<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________ to __________
Commission File No. 33-94724
JERRY'S FAMOUS DELI, INC.
(Exact name of registrant as specified in its charter)
California 95-3302338
- ------------------------------- -----------------------------------
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
12711 Ventura Boulevard, Suite 400, Studio City, California 91604
-----------------------------------------------------------------
(Address of Principal Executive Offices)
(818) 766-8311
----------------------------------------------------
(Registrant's Telephone Number, Including Area Code)
-----------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
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 ___
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date. As of July 15, 1999,
outstanding common shares totaled 14,049,202
<PAGE> 2
JERRY'S FAMOUS DELI, INC.
INDEX
<TABLE>
<CAPTION>
Page
Number
PART I - FINANCIAL INFORMATION
<S> <C> <C>
Item 1. Consolidated Financial Statements
Consolidated Balance Sheets as of June 30, 1999 and December 31, 1998................. 2
Consolidated Statements of Operations for the Three Months and Six Months Ended
June 30, 1999 and June 30, 1998....................................................... 3
Consolidated Statements of Cash Flows for the Six Months Ended
June 30, 1999 and June 30, 1998....................................................... 4
Notes to Consolidated Financial Statements............................................ 5
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
General .............................................................................. 7
Results of Operations................................................................. 8
Liquidity and Capital Resources....................................................... 9
Item 3. Quantitative and Qualitative Disclosure About Market Risk............................. 9
PART II - OTHER INFORMATION
Items 1. through 6............................................................................. 10
Signatures..................................................................................... 11
</TABLE>
1
<PAGE> 3
JERRY'S FAMOUS DELI, INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1999 1998
----------- ------------
(unaudited)
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents $ 527,664 $ 985,382
Accounts receivable, net 269,617 424,400
Inventory 1,326,433 1,394,899
Prepaid expenses 440,429 449,737
Deferred income taxes 269,327 269,327
Prepaid income taxes 58,421 267,321
----------- -----------
Total current assets 2,891,891 3,791,066
Property and equipment, net 29,304,562 33,534,787
Deferred income taxes 629,801 629,801
Goodwill and covenants not to compete 9,445,678 9,701,723
Other assets 1,249,222 1,335,331
----------- -----------
Total assets $43,521,154 $48,992,708
=========== ===========
LIABILITIES AND EQUITY
Current liabilities
Accounts payable $ 2,596,581 $ 3,099,839
Accrued expenses 1,176,412 1,411,457
Sales tax payable 196,317 421,897
Current portion of long-term debt 2,337,790 1,279,371
----------- -----------
Total current liabilities 6,307,100 6,212,564
Long-term debt 10,570,797 15,908,582
Deferred rent 457,151 457,525
----------- -----------
Total liabilities 17,335,048 22,578,671
Minority interest 601,236 554,899
Equity
Preferred stock Series A, no par, 5,000,000 shares
authorized, no shares issued or outstanding at
June 30, 1999 or at December 31, 1998 -
Common stock, no par value, 60,000,000 shares
authorized, 14,061,202 and 14,508,902 issued and
outstanding at June 30, 1999 and December 31, 1998,
respectively 24,621,273 25,271,737
Equity 963,597 587,401
----------- -----------
Total equity 25,584,870 25,859,138
----------- -----------
Total liabilities and equity $43,521,154 $48,992,708
=========== ===========
</TABLE>
The accompanying notes are an integral part
of these consolidated financial statements.
