================================================================================
________________________________________________________________________________
FORM 10-Q
_______________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 for the 13 Weeks ended February 27, 1999
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 number: (1-12757)
_______________
GENERAL CIGAR HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
Delaware 13-3922128
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
_______________
387 Park Avenue South 10016-8899
New York, New York (Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code: (212) 448-3800
_______________
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 for 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 [ ]
As of March 31, 1999, 12,605,313 shares of Class A common stock, par value $0.01
per share, and 13,793,836 shares of Class B common stock, par value $0.01 per
share, were outstanding.
________________________________________________________________________________
================================================================================
<PAGE>
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION:
Item 1. FINANCIAL STATEMENTS (UNAUDITED):
-------------------------------------------
Consolidated Statement of Operations for the 13 Weeks
ended February 27, 1999 and February 28, 1998........... Page 3
Consolidated Balance Sheet as of February 27, 1999
and November 28, 1998................................... Page 4
Consolidated Statement of Cash Flows for the 13 Weeks
ended February 27, 1999 and February 28, 1998........... Page 5
Consolidated Statement of Stockholders' Equity
for the 13 Weeks ended February 27, 1999................ Page 6
Notes to Consolidated Financial Statements................ Page 7
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
-----------------------------------------------------------
CONDITION AND RESULTS OF OPERATIONS.................... Page 10
-----------------------------------
PART II. OTHER INFORMATION:
Item 6. EXHIBITS AND REPORTS ON FORM 8-K....................... Page 13
------------------------------------------
SIGNATURE.......................................................... Page 14
EXHIBIT INDEX...................................................... Page E-1
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
- ----------------------------
GENERAL CIGAR HOLDINGS, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(thousands except per share data)
(Unaudited)
13 Weeks Ended
-------------------
Feb. 27, Feb. 28,
1999 1998
-------- --------
NET SALES................................................. $52,495 $67,737
Cost of goods sold........................................ 27,801 34,786
------ ------
GROSS PROFIT.............................................. 24,694 32,951
Selling, general and administrative expenses.............. 17,693 20,363
------ ------
OPERATING PROFIT.......................................... 7,001 12,588
Nonoperating income....................................... 107 164
Interest expense.......................................... 1,099 833
------ ------
Income before provision for income taxes.................. 6,009 11,919
Provision for income taxes................................ 2,043 4,232
------ ------
NET INCOME................................................ $ 3,966 $ 7,687
====== ======
Basic net income per share................................ $ 0.15 $ 0.28
====== ======
Weighted average common shares outstanding................ 26,456 27,591
====== ======
Diluted net income per share.............................. $ 0.15 $ 0.27
====== ======
Weighted average common shares
and equivalents outstanding............................ 27,164 28,672
====== ======
See Notes to Consolidated Financial Statements.
3
<PAGE>
PART I (Cont.)
GENERAL CIGAR HOLDINGS, INC.
