Jerry’s Famous Deli Inc. (Nasdaq:DELI), operator of Jerry’s Famous Deli and Solley’s Delicatessen and Bakery in Southern California, and Wolfie Cohen’s Rascal House and The Epicure Market in South Florida with licensing agreements at Universal CityWalk, California, and Naples, Florida, announced on April 24 record earnings for the quarter ended March 31, 2000.

Net income for the quarter ended March 31, 2000, was a record high totaling approximately $803,000 ($0.17 per fully diluted share) compared to approximately $513,000 in 1999, an increase of 57%.

Cash flow (net income plus non-cash depreciation and amortization) for the quarter was also a record high of approximately $1,670,000 ($0.36 per fully diluted share) and book value was approximately $5.72.

Revenues were approximately $18,800,000 for the quarter compared to approximately $19,600,000 in the same quarter 1999, a decrease of approximately $800,000, which is primarily due to the sale of the Pasadena restaurant in 1999.

“The extensive investments we have made in growth and remodeling are paying off, said CEO Isaac Starkman. The margins have improved significantly and I believe we can achieve earnings of $0.40 per share for this year. Cash flow remains strong and we paid down approximately $1,500,000 on our debt in the quarter ended March 31, 2000. However, in spite of these financial improvements, the stock market continues to present a difficulty without a clear solution. The company’s stock is undervalued in my opinion, and still trades well below industry and market averages based on all major financial ratios, including price to earnings, price to book value, price to cash flow and price to sales, trading in many cases at less than half the industry average.

“Given the aggregate earnings for the last 12 months ending March 31, 2000, of $0.25 per share and cash flow of $0.97 per share, I find it hard to understand why the stock is not trading at a higher price. Based on yesterday’s closing price of $2.00, the stock is trading at only a little over two times cash flow and eight times earnings for the prior four quarters. I hope that our current results will draw the market’s attention and restore the stock to common sense value.”

The company’s second licensed operation at “Universal CityWalk” opened in March 2000 with promising results so far. The company also launched its e-commerce Web site for all three brands—Jerry’s Famous Deli, The Rascal House and The Epicure Market—in this past quarter.

The company presently operates a total of 10 restaurants and one specialty market: Jerry’s Famous Deli in Studio City, Encino, Marina del Rey, West Hollywood, Woodland Hills, Westwood and Costa Mesa, in California; Solley’s Delicatessen and Bakery in Sherman Oaks, California; Wolfie Cohen’s Rascal House in Miami Beach and Boca Raton, Florida, The Epicure Market in Miami; and licensing agreements in Naples, Florida, and Universal CityWalk, California.

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