2
<PAGE> 4
JERRY'S FAMOUS DELI, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,
1999 1998 1999 1998
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Revenues $ 16,760,902 $ 16,094,831 $ 36,348,295 $ 30,359,516
Cost of sales 5,828,203 5,339,797 12,650,885 9,723,981
------------ ------------ ------------ ------------
Gross profit 10,932,699 10,755,034 23,697,410 20,635,535
Operating expenses
Labor 6,296,216 5,226,873 13,158,966 10,379,460
Occupancy and other 2,240,217 2,162,817 4,655,152 4,221,115
Occupancy - related party 277,129 256,535 537,115 417,053
General and administrative expenses 1,174,913 1,454,811 2,391,038 2,551,465
Depreciation 667,308 921,351 1,373,277 1,778,105
Amortization 177,330 196,330 342,402 307,397
------------ ------------ ------------ ------------
Total expenses 10,833,113 10,218,717 22,457,950 19,654,595
------------ ------------ ------------ ------------
Income from operations 99,586 536,317 1,239,460 980,940
Other income (expense)
Interest income 6,700 18,477 12,545 35,559
Interest expense (307,084) (370,156) (666,043) (562,728)
Other income (expense), net (2,548) 287 (2,548) 287
------------ ------------ ------------ ------------
Income (loss) before provision (benefit)
for income taxes and minority interest (203,346) 184,925 583,414 454,058
Provision (benefit) for income taxes (95,087) 50,091 110,900 108,474
Minority interest 24,925 26,430 92,707 52,302
------------ ------------ ------------ ------------
Income (loss) before cumulative effect of
change in accounting principle (133,184) 108,404 379,807 293,282
Cumulative effect of change in accounting
principle, net of tax benefit of $65,162 -- -- -- (132,299)
------------ ------------ ------------ ------------
Net income (loss) $ (133,184) $ 108,404 $ 379,807 $ 160,983
============ ============ ============ ============
Net income (loss) per share before cumulative
effect of change in accounting principle
applicable to common stock - Basic and
Diluted $ (0.01) $ 0.01 $ 0.03 $ 0.02
Cumulative effect of change in accounting
principle - Basic and Diluted -- -- -- (0.01)
------------ ------------ ------------ ------------
Net income (loss) per share applicable to
common stock - Basic and Diluted $ (0.01) $ 0.01 $ 0.03 $ 0.01
============ ============ ============ ============
Weighted average shares
outstanding - Basic 14,111,619 15,144,664 14,281,694 15,144,664
============ ============ ============ ============
Weighted average shares
outstanding - Diluted 14,136,767 15,212,901 14,306,842 15,246,076
============ ============ ============ ============
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
3
<PAGE> 5
JERRY'S FAMOUS DELI, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30,
1999 1998
------------- -------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 379,807 $ 160,983
------------- -------------
Adjustments to reconcile net income to net cash provided by
operating activities:
Cumulative effect of change in accounting principle - 132,299
Depreciation 1,373,277 1,778,105
Amortization 342,402 307,397
Minority interest 92,707 52,302
Deferred income taxes - (58,648)
Deferred rent (374) -
Changes in assets and liabilities:
Accounts receivable 154,783 (44,770)
Inventory 68,466 (120,150)
Prepaid expenses 9,308 1,158,142
Prepaid income taxes 208,900 24,605
Preopening costs - (222,693)
Other assets (21,863) (130,719)
Accounts payable (503,258) 1,630,418
Accrued expenses (235,045) (312,892)
Sales tax payable (225,580) (210,238)
------------- -------------
Total adjustments 1,263,723 3,983,158
------------- -------------
Net cash provided by operating activities 1,643,530 4,144,141
------------- -------------
Cash flows from investing activities:
Purchase of Epicure Market - (8,504,323)
Acquisition of restaurant - (1,760,000)
Net proceeds from sale of Pasadena facility 3,913,244 -
Additions to equipment (492,941) (404,950)
Additions to improvements - land, building and leasehold (698,883) (346,692)
Deductions (additions) to construction-in-progress 153,532 (1,107,251)
------------- -------------
Net cash provided by (used in) investing activities 2,874,952 (12,123,216)
------------- -------------
Cash flows from financing activities:
Borrowings on credit facilities 560,000 6,965,000
Payments on long-term debt (4,839,366) (450,631)
Dividends paid to minority shareholders (46,370) (45,093)
Purchase of Company's common stock (650,464) -
------------- -------------
Net cash provided by (used in) financing activities (4,976,200) 6,469,276
------------- -------------
Net decrease in cash and cash equivalents (457,718) (1,509,799)
Cash and cash equivalents, beginning of period 985,382 2,264,308
------------- ------------
Cash and cash equivalents, end of period $ 527,664 $ 754,509
============= ============
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
4
<PAGE> 6
JERRY'S FAMOUS DELI, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION AND ORGANIZATION:
Basis of Presentation
The accompanying consolidated financial statements of Jerry's Famous Deli,
Incorporated and its subsidiaries ("the Company") for the three and six months
ended June 30, 1999 and June 30, 1998 have been prepared in accordance with
generally accepted accounting principles and with the instructions to Form 10-Q
and Article 10 of Regulation S-X. These financial statements have not been
audited by independent accountants, but include all adjustments (consisting of
normal recurring adjustments) which are, in Management's opinion, necessary for
a fair presentation of the financial condition, results of operations and cash
flows for such periods. However, these results are not necessarily indicative of
results for any other interim period or for the full year. The December 31, 1998
consolidated balance sheet is derived from the audited consolidated financial
statements included in the Company's December 31, 1998 Form 10-K.
