ELXSI Corporation

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International Guild of Hospitality & Restaurant Managers

ELXSI Corporation operates principally through its two wholly owned subsidiaries, ELXSI and Bickford's Family Restaurants, Inc. (BFRI). Operations consist of two business segments, restaurant operations and equipment manufacturing.

On July 1, 1991 , ELXSI acquired 30 restaurants operating under the Bickford's or Bickford's Family Fare (Bickford's Restaurants) names and 12 restaurants operating under the Howard Johnson's name from Marriott Family Restaurants, Inc. These Bickford's restaurants were located in Massachusetts , Vermont , New Hampshire , Rhode Island and Connecticut . On October 30, 1992 , ELXSI acquired Cues, Inc., of Orlando , Florida , and its two wholly owned subsidiaries, Knopafex, Ltd., of Toronto , Canada , and Cues B.V., of Maastricht , the Netherlands . The Cues business in the United States is owned and operated as a division of ELXSI. Cues, Knopafex Ltd. and Cues B.V. (collectively, Cues). Cues is principally engaged in the manufacturing and servicing of video inspection and rehabilitation equipment for wastewater and drainage systems primarily for municipalities, service contractors and industrial users.

On December 30, 2000 , EXLSI contributed and transferred to a newly formed, wholly owned subsidiary, Bickford's Holding Company, Inc. (BHC), the Bickford's Restaurants and substantially all of their related operations, assets and liabilities. Immediately thereafter, these Restaurants, operations, assets and liabilities were contributed and transferred by BHC to another wholly owned subsidiary, BFRI. During 2001, one new Bickford's Restaurant was opened, in East Providence , Rhode Island , and one Bickford's Restaurant was closed. As of December 31, 2001 , the Company had 67 Bickford's Restaurants owned and operated by BFRI.

Restaurant Operations

The Company's restaurants, which are all located in New England , are family-oriented facilities that offer full-service meals. Featuring a breakfast menu available throughout the day, the restaurants appeal to customers who are interested in a casual, low- to moderately-priced meal. The Company markets the breakfast menu concept to customers regardless of the time of day, and has expanded lunch and dinner patronage by also offering improved traditional lunch and dinner items. Major categories of menu items are pancakes, waffles, french toast, eggs and omelets, country dinners, soups and side orders, salads, hamburgers, sandwiches and desserts. Breakfast items and coffee accounted for approximately 70% of all food sales.

The restaurants primarily cater to families, and to a lesser extent senior citizens, who tend to be attracted to the high-quality, low- to moderately-priced meals. Each Restaurant generally draws its customers from within a five-mile radius.

Each of the Bickford's Restaurants generally consists of a free-standing building that covers approximately 2,700 to 7,400 square feet, and they are typically located adjacent to major roads and highways and/or shopping malls. Nearly all of the restaurants located in communities that permit smoking contain dining areas designated as smoking and non-smoking. At December 31, 2001 , 16 of the restaurant buildings were owned, while the remaining 51 restaurants were either leased or owned buildings on leased land.

Cues Division

Cues manufactures systems utilizing closed circuit television and specialized rehabilitation equipment to inspect and repair underground sewer lines. The infiltration of groundwater into sewer pipelines through leaking joints and pipe fractures burdens the capacity of sewage treatment plants by increasing the volume of fluids being treated. Without a tightly maintained pipe network a treatment plant may become overwhelmed, resulting in raw sewage flowing into rivers, harbors, lakes or other bodies of water. The United States Environmental Protection Agency through the Clean Water Act imposes severe fines and penalties for such pollution. Leaking joints and pipe fractures can also contribute to sewer line damage that can be repaired, in severe cases, only by costly excavation. Cues mounts its systems in specially designed trucks and vans, which are sold as mobile units. Cues also designs and sells a range of portable systems that may be hand-carried or mounted on a wheeled dolly for ease of transport to difficult access locations. In addition, Cues provides product servicing and replacement parts for its customers. The principal customers of Cues are municipalities and contractors engaged in sewer inspection and repair. Cues is not directly engaged in the service business of maintaining and repairing sewer lines but primarily focuses on designing and manufacturing equipment for these uses.

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