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FORM 10-Q
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
For Quarter Ended August 4, 2002 Commission file number 0-11514
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Max & Erma's Restaurants, Inc.
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(Exact name of registrant as specified in its charter)
Delaware No. 31-1041397
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4849 Evanswood Drive, Columbus, Ohio 43229
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (614) 431-5800
------------------------------
Indicate by checkmark 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, and (2) has been subject to the filing
requirements for at least the past 90 days.
YES X NO
----------- -----------
As of August 4, 2002, the registrant had outstanding 2,317,843 common shares,
$0.10 par value.
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
MAX & ERMA'S RESTAURANTS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
August 4,
2002 October 28,
ASSETS Unaudited 2001
------ ------------ ---------
Current Assets:
Cash .......................................... $ 2,004,275 $ 2,350,828
Inventories ................................... 1,046,598 1,032,202
Other Current Assets .......................... 2,707,709 1,845,585
------------ ------------
Total Current Assets .......................... 5,758,582 5,228,615
Property - At Cost: ........................... 81,272,541 71,018,539
Less Accumulated Depreciation and Amortization 31,635,083 28,215,548
------------ ------------
Property - Net ................................ 49,637,458 42,802,991
Other Assets .................................. 7,549,702 6,901,361
------------ ------------
Total ......................................... $ 62,945,742 $ 54,932,967
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current Liabilities:
Current Maturities of Long-Term Obligations ... $ 2,544,736 $ 3,962,907
Accounts Payable .............................. 4,573,161 3,826,227
Accrued Payroll and Related Taxes ............. 2,818,448 2,259,361
Accrued Liabilities ........................... 3,168,970 3,454,633
------------ ------------
Total Current Liabilities ..................... 13,105,315 13,503,128
Long-Term Obligations - Less Current Maturities 39,429,333 32,227,965
Stockholders' Equity:
Preferred Stock - $.10 Par Value;
Authorized 500,000 Shares - none outstanding
Common Stock - $.10 Par Value;
Authorized 5,000,000 Shares
Issued and Outstanding 2,317,843 Shares
at 8/4/02 and 2,407,766 Shares at 10/28/01 . 231,784 240,777
Other Comprehensive Income .................... (845,592) (953,550)
Retained Earnings ............................. 11,024,902 9,914,647
------------ ------------
Total Stockholders' Equity .................... 10,411,096 9,201,874
------------ ------------
Total ......................................... $ 62,945,742 $ 54,932,967
============ ============
(See notes to interim unaudited condensed consolidated financial statements)
1
MAX & ERMA'S RESTAURANTS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
Twelve Weeks Ended Forty Weeks Ended
--------------------------- ----------------------------
August 4, August 5, August 4, August 5,
2002 2001 2002 2001
------------ ------------ ------------ -------------
REVENUES: .................. $ 35,712,493 $ 33,055,576 $115,992,136 $108,680,770
COSTS AND EXPENSES:
Costs of Goods Sold ........ 8,672,221 8,443,374 28,576,383 27,517,273
Payroll and Benefits ....... 11,395,408 10,676,257 37,274,130 35,006,518
Other Operating Expenses ... 10,796,877 10,001,985 35,087,016 33,188,990
Pre-Opening Expenses ....... 217,055 82,447 472,983 375,447
Administrative Expenses .... 2,926,622 2,404,917 9,341,889 7,895,170
------------ ------------ ------------ ------------
Total Operating Expenses ... 34,008,183 31,608,980 110,752,401 103,983,398
------------ ------------ ------------ ------------
Operating Income ........... 1,704,310 1,446,596 5,239,735 4,697,372
Interest Expense ........... 474,924 585,104 1,644,782 2,058,586
Minority Interest in Income
of Affiliated Partnerships 12,240 38,503 38,924
------------ ------------ ------------ ------------
INCOME BEFORE INCOME TAXES . 1,229,386 849,252 3,556,450 2,599,862
INCOME TAXES ............... 348,000 207,000 993,000 683,000
------------ ------------ ------------ ------------
NET INCOME ................. $ 881,386 $ 642,252 $ 2,563,450 $ 1,916,862
============ ============ ============ ============
NET INCOME PER SHARE:
Basic .................. $ 0.38 $ 0.27 $ 1.10 $ 0.80
============ ============ ============ ============
Diluted ................ $ 0.34 $ 0.25 $ 0.99 $ 0.75
============ ============ ============ ============
SHARES OUTSTANDING:
Basic ................... 2,319,028 2,365,184 2,336,895 2,389,393
============ ============ ============ ============
