VALH news:
(COMTEX) Management's Discussions: 10-Q, VALUE HOLDINGS INC
Management's Discussions: 10-Q, VALUE HOLDINGS INC
(Edgar Online via COMTEX)
Company Name: VALUE HOLDINGS INC
(SYMBOL:VALH)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Equity in Income of Unconsolidated Subsidiaries The Company had a 28%
interest in Forest Hill Capital Corp. (FHCC) at January 31, 1998 and
36% interest at January 31, 1998, and accounted for its investment by
the equity-method of accounting.
FHCC is a company that operates a chain of retail optical stores
throughout Canada.
On October 31, 1998 the Company adjusted investment in FHCC to market
based on recent trading prices of the stock in the Canadian Stock
Exchange (See Other Charges). Additionally, the Company has established
a reserve of $571,000 and a corresponding charge to income in fiscal
1998 for the balance of the investment in FHCC, based on the Company's
estimate of recoverability of its investment (See Other Charges).
Equity in earnings of Forest Hill for the fiscal period ended January
31, 1998, was $77,603.
Restaurant Operations
The Company currently owns one restaurant which is managed by another
Company under a licensing agreement that calls for monthly licensing
fees ranging from 3% of sales under $100,000 to 6% of sales over $200,
000, and receives licensing fees on five other restaurants under a
licensing agreement that calls for monthly licensing fees of 3% of
sales.
Licensing fee revenue for the quarters ended January 31, 1999 and
1998 were $88,538 and $84,106 respectively.
The Company is currently seeking to expand its operations through
licensing agreements with recognized restaurant operators, whereby
existing restaurant chains or management teams would convert and/or
develop new restaurants utilizing the Cami s format in return for a
license fee based on a percentage of sales. For this purpose the
Company has placed a sum equal to 1% of monthly sales into an escrow
account to be used for future development materials, and 1/2% of
monthly sales into an escrow account to be used for a national
advertising fund. Such materials are to be developed by the Company in
conjunction with CamFam but belong to the Registrant. Future licensed
units will pay a fee as a percentage of monthly sales to contribute to
this fund. As of the date of this report the Company has not negotiated
with or entered into similar arrangements with any other party.
Interest and Other Income
Other income for the quarters ended January 31, 1999 and 1998
includes $2,821 and $1,333, respectively, of interest income on notes
receivable.
COSTS AND EXPENSES
Selling, and administrative expenses for the quarter ended January
31, 1999 were $23,388 compared to $65,533 for the same quarter in 1998.
The decrease was due primarily to the reversal of legal fees accrued in
prior years.
Depreciation for the quarters ended January 31, 1999 and 1998 was $2,
311 and $10,345 respectively.
Amortization of intangible assets for the quarter ended January 31,
1999 and 1998 was $50,542 and $33,695 respectively.
Other Income and (Charges)
During the quarter ended January 31, 1999 the Company wrote off the
carrying value of its fixed assets and intangible assets related to its
restaurant operations, resulting in a charge to income of $130,464.
Interest expense for the quarter ended January 31, 1999 and 1998 was
$30,803 and $17,124 respectively. The increase was due primarily to
interest on debt incurred to settle payroll and sales taxes owed.
Capital Expenditures and Depreciation
The Company did not make any major capital expenditure during the
quarter ended January 31, 1999.
(c) 1995-1999 Cybernet Data Systems, Inc. All Rights Reserved.
Received by Edgar Online: Mar. 18, 1999
CIK Code: 0000804191
SEC Accession Number: 0000804191-99-000005
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