CONSOLIDATED BALANCE SHEET
(dollars in thousands except per share data)
Feb. 27, Nov. 28,
ASSETS 1999 1998
-------- --------
CURRENT ASSETS: (Unaudited)
Cash and cash equivalents.............................. $ 3,923 $ 3,985
Receivables, less allowance of $1,210 (1998--$1,327)... 28,171 39,666
Inventories............................................ 160,154 157,862
Other current assets................................... 7,694 7,852
------- -------
TOTAL CURRENT ASSETS........................... 199,942 209,365
Property and equipment, net............................... 77,119 76,809
Intangible assets, net, principally trademarks
and goodwill............................................ 70,511 71,170
Other assets.............................................. 1,864 1,959
------- -------
TOTAL ASSETS................................... $349,436 $359,303
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued liabilities............... $ 26,915 $ 41,518
Long-term debt due within one year..................... 1,341 1,457
Income taxes........................................... 1,936 3,087
------- -------
TOTAL CURRENT LIABILITIES...................... 30,192 46,062
Long-term debt............................................ 68,931 66,291
Accrued retirement benefits............................... 12,625 12,892
Deferred income taxes..................................... 10,060 9,852
Other noncurrent liabilities.............................. 10,895 9,033
------- -------
TOTAL LIABILITIES.............................. 132,703 144,130
------- -------
Commitments and Contingencies (Note 4)
STOCKHOLDERS' EQUITY:
Preferred stock, par value $0.01--authorized:
20,000,000 shares; Issued: none...................... - -
Class B common stock, par value $0.01--authorized:
25,000,000 shares; Issued: 13,801,811 shares
(1998--13,997,799 shares)............................ 138 140
Class A common stock, par value $0.01--authorized:
50,000,000 shares; Issued: 13,831,038 shares
(1998--13,635,050 shares)............................ 138 136
Additional paid-in capital............................. 165,598 165,598
Retained earnings...................................... 61,568 57,602
------- -------
227,442 223,476
Less: Cost of Class A common stock held in treasury,
1,233,700 shares (1998--974,800 shares)...... (10,709) (8,303)
------- -------
TOTAL STOCKHOLDERS' EQUITY..................... 216,733 215,173
------- -------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY..... $349,436 $359,303
======= =======
See Notes to Consolidated Financial Statements.
4
<PAGE>
PART I (Cont.)
GENERAL CIGAR HOLDINGS, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(dollars in thousands)
(Unaudited)
13 Weeks Ended
-------------------
Feb. 27, Feb. 28,
1999 1998
-------- --------
CASH FLOW FROM OPERATING ACTIVITIES:
Net income.............................................. $ 3,966 $ 7,687
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization.......................... 2,444 2,048
Changes in assets and liabilities:
Decrease in accounts receivable....................... 11,495 6,309
Increase in inventories............................... (2,292) (14,545)
Decrease in accounts payable
and accrued liabilities.............................. (14,603) (5,564)
(Decrease) increase in income taxes payable........... (1,151) 2,443
Increase in deferred income taxes..................... 208 840
Other, net............................................ 1,508 (3,360)
------ ------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES.. 1,575 (4,142)
------ ------
CASH FLOW FROM INVESTING ACTIVITIES:
Additions to property and equipment..................... (2,033) (4,941)
------ ------
NET CASH USED IN INVESTING ACTIVITIES................ (2,033) (4,941)
------ ------
CASH FLOW FROM FINANCING ACTIVITIES:
Net borrowing on credit facility........................ 3,000 3,500
Purchase of treasury stock.............................. (2,406) -
Payments of debt........................................ (198) (129)
Proceeds from exercise of stock options................. - 94
------ ------
NET CASH PROVIDED BY FINANCING ACTIVITIES............ 396 3,465
------ ------
Net decrease in cash and cash equivalents................. (62) (5,618)
Cash and cash equivalents at beginning of period.......... 3,985 8,976
------ ------
CASH AND CASH EQUIVALENTS AT END OF PERIOD................ $ 3,923 $ 3,358
====== ======
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION:
Cash paid during the year for:
Interest............................................... $ 1,123 $ 734
Income taxes........................................... $ 2,986 $ 949
See Notes to Consolidated Financial Statements.
5
<PAGE>
<TABLE>
PART I (Cont.)
GENERAL CIGAR HOLDINGS, INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(dollars in thousands)
(Unaudited)
<CAPTION>
Class B Class A
Common Stock Common Stock Additional Total
------------------ ------------------ Paid-in Retained Treasury Stockholders'
Shares Amount Shares Amount Capital Earnings Stock Equity
---------- ------ ---------- ------ ------- -------- ----- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE AT NOVEMBER 28, 1998..... 13,997,799 $140 13,635,050 $136 $165,598 $57,602 $(8,303) $215,173
Exchange of shares............... (195,988) (2) 195,988 2 - - - -
Purchase of treasury stock....... - - - - - - (2,406) (2,406)
Net income....................... - - - - - 3,966 - 3,966
---------- --- ---------- --- ------- ------ ------ -------
BALANCE AT FEBRUARY 27, 1999..... 13,801,811 $138 13,831,038 $138 $165,598 $61,568 $(10,709) $216,733
========== === ========== === ======= ====== ====== =======
See Notes to Consolidated Financial Statements.