Diluted ................. 2,582,193 2,567,074 2,597,210 2,542,389
============ ============ ============ ============
(See notes to interim unaudited condensed consolidated financial statements)
2
MAX & ERMA'S RESTAURANTS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Forty Weeks Ended
--------------------------
August 4, August 5,
2002 2001
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income .................................................. $ 2,563,450 $ 1,916,862
Depreciation and amortization ............................... 4,263,757 4,124,056
Minority Interest in Income of Affiliated Partnerships ...... 38,503 38,924
Changes in other assets and liabilities ..................... (620,456) (1,021,466)
------------ ------------
Net cash provided by operating activities ................... 6,245,254 5,058,376
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions .......................................... (12,967,044) (10,061,702)
Proceeds from sale of assets ................................ 2,210,648 2,509,397
Increase in other assets .................................... (113,124) (20,383)
------------ ------------
Net cash used by investing activities ....................... (10,869,520) (7,572,688)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments under long-term obligations .............. (42,018,003) (40,271,846)
Proceeds from long-term obligations ......................... 47,954,882 42,876,626
Proceeds from sale of stock ................................. 187,243 140,124
Purchase of common stock .................................... (1,718,026) (658,310)
Debt issue costs ............................................ (89,880)
Distributions to minority interests in Affiliated Partnership (38,503)
------------ ------------
Net cash provided by financing activities ................... 4,277,713 2,086,594
------------ ------------
NET DECREASE IN CASH AND EQUIVALENTS ........................ (346,553) (427,718)
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD ................. 2,350,828 2,761,842
------------ ------------
CASH AND EQUIVALENTS AT END OF PERIOD ....................... $ 2,004,275 $ 2,334,124
============ ============
SUPPLEMENTAL DISCLOSURES:
Cash paid during the period for:
Interest (net of $299,000 and $302,000 capitalized
in 2002 and 2001, respectively) ....................... $ 2,263,384 $ 2,776,183
Income taxes .............................................. $ 1,810,949 $ 850,010
Non-cash activities:
Property additions financed by accounts payable ........... $ 1,635,743 $ 762,516
(See notes to interim unaudited condensed consolidated financial statements)
3
MAX & ERMA'S RESTAURANTS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. Presentation
------------
The accompanying unaudited condensed financial statements have been
prepared in accordance with the instructions to Form 10-Q and include
all of the information and disclosures required by accounting
principles generally accepted in the United States of America for
interim reporting, which are less than those required for annual
reporting. In the opinion of management, all adjustments, consisting of
only normal recurring accruals, considered necessary for a fair
presentation have been included. Other than the adoption of SFAS No.
142, there have been no changes in the Company's critical accounting
policies.
The Company and its Affiliated Partnership each have a 52-53 week
fiscal year, which ends on the last Sunday in October. Fiscal 2001 and
2002 each consist of 52 weeks and include one sixteen-week and three
twelve-week quarters.
2. Recently Issued Financial Accounting Standards
----------------------------------------------
Effective October 29, 2001, the Company adopted Financial Accounting
Standards Board (FASB) Statement No. 141, "Business Combinations," and
SFAS No. 142, "Goodwill and Other Intangible Assets." SFAS No. 141
requires that the purchase method of accounting be used for all
business combinations initiated after June 30, 2001. The adoption of
this statement did not have a material impact on its consolidated
financial statements. SFAS No. 142 changes the accounting for goodwill
and certain other intangible assets from an amortization method to an
impairment only approach. Due to the adoption of SFAS No. 142, the
Company does not amortize goodwill. The total net book value of
goodwill at August 4, 2002 was $62,073. Amortization expense related to
goodwill in the third quarter of fiscal 2001 and for the year-to-date
2001 period was $7,162 and $23,874, respectively. Additionally, certain
intangible assets that were previously amortized and deemed to have an
indefinite life are no longer amortized. These intangibles had a net
book value of $1,066,157 as of August 4, 2002. Amortization expense
related to these intangible assets in the third quarter of fiscal 2001
and for the year-to-date period was $5,643 and $18,832, respectively.
