<PAGE> 1
Exhibit (c)(2)
CONFIDENTIAL
--------------------------------------------------------------------------------
WALNUT
Fairness Opinion
-November 8, 2000-
--------------------------------------------------------------------------------
BERWIND FINANCIAL, L.P.
--------------------------------------------------------------------------------
3000 Centre Square West, 1500 Market Street - Philadelphia, PA 19102
(215) 575-2400 - Fax (215) 564-5402 - www.berwindfinancial.com
<PAGE> 2
TABLE OF CONTENTS
================================================================================
<TABLE>
<S> <C>
I. Transaction Overview
II. Ownership Profile
III. Financial Overview
IV. Industry Observations and Comments
V. Company Observations
VI. Premiums Paid Analysis
VII. Discounted Cash Flow Analysis
VIII. Financial Sponsor Transaction Analysis
IX. "Comparable" Company Analysis
X. Industry Transactions Analysis
</TABLE>
--------------------------------------------------------------------------------
Walnut 2 Berwind Financial, L.P.
<PAGE> 3
EXHIBITS
================================================================================
A. Text of Fairness Opinion
--------------------------------------------------------------------------------
Walnut 3 Berwind Financial, L.P.
<PAGE> 4
TRANSACTION OVERVIEW
================================================================================
--------------------------------------------------------------------------------
SUMMARY TERMS:
<TABLE>
<S> <C>
Shares Outstanding(a) 5,846,478
Options Exercised(b) 756,385
------------
Fully Diluted Shares Outstanding 6,602,863
Offer Price per Share $ 5.50
Total Equity Value $ 36,315,747
Excess Cash and Marketable Securities(a) (15,814,754)
Option Proceeds(b) (1,469,547)
------------
Enterprise Value $ 19,031,446
</TABLE>
--------------------------------------------------------------------------------
(a) As of Nov. 7, 2000
(b) Consists of in-the-money options (based on exercise price of $5.50 per
share) as of Nov. 7, 2000
--------------------------------------------------------------------------------
VALUATION MULTIPLES:
<TABLE>
<S> <C>
Walnut LTM Revenue(a) $34,514,548
Enterprise Value / LTM Revenue 0.6x
Walnut LTM EBITDA(a) $ 4,969,004
Enterprise Value / LTM EBITDA 3.8x
Walnut LTM EBIT(a) $ 4,463,089
Enterprise Value / LTM EBIT 4.3x
Walnut LTM Net Income(a) $ 3,255,079
Equity Value / LTM Net Income 11.2x
PREMIUM OVER MARKET VALUE:
Walnut Share Price as of November 7, 2000 $ 3.50
Purchase Price Per Share 5.50
Premium over Share Price 57.1%
</TABLE>
(a) LTM as of Sept. 30, 2000
--------------------------------------------------------------------------------
Walnut 4 Berwind Financial, L.P.
<PAGE> 5
OWNERSHIP PROFILE
================================================================================
<TABLE>
<CAPTION>
TOTAL PERCENT
BENEFICIAL OWNERSHIP OCCUPATION OWNERSHIP(a) OF TOTAL
-----------------------------------------------------------------------------------------------------------------------------------
INSIDE OWNERSHIP:
<S> <C> <C> <C>
Directors & Beneficial Ownership:
Robert G. Levin President, Chairman of the Board, and CEO of Company 2,927,149 42.4%
Fuente Investment Partnership 1,522,964 22.1%
Carlos A. Fuente, Sr. Chairman of the Board, Director and CEO of Fuente Cigar, Ltd. 23,886 0.3%
Carlos P. Fuente, Jr. President and COO of Fuente Cigar, Ltd. 23,886 0.3%
Michael Pitkow COO & Executive VP 288,134 4.2%
Marvin B. Sharfstein President MBS Capital Corp 274,973 4.0%
Harvey W. Grossman CPA and partner in Cogen Sklar LLP 47,772 0.7%
Keith A. Goorsky Chief Financial Officer and Treasurer 26,825 0.4%
--------- -----
TOTAL INSIDE OWNERSHIP 5,135,589 74.4%
INSTITUTIONAL SHAREHOLDERS:
Palisades Capital Management 501,024 7.3%
--------- -----
TOTAL INSTITUTIONAL OWNERSHIP 501,024 7.3%
OTHER OWNERSHIP (RETAIL): 1,261,925 18.3%
--------- -----
TOTAL OWNERSHIP: 6,898,538 100.0%
</TABLE>
(a) Including options
Source: Information as provided by Company Proxy Statement dated 6/29/00
--------------------------------------------------------------------------------
Walnut 5 Berwind Financial, L.P.
<PAGE> 6
OWNERSHIP PROFILE
================================================================================
--------------------------------------------------------------------------------
OWNERSHIP SUMMARY
<TABLE>
<CAPTION>
SHARES OUTSTANDING (a,c) % OF TOTAL
------------------------ ----------
<S> <C> <C>
Robert G. Levin - President, Chairman of the Board, CEO 2,806,728 48.0%
Fuente Investment Partnership 1,522,964 26.0%
All Other Public 1,516,786 25.9%
--------- -----
SHARES OUTSTANDING 5,846,478 100.0%
</TABLE>
OPTIONS
<TABLE>
<CAPTION>
OPTIONS
EXERCISE PRICE OUTSTANDING
-------------- -----------
<S> <C>
$5.32 95,000
$4.45 63,750
$4.43 32,472
$4.09 30,000
$3.98 30,600
$3.82 25,000
$0.41 479,563
-------
TOTAL IN-THE-MONEY OPTIONS (b) 756,385
</TABLE>
FULLY DILUTED SHARES
<TABLE>
<S> <C> <C>
Fully Diluted Shares Outstanding (c) 6,602,863
</TABLE>
(a) Does not include options
(b) Based on offer price of $5.50 per share
(c) As of November 7, 2000
--------------------------------------------------------------------------------
Walnut 6 Berwind Financial, L.P.
<PAGE> 7
CAPITALIZATION
================================================================================
NET CASH POSITION
EXCESS CASH AND MARKETABLE SECURITIES (a) $15,814,754
<TABLE>
<CAPTION>
OPTIONS EXERCISE
EXERCISE PRICE OUTSTANDING PROCEEDS
<S> <C> <C>
$5.32 95,000 $ 505,400
$4.45 63,750 283,688
$4.43 32,472 143,851
$4.09 30,000 122,700
$3.98 30,600 121,788
$3.82 25,000 95,500
$0.41 479,563 196,621
------- -----------
TOTAL IN-THE-MONEY OPTIONS (b) 756,385 $ 1,469,548 (c)
</TABLE>
NET CASH POSITION $17,284,302
(a) As of September 30, 2000
(b) Based on offer price of $5.50 per share
(c) Totals do not sum due to rounding
--------------------------------------------------------------------------------
Walnut 7 Berwind Financial, L.P.
<PAGE> 8
FINANCIAL OVERVIEW
--------------------------------------------------------------------------------
HISTORICAL INCOME STATEMENT TRENDS
[BAR CHARTS - SALES - OPERATING INCOME - EBITDA - & NET INCOME OMITTED]
<TABLE>
<CAPTION>
FISCAL YEAR ENDED MARCH 31,
------------------------------------------------------------------ LTM
($ in thousands) 1996 1997 1998 1999 2000 9/30/00
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Sales $9,467 $17,278 $29,067 $30,531 $32,922 $34,515
Income from Operations 824 2,817 6,195 4,938 4,552 4,463
Net Income 527 2,272 3,917 3,639 3,237 3,255
EBITDA 939 2,958 6,379 5,222 4,870 4,969
</TABLE>
--------------------------------------------------------------------------------
Walnut 8 Berwind Financial, L.P.
<PAGE> 9
FINANCIAL OVERVIEW
--------------------------------------------------------------------------------
HISTORICAL INCOME STATEMENTS
<TABLE>
<CAPTION>
FISCAL YEAR ENDED MARCH 31, LTM
---------------------------------------------------------- SEPT. 30, 5 YEAR 3 YEAR
($ in thousands) 1996 1997 1998 1999 2000 2000 CAGR(a) CAGR(b)
------ ------- ------- ------- ------- ------- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Sales $9,467 $17,278 $29,067 $30,531 $32,922 $34,515 36.6% 6.4%
Cost of Goods Sold 5,159 9,566 15,953 16,676 18,088 18,975 36.8% 6.5%
------ ------- ------- ------- ------- ------- ------ ------
Gross Profit 4,308 7,712 13,114 13,855 14,834 15,539 36.2% 6.4%
Operating Expenses 3,484 4,895 6,919 8,917 10,282 11,076 31.1% 21.9%
------ ------- ------- ------- ------- ------- ------ ------
Income from Operations 825 2,817 6,195 4,937 4,552 4,463 53.3% -14.3%
Other Income 22 32 341 967 652 804 134.4% 38.3%
------ ------- ------- ------- ------- ------- ------ ------
Income Before Taxes 846 2,849 6,528 5,905 5,203 5,267 57.5% -10.7%
Income Tax Expense 318 577 2,611 2,267 1,967 2,012 57.7% -13.2%
------ ------- ------- ------- ------- ------- ------ ------
Net Income 528 2,273 3,917 3,638 3,236 3,255 57.3% -9.1%
====== ======= ======= ======= ======= ======= ====== ======
Depreciation 115 141 184 284 318 506 29.0% 31.5%
------ ------- ------- ------- ------- ------- ------ ------
EBITDA $ 939 $ 2,958 $ 6,379 $ 5,222 $ 4,870 $ 4,969 50.9% -12.6%
====== ======= ======= ======= ======= ======= ====== ======
Key Ratios
----------
Sales Growth 67.2% 82.5% 68.2% 5.0% 7.8% 4.8%
Gross Margin 45.5% 44.6% 45.1% 45.4% 45.1% 45.0%
Operating Margin 8.7% 16.3% 21.3% 16.2% 13.8% 12.9%
EBITDA Margin 9.9% 17.1% 21.9% 17.1% 14.8% 14.4%
Net Income Margin 5.6% 13.2% 13.5% 11.9% 9.8% 9.4%
</TABLE>
(a) Compounded Annual Growth Rate from 3/31/1996 to 3/31/2000
(b) Compounded Annual Growth Rate from 3/31/1998 to 3/31/2000
--------------------------------------------------------------------------------
Walnut 9 Berwind Financial, L.P.
<PAGE> 10
Financial Overview
================================================================================
Segment Income Statements
<TABLE>
<CAPTION>
WHOLESALE FISCAL YEAR ENDED MARCH 31, 9/30/00
($ in thousands) --------------------------------------------------------- -------- -------
1998 % CHANGE 1999 % CHANGE 2000 % CHANGE LTM
------- --- ------- ---- ------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Sales $13,288 6.1% $14,092 24.1% $17,494 10.6% $19,341
Cost of Sales 5,890 12.3% 6,613 28.8% 8,516 9.0% 9,285
------- --- ------- ---- ------- ---- -------
Gross Profit 7,399 1.1% 7,479 20.0% 8,977 12.0% 10,056
Gross Margin 55.7% 53.1% 51.3% 52.0%
</TABLE>
<TABLE>
<CAPTION>
RETAIL FISCAL YEAR ENDED MARCH 31, 9/30/00
($ in thousands) --------------------------------------------------------- --------- --------
1998 % CHANGE 1999 % CHANGE 2000 % CHANGE LTM
------- --- ------- ---- ------- ---- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Sales $15,779 4.2% $16,439 -6.1% $15,428 -1.7% $15,173
Cost of Sales 10,063 0.0% 10,063 -4.9% 9,572 1.2% 9,690
------- --- ------- ---- ------- ---- -------
Gross Profit 5,715 11.6% 6,376 -8.1% 5,856 -6.4% 5,484
Gross Margin 36.2% 38.8% 38.0% 36.1%
</TABLE>
<TABLE>
<CAPTION>
TOTAL FISCAL YEAR ENDED MARCH 31, 9/30/00
($ in thousands) --------------------------------------------------------- -------- --------
1998 % CHANGE 1999 % CHANGE 2000 % CHANGE LTM
------- --- ------- ---- ------- ---- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Sales $29,067 5.0% $30,531 7.8% $32,922 4.8% $34,515
Cost of Sales 15,953 4.5% 16,676 8.5% 18,088 4.9% 18,975
------- --- ------- ---- ------- ---- -------
Gross Profit 13,114 5.6% 13,855 7.1% 14,834 4.8% 15,539
Gross Margin 45.1% 45.4% 45.1% 45.0%
</TABLE>
--------------------------------------------------------------------------------
Walnut 10 Berwind Financial, L.P.