</TABLE>
6
<PAGE>
PART I (CONT.)
GENERAL CIGAR HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)
(UNAUDITED)
(1) INTERIM FINANCIAL PRESENTATION
The interim Consolidated Financial Statements are unaudited; however, they
have been prepared in accordance with Rule 10-01 of Regulation S-X adopted
by the Securities and Exchange Commission (the "Commission") and in the
opinion of management reflect all adjustments (all of which are of a
normal, recurring nature) which are necessary for a fair statement of the
financial condition, results of operations, cash flows and changes in
stockholders' equity for the periods presented. Results of operations for
the 13 weeks ended February 27, 1999 are not necessarily indicative of the
results that may be expected for the entire year ending November 27, 1999.
As used in these Notes, references to the "Company" mean General Cigar
Holdings, Inc. and its direct and indirect subsidiaries: General Cigar Co.,
Inc. ("General Cigar"), Villazon & Company, Inc. ("Villazon"), Club
Macanudo, Inc. and Club Macanudo (Chicago), Inc. (collectively "Club
Macanudo"), and 387 PAS Corp. ("387 PAS"). The accompanying financial
statements reflect the results of operations of these businesses and assets
for all of the periods presented. The operations of Club Macanudo, which
operates cigar bars in New York City and Chicago, and 387 PAS, which owns
and operates the Company's headquarters building, were not material to the
Company's results of operations in any of the periods presented.
The accompanying Consolidated Financial Statements should be read in
conjunction with the Company's audited 1998 financial statements included
in Form 10-K, as filed with the Commission on February 26, 1999, and should
be read in conjunction with the Notes to Consolidated Financial Statements
appearing in that report.
(2) NET INCOME PER SHARE
Basic and diluted net income per share are calculated based upon the
provisions of Statement of Financial Accounting Standards ("SFAS") No. 128
"Earnings per Share", adopted in 1998, using the following data:
13 Weeks Ended
-----------------------
Feb. 27, Feb. 28,
1999 1998
---------- ----------
Weighted average common shares outstanding
for basic calculation..................... 26,455,579 27,590,548
Add: Effect of stock options................. 708,636 1,081,039
---------- ---------
Weighted average common shares outstanding,
adjusted for diluted calculation.......... 27,164,215 28,671,587
========== ==========
7
<PAGE>
The calculation of weighted average common shares outstanding for the
diluted calculation excludes the consideration of stock options for
1,067,662 shares in the 13 weeks ended February 27, 1999, because the
assumed exercise of these options would not have been dilutive for the
period.
(3) STOCK REPURCHASE PROGRAM
During 1998 and the 1999 first quarter, the Company repurchased 974,800 and
258,900 shares of Class A common stock for an aggregate of $8.3 million and
$2.4 million, respectively, under its stock repurchase program.
(4) COMMITMENTS AND CONTINGENCIES
As of February 27, 1999, the Company had commitments for capital
expenditures of approximately $5.2 million for the completion of a new
computer system and the transfer of certain domestic production offshore.
The Company believes that the outcome of currently pending legal
proceedings will not, in the aggregate, have a material adverse effect on
the Company's financial position.
(5) RECLASSIFICATIONS
Certain amounts in the prior years' financial statements have been
reclassified to conform to the current year's presentation.
(6) INVENTORIES
Inventories consist of:
Feb. 27, Nov. 28,
1999 1998
-------- --------
Raw materials and supplies........................ $113,814 $108,327
Work-in-process................................... 9,157 6,968
Finished goods.................................... 37,183 42,567
------- -------
$160,154 $157,862
======= =======
(7) USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
8
<PAGE>
financial statements, and revenue and expenses during the period reported.
