Welcome to Inter Parfum fourth quarter 2007 conference call. (Operator Instructions) I will now turn the conference over to Russell Greenberg, Executive Vice President and Chief Financial Officer.

Welcome to our 2007 fourth quarter and year-end conference call. If you have not received a copy of the press release we issued yesterday afternoon, please contact Linda Latman at the Equity Group, 212-836-9609, and she will either fax or e-mail a copy to you. Before proceeding further, I want to remind listeners that this conference call may contain forward-looking statements, which involve known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from projected results. These factors include, but are not limited to the risks and uncertainties discussed under the headings, forward-looking statements and risk factors in Inter Parfum’s annual report on Form 10-K for the fiscal year ended December 31, 2007, 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 discussed. When we referred to our European based operation, we were primarily talking about sales of prestige brand names fragrances, which are conducted out of France. When we discussed our United States operations, we are referring to sales of specialty retail and mass market products. Moving on to our fourth quarter financial results, as we reported yesterday, net sales rose to a record of $119.4 million, up 32% from $90.2 million in the same period last year. At comparable foreign currency exchange rates, net sales were 24% ahead of last year’s fourth quarter. Fourth quarter sales by our European-based operations rose 37% to $96.6 million while US-based operation sales increased by 15% to $22.8 million for the quarter. To repeat a point raised on our last two conference calls, our business has become far more seasonal due to the operation of our four majority-owned distribution subsidiaries and our entry into…

I am thanking for your participation on today’s conference call on both sides of Atlantic. We can point to some very significant accomplishments in 2007. In Europe, the acquisition of the long run trademarks, the establishment of distribution subsidiaries, the addition of Van Cleef & Arpels license, and product launches under S. T. Dupont, Paul Smith and Roxy were just some of the highlights of 2007. In the U.S., the launch and rollout of Gap fragrance, personal care, men’s grooming, and home fragrance products was by far the most ambitious endeavor since we entered the specialty retail business. We also entered into the popular price arena with our New York & Company agreements in April 2007, and we launched the City Beauty Collection in time for holiday 2007 sale. A few weeks after our last conference call, the Brooks Brothers agreement was signed under which we are designing, manufacturing, and supplying personal care products for men and women be sold at Brooks Brothers location in the US. In addition, such agreement also going to slice something like covering Brooks Brothers stores and special department store outside the U.S., and duty free and other travel related retailers. We are extremely honored by getting this association with Brooks Brothers, an American icon since 1818 an enduring name that has shaped the American style of dress for fashion innovation, fine quality, and personal service. Joining upon the Brooks Brother heritage we are developing [inaudible] and personal care products and collections for men and women. The first new products, the men and women fragrances, are tentatively scheduled for launch in November 2008 at 200 Brooks Brothers retail locations in the U.S. Plans are for international distribution to begin in 2009. As we have reported, the most ambitious launch scheduling the victory of our company…

(Operator Instructions) Your first question will be from the line of Joe Altobello - Oppenheimer & Co. Joe Altobello Oppenheimer & Co.: I want to just drill down to sort what happened in ’07 to make you much more optimistic for ’08. How much was it you were too conservative on the consumer heading into the holiday season and how much was the very strong initial sales you are seeing in the Beat in early ’08?

Well, I don’t really like to comment as to whether we were conservative in 2007. The reality is as we stated in the press release and in my remarks that going into the fourth quarter, we were hearing the same stories with respect to the market with which we operate. People not looking for a very successful holiday season so we were very cautious in entering that quarter and there were certain programs that we kind of trimmed out a little bit. And this is one of the reasons that we exceeded our own guidance so handsomely at the end of 2007 but as we approached the fourth quarter and as we saw the final results in the fourth quarter, we also saw the impact that the new seasonality has with respect to our distribution joint ventures. And going into the early part of 2008 when we began to launch the Beat for Burberry, a launch that because Burberry is such a large percentage of our overall business it still represents around 52%, 53%, 54%. A launch of that magnitude has a huge impact on our expectations for full year results and so far from what we’ve seen for the first two months and as Jean mentioned with respect to successes at certain retail locations, we are very optimistic and as a result that’s what led us to increase our guidance for 2008.

