UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended November 30, 1998
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the transition period to
Commission File No. 0-9833
UNIHOLDING CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 58-1443790
(State or other jurisdiction (I.R.S. Employer
of incorporation) Identification Number)
96 Spring Street, 8th Floor, New York, New York 10012
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 219-9496
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No___
As of January 13, 1999, there were 6,079,151 shares of Common Stock, par value
$0.01 per share, of the Registrant outstanding.
1
<PAGE>
UNIHOLDING CORPORATION AND SUBSIDIARIES
Form 10-Q for the Quarterly Period Ended November, 30, 1998
INDEX
Page
Part I - FINANCIAL INFORMATION:
Item 1. Financial Statements 3
Consolidated Balance Sheets - November 30, 1998
(unaudited) and May 31, 1998 4
Unaudited Consolidated Statements of
Operations - Three month and six month periods ended
November 30, 1998, and November 30, 1997 6
Unaudited Consolidated Statements of Cash Flows - Six month
periods ended November 30, 1998, and November 30, 1997 7
Notes to Unaudited Consolidated Financial Statements 9
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 13
Part II - OTHER INFORMATION:
Item 1. Legal Proceedings 16
Item 6. Exhibits 17
Signatures 18
2
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
3
<PAGE>
UNIHOLDING CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
<TABLE>
<CAPTION>
ASSETS November May 31,
30, 1998 1998
--------------- ------------
(Unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $6,155 $9,186
Accounts receivable, net of allowance for doubtful accounts 20,853 19,464
Due from related companies 2,782 1,587
Inventories 1,853 1,849
Prepaid expenses 1,740 3,090
Other current assets 437 411
---------- ----------
Total current assets 33,820 35,587
---------- ----------
NON-CURRENT ASSETS:
Long-term notes receivable 818 818
Deferred tax assets 289 157
Intangible assets, net 46,507 44,344
Property, plant and equipment, net 20,546 8,828
Investment in equity affiliates 550 481
Long-term investments 23,289 22,781
Other assets, net 232 132
---------- ----------
Total non-current assets 91,942 77,384
---------- ----------
$125,762 $112,971
========== ==========
</TABLE>
See notes to financial statements
4
<PAGE>
UNIHOLDING CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY November May 31,
30, 1998 1998
------------- ------------
(Unaudited)
<S> <C> <C>
CURRENT LIABILITIES:
Bank overdrafts $2,886 $4,010
Lease payable 701 809
Payable to related parties 109 100
Trade payables 7,028 6,911
Accrued liabilities 7,253 6,018
Long-term debt 6,866 5,727
Taxes payable 6,682 6,459
Deferred taxes - 769
----------- -----------
Total current liabilities 31,525 30,803
----------- -----------
NON-CURRENT LIABILITIES
Lease payable 557 725
Long-term debt 42,511 29,544
Taxes payable 77 74
Deferred taxes 33 179
----------- -----------
Total non-current liabilities 43,178 30,522
----------- -----------
Total liabilities 74,703 61,325
----------- -----------
MINORITY INTERESTS 9,323 9,440
----------- -----------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock, $0.01 par value;
Voting; authorized 18,000,000 shares; issued 7,627,736 at
November 30 and May 31, 1998 $ 76 76
Non-Voting; authorized 2,000,000 shares; issued and
outstanding 298,384 at November 30 and May 31, 1998 3 3
Additional paid-in capital 49,832 49,832
Cumulative translation adjustment (969) (2,074)
Retained earnings 8,498 7,623
----------- -----------
57,440 55,460
Less - cost of 2,006,969 and 1,602,569 shares of Common
Stock held in treasury at November 30 and May 31, 1998,
respectively (15,704) (13,254)
----------- -----------
Total stockholders' equity 41,736 42,206
----------- -----------
$125,762 $112,971
======== ===========
</TABLE>
See notes to financial statements
5
<PAGE>
UNIHOLDING CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share data)
<TABLE>
<CAPTION>
Three Months ended Six Months ended
November 30, November 30,
1998 1997 1998 1997
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
REVENUE $26,942 $18,074 $47,484 $37,848
Operating expenses:
Salaries and related charges 10,458 6,545 19,990 15,190
