exchange Commission for the year ended December 31, 1997. 2. Earnings Per Share: The Company adopted SFAS No. 128 "Earnings Per Share" in the period ended December 31, 1997 and has retroactively applied the effects for all periods presented herein. Accordingly, the presentation of per share information includes calculations of basic and diluted income per share. The impact on the per share amounts previously reported was not significant. Basic earnings per share are computed using the weighted average number of shares outstanding during each period. Diluted earnings per share are computed using the weighted average number of shares outstanding during each period, plus the incremental shares outstanding assuming the exercise of dilutive stock options. 3. Inventories: Inventories consist of the following: September 30, December 31, 1998 1997 ----------- ----------- Raw materials and component parts $ 9,500,475 $10,566,904 Finished goods 14,600,522 11,140,593 ----------- ----------- $24,100,997 $21,707,497 =========== =========== Page 5 JEAN PHILIPPE FRAGRANCES, INC. AND SUBSIDIARIES Item 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Jean Philippe Fragrances, Inc. together with its French subsidiary, Groupe Inter Parfums, are manufacturers and distributors of fragrances, cosmetics and personal care products. The Company's dedication to innovation and diversity, and its commitment to creating quality products are the catalysts behind new product introductions and product line expansion. The Company, produces and distributes, world wide, a variety of fragrance, personal care and cosmetic products including: * Alternative Designer Fragrances and personal care products. * International moderately priced fragrances. * Brand name and licensed fragrances. * Mass market cosmetics. The Company's business strategy of building core volume and profitability, developing products in new categories, exploring strategic acquisition opportunities, and pursuing expansion in international markets remains as management's primary long-term focus. The Company is determined to remain a diversified fragrance and personal care products company. Growth opportunities exist in each of the Company's product lines and management's goal is to develop them to achieve competitive superiority and, thereby maximize shareholder value. Three and Nine Months Ended September 30, 1998 Compared to the Three and Nine Months Ended September 30, 1997 Net sales for the three months ended September 30, 1998 was $22.5 million, as compared to $24.5 million for the corresponding period of the prior year. Net sales for the nine months ended September 30, 1998 was $67.4 million, as compared to $67.3 million for the corresponding period of the prior year. On April 30, 1997, the Company divested its Cutex nail and lip products license and net sales for the nine months ended September 30, 1997 includes $3.3 million of Cutex product sales. Page 6 JEAN PHILIPPE FRAGRANCES, INC. AND SUBSIDIARIES Excluding the effect of Cutex product sales, net sales generated by the Company's domestic operations decreased 33% for the three months ended September 30, 1998 and 14% for the nine months ended September 30, 1998, as compared to the corresponding periods of the prior year. The primary factor contributing to this decline is a result of the economic turmoil in Russia. For the three months ended September 30, 1998, the Company had no net sales from Russian Territories, as compared to net sales of approximately $3.5 million for the three months ended September 30, 1997. Excluding such sales the decline was only 3% for the three months ended September 30, 1998. Further, no assurances can be given that the economic turmoil will abate in the foreseeable future, and thus management is uncertain as to whether the Russian market will again become viable in the near future. However, the Company does not have any material exposure with respect to accounts receivable from its Russian Territory customers. In addition, the overall market for Alternative Designer Fragrances has become extremely competitive, very price sensitive and customers are reducing their overall inventory levels. This trend is expected to continue into the fourth quarter of 1998 and is affecting the entire industry. In an attempt to combat the negative impact of this industry-wide trend, the Company is in the process of developing a line of moderately priced fragrances which are not Alternative Designer Fragrances. Utilizing prestige and upscale concepts in bottle design and packaging, the Company is creating a line of unique and high quality fragrances to be sold domestically and internationally, in existing and new distribution channels, at mass market prices. Although management of the