<PAGE> 11
FINANCIAL OVERVIEW
================================================================================
QUARTERLY INCOME STATEMENTS
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------
($ in thousands) FISCAL YEAR ENDING MARCH 31, 2001
----------- ---------- ---------- ---------- ----------
1ST QUARTER 2ND QUARTER YTD LTM BUDGET
ACTUAL ACTUAL 9/30/2000 9/30/2000 2001
----------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net Sales $ 8,742 $ 9,948 $ 18,690 $ 34,515 $ 33,882
Gross Profit 3,785 4,440 8,225 15,539 15,166
Gross Margin 43.3% 44.6% 44.0% 45.0% 44.8%
Operating Income 1,235 1,702 2,937 4,463 4,962
Operating Income Margin 14.1% 17.1% 15.7% 12.9% 14.6%
Net Income 935 1,128 2,063 3,255 3,734
Net Income Margin 10.7% 11.3% 11.0% 9.4% 11.0%
Earnings per Share $ 0.16 $ 0.19 $ 0.35 $ 0.56 $ 0.64
</TABLE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------
($ in thousands) FISCAL YEAR ENDED MARCH 31, 2000
----------- ----------- --------- ----------- ----------- ---------
YTD
1ST QUARTER 2ND QUARTER 9/30/1999 3RD QUARTER 4TH QUARTER FULL YEAR
----------- ----------- --------- ----------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net Sales $ 8,301 $ 8,950 $ 17,251 $ 9,056 $ 6,615 $ 32,922
Gross Profit 3,849 3,824 7,673 4,028 3,133 14,834
Gross Margin 46.4% 42.7% 44.5% 44.5% 47.4% 45.1%
Operating Income 1,580 1,403 2,983 1,189 380 4,552
Operating Income Margin 19.0% 15.7% 17.3% 13.1% 5.7% 13.8%
Net Income 1,043 1,000 2,043 881 312 3,236
Net Income Margin 12.6% 11.2% 11.8% 9.7% 4.7% 9.8%
Earnings per Share $ 0.17 $ 0.17 $ 0.34 $ 0.15 $ 0.05 $ 0.54
</TABLE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------
($ in thousands) FISCAL YEAR ENDED MARCH 31, 1999
----------- ----------- --------- ----------- ----------- ---------
YTD
1ST QUARTER 2ND QUARTER 9/30/1998 3RD QUARTER 4TH QUARTER FULL YEAR
----------- ----------- --------- ----------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net Sales $ 7,300 $ 8,260 $ 15,560 $ 9,315 $ 5,656 $ 30,531
Gross Profit 3,281 3,662 6,943 4,362 2,550 13,855
Gross Margin 44.9% 44.3% 44.6% 46.8% 45.1% 45.4%
Operating Income 1,409 1,553 2,962 1,788 187 4,937
Operating Income Margin 19.3% 18.8% 19.0% 19.2% 3.3% 16.2%
Net Income 966 1,126 2,092 1,272 275 3,639
Net Income Margin 13.2% 13.6% 13.4% 13.7% 4.9% 11.9%
Earnings per Share $ 0.16 $ 0.18 $ 0.34 $ 0.21 $ 0.04 $ 0.59
</TABLE>
--------------------------------------------------------------------------------
Walnut 11 Berwind Financial, L.P.
<PAGE> 12
FINANCIAL OVERVIEW
================================================================================
COMMON SIZE INCOME STATEMENTS
<TABLE>
<CAPTION>
FISCAL YEAR ENDED MARCH 31, LTM SEPT. 30,
-------------------------------------------------------------------- -------------
(% of sales) 1996 1997 1998 1999 2000 2000
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Net Sales 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
Cost of Goods Sold 54.5% 55.4% 54.9% 54.6% 54.9% 55.0%
----- ----- ----- ----- ----- -----
Gross Profit 45.5% 44.6% 45.1% 45.4% 45.1% 45.0%
Operating Expenses 36.8% 28.3% 23.8% 29.2% 31.2% 32.1%
----- ----- ----- ----- ----- -----
Income from Operations 8.7% 16.3% 21.3% 16.2% 13.8% 12.9%
Other Income 0.2% 0.2% 1.2% 3.2% 2.0% 2.3%
----- ----- ----- ----- ----- -----
Income Before Taxes 8.9% 16.5% 22.5% 19.3% 15.8% 15.3%
Income Tax Expense 3.4% 3.3% 9.0% 7.4% 6.0% 5.8%
----- ----- ----- ----- ----- -----
Net Income 5.6% 13.2% 13.5% 11.9% 9.8% 9.4%
Depreciation 1.2% 0.8% 0.6% 0.9% 1.0% 1.5%
----- ----- ----- ----- ----- -----
EBITDA 9.9% 17.1% 21.9% 17.1% 14.8% 14.4%
</TABLE>
--------------------------------------------------------------------------------
Walnut 12 Berwind Financial, L.P.
<PAGE> 13
FINANCIAL OVERVIEW
================================================================================
HISTORICAL INCOME STATEMENTS TRENDS
<TABLE>
<CAPTION>
SIX MONTHS
TWELVE MONTHS ENDED MARCH 31, ENDED SEPT. 30,
----------------------------------------------------- ---------------
(% change period over period) 1997 1998 1999 2000 2000
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Net Sales 82.5% 68.2% 5.0% 7.8% 9.3%
Cost of Goods Sold 85.4% 66.8% 4.5% 8.5% 9.3%
------ ------ ------ ------ ------
Gross Profit 79.0% 70.0% 5.6% 7.1% 9.4%
Operating Expenses 40.5% 41.3% 28.9% 15.3% 17.7%
------ ------ ------ ------ ------
Income from Operations 241.6% 119.9% -20.3% -7.8% -2.9%
Other Income 48.0% 965.8% 183.8% -32.6% 43.4%
------ ------ ------ ------ ------
Income Before Taxes 236.7% 129.1% -9.5% -11.9% 1.9%
Income Tax Expense 81.2% 352.8% -13.2% -13.2% 3.3%
------ ------ ------ ------ ------
Net Income 330.4% 72.4% -7.1% -11.1% 0.9%
Depreciation 22.7% 30.6% 54.6% 11.9% 127.6%
------ ------ ------ ------ ------
EBITDA 214.9% 115.7% -18.1% -6.7% 3.1%
</TABLE>
--------------------------------------------------------------------------------
Walnut 13 Berwind Financial, L.P.
<PAGE> 14
FINANCIAL OVERVIEW
================================================================================
HISTORICAL BALANCE SHEETS
<TABLE>
<CAPTION>
AS OF MARCH 31, SEPT. 30,
-------------------------------------------------------------- --------
($ in thousands) 1996 1997 1998 1999 2000 2000
------- ------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Cash and Cash Equivalents $ 639 $ 516 $ 4,074 $ 5,010 $ 2,882 $ 6,677
Investment Securities - Held to Maturity 0 0 4,096 8,136 4,183 4,421
Accounts Receivable 465 1,236 1,319 1,269 2,170 3,159
Inventory 1,557 2,584 3,457 4,925 7,559 5,447
Other Current Assets 61 75 564 982 1,100 606
------- ------- -------- -------- -------- --------
Total current assets 2,722 4,410 13,510 20,321 17,895 20,309
Investment Securities - Held to Maturity 0 0 7,949 4,043 7,897 7,968
Property and Equipment, net 818 848 1,457 1,482 2,049 2,683
Other Assets 147 147 825 774 1,481 1,485
------- ------- -------- -------- -------- --------
TOTAL ASSETS $ 3,686 $ 5,406 $ 23,741 $ 26,620 $ 29,322 $ 32,444
======= ======= ======== ======== ======== ========
Lines of Credit 5 0 0 0 0 0
Accounts Payable 384 893 657 720 618 1,118
Due to Related Party 504 714 534 860 1,348 1,499
Accrued Expenses and Other Current Liabilities 184 166 241 126 401 798
Income Taxes Payable 462 296 521 99 0 0
------- ------- -------- -------- -------- --------
Total Current Liabilities 1,539 2,069 1,953 1,805 2,367 3,415
Long Term Debt 492 312 0 0 0 0
Deferred Income Taxes 3 0 0 0 0 0
Common Stock 91 91 6 6 6 6
Additional Paid in Capital 304 304 17,641 19,562 20,055 20,055
Retained Earnings 1,308 2,680 4,226 5,942 8,685 10,748
Treasury Stock (50) (50) (85) (621) (1,716) (1,723)
Stock Purchase Loans 0 0 0 (75) (75) (66)
Other Comprehensive Income - Available for Sale
Investments 0 0 0 0 0 9
------- ------- -------- -------- -------- --------
Total Owner's Equity 1,653 3,025 21,787 24,814 26,955 29,029
TOTAL LIABILITIES AND OWNER'S EQUITY $ 3,686 $ 5,406 $ 23,741 $ 26,620 $ 29,322 $ 32,444
======= ======= ======== ======== ======== ========
Key Ratios
Days Receivables 30.0 47.6 27.9 15.9 25.9 35.0
Inventory Turns 4.9 5.2 6.7 6.1 4.2 6.5
Days Payables 46.0 63.2 25.1 16.5 13.5 19.5
Working Capital 1,183 2,341 11,557 18,516 15,528 16,893
</TABLE>
--------------------------------------------------------------------------------
Walnut 14 Berwind Financial, L.P.
<PAGE> 15
Financial Overview
================================================================================
Historical Cash Flow Statements
<TABLE>
<CAPTION>
FISCAL YEAR ENDED MARCH 31,
-------------------------------------------------------------
($ in thousands) 1996 1997 1998 1999 2000
-------- ------- -------- ------- -------
<S> <C> <C> <C> <C> <C>
Cash Flows from Operating Activities
Net Income $ 528 $ 2,273 $ 5,038 $ 3,638 $ 3,236
Allowance for Doubtful Accounts 12 15 86 (45)
Depreciation and amortization 115 141 184 284 318
Deferred Taxes 3 (3) (170) 11 17
Write Off of Stock Purchase Loans
Increase (decrease) in:
Investments - Trading (133) 8,240
Accounts Receivable (148) (786) (169) 96 (902)
Inventory (463) (1,027) (873) (1,468) (2,635)
Prepaid Expenses and Other Assets 24 (17) (351) (437) 347
Increase (decrease) in:
Accounts Payable and Due to Related Parties 209 719 (415) 389 385
Accrued Expenses and Other Current Liabilities 134 (18) 75 (115) 275
Income Tax Payable 254 (166) 225 (422) (693)
-------- ------- -------- ------- -------
Net Cash Provided by Operating Activities 669 1,131 3,628 1,797 8,589
Cash Flows from Investing Activities
Purchase of Investment Securities (12,040) (8,142)
Purchase of Equipment (62) (143) (1,220) (241) (779)
Other (19) (5) (85) (700)
-------- ------- -------- ------- -------
Net Cash Provided by (Used in) Investing (81) (147) (13,345) (241) (9,622)
Activities
Cash Flows from Financing Activities
Payments on Long Term Debt (90) (202) (3,462)
Proceeds from Long Term Debt 5 (5) 3,150
Proceeds from Issuance of Common Stock 17,079
Stockholder Distribution (80) (901) (3,492)
Purchase of Company Stock (621) (1,095)
-------- ------- -------- ------- -------
Net Cash Provided by (Used in) Financing Activities (164) (1,108) 13,275 (621) (1,095)
NET INCREASE (DECREASE) IN CASH $ 424 $( 124) $ 3,558 $ 935 $(2,128)
Cash - Beginning of Period 215 639 516 4,074 5,009
CASH - END OF PERIOD $ 639 $ 516 $ 4,074 $ 5,009 $ 2,882
</TABLE>
--------------------------------------------------------------------------------
Walnut 15 Berwind Financial, L.P.