Supplies 4,693 2,935 8,356 6,553
Other operating expenses 6,533 5,408 11,945 10,745
Depreciation and amortization of
tangible assets 719 540 1,313 1,691
Amortization of intangible assets 806 609 1,552 1,091
----------- ----------- ----------- -----------
OPERATING INCOME 3,733 2,037 4,328 2,578
Interest, net (626) 1 (1,047) (271)
Other, net 24 2,601 193 2,908
----------- ----------- ----------- -----------
Income before taxes and minority
interests 3,131 4,639 3,474 5,215
Tax provision (907) (606) (1,124) (874)
----------- ----------- ----------- -----------
Income from continuing operations
before minority interests 2,224 4,033 2,350 4,341
Minority interests in income of
continuing operations (1,263) (730) (1,475) (882)
----------- ----------- ----------- -----------
Income from continuing operations 961 3,303 875 3,459
Loss from discontinued operations, net
of taxes and minority interests - (1,379) - (2,499)
----------- ----------- ----------- -----------
NET INCOME $961 $1,924 $875 $960
========== =========== =========== ===========
Weighted average common shares
outstanding 5,926,184 7,581,870 6,064,519 7,754,936
Earnings per share of common stock
Net income from continuing operations
$0.16 $0.44 $0.14 $0.45
Loss from discontinued operations - ($0.18) - ($0.32)
Net income $0.16 $0.25 $0.14 $0.12
</TABLE>
6
See notes to financial statements
<PAGE>
UNIHOLDING CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
<TABLE>
<CAPTION>
Six Months ended November 30,
1998 1997
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income from continuing operations $875 $3,459
Adjustments to reconcile net income to net cash provided by
operations:
Minority interests in income 1,475 1,083
Deferred taxes (940) (175)
Depreciation and amortization of tangible assets 1,313 1,168
Amortization of intangible assets 1,552 1,062
Other non-cash (income) expenses 762 (2,847)
Net changes in assets and liabilities, net of acquisitions:
Accounts receivable (514) (953)
Inventories 78 (63)
Prepaid expenses 1,468 (57)
Other current assets 17 (88)
Trade payables (167) (171)
Accrued liabilities 1,031 365
Taxes payable 141 (806)
----------- -----------
Net cash provided by (used in) operating activities 7,091 1,977
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of long-term debt (3,115) (821)
Cash proceeds from long-term debt 6,977 -
Proceeds (reimbursement) from (of) bank overdrafts (1,277) 861
Dividend paid to minority shareholders (1,819) (1,317)
Repayment of lease debt (435) (113)
Payment for purchase of treasury stock (2,450) (3,977)
----------- -----------
Net cash provided by (used in) financing activities (2,119) (5,367)
----------- -----------
</TABLE>
(continued)
7
<PAGE>
UNIHOLDING CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(continued)
<TABLE>
<CAPTION>
Six Months ended November 30,
1998 1997
----------- -----------
<S> <C> <C>
CASH FLOWS FROM INVESTING ACTIVITIES:
Payment for purchases of property and equipment ($4,119) ($847)
Loans and advances (to) from affiliates and related companies, net
(1,919) 1,555
Payment for purchase of interest in subsidiaries (72) (242)
Payment for purchase of intangible assets (2,243) (712)
Proceeds from sale of assets - 743
--------- ---------
Net cash (used in) provided by investing activities (8,353) 497
--------- ---------
Effect of exchange rate changes on cash 350 (94)
Net increase (decrease) in cash and cash equivalents
from continuing operations
(3,031) (2,987)
Net cash flows provided by discontinued operations - 276
Cash and cash equivalents, beginning of year 9,186 4,925
--------- ---------
Cash and cash equivalents, end of period $6,155 $2,214
======== =========
</TABLE>
See notes to financial statements
8
<PAGE>
UNIHOLDING CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Monetary amounts in
thousands, except per share data)
1. Basis of Presentation
The consolidated financial statements include the accounts of UniHolding and its
majority-owned subsidiaries. All significant intercompany accounts and
transactions have been eliminated. The investment in the Company's equity
affiliates is accounted for on the equity method. Prior periodsO financial
statements have been restated to reflect the effect of discontinued operations.
