8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): June 18, 2008

Max & Erma’s Restaurants, Inc.

(Exact Name of registrant as specified in its charter)

Delaware
(State or other
jurisdiction of
incorporation or
organization) 0-11514
(Commission File Number) 31-1041397
(IRS Employer
Identification No.)

4849 Evanswood Drive
Columbus, OH 43229
(614) 431-5800
(Address, including zip code, and telephone number
including area code of registrant’s
principal executive offices)

Not Applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition.

     On June 18, 2008, Max & Erma’s Restaurants, Inc. (the “Company”) issued a press release entitled, “Max & Erma’s Restaurants, Inc. Reports Second Quarter Results,” regarding its financial results for the second quarter ended May 11, 2008. A copy of the Company’s press release is furnished as Exhibit 99.1 to this Form 8-K and is incorporated into this Item 2.02 by reference.

     The information in this Item 2.02 of this Form 8-K, including Exhibit 99.1 hereto, shall not be treated as “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended.

     The information contained or incorporated by reference in this Form 8-K contains forward-looking statements, including certain statements regarding intent, beliefs, expectations, projections, forecasts and plans, which are subject to numerous assumptions, risks, and uncertainties. A number of factors, including but not limited to those set forth under the heading “Item 1A. Risk Factors” included in the Company’s Annual Report on Form 10-K, as amended, for the year ended October 28, 2007, and other factors described from time to time in the Company’s other filings with the Securities and Exchange Commission, could cause actual conditions, events, or results to differ significantly from those described in the forward-looking statements. All forward-looking statements included in this Form 8-K are based on information available at the time of the report. The Company assumes no obligation to update any forward-looking statement.

Item 9.01 Financial Statements and Exhibits.

     (d) Exhibits.

Exhibit No.	Description
99.1	Press Release, dated June 18, 2008, entitled “Max & Erma’s Restaurants, Inc. Reports Second Quarter Results”

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 hereunto duly authorized.

	Max & Erma’s Restaurants, Inc.
Date: June 19, 2008	By:	/s/ William C. Niegsch, Jr.
		William C. Niegsch, Jr., Executive Vice
		President, Chief Financial Officer,           Treasurer and Secretary

EXHIBIT INDEX

Exhibit No.	Description
99.1	Press Release, dated June 18, 2008, entitled “Max & Erma’s Restaurants, Inc. Reports Second Quarter Results”

EX-99.1

Exhibit 99.1

4849 Evanswood Drive, Columbus, Ohio 43229

FOR IMMEDIATE RELEASE
Max & Erma’s Restaurants, Inc.	For Further Information Contact:
NASDAQ: MAXE	William C. Niegsch, Jr.
	Exec.Vice President & Chief Financial Officer
June 18, 2008	(614) 431-5800
	www.maxandermas.com

MAX & ERMA’S RESTAURANTS, INC.
REPORTS SECOND QUARTER RESULTS

Second Quarter Highlights:

• Three new company owned restaurants continue to perform well;

• Franchise fees and royalties up 10% for the second quarter;

• Merger with G&R Acquisition, Inc. expected to be completed in mid July.

Financial Summary (Unaudited)
(In thousands, except per share data)

	12 Weeks Ended						28 Weeks Ended
	5/11/08			5/13/07			5/11/08			5/13/07
Revenues	$	40,027		$	41,135		$	95,226		$	96,656
Operating Income (Loss)	$	(519	)	$	279		$	(475	)	$	2,128
Income (Loss) Before Taxes	$	(1,549	)	$	(512	)	$	(2,660	)	$	248
Net Income (Loss)	$	(1,631	)	$	(102	)	$	(2,367	)	$	648
Diluted Net Income (Loss) per Common Share	$	(0.64	)	$	(0.04	)	$	(0.93	)	$	0.25
Diluted Shares Outstanding		2,554			2,556			2,554			2,554

Columbus, Ohio, June 12, 2008 – Max & Erma’s Restaurants, Inc. (NASDAQ/Capital Market: MAXE) today reported second quarter 2008 financial results.

The Company reported that revenues for the second quarter of 2008 declined 2.7% from $41.1 million for the second quarter of 2007 to $40.0 million for the second quarter of 2008. The Company reported a net loss of $1,631,000 or $(0.64) per diluted share for the second quarter of 2008 versus a net loss of $102,000 or $(0.04) per diluted share for the second quarter of 2007. Year-to-date Max & Erma’s reported revenues fell 1.5% to $95.2 million for 2008 from $96.7 million in 2007. Year-to-date the Company reported a net loss of $2,367,000 or $(0.93) per diluted share versus a net income of $648,000 or $0.25 per diluted share for 2007. The net loss for 2008 includes a $424,000 pre-tax asset impairment charge recorded in the first quarter of 2008.

Rob Lindeman, President and Chief Executive Officer of Max & Erma’s, said: “Sales for both the quarter and year-to-date periods were impacted by both the economy and weather.” A March 2008 blizzard cost the Company almost $600,000 in sales during the quarter. Mr. Lindeman added, “The weather related sales loss and consumer concerns regarding the overall slowdown of the economy combined to drive same store sales down 6.7%” for the second quarter of 2008.