Actual results could differ from those estimates. Estimates are used when
accounting for allowance for uncollectible accounts receivable,
depreciation and amortization, employee benefit plans, taxes, and
contingencies, among others.
(8) NEW ACCOUNTING PRONOUNCEMENTS
In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities". This
statement requires that all derivative instruments be recognized at fair
value as either assets or liabilities. SFAS No. 133 is effective for all
fiscal quarters of fiscal years beginning after June 15, 1999. The Company
is currently evaluating the impact of adopting SFAS No. 133.
(9) SUBSEQUENT EVENT
On March 26, 1999, the Company announced that it has entered into a
definitive Asset Purchase Agreement with Swedish Match North America for
the sale of the Company's mass-market cigar business for $200 million in
cash. The transaction is subject to customary closing conditions and is
expected to close within approximately three weeks.
9
<PAGE>
PART I (CONT.)
GENERAL CIGAR HOLDINGS, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
- --------------------------------------------------------------------------------
OF OPERATIONS
-------------
As used herein, references to the "Company" mean General Cigar Holdings, Inc.
and its direct and indirect subsidiaries: General Cigar Co., Inc. ("General
Cigar"), Villazon & Company, Inc. ("Villazon"), Club Macanudo, Inc. and Club
Macanudo (Chicago), Inc. (collectively, "Club Macanudo"), and 387 PAS Corp.
("387 PAS").
LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by operating activities was $1.6 million in the first quarter
of 1999 ("1999 First Quarter") compared to net cash of $4.2 million used in
operations in the first quarter of 1998 ("1998 First Quarter"). The cash
provided in the 1999 First Quarter compared with the use of cash in the 1998
First Quarter reflected principally a greater reduction of accounts receivable
and a lower increase in inventories which more than offset the decrease in
accounts payable and accrued liabilities compared to the 1998 First Quarter. The
continued increase in inventories of raw materials and supplies reflected
purchases of tobacco and lower production of cigars. The Company has implemented
a work force reduction to bring production levels in line with current market
conditions. Accounts receivable decreased $11.5 million as a result of decreased
sales during the 1999 First Quarter and seasonal sales in the fourth quarter of
1998.
Cash used in investing activities was $2.0 million in the 1999 First Quarter
compared to $4.9 million in the 1998 First Quarter. In both periods, investing
activities consisted of purchases of property and equipment including in the
1999 First Quarter, purchases of software to complete the computer system
replacement project.
Cash provided by financing activities was $0.4 million in the 1999 First Quarter
compared to $3.5 million in the 1998 First Quarter. The financing activities in
the 1999 First Quarter included $3.0 million in borrowings under the Company's
revolving line of credit in part to finance the repurchase of the Company's
Class A common shares. Increased borrowings for both periods were used also used
to finance higher working capital and capital expenditures.
The Company's working capital increased to $169.8 million at February 27, 1999,
from $163.3 million at November 28, 1998, principally due to higher level of
inventories and related increases in long-term borrowings.
The Company's Board of Directors has authorized the purchase of up to 5% of the
Company's common stock from time to time in open market transactions. As of
March 31, 1999, 1,233,700 shares, representing approximately 4.5% of the
outstanding shares, had been repurchased under this program at a cumulative cost
of $10.7 million.
Based on its current projection of cash flows, management believes that cash
from operations combined with the revolving credit facility will be sufficient
to fund the Company's working capital requirements and its anticipated capital
expenditures. The Company expects that it will make capital expenditures of
10
<PAGE>
approximately $12.0 million in 1999. On March 26, 1999, the Company announced
that it has entered into a definitive Asset Purchase Agreement with Swedish
Match North America for the sale of the Company's mass-market cigar business for
$200 million in cash. The transaction is subject to customary closing conditions
and is expected to close within approximately three weeks.
