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SUPREME COURT AIDS CIGAR DELIVERIES

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All other manufacturers and distributors totaled 14.4 percent. Ranked by dollar volume, Swisher and Altadis U.S.A. were shown with 30.4 percent of the U.S. market, with Middleton (primarily its Black & Mild brand) at 21.1 percent, Swedish Match at 12.3 percent, Lane Limited (selling little cigars such as Captain Black and Winchester) at 1.5 percent and all others combined at 4.3 percent.

Also of note in the year-end report:

While cigars were flat, sales in all other sectors of the company decreased slightly. Snuff was down 2 percent, chewing tobacco was down 10 percent, pipe tobacco and accessories went down 5 percent, matches and lighters were also down 2 percent. Overall, sales were off 3 percent for the company as a whole to $1.98 billion with profits down 9 percent from $519.5 million in 2006 to 473.9 million for 2007. Operating margins for cigars also fell from 22.6 percent in 2006 to 21.6 percent in 2007.

Despite the turbulence and the announcement of the resignation of Chief Executive Officer Sven Hindrikes during 2008, the company’s outlook for this year was positive:

We finished 2007 on a strong note. Group sales reached an all-time high in the fourth quarter. We will continue with programs to stimulate growth, primarily for snuff and cigars, with product development, new brand launches and market segmentation as key components. In these efforts, we will capitalize on changing consumption patterns in the tobacco area by offering consumers modern smokefree tobacco products and attractive cigars.

. . .

For the product line cigars, sales for the full year 2008 are expected to increase significantly. The inclusion of recently-acquired businesses, including amortization of intangible assets, and the challenging market conditions in some European countries, are however expected to put some pressure on the operating margin, especially in the beginning of the year.

According to the company’s financial statements, the investment in the “Acquisition of subsidiaries, net of cash acquired” was $191.2 million in 2007, representing the ingestion of both Bogaert Cigars in June and Cigars International in September. No details of the terms of either transaction were ever announced (or will ever be), but the annual sales of the two firms were disclosed with Cigars International ($63.3 million) having about 2.33 times the sales of Bogeart ($26.6). On that basis – useful only for a guesstimate of the relative weight of the transactions – about 70 percent of the acquisitions line item, or roughly $130 million, would have been allocated to the Cigars International purchase.

And the winner is:
Congratulations to Ron Fedele of Brookfield, Connecticut, winner of our “Register & Win” drawing for a free box of Cuban Crafters Cabinet Selection Churchills from our Perelman, Pioneer & Company humidors, courtesy of Mike’s Cigars.

Up for your pleasure this week is a glorious box of eight Punch Café Royales, individually cased in glass tubes and featuring the zesty taste that has made Punch so famous. Made in Honduras, they’re medium-to-full in body with plenty of flavor and offered in the under-appreciated grand corona size of 5 5/8 inches by 45 ring gauge, provided courtesy of our friends at Mike’s Cigars.. The box will be awarded in our drawing to be held on Sunday, February 24.

To enter, just click on the “Register & Win” tab above and fill out the required information. If you have entered in the past, there is no need to re-enter; all past entries are carried forward to future drawings. You must be 21 or older to win; good luck!
~ Rich Perelman

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Don’t forget to register for our drawing for free cigars and accessories! Just click on the “Register & Win” button above; enter today!

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