Management has performed an analysis on the remaining intangibles and
has concluded that there is not an impairment of such assets.
In August 2001, the FASB issued SFAS No. 144, "Accounting for
Impairment or Disposal of Long-Lived Assets." While this statement
supercedes SFAS No. 121, "Accounting for Impairment of Long-Lived
Assets to Be Disposed Of," it retains the fundamental provisions of
SFAS No. 121 for recognition and impairments of assets to be
4
held and used, and assets to be disposed of by sale. The adoption of
this statement, as of October 29, 2001, did not have a material impact
on its consolidated financial statements.
SFAS No. 145, "Rescission of FASB Statements No. 4, 44, and 64,
Amendment of FASB Statement No. 13, and Technical Corrections, "will be
effective for fiscal years beginning after May 15, 2002 (October 28,
2002 for the Company). The standard rescinds FASB Statements No. 4 and
64 that deal with issues relating to the extinguishment of debt. The
standard also rescinds FASB Statement No. 44 that deals with intangible
assets of motor carriers. The standard modifies SFAS No. 13,
"Accounting for Leases," so that certain capital lease modifications
must be accounted for by lessees as sale-leaseback transactions.
Additionally, the standard identifies amendments that should have been
made to previously existing pronouncements and formally amends the
appropriate pronouncements. The adoption of SFAS No. 145 will not have
a significant effect on the Company's results of operations or its
financial position.
In June 2002, SFAS No. 146, "Accounting for Costs Associated with Exit
or Disposal Activities," was issued. SFAS No. 146 changes the timing of
when companies recognize costs associated with exit or disposal
activities, so that the costs would generally be recognized when they
are incurred rather than at the date of a commitment to an exit or
disposal plan. SFAS No. 146 is effective for exit or disposal
activities initiated after December 31, 2002, and could result in the
Company recognizing the costs of future exit or disposal activities
over a period of time as opposed to a single event.
3. Amended Bank Loan Agreement
---------------------------
During the second quarter of 2002 the Company amended its bank loan
agreement. Under the amended agreement two term notes totaling $23.0
million were combined into one note with the combined principal
amortization reduced from $1.0 million per quarter to $600,000 per
quarter. Under the amended agreement the Company's revolving credit
line remained at $12.8 million.
5
Item 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
----------------------------------------------
REVENUES
- --------
Revenues for the third quarter of 2002 rose $2,656,000 or 8% from the
third quarter of 2001. The increase was a result of i) the opening of one Max &
Erma's restaurant during the fourth quarter of 2001, ii) the opening of three
Max & Erma's restaurants during the first three quarters of 2002, and iii) an
increase of $191,000 or 0.6% in same-store sales for restaurants opened at least
18 months (exclusive of two locations where a shopping mall and a freeway
interchange, respectively, are undergoing major reconstruction).
Year-to-date revenues increased $7,311,000 or 7% from 2001 to 2002. The
increase was a result of i) the opening of five Max & Erma's restaurants during
2001 ii) the opening of three Max & Erma's restaurants during 2002, and iii) a
year-to-date increase of $943,000 or 1.0% in same-store sales (exclusive of the
freeway location described above).
The same-store sales increases were a result of menu price increases of
approximately 2% over last year and offset the loss of sales due to the
elimination of coupon discounting, particularly during the first quarter of
2002. The third quarter of 2002 was the 13th consecutive quarter of positive
same-store sales. However, same-store sales gains for the third quarter of 2002
were relatively modest due to a slowing economy. Management still anticipates
continued positive same-store sales in the fourth quarter of 2002 and into 2003,
because historically the Company's restaurants have performed well during
economic slowdowns and with an overall average guest check under $11.00,
Management believes the Company's restaurants still offer an attractive value.
