Caribbean Cigar Company Makes Announcement.

MIAMI--(BUSINESS WIRE)--Nov. 19, 1997--Caribbean Cigar Company (the "Company") announced today that it had restated its earnings for the Company's first fiscal quarter ended June 30, 1997 to reflect a loss of approximately $600,000, resulting primarily from (a) additional accruals for lease terminations and a write-off of leasehold improvements; (b) additional professional service fees; (c) additional advertising expenses; (d) a write-down in inventory; (e) a write-down of certain accounts receivable; (f) an increase in depreciation expense; and (g) and an increase in selling expenses. The revised earnings were contained in an amended Report of Form 10-QSB which was filed with the Securities and Exchange Commission (the "SEC") on Nov. 19, 1997.

The Company also announced a net loss of approximately $2 million for the second fiscal quarter ended Sept. 30, 1997, due primarily to sales and gross margins, which were weaker than anticipated with no corresponding reduction in expenses, and a write-down in inventory. The Report on Form 10-QSB for the second fiscal quarter is expected to be filed with the SEC on Nov. 19, 1997.

In response to results, the Company also announced it had taken steps to reduce selling expenses, including reductions in headquarters staff. The Company estimates that these overhead reductions will save the Company approximately $1,000,000 on an annual basis, beginning with the third fiscal quarter of 1997.

The Company also announced that, effective Sept. 15, 1997, it had named Edward C. Williams as its chief financial officer. Williams replaces Thomas Dilk. Effective Nov. 19, 1997, Dilk, Eric Kamisher and Luciano Nicasio have resigned as directors of the Company. No replacements were named at this time. The remaining directors, Kevin Doyle, the president and CEO, and Alfred Berger, intend to meet next week to consider replacements. The Company also announced that, on or about Aug. 15, 1997, Carlos Torano had resigned as a director of the Company.

The resignations of Dilk, Kamisher and Nicasio resulted, in part, from a disagreement about the results of operations reported today. The Company believes that the Form 10-QSB for the quarter ended Sept. 30, 1997 expected to be filed today with the SEC fairly presents the results of operations and financial conditions of the Company.

The Company also announced that during the second fiscal quarter it had entered into a secured credit facility with Finova Capital Corp., under which it can borrow up to $3 million, based on eligible accounts receivable and inventory. As of Nov. 19, the Company had borrowed approximately $1.9 million.

Doyle, president of the Company said, "These loses occurred primarily during a period of rapid expansion, including the opening of our plant in the Dominican Republic, the expansion of our import capacity from Indonesia, and the move to our new headquarters facility in Miami. They are disappointing and unacceptable to our Company, our employees, our stockholders and our customers. However, we are confident that we have now identified the sources of these problems and have taken appropriate action to keep costs under control. We are actively focused on evaluating every element of our cost structure to further reduce costs. We also continue to explore all opportunities for increasing sales, with a goal of establishing profitability for the Company."

For further information, please contact Caribbean Cigar Company, 8305 NW 27th Street, Miami, 33122, attention: Edward C. Williams, 305/267-3911 or John Germinario, ADR Management Ltd. at 973/285-3224. The Company's common stock trades on the NASDAQ Small Cap Market under the symbol "CIGR."

CONTACT: Caribbean Cigar Company,

Edward C. Williams, 305/267-3911

or

ADR Management Ltd.

John Germinario, 973/285-3224