Moving on to 2008, as we sort of build the model here I am just, there are a number puts and takes, just want to make sure I've got them down. It seems that the gross margin expansion you saw this year obviously will not repeat, but I would think you would expect to see gross margins up in 2008. And as for SG&A I would imagine you are going to start to see some type of leverage this year, where SG&A sales may be flat even slightly down in 2008?

Well I'm not going to comment with respect to individual components. I understand your rationale with respect to gross margin and I can agree with that. But the impact that our distribution subsidiaries had certainly will anniversary itself so you are not going to see a big shot in the arm with respect to that. What’s going to drive changes in gross margin is going to be changes in product mix. That’s product mix within the different product lines in Paris and product lines mixed here in the United States and even different growth rates between US operations and Parisian operations. Now when you get down to selling expenses our guidance is not looking for a huge amount of leverage, its not even looking for any leverage on our growth in sales. There are a lot of different factors that are incorporated in that. And many of them, we discuss that at length when we announce our guidance for 2008, because even when our initial guidance did not have leverage in the operating margins of the company. And there is a multitude of different factors that play in there on both sides of the Atlantic.

The tax rate in the fourth quarter, it was much higher than we had anticipated. And it would seem kind of odd, given that a lot of the income came from oversees which tends to have a lower tax rate. What was the reason for the taxes being so high?

We have a couple of things but I am not sure if there was anything that was in fact unusual given that it was around 38%. There is a small amount that is related to Nickel with respect to the deferred tax assets and valuation reserves that we put under deferred tax assets. I believe that is, I talked a little bit about it, in the actual 10-K. Other than that, it’s how things are flowing through from all the different subsidiaries and gains and losses that occur in each of the different jurisdictions with which we now operate that can create unusual fluctuations in our overall tax rate. I can’t dissect it much more and honestly I didn’t look that closely at it because overall for the year it came in pretty close to what we would have anticipated.

Your next question will be from the line of Nelly Tamminga - Piper Jeffrey & Co. Nelly Tamminga - Piper Jeffrey & Co.: On the retails ops business I guess kind of an overall heading. Remind me again that you don’t actually pick up the tab on the marketing span. I think that is done by the retailer. In that context in some of the conversations that we have been having with these people seems to me that they are reining in their budgets with respect to marketing span that it varies for the CapEx spending. Do you think that potentially could have an impact on your retail business or are you just finding out that you are a year and a half into it or so that there is really no correlation that the business kind of just stands on it’s own with it’s own [inaudible] store?

Specifically, where we are selling in to specialty retail stores because we don’t really have retail operations for say. You are correct that the marketing span with respect to that part of the business is solely the responsibility of the retailer whether that be New York, Brooks Brothers, the Gap, Banana Republic, etc. They do and clearly you are right they have been reigning in certain promotion, certain advertising. But most of this business is really driven by promotion, in store types of promotions to move product growth. And we work with then to create programs that they can use within their stores, whether it’s a “buy one, get one” or things to drive sales within the store. So far, other than the initial launch of the Banana Republic where we saw some media advertising, the amount of advertising has been minimal and that’s probably as you say, it could be because they are reining in their budget. So we are driving the business without a tremendous amount of spend on media so if in fact in future this changes and our budgets opens up then we can actually see even with greater potential with respect to the sales net. Nelly Tamminga - Piper Jeffrey & Co.: In the terms of Brooks Brothers, if you could you just give me a sense of how many doors of distribution is that launch and kind of the relevant number of SKU’s. And is this a brand then that you can take and launch wholesale internationally given its international appeal as a brand, just give me some sense there.

Brook’s Brothers will start at the end of the year, we will try to be ready for Christmas and we will launch it in 200 domestic doors. And the concept is to stay on need in that doors in same way that in the US we have stayed in the doors of Banana Republic or Gap. In 2009 when we start the rollout internationally we will sell upside of them. Even with the ups in Brook’s Brothers doors in Europe, in Japan at around 200 doors. We will be able to be in many doors, as you said going wholesale selling to consumer reality stores in Europe and in Far East. Also I think that we could have some good business with duty free airline, as Brooks Brothers is very iconic of America. We have already identified good demand for listing Brooks Brothers in duty free. Brooks Brothers is a brand so Brooks Brothers doesn’t need a retail chain. It’s a brand and that’s why it has good reason to be in the personal care. The development will be very similar to the Banana Republic development, where Banana Republic is not only a chain of store it’s a life style brand. Nelly Tamminga - Piper Jeffrey & Co.: In terms of the brand obviously they offer both man’s and woman’s but it is, to your point, iconic ally more of a men’s brand versus a woman’s brand. So would you expect relatively to Banana Republic launch that it would be about half the SKU’s on the launch, again focusing more on the man’s scents versus female scents?

