<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 September 30, 2000
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 October 15, 2000,
outstanding common shares totaled 4,673,043.
<PAGE> 2
JERRY'S FAMOUS DELI, INC.
INDEX
<TABLE>
<CAPTION>
Page
Number
------
PART I - FINANCIAL INFORMATION
<S> <C>
Item 1. Consolidated Financial Statements
Consolidated Balance Sheets as of September 30, 2000 and December 31, 1999 ...........................2
Consolidated Statements of Operations for the Three Months and Nine Months Ended
September 30, 2000 and September 30, 1999 ............................................................3
Consolidated Statements of Cash Flows for the Nine Months Ended
September 30, 2000 and September 30, 1999 ............................................................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>
SEPTEMBER 30, DECEMBER 31,
2000 1999
------------- ------------
(unaudited)
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents ...................................... $ 492,890 $ 1,184,329
Accounts receivable, net ....................................... 405,610 519,948
Inventory ...................................................... 1,315,087 1,382,784
Prepaid expenses ............................................... 1,066,904 349,105
Deferred income taxes .......................................... 288,725 288,725
Prepaid income taxes ........................................... -- 201,700
----------- -----------
Total current assets ................................ 3,569,216 3,926,591
Property and equipment, net ....................................... 31,764,468 30,155,403
Deferred income taxes ............................................. 312,531 312,531
Goodwill and covenants not to compete ............................. 8,851,796 9,184,526
Other assets ...................................................... 1,493,173 1,569,138
----------- -----------
Total assets ........................................... $45,991,184 $45,148,189
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable ............................................... $ 3,052,989 $ 3,378,452
Accrued expenses ............................................... 1,042,872 1,414,934
Sales tax payable .............................................. 320,039 404,613
Income taxes payable ........................................... 145,901 --
Current portion of capital leases .............................. 27,943 --
Current portion of long-term debt .............................. 1,700,955 1,700,955
----------- -----------
Total current liabilities ............................. 6,290,699 6,898,954
Long-term debt .................................................... 11,542,700 11,042,092
Capital leases .................................................... 149,689 --
Deferred rent ..................................................... 435,648 456,774
----------- -----------
Total liabilities ...................................... 18,418,736 18,397,820
Minority interest ................................................. 776,029 677,053
Shareholders' equity
Preferred stock Series A, no par, 5,000,000 shares authorized;
no shares issued or outstanding at September 30, 2000 or
at December 31, 1999 ........................................ -- --
Common stock, no par value, 60,000,000 shares authorized;
4,673,068 shares issued and outstanding at September 30, 2000
and December 31, 1999, respectively ......................... 24,575,522 24,575,522
Retained earnings ............................................. 2,220,897 1,497,794
----------- -----------
Total shareholders' equity ............................. 26,796,419 26,073,316
----------- -----------
Total liabilities and shareholders' equity ............. $45,991,184 $45,148,189
=========== ===========
</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 SEPTEMBER 30, NINE MONTHS ENDED SEPTEMBER 30,
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues .................................. $ 15,633,711 $ 15,578,675 $ 50,718,374 $ 51,926,970
Cost of sales ............................. 5,449,357 5,366,261 17,323,660 18,017,146
------------ ------------ ------------ ------------
Gross profit ........................ 10,184,354 10,212,414 33,394,714 33,909,824
Operating expenses
Labor .................................. 5,622,069 5,597,900 17,903,436 18,756,866
Occupancy and other .................... 2,157,238 2,111,905 6,575,199 6,767,057
Occupancy - related party .............. 240,876 279,014 798,406 816,129
General and administrative expenses ....... 1,002,535 1,091,055 3,301,833 3,482,093
Depreciation .............................. 721,284 654,714 2,129,556 2,027,991
Amortization .............................. 188,978 169,179 540,115 511,581
------------ ------------ ------------ ------------
Total expenses ............. 9,932,980 9,903,767 31,248,545 32,361,717
------------ ------------ ------------ ------------
Income from operations .............. 251,374 308,647 2,146,169 1,548,107
Other income (expense)
Interest income ........................ 1,874 3,455 17,115 15,999
Interest expense ....................... (295,344) (274,797) (828,743) (940,840)
Licensing income ....................... 60,000 -- 67,700 --
Other income (expense), net ............ 29,101 8,500 32,361 5,952
------------ ------------ ------------ ------------
Income before provision (benefit) for
income taxes and minority interest .. 47,005 45,805 1,434,602 629,218
Provision (benefit) for income taxes ...... 4,254 (25,180) 382,601 85,720
Minority interest ......................... 32,826 38,430 159,267 131,137
------------ ------------ ------------ ------------
Net income .......................... $ 9,925 $ 32,555 $ 892,734 $ 412,361
============ ============ ============ ============
Net income per share:
Basic ................................ $ 0.00 $ 0.01 $ 0.19 $ 0.09
============ ============ ============ ============
Diluted .............................. $ 0.00 $ 0.01 $ 0.19 $ 0.09
============ ============ ============ ============
Weighted average shares
outstanding - Basic .................... 4,673,068 4,682,901 4,673,068 4,734,677
============ ============ ============ ============
Weighted average shares
outstanding - Diluted .................. 4,681,967 4,685,561 4,681,967 4,737,337
============ ============ ============ ============