Certain information and footnote disclosures normally included in financial
statements in accordance with generally accepted accounting principles have been
omitted pursuant to requirements of the Securities and Exchange Commission.
Management believes that the disclosures included in the accompanying interim
financial statements and footnotes are adequate to make the information not
misleading, but should be read in conjunction with the consolidated financial
statements and notes thereto included in the Company's Form 10-K for the
preceding fiscal year.
Organization
The accompanying consolidated financial statements consist of Jerry's
Famous Deli, Incorporated ("JFD--Inc."), a California corporation, JFD--Encino
("JFD--Encino"), a California limited partnership and National Deli Corporation,
("NDC"), a Florida corporation and wholly-owned subsidiary of JFD--Inc.
JFD--Inc. and JFD--Encino operate family oriented, full-service restaurants. NDC
operates The Epicure Market ("Epicure"), a specialty gourmet food store located
in Miami Beach, Florida. These entities are collectively referred to as "Jerry's
Famous Deli, Inc." or the "Company."
JFD--Inc. and JFD--Encino include the operations of the Southern California
restaurants located in Studio City, Encino, Marina del Rey, West Hollywood,
Pasadena, Westwood, Sherman Oaks, Woodland Hills, and Costa Mesa. JFD--Inc.also
includes the two Rascal House restaurants located in Miami Beach and Boca Raton,
Florida.
Reclassification
Certain amounts in the previously presented financial statements have been
reclassified to conform to the current period presentation.
2. SUPPLEMENTAL CASH FLOW INFORMATION
<TABLE>
<CAPTION>
Six Months Ended June 30,
1999 1998
--------- ----------
Supplemental cash flow information:
Cash paid for:
<S> <C> <C>
Interest ................................................. $ 335,000 $ 588,000
Income taxes ............................................. 2,000 $ 236,000
Supplemental information on noncash investing and financing activities:
Common Stock issued in purchase of Epicure................ $ - $2,395,147
</TABLE>
5
<PAGE> 7
JERRY'S FAMOUS DELI, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
3. NET INCOME PER SHARE
In accordance with Statement of Financial Accounting Standards ("SFAS") No.
128, "Earnings Per Share," basic net income per share is computed by dividing
the net income attributable to common shareholders by the weighted average
number of common shares outstanding during the period. Diluted net income per
common share is computed by dividing the net income attributable to common
shareholders by the weighted average number of common and common share
equivalents outstanding during the period. Common share equivalents included in
the diluted computation represent shares issuable upon assumed exercise of stock
options using the treasury stock method.
4. IMPACT OF RECENT ACCOUNTING PRONOUNCEMENTS
In April 1998, the American Institute of Certified Public Accountants
("AICPA") issued Statement of Position ("SOP") 98-5 entitled "Reporting on the
Costs of Start-Up Activities." SOP 98-5 requires entities to expense as incurred
all start-up and preopening costs that are not otherwise capitalizable as
long-lived assets. Restatement of the previously issued financial statements is
not permitted by SOP 98-5, and entities are not required to report the pro forma
effects of the retroactive application of the new accounting standard. The
Company's early adoption of this new accounting principle in 1998 resulted in
the recognition of the cumulative effect of the change in accounting principle
as a one-time charge against earnings of $132,299, net of related income tax
benefit of $65,162, recorded as of January 1, 1998. Thus, the Consolidated
Statement of Operations and the Consolidated Statement of Cash Flows for the six
months ended June 30, 1998 have been restated to reflect the change.
5. SALE OF PASADENA PROPERTY
The Company closed escrow on the sale of its Pasadena facility at the close
of business on May 2, 1999. The gross proceeds from the sale were $4,120,000
which resulted in no significant gain or loss. Of these proceeds, approximately
$3,750,000 was used to reduce the Company's debt and the remaining proceeds were
applied to other related costs of the sale.