<PAGE> 16
FINANCIAL OVERVIEW
================================================================================
HISTORICAL STOCK PERFORMANCE
[GRAPH OMITTED]
Stock Price from 11/24/97 to present
11/24/97
Initial Equity Offering
10/28/98
Prudential upgrades rating
from Hold to Strong Buy
8/28/00
800-JR Cigar announces
going private transaction
OFFER PRICE OF $5.50 PER SHARE
<TABLE>
<CAPTION>
DATE CLOSE VOLUME
---- ----- ------
<S> <C> <C>
11/7/00
11/6/00 3.5 19200
11/3/00 3.813 3200
11/2/00 3.5 3800
11/1/00 3.5 0
10/31/00 3.5 2600
10/30/00 3.375 1100
10/27/00 3.5 5500
10/26/00 3.547 2000
10/25/00 3.5 0
10/24/00 3.5 4100
10/23/00 3.563 0
10/20/00 3.563 2700
10/19/00 3.5 0
10/18/00 3.5 0
10/17/00 3.5 2000
10/16/00 3.563 0
10/13/00 3.563 2000
10/12/00 3.5 0
10/11/00 3.5 500
10/10/00 3.5 14400
10/9/00 3.5 3500
10/6/00 3.375 3100
10/5/00 3.375 0
10/4/00 3.375 2500
10/3/00 3.469 100
10/2/00 3.563 1400
9/29/00 3.5 9400
9/28/00 3.5 23200
9/27/00 3.563 400
9/26/00 3.625 6900
9/25/00 3.75 2900
9/22/00 3.688 10800
9/21/00 4.125 100
9/20/00 4 33800
9/19/00 4.375 0
9/18/00 4.375 1800
9/15/00 4.469 1000
9/14/00 4.25 1000
9/13/00 4.25 0
9/12/00 4.25 1100
9/11/00 4.188 400
9/8/00 4.25 1900
9/7/00 4.25 2400
9/6/00 4.125 0
9/5/00 4.125 5300
9/4/00
9/1/00 4.125 2200
8/31/00 4.25 1700
8/30/00 4 1100
8/29/00 3.938 0
8/28/00 3.938 2000
8/25/00 3.75 3700
8/24/00 4.25 0
8/23/00 4.25 2500
8/22/00 4 0
8/21/00 4 33000
8/18/00 4.375 300
8/17/00 4.75 0
8/16/00 4.75 100
8/15/00 4.5 0
8/14/00 4.5 0
8/11/00 4.5 0
8/10/00 4.5 100
8/9/00 4.5 2700
8/8/00 4.875 3400
8/7/00 5.25 0
8/4/00 5.25 100
8/3/00 5 2200
8/2/00 4.75 4000
8/1/00 5.25 2600
7/31/00 5 0
7/28/00 5 400
7/27/00 5 400
7/26/00 5 400
7/25/00 5.25 1500
7/24/00 5.25 1000
7/21/00 5.5 1000
7/20/00 5.5 200
7/19/00 5.5 600
7/18/00 5.5 600
7/17/00 5.375 200
7/14/00 5.25 5000
7/13/00 5.281 1600
7/12/00 5.688 5000
7/11/00 5.375 9400
7/10/00 5.5 1000
7/7/00 5.625 500
7/6/00 5.625 500
7/5/00 5.063 2900
7/4/00
7/3/00 5.688 0
6/30/00 5.688 1400
6/29/00 5.25 0
6/28/00 5.25 700
6/27/00 4.75 1600
6/26/00 4.5 0
6/23/00 4.5 400
6/22/00 5.281 2200
6/21/00 5.125 200
6/20/00 5.188 100
6/19/00 5 0
6/16/00 5 200
6/15/00 5 8000
6/14/00 5.625 0
6/13/00 5.625 3100
6/12/00 5.813 3800
6/9/00 5 1600
6/8/00 5.375 1300
6/7/00 5.375 3000
6/6/00 5.438 200
6/5/00 5.375 0
6/2/00 5.375 800
6/1/00 5.375 0
5/31/00 5.375 5100
5/30/00 5.063 500
5/29/00
5/26/00 5.063 100
5/25/00 5.25 4400
5/24/00 4.313 14500
5/23/00 5.625 11600
5/22/00 5.875 3000
5/19/00 6.125 33200
5/18/00 6 0
5/17/00 6 14400
5/16/00 6.5 22800
5/15/00 6 24700
5/12/00 6.5 22700
5/11/00 5.625 9600
5/10/00 5.5 8700
5/9/00 5.25 4400
5/8/00 5 9300
5/5/00 4.875 1500
5/4/00 5.25 2200
5/3/00 5.25 1800
5/2/00 5 3600
5/1/00 4.75 0
4/28/00 4.75 400
4/27/00 4.75 2400
4/26/00 4.875 12400
4/25/00 4.75 24400
4/24/00 4.625 23600
4/21/00
4/20/00 4.563 3100
4/19/00 4.75 1100
4/18/00 4.75 20200
4/17/00 4.25 5100
4/14/00 4.375 6500
4/13/00 4.5 400
4/12/00 4.5 3600
4/11/00 4.938 400
4/10/00 4.938 25300
4/7/00 4.938 18400
4/6/00 4.5 1200
4/5/00 4.625 0
4/4/00 4.625 39200
4/3/00 5.484 35100
3/31/00 4.188 9900
3/30/00 3.875 800
3/29/00 3.875 700
3/28/00 4 1000
3/27/00 4.125 48700
3/24/00 3.313 300
3/23/00 3.313 4000
3/22/00 3.25 4300
3/21/00 3.063 2000
3/20/00 3.125 26400
3/17/00 3.375 300
3/16/00 3.375 1000
3/15/00 3.5 29800
3/14/00 3.313 800
3/13/00 3.563 10300
3/10/00 3.313 28900
3/9/00 3.438 0
3/8/00 3.438 3200
3/7/00 3.25 31300
3/6/00 3.375 0
3/3/00 3.375 1000
3/2/00 3.313 300
3/1/00 3.313 0
2/29/00 3.313 0
2/28/00 3.313 300
2/25/00 3.375 300
2/24/00 3.375 3500
2/23/00 3.438 400
2/22/00 3.5 10300
2/21/00
2/18/00 3.625 5800
2/17/00 3.688 6400
2/16/00 3.828 18300
2/15/00 3.781 1000
2/14/00 3.875 1000
2/11/00 3.75 0
2/10/00 3.75 25800
2/9/00 3.75 2200
2/8/00 3.75 1500
2/7/00 3.813 400
2/4/00 3.75 4200
2/3/00 3.75 1800
2/2/00 4 0
2/1/00 4 2100
1/31/00 3.75 16200
1/28/00 3.75 1100
1/27/00 3.875 1500
1/26/00 3.813 16100
1/25/00 3.813 21900
1/24/00 3.813 31200
1/21/00 3.688 7000
1/20/00 3.516 11200
1/19/00 3.5 8200
1/18/00 3.563 21300
1/17/00
1/14/00 3.5 200
1/13/00 3.563 27100
1/12/00 3.5 500
1/11/00 3.594 3100
1/10/00 3.5 4200
1/7/00 3.5 1400
1/6/00 3.5 900
1/5/00 3.625 0
1/4/00 3.625 2100
1/3/00 3.5 12800
12/31/99 3.625 48400
12/30/99 3.531 16400
12/29/99 3.375 32800
12/28/99 3.375 20800
12/27/99 3.375 23600
12/24/99
12/23/99 3.688 10700
12/22/99 3.875 8400
12/21/99 3.875 24100
12/20/99 4 13300
12/17/99 4 1500
12/16/99 4 2300
12/15/99 3.938 22600
12/14/99 3.938 10400
12/13/99 3.875 0
12/10/99 3.875 11800
12/9/99 4 22400
12/8/99 4.375 13300
12/7/99 3.875 9300
12/6/99 4.188 8600
12/3/99 4 3100
12/2/99 4.25 49000
12/1/99 4.375 6000
11/30/99 4.625 44200
11/29/99 4.313 21100
11/26/99 4.375 800
11/25/99
11/24/99 4.5 32500
11/23/99 3.625 5100
11/22/99 3.875 5300
11/19/99 3.688 6100
11/18/99 3.75 5500
11/17/99 3.75 2900
11/16/99 3.656 1800
11/15/99 3.781 9100
11/12/99 3.75 3900
11/11/99 4 5600
11/10/99 3.75 11100
11/9/99 3.875 15800
11/8/99 3.563 200
11/5/99 3.75 3400
11/4/99 3.563 800
11/3/99 3.75 5200
11/2/99 3.75 700
11/1/99 3.5 4900
10/29/99 3.5 500
10/28/99 3.5 200
10/27/99 3.5 0
10/26/99 3.5 5400
10/25/99 3.5 800
10/22/99 3.563 8900
10/21/99 3.563 1100
10/20/99 3.594 1200
10/19/99 3.563 200
10/18/99 3.563 14800
10/15/99 3.563 2300
10/14/99 3.875 0
10/13/99 3.875 1000
10/12/99 3.813 300
10/11/99 3.563 1700
10/8/99 3.563 400
10/7/99 3.844 7100
10/6/99 3.5 43000
10/5/99 3.625 0
10/4/99 3.625 700
10/1/99 3.625 17500
9/30/99 3.75 3700
9/29/99 4.219 0
9/28/99 4.219 0
9/27/99 4.219 400
9/24/99 3.75 0
9/23/99 3.75 7400
9/22/99 4.25 300
9/21/99 4.125 600
9/20/99 3.75 3500
9/17/99 3.75 400
9/16/99 3.75 700
9/15/99 3.75 3500
9/14/99 3.75 6600
9/13/99 3.375 0
9/10/99 3.375 13800
9/9/99 3.781 0
9/8/99 3.781 0
9/7/99 3.781 1200
9/6/99
9/3/99 3.75 0
9/2/99 3.75 0
9/1/99 3.75 4800
8/31/99 3.813 1000
8/30/99 3.938 0
8/27/99 3.983 0
8/26/99 3.983 0
8/25/99 3.983 1100
8/24/99 4.044 3300
8/23/99 4.105 13900
8/20/99 4.105 0
8/19/99 4.105 0
8/18/99 4.105 100
8/17/99 4.105 0
8/16/99 4.105 0
8/13/99 4.105 31000
8/12/99 4.105 3000
8/11/99 4.105 8100
8/10/99 3.983 0
8/9/99 3.983 1600
8/6/99 3.922 17200
8/5/99 3.922 500
8/4/99 3.922 1000
8/3/99 3.922 100
8/2/99 3.922 0
7/30/99 3.922 700
7/29/99 4.044 100
7/28/99 3.922 3700
7/27/99 4.044 3000
7/26/99 3.922 300
7/23/99 3.922 9500
7/22/99 3.952 100
7/21/99 4.167 3700
7/20/99 3.922 400
7/19/99 4.044 17600
7/16/99 4.075 14200
7/15/99 4.075 4200
7/14/99 4.075 200
7/13/99 4.167 0
7/12/99 4.167 2000
7/9/99 4.167 21900
7/8/99 4.197 0
7/7/99 4.197 1200
7/6/99 4.289 2100
7/5/99
7/2/99 4.289 1600
7/1/99 4.289 1300
6/30/99 4.289 1300
6/29/99 4.473 1000
6/28/99 4.289 1200
6/25/99 4.35 300
6/24/99 4.35 8500
6/23/99 4.35 24400
6/22/99 4.289 1300
6/21/99 4.412 1900
6/18/99 4.412 21600
6/17/99 4.412 0
6/16/99 4.412 1400
6/15/99 4.412 800
6/14/99 4.534 4400
6/11/99 4.412 7900
6/10/99 4.412 5900
6/9/99 4.534 1500
6/8/99 4.289 18100
6/7/99 4.289 1000
6/4/99 4.289 22000
6/3/99 4.289 700
6/2/99 4.289 10800
6/1/99 4.289 200
5/31/99
5/28/99 4.289 1800
5/27/99 4.289 0
5/26/99 4.289 6300
5/25/99 4.534 6300
5/24/99 4.534 2400
5/21/99 4.289 1200
5/20/99 4.718 800
5/19/99 4.779 700
5/18/99 4.473 5900
5/17/99 4.412 2800
5/14/99 4.473 12900
5/13/99 4.412 0
5/12/99 4.412 200
5/11/99 4.412 0
5/10/99 4.412 1900
5/7/99 4.197 0
5/6/99 4.197 12700
5/5/99 4.412 1900
5/4/99 4.044 300
5/3/99 4.412 2000
4/30/99 3.983 2300
4/29/99 3.983 6200
4/28/99 4.412 5700
4/27/99 4.228 8900
4/26/99 3.922 7200
4/23/99 3.891 2100
4/22/99 3.554 1600
4/21/99 3.922 600
4/20/99 3.922 4200
4/19/99 4.044 7600
4/16/99 3.676 1500
4/15/99 3.676 800
4/14/99 3.676 20500
4/13/99 3.309 1300
4/12/99 3.309 4400
4/9/99 3.799 800
4/8/99 3.309 2100
4/7/99 3.37 2700
4/6/99 3.554 800
4/5/99 3.554 4400
4/2/99
4/1/99 3.922 4600
3/31/99 3.799 4900
3/30/99 3.922 200
3/29/99 3.738 4000
3/26/99 3.707 7400
3/25/99 3.922 3700
3/24/99 3.799 2000