We expect to generate 70% of our volume of man’s products and 30% with woman’s products. Nelly Tamminga - Piper Jeffrey & Co.: And the price band will be comparable to than Banana Republic, is that what I am hearing right?

No, the price band will be much higher than Banana. Much higher, price band will be very similar to department stores or designer fragrances which mean the 3.3 oz will retail around $70 to $90. We will have high end of the spectrum. Nelly Tamminga - Piper Jeffrey & Co.: The tax rate, I am not sure we got that full answer so I don’t it was given. So what should we be expecting to use for the tax rate?

I think that the annual tax rate is more reflective of what can be expected which is around 35%.

Your next question will be from the line of Kurt Frederick - Wedbush Morgan Securities.

On the marketing behind the launches this year one or two queries, are we going to have big increase or will you just do that on the timing of the launches?

The reality is although we are launching Burberry, the Beat in the first quarter of 2008 a lot of the marketing spending actually comes later on during the year. There are some obligations that we have with respect to contractual obligations with Burberry. And with spending and the timing with which those obligations are actually required is different then when we were actually selling the product in to our distributors which are going to cause some distortion. And what I mean by that is that as we enter the first quarter we are going to have a lot shipment that go into our distributors. But the marketing requirement for Burberry is when our distributors sell the product to the retailer. So as we approach the first quarter we are going to probably see that we are spending less in marketing because there is not a lot do marketing expenditure that you do in January, February and March. And the fact our sales are going to be relatively high because we are selling into our distributors and the requirement of the marketing doesn’t really hit until the second quarter when our distributors will move the product in to the retailers. So it is going to cause some unusual fluctuations in our marketing span. And this is one of the real first times that we have a major launch of a Burberry fragrance because I'm only talking Burberry here. This is the only one of our licenses that is written like this and because Burberry is such a significant asset to the company and such a significant product line, this is going to cause some interesting modeling as we enter the first and second quarter. Other launches with other brands are very different because all of our licenses with wholesalers of Burberry require a minimum spend based upon our sales. In Burberry it is a little bit different. It is not based on our sales. It is based on our distributor sales so you have a different timing period of when this can come about. I'm going to be able to go into much more detail at the end of the first quarter, and I’ll probably try to put some impact it could have even going in to the second quarter. But that really is kind of the irony of what’s going on with respect to that particular license.

I would like to add, we are talking about the Beat and I mentioned some earlier readings from the department store. I would like to say that we didn’t ship any of the Beat in 2007 so our numbers of 2007 do not include any sales of Burberry, the Beat. We started to ship the Beat to distributors very early January, the first day of the year and so we have seen the last two months huge amounts of products going out to our distributors. Some distributors started to put it in the market. In the case of the US, where Procter & Gamble is our distributor and they started the sale, we’ve seen already some strong reorders from the retailers, from the stores. So it means the selling was strong, the sell through was strong. We had an aggressive plan with Nordstrom and with Bloomingdales, the rollout is going to continue during the second quarter but we’d like to compare with other launches that we have done for Burberry. Thus far the Beat exceeds what we had seen for [inaudible] which was our latest launch before, just to give you a feel of the market.

On the four Europeans subs, I'm just kind of wondering how they are performing versus expectations and then is what you are seeing in that time maybe like more willing to kind of look at additional markets to do that.

We started on a slow pace with our subsidiaries in UK, in Italy, in Spain, and in Germany. The reason that we decided to go into the subsidiary was we need to have a better control of our marketing in these European countries which represent a very important part of our business. So in partnership with our former distributors we formed these subsidiaries. They are now generating profits from operation during the first year. We are not expecting to have losses or profits from these subsidiaries but what is important is that it will, we’ve seen already a strong positive impact in terms of space allotted in the store especially in Germany. We have seen already that our presence, for instance in Italy has been better this year in 2007 versus 2006 so it is difficult to quantify with numbers but from a positioning and from marketing point of view I think that we will see benefit especially with a launch like the Beat.

