In the quarter ending Sept. 30, Schlotzsky's reported a loss of $240,000 or 3 cents per share on revenue of $15 million. That compares with a profit of $659,000 or 9 cents per share on revenue of $15.5 million recorded in Q3 2001.

The company said it is working on a long-term financing plan to develop new company-owned restaurants in up to 25 markets. In the earnings release, John Wooley, president and CEO, said it continues to make strategic investments in its concept and will accelerate development of company-owned restaurants. Previously, the company said it would center concept development around the restaurant-and-bakery format of its company-owned stores. The moves will help the company be ready to take advantage of an economic upturn.

Schlotzsky's has 658 restaurants, down from 692 at the end of the 2001 third quarter. Its restaurants situated in shopping centers range from 2,800 sf to 3,200 sf. Freestanding stores range in size from 3,200 sf to 3,700 sf.