3/23/99 3.922 1300
3/22/99 3.799 23800
3/19/99 3.922 1700
3/18/99 3.922 2800
3/17/99 3.922 16100
3/16/99 3.922 14000
3/15/99 3.983 10400
3/12/99 4.044 800
3/11/99 4.167 12100
3/10/99 4.197 400
3/9/99 4.167 1500
3/8/99 4.167 5500
3/5/99 4.35 0
3/4/99 4.35 3500
3/3/99 4.289 1000
3/2/99 4.412 2500
3/1/99 4.412 700
2/26/99 4.534 0
2/25/99 4.534 3600
2/24/99 4.534 900
2/23/99 4.289 1400
2/22/99 4.596 2600
2/19/99 4.167 300
2/18/99 4.205 4700
2/17/99 4.325 3300
2/16/99 4.325 400
2/15/99
2/12/99 4.325 4300
2/11/99 4.265 8900
2/10/99 4.085 4600
2/9/99 4.085 0
2/8/99 4.085 4000
2/5/99 4.205 7900
2/4/99 4.325 27400
2/3/99 4.205 5300
2/2/99 4.566 4400
2/1/99 4.566 5000
1/29/99 4.806 500
1/28/99 4.686 800
1/27/99 4.686 2100
1/26/99 4.806 6700
1/25/99 4.806 12100
1/22/99 5.046 600
1/21/99 5.046 10000
1/20/99 4.926 5300
1/19/99 4.926 9000
1/18/99
1/15/99 5.166 4800
1/14/99 5.407 3200
1/13/99 5.076 12500
1/12/99 5.166 1000
1/11/99 5.226 12600
1/8/99 5.046 3500
1/7/99 5.286 7900
1/6/99 5.286 6600
1/5/99 5.046 1700
1/4/99 5.106 10800
1/1/99
12/31/98 5.286 14100
12/30/98 5.106 33100
12/29/98 5.046 11200
12/28/98 5.106 9200
12/25/98
12/24/98 5.407 11500
12/23/98 5.166 9900
12/22/98 5.527 1600
12/21/98 5.407 6800
12/18/98 5.407 6700
12/17/98 5.286 22300
12/16/98 5.767 27700
12/15/98 5.166 7400
12/14/98 5.166 300
12/11/98 5.286 4300
12/10/98 5.407 25300
12/9/98 5.407 4000
12/8/98 5.527 5700
12/7/98 5.407 3200
12/4/98 5.647 10800
12/3/98 5.647 6400
12/2/98 5.647 48100
12/1/98 5.647 10900
11/30/98 5.647 5400
11/27/98 5.407 14900
11/26/98
11/25/98 5.527 9000
11/24/98 5.527 3000
11/23/98 5.767 18200
11/20/98 5.527 7100
11/19/98 5.347 9700
11/18/98 5.407 14000
11/17/98 5.767 6100
11/16/98 5.887 9100
11/13/98 5.767 9500
11/12/98 6.007 4700
11/11/98 5.467 21700
11/10/98 5.647 34800
11/9/98 5.527 23300
11/6/98 5.767 23300
11/5/98 6.127 63800
11/4/98 5.887 16500
11/3/98 6.248 24800
11/2/98 6.728 16600
10/30/98 6.488 139600
10/29/98 7.449 409100
10/28/98 6.668 254200
10/27/98 4.686 13900
10/26/98 4.566 200
10/23/98 4.205 200
10/22/98 4.445 2300
10/21/98 3.845 2200
10/20/98 3.664 7800
10/19/98 3.785 2000
10/16/98 3.815 6200
10/15/98 3.785 4300
10/14/98 3.785 9900
10/13/98 3.544 0
10/12/98 3.544 2100
10/9/98 3.424 2900
10/8/98 3.364 11700
10/7/98 3.484 7100
10/6/98 3.544 3400
10/5/98 3.484 100
10/2/98 3.604 8700
10/1/98 3.845 3300
9/30/98 3.965 1400
9/29/98 3.965 1700
9/28/98 3.484 600
9/25/98 3.725 200
9/24/98 3.725 20400
9/23/98 3.604 4100
9/22/98 3.604 8100
9/21/98 3.845 1700
9/18/98 3.725 1600
9/17/98 3.725 2300
9/16/98 3.845 5500
9/15/98 3.725 200
9/14/98 3.725 27000
9/11/98 3.304 200
9/10/98 3.484 3900
9/9/98 3.484 34600
9/8/98 3.604 3600
9/7/98
9/4/98 3.845 5400
9/3/98 3.905 1100
9/2/98 4.085 4600
9/1/98 3.769 51500
8/31/98 3.769 5000
8/28/98 4.064 7300
8/27/98 4.005 5000
8/26/98 4.005 9900
8/25/98 4.005 1500
8/24/98 4.005 2200
8/21/98 4.005 2700
8/20/98 3.946 15200
8/19/98 4.358 200
8/18/98 4.24 5200
8/17/98 3.946 400
8/14/98 4.005 9700
8/13/98 4.947 2600
8/12/98 5.065 13200
8/11/98 4.947 21100
8/10/98 4.771 1300
8/7/98 4.712 6000
8/6/98 4.712 35600
8/5/98 4.005 11500
8/4/98 4.123 9500
8/3/98 4.24 12300
7/31/98 4.476 1400
7/30/98 4.594 4900
7/29/98 4.594 200
7/28/98 4.594 34000
7/27/98 4.594 13600
7/24/98 4.829 42500
7/23/98 4.594 6600
7/22/98 4.594 8800
7/21/98 4.476 9300
7/20/98 4.476 16200
7/17/98 4.535 43500
7/16/98 4.712 43700
7/15/98 4.829 13000
7/14/98 5.065 3700
7/13/98 4.947 5400
7/10/98 5.153 14600
7/9/98 5.301 64300
7/8/98 4.712 52000
7/7/98 5.713 15700
7/6/98 5.536 23100
7/3/98
7/2/98 5.713 4200
7/1/98 5.536 14600
6/30/98 5.418 11200
6/29/98 5.654 500
6/26/98 5.772 5800
6/25/98 5.713 6600
6/24/98 5.595 25300
6/23/98 5.654 14100
6/22/98 5.654 9700
6/19/98 5.772 3900
6/18/98 5.89 3600
6/17/98 5.89 5300
6/16/98 5.772 8400
6/15/98 5.772 800
6/12/98 5.772 6800
6/11/98 6.184 2000
6/10/98 6.125 15700
6/9/98 6.184 9900
6/8/98 6.361 14500
6/5/98 6.537 11800
6/4/98 6.243 10000
6/3/98 6.125 3200
6/2/98 6.478 3000
6/1/98 6.361 22100
5/29/98 6.478 21200
5/28/98 6.243 14200
5/27/98 6.302 2300
5/26/98 6.478 31300
5/25/98
5/22/98 6.243 13700
5/21/98 6.714 3700
5/20/98 6.596 2200
5/19/98 6.714 21900
5/18/98 6.596 50900
5/15/98 6.125 17700
5/14/98 6.361 18100
5/13/98 6.243 4800
5/12/98 6.361 18800
5/11/98 6.596 14800
5/8/98 6.95 31300
5/7/98 6.832 80800
5/6/98 6.243 27800
5/5/98 6.125 23700
5/4/98 6.125 26900
5/1/98 6.302 48900
4/30/98 6.773 106600
4/29/98 7.126 77300
4/28/98 6.596 150300
4/27/98 6.184 46400
4/24/98 6.125 135700
4/23/98 6.184 114600
4/22/98 6.066 97900
4/21/98 5.89 31300
4/20/98 6.361 18700
4/17/98 6.478 24600
4/16/98 6.478 16300
4/15/98 6.596 14800
4/14/98 6.714 16300
4/13/98 6.95 26100
4/10/98
4/9/98 7.067 11500
4/8/98 7.185 1100
4/7/98 7.185 7500
4/6/98 7.126 79000
4/3/98 7.303 4000
4/2/98 7.303 23400
4/1/98 7.539 7900
3/31/98 7.421 900
3/30/98 7.892 1500
3/27/98 7.892 5000
3/26/98 7.656 2900
3/25/98 7.656 5400
3/24/98 7.539 6400
3/23/98 7.656 11600
3/20/98 7.303 9400
3/19/98 7.539 9500
3/18/98 7.421 1300
3/17/98 7.303 10400
3/16/98 7.539 6700
3/13/98 7.656 2000
3/12/98 7.421 2400
3/11/98 7.539 14300
3/10/98 8.128 15600
3/9/98 7.774 1200
3/6/98 7.539 400
3/5/98 7.539 2700
3/4/98 8.01 16200
3/3/98 7.597 6800
3/2/98 8.01 21300
2/27/98 7.185 20500
2/26/98 7.656 5000
2/25/98 7.656 6000
2/24/98 8.128 4900
2/23/98 8.01 6400
2/20/98 8.01 15800
2/19/98 8.01 20300
2/18/98 7.303 3700
2/17/98 7.185 19100
2/16/98
2/13/98 7.067 10200
2/12/98 6.891 9700
2/11/98 6.832 12700
2/10/98 6.832 27100
2/9/98 6.832 18500
2/6/98 7.067 9100
2/5/98 7.421 378200
2/4/98 7.421 15000
2/3/98 7.656 30900
2/2/98 8.069 3900
1/30/98 8.01 16900
1/29/98 8.01 26900
1/28/98 8.01 8900
1/27/98 8.245 30100
1/26/98 8.599 12400
1/23/98 8.481 35800
1/22/98 8.599 39700
1/21/98 8.54 57300
1/20/98 8.599 11100
1/19/98
1/16/98 8.481 34200
1/15/98 8.481 3200
1/14/98 8.481 11700
1/13/98 8.54 30800
1/12/98 8.716 8500
1/9/98 9.07 11700
1/8/98 8.952 3100
1/7/98 8.952 34800
1/6/98 8.952 29100
1/5/98 8.716 45500
1/2/98 8.599 57000
1/1/98
12/31/97 8.599 24500
12/30/97 8.716 39000
12/29/97 8.834 41800
12/26/97 8.775 41700
12/25/97
12/24/97 8.363 100000
12/23/97 9.305 60200
12/22/97 9.423 4500
12/19/97 9.541 8300
12/18/97 9.423 2500
12/17/97 9.423 18800
12/16/97 9.423 8500
12/15/97 9.482 70000
12/12/97 10.366 10100
12/11/97 10.366 15400
12/10/97 10.366 13600
12/9/97 10.424 40000
12/8/97 10.366 8200
12/5/97 10.483 23600
12/4/97 10.366 64000
12/3/97 10.483 33700
12/2/97 10.483 13900
12/1/97 10.483 145400
11/28/97 10.483 34300
11/27/97
11/26/97 10.601 166800
11/25/97 10.012 1547500
11/24/97
</TABLE>
MARKET STATISTICS
-----------------
<TABLE>
<S> <C>
Recent Market Price (11/7/00) $ 3.50
52-Week High Price $ 6.75
52-Week Low Price $ 3.06
Avg. Daily Volume (52 Week)(a) 3,681
</TABLE>
(a) Source: Zacks
--------------------------------------------------------------------------------
Walnut 16 Berwind Financial, L.P.
<PAGE> 17
Industry Observations and Comments
================================================================================
- Slow/no growth in demand for premium cigars; limited ability to raise
prices/need to discount even premium brands
- Investor interest in cigar industry has decreased
- Increased industry consolidation
- Domestic manufacturers or distributors of cigars have been
acquired or taken private
- Little institutional interest, no meaningful Wall Street coverage
- Lack of investor interest and market conditions have led to poor
returns for shareholders of cigar manufacturers and distributors
- Increased risk of government legislation, regulation and taxes
- Increased awareness of health risks associated with cigar smoking
- Increased cost of bringing new product offerings to market decreases
profit margin
- Increased litigation exposure - current and expected
================================================================================
Walnut 17 Berwind Financial, L.P.
