Noble Roman's Announces Continued Profitability for First Quarter 2015
Sets Groundwork for Substantial Growth in Grocery Venue for 2015; Maintains Focus on Long-Term Sustainable Growth in All Three Target Venues
INDIANAPOLIS, IN - (Marketwired - May 11, 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 first quarter 2015.
Scott Mobley, President and Chief Executive Officer of Noble Roman's, Inc., commented, "Our efforts to build a diversified platform for growth based on three primary venues are progressing well. During the first quarter, we saw notable growth in the grocery store segment, validating efforts in this area during 2014, and 32% year-over-year growth in the stand-alone segment, helping us largely overcome weather-related headwinds during the first quarter in our non-traditional segment. Looking at the rest of 2015, we are particularly excited about the rising uptick in the grocery segment as well as growth in the stand-alone segment, and we remain confident in all three target venues. We believe the company has created a highly diversified platform for sustainable and profitable growth into the future."
"As previously announced in the March 12, 2015 release regarding the year-end 2014 results, two significant highlights from 2014 and early 2015 are very important and should positively impact the remainder of 2015 and beyond," Mr. Mobley continued. "First, two larger grocery store chains, signed in late 2014, began opening the company's take-n-bake concept in their locations during April, 2015. Second, the company is now beginning to benefit from the extensive ground work to expand its footprint in the grocery store venue by signing on new grocery distributors that collectively service hundreds of individual grocery locations. These new grocery distributors began purchasing and stocking Noble Roman's take-n-bake products in April of this year, with several more distribution centers projected to purchase inventory beginning in May. In addition, the company is currently in discussions with several larger grocery store chains about adding the company's take-n-bake program to their locations. All of these developments are expected to result in significant growth in this venue for the remainder of 2015."
Financial Highlights for the First Quarter Ended March 31, 2015 Compared to the First Quarter in 2014.
- Net income before taxes was $618,000, or $0.03 per basic share, compared to $727,000, or $0.04 per basic share. The company will pay no income taxes on approximately the next $22 million in net income.
- Net income was $380,000, or $0.02 per basic share, compared to $439,000, or $0.02 per basic share.
- Operating margin was 35.6% of revenue compared to 40.7%.
- Total revenue was $1.9 million compared to $1.9 million.
- Upfront franchisee fees and commissions were $66,000 compared to $50,000.
- Royalties and fees less upfront fees were $1.7 million compared to $1.8 million.
- Royalties and fees from non-traditional franchises other than grocery stores were $1.0 million compared to $1.2 million.
- Royalties and fees from grocery store take-n-bake locations were $402,000 compared to $344,000.
- Royalties and fees from stand-alone take-n-bake locations were $236,000 compared to $179,000.
- Royalties and fees from traditional locations were $65,000 compared to $71,000.
As previously stated, the company continues to focus on growth in three primary venues: non-traditional franchises and 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 inthis and future years while maintaining relatively stable operating costs, as has been the company's history for the past several years.
"In the first quarter 2015, the company focused on initiatives designed to increase our number of locations and further improve our product offerings while maintaining a relatively steady level of operating expense capable of accommodating ramped up growth this year," stated Mr. Mobley. In the stand-alone take-n-bake venue, for example, extensive research and development efforts resulted in the testing of several significant system enhancements in late 2014 and the first quarter of 2015, and are now being rolled out into additional units throughout the system. Additional R&D efforts continue. Our stand-alone take-n-bake venue is still relatively new and we are always testing new innovations to continually improve sales, reduce costs and make the operation even more appealing."
The previously announced new packaging for the company's grocery store take-n-bake deli pizza program consisting of bakeable, treated aluminum pans with a clear plastic top are proving to be a significant advantage. Consumers bake the pizzas in these pans that have an anodized treatment on the bottom designed to increase home baking performance, making the pizzas crispy on the bottom but soft and tender in the middle. The clear plastic top allows the entire pizza to be visible and appealing on the grocers' shelves. The previously announced 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." These new products now account for approximately 40% of sales where those products have been implemented.
Balance Sheet Summary
Current assets totaled $4.5 million and current liabilities totaled $2.1 million as of March 31, 2015 compared to total current assets of $4.4 million and current liabilities of $2.1 million as of December 31, 2014. Total bank debt was $2.9 million as of March 31, 2015 compared to $3.3 million as of December 31, 2014. Total stockholders' equity as of March 31, 2015 was $14.2 million compared to $13.8 million as of December 31, 2014.
Conference Call - Management will conduct a live teleconference to discuss its financial results Monday, May 11, 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 13609394. 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.
SOURCE Noble Roman's, Inc.