Mr. Lindeman said, “Our efforts to control costs resulted in lower payroll and benefits and a significant reduction in corporate overhead, but could not offset the effect of the sales decline.” The Company also reported that three restaurants that opened around the start of the fiscal year continue to perform well, with sales per restaurant annualizing almost a half a million dollars above chain average. Mr. Lindeman went on to say “Franchise fees and royalties grew 10% during the second quarter as a result of two franchise openings during the first quarter of 2008 and one during the second quarter.” The Company expects that three additional franchise restaurants will open during the remainder of 2008.

Mr. Lindeman reported that the Company expects to complete the previously announced merger with G&R Acquisition, Inc. in mid July, assuming shareholders approve the transaction at a special meeting of shareholders to be held July 8, 2008.

Max & Erma’s currently owns and operates 79 casual dining full-service restaurants in Akron, Canton, Cincinnati, Cleveland, Columbus, Dayton, Niles, and Toledo, Ohio; Indianapolis, Indiana; Ann Arbor, Detroit, Grand Rapids, and Lansing, Michigan; Pittsburgh, Erie and Washington, Pennsylvania; Crestview Hills, Lexington and Louisville, Kentucky; Chicago, Illinois; Charlotte, North Carolina; Atlanta, Georgia; Virginia Beach and Norfolk, Virginia. The Company also currently franchises 27 restaurants in Chillicothe, Cincinnati, Cleveland, Columbus, Dayton, Findlay, Sandusky and Wilmington, Ohio; St. Louis, Missouri; Philadelphia, Pennsylvania; Detroit, Michigan; Dulles, Richmond, Norfolk and Virginia Beach, Virginia; Myrtle Beach, South Carolina; Huntington, West Virginia; and the State of Indiana. The Company’s common shares are traded on the NASDAQ Capital Market System under the symbol MAXE.

This release includes “forward-looking” information statements, as defined in the Private Securities Litigation Reform Act of 1995, including the statements relating to future restaurant openings. Actual performance may differ materially from that projected in such statements. Major factors potentially affecting performance include a significant change in the performance of any existing units, the ability to obtain locations for, and complete construction of, additional restaurants at acceptable costs and the ability to obtain the services of qualified personnel at acceptable wages. The Cautionary statements regularly filed by the Company in its most recent annual report to the Securities and Exchange Commission on Form 10-K and its Quarterly Reports to the SEC on Forms 10-Q are incorporated herein by reference. Investors are specifically referred to such cautionary statements for a discussion of factors which could affect the Company’s operations and forward-looking statements made in this communication.

- FINANCIAL HIGHLIGHTS FOLLOW -

MAX & ERMA’S RESTAURANTS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS

	May 11, 2008
	(UNAUDITED)		October 28, 2007
ASSETS
Current Assets:
Cash and Equivalents	$	2,602,518	$	2,465,852
Inventories		1,226,187		1,320,669
Other Current Assets		5,561,464		4,776,568
Total Current Assets		9,390,169		8,563,089
Property – At Cost		112,615,872		112,989,108
Less Accumulated Depreciation and Amortization		61,077,663		57,971,840
Property – Net		51,538,209		55,017,268
Deferred Income Taxes and Other Assets		14,150,689		14,979,932
Total	$	75,079,067	$	78,560,289
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Current Maturities of Long-Term Obligations	$	32,856,103	$	2,914,530
Accounts Payable		5,959,698		9,280,424
Accrued Payroll and Related Taxes		2,616,276		2,966,378
Accrued Liabilities		7,420,346		6,548,035
Total Current Liabilities		48,852,423		21,709,367
Long-Term Obligations – Less Current Maturities		18,811,521		47,164,076
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 2,554,474 Shares At 05/11/08 and 2,554,474 Shares at 10/28/07		255,446		255,446
Additional Paid-In Capital		1,261,124		1,165,389
Retained Earnings		5,898,553		8,266,011
Total Stockholders’ Equity		7,415,123		9,686,846
Total	$	75,079,067	$	78,560,289

MAX & ERMA’S RESTAURANTS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

	Twelve Weeks Ended						Twenty-eight Weeks Ended
	May 11, 2008			May 13, 2007			May 11, 2008			May 13, 2007
REVENUES	$	40,026,587		$	41,134,932		$	95,226,454		$	96,655,791
COSTS AND EXPENSES:
Costs of Goods Sold		10,272,214			10,312,159			24,505,951			24,159,772
Payroll and Benefits		12,969,587			13,443,100			30,951,130			30,912,900
Other Operating Expenses		14,373,530			13,874,815			32,861,650			31,763,122
Pre-Opening Expenses		9,326			1,190			168,999			13,068
Impairment of Assets		167,961						591,810
Administrative Expenses		2,752,658			3,224,615			6,621,908			7,679,407
Total Operating Expenses		40,545,276			40,855,879			95,701,448			94,528,269
Operating Income		(518,689	)		279,053			(474,994	)		2,127,522
Interest Expense		991,502			771,614			2,127,708			1,841,505
Other Non-Operating Expense		38,504			19,252			57,756			38,503
INCOME (LOSS) BEFORE INCOME TAXES		(1,548,695	)		(511,813	)		(2,660,458	)		247,514
INCOME TAXES EXPENSE (CREDIT)		82,000			(410,000	)		(293,000	)		(400,000	)
NET INCOME (LOSS)	$	(1,630,695	)	$	(101,813	)	$	(2,367,458	)	$	647,514
NET INCOME (LOSS) PER SHARE
Basic and Diluted	$	(0.64	)	$	(0.04	)	$	(0.93	)	$	0.25
SHARES OUTSTANDING:
Basic and Diluted		2,554,474			2,555,664			2,554,474			2,554,066