2. Management Opinion
In the opinion of management, the accompanying unaudited interim financial
statements reflect all adjustments that are necessary to present fairly the
financial position, results of operations and cash flows for the interim periods
reported. All such adjustments made were of a normal recurring nature.
The results of operations and financial position for interim periods are not
necessarily indicative of those to be expected for a full year, due, in part, to
the seasonal fluctuations which are normal for the Company's business.
The preparation of consolidated financial statements in conformity with United
States generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts reported in the consolidated
financial statements and accompanying notes. Actual results may differ from
these estimates.
The accompanying interim financial statements and related notes should be read
in conjunction with the consolidated financial statements of the Company and
related notes as contained in the Annual Report on Form 10-K for the year ended
May 31, 1998.
3. Earnings Per Share
Effective December 1997, the Company adopted Statement of Financial Accounting
Standards No. 128, "Earnings per Share" ("SFAS 128"), which changes the method
used to compute earnings per share. This Statement specifies the computation,
presentation and disclosure requirements for earnings per share ("EPS") for
entities with publicly held common stock. SFAS 128 replaces the presentation of
primary EPS with a presentation of basic EPS, and for entities with a complex
capital structure requires the additiona presentation of diluted EPS on the face
of the income statement. Basic EPS is computed by dividing net income available
to common stockholders by the weighted average number of shares outstanding
during the period. The computation of diluted EPS is similar to the computation
of basic EPS, except that the denominator is increased to include the number of
additional common shares that would have been outstanding if any dilutive
potential common shares had been issued.
The adoption of this standard did not impact the Company's reported EPS, as no
dilutive securities were outstanding during the periods presented, because all
outstanding options were and are out of the money. Accordingly, for all periods
presented, income or loss per common share was computed by dividing net income
or net loss by the weighted average number of voting and non-voting shares
outstanding during the year.
4. Cumulative Translation Adjustment
The Company's principal operations are located primarily in Switzerland, Italy,
Spain, Turkey and Russia. A significant part of net assets, revenues and
expenses are denominated in the currency of those countries, while the Company
presents its consolidated financial statements in US dollars. Assets and
liabilities are translated at the exchange rates in effect at the balance sheet
date. Revenues and expenses are translated at the weighted average exchange
rates for the period. Net gains and losses arisin upon translation of local
currency financial statements to US dollars are accumulated in a separate
component of Stockholders' Equity, the Cumulative Translation Adjustment
account.
5. Comprehensive Income
In June 1997, the FASB issued Statement No. 130, Reporting Comprehensive Income
("SFAS 130"). This Statement establishes standards for reporting and display of
comprehensive income and its components in the financial statements. This
Statement is effective for financial statements for periods beginning after
December 15, 1997, however interim period disclosure is limited to reporting a
total for comprehensive income. The CompanyOs comprehensive income represents
net income plus the change in the cumulativ translation adjustment equity
account for the periods presented. The Company has determined total
comprehensive income or (loss), net of tax, to be $1,627 and $486 for the three
months ended November 30, 1998 and 1997, respectively, and $1,979 and ($2,470)
for the six months ended November 30, 1998 and 1997, respectively.
6. Supplemental Disclosure of Cash Flow Information
Six months ended November 30,
1998 1997
Cash paid during the year for:
Interest $ 1,015 $ 582
Income taxes 1,059 1,418
During the period ended November 30, 1998, capital lease obligations of $96 were
incurred when the Company entered into leases for new capital equipment.
During the period ended November 30, 1998, in connection with the acquisition of
Bewlay House, the Company incurred liabilities as described in Note 7.
7. Acquisition of Bewlay House
In connection with the sale of UGUK, ULSA agreed to purchase from the latter the
London building which houses most of UGUK's operations ("Bewlay House").
On July 8, 1998, the Company completed this transaction and acquired a 999-year
leasehold in Bewlay House for a purchase price of $12,322. This consideration
was paid by (i) the assumption of UGUK's existing debt of $10,812 with a bank
and a finance institution; (ii) compensation of an intercompany account of $733;
and (iii) $777 in cash. The company simultaneously entered into rental
agreements with the tenants of the building. The bank facility was reduced by
$2,388 to $6,966 at closing, has a three-yea maturity and is subject to
quarterly repayments of $162. The financial institution's facility of $1,458 is
subject to monthly repayments increasing from $19 presently to $32 in January
2003 when it matures. The Company is actively looking to sell the building. Upon
such a sale, if and when it occurs, the Company intends to prepay the debts to
the bank and finance institution.