The Company expects to open three restaurants during the fourth quarter
of 2002. All three restaurants were under construction at the end of the third
quarter. The Company expects to open six to seven restaurants during 2003. At
the end of the third quarter the Company owned two of the sites planned for 2003
and three additional sites were under contract to purchase or lease.
The Company also expects the continued increase in franchise fees and
royalties for the fourth quarter of 2002 and into 2003. Through the third
quarter of 2002 three franchised restaurants have opened in Wilmington, Ohio,
St. Louis, Missouri and Evansville, Indiana, increasing the number of franchised
Max & Erma's restaurants to twelve. The Company anticipates the opening of six
franchised restaurants during fiscal 2003, two of which were under construction
at the end of the third quarter of 2002. Multi-store franchise development
agreements have been signed for St. Louis, Milwaukee-Green Bay, Philadelphia,
southern Indiana and the Wilkes-Barre/Scranton, Pennsylvania area, which require
franchisees to open an additional 25 restaurants over the next ten years.
6
COSTS AND EXPENSES
- ------------------
Cost of goods sold, as a percentage of revenues, decreased from 25.5%
for the third quarter of 2001 to 24.3% for the third quarter of 2002.
Year-to-date cost of goods sold, as a percentage of revenues, declined from
25.3% for 2001 to 24.6% for 2002. The decreases for both the quarter and
year-to-date periods were a result of an across the board decline in almost all
inventory cost categories, particularly beef, seafood and dairy prices which
were higher than normal last year. An approximate menu increase of 2% over last
year also helped reduce cost of goods sold, as a percentage of revenue.
Payroll and benefits, as a percentage of revenues, declined from 32.3%
for the third quarter of 2001 to 31.9% for the third quarter of 2002.
Year-to-date payroll and benefits, as a percentage of revenues, declined from
32.2% for 2001 to 32.1% for 2002. Generally a more stable labor pool has allowed
a leveling off of wage rates in 2002. This along with positive same-store sales
and higher initial sales volumes at restaurants opened in 2002 have contributed
to a decline in payroll costs, as a percentage of revenues. This decrease has
been partially offset by higher benefits, primarily health insurance expense in
2002.
Other operating expenses, as a percentage of revenues, decreased from
30.3% for the third quarter of 2001 to 30.2% for the third quarter of 2002 and
year-to-date decreased from 30.5% for 2001 to 30.3% for 2002. The decreases were
a result of reduced advertising and utility costs and offset higher occupancy
costs.
Pre-opening expenses, as a percentage of revenues, increased from 0.2%
for the third quarter of 2001 to 0.6% for the third quarter of 2002. The
increase was a result of costs incurred prior to three restaurant openings
planned for the fourth quarter of 2002. Pre-opening expenses are incurred and
expensed for up to six months prior to the opening of a restaurant. Year-to-date
pre-opening expenses, as a percentage of revenues, remained constant at 0.4% of
revenues.
ADMINISTRATIVE EXPENSES
- -----------------------
Administrative expenses, as a percentage of revenues, increased from
7.3% for the third quarter of 2001 to 8.2% for the third quarter of 2002.
Year-to-date administrative expenses, as a percentage of revenues, increased
from 7.3% for 2001 to 8.1% for 2002. In dollar terms administrative expenses
increased 22% and 18% for the quarter and year-to-date periods, respectively.
The increases were due to a percentage increase in dollars of expense which was
greater than the increase in revenues. The dollar increase was due to raises for
corporate personnel and significantly higher performance-based bonus expense
related to 2002's operating results. Excluding bonus expense, administrative
expenses increased 11% year-to-date from 2001 to 2002.
