Headline: Caribbean Cigar Company Makes Announcement
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MIAMI--(BUSINESS WIRE)--Nov. 19, 1997--Caribbean Cigar Company
(the "Company") announced today that it had restated its earnings for
the Company's first fiscal quarter ended June 30, 1997 to reflect a
loss of approximately $600,000, resulting primarily from (a)
additional accruals for lease terminations and a write-off of
leasehold improvements; (b) additional professional service fees; (c)
additional advertising expenses; (d) a write-down in inventory; (e) a
write-down of certain accounts receivable; (f) an increase in
depreciation expense; and (g) and an increase in selling expenses.
The revised earnings were contained in an amended Report of Form
10-QSB which was filed with the Securities and Exchange Commission
(the "SEC") on Nov. 19, 1997.
The Company also announced a net loss of approximately $2 million
for the second fiscal quarter ended Sept. 30, 1997, due primarily
to sales and gross margins, which were weaker than anticipated with
no corresponding reduction in expenses, and a write-down in
inventory. The Report on Form 10-QSB for the second fiscal quarter
is expected to be filed with the SEC on Nov. 19, 1997.
In response to results, the Company also announced it had taken
steps to reduce selling expenses, including reductions in
headquarters staff. The Company estimates that these overhead
reductions will save the Company approximately $1,000,000 on an
annual basis, beginning with the third fiscal quarter of 1997.
The Company also announced that, effective Sept. 15, 1997, it
had named Edward C. Williams as its chief financial officer.
Williams replaces Thomas Dilk. Effective Nov. 19, 1997, Dilk,
Eric Kamisher and Luciano Nicasio have resigned as directors of
the Company. No replacements were named at this time. The remaining
directors, Kevin Doyle, the president and CEO, and Alfred Berger,
intend to meet next week to consider replacements. The Company also
announced that, on or about Aug. 15, 1997, Carlos Torano had
resigned as a director of the Company.
The resignations of Dilk, Kamisher and Nicasio resulted, in part,
from a disagreement about the results of operations reported today.
The Company believes that the Form 10-QSB for the quarter ended Sept.
30, 1997 expected to be filed today with the SEC fairly presents the
results of operations and financial conditions of the Company.
The Company also announced that during the second fiscal quarter
it had entered into a secured credit facility with Finova Capital
Corp., under which it can borrow up to $3 million, based on eligible
accounts receivable and inventory. As of Nov. 19, the Company had
borrowed approximately $1.9 million.
Doyle, president of the Company said, "These loses occurred
primarily during a period of rapid expansion, including the opening
of our plant in the Dominican Republic, the expansion of our import
capacity from Indonesia, and the move to our new headquarters
facility in Miami. They are disappointing and unacceptable to our
Company, our employees, our stockholders and our customers. However,
we are confident that we have now identified the sources of these
problems and have taken appropriate action to keep costs under
control. We are actively focused on evaluating every element of our
cost structure to further reduce costs. We also continue to explore
all opportunities for increasing sales, with a goal of establishing
profitability for the Company."
For further information, please contact Caribbean Cigar Company,
8305 NW 27th Street, Miami, 33122, attention: Edward C. Williams,
305/267-3911 or John Germinario, ADR Management Ltd. at
973/285-3224. The Company's common stock trades on the NASDAQ Small
Cap Market under the symbol "CIGR."
CONTACT: Caribbean Cigar Company,
Edward C. Williams, 305/267-3911
or
ADR Management Ltd.
John Germinario, 973/285-3224
KEYWORD: FLORIDA
INDUSTRY KEYWORD: FOODS/BEVERAGES MANAGEMENT CHANGES EARNINGS
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