And the next question will be from the line of Mimi Noel - Sidoti & Co. Mimi Noel - Sidoti & Co. : Rusty said earlier that you are looking for margin compressions on both sides of the Atlantic and I just want to make sure I'm looking at that properly. In Europe based on the perspective of currency and translation there and domestically the infrastructure built to accommodate the specialty business, is that accurate?

Yes. To a great extent and that’s pretty much what we said when we announced our initial guidance for 2008. Clearly to a smaller side that is here in the United States because of certain inability to leverage. We didn’t have all the expenses in for this business throughout the entire year of ’07. From the European side part of it is from currency translation but the other side of it is that there are certain items of expense that are not part of the actual operations in Paris. In other words, in our subsidiary released guidance, it indicated a stability in margins. And the reality is once there are certain inter-corporate allocations, number one. And there are certain consolidating issues with respect to the minority interest that creates additional expenses in the consolidated environment of the financials so that also contributes a little bit to the de-leveraging if you will of our guidance of 2008. Mimi Noel - Sidoti & Co. : With the SG&A line up, I'm looking at this year versus last year and in the 10-K you gave the expenses for royalty and advertising promotional expenditure which I think you also gave on the call. And if I compare the balance of the expense this year versus last year, it looks like roughly $56 million versus $87 million or there about? That increases, if my math is correct, is that primarily due to accommodate specialty retail? Is that for the distribution subsidiaries in Europe? Can you give me an idea for what accounts for the majority of the increase?

Well, basically you have small increases on the royalty and on the marketing but, yes; a major portion of the increase of the overall expense is absolutely the result of the selling expenses of the distribution subsidiary. Jean mentioned just a couple of minutes ago that, yes, we gain in the gross margin because we are selling the product at a wholesale price instead of ex-factory price but these distribution subsidiaries in 2007 were not profitable. In the future we expect a breakeven maybe a little bit of a profitability but all that benefit that you get in the gross margin is coming back out in the standpoint of an SG&A expense. Mimi Noel - Sidoti & Co. : Also there is a $12 million fee outlined in the 10-K, that was in the P&O is that recurring or nonrecurring for the distribution JVs?

No, I'm not sure what you are implying. Mimi Noel - Sidoti & Co. : I’ll go back and have a second look, perhaps it is my mistake. You mentioned trimming programs for the end of the year in 2007, can you tell me what kind of programs were trimmed and does it maybe cause you to rethink what kind of brand product launch support you might need in the future?

No, the type of programs that were just held back was mostly in the cost of sales area and the point of purchase material and things like that. Because when you look at the overall marketing, the marketing spend is a percentage of sales on the promotion line was very consistent in 2006 versus 2007. What all we were basically saying is that we took a conservative approach as we entered into the fourth quarter as we were hearing the same muses that you were with respect to the economic environment.

Your next question will be from the line of Mark [Detalon] - Cin Capital. Mark [Detalon] - Cin Capital: Russ, we have been through this conversation six months ago on the net debts. Could you expand again on the amounts of dividends that the US company is entitled to which has not been distributed by the French company, on the French level.

As look at the cash flow statements, there is actually a line item in our financing activities that states what the dividends were that were paid to minority interests. Because the dividends that are paid to Inter Parfums Holding, which is owned 100%, who owns the shares of IPSA that money is paid by the operating subsidiary by Inter Parfums SA to Inter Parfums Holdings, which is a 100% owned by Inter Parfum, Inc. That money up until recently was loaned back to Inter Parfums SA and they would pay interest at a fair market interest rate on it. But what we did more recently is the shares that we purchased of Inter Parfums SA we used funds that were held by Inter Parfums Holding to buy those shares. That’s where they came from.

And today I think that now we own 75% of our.

That’s correct. Mark [Detalon] - Cin Capital: What about 4.5?

We went from 71% to 75% on ownership of our French subsidiary and we used. Mark [Detalon] - Cin Capital: You may be going too fast for me here, basically what you are saying is, the money and I had that money as payable as €11.9 million on the back half of 2007.

That’s correct, €12 million, something like that. Mark [Detalon] - Cin Capital: The money acquired the buyer the additional 4% in IPSA.

That’s absolutely right. IPSA recently declared a dividend to shareholders for 2008 based upon its profitability of 2007, that money was already used, and we bought additional shares in February in anticipation of receiving that dividend. Mark [Detalon] - Cin Capital: Right so the 75% that you were alluding to today includes the Feb. ’08 acquisition of shares?

