SOURCE: Noble Roman's, Inc.

March 12, 2015 16:01 ET

Noble Roman's Announces Continued Growth and Expanded Profitability for 2014

Company Continues to Focus on Delivering Profitable Growth in All Three Venues

INDIANAPOLIS, IN--(Marketwired - Mar 12, 2015) - Noble Roman's, Inc. (OTCQB: NROM), the Indianapolis based franchisor and licensor of Noble Roman's Pizza and Tuscano's Italian Style Subs, today announced results for the year 2014 and the quarterly period ended December 31, 2014.

In addition to expanded profitability, two significant highlights from 2014 are very important, and should positively impact 2015. First, extensive ground work was laid to expand the company's footprint in grocery stores by adding larger distributors and larger grocery store chains and to improve the company's grocery store take-n-bake offering. Second, significant research, development and testing occurred within the company's stand-alone take-n-bake venue, which is showing significant promise in test units, that have adapted the changes, and the company is now expanding these changes to other locations.

Financial Highlights for the Year Ended December 31, 2014 Compared to Year Ended December 31, 2013

  • Net income from continuing operations before taxes was $2.85 million, or $0.14 per basic share, compared to $1.44 million, or $0.07 per basic share. The company will pay no income taxes on approximately the next $22 million in net income.
  • Loss on discontinued operations in 2014 was reduced to $154,000 compared to $780,000 in 2013 as matters related to the discontinued operations have largely been resolved.
  • Net income was $1.59 million, or $0.08 per basic share, compared to $91,000, or $0.01 per basic share. In 2013, the Company recorded an adjustment for valuation of receivables in the Heyser case with an after tax effect of $731,000 without which the net income would have been $822,000, or $0.04 per basic share.
  • Operating margin was 38.4% of revenue compared to 37.9%. 
  • Total revenue was $7.92 million compared to $7.53 million, or an increase of 5.2%.
  • Upfront franchisee fees and commissions were $392,000 compared to $883,000. 
  • Royalties and fees less upfront fees were $7.09 million compared to $6.20 million, or an increase of 14.3%.
  • Royalties and fees from non-traditional franchises other than grocery stores were $4.49 million compared to $4.27 million, or an increase of 5.0%.
  • Royalties and fees from grocery store take-n-bake locations were $1.47 million compared to $1.30 million, or an increase of 13.0%.
  • Royalties and fees from stand-alone take-n-bake locations were $849,000 compared to $310,000, or an increase of 173.5%.
  • Royalties and fees from traditional locations were $283,000 compared to $313,000.

Financial Highlights for Fourth Quarter 2014 Compared to Fourth Quarter 2013

  • Net income before taxes from continuing operations was $501,000, or $0.03 per basic share, compared to a net loss of $712,000. The company will pay no income taxes on approximately the next $22 million in net income.
  • Net income was $149,000, or $0.01 per share, compared to a net loss of $1.2 million.
  • Total revenue was $1.81 million compared to $1.72 million, or an increase of 5.3%.
  • Upfront franchisee fees and commissions were $74,000 compared to $147,000. 
  • Royalties and fees less upfront fees were $1.63 million compared to $1.48 million, or an increase of 10.7%.
  • Royalties and fees from non-traditional franchises other than grocery stores were $993,000 compared to $1.00 million, or a decrease of 0.7%.
  • Royalties and fees from grocery store take-n-bake locations were $340,000 compared to $257,000, or an increase of 32.2%.
  • Royalties and fees from stand-alone take-n-bake locations were $234,000 compared to $146,000, or an increase of 60.5%.
  • Royalties and fees from traditional locations were $67,000 compared to $74,000.
  • Operating margin was 30.4% compared to 31.9%.

The company continues to focus on growth in its three primary venues, which are non-traditional franchises/licenses other than grocery stores, the sale of take-n-bake pizzas through grocery deli departments and stand-alone take-n-bake franchised locations. The company anticipates continued growth in all three venues in future years while maintaining stable operating costs, as has been the company's history for the past several years. 

"In 2014, we delivered top-line growth, as well as an increase in operating margin and earnings per share, all while we deployed initiatives designed to increase our number of locations, further improve our product offerings and maintain a steady level of operating expense. We are currently in the process of stocking six new grocery distribution centers, four of which are with very large distribution chains. In addition, we are in ongoing discussions with a number of larger grocery store chains to add our license take-n-bake to several thousand more grocery stores," said Scott Mobley, President and Chief Executive Officer of Noble Roman's, Inc. Mr. Mobley also added, "The interest shown by the larger distribution chains and by larger grocery chains is expected to result in significant growth in this venue for 2015."

The company's 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 with the anodized treatment on the bottom of the pan which is designed to increase home baking performance by 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 a gluten-free crust designed to appeal to a growing segment of the population and three varieties of 14-inch mega-topped pizzas, designed for tremendous value appeal, which are called "Mile-High Extra Meat Pizza," "Extra Cheese Four Cheese Pizza" and "Double-Topped Pepperoni Pizza."

Mr. Mobley added, "Our stand-alone take-n-bake development is still relatively new and we are always testing further enhancements to continually improve sales, reduce costs and make the operation even more appealing. Current tests are proving to be extremely positive so far, and we are currently implementing those enhancements into some additional locations." 

Balance Sheet Summary

Current assets totaled $4.4 million and current liabilities totaled $2.1 million as of December 31, 2014 compared to total current assets of $3.5 million and current liabilities of $2.0 million as of December 31, 2013. Total bank debt was $3.3 million as of December 31, 2014 compared to $3.9 million as of December 31, 2013. Total stockholders' equity as of December 31, 2014 was $13.8 million compared to $11.7 million as of December 31, 2013.

