At our Annual General Meeting one year ago we reported that we had a net income of $300,621 before writing off the cost of the discontinued Burnaby Street operation which amounted to $231,182.
In our Annual Report this year you will note we reported net income of $293,605 compared with a net income of $69,439 last year. Perhaps more importantly we have achieved what we said we hoped to achieve in that our bank indebtedness was eliminated by January 31, 1999 and our liabilities reduced to accounts payable of $179,000 - all of which are current. Current assets at the end of the January 1999 fiscal year amounted to $189,431 and $146,550 was in the form of cash and deposits in the bank.
In the first two months of this fiscal year we have not been as profitable as last year, notwithstanding a significant increase in sales, largely due to two factors - an increase in costs amounting to $11,827 including repairs and maintenance of $7,500 combined with a 7% increase in cost of sales.
We are actively addressing the question of reduced margins by a detailed examination of our supply costs but I am afraid our operating expenses may continue at the present level in the short term due to the need to replace cash registers as well as other equipment such as fryers to make our operation Y2K compliant.
Notwithstanding the short term effect of the additional investment in equipment we are still hopeful our earnings for the year will equal or surpass that of last year.
The only other transaction of significance shareholders will find of interest is the knowledge that the shareholding by Oppenheimer has been sold to friendly hands eliminating the share overhang in the market for we were all aware that Oppenheimer would like to sell their very large shareholding of 151,000 shares. Coincident with and as a part of this acquisition by friendly shareholders, 10,000 shares were also acquired by the Company out of excess funds which have been accumulated and these shares will be retired - thus reducing the number of shares outstanding.
It is our hope we will be able to acquire further shares during the coming year if available at a price which we consider attractive. For this reason and for reasons to do with the need to invest in new equipment, the Directors have decided we should not pay dividends at this time despite the improvement in the Company's results.
In closing, I would like to thank my fellow Executive Directors, Crayton Greene, Susan Wilson and Bill Thomson for their assistance and hard work during the past year and I also extend sincere thanks to Graham Redford for his contribution to our results.