That’s correct. Mark [Detalon] - Cin Capital: What the IPSA CFO had spoken to me about what she qualified in French as [inaudible] of €11.9 million is down to zero?

That’s correct.

Absolutely. Mark [Detalon] - Cin Capital: So if I look at your net debt situation, looking at your release today, it is a very straight forward calculation of taking cash and then just the term portion and non-term portion of loan payable that gets me to the $23 million position yet the end of summer, is that correct?

That is correct and I'm going to add one thing in there, if you look at our cash flow statement, for the year ended December 31, 2007 you will see that we generated over $38 million of cash from operations. Mark [Detalon] - Cin Capital: There is a statement from Russ in the release that says that your guidance for ’08 is $442 million at the current exchange rate. So I looked at the current exchange rate on Bloomberg and that’s 154. If I looked at the guidance of IPSA which is €260 million and I multiply that by 154 that get me to $400 million. So basically it is $42 million to justify.

You can't look at an exchange rate. The sales exchange rate is based on an average throughout the year.

But this guidance assumes the dollar remained at current levels so that is the sense.

At current levels, that doesn’t mean the rate of today. Current levels have an average of last; let’s say the trend of the last two, three, four months or whatever. Mark [Detalon] - Cin Capital: Do you have that number actually because that enables me to figure out what the sales of the US business are? I look at your business, I think a lot of people don’t, which is I look at your business as the arbitrage of the French and US business and I got to figure out the value of the US business on a stand alone basis, excluding IPSA. So I have to figure out the Brooks Brother, Banana Republic and Gap business, how much is that business worth. Obviously I make that calculation but I have to figure out what the sales of that business is? And the guidance I’m of backing out from the consensus that I read obviously I'm not using the right US dollar to euro exchange rate.

Because you have taken exchange rate as of this moment and we are using an average that is representative over the past several months. Mark [Detalon] - Cin Capital: And I completely agree. My bid, I read current as today and obviously current is not today in your definition. Could you just give me that number? It is 1.4.

I don’t think we should give a number. I want to say today we are much tense and we are giving projections for the year so with the variance of the dollar over the last three months and we need to take conservative approach so under no circumstances will we use the rate of today which is 154. We are definitely below that, by how much I don’t think I want to give you. Mark [Detalon] - Cin Capital: But given that the French business has disclosed the guidance precise. You put a €260 million number out there and that the sales that you generate in your US business or invoice.

You are not aware of what Inter company sales are and that’s sales that are included in the €260 million that IPSA puts out as public information. How much is that €260 million is actually sold to Inter Parfums here in the United States. That’s the information that’s disclosed because it is consolidated entry and it is eliminated in consolidation. You can talk to the people of France. You can evaluate it. You can, maybe someone will tell you that amount. I don’t think so, but this is all information that is well beyond the amount of information the company wants to disclose with respect to it’s guidance of 2008. We came up with numbers. We’re telling you that we are not going use a rate as of this moment in time but we are telling it is a blend over the last several months. You can look at the exchange rate and see what the blend is and the make an evaluation from there.

We will not disclose the exchange rate the we have used to calculate our projections.

But it can easily be calculated.

It can be calculated our automated business is going and but again, as you can see 1% change in the dollar value represents millions of dollars in sales plus or minus.

We would really be very, very aggressive if we use $1.54 to come up with guidance today. That would be extremely, extremely aggressive and the reality is as the exchange rate continues to gain its average throughout 2008, we will do exactly what we did throughout 2007 and we will adjust our guidance as appropriate. Mark [Detalon] - Cin Capital:

The actual shares outstanding were 20,532,141 and that includes shares, in my remarks we indicated that we repurchased around 125,000 shares. They were included. We are outstanding as of December 31 so yes, that number as of December 31 includes shares that we repurchased in February. Mark [Detalon] - Cin Capital: Can you comment on the number of outstanding shares of IPSA or should I talk to IPSA?

We already indicated there is approximately in my remarks 12 million shares. I think the number was 12.1, 12.06 something along those lines but there is approximately 12 million outstanding shares and as of today we own approximately 75% of those shares.

If there are no further questions I will turn back the conference to management.

Thank you for your participation on this call whether you are on the call live or listening to our webcast. As always if you do have additional question, I am available by phone. Have a great day and thanks again for joining us.