The Austin-based company reported net income of $2.5 million, 33 cents a share, on revenue of $61.9 million in 2001. In 2000, it lost $2.3 million, 31 cents a share, on revenue of $59.1 million. For the fourth quarter ending Dec. 31, 2001, Schlotzsky's posted net income of $488,000, seven cents a share, on revenue of $14.9 million. In the same quarter in 2000, net income was $361,000, five cents a share, on revenue of $14.9 million. Same-store sales for the 2001 quarter were off 2.7% from the year before.

John Wooley, Schlotzsky's CEO, says there are indicators showing that sandwiches are gaining as an alternative to hamburgers for health-conscious consumers. One indication is that competitors such as Panera's, Cosi and Potbelly are expanding and McDonald's and Wendy's have recently bought sandwich chains. "This is the best opportunity we've had to grow this business in the 21 years I've been here," he said in Thursday's conference call to disclose the financial results.

Schlotzsky's and its franchisees operate freestanding, 3,200-sf units and smaller stores that are part of shopping centers. Wooley said the company is translating features that have worked in the bigger stores to the smaller ones. "We feel that our shopping center facilities are much stronger than they have even been," he said.