7
INTEREST EXPENSE
- ----------------
Interest expense decreased 19% and 20%, respectively, from the third
quarter and year-to-date periods of 2001 to 2002 due to declining interest
rates. At August 4, 2002, the interest rate under the Company's revolving credit
line was 5.0% as compared to 7.5% at August 5, 2001. Through the use of an
interest rate swap the interest rate on a major portion of a term note is
essentially fixed at approximately 9.5%. The interest rate on approximately 30%
of the note's balance declined from 7.25% at August 5, 2001 to 5.0% at August 4,
2002. Total interest-bearing debt (term note and revolving credit line)
increased from $32.5 million at August 5, 2001 to $33.1 million at August 4,
2002. The Company expects to close on the sale and lease-back of two restaurant
properties during the fourth quarter of 2002 or shortly thereafter. The net
proceeds of approximately $5.25 million plus $1.5 million in landlord
construction allowance will be used to reduce borrowings under the Company's
revolving credit line. The Company capitalized $299,000 and $302,000 of
construction period interest during the first 40 weeks of 2002 and 2001,
respectively.
INCOME TAXES
- ------------
The Company's effective tax rate increased from 26.2% for the first 40
weeks of 2001 to 27.9% for the first 40 weeks of 2002. Due to the amount of FICA
tax on tips credit earned by the Company, its effective tax rate is expected to
remain approximately 28% for the remainder of 2002. The increase in the
Company's effective tax rate from 2001 to 2002 is due to the fact that at higher
levels of pre-tax income the credits have a lesser affect on reducing the
Company's effective tax rate.
LIQUIDITY AND CAPITAL RESOURCES
- --------------------------------
The Company's working capital ratio remained at .4 to 1 at October 28,
2001 and August 4, 2002. Historically, the Company has been able to operate with
a working capital deficiency because 1) restaurant operations are primarily
conducted on a cash basis, 2) high turnover (about once every 10 days) permits a
limited investment in inventory, and 3) trade payables for food purchases
usually become due after receipt of cash from the related sales.
During the first 40 weeks of 2002, the Company expended approximately
$12,967,000 for property additions, $42,018,000 to reduce long-term obligations
and $1,718,000 to repurchase approximately 128,000 shares of its common stock.
Funds for such expenditures were provided primarily by $47,955,000 from proceeds
of long-term obligations, $6,245,000 from operations, $2,211,000 from the sale
of assets and $346,000 from cash on hand. The Company routinely draws down and
repays balances under its revolving credit agreement, the gross amounts of which
are included in the above numbers.
8
The Company intends to open three additional Max & Erma's restaurants
during the remainder of 2002 and six to seven restaurants during fiscal 2003. At
August 4, 2002, the Company was contractually committed to the purchase or lease
of eight sites, three of which were under construction. Three additional sites
had been approved and were in some stage of negotiations.
The estimated cost to complete the eight restaurants that the Company
is contractually committed to is approximately $11.9 million as of August 4,
2002. Funding for new restaurants is expected to be provided by cash flow from
operations, the sale-leaseback of real estate, equipment leasing, landlord
construction allowances and the Company's revolving credit line. At August 4,
2002, the Company had approximately $1.5 million available under its $12.8
million revolving credit line, approximately $8.0 million available under
sale-leaseback commitments for three properties and approximately $1.7 million
available under equipment lease commitments. During the second quarter of 2002
the Company amended its bank loan agreement. Under the amended agreement two
term notes totaling $23.0 million were combined into one note with the combined
principal amortization reduced from $1.0 million per quarter to $600,000 per
quarter. Under the amended agreement the Company's revolving credit line
remained at $12.8 million. The Company expects to complete the sale and
leaseback of two properties during the fourth quarter of 2002 or shortly
thereafter with net proceeds of approximately $5.25 million. Additionally, the
Company expects to receive landlord construction allowances related to two
locations totaling $1.5 million during the fourth quarter of 2002. The total
receipts of $6.75 million will be used to reduce outstanding borrowings under
the Company's revolving credit line and be available for future restaurant
development.
The Company has authorized the repurchase of 250,000 shares of its
common stock from October 31, 2001 to October 31, 2002. At August 4, 2002,
approximately 124,000 shares remain available for repurchase under the
authorization. Funds for the repurchase of common stock will be provided by cash
from operations and the Company's revolving credit line.