6
<PAGE> 8
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
GENERAL
The following table presents for the three and six months ending June 30,
1999 and 1998, the Consolidated Statements of Operations of the Company
expressed as percentages of total revenue. The results of operations for the
first six months of 1999 are not necessarily indicative of the results to be
expected for the full year ending December 31, 1999.
<TABLE>
<CAPTION>
PERCENTAGE OF TOTAL REVENUE
---------------------------------------
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------- ---------------
1999 1998 1999 1998
----- ----- ----- -----
<S> <C> <C> <C> <C>
Revenues 100.0% 100.0% 100.0% 100.0%
Cost of sales
Food 33.6 31.2 33.7 30.1
Other 1.2 2.0 1.1 1.9
----- ----- ----- -----
Total cost of sales 34.8 33.2 34.8 32.0
----- ----- ----- -----
Gross profit 65.2 66.8 65.2 68.0
Operating expenses
Labor 37.6 32.5 36.2 34.2
Occupancy and other 15.0 15.0 14.3 15.3
----- ----- ----- -----
Total operating expenses 52.6 47.5 50.5 49.5
General and administrative expenses 7.0 9.0 6.6 8.4
Depreciation and amortization expense 5.1 7.0 4.7 6.9
----- ----- ----- -----
Total expenses 64.7 63.5 61.8 64.8
----- ----- ----- -----
Income from operations 0.5 3.3 3.4 3.2
Interest income 0.0 0.1 0.0 0.1
Interest expense (1.8) (2.3) (1.8) (1.8)
Other income, net 0.0 0.0 0.0 0.0
----- ----- ----- -----
Income (loss) before provision for income
taxes and minority interest (1.3) 1.1 1.6 1.5
Provision (benefit) for income taxes (0.6) 0.3 0.3 0.3
Minority interest 0.1 0.1 0.3 0.2
----- ----- ----- -----
Income (loss) before cumulative effect of
change in accounting principle (0.8) 0.7 1.0 1.0
Cumulative effect of change in accounting
principle -- -- -- 0.4
----- ----- ----- -----
Net income (loss) (0.8)% 0.7% 1.0% 0.6%
===== ===== ===== =====
</TABLE>
7
<PAGE> 9
RESULTS OF OPERATIONS
Three Months Ended June 30, 1999 Compared to Three Months Ended June 30, 1998
Revenues for the three months ended June 30, 1999 increased approximately
$666,000, or 4.1%, to approximately $16,761,000 for the 1999 quarter from
approximately $16,095,000 for the 1998 quarter. The Rascal House restaurant in
Boca Raton, Florida, opened July 1, 1998, contributed revenues of approximately
$1,089,000 for the 1999 period. In addition, same store sales for the eight
Southern California stores in operation since April 1, 1998 increased
approximately $368,000, or 3.8% for the 1999 period. The combined increase was
primarily offset by a decrease in sales of approximately $132,000 for the other
Rascal House restaurant in Miami Beach, Florida, a decrease in sales of
approximately $463,000 related to the sale of the Pasadena restaurant, which was
sold on May 2, 1999, and a decrease in revenues of approximately $236,000 for
The Epicure Market. Management attributes the decrease in sales in the Florida
area primarily due to increased competition. To address the above decreases, the
Company believes additional marketing of its restaurants and specific products,
consistent with other casual dining and fast food restaurants, will have a
positive effect on same store sales.
Cost of sales, as a percentage of revenues, increased 1.6 percentage points
to 34.8% for the 1999 quarter from 33.2% for the 1998 quarter. Total food cost
which comprises over 96% of cost of sales increased 2.4 percentage points to
33.6% for 1999 from 31.2% for 1998. This increase is partially a result of the
opening of the Boca store. The Rascal House restaurants operate with a higher
food cost percentage than the stores in California. The Company's other
components of cost of sales decreased 0.8% mainly as a result of more efficient
buying.
Operating expenses, which include all restaurant level operating costs,
including, but not limited to, labor, rent, laundry, maintenance, utilities and
repairs, as a percentage of revenues, increased 5.1 percentage points to 52.6%
for the 1999 quarter from 47.5% for the 1998 quarter. Labor increased 5.1
percentage points to 37.6% for 1999 from 32.5% for 1998. Contributing to this
increase is the higher labor costs associated with the Boca restaurant, which
opened in July 1998, although all the Company's restaurants experienced
increased labor costs. Management is taking several steps to control such costs,
of which one is the implementation of an incentive program for restaurant
managers which is based on a reduction of food and labor costs.