Company believes that this new concept of moderately priced fragrances will not affect its other core fragrance businesses, no assurances can be given the new line will be successful. The Company expects to launch its new line in December 1998. A third factor contributing to the sales decline was the inability of Jean Philippe do Brasil, Ltda., a wholly-owned limited liability company ("Jean Philippe Brasil"), to effectively penetrate the Brazilian marketplace. As previously reported, sales generated by the Company's Brazilian subsidiary, Jean Philippe Brasil, were $2.0 million in 1997 as compared to $3.0 million in 1996, and this trend has continued for the nine months ended September 30, 1998, with net sales decreasing to $0.6 million from $1.0 million for the nine months ended September 30, 1997. Management believes such decline reflected the Brazilian consumers' fear of a possible currency devaluation brought on by the Asian crisis. In addition, as previously reported, Jean Philippe Brasil underwent an organizational change during 1997, whereby it terminated its contract with its exclusive sales representative. However, Jean Philippe Brasil was not able to effectively penetrate the Brazilian marketplace as a direct seller. Page 7 JEAN PHILIPPE FRAGRANCES, INC. AND SUBSIDIARIES In view of the less than optimistic Brazilian consumer confidence level, heavily regulated Brazilian environment, and the inability, to date, to increase sales in Brazil to an acceptable level, the Company has determined it is in its best interest to close its Jean Philippe Brasil subsidiary. Such closing is not expected to have a material adverse effect on the Company's results from operations. In addition, the Company has entered into a distribution agreement with a well known Brazilian fragrance distributor and such agreement included the purchase of all existing inventory. Sales generated by the Company's French subsidiary, Groupe Inter Parfums, continued to post strong sales growth with an increase of 14% for the three months ended September 30, 1998 and 20% for the nine months ended September 30, 1998, as compared to the corresponding periods of the prior year. At comparable foreign currency exchange rates, sales by Groupe Inter Parfums increased 11% and 24% for the three and nine month periods ended September 30, 1998, respectively. Such increase is primarily the result of expanded distribution of the Burberrys fragrance line as well Groupe Inter Parfums introduction of "I Love You" by Molyneux. Sales growth by Groupe Inter Parfums is expected to continue at the rate of approximately 12% to 15% in the fourth quarter as they continue the launch of their new S.T. Dupont fragrance line during the fourth quarter of 1998. Gross profit margins increased to 45% and 46% of net sales for the three and nine month periods ended September 30, 1998, respectively, as compared to 42% and 45% for the three and nine month periods ended September 30, 1997, respectively. The Company's program of "Product Value Analysis" has allowed the Company to better its original target of a 44% to 45% gross profit margin. These cost saving techniques are also utilized in all new product introductions. In addition, the nine month period ended September 30, 1997 includes approximately $3.3 million of net sales of higher margin Cutex brand products. Selling, general and administrative expenses were $8.0 million for the three months ended September 30, 1998, as compared to $7.0 million for the corresponding period of the prior year and aggregated 36% and 29% of net sales for the three and nine month periods, respectively. Selling, general and administrative expenses were $24.4 million or 36% of net sales for the nine months ended September 30, 1998, as compared to $23.5 million or 35% of net sales for the corresponding period of the prior year. In support of the tremendous success of the Burberrys fragrance line, Groupe Inter Parfums continues to spend heavily on advertising and media. For the three and nine month periods ended September 30, 1998, such expenditures aggregated $1.0 million and $2.8 million, respectively. Page 8 JEAN PHILIPPE FRAGRANCES, INC. AND SUBSIDIARIES In connection with the April 30, 1997 restructuring of the Company's domestic operations, which coincided with the divestiture of the Company's Cutex license, the Company reduced its domestic work force by approximately 20%. As a result of both the work force reduction and the divestiture of the Cutex license, domestic selling, general and administrative expenses declined to $8.7 million for the nine months ended September 30, 1998 as compared to $10.3 million for the corresponding period of the prior year. However, as a result of the decline in domestic net sales, discussed