RESULTS OF OPERATIONS
13 WEEKS ENDED FEBRUARY 27, 1999 AS COMPARED TO 13 WEEKS ENDED FEBRUARY 28, 1998
Net sales decreased 22.5%, or $15.2 million, to $52.5 million in the 1999 First
Quarter from $67.7 million in the 1998 First Quarter. The decrease in net sales
reflected lower unit sales of cigars, principally premium cigars. The decrease
in sales was due to a slow-down in the growth of demand for cigars and the
higher sales in the 1998 First Quarter when customers continued to purchase
cigars in excess of demand in order to avoid potential short supply.
Gross profit decreased 25.1%, or $8.3 million, to $24.7 million in the 1999
First Quarter from $33.0 million in the 1998 First Quarter. Gross margin
decreased to 47.0% in the 1999 First Quarter from 48.6% in the 1998 First
Quarter. The decrease in gross margin was primarily due to a decrease in the
sales mix of premium cigars versus mass market cigars and higher tobacco costs.
Selling, general and administrative expenses ("SG&A") decreased to $17.7 million
in the 1999 First Quarter from $20.4 million in the 1998 First Quarter, but as a
percentage of net sales were 33.7% and 30.1% in the 1999 First Quarter and 1998
First Quarter, respectively. The decrease principally reflected lower general
and administrative expenses and marketing expenses as a result of the Company's
efforts to streamline its business. As a percentage of net sales, SG&A was
higher due to greater decrease in net sales relative to the decrease in SG&A
expenses.
Operating profit decreased 44.4%, or $5.6 million, to $7.0 million in the 1999
First Quarter from $12.6 million in the 1998 First Quarter. As a result of the
lower gross margin, operating margin decreased to 13.3% in the 1999 First
Quarter compared to the 18.6% in the prior year's quarter.
Interest expense increased 31.9% in the 1999 First Quarter to $1.1 million from
$0.8 million in the 1998 First Quarter. This increase was due to higher average
borrowings during the 1999 First Quarter, principally for inventories, capital
expenditures and repurchases of shares of common stock.
The provision for income taxes was $2.0 million in the 1999 First Quarter as
compared to $4.2 million in the 1998 First Quarter. The lower effective tax rate
of 34.0% in the 1999 First Quarter compared to 35.5% in the 1998 First Quarter
reflects an increase in earnings in lower tax jurisdictions.
As a result of the changes described above, net income in the 1999 First Quarter
decreased 48.4% to $4.0 million compared to $7.7 million in the 1998 First
Quarter.
11
<PAGE>
YEAR 2000 COMPLIANCE
The Company is addressing the Year 2000 issue by both replacing and modifying
its existing critical computer systems. In 1997, the Company began a company
wide system replacement project with Oracle Corporation to install a new
Enterprise Resource Planning ("ERP") system. The new Oracle ERP system is
expected to provide significantly enhanced systems capabilities and make the
Company's critical business computer applications Year 2000 compliant. It is
scheduled for completion by mid-1999. The Company has initiated a company wide
review of the remaining non-critical systems, including hardware, software and
control systems.
The cost of the Oracle ERP system will be approximately $7 million. Through the
1999 First Quarter, $5.5 million has been incurred on this project. The cost of
the modifications for its non-critical systems is not expected to be material to
the Company.
The Company has communicated with its major customers, suppliers and financial
institutions to determine the extent to which the Company is vulnerable to those
third parties' failure to remedy their own Year 2000 issues. Most of those
contacted have indicated that they have Year 2000 readiness programs or they
anticipate being Year 2000 compliant on or before December 31, 1999. The Company
is continuing to assess the progress of its critical business partners in
reaching Year 2000 readiness.
The Company currently believes that its efforts to address the Year 2000 issue
should be successful. However, a failure of critical third parties to adequately
address their respective Year 2000 issues could have a material adverse effect
on the Company's business, financial condition and results of operations.