<PAGE> 18
Company Observations
================================================================================
- The Company suffers from several challenges given its industry
segment, size, growth characteristics, business risks and
institutional following
- Cigar demand (particularly the premium segment) has decreased
- The Company's market capitalization and revenue are small
- The Company's stock is very thinly traded
- The Company has limited revenue and profit growth prospects
- The Company is dependent on a single brand for a majority of its
sales
- The Company is dependent on a single supplier for a majority of
its sales. The supply agreement does not provide the Company with
a guaranteed supply in the event of a sale to an unaffiliated
third party.
- The Company has no Wall Street analyst coverage and no meaningful
institutional following
- Due to limited growth potential and industry conditions,
catalysts for price appreciation are limited as additional
revenue growth is achieved only by increasing expenses.
- Fiscal Year 2001 budgeted profitability increase reflects certain
non-repeatable events (such as the success of the limited edition
VSG sub-brand) which are not forecast to improve profits past
2001
================================================================================
Walnut 18 Berwind Financial, L.P.
<PAGE> 19
Premiums Paid Analysis
================================================================================
<TABLE>
<CAPTION>
STOCK PREMIUM
DATE TARGET NAME/ DEAL ENTERPRISE -----------------------------
ANNCD BUSINESS DESCRIPTION ACQUIRER NAME VALUE VALUE 1 DAY 1 WEEK 4 WEEKS
=================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C>
MEAN $ 228.90 $ 1,837.09 20.57% 25.07% 35.71%
MEDIAN 72.82 657.02 20.04 20.81 27.62
HIGH 2,449.30 17,040.14 75.00 94.44 253.28
LOW 0.16 1.35 (46.25) (37.46) (40.78)
---------------------------------------------------------------
WALNUT $ 36.32 $ 19.03 57.14% 62.96% 57.14%
---------------------------------------------------------------
10/17/00 Trex Medical Corp (Thermo Trex Thermo Electron Corp $ 16.78 $ 72.93 (46.25)% (37.46)% (25.22)%
Corp/Thermo Electron Corp)
Mnfr mammograghy, x-ray equip
9/21/00 Hertz Corp(Ford Motor Co) Ford Motor Co 600.56 10,717.36 23.71 20.60 (5.33)
Pvd auto,truck rental services
8/28/00 800-JR Cigar Inc Investor Group 33.31 151.55 20.93 18.86 18.18
Wholesale tobacco
8/14/00 BHC Communications Inc News Corp Ltd 887.75 2,403.16 16.40 13.40 10.00
(Chris-Craft Industries Inc)
Own and operate TV stations
7/27/00 Brookdale Living Communities Inc Investor Group 149.33 377.91 1.67 2.52 4.72
Pvd residential care services
7/20/00 JLK Direct Distribution Inc Kennametal Inc 36.46 209.79 48.94 94.44 68.67
(Kennametal Inc)
Wholesale indl machinery
3/23/00 Homestead Village Inc Security Capital Group Inc 156.77 1,188.91 49.09 56.19 98.79
(Security Capital Corp) (Security Capital Corp)
Real estate development firm
3/21/00 Travelers Property Casualty Corp Citigroup Inc 2,449.30 17,040.14 24.53 39.54 35.05
(Travelers Insurance Group
/Travelers Grp)
Property,casualty insurance
3/17/00 Vastar Resources Inc BP Amoco PLC 1,575.66 9,152.52 16.19 34.96 69.39
(Atlantic Richfield)
Oil and gas exploration,prodn
3/14/00 Howmet International Inc Alcoa Inc 349.32 2,213.41 13.51 12.75 14.29
(Cordant Technologies Inc)
Mnfr investment engine parts
3/3/00 Hartford Life Inc Hartford Financial 1,324.61 7,677.26 18.65 40.28 43.26
(ITT Hartford Group) Services Group Inc
Pvd insurance, finl services
2/22/00 IXnet Inc Global Crossing Ltd 876.94 2,779.06 18.12 22.80 25.91
(IPC Information Systems Inc)
Provide global networking svcs
1/31/00 Thermo Sentron Inc(Thermedics) Thermedics Inc 30.69 153.55 7.36 6.90 6.90
Mnfr packaging machinery (Thermo Electron Corp)
</TABLE>
Source: Thomson's Financial
Acquisitions since 1/1/97 in which the acquirer owned greater than 70% of the
company prior to the acquisition
N/A: Not reported by Thomson's Financial
================================================================================
Walnut 19 Berwind Financial, L.P.
<PAGE> 20
Premiums Paid Analysis
================================================================================
<TABLE>
<CAPTION>
STOCK PREMIUM
DATE TARGET NAME/ DEAL ENTERPRISE -----------------------------
ANNCD BUSINESS DESCRIPTION ACQUIRER NAME VALUE VALUE 1 DAY 1 WEEK 4 WEEKS
=================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C>
1/31/00 Thermedics Detection Inc Thermedics Inc 17.02 144.62 0.79 0.79 14.29
(Thermedics Inc/ (Thermo Electron Corp)
Thermo Electron Corp)
Mnfr process control systems
1/31/00 Thermo BioAnalysis Corp Thermo Instrument Systems
(Thermo Instrument Systems Inc/ Inc (Thermo Electron Corp) 167.87 637.58 51.35 55.56 53.43
Thermo Electron Corp)
Mnfr,whl lab instruments
1/11/00 Hayes Lemmerz International Inc Investor Group 165.21 2,271.44 1.21 23.53 38.84
Mnfr,whl wheels,brakes
12/17/99 ThermoTrex Corp Thermo Electron Corp 36.93 355.57 (5.66) (0.69) 3.19
(Thermo Electron Corp)
Pvd electromedical services
12/1/99 Boise Cascade Office Products Boise Cascade Corp 205.26 1,450.75 43.48 55.29 60.00
Corp(Boise Cascade Corp)
Whl stationary,office supplies
11/12/99 Howmet International Inc Cordant Technologies Inc 261.39 1,787.49 20.89 18.78 38.07
(Cordant Technologies Inc)
Mnfr investment engine parts
10/21/99 Student Loan Corporation Citigroup Inc 180.00 10,612.79 11.46 11.63 0.84
Pvd personal credit services
10/20/99 Randers Killam Group Thermo Electron Corp 6.67 117.01 12.50 12.50 33.33
(Thermo TerraTech Inc)
Construct nonresidential bldgs
6/13/99 Thermo Vision Corp (Thermo Thermo Instrument Systems 11.87 56.86 75.00 60.00 107.41
Instrument/Thermo Electron) Inc
Mnfr medical monitoring equip
5/21/99 ThermoSpectra Corp (Thermo Thermo Instrument Systems 26.09 298.21 39.13 43.82 61.01
Instrument Systems Inc/Thermo Inc
Electron Corp)
Mnfr precision imaging equip
4/12/99 Meadowcraft Inc Investor Group 53.16 252.18 64.95 63.27 77.78
Mnfr,whl outdoor furniture
4/1/99 Aqua Alliance Inc (Vivendi SA) Vivendi SA 117.07 662.87 28.89 18.97 101.74
Pvd engineering services
3/21/99 Spelling Entertainment Group Inc Viacom Inc (National 191.65 1,153.86 8.33 43.12 54.46
(Blockbuster Entertainment Corp) Amusements Inc)
Pvd motion picture distn svcs
3/9/99 Sun Energy Partners LP Kerr-McGee Corp 43.37 3,218.73 41.54 43.75 50.82
(Kerr-McGee Corp)
Oil and gas exploration,prodn
3/8/99 LabOne Inc(Lab Holdings Inc) Lab Holdings Inc 34.29 183.95 17.24 10.27 8.51
Pvd testing svcs for ins in
1/22/99 Trex Medical Corp (ThermoTrex Thermo Electron Corp 22.58 359.59 42.88 35.53 44.00
Corp/Thermo Electron Corp)
Mnfr mammograghy, x-ray equip
11/16/98 Western Beef Inc Cactus Acquisitions Inc 13.61 NA 25.00 14.68 22.72
(Cactus Acquisitions Inc)
Own,op grocery stores
11/12/98 Aquila Gas Pipeline Corp UtiliCorp United Inc 43.20 458.10 23.08 17.43 68.42
(Aquila Energy Corp/UtiliCorp
United Inc) Gas utility
</TABLE>
================================================================================
Walnut 20 Berwind Financial, L.P.
<PAGE> 21
Premiums Paid Analysis
================================================================================
<TABLE>
<CAPTION>
STOCK PREMIUM
DATE TARGET NAME/ DEAL ENTERPRISE -----------------------------
ANNCD BUSINESS DESCRIPTION ACQUIRER NAME VALUE VALUE 1 DAY 1 WEEK 4 WEEKS
=================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C>
10/27/98 Citizens Corp Allmerica Financial Corp 212.37 1,109.65 20.64 17.18 20.91
(Hanover Insurance Co)
Auto,workers comp insurance co
10/21/98 Capital Factors Holdings Inc Union Planters Bank 22.25 739.91 4.48 8.95 2.94
(Capital Bank,Miami,FL) National Association
Pvd short-term bus credit svcs
10/5/98 Insignia Properties Trust Apartment Investment and 63.62 225.16 7.48 7.48 NA
(Apartment Investment and Management Co
Management Co)
Real estate investment trust
9/29/98 Newmont Gold Co Newmont Mining Corp 264.83 NA (5.16) 20.81 62.37
(Newmont Mining Corp)
Gold mining
9/8/98 PEC Israel Economic Corp Investor Group 125.00 685.15 60.00 55.73 50.52
(IDB Development Corp/
IDB Holding Corp)
Investment firm
8/24/98 Tele-Communications Liberty Media Corp 379.06 2,554.70 (1.10) (4.51) (9.94)
International Inc
(Tele-Commun Inc)
Pvd cable TV svcs
8/23/98 Ryerson Tull Inc Inland Steel Industries 61.15 510.81 (8.50) (11.60) (40.78)
(Inland Steel Industries Inc) Inc
Wholesale steel
7/21/98 Forum Retirement Partners LP Forum Group Inc 6.52 128.49 24.32 24.32 24.32
(Forum Group Inc)
Own,op retirement centers
7/17/98 West Teleservices Corp Investor Group 147.24 985.53 25.89 29.17 22.77
Provide business services
6/11/98 Imo Industries Inc Constellation Capital 9.10 NA (1.05) 4.44 2.55
(Constellation Capital Partners LLC
Partners LLC)
Mnfr industrial controls,pumps
4/29/98 Group 1 Software Inc COMNET Corp 11.77 64.59 71.60 83.04 83.04
Develop software
3/27/98 International Specialty Products ISP Holdings Inc 324.46 2,125.81 4.29 1.74 14.51
Inc (ISP Holdings Inc)
Mnfr specialty chemicals
2/17/98 Universal International, Inc. 99 Cents Only Stores 10.22 23.59 39.84 52.55 253.28
Wholesale goods
2/6/98 PRIMEDIA Inc Kohlberg Kravis Roberts 200.00 3,627.09 (9.86) (5.88) NA
Publishing company & Co
1/22/98 BT Office Products International Koninklijke KNP BT NV 138.05 689.73 32.53 78.86 78.86
Inc (Buhrmann-Tetterode NV)
Whl office stationary,supplies
1/8/98 Rayonier Timberlands LP Rayonier Inc 65.78 482.26 11.23 25.30 17.51
(Rayonier Inc)
Own,op timber tracts
12/23/97 American Paging Inc Telephone and Data Systems 9.06 217.94 17.65 33.33 29.03
(Telephone & Data Systems Inc) Inc
Pvd wireless messaging svcs
12/18/97 United States Cellular Corp Telephone and Data Systems 539.22 3,239.37 NA 2.33 1.15
(Telephone and Data Systems) Inc
Pvd cellular commun services
12/18/97 Aerial Communications Inc. Telephone and Data Systems 107.56 1,073.19 (2.29) 3.23 (5.88)
(Telephone and Data Systems Inc) Inc
Pvd cellular telephone svcs
</TABLE>
================================================================================
Walnut 21 Berwind Financial, L.P.