</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>
NINE MONTHS ENDED SEPTEMBER 30,
2000 1999
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net income .................................................................. $ 892,734 $ 412,361
----------- -----------
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization ............................................ 2,669,671 2,539,572
Minority interest ........................................................ 159,267 131,137
Deferred rent ............................................................ (21,126) 21,980
Net gain from insurance settlement ....................................... (30,268) --
Changes in assets and liabilities:
Accounts receivable ................................................... 114,338 141,380
Inventory ............................................................. 67,697 (6,628)
Prepaid expenses ...................................................... (717,799) (113,145)
Income taxes receivable ............................................... 201,700 183,720
Other assets .......................................................... (131,419) (67,616)
Accounts payable ...................................................... (325,463) (1,057,751)
Accrued expenses ...................................................... (372,062) 145,863
Sales tax payable ..................................................... (84,574) (99,878)
Income taxes payable .................................................. 145,901 --
----------- -----------
Total adjustments .................................................. 1,675,863 1,818,634
----------- -----------
Net cash provided by operating activities .......................... 2,568,597 2,230,995
----------- -----------
Cash flows from investing activities:
Net proceeds from sale of assets ............................................ 7,516 3,913,244
Additions to equipment ...................................................... (523,719) (940,734)
Additions to improvements - land, building and leasehold .................... (2,987,535) (1,096,940)
----------- -----------
Net cash (used in) provided by investing activities ............... (3,503,738) 1,875,570
----------- -----------
Cash flows from financing activities:
Borrowings on credit facilities ............................................. 2,827,217 2,178,988
Payments on long-term debt .................................................. (2,326,609) (5,468,813)
Payments of obligations under capital leases ................................ (26,984) --
Distributions paid to minority shareholders ................................. (169,631) --
Dividends paid to minority shareholders ..................................... (60,291) (70,036)
Purchase of Company's common stock .......................................... -- (696,215)
----------- -----------
Net cash provided by (used in) financing activities ................ 243,702 (4,056,076)
----------- -----------
Net (decrease) increase in cash and cash equivalents ............... (691,439) 50,489
Cash and cash equivalents, beginning of period ................................. 1,184,329 985,382
----------- -----------
Cash and cash equivalents, end of period ....................................... $ 492,890 $ 1,035,871
=========== ===========
</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 nine months
ended September 30, 2000 and September 30, 1999 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, 1999
consolidated balance sheet is derived from the audited consolidated financial
statements included in the Company's December 31, 1999 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, 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.
2. SUPPLEMENTAL CASH FLOW INFORMATION
<TABLE>
<CAPTION>
Nine Months Ended September 30,
2000 1999
---- ----
<S> <C> <C>
Supplemental cash flow information:
Cash paid for:
Interest ..............................................................$834,000 $809,000
Income taxes...........................................................$135,000 $ 2,000
Supplemental information on noncash investing and financing activities:
Capital lease obligation for new equipment ............................$204,615 $ --
</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. SHAREHOLDERS' EQUITY
As of February 3, 2000, the Company's stock is being traded over the Nasdaq
SmallCap Market.
On February 9, 2000, the Company completed a one-for-three reverse stock
split of its Common Stock applicable to the shareholders of record on February
9, 2000. The reverse stock split reduced the Company's outstanding shares from
14,019,203 to approximately 4,673,068. All common share and per share amounts
have been adjusted to give retroactive effect to the one-for-three reverse stock
split for the periods presented.
5. PROPERTY AND EQUIPMENT
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. 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. No
significant gain or loss resulted from the sale.
On August 10, 2000, the Starkman Family Partnership (an affiliate of the
Company) and the Company finalized the sale of two parcels of land constituting
the primary parking facility for the West Hollywood restaurant. The Company
previously leased these two parcels from the Starkman Family Partnership on
terms arranged before the Company's initial public offering. The Company had no
option or right of first refusal in relation to the parcels. The West Hollywood
restaurant facility is still leased by the Company from a third party landlord.
The parcels are required for use of the restaurant facility. The independent
Directors of the Company determined that control of the parking lots was
strategically important to the Company, especially in future lease negotiations
with the landlord of the restaurant facility. In addition, with the rent
projected to be equivalent to the carrying cost of the funds to purchase the
property, the Directors believed that the future appreciation in value would be
a valuable asset to the Company. The Starkman Family Partnership sold the
parcels to the Company for a set price of $1,420,000, which was determined by an
independent third party appraiser. The Board of Directors approved the purchase
of the parcels in July 2000. The purchase price was financed through funds
available on the Company's line of credit.