Therefore, the Company's Year 2000 Program includes the development of
contingency plans for continuing operations in the event such problems arise.
However, there can be no assurance that such contingency plans will be
sufficient to address all problems which may arise.
FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. Such statements
include, without limitations, 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 to reduce SG&A expenses
as expected, (iii) an increase in the price of raw materials, (iv) additional
governmental regulation of tobacco or further tobacco litigation, (v) enactment
of new or significant increases in existing excise taxes, (vi) political and/or
economic instability in foreign countries where the Company has operations,
(vii) failure to remediate Year 2000 issues and (viii) other risks and
uncertainties set forth in the Company's other filings with the Securities and
Exchange Commission.
12
<PAGE>
PART II. OTHER INFORMATION
GENERAL CIGAR HOLDINGS, INC.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
- -----------------------------------------
(a) EXHIBITS
The exhibit listed in the following table has been filed as part of this
Quarterly Report on Form 10-Q.
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
--------------------------------------------------------------------------
27 Financial Data Schedule for the First Quarter of 1999
(for Commission use only)
(b) REPORTS ON FORM 8-K
On April 2, 1999, the Company filed a report on Form 8-K, reporting under
Items 5 and 7(c), disclosing the announcement that the Registrant and
Swedish Match North America have entered into a definitive Asset Purchase
Agreement which could lead to the sale of the Registrant's mass-market
cigar business for $200 million in cash.
13
<PAGE>
GENERAL CIGAR HOLDINGS, INC.
SIGNATURE
Pursuant to the requirement 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.
GENERAL CIGAR HOLDINGS, INC.
Date: April 13, 1999 By: /s/ Joseph C. Aird
------------------
Joseph C. Aird
Senior Vice President,
Chief Financial Officer,
Treasurer and Acting Controller
14
<PAGE>
GENERAL CIGAR HOLDINGS, INC.
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
- --------------------------------------------------------------------------------
27 Financial Data Schedule for the First Quarter of 1999
(for Commission use only)
E-1
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY CONSOLIDATED FINANCIAL INFORMATION EXTRACTED FROM
THE CONSOLIDATED FINANCIAL STATEMENTS OF GENERAL CIGAR HOLDINGS, INC. INCLUDED
IN ITS QUARTERLY REPORT ON FORM 10-Q FOR THE 13 WEEKS ENDED FEBRUARY 27, 1999
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH CONSOLIDATED FINANCIAL
STATEMENTS.
</LEGEND>
<CIK> 0001029456
<NAME> GENERAL CIGAR HOLDINGS, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> NOV-27-1999
<PERIOD-START> NOV-29-1998
<PERIOD-END> FEB-27-1999
<CASH> 3,923
<SECURITIES> 0
<RECEIVABLES> 29,381
<ALLOWANCES> 1,210
<INVENTORY> 160,154
<CURRENT-ASSETS> 199,942
<PP&E> 129,423
<DEPRECIATION> 52,304
<TOTAL-ASSETS> 349,436
<CURRENT-LIABILITIES> 30,192
<BONDS> 68,931
0
0
<COMMON> 276
<OTHER-SE> 216,457
<TOTAL-LIABILITY-AND-EQUITY> 349,436
<SALES> 52,495
<TOTAL-REVENUES> 52,495
<CGS> 27,801
<TOTAL-COSTS> 27,801
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 244
<INTEREST-EXPENSE> 1,099
<INCOME-PRETAX> 6,009
<INCOME-TAX> 2,043
<INCOME-CONTINUING> 3,966
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,966
<EPS-PRIMARY> 0.15 <F1>
<EPS-DILUTED> 0.15 <F1>
<FN>
<F1> The EPS-PRIMARY amount represents basic net income per share and the
EPS-DILUTED amount represents diluted net income per share, computed in
accordance with Statement of Financial Accounting Standards No. 128,
"Earnings Per Share."
</FN>
</TABLE>
