Noble Roman’s Announces Continued Growth for First Quarter 2014

INDIANAPOLIS, May 8, 2014 /PRNewswire/ — Noble Roman’s, Inc. (OTC/BB: NROM),
the Indianapolis based franchisor and licensor of Noble Roman’s Pizza and
Tuscano’s Italian Style Subs, today announced results for the quarterly period
ended March 31, 2014.

First Quarter 2014 Financial and Operational Highlights Compared to First
Quarter 2013

— Total revenue was $1.91 million compared to $1.89 million.
— Upfront franchisee fees and commissions were $50,000 compared to
$123,000.
— Royalties and fees less upfront fees were $1.76 million compared to
$1.66 million.
— Royalties and fees from non-traditional franchises other than grocery
stores were $1.17 million compared to $1.16 million.
— Royalties and fees from grocery store take-n-bake locations were
$344,000 compared to $397,000.
— Royalties and fees from stand-alone take-n-bake locations were $179,000
compared to $24,000.
— Royalties and fees from traditional locations were $71,000 compared to
$77,000.
— Operating margin was 40.7% compared to 39.4%.
— Net income before taxes was $726,536, or $0.04 per share, compared to
$692,714, or $0.04 per share. The company will pay no income taxes on
the next $25 million in net income.
— Net income was $438,755, or $0.02 per share, compared to $418,330, or
$0.02 per share.
“We are extremely pleased with the increase in revenue and net income in the
first quarter this year compared to the comparable quarter last year considering
the extreme winter weather during this quarter,” said Paul Mobley, Chairman and
CEO of Noble Roman’s, Inc. “Because of the weather, new openings were delayed,
exploratory visits for new prospects were canceled or rescheduled, and many
locations faced weather-related closings. Despite this challenge, we generated
higher revenue and net income, as well as an increased operating margin which
grew to 40.7% of revenue.”

Mr. Mobley added, “Interest in the grocery store take-n-bake locations has
increased significantly after displaying the new packaging and new products at
the National Grocers Association show in February and at distributor food shows
during the first quarter. The grocery store take-n-bake pizzas are now displayed
in bakeable, treated aluminum pans with a clear plastic top. Consumers bake the
pizzas in these pans and the anodized treatment on the bottom is designed to
increase home baking performance, drawing in more heat to make the pizzas crispy
on the bottom but soft in the middle. The clear plastic top allows the entire
pizza to be visible and appealing. The new products include gluten-free crust to
appeal to a growing segment of the population and 14 inch mega-topped pizzas
which are called ‘Mile-High Extra Meat Pizza’, ‘Extra Cheese Four Cheese Pizza’
and ‘Double-Topped Pepperoni Pizza’. The interest shown at these shows by large
grocery distributors and many retailers was a very positive sign for additional
growth in this venue for the remainder of 2014.”

The company has entered into agreements for 57 stand-alone take-n-bake locations
and is currently in discussions with many other prospects. The first stand-alone
take-n-bake pizza location opened in October 2012 and, to date, a total of 26
have been opened. The company’s stand-alone take-n-bake program features the
chain’s popular traditional Hand-Tossed Style pizza, Deep-Dish Sicilian pizza,
SuperThin pizza, all with a choice of three different types of sauce, all in a
convenient cook-at-home format. Additional menu items include Noble Roman’s
famous breadsticks with spicy cheese sauce, fresh salads, cookie dough, cinnamon
rounds, bake-able pasta and more.

Mr. Mobley added, “Our stand-alone take-n-bake concept is still relatively new
and we are continuing to look at further enhancements to improve sales and to
make the concept even more appealing. We just completed a three-unit test of our
new, in-store baking service called ‘You Bake or We Bake!’ which is resulting in
improved sales. In addition to broadening consumer appeal in general, this
service has expanded our take-n-bake daypart earlier into the day, as we now
offer hot pizzas and other menu items for lunch. The new baking service requires
no substantial change in unit layouts, square footage or labor requirements, and
can easily be incorporated into existing operations as well as new ones.
Additional franchisees are now in the process of adding ‘You Bake or We Bake!'”

“Our marketing initiatives to attract potential take-n-bake franchisees
continues to be successful in generating a significant number of leads”
concluded Mr. Mobley. “However we remain highly selective in the approval
process for accepting new franchisees.”

Thus far in 2014, the company has signed 15 additional new franchise/license
agreements for non-traditional locations and is in discussion with numerous
other convenience store chains and entertainment facilities for additional
non-traditional locations. The primary source of growth in this segment comes
from existing franchisees and exhibiting in various industry trade shows
including the National Association of Convenience Stores, Western Petroleum
Marketers Association, International Association of Amusement Parks and
Attractions, and selected state convenience store associations.

Balance Sheet Summary

Cash totaled approximately $400,491 as of March 31, 2014 compared to $157,787 as
of December 31, 2013. Total bank debt was $3.55 million as of March 31, 2014
compared $3.85 million as of December 31, 2013. Total stockholders’ equity as of
March 31, 2014 was approximately $12.15 million compared to $11.70 million as of
December 31, 2013.

