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Oct./Nov.
2001

TOBACCO INDUSTRY NEWS (cont.)

Quarterly Losses Grow at Grand Havana
LOS ANGELES - Grand Havana Enterprises, Inc., owner and operator of Grand Havana Room private membership restaurants and cigar clubs, and operator of Grand Havana House of Cigars retail cigar stores, reported a loss of $234,583 for the quarter ended June 24, 2001, compared to a net loss of $153,004 for the fiscal quarter ended June 25, 2000. This is primarily due to a reduction in revenue, resulting from the general economic slowdown. The company's two House of Cigars locations are still experiencing operating losses. The Las Vegas House of Cigars location had an operating loss of $25,837 for the quarter ended June 24, 2001, as compared to $9,949 for the quarter ended June 25, 2000. The Beverly Hills House of Cigars had an operating loss of $2,688 for the quarter ended June 24, 2001, as compared to an operating loss of $5,021 for the quarter ended June 25, 2000.

Altadis H1 Earnings up 13%
PARIS - Altadis S.A. reported an 8.5% increase in economic sales for the first half of 2001 to $1.33 million. The company's highest growth was in its cigar business with a 15.8% increase, benefiting from improved sales and expansion of markets resulting from the acquisition of 50% of Cuba's Corporacion Habanos. All segments, including cigarettes, posted gains.

Altadis is the leading cigar manufacturer in the U.S., and the company says it is confirming its position while benefiting from merger synergies at its U.S. operations. Corporacion Habanos sales increased by 33%, and the company says that the crop in Cuba is "back to normal."


Star Scientific Sees Net Income up 56%
CHESTER, VA - Star Scientific, Inc. announced a 56% increase in net income for the three months ended June 30, 2001. Second quarter 2001 net revenues were $43.7 million, compared to $42.2 million in the second quarter of 2000, an increase of 3.4%. Second quarter 2001 pre-tax and net earnings were $4.5 million and $2.7 million, respectively, compared to pre-tax and net earnings of $3.3 million and $1.7 million, respectively, in the second quarter of 2000. Paul L. Perito, Star's chairman, president, and c.o.o., says the company's primary focus continues to center on the development of technologies and tobacco products that deliver less toxins, and the marketing of smoking and smokeless products.

Net Sales Surge 406% at Havana Group
CANTON, OH - The Havana Group, Inc., reported that net sales for the quarter ended June 30, 2001 were $2.4 million, an increase of $1.93 million or 405.9% over the $474,790 recorded during the same quarter last year. The increase was due to the acquisition of Phillips & King International, which took place on August 4, 2000. Sales from P&K of $2.09 million accounted for all of the increase.

Cost of sales increased to 79.4% of net sales during the second quarter of 2001 from 57.5% incurred during the same period in 2000. Selling expenses were 10.7% of sales for the second quarter of 2001 compared with 25.0% of sales in the second quarter of 2000. Havana Group sells tobacco, cigars, smoking pipes, and accessories via mail order business. The company's consolidated financial statements include the accounts of The Havana Group, Inc., and its two wholly-owned subsidiaries, wholesale tobacco distributor Phillips & King International, Inc., and Monarch Pipe Company.


Synergy Authorizes Stock Repurchase
MELVILLE, NY - Synergy Brands Inc. announced that its board of directors has authorized a stock repurchase program. "At current market levels, we believe that our shares are one of the best investments the company can make," stated Mair Faibish chairman of Synergy Brands. As of September 13, 2001, the company has approximately four million shares outstanding.

General Cigar Closes Connecticut Offices
Swedish Match also announced that its majority-held unit General Cigar Holdings, Inc. has closed its management offices in Connecticut, relocating these activities to the General Cigar's New York and New Jersey facilities. Swedish Match owns 64 percent of the shares of General Cigar.


SMOKESHOP - October/November, 2001