<PAGE> 22
Premiums Paid Analysis
================================================================================
<TABLE>
<CAPTION>
STOCK PREMIUM
DATE TARGET NAME/ DEAL ENTERPRISE -----------------------------
ANNCD BUSINESS DESCRIPTION ACQUIRER NAME VALUE VALUE 1 DAY 1 WEEK 4 WEEKS
=================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C>
10/23/97 Brad Ragan Inc Goodyear Tire & Rubber Co 20.75 119.09 24.17 15.06 22.63
(Goodyear Tire & Rubber Co)
Wholesale tires and tubes
9/18/97 Guaranty National Corp Orion Capital Corp 117.22 647.41 10.77 23.87 27.72
(Orion Capital Corp)
Insurance company
7/18/97 Larcan TTC Inc Larcan Inc(LeBlanc & 0.16 1.35 0.00 0.00 0.00
(Larcan Inc) Royale Enterprises Inc)
Mnfr TV transmission equipment
6/13/97 Bally's Grand Inc Bally's Grand Inc 55.39 651.18 27.88 29.85 31.06
Own and operate casino hotels
6/13/97 Bally's Grand Inc Hilton Hotels Corp 42.59 667.81 37.91 29.83 40.67
Own and operate casino hotels
5/22/97 Chaparral Steel Co Texas Industries Inc 72.82 519.31 20.39 25.25 29.17
(Texas Industries Inc)
Mnfr primary steel products
4/16/97 Steck-Vaughn Publishing Corp Harcourt General Inc 40.29 221.36 21.65 32.58 24.21
(National Education Corp)
Publish books, magazines
2/25/97 Fina Inc(Petrofina Delaware Inc/ Petrofina SA 257.02 2,427.11 19.70 18.52 21.52
Petrofina SA)
Mnfr petroleum refined prods
1/21/97 Mafco Consolidated Group Inc Mafco Holdings Inc 116.77 980.32 23.50 23.50 27.62
(Mafco Holdings)
Mnfr cosmetics,beauty products
</TABLE>
================================================================================
Walnut 22 Berwind Financial, L.P.
<PAGE> 23
Discounted Cash Flow Analysis
================================================================================
Summary Valuation
COMMON EQUITY VALUE BASED ON DISCOUNTED FREE CASH FLOWS
--------------------------------------------------------------------------------
IMPLIED EQUITY VALUE(a)
--------------------------------------------------------------------------------
($ in thousands)
<TABLE>
<CAPTION>
OPERATING MARGIN
MANAGEMENT LTM BUDGET
FORECAST(c) EXTRAPOLATION(d) EXTRAPOLATION(e)
----------- ---------------- ----------------
<S> <C> <C> <C> <C>
16.5% $32,538 $35,272 $36,836
17.0% $32,110 $34,746 $36,265
DISCOUNT RATE(b) 17.5% $31,708 $34,250 $35,728
18.0% $31,328 $33,783 $35,221
18.5% $30,970 $33,342 $34,743
</TABLE>
--------------------------------------------------------------------------------
IMPLIED PER SHARE EQUITY VALUE (FULLY DILUTED)(f)
--------------------------------------------------------------------------------
(in $'s)
<TABLE>
<CAPTION>
OPERATING MARGIN
MANAGEMENT LTM BUDGET
FORECAST(c) EXTRAPOLATION(d) EXTRAPOLATION(e)
----------- ---------------- ----------------
<S> <C> <C> <C> <C>
16.5% $4.93 $5.34 $5.58
17.0% $4.86 $5.26 $5.49
DISCOUNT RATE(b) 17.5% $4.80 $5.19 $5.41
18.0% $4.75 $5.12 $5.33
18.5% $4.69 $5.05 $5.26
</TABLE>
NOTES
--------------------
(a) Present value of forecasted free cash flow plus present value of the
terminal value plus cash and marketable securities (as of September 30,
2000) plus proceeds from the exercise of in-the-money options less operating
cash needs (as of September 30, 2000)
(b) Discount rate based on equity cost of capital
(c) Based on Company Management forecasts
(d) Based on actual LTM as of Sept. 30, 2000
(e) Based on Company adjusted budget for the fiscal year ended March 31, 2001
dated June 21, 2000
(f) Based on fully diluted shares outstanding as of November 7, 2000
================================================================================
Walnut 23 Berwind Financial, L.P.
<PAGE> 24
Discounted Cash Flow Analysis
================================================================================
Based on Company Management Forecasts
<TABLE>
<CAPTION>
FORECASTED(a)
--------------------------------------------------------------
($ in thousands) LTM(e) Y1 Y2 Y3 Y4 Y5
--------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Sales $34,515 $35,550 $36,617 $37,715 $38,847 $40,012
Sales Growth 3% 3% 3% 3% 3%
Cost of Goods Sold 18,976 19,603 20,187 20,793 21,412 22,075
--------------------------------------------------------------
Gross Profit 15,539 15,948 16,430 16,923 17,435 17,938
Gross Profit% 45.0% 44.9% 44.9% 44.9% 44.9% 44.8%
Operating Expenses 11,076 11,504 12,182 12,246 13,258 13,784
--------------------------------------------------------------
Operating Profit(EBIT) 4,463 4,444 4,248 4,677 4,176 4,153
Operating Profit Margin 12.9% 12.5% 11.6% 12.4% 10.8% 10.4%
Income Tax Provision (@ 40%) 2,012 1,778 1,699 1,871 1,670 1,661
--------------------------------------------------------------
Operating Profit (after tax) 2,451 2,666 2,549 2,806 2,506 2,492
Adjustments to Operating Income:
Depreciation & Amortization 506 536 686 600 600 600
Working Capital Requirements 0 0 (150) (1,650) 500
Capital expenditures (350) (1,500) (450) (350) (350)
---------------------------------------------------
Positive Adjustments to Cash Flow (Reductions) 186 (814) 0 (1,400) 750
Free Cash Flows $ 2,852 $ 1,735 $ 2,806 $ 1,106 $ 3,242
Discount Rate(b) 17.5% 17.5% 17.5% 17.5% 17.5% 17.5%
-----
Present Value of the Operating Cash Flows $ 2,631 $ 1,362 $ 1,875 $ 629 $ 1,569
NET PRESENT VALUE OF OPERATING CASH FLOWS $ 8,066
NET PRESENT VALUE OF TERMINAL VALUE(c) $ 6,358
-------
TOTAL NET PRESENT VALUE OF CASH FLOWS $14,424
Subtract Debt: 0
Add Excess Cash as of September 30, 2000(d): 17,284
-------
COMMON EQUITY VALUE OF PROJECT WALNUT $31,708
=======
</TABLE>
NOTES:
--------------
(a) Based on Company Management forecasts
(b) Based on all equity discount rate
(c) Terminal value based on perpetuity method
(d) Excess cash as of September 30, 2000 includes proceeds from options
exercised
(e) For the period ended September 30, 2000
================================================================================
Walnut 24 Berwind Financial, L.P.
<PAGE> 25
Discounted Cash Flow Analysis
================================================================================
Operating Margins Based on LTM as of Sept. 30, 2000
<TABLE>
<CAPTION>
FORECASTED(a)
--------------------------------------------------------------
($ in thousands) LTM(e) Y1 Y2 Y3 Y4 Y5
--------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Sales $34,515 $35,550 $36,617 $37,715 $38,847 $40,012
Sales Growth 3% 3% 3% 3% 3%
Cost of Goods Sold 18,976 19,545 20,132 20,736 21,358 21,998
--------------------------------------------------------------
Gross Profit 15,539 16,005 16,485 16,980 17,489 18,014
Gross Profit% 45.0% 45.0% 45.0% 45.0% 45.0% 45.0%
Operating Expenses 11,076 11,408 11,751 12,103 12,466 12,840
--------------------------------------------------------------
Operating Profit(EBIT) 4,463 4,597 4,735 4,877 5,023 5,174
Operating Profit Margin 12.9% 12.9% 12.9% 12.9% 12.9% 12.9%
Income Tax Provision(@ 40%) 2,012 1,839 1,894 1,951 2,009 2,070
--------------------------------------------------------------
Operating Profit (after tax) 2,451 2,758 2,841 2,926 3,014 3,104
Adjustments to Operating Income:
Depreciation & Amortization 506 536 686 600 600 600
Working Capital Requirements 0 0 (150) (1,650) 500
Capital expenditures (350) (1,500) (450) (350) (350)
---------------------------------------------------
Positive Adjustments to Cash Flow (Reductions) 186 (814) 0 (1,400) 750
Free Cash Flows $ 2,944 $ 2,027 $ 2,926 $ 1,614 $ 3,854
Discount Rate(b) 17.5% 17.5% 17.5% 17.5% 17.5% 17.5%
-------
Present Value of the Operating Cash Flows $ 2,716 $ 1,591 $ 1,955 $ 918 $ 1,865
NET PRESENT VALUE OF OPERATING CASH FLOWS $ 9,046
NET PRESENT VALUE OF TERMINAL VALUE(c) $ 7,920
-------
TOTAL NET PRESENT VALUE OF CASH FLOWS $16,966
Subtract Debt: 0
Add Excess Cash as of September 30, 2000(d): 17,284
-------
COMMON EQUITY VALUE OF PROJECT WALNUT $34,250
=======
</TABLE>
NOTES:
----------
(a) Based on Company Management forecasts. Operating margin based on LTM as of
September 30, 2000
(b) Based on all equity discount rate
(c) Terminal value based on perpetuity growth method
(d) Excess cash as of September 30, 2000 includes proceeds from options
exercised
(e) For the period ended September 30, 2000
================================================================================
Walnut 25 Berwind Financial, L.P.
<PAGE> 26
Discounted Cash Flow Analysis
================================================================================
Operating Margins Based on Company Adjusted 2001 Budget
<TABLE>
<CAPTION>
FORECASTED(a)
--------------------------------------------------------------
($ in thousands) LTM(e) Y1 Y2 Y3 Y4 Y5
--------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Sales $34,515 $35,550 $36,617 $37,715 $38,847 $40,012
Sales Growth 3% 3% 3% 3% 3%
Cost of Goods Sold 18,976 19,545 20,132 20,736 21,358 21,998
--------------------------------------------------------------
Gross Profit 15,539 16,005 16,485 16,980 17,489 18,014
Gross Profit% 45.0% 45.0% 45.0% 45.0% 45.0% 45.0%
Operating Expenses 11,076 11,028 11,359 11,700 12,051 12,412
--------------------------------------------------------------
Operating Profit(EBIT) 4,463 4,977 5,126 5,280 5,439 5,602
Operating Profit Margin 12.9% 14.0% 14.0% 14.0% 14.0% 14.0%
Income Tax Provision (@ 40%) 2,012 1,991 2,051 2,112 2,175 2,241
--------------------------------------------------------------
Operating Profit (after tax) 2,451 2,986 3,076 3,168 3,263 3,361
Adjustments to Operating Income:
Depreciation & Amortization 506 536 686 600 600 600
Working Capital Requirements 0 0 (150) (1,650) 500
Capital expenditures (350) (1,500) (450) (350) (350)
---------------------------------------------------
Positive Adjustments to Cash Flow (Reductions) 186 (814) 0 (1,400) 750
Free Cash Flows $ 3,172 $ 2,262 $ 3,168 $ 1,863 $ 4,111
Discount Rate(b) 17.5% 17.5% 17.5% 17.5% 17.5% 17.5%
-------
Present Value of the Operating Cash Flows $ 2,926 $ 1,776 $ 2,117 $ 1,060 $ 1,990
NET PRESENT VALUE OF OPERATING CASH FLOWS $ 9,868
NET PRESENT VALUE OF TERMINAL VALUE(c) $ 8,575
-------
TOTAL NET PRESENT VALUE OF CASH FLOWS $18,444
=======
Subtract Debt: 0
Add Excess Cash as of September 30, 2000(d): 17,284
-------
COMMON EQUITY VALUE OF PROJECT WALNUT $35,728
=======
</TABLE>
NOTES:
-------------
(a) Based on Company Management forecasts. Operating margin based on Company
adjusted FY2001 budget dated June 21, 2000
(b) Based on all equity discount rate
(c) Terminal value based on perpetuity growth method
(d) Excess cash as of September 30, 2000 includes proceeds from options
exercised
(e) For the period ended September 30, 2000
================================================================================
Walnut 26 Berwind Financial, L.P.