above, such expenses increased as a percentage of net sales to 36% in 1998, as compared to 33% in 1997. In the first quarter of 1997, the Company took a pre-tax charge against earnings of $1.3 million to write-off intangible assets and other expenses relating to the divestiture of the Cutex license. Management is confident that such charge is sufficient to cover all potential obligations relating to the Cutex business. Interest expense declined to $0.1 million and $0.4 million for the three and nine month periods ended September 30, 1998, respectively, as compared to $0.2 million and $0.5 million for the three and nine month periods ended September 30, 1997. The Company uses its available credit lines, as needed, to finance its working capital needs. The Company's effective income tax rate was 37% and 40% for the three and nine month periods ended September 30, 1998, respectively, as compared to 37% and 34% for the corresponding periods of the prior year. The effective tax rate for the three months ended September 30, 1998 reflects the tax benefit to be realized as a result of the Company's decision to close its Brazilian subsidiary. The 1997 periods benefitted from reductions of valuation reserves on deferred tax assets relating to the utilization of net operating loss carry forwards. No such benefit was available for the 1998 periods. In addition, corporate income tax rates in France have increased from 36% to approximately 43% over the last two years. Net income was to $1.1 million or $0.12 per diluted share for the three months ended September 30, 1998, as compared to $1.6 million or $0.18 per diluted share for the corresponding period of the prior year. Net income was $3.5 million or $0.38 per diluted share for the nine months ended September 30, 1998, as compared to $3.1 million or $0.33 per diluted share for the corresponding period of the prior year. Results for the nine months ended September 30, 1997 include a nonrecurring charge of $800,000, on an after tax basis, relating to the divestiture of the Cutex license. Excluding the nonrecurring charge, net income was $3.9 million or $0.41 per diluted share for the nine months ended September 30, 1997. Page 9 JEAN PHILIPPE FRAGRANCES, INC. AND SUBSIDIARIES The weighted average shares outstanding were 8.7 million and 8.8 million for the three and nine month periods ended September 30, 1998, as compared to 9.1 million and 9.4 million for the three and nine month periods ended September 30, 1997, respectively. On a diluted basis, average shares outstanding were 8.9 million and 9.0 million for the three and nine month periods ended September 30, 1998, respectively, as compared to 9.3 million and 9.5 million for the corresponding periods of the prior year. Such decline is the result of the Company's ongoing stock repurchase program. Liquidity and Capital Resources As a result of continued profitable operating results, the Company's financial position remains very strong. At September 30, 1998, working capital aggregated $48 million and the Company had cash and cash equivalents on hand of $19 million. Net book value aggregated $6.20 per outstanding share as of September 30, 1998. The 1995 initial public offering in France of approximately 21% of the common stock of the Groupe Inter Parfums, has proven to be extremely successful. In addition to the strength such stock sale provided to the financial position of Groupe Inter Parfums, the proceeds of the offering have enabled Groupe Inter Parfums to control its growth and invest for the future without incurring any significant increase in debt. Long-term debt of Groupe Inter Parfums stood at $0.3 million as of September 30, 1998. As a result of continued growth in both sales and earnings of Groupe Inter Parfums, in January 1998, the Company exercised its rights to convert the remaining portion of its convertible debt, approximately $4.4 million, into 318,326 additional shares of Groupe Inter Parfums bringing the total shares outstanding to 2,209,000. The conversion price was approximately $14 per share while Groupe Inter Parfums stock is presently trading at approximately $30 per share. The effect of this conversion increases the Company's ownership percentage from 76.4% to 79.3%. Page 10 JEAN PHILIPPE FRAGRANCES, INC. AND SUBSIDIARIES The Board of Directors authorized the repurchase of an additional 500,000 shares of the Company's common stock, bringing the total shares authorized to be repurchased under the current repurchase program to 2.5 million shares. Shares of Jean Philippe Fragrances are presently trading at approximately $5.50 per share, which is below the net asset value per share of $6.20. In addition, the Company's investment in its publically traded French subsidiary, Groupe Inter