INDIANAPOLIS, IN - (Marketwired - Nov 9, 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 third quarter of 2015.
Over the course of this year, the company has focused on steps to achieve faster adoption of its take-n-bake offering within the grocery segment. This began with increased participation at trade shows and the introduction of completely redesigned and improved packaging and merchandising. Recently, the company hired a new supermarket veteran as VP of Supermarket Development, Procurement & Distribution, as well as two additional, experienced sales people whose focus remains entirely on expanding the grocery venue.
According to Scott Mobley, President and Chief Executive Officer, "A key component of our strategy in this venue has been to sell grocery distribution companies on stocking and supporting our program, as each new center represents substantial growth opportunity. Each grocery distribution center on our program allows us to sell our program directly to the individual groceries to which they distribute products, with each center representing up to several hundred such individual groceries." On May 31, 2015, the company had its take-n-bake products in 11 such grocery store distribution centers. By October 31, 2015, the company had increased that number to 28 grocery store distribution centers, nearly tripling the potential lead base for new licensees. Those 28 distribution centers deliver to over 10,000 grocery stores and the company anticapates it can sign license agreements with over half those 10,000 groceries over the next three to four years. In a further initiative to strengthen and grow the grocery venue, the company has begun discussions with individual food brokerage companies across the U.S. with the intent of creating a national network of such brokers to constantly communicate with, monitor and inspect grocery licensees after they sign a license agreement and initiate the company's take-n-bake program.
During the year, the company also focused on many new developments to its stand-alone take-n-bake venue. After considerable testing, the company has begun incorporating the following evolutionary enhancements: hand stretched dough per order, higher capacity in-store baking service, home delivery service, limited in-store seating, new approaches to interior design, as well as others. During the third quarter the company also engaged a franchise broker and a franchise referral company to increase franchise sales leads and sales capacity.
Additionally, the company also undertook to enhance and invigorate its competitive presence in its non-traditional venue. "We have completely re-designed our non-traditional franchise foodservice kiosk to a more modern and appealing look that will serve to garner more attention and better demarcate the food sale area inside host locations," said Mr. Mobley. "We have also reviewed every product in our menu line-up for both recipe enhancements and process simplification to further increase our attractiveness to potential franchisees." The new foodservice kiosk design was introduced in mid-October at the National Association of Convenience Stores trade show.
"These are exciting and significant events and we are looking forward to the potentially very positive impact they will play in the company's growth, especially as we look forward to 2016 and beyond," said Mr. Mobley. "We believe the company has created a diversified platform for profitable future growth. We are encouraged by the strong response from grocery store distributors and the number of their customers adding Noble Roman's, and we believe all of the enhancements we have been working on this year in our selected venues will combine to help accelerate future revenue growth."
Financial Highlights for the Third Quarter Ended September 30, 2015 Compared to the Third Quarter of 2014.
Financial Highlights for the Nine Months Ended September 30, 2015 Compared to the Nine Months Ended September 30, 2014
The company made the decision to create a valuation allowance of $850,000 against its receivables including receivables from the Heyser case.
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 in this and future years while maintaining relatively stable operating costs, as has been the company's history for the past several years.
"Primarily because of unexpected delays with grocery store distribution centers acquiring Noble Roman's program inventory, which had been committed for several months, revenues did not meet our expectations for this quarter," stated Paul Mobley, Executive Chairman and Chief Financial Officer. "However, the progress we have made during the third quarter should have a very positive impact on revenues going forward, especially in 2016 and 2017, including the result of going from 11 grocery store distribution centers to 28 grocery store distribution centers in a very short time."
Current assets totaled $4.2 million and current liabilities totaled $1.9 million as of September 30, 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 $2.2 million as of September 30, 2015 compared to $3.3 million as of December 31, 2014. Total stockholders' equity as of September 30, 2015 was $14.9 million compared to $13.8 million as of December 31, 2014.
Conference Call - Management will conduct a live teleconference to discuss its results Monday, November 9, 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 December 9, 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 13624503. A live webcast is available at http://www.investorcalendar.com/IC/CEPage.asp?ID=174506.
Noble Roman's, Inc. sells and services franchises and licenses for non-traditional foodservice operations under the trade names "Noble Roman's Pizza,""Noble Roman's Take-n-Bake," and "Tuscano's Italian Style Subs." The company has awarded franchise and/or license agreements in all 50 states plus Washington, D.C., Puerto Rico, the Bahamas, Italy, Canada and the Dominican Republic.
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 and the performance of the recently added sales staff and a franchise broker. 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