8. Long-term Investments
Focused Healthcare (Jersey) Limited
As partial consideration for the Company's disposal of UGUK, the Company
received non-voting, non-convertible, redeemable preferred shares of Focused
Healthcare (Jersey) Limited ("FHL"), with a face value of $11,797. During the
year ended May 31, 1998, the Company amortized $1,180 related to its investment
in FHL, which reflects management's appraisal of the uncertainty as to the
timing and the possibility of recovery of the investment. As of November 30,
1998, such preferred stock of FHL is recorded at $11,106 in the accompanying
consolidated financial statements. The Company is of the opinion that no further
write-downs are necessary at this time.
Global Unilabs Clinical Trials Limited
As of February 27, 1998, the Company spun off its then wholly-owned subsidiary
Global Unilabs Clinical Trials Limited (OGUCTO) to its shareholders. During the
three and six months periods ended November 30, 1997, GUCT had consolidated
revenues of $2,837 and $5,652, respectively. The Company continues to hold
non-voting, non-convertible, redeemable preferred stock of GUCT, with a face
value of $20,000. As of November 30, 1998, such preferred stock of GUCT is
recorded at $12,183 in the accompanying consolidated financial statements. The
Company is of the opinion that no further write-downs are necessary at this
time.
9. Segment Information
During the year ended May 31, 1998, the Company performed testing in relation to
clinical trials for the pharmaceutical industry and therefore distinguished its
core clinical laboratory business (the "Diagnostic Laboratory Division") from
its clinical trials testing business (the "Clinical Trials Division"). As of
February 27, 1998, the Company's Clinical Trials Division was spun off to the
Company's shareholders.
Following are the key financial data of the Company for purposes of geographical
information.
Six Months Ended
November 30,
1998 1997
Revenues from unaffiliated customers
Switzerland $39,998 $26,761
United Kingdom - -
Spain 3,923 3,274
Other 3,563 7,813
Operating Profit or Loss:
Switzerland 5,772 3,922
United Kingdom (181) -
Spain (352) (242)
Other (912) (1,102)
Identifiable Assets:
Switzerland 74,594 55,338
United Kingdom 23,497 9,544
Spain 6,537 5,417
Other 21,423 5,992
<PAGE>
Item 2. Management's Discussions and Analysis of Financial Condition and Results
of Operations
Results of Operations
Three and six month periods ended November 30, 1998 compared with the three and
six month periods ended November 30, 1997
Consolidated revenue was $26.9 million and $47.5 million for the three and six
months ended November 30, 1998, representing respectively an increase of $8.8
million and $9.7 million (including the effect of the change in the US dollar
exchange rate of $0.3 million) from the comparable prior year periods, as
restated for the spin-off of the clinical trials operations. Revenue generated
by the Swiss operations for the three and six months was up by 49% and 56% in
local currency as a result of (i) a 1% increase in sales of the existing
laboratories and (ii) the contribution made by the new operations acquired
during fiscal 1998. The UK operations, disposed of in January 1998, generated
sales of $5.2 million in the prior year six months period. The Spanish
operations increased revenues to $3.9 million, as compared to $3.3 million in
the comparable prior year six months period representing a 19% increase in local
currency.
Operating income for the three months ended November 30, 1998 was $3.7 million,
versus $2.0 million in the comparable prior year three months period, and for
the six months ended November 30, 1998 was $4.3 million, versus $2.6 million in
the comparable prior year six months period, as restated for the spin-off of
clinical trials operations. Such increase of $1.7 million was essentially due to
the Swiss operations, which increased operating income by $1.8 million.
Interest expense, net, increased $0.7 million during the six months ended
November 30, 1998, as compared to the prior year, primarily due to higher
average borrowing levels resulting from the Swiss acquisitions completed during
fiscal 1998 and to the increase in UK debt as a result of the acquisition of the
UK building.
Provision for income taxes in the six months ended November 30, 1998, was $1.1
million, as compared to $0.9 million in the prior year comparable period.