SAFE HARBOR STATEMENT UNDER THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995
- ----------------------------------------
This Management's Discussion and Analysis of Financial Condition and
Results of Operations ("MD&A") contains forward-looking statements within the
meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and
Section 27A of the Securities Act of 1933, as amended. The words "plan,"
"anticipate," "believe," "expect," "estimate," and "project" and similar words
and expressions identify forward-looking statements which speak only as of the
date hereof. Forward-looking statements in this MD&A include statements
regarding continued positive same-store sales (paragraph 3), the value of dining
at the Company's restaurants (paragraph 3), the opening of Company-owned
restaurants (paragraphs 4 and 15), increased franchise fees and royalties
(paragraph 5), the opening of franchised Max & Erma's restaurants (paragraph 5),
the completion of sale-leaseback transactions and receipt of landlord
construction allowances
9
(paragraphs 11 and 16), the Company's effective tax rate (paragraph 12), and the
estimated costs and source of funds for new Company-owned restaurants (paragraph
16).
Investors are cautioned that forward-looking statements involve risks
and uncertainties that could cause actual results to differ materially from
historical or anticipated results due to many factors, including, but not
limited to, the Company's ability to open or franchise new restaurants as
planned, changes in competition in markets where the Company operates
restaurants, the availability of restaurant workers, the Company's ability to
control administrative expenses, changes in interest rates, changes in cash
flows from operations, the availability of real estate for purchase or lease,
and other risks, uncertainties and factors described in the Company's most
recent Annual Report on Form 10-K and other filings from time to time with the
Securities and Exchange Commission. The Company undertakes no obligation to
publicly update or revise any forward-looking statements.
Item 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
----------------------------------------------------------
The Company's primary market risk results from fluctuations in interest
rates. The Company is exposed to interest rate risk through borrowings under its
revolving credit agreement, which permits borrowings up to $35.8 million. To
minimize the effect of interest rate fluctuations, the Company has entered into
an interest rate swap arrangement. Under this agreement, the Company pays a
fixed rate of interest on a portion of the outstanding balance.
PART II - OTHER INFORMATION
Item 6 - EXHIBITS AND REPORTS ON FORM 8-K
---------------------------------
(a) Exhibits
The exhibits listed in the accompanying index to exhibits on page 14
are filed as part of this report.
(b) Reports on Form 8-K
None
10
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.
MAX & ERMA'S RESTAURANTS, INC.
-----------------------------
Registrant
Todd B. Barnum
--------------------------------------------------
Todd. B. Barnum
Chairman of the Board
(Chief Executive Officer)
William C. Niegsch, Jr.
--------------------------------------------------
William C. Niegsch, Jr.
Executive Vice President &
Chief Financial Officer
September 6, 2002
- -----------------
Date
11
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Todd B. Barnum, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Max & Erma's
Restaurants, Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period
covered by this quarterly report; and
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the period presented in
this quarterly report.
Date: September 6, 2002
/s/ Todd B. Barnum
----------------------------------------
Todd B. Barnum, Chief Executive Officer
Max & Erma's Restaurants, Inc.
12
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, William C. Niegsch, Jr., certify that:
1. I have reviewed this quarterly report on Form 10-Q of Max & Erma's
Restaurants, Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period
covered by this quarterly report; and
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the period presented in
this quarterly report.
Date: September 6, 2002
/s/ William C. Niegsch, Jr.
----------------------------------------
William C. Niegsch, Jr., Executive Vice
President & Chief Financial Officer,
Max & Erma's Restaurants, Inc.
13
MAX & ERMA'S RESTAURANTS INC.
EXHIBIT INDEX
Exhibit No. Exhibit Page No.
- ----------- ------- --------
2 Not applicable
3 Not applicable
4 Not applicable
11 Not applicable
15 Not applicable
18 Not applicable
19 Not applicable
22 Not applicable
23 Not applicable
24 Not applicable
99.1 Chief Executive Officer Certification Statement 15
99.2 Chief Financial Officer Certification Statement 16
14