Conference Call - Management will conduct a live teleconference to discuss its financial results Thursday, March 12, 2015 at 4:30 p.m. ET. Anyone interested should call 1-877-407-0778 if calling within the United States or 1-201-689-8565 if calling internationally. A replay will be available until April 12, 2015 by dialing 1-877-660-6853 if calling within the United States or 1-201-612-7415 if calling internationally and referencing replay pin number 13603404. In addition, the call will be webcast and will be available on the company's website at www.nobleromans.com.

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, the success of new franchise programs with limited operating history including the stand-alone take-n-bake locations, 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 dependence on continued involvement of current management. 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.

   
   
Consolidated Balance Sheets  
Noble Roman's, Inc. and Subsidiaries  
   
   
    December 31,  
Assets   2013     2014  
Current assets:                
  Cash   $ 157,787     $ 200,349  
  Accounts receivable - net     1,268,788       1,687,954  
  Inventories     337,822       381,400  
  Prepaid expenses     472,065       467,721  
  Deferred tax asset - current portion     1,250,000       1,675,000  
    Total current assets     3,486,462       4,412,424  
                 
Property and equipment:                
  Equipment     1,361,205       1,383,380  
  Leasehold improvements     88,718       88,718  
        1,449,923       1,472,098  
  Less accumulated depreciation and amortization     962,502       1,041,951  
    Net property and equipment     487,421       430,147  
Deferred tax asset (net of current portion)     9,332,024       7,899,497  
Other assets including long-term portion of accounts receivable - net     3,067,754       5,015,931  
        Total assets   $ 16,373,661     $ 17,757,999  
Liabilities and Stockholders' Equity                
Current liabilities:                
  Current portion of long-term notes payable to bank   $ 1,216,250     $ 1,469,028  
  Accounts payable and accrued expenses     818,803       676,386  
      Total current liabilities     2,035,053       2,145,414  
                 
Long-term obligations:                
  Notes payable to bank (net of current portion)     2,635,208       1,846,736  
      Total long-term liabilities     2,635,208       1,846,736  
                 
Stockholders' equity:                
  Common stock - no par value (25,000,000 shares authorized, 19,585,089 issued and outstanding as of December 31, 2013 and 20,095,087 as of December 31, 2014)    

23,498,401
     

23,970,654
 
  Accumulated deficit     (11,795,001 )     (10,204,805 )
      Total stockholders' equity     11,703,400       13,765,849  
        Total liabilities and stockholders' equity   $ 16,373,661     $ 17,757,999  
                         
                         
   
Consolidated Statements of Operations  
Noble Roman's, Inc. and Subsidiaries  
   
   
  Year Ended December 31,  
  2012     2013     2014  
Royalties and fees $ 6,823,811     $ 7,082,548     $ 7,479,334  
Administrative fees and other   19,872       24,138       72,541  
Restaurant revenue   456,449       420,753       363,340  
      Total revenue   7,300,132       7,527,439       7,915,215  
                       
Operating expenses:                      
  Salaries and wages   979,447       1,056,790       1,063,076  
  Trade show expense   498,951       514,570       541,385  
  Travel expense   183,316       207,572       235,127  
  Other operating expenses   685,836       747,914       876,162  
  Restaurant expenses   427,127       390,507       402,281  
Depreciation and amortization   116,287       113,607       111,750  
General and administrative   1,593,646       1,646,993       1,646,502  
      Total expenses   4,484,610       4,677,953       4,876,283  
      Operating income   2,815,522       2,849,486       3,038,932  
                       
Interest and other expense   413,334       201,381       190,382  
Adjust valuation of receivables - Heyser case   500,000       1,208,162       -  
    Income before income taxes from continuing operations   1,902,188       1,439,943       2,848,550  
Income tax expense   753,457       568,406       1,104,809  
    Net income from continuing operations   1,148,731       871,537       1,743,741  
                       
Loss from discontinued operations net of tax benefit of $344,079 for 2012, $511,893 for 2013 and $97,284 for 2014  

(524,588
)    

(780,440
)    

(153,545
)
    Net income   624,143       91,097       1,590,196  
Cumulative preferred dividends   99,271       99,000       -  
    Net income (loss) available to common stockholders $
524,872
    $
(7,903
)   $
1,590,196
 
Earnings per share - basic:                      
  Net income from continuing operations $ .06     $ .05     $ .09  
  Net loss from discontinued operations net of tax benefit $
(.03
)   $
(.04
)   $
(.01
)
  Net income $ .03     $ .01     $ .08  
  Net income available to common stockholders $
.03
    $
-
    $
.08
 
Weighted average number of common shares outstanding  
19,497,638
     
19,533,201
     
19,870,904
 
                       
Diluted earnings per share:                      
  Net income from continuing operations $ .06     $ .05     $ .08  
  Net loss from discontinued operations net of tax benefit $ (.03 )   $ (.04 )   $ (.01 )
  Net income $ .03     $ .01     $ .07  
Weighted average number of common shares outstanding  
20,077,910
     
20,472,908
     
21,204,439
 
                       

Contact Information

  • FOR ADDITIONAL INFORMATION, CONTACT:
    For Media Information:
    Scott Mobley
    President & CEO
    317/634-3377

    For Investor Relations:
    Paul Mobley
    Executive Chairman
    317/634-3377
    or
    Brett Maas
    Hayden IR
    646/536-7331
    brett@haydenir.com