<PAGE> 27
Discounted Cash Flow Analysis
================================================================================
Weighted Average Cost of Capital
<TABLE>
<S> <C>
CALCULATION OF WALNUT IMPLIED LEVERED BETA
Walnut Unlevered Beta 0.85
Debt/Equity Ratio 0%
Walnut's Levered Beta(a) 0.85
WALNUT WEIGHTED AVERAGE COST OF CAPITAL ASSUMPTIONS(c)
Risk-free Rate (30 Year Treasury, November 7, 2000) 5.88%
Assumed Marginal Tax Rate 40.00%
Market Equity Risk Premium 8.40%
Small Company Risk Premium 2.60%
Specific Company Risk Premium 2.00%
Cost of Equity(b) 17.62%
Cost of Debt: Prime Rate + 0.5 10.00%
After Tax Cost of Debt: Cost of Debt * (1-Tax Rate) 6.00%
Debt/Total Capital Ratio 0.0%
WALNUT'S WEIGHTED AVERAGE COST OF CAPITAL(WACC)(c) 17.62%
</TABLE>
Notes:
(a) Beta(L) = [1+ (1-Tax Rate) * Debt / Equity] * Beta(U)
(b) Capital Asset Pricing Model (CAPM): Cost of Equity = Risk-free Rate +
(Relevered Beta * Equity Risk Prem.) + Size Prem. + Specific Company Premium
(c) WACC: [[Cost of Debt * (1-Tax Rate)] * (Debt/Tot. Cap.)] + [Cost of Equity *
(1 - Equity/Tot. Cap.)]
Sources: Zacks; Ibbotson Associates: Stocks, Bonds, Bills, and Inflation 1999
Yearbook
================================================================================
Walnut 27 Berwind Financial, L.P.
<PAGE> 28
FINANCIAL SPONSOR TRANSACTION ANALYSIS
<TABLE>
<CAPTION>
<S> <C>
Equity Value $36,316
Less: Excess Cash $17,284
-------
FINANCING REQUIREMENT $19,031
</TABLE>
TRANSACTION MULTIPLES:
<TABLE>
<CAPTION>
--------
LTM 2000
--------
<S> <C>
Enterprise Value/Sales 0.6x
Enterprise Value/EBIT 4.3x
Enterprise Value/EBITDA 3.8x
Financing Requirement/Net Income 11.2x
EBIT $4,463
EBITDA $4,969
Total Debt at Opening/EBITDA 2.5x
</TABLE>
SOURCE OF FUNDS:
<TABLE>
<CAPTION>
Amount %
---------------
<S> <C> <C>
Revolver $0 0.0%
Term Loan 1 4,726 24.3%
Term Loan 2 7,898 40.7%
Sub Debt 1 0 0.0%
Preferred Equity 1 0 0.0%
Common Equity 1 6,797 35.0%
Common Equity 2 0 0.0%
Common Equity 3 0 0.0%
---------------
Total Sources $19,421 100.0%
</TABLE>
USES OF FUNDS:
<TABLE>
<CAPTION>
Amount %
---------------
<S> <C> <C>
Purchase Price $19,031 98.0%
Refinance Debt 0 0.0%
Earn-Out 0 0.0%
Other Purchase Price 0 0.0%
Transaction Expenses 390 2.0%
Other 0 0.0%
---------------
Total Uses $19,421 100.0%
</TABLE>
MANAGEMENT FORECAST(a)
<TABLE>
<CAPTION>
2005
---------------------
<S> <C> <C> <C>
EBITDA Multiple 3.5x 4.0x 4.5x
---------------------
Implied IRR - Common Equity 14.8% 18.6% 21.9%
</TABLE>
LTM EXTRAPOLATION(b)
<TABLE>
<CAPTION>
2005
---------------------
<S> <C> <C> <C>
EBITDA Multiple 3.5x 4.0x 4.5x
---------------------
Implied IRR - Common Equity 22.7% 26.2% 29.4%
</TABLE>
BUDGET EXTRAPOLATION(c)
<TABLE>
<CAPTION>
2005
---------------------
<S> <C> <C> <C>
EBITDA Multiple 3.5x 4.0x 4.5x
---------------------
Implied IRR - Common Equity 26.1% 29.6% 32.6%
</TABLE>
COLLATERAL VALUE OF ASSETS:
<TABLE>
<CAPTION>
Book Value Discount Discounted Collat.: Debt Debt @ Excess
Asset 9/30/00 % Value Asset Capacity Closing Capacity
----------- ---------- -------- ---------- -------- -------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Receivables $3,159 10.0% $2,843 80.0% $2,274
Inventory 5,447 10.0% 4,902 50.0% 2,451
-----------------------------------------------------------------------------
Total $8,606 $7,745 $4,726 $0 $4,726
</TABLE>
(a) Operating margins based on management forecasts
(b) Operating margins based on LTM September 30, 2000 results
(c) Operating margins based on adjusted FY2001 budget dated June 21, 2000
================================================================================
Walnut 28 Berwind Financial, L.P.
<PAGE> 29
Financial Sponsor Transaction Analysis
================================================================================
--------------------------------------------------------------------------------
BASED ON COMPANY MANAGEMENT FORECAST
--------------------------------------------------------------------------------
($ in millions, except per share data)
<TABLE>
<CAPTION>
FINANCING EQUITY NUMBER IMPLIED EQUITY
COMMON EQUITY IRR REQUIREMENT(a) NET CASH VALUE OF SHARES VALUE PER SHARE
----------------- -------------- -------- ----- --------- ---------------
<S> <C> <C> <C> <C> <C>
30% $ 14.4 $ 17.3 $ 31.7 6,602,863 $ 4.80
35% $ 12.7 $ 17.3 $ 30.0 6,602,863 $ 4.54
</TABLE>
--------------------------------------------------------------------------------
OPERATING MARGINS BASED ON LTM ACTUAL SEPT. 30, 2000
--------------------------------------------------------------------------------
($ in millions, except per share data)
<TABLE>
<CAPTION>
FINANCING EQUITY NUMBER IMPLIED EQUITY
COMMON EQUITY IRR REQUIREMENT(a) NET CASH VALUE OF SHARES VALUE PER SHARE
----------------- -------------- -------- ----- --------- ---------------
<S> <C> <C> <C> <C> <C>
30% $ 17.3 $ 17.3 $ 34.6 6,602,863 $ 5.24
35% $ 15.2 $ 17.3 $ 32.5 6,602,863 $ 4.92
</TABLE>
--------------------------------------------------------------------------------
OPERATING MARGINS BASED ON COMPANY FY2001 ADJUSTED BUDGET
--------------------------------------------------------------------------------
($ in millions, except per share data)
<TABLE>
<CAPTION>
FINANCING EQUITY NUMBER IMPLIED EQUITY
COMMON EQUITY IRR REQUIREMENT(a) NET CASH VALUE OF SHARES VALUE PER SHARE
----------------- -------------- -------- ----- --------- ---------------
<S> <C> <C> <C> <C> <C>
30% $ 18.8 $ 17.3 $ 36.1 6,602,863 $ 5.46
35% $ 16.6 $ 17.3 $ 33.9 6,602,863 $ 5.13
</TABLE>
(a) Assumes exit EBITDA multiple of 4.0x
================================================================================
Walnut 29 Berwind Financial, L.P.
<PAGE> 30
"Comparable" Company Analysis
================================================================================
Peer Group
- Walnut has no comparable public companies in the cigar industry
- The peer group consists of public companies in the specialty retail
industry that meet the following criteria:
- Sell specialty products in a niche market
- Sell high end products
- Sell to consumers
- These companies are not comparable for a variety of reasons including:
- Size
- Growth: historical and projected
- Profitability: historical and projected
- Industry risk characteristics
================================================================================
Walnut 30 Berwind Financial, L.P.
<PAGE> 31
"Comparable" Company Analysis
--------------------------------------------------------------------------------
Market Valuation
($ in thousands)
<TABLE>
<CAPTION>
ENTERPRISE VALUE MULTIPLE(b)
STOCK % OF 52 EQUITY ----------------------------
PRICE WEEK MARKET ENTERPRISE LTM LTM LTM
COMPANY(a) TICKER 11/7/00 HIGH CAP. VALUE(a) SALES EBITDA EBIT
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Boyd's Collection, Ltd. FOB $ 7.750 70.5% $ 458,435 $ 667,623 3.3x 6.0x 6.4x
Brookstone, Inc. BKST 14.188 74.4% 118,035 116,500 0.3 3.7 5.5
Guitar Center, Inc. GTRC 12.500 78.7% 275,681 387,626 0.5 7.6 8.7
Natural Wonders, Inc. NATW 2.063 100.0% 16,187 24,995 0.2 NM NM
Right Start, Inc. RTST 1.625 6.8% 9,123 26,130 0.5 NM NM
Sharper Image Corp. SHRP 16.500 70.2% 198,978 165,270 0.4 6.4 8.7
Sunglass Hut International, Inc.(c) RAYS 8.500 60.7% 341,198 508,917 0.8 6.6 10.6
UST, Inc. UST 23.625 82.4% 3,857,301 4,354,298 2.8 5.5 5.8
--------------------------------------------------------------------------------------------------------------------------------
MEAN 68.0% $ 659,367 $ 781,420 1.1x 6.0x 7.6x
MEDIAN 72.4% $ 237,330 $ 276,448 0.5x 6.2x 7.5x
--------------------------------------------------------------------------------------------------------------------------------
WALNUT(d) 5.50 81.5% $ 36,316 $ 19,031 0.6x 3.8x 4.3x
</TABLE>
<TABLE>
<CAPTION>
PRICE EARNINGS MULTIPLES
------------------------ PROJECTED
PRICE/ CURRENT NEXT 5 YR. EPS
COMPANY(a) BOOK LTM FYE FYE CAGR (%)
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Boyd's Collection, Ltd. 10.4x 8.8x 7.4x NA 10.0%
Brookstone, Inc. 1.4 9.2 8.4 NA 20.0%
Guitar Center, Inc. 3.0 10.8 12.5 10.0 26.2%
Natural Wonders, Inc. 0.4 NM NA NA NA
Right Start, Inc. NM NM NA NA NA
Sharper Image Corp. 2.5 16.0 13.9 11.9 22.6%
Sunglass Hut International, Inc.(c) 6.8 14.4 13.5 10.9 18.0%
UST, Inc. 21.6 8.7 8.8 8.0 6.0%
--------------------------------------------------------------------------------------------
MEAN 6.6x 11.3x 10.7x 10.2x 17.1%
MEDIAN 3.0x 10.0x 10.6x 10.4x 19.0%
--------------------------------------------------------------------------------------------------
WALNUT(d) 1.3x 11.2x 9.7x NA NA
</TABLE>
Source: Latest financial information from SEC Filings and press releases
(a) Peer Group: Specialty Retail Industry
(b) Enterprise value equals equity market capitalization plus debt and preferred
stock, less cash and marketable securities
(c) Sunglass Hut International: Tax effected non-recurring benefit in 1997 at
the effective tax benefit rate for that year (20%)
(d) Implied Walnut multiples based on $5.50 per share
--------------------------------------------------------------------------------
WALNUT 31 BERWIND FINANCIAL, L.P.