Minority interests in income in the six months ended November 30, 1998, were
$1.5 million as compared to $0.9 million in the prior year comparable period, an
increase resulting essentially from the increased profitability of the Swiss
operations.
Liquidity and Capital Resources
Net cash provided by operating activities for the six months ended November 30,
1998 amounted to $7.1 million, a change of $5.1 million from the prior year
primarily due to the increased profitability of Swiss operations and a change in
working capital of $4.8 million.
Net cash used in financing activities for the six months ended November 30, 1998
was $2.1 million, a decrease of $3.3 million from the prior period, primarily
due to a net debt increase of $2.2 million, offset by a reduction in purchases
of treasury stock of $1.5 million.
Net cash used in investing activities for the six months ended November 30, 1998
was $8.4 million, comparing to net cash provided of $0.5 million in the prior
year comparable period. The change is primarily due to increased cash capital
expenditures incurred in connection with the acquisition of Bewlay House, and to
the purchase of intangible assets.
In connection with the sale of UGUK, ULSA agreed to purchase from UGUK the
London building which houses most of UGUK's operations ("Bewlay House"). On July
8, 1998, the Company completed this transaction and acquired a 999-year
leasehold in Bewlay House for a purchase price of $12.3 million. This
consideration was paid by (i) the assumption of UGUK's existing debt of $10.8
million with a bank and a finance institution; (ii) compensation of an
intercompany account of $0.7 million; and (iii) $0.8 million in cash. The
company simultaneously entered into rental agreements with the tenants of the
building. The bank facility reduced to $6.9 million after the closing, has a
three-year maturity and is subject to quarterly repayments of $0.1 million. The
financial institution's facility of $1.5 million is subject to monthly
repayments up to January 2003 when it matures. The Company is actively seeking
to sell the building. Upon such a sale, if and when it occurs, the Company
intends to prepay the debts to the bank and finance institution. Accordingly, as
of January 12, 1999, the Company's bank facilities provide for a total of
approximately $59 million, including secured senior revolving facilities
consisting of term loans, working capital loans and/or guarantees. As of January
12, 1999, the Company had approximately $10 million of availability under the
aggregate credit facilities.
The Company believes that the liquidity provided by the cash flow from
operations, the existing cash balances and the borrowing arrangements described
above will be sufficient to meet the Company's capital requirements including
anticipated operating expenses arising from the Company's recent expansion into
the Spanish and Italian markets, as well as debt repayments.
In addition, the Company has outstanding obligations and commitments under
capital leases which mature over the next five to ten years.
IMPACT OF YEAR 2000
As previously reported in the Company's Form 10-K for the year ended May 31,
1998, most of the Company's laboratories are faced with "Year 2000" remediation
issues. Many computer programs were written with a two digit date field and if
these programs are not made Year 2000 compliant, they will be unable to
correctly process date information on or after the Year 2000. While these issues
impact all of the Company's data processing systems to some extent, they are
most significant in connection with patient- related computer programs.
Moreover, remediation efforts go beyond the Company's internal computer systems
and require coordination with clients, suppliers and other third parties to
assure that their systems and related interfaces are compliant. Given the
different computer systems operated by the Company's business units, the type
and extent of the Year 2000 issues and the cost of remediation vary
significantly among the Company's laboratories. Failure to achieve timely
remediation of computer systems that process client information and
transactions, and of all other systems with embedded technologies that are
critical to the Company's operations, would have a material adverse effect on
the Company's business, operations and financial results.
In response to the Year 2000 concerns, the Company created a Year 2000 Task
Force to coordinate and monitor the laboratories' progress in their Year 2000
remediation efforts. The Task Force reports directly to the Company's executive
management, provides regular progress reports to executive management, and
regularly meets with executive management to discuss its reports.
