Federal Excise Increase Skews Star's Sales

Source from:  Tobacco Reporter 05/13/2009

Star Scientific yesterday reported net sales for the first quarter to the end of March 2009, at $0.15 million, essentially unchanged from those of the fourth quarter of 2008. The company said it believed that sales of its dissolvable smokeless tobacco products, Ariva and Stonewall, had been adversely impacted by an increase in federal excise tax on April 1. 'Wholesale and retail operations were reluctant to maintain inventory on hand beginning in late February, in an effort to minimize taxable inventory as of the April 1 effective date,' Star said in a note posted on its website. 'Early second quarter sales data appear to indicate that dissolvable tobacco sales have rebounded as wholesale and retail inventories are being restocked.' Star reported a net loss of $5.2 million for first quarter 2009 compared with a $5.5 million loss for first quarter 2008. Meanwhile, Star said the jury trial in its patent infringement lawsuit against RJ Reynolds Tobacco Company would start on May 18 and last for about three weeks. Enditem