INDIANAPOLIS, May 10, 2011 (GLOBE NEWSWIRE) -- Noble Roman's, Inc. (OTCBB:NROM), the Indianapolis based franchisor of Noble Roman's Pizza and Tuscano's Italian Style Subs, today announced results for the quarterly period ended March 31, 2011. Net income was $368,012 or $.02 per share basic and diluted, on weighted average number of common shares outstanding of 19.4 million and diluted weighted average shares of 20.1 million. This compares to net income of $351,667 for the quarterly period ended March 31, 2010, or $.02 per share basic and diluted, on weighted average number of common shares outstanding of 19.4 million, and diluted weighted average shares of 20.0 million. Total revenues for the quarterly period ended March 31, 2011 were $1.802 million compared to total revenues of $1.755 million for the comparable period in 2010.
Total revenue increased from $1.775 million to $1.802 million for the three-month period ended March 31, 2011 compared to the corresponding period in 2010. One-time fees, franchisee fees and equipment commissions decreased during this period from $123,684 in the first quarter 2010 to $62,625 in 2011. Ongoing royalties and fees increased during this period from $1,511,972 in 2010 to $1,609,163 in 2011. Of this increase, $238,222 resulted from an increase in ongoing royalties and fees from grocery store take-n-bake additions and $55,228 from an increase in ongoing royalties and fees from non-traditional franchises, other than grocery stores, as a result of same store revenue increases partially offset by four fewer locations. These increases were partially offset by a decrease in ongoing royalties and fees from traditional locations.
In September 2009, the company introduced a take-n-bake version of its pizza as an addition to its menu offerings. The take-n-bake pizza is designed as an add-on component for new and existing convenience store franchisees and as a stand-alone offering for grocery store chains. Since the company started offering take-n-bake pizza to grocery store chains, the company has signed agreements for 635 grocery store locations to operate the take-n-bake pizza program, 491 of which are now opened. In an attempt to accelerate the growth of Noble Roman's take-n-bake in grocery stores, the company has been focusing on signing agreements with various grocery store distributors to market the take-n-bake pizza program to the distributors' current customer base. On July 19, 2010, the company signed an agreement with a grocery store distributor headquartered in California and now has 163 take-n-bake agreements with their customers. On October 13, 2010, the company signed an agreement with a grocery store distributor in Wisconsin, however, they did not stock their warehouse until February 1, 2011. The company now has 25 take-n-bake agreements with their customers. On January 13, 2011, the company signed an agreement with a grocery store distributor headquartered in Connecticut. The company now has 61 take-n-bake agreements with their customers. On March 28, 2011, the company signed an agreement with a grocery store distributor in Oklahoma. The company now has 66 take-n-bake agreements with their customers. On March 30, 2011, the company signed an agreement with a grocery store distributor in Utah. The company now has 16 take-n-bake agreements with their customers. On April 12, 2011, the company signed an agreement with a grocery store distributor in Pennsylvania, however, they will not be stocking their warehouse until the end of May 2011. The company is currently in discussion with a number of other grocery store distributors and expects to sign agreements with some of them in the next few weeks.
At the beginning of 2011, to supplement the take-n-bake pizza offering, the company introduced five carton-to-shelf retail items that require no assembly at the grocery store and were designed to complement to the take-n-bake program. These five items are Noble Roman's Pasta Sauce, Noble Roman's Flavor-Aged Parmesan Cheese, Noble Roman's Deep-Dish Lasagna with Italian Sausage, Noble Roman's Spicy Cheese Sauce and Noble Roman's Cheesy Stix. In addition to complementing the take-n-bake program, these five products are being offered to all grocery stores and, unlike the take-n-bake program which requires a supply agreement to help control quality because the pizzas are assembled in the grocery store deli departments, these products require no agreement.
The company believes that it has an opportunity for increasing unit growth and revenue within its non-traditional venues such as hospitals, military bases, universities, convenience stores, entertainment facilities, attractions and travel plazas during 2011. The growth in this area has been limited the last two years primarily due to the economic environment; however, the company is experiencing some renewed interest in these venues thus far in 2011.
As previously reported, in an order dated December 23, 2010, the Superior Court in Hamilton County, Indiana granted summary judgment in favor of the company and against all of the plaintiffs in a long-running lawsuit styled Kari Heyser, Fred Eric Heyser, Meck Enterprises, LLC, et al vs. Noble Roman's, Inc., et al, filed in Superior Court Hamilton County, Indiana on June 19, 2008. As a result, the plaintiff's allegations of fraud against the company and certain of its officers were determined to be without merit. In addition to the fraud claim, one group of franchisee plaintiffs asserted a separate claim under the Indiana Franchise Act. The court denied summary judgment on this claim finding the existence of genuine issue of material fact and did not render any opinion on the merits of that claim. The plaintiffs have filed a motion with the court asking it to correct errors and reconsider the order for summary judgment. The company has opposed that motion, and a ruling by the court remains pending.