General and administrative expenses, as a percentage of revenues, decreased
2.0 percentage points, to 7.0% for the 1999 quarter from 9.0% in the 1998
quarter. This decrease is partly due to reclassification of certain expenses at
the Epicure store and partly a result of reduction in personnel employed at the
Company's corporate headquarters.
Depreciation and amortization expense, as a percentage of revenue,
decreased 1.9 percentage points to 5.1% for 1999 from 7.0% for the 1998 quarter.
Depreciation expense decreased approximately $254,000 for the 1999 quarter as
compared to the 1998 quarter, which was primarily the result of the change in
life of certain restaurant equipment and furniture and fixtures from a five-year
useful life to an eight-year useful life, coupled with the sale of the Pasadena
restaurant.
The decrease in interest expense of approximately $63,000 to approximately
$307,000 for the 1999 second quarter from approximately $370,000 for the same
1998 period, resulted from approximately $17,000 less in interest expense due to
the sale of the Pasadena store and a lower interest rate on the credit
facilities utilized in the purchase of Epicure on April 1, 1998.
Six Months Ended June 30, 1999 Compared to Six Months Ended June 30, 1998
Revenues increased approximately $5,988,000, or 19.7%, to approximately
$36,348,000 for the 1999 six-month period from approximately $30,360,000 for the
1998 six-month period. Epicure, acquired on April 1, 1998, contributed increased
revenues of approximately $3,741,000 in 1999. The Boca restaurant, which opened
in July 1, 1998, contributed revenues of approximately $2,753,000 to the 1999
period. The Rascal House restaurant in Miami Beach, Florida had decreased
revenues of approximately $412,000, for the 1999 period, which is mostly due to
the opening of the Boca store and increased competition. Revenues for the same
eight Southern California restaurants operated during both six-month periods,
increased approximately $378,000, or 1.9%.
8
<PAGE> 10
Cost of sales, as a percentage of revenues, increased 2.8 percentage
points, to 34.8% for the 1999 period from 32.0% for the 1998 period. The
majority of these increases are attributable to the reasons discussed in
quarter-to-quarter comparison.
Labor expense, as a percentage of revenues, increased 2.0 percentage
points, to 36.2% in 1999 from 34.2% for 1998, primarily due to the same factors
as those discussed above with respect to the second quarter.
General and administrative expenses, as a percentage of revenues, decreased
1.8 percentage point to 6.6% for 1999 from 8.4% for 1998 due to the reasons
discussed above in the quarter-to-quarter analysis.
Depreciation and amortization expense, as a percentage of revenues,
decreased 2.2 percentage point to 4.7% in 1999 from 6.9% in the 1998 period,
mostly due to the same factors as those discussed above with respect to the
second quarter.
Interest expense increased approximately $103,000 mostly due to the
increase in expense on the credit facility as a result of the purchase of
Epicure. This increase was partially offset by the decrease in debt from the
proceeds of the sale of the Pasadena restaurant.
LIQUIDITY AND CAPITAL RESOURCES
The Company's capital requirements are primarily for the development,
construction and equipping of new restaurants. Generally, the Company leases the
property and extensively remodels the existing building. The cost of renovation
will depend upon the style of restaurant being converted. Renovation of Jerry's
Famous Deli restaurants have cost between $2 million and $3 million per
location, or $267 to $400 per square foot. In addition, the Company spent
approximately $650,000 pursuant to the Company's stock repurchase program.
In September 1998, the Company entered into a $15,000,000 credit facility
with BankBoston, N.A. in the form of a $9,000,000 term loan and $6,000,000
revolving line of credit. In conjunction with the agreement, the Company repaid
certain existing debt with the proceeds from the term loan. The term loan and
the revolver mature five years from inception and bear interest at the
Eurodollar rate plus a variable percentage margin totaling approximately 7.5% at
June 30, 1999. The debt is collateralized by assets of the Company and includes
certain financial covenants. The Company utilized approximately $560,000 of the
credit line in conjunction with the repurchase of approximately $650,000 of its
Common Stock during the six months period ended June 30, 1999. In addition,
approximately $3,750,000 from the proceeds of the sale of the Pasadena facility
was used to reduce the Company's debt.
