The company reported net income of $628,000, eight cents a share, on revenue of $15.2 million. That compares to net income of $592,000, also eight cents a share, on revenue of $15.3 million in the first three months of 2001.
Same-store sales were off by 5.4% and system-wide sales were down 6.5% to $100.2 million. John Wooley, the company's CEO and president, blamed the reduced sales on "the economic downturn, our concentration in markets with a heavy technology employer base and comparisons to our best-ever sales in the year-ago quarter."
During the quarter, the company reduced expenses 4.3% from the previous year's quarter and reduced its debt by $2.4 million. With the opening of two new stores and closing of four, its total is 672. That's down from 711 as of March 31, 2001.
Wooley said the company continues to scout for new franchisees and to look at opening more company-owned stores. "We intend to stick with our strategic plan and make the investment necessary to increase the number of franchised and company-owned restaurants and position Schlotzsky's for growth," Wooley said.
He said the company has been advertising for new franchisees since January. "We're very encouraged by the qualifications, experience and capitalization of our new prospects," Wooley said.
Schlotzsky's, he said, is working with lenders to design credit facilities that will fund the growth of company-owned stores and allow it to buy the territorial rights from its largest area developer. The company released financial results before the market opened Thursday. Its shares closed at $5.01, down 18 cents.
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