6
<PAGE> 8
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
GENERAL
The following table presents for the three and nine months ending September
30, 2000 and 1999, the Consolidated Statements of Operations of the Company
expressed as percentages of total revenue. The results of operations for the
first nine months of 2000 are not necessarily indicative of the results to be
expected for the full year ending December 31, 2000.
<TABLE>
<CAPTION>
PERCENTAGE OF TOTAL REVENUE
-----------------------------------------
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------- -----------------
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues 100.0% 100.0% 100.0% 100.0%
Cost of sales 34.9 34.4 34.2 34.7
----- ----- ----- -----
Gross profit 65.1 65.6 65.8 65.3
Operating expenses
Labor 36.0 35.9 35.3 36.1
Occupancy and other 15.3 15.4 14.5 14.6
----- ----- ----- -----
Total operating expenses 51.3 51.3 49.8 50.7
General and administrative expenses 6.4 7.0 6.5 6.7
Depreciation and amortization expense 5.8 5.3 5.3 4.9
----- ----- ----- -----
Total expenses 63.5 63.6 61.6 62.3
----- ----- ----- -----
Income from operations 1.6 2.0 4.2 3.0
Interest income 0.0 0.0 0.0 0.0
Interest expense (1.9) (1.8) (1.6) (1.8)
Licensing income 0.4 -- 0.1 --
Other income, net 0.2 0.1 0.1 0.0
----- ----- ----- -----
Income before provision for income
taxes and minority interest 0.3 0.3 2.8 1.2
Provision (benefit) for income taxes 0.0 (0.2) 0.7 0.2
Minority interest 0.2 0.3 0.3 0.2
----- ----- ----- -----
Net income 0.1% 0.2% 1.8% 0.8%
===== ===== ===== =====
</TABLE>
7
<PAGE> 9
RESULTS OF OPERATIONS
Three Months Ended September 30, 2000 Compared to Three Months Ended September
30, 1999
Revenues for the three months ended September 30, 2000 increased
approximately $55,000, or 0.4%, to approximately $15,634,000 for the 2000
quarter from approximately $15,579,000 for the 1999 quarter. The overall
increase in revenues was primarily the net effect of an increase in revenues for
The Epicure Market of approximately $231,000 or 7.2%, coupled with an increase
in revenues for the Rascal House restaurant, in Boca Raton, of approximately
$41,000 or 4.6% and an increase in revenues of approximately $73,000 or 0.7% in
same store sales for the eight Southern California stores in operation since
January 1, 1999. However, the overall increase in revenues was primarily offset
by the decrease in sales of approximately $290,000 or 22.4% for the Rascal House
restaurant in Miami. The decrease in revenues for the Rascal House restaurant in
Miami was in part due to the closure of the restaurant for 36 days beginning
August 6, 2000 for repairs as a result of a grease fire in the kitchen, as
compared to the closure of the same restaurant for about 26 days during the same
quarter in 1999. The expenses incurred for the repairs related to the grease
fire in the kitchen were adequately covered by general liability and business
interruption insurance. During the same quarter in 1999, the Miami restaurant
was closed for remodeling. Management also believes that the increase in
competition in the Miami and Boca Raton areas has impacted revenues in these
areas.
Cost of sales, as a percentage of revenues, increased 0.5 percentage point
to 34.9% for the 2000 quarter from 34.4% for the 1999 quarter.
Total expenses, as a percentage of revenues, decreased slightly by 0.1
percentage point to 63.5% for the three months ended September 30, 2000 from
63.6% for the three months ended September 30, 1999. While total operating
expenses remained comparable at 51.3% of total revenues for the quarter ended
September 30, 2000 as compared to the same quarter for 1999, the overall
decrease in total expenses is primarily attributable to the decrease in general
and administrative expenses, which as a percentage of revenues, decreased 0.6
percentage point to 6.4% for the 2000 quarter from 7.0% for the same 1999
quarter. The overall decrease was offset by the increase in depreciation and
amortization expense of 0.5 percentage point to 5.8% for the 2000 quarter from
5.3% for the same 1999 quarter.
The increase in interest expense of approximately $20,000 to approximately
$295,000 for the 2000 third quarter from approximately $275,000 for the same
1999 quarter, primarily resulted from the increase in the Company's debt for the
purchase of the parcels of land adjacent to the West Hollywood restaurant.
The increase in other income to approximately $29,000 for the 2000 third
quarter is primarily due to the net gain recognized from the insurance
settlement received related to the Rascal House restaurant in Miami, Florida.
