| Holt's Cigar Holdings, Inc. | |||
| Ticker: | HOLT | 12270 Townsend Road | |
| Exchange: | NASDAQ-National Market | Philadelphia, PA 19154 | |
| Industry: | Retail (SIC Code 5993) | (215) 676-8778 | |
| # of Employees: | 37 | ||
| Type of Shares: | Common Shares | Filing Date: | 9/24/97 | |
| U.S. Shares: | 1,750,000 | Offer Date: | 11/24/97 | |
| Non-U.S. Shares: | 0 | Filing Range: | $12.00 - $14.00 | |
| Primary Shares: | 1,750,000 | Offer Price: | $11.00 | |
| Secondary Shares: | 0 | Gross Spread: | $0.70 | |
| Offering Amount: | $22,750,000 | Selling: | $0.43 | |
| Expenses: | $550,000 | Reallowance: | $0.10 | |
| Shares Out After: | 5,700,000 |
| Manager | Tier | Phone |
| Prudential Securities Incorporated | Lead Manager | (212) 778-5420 |
| Janney Montgomery Scott | Co-manager | (215) 665-6520 |
| Issuer's Law Firm: | Fox, Rothschild, O'Brien & Frankel |
| Bank's Law Firm: | Fulbright & Jaworski |
| Auditor: | Price Waterhouse |
Dollar amounts in U.S. millions except for per share data | |||||
| 3 Month Ending Financials | |||||
| Full Year Audited Income | Latest Unaudited Income | Prior Unaudited Income | Balance Sheet | ||
| 3/31/96 | 6/30/97 | 6/30/96 | 6/30/97 | ||
| Revenue: | $17.28 | $6.36 | $3.45 | Assets: | $5.89 |
| Net Income: | $1.75 | $0.82 | $0.27 | Curr Assets: | $4.70 |
| EPS: | $0.42 | $0.20 | $0.07 | Liabilities: | $2.24 |
| Prior EPS: | $0.84 | $0.09 | Curr Liabilities: | $1.91 | |
| Cash Flow/Oper: | $1.13 | -$0.29 | -$0.21 | Equity: | $3.65 |
| Cash Flow/Fin: | -$1.11 | -$0.22 | -$0.03 | Cash: | $0.84 |
| Cash Flow/Inv: | -$0.15 | -$0.22 | Working Cap: | $2.79 | |
| Business Description |
| The company is a leading distributor and retailer of brand name premium cigars. The company is the exclusive wholesale distributor of Ashton premium cigars and Ashton cigar-related accessories, a proprietary brand owned by the company. The Company believes that Ashton premium cigars are nationally recognized as among the top brands due to their flavor, consistency and quality of construction. Cigar Aficionado magazine has rated the Ashton brand as "very good to excellent" in each category evaluated by the publication. The company's retail operations, which consist of a mail order catalog and the Company's Philadelphia, Pennsylvania retail store, sell over 170 brands of premium cigars as well as cigar-related accessories and other tobacco products. In Fiscal 1997 and the three months ended June 30, 1997, the Company had net sales of $17.3 million and $6.4 million, respectively, of which sales of premium cigars represented approximately 86.3% and 92.0%, respectively. The Company believes that the strength of the Ashton brand and the Company's distribution capabilities, combined with increasing demand for premium cigars, will enable the Company to continue to realize significant future growth. |
| Competition |
| The markets for the Company's products are highly competitive and subject to rapid consumer change and frequent new product introductions and extensions. The Company's wholesale distribution business faces competition from larger, well-established premium cigar companies, including Fuente Cigar and its affiliates, which manufacture and distribute numerous high-quality premium cigar brands that are competitive with the Company's products, as well as from an increasing number of new entrants to the marketplace. The Company's retail sales compete with a large number of other mailorder companies, some of which are larger and better financed than the Company. The Company also faces significant competition from a large number of existing, and an increasing number of new, retail stores and smoking establishments selling the same branded products as the Company. Existing or future competitors may develop or offer the same or similar premium cigars which may result in decreases in the Company's sales of premium cigars. Many of these competitors have longer operating histories and significantly greater financial, managerial, creative, sales and marketing and other resources than the Company. The Company's ability to retain its existing customers and attract new customers depends on the quality of its premium cigars, the availability of product, its reputation in the industry, and its ability to maintain customer satisfaction. The Company's Ashton brand competes on the basis of quality and consistency of its premium cigars and service to its wholesale customers. The Company's retail operations compete on the basis of breadth of product, customer service and price. |
| Business Plan |
| The company's principal business objective is to enhance its position as a leading distributor and retailer of a broad range of premium cigars and cigar-related accessories. The principal elements of this business strategy include: (I) Strengthening the Ashton Brand, (ii) Concentration on Premium Cigars, (iii) Building on Relationship with Fuente Cigar, (iv) Use of Multiple Distribution Channels and (v) Commitment to Customer Service. |
| Use of Proceeds |
| The proceeds from the proposed offering will be used to effect the distribution of previously taxed but undistributed earnings from Ashton Distributors, Inc. to its former shareholder, to establish new retail stores, expand inventories of premium cigars, repay outstanding indebtedness, expand the company's mail order business, introduce new premium cigar brands, upgrade the company's management information and accounting systems, and for general corporate purposes, including working capital. |
| Officer Name | Title | Age |
| Robert G. Levin | Chairman of the Board, Chief Executive Officer and President | 51 |
| Robert H. Levitt | Chief Financial Officer | 40 |
| Michael Pitkow | Chief Operating Officer, Executive Vice President and Director | 48 |