The company's counter-claims against the defendants in the approximate amount of $3.6 million plus attorney fees, cost of collection and prejudgment interest, as well as punitive damages in certain instances, continue to be pending. The company intends to prosecute the counter-claims and execute on any judgments against all counter-claim defendants.
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, market acceptance of recently introduced products, competitive factors and pricing pressures, the current litigation with certain former traditional franchisees, non-renewal of franchise agreements, shifts in market demand, general economic conditions and other factors including, but not limited to, changes in demand for the company's products or franchises, the success or failure of individual franchisees and changes in prices or supplies of food ingredients and labor as well. In addition, the company has no previous experience selling its products through retail channels and there can be no assurance that grocers will stock them or that customers will buy them. Should one or more of these risks or uncertainties materialize, or should underlying assumptions or estimates prove incorrect, actual results may vary 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.
| Noble Roman's, Inc. and Subsidiaries | ||
| Condensed Consolidated Balance Sheets | ||
| (Unaudited) | ||
| Assets |
December 31, 2010 |
March 31, 2011 |
| Current assets: | ||
| Cash | $ 337,044 | $ 242,166 |
| Accounts and notes receivable - net | 920,304 | 961,214 |
| Inventories | 316,913 | 331,367 |
| Assets held for resale | 246,278 | 247,681 |
| Prepaid expenses | 235,778 | 301,916 |
| Deferred tax asset - current portion | 1,400,000 | 1,400,000 |
| Total current assets | 3,456,317 | 3,484,344 |
| Property and equipment: | ||
| Equipment | 1,139,050 | 1,142,425 |
| Leasehold improvements | 12,283 | 12,283 |
| 1,151,333 | 1,154,708 | |
| Less accumulated depreciation and amortization | 784,282 | 800,511 |
| Net property and equipment | 367,051 | 354,197 |
| Deferred tax asset (net of current portion) | 10,150,558 | 9,909,176 |
| Other assets including long-term portion of notes receivable | 2,920,853 | 3,190,633 |
| Total assets | $ 16,894,779 | $ 16,938,350 |
| Liabilities and Stockholders' Equity | ||
| Current liabilities: | ||
| Current portion of long-term note payable to bank | $ 1,875,000 | $ 1,975,000 |
| Current portion of long-term note payable to officer | -- | 300,000 |
| Accounts payable and accrued expenses | 654,319 | 531,059 |
| Total current liabilities | 2,529,319 | 2,806,059 |
| Long-term obligations: | ||
| Note payable to bank (net of current portion) | 2,625,000 | 2,250,000 |
| Note payable to officer (net of current portion) | 855,821 | 605,821 |
| Total long-term liabilities | 3,480,821 | 2,855,821 |
| Stockholders' equity: | ||
|
Common stock – no par value (25,000,000 shares authorized, 19,419,317 issued and outstanding as of December 31, 2010 and 19,469,317 as of March 31, 2011) |
23,116,317 |
23,165,089 |
|
Preferred stock (5,000,000 shares authorized and 20,625 issued and outstanding as of December 31, 2010 and March 31, 2011) |
800,250 |
800,250 |
| Accumulated deficit | (13,031,928) | (12,688,869) |
| Total stockholders' equity | 10,884,639 | 11,276,470 |
| Total liabilities and stockholders' equity | $ 16,894,779 | $ 16,938,350 |
| Noble Roman's, Inc. and Subsidiaries | ||
| Condensed Consolidated Statements of Operations | ||
| (Unaudited) | ||
|
Three Months Ended March 31, |
||
| 2010 | 2011 | |
| Royalties and fees | $ 1,635,656 | $ 1,674,788 |
| Administrative fees and other | 6,250 | 8,377 |
| Restaurant revenue | 113,226 | 118,852 |
| Total revenue | 1,755,132 | 1,802,017 |
| Operating expenses: | ||
| Salaries and wages | 240,388 | 237,644 |
| Trade show expense | 75,139 | 90,000 |
| Travel expense | 36,239 | 46,885 |
| Other operating expenses | 190,515 | 178,942 |
| Restaurant expenses | 111,749 | 118,564 |
| Depreciation and amortization | 14,574 | 13,549 |
| General and administrative | 394,804 | 408,388 |
| Total expenses | 1,063,406 | 1,093,972 |
| Operating income | 691,725 | 708,045 |
| Interest and other expense | 109,399 | 98,652 |
| Income before income taxes | 582,326 | 609,393 |
| Income tax expense | 230,659 | 241,381 |
| Net income | 351,667 | 368,012 |
| Cumulative preferred dividends | 16,636 | 24,953 |
|
Net income available to common stockholders |
$ 335,031 |
$ 343,059 |
| Earnings per share – basic: | ||
| Net income | $ .02 | $ .02 |
| Net income available to common stockholders | .02 | .02 |
|
Weighted average number of common shares outstanding |
19,412,499 |
19,422,650 |
| Diluted earnings per share: | ||
| Net income | $ .02 | $ .02 |
|
Weighted average number of common shares outstanding |
20,036,415 |
20,118,211 |