Blimpie International, Inc. (Amex: BLM) today reported financial results for the fiscal year 2001 first quarter ended September 30, 2000.

Revenues for the three months ended September 30, 2000 were $8,179,000, compared to $8,402,000 for the same quarter in the prior year. Net income for the first quarter of fiscal 2001 was $160,000, or $0.02 per diluted share, compared to $283,000, or $0.03 for the same period in the prior year.

Revenues from continuing fees, the ongoing fees paid by franchisees to Blimpie International, increased 5.4% to a record $5,204,000 for the quarter ended September 30, 2000, from $4,937,000 for the same period in the prior year. Revenues from subfranchisor fees, master license fees and the sale of franchises were $1,044,000 for the quarter, compared with $1,108,000 for the same period in the prior year. Store equipment sales were $1,254,000 for the quarter, compared to $2,098,000 for the same period in the prior year. Company restaurant sales were $477,000 for the quarter, compared with $125,000 for the same period in the prior year.

Blimpie Subs & Salads’ traditional location same store sales grew 5.0% for the first quarter, following an increase of 4.0% for the fourth quarter of fiscal 2000. For the quarter, Blimpie Subs & Salads opened 53 locations and closed 53 locations. There were 1,990 Blimpie Subs & Salads locations open at September 30, 2000 as compared to 2,117 locations open at September 30, 1999.

Revenue growth was affected during the first quarter by a decline in franchise fees and equipment sales. This decline was due mainly to decreased store openings, which declined from 82 new openings in the first quarter of fiscal 2000 to 53 new openings in the current quarter. Selling, general and administrative expenses were 2.9% lower in the quarter due primarily to personnel reductions achieved throughout fiscal 2000 and into the first quarter of fiscal 2001.

The Company’s profitability was diminished by losses from Company restaurant operations, which were $375,000 in the first quarter of fiscal 2001, compared to income from Company restaurant operations of $4,000 in the first quarter of fiscal 2000. The change in the profitability of these operations was due to losses incurred at the Company-owned Maui Tacos locations in New York City and the Smoothie Island JUICE BAR locations in Houston, TX. These losses were attributable primarily to pre-opening costs associated with opening three Smoothie Island JUICE BAR locations during the quarter. Additionally, the Company closed one of the Maui Tacos locations in New York City and wrote off the related investment, which resulted in greater losses from Company restaurant operations during the quarter.

“This quarter, Blimpie Subs & Salads continued the positive momentum started in fiscal 2000,” said Tony Conza, co-founder, chairman, and CEO, commented. “We achieved record continuing fee revenues with fewer locations open than in the previous record quarter by increasing same store sales and by continuing to shift to a greater percentage of traditional locations. These trends indicate that our franchisees continue to improve their profitability, which has been the focus of our Blimpie Subs & Salads employees for the past year. We also continued to reduce our operating costs, but were hurt by operating losses from Company-owned restaurants. We have addressed these losses by closing one location and by increasing our scrutiny of the operations in the remaining Company-owned locations.”

Headquartered in New York, with offices in Atlanta and Houston, Blimpie International, Inc. franchises Blimpie® Subs & Salads and Pasta Central and is the majority owner of Maui Tacos International, Inc., the franchisor of Maui Tacos and Smoothie Island . Blimpie International, Inc. has approximately 2,100 franchises operating in the United States and in 13 other countries. Blimpie Subs & Salads is a quick-service sandwich chain operating in traditional free-standing outlets as well as new concept locations, such as college campuses, hospitals, mini-marts, institutional food service operations, convenience stores and sporting arenas. Pasta Central is a quick service Italian food concept that addresses current eating trends for eat-in or take home meals. Maui Tacos offers a healthy, affordable restaurant- quality menu of “Maui-Mex ” items, including traditional Mexican food marinated in Hawaiian spices. Smoothie Island offers a menu of blended beverages of frozen yogurt, fruit and nutritional supplements. The Company also owns the subsidiary B I Concept Systems, Inc., a professional design and equipment service company.