Management believes that cash on hand, including cash drawn on the line of
credit, proceeds from the sale of the Pasadena facility and cash flows from
operations will be sufficient for operation of the Company's existing
restaurants and market. Future anticipated capital needs, primarily for
development or acquisition of new restaurants, cannot be projected with
certainty. Additional capital expenditures will be required as new locations are
added. The Company generally intends to seek leased locations.
Statements made herein that are not historical facts are forward looking
statements and are subject to a number of risk factors, including the public's
acceptance of the Jerry's Famous Deli format in each new location, consumer
trends in the restaurant industry, competition from other restaurants, the costs
and delays experienced in the course of remodeling or building new restaurants,
the amount and rate of growth of administrative expenses associated with
building the infrastructure needed for future growth, the availability, amount,
type and cost of financing for the Company and general economic conditions and
other factors. Further information on these and other factors is contained in
the Company's Annual Report on Form 10-K for the year ended December 31, 1998
and its other reports filed with the Securities and Exchange Commission.
Item 3. Quantitative and Qualitative Disclosure About Market Risk.
Not applicable.
9
<PAGE> 11
PART II - OTHER INFORMATION
Items 1. through 3. Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders.
On May 25, 1999, the Company held its Annual Meeting of Shareholders.
Shareholders voted upon the election of directors and upon the ratification of
PricewaterhouseCoopers LLP, as the Company's independent public accountants for
the fiscal year ending December 31, 1999. Isaac Starkman, Guy Starkman, Jason
Starkman, Paul Gray, Stanley Schneider and Kenneth Abdalla, all of whom were
directors prior to the Annual Meeting and were nominated by management for
re-election, were re-elected at the meeting. The following votes were cast for
each nominees:
<TABLE>
<CAPTION>
Authority
Name For Withheld
---- --- ---------
<S> <C> <C>
Isaac Starkman 13,171,603 162,580
Guy Starkman 13,171,603 162,580
Jason Starkman 13,171,603 162,580
Paul Gray 13,171,603 162,580
Stanley Schneider 13,171,603 162,580
Kenneth Abdalla 13,171,603 162,580
</TABLE>
The following votes were cast for the ratification of
PricewaterhouseCoopers LLP as the Company's independent public accountants for
the fiscal year ending December 31, 1999: For: 13,242,864; Against: 83,669;
Abstain: 7,650.
Shareholders who wish to submit proposals to be included in the Company's
proxy materials for the 2000 annual meeting may do so in accordance with
Securities and Exchange Commission Rule 14a-8. For those shareholder proposals
which are not submitted in accordance with Rule 14a-8, the Company's management
proxies may exercise their discretionary voting authority, without any
discussion of the proposal in the Company's proxy materials, for any proposal
which is received by the Company after January 5, 2000.
Items 5 and 6. Not applicable.
10
<PAGE> 12
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 thereunto duly authorized.
JERRY'S FAMOUS DELI, INC.
Date: August 13, 1999 By: /s/ Isaac Starkman
-------------------------------------------
Isaac Starkman
Chief Executive Officer and Chairman
of the Board of Directors
By: /s/ Christina Sterling
--------------------------------------------
Christina Sterling
Chief Financial Officer
11
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 527,664
<SECURITIES> 0
<RECEIVABLES> 272,459
<ALLOWANCES> 2,842
<INVENTORY> 1,326,433
<CURRENT-ASSETS> 2,891,891
<PP&E> 41,481,155
<DEPRECIATION> 12,176,593
<TOTAL-ASSETS> 43,521,154
<CURRENT-LIABILITIES> 6,307,100
<BONDS> 10,570,797
0
0
<COMMON> 24,621,273
<OTHER-SE> 963,597
<TOTAL-LIABILITY-AND-EQUITY> 43,521,154
<SALES> 36,348,295
<TOTAL-REVENUES> 36,348,295
<CGS> 12,650,885
<TOTAL-COSTS> 12,650,885
<OTHER-EXPENSES> 22,457,950
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 666,043
<INCOME-PRETAX> 490,707
<INCOME-TAX> 110,900
<INCOME-CONTINUING> 379,807
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 379,807
<EPS-BASIC> .03
<EPS-DILUTED> .03
</TABLE>
