General Cigar Holdings, Inc. Announces Second Quarter Results
Monday July 6, 5:43 pm Eastern Time
Company Press Release
NEW YORK--(BUSINESS WIRE)--July 6, 1998--General Cigar Holdings, Inc. (NYSE: MPP - news) General Cigar Holdings, Inc. today reported second quarter net income of $6,766,000 or $0.24 a diluted share on sales of $68,248,000 compared to net income of $6,390,000 or $0.22 a diluted share on sales of $58,908,000 in the 1997 second quarter. Basic earnings per share was $0.24 in both periods. For the six-month period, the Company reported net income of $14,453,000 or $0.51 a diluted share on sales of $135,985,000 compared to net income of $10,667,000 or $0.37 a diluted share on sales of $108,706,000 in the 1997 six-month period. Basic per share earnings rose from $0.39 to $0.52 in the six-month comparable period.
Edgar M. Cullman, Jr., President and Chief Executive Officer, stated that, ''Our sales growth both in the second quarter and six months validates the continuing demand for cigars, especially in the midst of an over-supply in the marketplace. We believe the over-supply of premium cigars is starting to diminish as retailers and wholesalers balance their inventories against demand. Therefore, we anticipate a more orderly marketplace but one that is increasingly more price sensitive than we experienced in 1997. Our first half results are indicative of a strong business. However, in retrospect, 1997 was a very exuberant year in the cigar industry and we may find it difficult to equal our performance again in 1998.''
The Company also reported that, pursuant to its previously announced stock repurchase program, it had spent approximately $4,000,000 through the end of June to repurchase shares of its common stock in open market transactions.
General Cigar Holdings, which traces it roots to 1906, is a leading manufacturer and marketer of premium cigar brands including Macanudo, Partagas, Punch (MPP) and Hoyo de Monterrey, as well as mass market cigars including Garcia y Vega, White Owl and Tiparillos. In addition to being a major grower of high-quality Connecticut shade wrapper tobacco, General Cigar owns and operates the Club Macanudo cigar bars in New York City and Chicago.
FORWARD LOOKING STATEMENTS: Certain matters discussed within this press release may constitute forward-looking statements within the meaning of the federal securities laws. Such statements include, without limitation, the Company's beliefs about trends in the cigar industry and its views about the long-term future of the industry and the Company. The following factors, among others, could cause the Company's financial performance to differ materially from that expressed in such statements: (i) changes in consumer preferences resulting in a decline in the demand for and consumption of cigars; (ii) an inability on the part of the Company to increase production of cigars, particularly premium cigars, to meet demand as a result of, among other things, a shortage of raw materials, trained labor or production capacity, (iii) an increase in the price of raw materials, (iv) additional governmental regulation of tobacco or tobacco litigation, (v) enactment of new or significant increases in state or federal existing excise taxes or (vi) political and/or economic instability in its foreign operations. We refer you to the documents the Company files from time to time with the Securities and Exchange Commission.
GENERAL CIGAR HOLDINGS, INC.
CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
(dollars in thousands except per share data)
(Unaudited)
Three Months Ended Six Months Ended
May 30, 1998 May 31, 1997 May 30, 1998 May 31, 1997
Net sales and
other revenues $ 68,248 $ 58,908 $ 135,985 $ 108,706
Gross profit 31,926 26,473 64,877 48,756
Operating profit 11,309 10,600 23,897 18,455
Income before
income tax
provision 10,489 10,306 22,408 17,204
Income taxes 3,723 3,916 7,955 6,537
Net income $ 6,766 $ 6,390 $ 14,453 $ 10,667
Net income per
common share:
Diluted $ 0.24 $ 0.22 $ 0.51 $ 0.37
Basic $ 0.24 $ 0.24 $ 0.52 $ 0.39
Weighted average
common shares
and equivalents
outstanding:
Diluted 28,444,426 28,900,000 28,558,007 28,550,000
Basic 27,620,694 27,101,922 27,605,621 27,044,552
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Contact:
Jay M. Green
(212) 448-3808
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