Parfums, has a market value which alone represents approximately $6.15 per share. During the nine month period ended September 30, 1998, the Company continued repurchasing its common stock pursuant to the authorized repurchase plan and as of September 30, 1998, 1,810,705 shares of common stock have been purchased at an average price per share of $7.25. The Company's short-term financing requirements are expected to be met by available cash at September 30, 1998, cash generated by operations and short-term credit lines provided by domestic and foreign banks. The principal credit facilities for 1998 are a $12.0 million unsecured revolving line of credit provided by a domestic commercial bank and $12.0 million in credit lines provided by a consortium of international financial institutions. A buildup of inventory in preparation of fourth quarter new product introductions along with an increase in accounts receivable, resulting from extended payment terms to certain customers, required a use of cash from operating activities for the nine months ended September 30, 1998. Management of the Company believes that funds generated from operations, supplemented by its available credit facilities, will provide it with sufficient resources to meet all present and reasonably foreseeable future operating needs. The Company has substantially completed all projects to address "Year 2000" compliance with respect to its internal information systems. As such, management believes that "Year 2000" transition will not have a material adverse effect on future results. Inflation rates in the U.S. and foreign countries in which the Company operates have not had a significant impact on operating results for the nine months ended September 30, 1998. Page 11 JEAN PHILIPPE FRAGRANCES, INC. AND SUBSIDIARIES Part II. Other Information Items 1, 2, 3 and 5 are omitted as they are either not applicable or have been included in Part I. Item 4. Submission of Matters to a Vote of Security Holders (a) The Annual Meeting of Stockholders (the "Meeting") of Jean Philippe Fragrances, Inc. (the "Corporation") was held on July 10 at 10:00 a.m., local time, at the offices of the Corporation, 551 Fifth Avenue, New York, New York 10176. (b) The following individuals were nominated for election as members of the Board of Directors to hold office for a term of one (1) year until the next annual meeting of stockholders and until their successors are elected and qualify: Jean Madar, Philippe Benacin, Russell Greenberg, Francois Heilbronn, Joseph A. Caccamo, Jean Levy and Robert Bensoussan-Torres. The results of the voting were as follows: 8,172,744 votes for Jean Madar, 12,620 withheld; 8,182,984 votes for Philippe Benacin, 12,380 withheld; 8,183,984 votes for Russell Greenberg, 11,380 withheld; 8,183,984 votes for Francois Heilbronn, 11,380 withheld; 8,183,984 votes for Joseph A. Caccamo, 11,380 withheld; 8,183,984 votes for Jean Levy, 11,380 withheld; and 8,183,984 votes for Robert Bensoussan-Torres, 11,380 withheld. A plurality of the votes having been cast in favor of each of the above-named Directors, they were duly elected to serve a one (1) year term. (c) (i) The second item of business was the resolution to adopt the 1998 Stock Option Plan. The results of the voting were as follows: 6,739,242 votes for the resolution, 1,046,882 votes against and 409,240 votes abstained. A majority of the outstanding shares were cast for resolution no. 2, and the resolution was duly passed. Page 12 JEAN PHILIPPE FRAGRANCES, INC. AND SUBSIDIARIES (c) (ii) The final item of business was the proposal to ratify the appointment of Richard A. Eisner & Company LLP, the independent certified public accountants of the Corporation, for the current fiscal year. The results of the voting were as follows: 8,183,147 votes for the resolution, 2,330 votes against and 9,887 votes abstained. A majority of the votes cast at the meeting have voted for the resolution, and the resolution was duly passed. Item 6. Exhibits and Reports on Form 8-K (b) A Current Report on Form 8-K, date of report, October 6, 1998, was filed, reporting items Item 5 and Item 7. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized on the 12th day of November 1998. JEAN PHILIPPE FRAGRANCES, INC. By: /s/ Russell Greenberg --------------------------------- Russell Greenberg, Executive Vice President and Chief Financial Officer Page 13 EX-27 2 FINANCIAL DATA SCHEDULE
5 1 9-MOS DEC-31-1998 JAN-01-1998 SEP-30-1998 18,614,527 0 32,076,038 0 24,100,997 77,531,617 0 0 89,358,726 29,067,045 0 0 0 7,615,825 45,386,532 89,358,726 67,403,931 67,403,931 36,162,149 60,581,611 0 85,507 350,730 6,907,827 2,751,518 4,156,309 0 704,061 0 3,452,248 0.39 0.38
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