After bouncing back from a disastrous 1998, the new president of Studio City-based Jerry’s Famous Deli says the company is on the comeback trail with plans to break into the very competitive New York City deli market. Guy Starkman, named company president last month, says Jerry’s Famous Deli is preparing for more expansion and a higher profile to take on its competitors. “We’re back in a growth mode and looking for new opportunities,” said Starkman, the 30-year-old son of company co-founder and chief executive officer Isaac Starkman. After a $264,000 net loss in 1998 following a highly-publicized failed health inspection at one of its restaurants, Jerry’s plans to bring its famed delis to the Big Apple and the Vegas Strip. Starkman said he has been looking for suitable locations in Manhattan, but has thus far been thwarted. Likewise, the company is readying for a push into Las Vegas where some locations are already being considered. At the same time, the company has been studying several Southern California locations. “We’d like to be in major cities, but I’d like to expand in places where we already are,” he said. “When you build a Jerry’s, it’s a big operation. You have to find yourself a 7,000- to 8,000-foot location and you have to build yourself a million-dollar kitchen, so we can’t open 16 to 17 places at one time,” he said. On the heels of last year’s turnaround in which the company posted a $910,000 net profit with record sales of $70.7 million, Jerry’s Famous Deli figures to again post record numbers for 2000. Net earnings for the first three quarters of 2000 are $893,000, nearly eclipsing all of 1999. Total revenues through the end of that quarter were $50.7 million, or about $1 million less than during the same period a year earlier, a phenomenon the company attributes to the sale of its Pasadena restaurant last year. “The company’s cash flow remains strong and we anticipate a strong fourth quarter,” said company CEO Isaac Starkman. Nevertheless, the company’s struggles and subsequent turnaround have not impressed some analysts who say their overall numbers must move higher to be noticed on Wall Street. “Their nine-month figures are flat, but their cash flow is good,” said Doug Christopher of Crowell, Weedon & Co. Likewise, Robert E. Robotti of Robotti & Co. says the industry leader continues to be Subway with its more than 2,000 restaurants. Robotti said, “There’s a lot of smaller players out there like Jerry’s who post some good numbers, but it’s hard to say where they’ll end up.” Complicating the company’s uncertain future is a bid by Mitchell Equity, a Los Angeles-based investment partnership controlled by Jonathan and Joseph Mitchell who want to take the company private. The Mitchells own 20 percent of the company’s stock with Jerry’s CEO Isaac Starkman controlling another 53 percent. The company has formed a committee to evaluate any potential proposals and alternatives. Jerry’s Famous Deli was founded by Jerry Seidman and Isaac Starkman in 1978, with Starkman purchasing Seidman’s interest in 1984. The company grew to five restaurants in 1995 when it went public. It has since expanded to its current 11 restaurants, including seven under the Jerry’s name and the recently purchased Solley’s Restaurant in Sherman Oaks. “We’re not a cookie-cutter chain. Each store has its own personality,” Guy Starkman said. In November 1997, KCBS-TV launched a massive expose of Los Angeles-area eateries, some of which were found to be in violation of public health and safety codes. Hidden cameras showed video of kitchen workers with unclean hands preparing meals in several eateries; other footage showed cockroaches running along kitchen countertops. But while none of the footage featured kitchens run by Jerry’s, it was disclosed that its Studio City restaurant had failed a routine health inspection. County officials closed the restaurant because food was not refrigerated at the required temperatures. While the restaurant reopened after a follow-up inspection the next day, the bad news had spread like wildfire and the company’s fortunes quickly headed south. “A lot of it had to do with sensationalism. Jerry’s was completely and unfairly victimized,” Guy Starkman said. But thanks to an aggressive expansion plan that saw the addition of four new restaurants in three years, the company’s revenues grew to $66.6 million in 1998, from $56.4 million in 1997. Much of the increase was due to the acquisition of the Epicure Market and Rascal Restaurant, both in Miami, and the opening of a new Rascal Restaurant in Boca Raton, Fla. These restaurants, with a built-in clientele, helped push revenues up. Still, the Jerry’s Famous Deli restaurants limped into 1999 with flat revenues. Jerry’s is traded on the Nasdaq Small Cap exchange with its price ranging from $6.66 in September to a low of $1.16 in November. It closed Thursday at $3.16. The company went public in 1995 with an initial offering that netted about $8 million.