The Company's initial plans called for all critical systems to be renovated and
compliance testing underway by the end of calendar 1998. As of January 11, 1999,
the Company estimated that approximately 40 to 50% of its critical systems had
been renovated and compliance testing underway, and that the balance will be
renovated by June 30, 1999. As the Company uses many computerized laboratory
machinery manufactured, provided and maintained by third-party vendors, it has
requested each of those vendors to provide the Company with appropriate
certification that the machinery is Year 2000 compliant. The Company currently
estimates that approximately 40% of such certification has been received, and it
continuously presses those vendors that have not responded. Acceptance testing
is scheduled to take place through mid-1999 with time frames differing by
laboratory unit. Completion of any third party interface testing is dependent
upon those third parties completing their own internal remediation. The Company
could be adversely affected to the extent third parties with which it interfaces
(including some of the Company's customers) have not properly addressed their
Year 2000 issues. The Company currently develops contingency plans to handle
critical areas in the event remediation is not fully successful or is beyond the
Company's control.
In fiscal 1998, the Company spent approximately $0.5 million on its Year 2000
remediation efforts. The Company currently anticipates expenditures for Year
2000 remediation efforts and testing in the range of $0.5 million to $1.0
million in fiscal 1999, out of which approximately $0.3 million were spent in
the six months ended November 30, 1998, and of approximately $0.2 million in
fiscal 2000. Substantially all of the expenditures already made are related to
internal payroll and external consultants, while future expenditures include
approximately $0.5 for computer equipment that was not compliant and should be
replaced.
The costs of the project and the date on which the Company believes it will
complete the Year 2000 modifications are based on management's best estimates,
which were derived utilizing numerous assumptions of future events, including
the continued availability of certain resources and other factors. However,
there can be no guarantee that these estimates will be achieved and actual
results could differ materially from those anticipated.
CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995
Management's Discussion and Analysis contains various "forward looking
statements" within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended,
which represent the Company's expectations or beliefs concerning the Company's
operations, economic performance and financial condition, including, in
particular, forward-looking statements regarding the Company's expectation of
future performance following implementation of its ne business strategy. Such
statements are subject to various risks and uncertainties. Accordingly, the
Company hereby identifies the following important factors that could cause the
Company's actual financial results to differ materially from those projected,
forecast, estimated, or budgeted by the Company in such forward-looking
statements.
(a) Inability to carry out marketing and sales plans.
(b) Inability to recover the carrying value of the preferred stock in GUCT.
(c) Inability to recover the carrying value of the preferred stock in FHL.
As well as other factors listed in the Company's 1998 Annual Report on Form
10-K, which are incorporated herein by reference.
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Arbitration
As described and discussed more thoroughly in the Company's Annual Report on
Form 10-K for the year ended May 31, 1998, the Company is entitled to 80% of the
net recovery (less legal fees and costs) of any settlement or successful
resolution of the pending arbitration instituted by Americanino Capital Corp.
("ACC") pursuant to an agreement by which the Company sold its remaining
interest in ACC.
The Company's management will continue to monitor and report the progress of the
proceedings.
See also the discussion on Foreclosure Proceedings and Attachment Claim in the
1998 Annual Report on Form 10-K.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits.
27 Financial Data Schedule
(b) Reports on Form 8-K.
None
12
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
UniHolding Corporation
By: /s/ Bruno Adam
Bruno Adam, CFO
Date: January 13, 1999
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from this
Consolidated Statement of Financial Condition at November 30, 1998 (Unaudited)
and the Consolidated Statement of Income for the Six Months Ended November 30,
1998 (Unaudited) and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-mos
<FISCAL-YEAR-END> May-31-1998
<PERIOD-START> Sep-1-1998
<PERIOD-END> Nov-30-1998
<CASH> 6,155
<SECURITIES> 0
<RECEIVABLES> 20,853
<ALLOWANCES> 0
<INVENTORY> 1,853
<CURRENT-ASSETS> 33,820
<PP&E> 20,546
<DEPRECIATION> 1,313
<TOTAL-ASSETS> 125,762
<CURRENT-LIABILITIES> 31,525
<BONDS> 0
0
0
<COMMON> 76
<OTHER-SE> 41,660
<TOTAL-LIABILITY-AND-EQUITY> 125,762
<SALES> 47,484
<TOTAL-REVENUES> 47,484
<CGS> 40,291
<TOTAL-COSTS> 43,156
<OTHER-EXPENSES> 193
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (1,047)
<INCOME-PRETAX> 3,474
<INCOME-TAX> (1,124)
<INCOME-CONTINUING> 2,350
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 875
<EPS-PRIMARY> .14
<EPS-DILUTED> .14
</TABLE>