<PAGE> 32
"Comparable" Company Analysis
Operating Performance
($ in thousands)
<TABLE>
<CAPTION>
LTM LTM LTM
TOTAL GROSS LTM LTM LTM GROSS
COMPANY(a) TICKER SALES PROFIT EBITDA EBIT NET INCOME PROFIT (%)
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Boyd's Collection, Ltd. FOB $ 200,898 $ 126,984 $ 111,586 $ 104,721 $ 51,903 63.2%
Brookstone, Inc. BKST 339,031 132,047 31,225 21,363 12,761 38.9%
Guitar Center, Inc. GTRC 738,340 191,717 51,021 44,586 25,532 26.0%
Natural Wonders, Inc. NATW 156,598 40,064 (5,273) (11,813) (7,553) 25.6%
Right Start, Inc. RTST 57,272 25,247 (18,384) (21,140) (19,392) 44.1%
Sharper Image Corp. SHRP 374,265 172,793 25,762 18,971 12,427 46.2%
Sunglass Hut International, RAYS 653,903 266,341 77,171 48,197 23,664 40.7%
Inc.(c)
UST, Inc. UST 1,550,977 1,248,814 789,491 753,714 444,751 80.5%
------------------------------------------------------------------------------------------------------------------------------
MEAN $ 508,911 $ 275,501 $ 132,825 $ 119,825 $ 68,012 45.7%
MEDIAN $ 356,648 $ 152,420 $ 41,123 $ 32,975 $ 18,213 42.4%%
------------------------------------------------------------------------------------------------------------------------------
WALNUT(d) $ 34,515 $ 15,540 $ 4,969 $ 4,464 $ 3,255 45.0%
</TABLE>
<TABLE>
<CAPTION>
LTM LTM DEBT/ 3-YEAR CAGR
EBITDA EBIT ENT. --------------------------------------------
COMPANY(a) MARGIN (%) MARGIN (%) VAL. (%) SALES (%) EBITDA (%) EBIT (%) EPS (%)
--------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Boyd's Collection, Ltd. 55.5% 52.1% 83.3% 27.2% 24.4% 24.2% 45.5%
Brookstone, Inc. 9.2% 6.3% 2.9% 15.4% 25.8% 31.2% 31.8%
Guitar Center, Inc. 6.9% 6.0% 57.1% 29.9% 12.9% 7.1% -5.0%
Natural Wonders, Inc. NM NM 19.4% -0.7% NM NM NM
Right Start, Inc. NM NM 59.2% 12.9% 42.0% 29.6% 13.4%
Sharper Image Corp. 6.9% 5.1% 3.0% 16.5% 91.7% 215.5% 252.4%
Sunglass Hut International, 11.8% 7.4% 78.1% 5.2% 99.6% NM NM
Inc.(c)
UST, Inc. 50.9% 48.6% 75.1% 3.9% 4.7% 4.5% 6.2%
--------------------------------------------------------------------------------------------------------------------------
MEAN 23.5% 20.9% 47.3% 13.8% 43.0% 52.0% 57.4%
MEDIAN 10.5% 6.8% 58.1% 14.2% 25.8% 26.9% 22.6%
-----------------------------------------------------------------------------------------------------------------------------------
WALNUT(d) 14.4% 12.9% 0.0% 6.4% -12.6% -14.3% -16.3%
</TABLE>
Source: Latest financial information from SEC Filings and press releases
(a) Peer Group: Specialty Retail Industry
(b) Enterprise value equals equity market capitalization plus debt and preferred
stock, less cash and marketable securities
(c) Sunglass Hut International: Tax effected non-recurring benefit in 1997 at
the effective tax benefit rate for that year (20%)
(d) LTM results of operations as of September 30, 2000
--------------------------------------------------------------------------------
WALNUT 32 BERWIND FINANCIAL, L.P.
<PAGE> 33
Industry Transactions Analysis
--------------------------------------------------------------------------------
Industry Group
- No comparable transactions
- The subject transaction and company differ materially from
transactions listed for the following reasons:
- Size
- Growth prospects
- Profit margins
- Product mix
- Transactions listed include manufacturers
- Percent ownership of acquirer prior to transaction
- Date of transaction relative to industry conditions
--------------------------------------------------------------------------------
WALNUT 33 BERWIND FINANCIAL, L.P.
<PAGE> 34
INDUSTRY TRANSACTIONS ANALYSIS
================================================================================
MARKET PERFORMANCE
<TABLE>
<CAPTION>
TARGET NAME/ PURCHASE
DATE ANNCD. BUSINESS DESCRIPTION BUYER DEAL TYPE PAYMT PRICE
---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
All Mean $ 362.7
Transactions Median 321.8
High 1,010.2
Low 2.6
3 Going Mean $496.0
Private Median 321.8
Transactions High 1,010.2
Low 156.0
28-Aug-00 800-JR Cigar Inc L&LR Inc Going Private Cash $ 156.0
Dist. and retails brand name prem.cigars
20-Jan-00 General Cigar Holdings Inc Swedish Match AB Acquisition Cash 425.0
Manufactures cigars
16-Dec-98 Consolidated Cigar Holdings Inc Seita SA Acq-TO Cash 531.4
Manufactures and markets cigars
1-Dec-98 Swisher International Swisher International Going Private 321.8
Manufactures cigars
3-Feb-98 Boynton Tobacconists Inc Windsor Capital Corp Acquisition Stock 2.6
Retails cigars
12-Sep-97 Havatampa Inc Tabacalera SA Acquisition 275.0
Makes cigars
2-Jun-97 Culbro Corp General Cigar Holding Co Acquisition Stock 452.7
Makes cigars
21-Jan-97 Mafco Consolidated Group Inc Mafco Holdings Inc Going Private Cash 1,010.2
Makes and markets cigars
1-Nov-96 Villazon & Co. General Cigar Holding Co Acquisition 90.0
Manufactures cigars
---------------------------------------------------------------------------------------------------------------------------------
Walnut Going Private $ 36.3
=================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
PURCHASE PRICE TO
TARGET NAME/ NET ENT. ----------------------
DATE ANNCD. BUSINESS DESCRIPTION DEBT VALUE BK. VAL. NET INC.
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 34.1 $ 396.9 5.0x 16.8x
0.0 310.8 4.9 12.1
197.6 1,010.2 9.3 44.2
(114.2) 2.6 1.3 4.6
$29.5 $525.5 5.3x 13.0x
0.0 424.4 4.9 11.7
102.6 1,010.2 9.3 18.2
(14.0) 142.0 1.7 9.0
28-Aug-00 800-JR Cigar Inc ($14.0) $142.0 1.7x 11.7x
Dist. and retails brand name prem.cigars
20-Jan-00 General Cigar Holdings Inc (114.2) 310.8 1.3 25.1
Manufactures cigars
16-Dec-98 Consolidated Cigar Holdings Inc 197.6 729.0 7.6 12.5
Manufactures and markets cigars
1-Dec-98 Swisher International 102.6 424.4 9.3 9.0
Manufactures cigars
3-Feb-98 Boynton Tobacconists Inc 0.0 2.6 4.6
Retails cigars
12-Sep-97 Havatampa Inc 0.0 275.0
Makes cigars
2-Jun-97 Culbro Corp 145.2 597.9 3.3 44.2
Makes cigars
21-Jan-97 Mafco Consolidated Group Inc 0.0 1,010.2 4.9 18.2
Makes and markets cigars
1-Nov-96 Villazon & Co. (9.9) 80.1 7.0 9.0
Manufactures cigars
-------------------------------------------------------------------------------------------------------------------
Walnut ($17.3) $ 19.0 1.3x 11.2x
===================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
ENT. VALUE AS A MULITPLE OF 4 WEEK
TARGET NAME/ ---------------------------- -----------
DATE ANNCD. BUSINESS DESCRIPTION REV. EBIT EBITDA STOCK PREM.
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1.9x 12.1x 10.3x 49.7%
2.0 9.6 8.7 42.7
3.4 25.9 21.1 93.7
0.5 6.3 6.1 18.2
1.8x 9.4x 8.5x 37.3%
1.6 7.4 6.5 27.6
3.4 14.6 12.8 66.2
0.5 6.3 6.1 18.2
28-Aug-00 800-JR Cigar Inc 0.5x 7.4x 6.5x 18.2%
Dist. and retails brand name prem.cigars
20-Jan-00 General Cigar Holdings Inc 1.7 13.2 9.6 93.7
Manufactures cigars
16-Dec-98 Consolidated Cigar Holdings Inc 2.6 9.6 8.7
Manufactures and markets cigars
1-Dec-98 Swisher International 1.6 6.3 6.1 66.2
Manufactures cigars
3-Feb-98 Boynton Tobacconists Inc 0.6
Retails cigars
12-Sep-97 Havatampa Inc 2.0
Makes cigars
2-Jun-97 Culbro Corp 2.7 25.9 21.1 42.7
Makes cigars
21-Jan-97 Mafco Consolidated Group Inc 3.4 14.6 12.8 27.6
Makes and markets cigars
1-Nov-96 Villazon & Co. 2.0 7.7 7.6
Manufactures cigars
-----------------------------------------------------------------------------------------------------------
Walnut 0.6x 4.3x 3.8x 57.1%
===========================================================================================================
</TABLE>
Source: Mergerstat (SIC Codes 2121, 5194 and 5993) and Company filings
================================================================================
WALNUT 34 BERWIND FINANCIAL, L.P.
<PAGE> 35
INDUSTRY TRANSACTIONS ANALYSIS
================================================================================
OPERATING PERFORMANCE
<TABLE>
<CAPTION>
LTM
DATE ANNCD. TARGET NAME/BUSINESS DESCRIPTION BUYER REV. EBIT EBITDA NET INC.
-------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
All Mean $ 195.4 $ 40.3 $ 45.8 $ 22.0
Transactions Median 225.4 23.6 32.3 14.2
High 316.1 75.7 83.1 55.5
Low 4.4 10.4 10.6 0.6
3 Going Mean $ 294.5 $ 49.8 $ 55.3 $ 32.3
Private Median 300.4 60.7 65.4 29.2
Transactions High 316.1 69.3 78.7 55.5
Low 267.0 19.4 21.9 12.1
28-Aug-00 800-JR Cigar Inc L&LR Inc $ 316.1 $19.4 $21.9 $12.1
Dist. and retails brand
name prem.cigars
20-Jan-00 General Cigar Holdings Inc Swedish Match AB 182.3 23.6 32.3 16.3
Manufactures cigars
16-Dec-98 Consolidated Cigar Holdings Inc Seita SA 282.8 75.7 83.1 42.4
Manufactures and markets cigars
1-Dec-98 Swisher International Swisher International 267.0 60.7 65.4 29.2
Manufactures cigars
3-Feb-98 Boynton Tobacconists Inc Windsor Capital Corp 4.4 0.6
Retails cigars
12-Sep-97 Havatampa Inc Tabacalera SA 140.0
Makes cigars
2-Jun-97 Culbro Corp General Cigar Holding Co 225.4 23.1 28.4 9.7
Makes cigars
21-Jan-97 Mafco Consolidated Group Inc Mafco Holdings Inc 300.4 69.3 78.7 55.5
Makes and markets cigars
1-Nov-96 Villazon & Co. General Cigar Holding Co 40.5 10.4 10.6 10.0
Manufactures cigars
--------------------------------------------- ----------------------------------------------------------------------------------
Walnut $34,515 $4,463 $4,969 $3,255
============================================= ==================================================================================
</TABLE>
<TABLE>
<CAPTION>
MARGINS 3 YEAR CAGR
---------------------------- --------------------------
DATE ANNCD. TARGET NAME/BUSINESS DESCRIPTION EBIT EBITDA NET INC. REV. EBITDA NET INC.
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
18.2% 20.5% 11.0% 21.5% 32.5% 55.3%
22.7 24.5 10.9 21.6 34.9 71.3
26.8 29.4 24.8 42.6 79.9 161.1
6.1 6.9 0.0 (16.7) (30.7) (31.5)
17.3% 19.2% 11.1% 17.8% 15.6% 28.5%
22.7 24.5 10.9 17.0 18.3 35.8
23.1 26.2 18.5 21.6 34.9 71.3
6.1 6.9 3.8 14.8 (6.3) (21.6)
28-Aug-00 800-JR Cigar Inc 6.1% 6.9% 3.8% 14.8% (6.3)% (21.6)%
Dist. and retails brand name
prem.cigars
20-Jan-00 General Cigar Holdings Inc 12.9 17.7 9.0 (16.7) (30.7) (31.5)
Manufactures cigars
16-Dec-98 Consolidated Cigar Holdings Inc 26.8 29.4 15.0 37.5 60.0 96.1
Manufactures and markets cigars
1-Dec-98 Swisher International 22.7 24.5 10.9 21.6 34.9 35.8
Manufactures cigars
3-Feb-98 Boynton Tobacconists Inc 12.8
Retails cigars
12-Sep-97 Havatampa Inc
Makes cigars
2-Jun-97 Culbro Corp 10.2 12.6 4.3 33.9 79.9 161.1
Makes cigars
21-Jan-97 Mafco Consolidated Group Inc 23.1 26.2 18.5 17.0 18.3 71.3
Makes and markets cigars
1-Nov-96 Villazon & Co. 25.8 26.2 24.8 42.6 71.6 76.2
Manufactures cigars
------------------------------------------ ----------------------------------------------------------
Walnut 12.9% 14.4% 9.4% 6.4% (12.6)% (9.1)%
========================================== ==========================================================
</TABLE>
Source: Mergerstat (SIC Codes 2121, 5194 and 5993) and Company filings
================================================================================
WALNUT 35 BERWIND FINANCIAL, L.P.
