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Noble Roman's Announces Continued Growth, Profitability for First Quarter 2013

By: Noble Roman's Pizza |  4 Shares     99 Reads

Five Stand-Alone Take-n-Bake Locations Open with Three Additional Locations to Open in May

Grocery Take-n-Bake Program Continues to Expand with Approximately 1,550 Grocery License Agreements

16 New Non-Traditional Franchise Agreements Signed Thus Far in 2013

INDIANAPOLIS - May 9, 2013 // 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, 2013.

First Quarter 2013 Financial and Operational Highlights Compared to First Quarter 2012

• Total revenue was $1.89 million, up 15.5% compared to $1.64 million. 
• Upfront franchisee fees and commissions were $123,000, up 46.5% compared to $84,000. 
• Royalties and fees less upfront fees were $1.66 million, up 16.9% compared to $1.42 million.
• Royalties and fees from non-traditional franchises other than grocery stores were $1.16 million, up 14.4% compared to $1.01 million.
• Royalties and fees from grocery store take-n-bake locations were $397,000, up 22.4% compared to $324,000.
• Royalties and fees from traditional locations were $77,000, down 3.8% compared to $80,000.
• Operating margin on total revenue was 39.4% compared to 30.6%. 
• Net income was $418,330, or $0.02 per share, compared to $244,300, or $0.01 per share.
• Net income before taxes was $692,714, or $0.04 per share, compared to $404,537, or $0.02 per share.  The company will pay no income taxes on the next $26 million in net income.

For purposes of comparing current operating results, the 2012 amounts above were adjusted, where appropriate, for the $200,000 reduction in reserve for collectability of receivables from the Heyser Plaintiffs, which resulted in increasing revenues for the 2012 period shown for units no longer operating. Details regarding the adjustment for the reserve are provided in the company's Form 10-Q filed with the Securities and Exchange Commission.

"We continue to successfully leverage the opportunities we see for increasing unit growth and revenue within our non-traditional venues, while further developing the company's primary growth engines through our take-n-bake initiatives," said Paul Mobley, Chairman and CEO of Noble Roman's, Inc. "This success is reflected in our positive operating metrics and by the increase in franchise agreements we've signed for new, non-traditional locations other than grocery stores."

The company has entered into agreements for 11 stand-alone take-n-bake locations. The first two stand-alone take-n-bake pizza locations opened in October and December 2012, the third location opened in January 2013 and the fourth and fifth locations opened in April 2013. Three additional locations are scheduled to open in May 2013 and the remaining three locations will open in the next few months. 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, and Noble Roman's famous breadsticks with spicy cheese sauce, all in a convenient cook-at-home format. Additional menu items include such items as fresh salads, cookie dough, cinnamon rounds, bake-able pasta and more. The company is currently in discussions with several other prospects for its stand-alone program and is advertising for additional franchisees through various web-based franchise referral systems, which began in late January 2013 and currently is producing approximately 90 leads per month. In addition, the company will demonstrate Noble Roman's stand-alone take-n-bake pizza concept at the National Restaurant Association Show in May 2013.

"Consumers continue to embrace the convenience and quality of our take-n-bake offering, which allows busy families to enjoy a hot, great-tasting meal in the comfort of their home at an affordable price," Mr. Mobley continued. "Our take-n-bake offerings taste better and are ready more quickly than a delivery pizza, and this message is resonating with groceries, convenience stores and, now, with customers of our stand-alone retail outlets. Take-n-bake is a fast growing segment of the pizza industry, and with Noble Roman's brand reputation and a growing network of locations consumers can visit to purchase a take-n-bake meal. We believe that the take-n-bake initiatives in grocery stores and in stand-alone retail outlets will continue to provide a primary growth engine for the company to add revenue in addition to the continued steady growth from non-traditional franchises while fees from the traditional locations will remain stable."

Since the company started offering take-n-bake pizza to grocery store chains in late 2009, through May 6, 2013, the company has signed agreements for approximately 1,550 grocery store locations to operate the take-n-bake pizza program and has opened the take-n-bake pizza program in approximately 1,150 of those locations. The company is currently in discussions with several grocery store operators for numerous locations for additional take-n-bake license agreements. The primary source of licensing growth in this segment comes from exhibiting in our grocery distributors' trade shows plus exhibiting in national grocery store trade shows such as the National Grocers Association and International Dairy-Deli-Bakery Association.

Thus far in 2013, the company has signed 16 additional new franchise 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 Assocation, International Association of Amusement Parks and Attractions, and selected state convenience store associations.

Balance Sheet Summary

Cash and cash equivalents totaled approximately $164,223 as of March 31, 2013 compared to $144,354 as of December 31, 2012. Total bank debt was $3.96 million as of March 31, 2013 compared $4.27 million as of December 31, 2012. Total stockholders' equity as of March 31, 2012 was approximately $12.80 million compared to $12.38 million as of December 31, 2012.

Update on Litigation

The company has been dismissed from any liability in the former Heyser lawsuit but the counterclaims against two of the former Plaintiffs remain pending. The company has obtained damage awards against both and has been granted summary judgment against those Plaintiffs to recover its attorney fees. The hearing on the amount of damages was set for March 21, 2013 but that date was extended and the Court has not yet issued an Order setting a new hearing date.

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.

                       

Contacts:

For Media Information

Scott Mobley
President
317/634-3377

For Investor Relations

Paul Mobley
Chairman & CEO
317/634-3377

Brett Maas
Hayden IR
646/536-7331
brett@haydenir.com

SOURCE Noble Roman's, Inc.

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