The statements contained in this press release concerning the company’s future
revenues, profitability, financial resources, market demand and product
development are forward-looking statements (as such term is defined in the
Private Securities Litigation Reform Act of 1995) relating to the company that
are based on the beliefs of the management of the company, as well as
assumptions and estimates made by and information currently available to the
company’s management. The company’s actual results in the future may differ
materially from those projected in the forward-looking statements due to risks
and uncertainties that exist in the company’s operations and business
environment, including, but not limited to, competitive factors and pricing
pressures, non-renewal of franchise agreements, shifts in market demand, general
economic conditions, changes in purchases of or demand for the company’s
products, licenses or franchises, the success or failure of individual
franchisees and licensees, changes in prices or supplies of food ingredients and
labor, and the success or failure of its recently developed stand-alone
take-n-bake operation. Should one or more of these risks or uncertainties
materialize, or should underlying assumptions or estimates prove incorrect,
actual results may differ materially from those described herein as anticipated,
believed, estimated, expected or intended. The company undertakes no obligations
to update the information in this press release for subsequent events.

FOR ADDITIONAL INFORMATION, CONTACT:
For Media Information: Scott Mobley, President 317/634-3377
For Investor Relations: Paul Mobley, Chairman & CEO 317/634-3377
or Brett Maas, Hayden IR, 646/536-7331 or brett@haydenir.com

Noble Roman’s, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(Unaudited)

Assets December 31, March 31,

2013 2014
—- —-

Current assets:

Cash $157,787 $400,491

Accounts receivable – net 1,268,788 1,352,853

Inventories 337,822 331,351

Prepaid expenses 472,065 513,142

Deferred tax asset – current portion 1,250,000 1,250,000
——— ———

Total current assets 3,486,462 3,847,837
——— ———

Property and equipment:

Equipment 1,361,205 1,364,179

Leasehold improvements 88,718 88,719
—— ——

1,449,923 1,452,898

Less accumulated depreciation and amortization 962,502 981,367
——- ——-

Net property and equipment 487,421 471,531

Deferred tax asset (net of current portion) 9,332,024 9,044,243

Other assets including long-term portion of
receivables-net 3,067,754 3,079,987
——— ———

Total assets $16,373,661 $16,443,598
=========== ===========

Liabilities and Stockholders’ Equity

Current liabilities:

Current portion of long-term notes payable to bank $1,216,250 $1,216,250

Accounts payable and accrued expenses 818,803 743,088
——- ——-

Total current liabilities 2,035,053 1,959,338
——— ———

Long-term obligations:

Notes payable to bank – net of current portion 2,635,208 2,331,146
——— ———

Total long-term liabilities 2,635,208 2,331,146
——— ———

Stockholders’ equity:

Common stock – no par value (25,000,000 shares authorized, 19,585,089

issued and outstanding as of December 31, 2013 and 19,801,087

issued and outstanding as of March 31, 2014) 23,498,401 23,509,360

Accumulated deficit (11,795,001) (11,356,246)
———– ———–

Total stockholders’ equity 11,703,400 12,153,114
———- ———-

Total liabilities and stockholders’ equity $16,373,661 $16,443,598
=========== ===========

This statement should be
read in conjunction with
the footnotes contained
in the Company’s Form
10-Q.

Noble Roman’s, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(Unaudited)

For the three months
ended

March 31,

2013 2014
—- —-

Royalties and fees $1,782,306 $1,814,066

Administrative fees and other 1,276 20,686

Restaurant revenue 107,156 76,952
——- ——

Total revenue 1,890,738 1,911,704

Operating expenses:

Salaries and wages 249,203 259,894

Trade show expense 129,549 126,261

Travel expense 44,315 47,118

Other operating expenses 181,363 188,586

Restaurant expenses 105,107 91,428

Depreciation and amortization 28,346 27,821

General and administrative 406,984 394,007
——- ——-

Total expenses 1,144,867 1,135,115
——— ———

Operating income 745,871 776,589

Interest and other expense 53,157 50,053
—— ——

Income before income taxes 692,714 726,536

Income tax expense 274,384 287,781
——- ——-

Net income 418,330 438,755

Cumulative preferred dividends 24,953 –
—— —

Net income available to common
stockholders $393,377 $438,755
======== ========

Earnings per share – basic:

Net income $.02 $.02

Net income available to common
stockholders .02 .02

Weighted average number of common
shares outstanding 19,516,589 19,823,767

Diluted earnings per share:

Net income $.02 $.02

Net income available to common
stockholders $.02 $.02

Weighted average number of common
shares outstanding 20,244,804 21,305,509

This statement should be
read in conjunction with
the footnotes contained
in the Company’s Form
10-Q.

SOURCE Noble Roman’s, Inc.

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