Nine Months Ended September 30, 2000 Compared to Nine Months Ended September 30,
1999
Revenues decreased approximately $1,209,000, or 2.3%, to approximately
$50,718,000 for the 2000 nine-month period from approximately $51,927,000 for
the 1999 nine-month period. The overall decrease in revenues was in part due to
the sale of the Pasadena restaurant, which had revenues of approximately
$977,000 for the nine months ended September 30, 1999. Also contributing to the
overall decrease was a decrease in revenues of approximately $942,000 or 9.9%
for the Florida restaurants, coupled with a decrease in revenues of
approximately $63,000 or 0.2% for same store sales for the eight Southern
California stores in operation since January 1, 1999. Same store sales for the
eight Southern California stores were approximately $30,851,000 for the nine
months ended September 30, 2000 as compared to approximately $30,914,000 for the
same period for 1999. The combined decrease in revenues was offset by an
increase in sales of approximately $773,000 or 7.4% for The Epicure Market. The
reason for this overall decrease is discussed in the above quarter-to-quarter
comparison.
Cost of sales, as a percentage of revenues, decreased 0.5 percentage point,
to 34.2% for the 2000 period from 34.7% for the 1999 period. This decrease is
primarily the result of the Company's continued focus on more efficient buying
and increased management monitoring of purchase costs at the restaurants and
Epicure.
Total expenses, as a percentage of revenues, decreased slightly by 0.7
percentage point to 61.6% for the nine months ended September 30, 2000 from
62.3% for the nine months ended September 30, 1999. The overall decrease in
total expenses is primarily attributable to the overall decrease in operating
expenses, which as a percentage of revenues,
8
<PAGE> 10
decreased 0.9 percentage point to 49.8% for 2000 from 50.7% for the same nine
month 1999 period. The overall decrease in operating expenses is primarily
attributable to a decrease in labor expense of 0.8 percentage point to 35.3% for
the 2000 nine month period from 36.1% for the same 1999 period. In addition,
while general and administrative expenses, as a percentage of revenues,
decreased to 6.5% as of September 30, 2000 compared to 6.7% of revenues for the
same 1999 nine month period, the decrease in operating expenses was partially
offset by a slight increase in depreciation and amortization expense, as a
percentage of revenues, of 0.4 percentage point to 5.3% for the 2000 nine month
period from 4.9% for the same 1999 period. The aforementioned changes are mostly
due to the same factors as those discussed above with respect to the
quarter-to-quarter comparison.
Interest expense decreased approximately $112,000 to approximately $829,000
for the period ended September 30, 2000 as compared to $941,000 for the same
1999 period mostly due to the reduction in the Company's debt during the first
six months of the current fiscal year.
LIQUIDITY AND CAPITAL RESOURCES
The Company paid down approximately $2,300,000 of debt and used
approximately $1,400,000 for the purchase of the parcels adjacent to the West
Hollywood restaurant, approximately $300,000 for future development of the
Jerry's Famous Deli restaurant concept in the South Beach area of Miami, and
approximately $169,000 for the distribution of capital to minority shareholders
during the nine months ended September 30, 2000. 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. Additional capital expenditures will be required
for new locations. The cost of renovation will depend upon the style of
restaurant being converted. Renovation of Jerry's Famous Deli restaurants have
cost between $2.0 million and $3.0 million per location, or $267 to $400 per
square foot.
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 8.5% at
September 30, 2000. The debt is collateralized by assets of the Company and
includes certain financial covenants.
Management believes that cash on hand, including cash available on the line
of credit and cash flows from operations will be sufficient for operation of the
Company's existing restaurants and market. Future anticipated capital needs
cannot be projected with certainty. Additional capital expenditures will be
required for new locations.
The Company continues to search for prime locations appropriate for its
customer base and to develop them into restaurants, both in the Southern
California and Southern Florida areas, as well as new areas, while continuing to
provide quality food and service in its existing restaurants. However, the issue
of whether or not to aggressively expand, in light of stock market conditions,
is currently under review. The Company seeks to exploit its brand names for
ancillary income from licensing and possibly third party retail sales. This is a
new initiative and the outlook is not yet clear.
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, 1999
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 4. Not applicable.
ITEM 5. OTHER INFORMATION
In September 2000, the Company entered into an operating lease agreement
with an individual for property located at 1450 South Collins Avenue in South
Miami Beach, Florida for development as a Jerry's Famous Deli. The lease
agreement has an initial term of 15 years from the restaurants opening date,
which is currently scheduled for the second or third quarter of 2001, and
required a non-refundable deposit of $300,000.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
Exhibit
Number
10.47 Net Lease Agreement, dated September 12, 2000, between Jerry's Famous
Deli, Inc. and Zori Hayon for property located at 1450 South Collins
Avenue in South Miami Beach, Florida.
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: November 9, 2000 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
