INDIANAPOLIS, March 13, 2012 (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 year 2011. Net income from continuing operations was $1.5 million, or $.08 per share basic and diluted, on weighted average number of common shares outstanding of 19.5 million and diluted weighted average shares of 20.1 million for the year ended December 31, 2011. This compares to a net income from continuing operations for the year ended December 31, 2010 of $1.5 million, or $.08 per share basic and diluted on weighted average number of shares outstanding of 19.4 million and diluted weighted average number of shares of 20.1 million. For the year ended December 31, 2011, the company recorded a loss on discontinued operations in the amount of $710 thousand resulting in a net income for the year of $819 thousand, or $.04 per share basic and diluted. This compares to a loss on discontinued operations in 2010 of $1.2 million resulting in net income for 2010 of $310 thousand, or $.02 per share basic and diluted.
Total revenue increased from $7,271,103 in 2010 to $7,376,073 in 2011. One-time fees, franchisee fees and equipment commissions ("upfront fees") decreased from $376,613 in 2010 to $255,236 in 2011. Royalties and fees, less upfront fees, increased from $6,349,156 in 2010 to $6,558,710 in 2011. The breakdown of royalties and fees, less upfront fees, were: royalties and fees from non-traditional franchises other than grocery stores were $4,425,822 in 2010 and $4,023,177 in 2011; fees from the grocery store take-n-bake licensing program were $462,625 in 2010 and $1,166,650 in 2011; and royalties and fees from traditional locations were $1,460,709 in 2010 and $1,368,883 in 2011.
Looking forward, the company is focused on revenue expansion through two primary growth vehicles:
Sales of Non-Traditional Franchises and Licenses. The company believes it has an opportunity for increasing unit growth and revenue within its non-traditional venues, particularly with convenience stores, travel plazas and entertainment facilities. The company's franchises in non-traditional locations are foodservice providers within a host business, and usually require a substantially lower investment compared to a stand-alone, traditional location. With the recent improvements in the overall economy, the company is experiencing renewed interest in its non-traditional franchises and is currently in discussions with many franchise prospects. As previously announced, the company is partnering with The Pantry, Inc., a convenience store chain of over 1,650 locations, and will be opening a pilot location in Raleigh, North Carolina within the next few weeks. In addition, the company has signed an agreement with Huck's, a 110-unit convenience store chain in 5 states, for 8 pilot locations in Indiana, Illinois and Kentucky, to be opened in the 2nd quarter. The company believes it could experience significant growth in non-traditional franchises in 2012.
Licensing the Company's Take-N-Bake Program. In September 2009, the company introduced a take-n-bake pizza as an addition to its menu offering. Since the company introduced take-n-bake pizza in grocery store chains, through March 8, 2012, the company has signed agreements for 1,016 grocery store locations to operate the take-n-bake pizza program and has opened take-n-bake pizza programs in approximately 833 of those locations. The company is currently in discussions with numerous grocery store operators for additional take-n-bake locations. In August 2011, the company introduced six new "Signature Specialty Take-N-Bake Pizza" combinations to its current standard offerings. These pizzas feature unique, fun combinations of ingredients with proven customer appeal in other company venues, and include Hawaiian pizza, Four Cheese pizza, BBQ Pork pizza, BBQ Chicken pizza, Hoppin' Jalapeno pizza and Parmesan Tomato pizza. The company's strategy with these new combinations is to secure more shelf space in existing locations, to add to the appeal of the program in order to attract new locations, and to generally increase sales of the company's products.
To further accelerate the growth of take-n-bake pizza in grocery stores, the company has focused on signing agreements with various grocery store distributors to market the take-n-bake pizza program to the distributors' current customer base. As of March 8, 2012, the company had signed 11 grocery distributors to the program, and continues to pursue others as well. The company believes that it could continue to have accelerated growth in its licensing program for grocery store take-n-bake locations during 2012.
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 in June 2008. As a result, the plaintiff's allegations of fraud against the company and certain of its officers were determined to be without merit. Plaintiffs filed numerous motions and an appeal to the Indiana Court of Appeals, in an attempt to reverse the December 23, 2010 summary judgment. All of the motions failed and the Indiana Court of Appeals dismissed the appeal with prejudice. The fraud charges against the company and certain of its officers are dismissed entirely and the Plaintiffs have no appeal rights remaining.
The company's counter-claims against the Plaintiffs/Counterclaim-Defendants in excess of $5 million remain pending, however the company has been granted partial summary judgment as to Plaintiffs/Counterclaim-Defendants liability. In this partial summary judgment, the Court determined that the Plaintiffs/Counterclaim-Defendants were liable to the company for direct damages and consequential damages, including future royalties for breach of their franchise agreements. In addition, the Court determined that, as a matter of law, the company was entitled to recover attorney's fees associated with obtaining preliminary injunctions, fees resulting from the prosecution of the company's counterclaims and fees for defending against the fraud claims. The amount of the award is to be determined at trial.
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 and other factors including, but not limited to, the company's ability to refinance its bank loan at or before maturity, 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. 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 | 2010 | 2011 |
| Current assets: | ||
| Cash | $ 337,044 | $ 233,296 |
| Accounts and notes receivable - net | 920,304 | 884,811 |
| Inventories | 316,913 | 338,447 |
| Assets held for resale | 246,278 | 252,552 |
| Prepaid expenses | 235,778 | 278,718 |
| Deferred tax asset - current portion | 1,400,000 | 1,400,000 |
| Total current assets | 3,456,317 | 3,387,824 |
| Property and equipment: | ||
| Equipment | 1,139,050 | 1,147,109 |
| Leasehold improvements | 12,283 | 12,283 |
| 1,151,333 | 1,159,392 | |
| Less accumulated depreciation and amortization | 784,282 | 851,007 |
| Net property and equipment | 367,051 | 308,385 |
| Deferred tax asset (net of current portion) | 10,150,558 | 9,613,399 |
| Other assets including long-term portion of notes receivable - net | 2,920,853 | 3,914,523 |
| Total assets | $ 16,894,779 | $ 17,224,131 |
| Liabilities and Stockholders' Equity | ||
| Current liabilities: | ||
| Current portion of long-term note payable to bank | $ 1,875,000 | $ 3,575,000 |
| Accounts payable and accrued expenses | 654,319 | 665,054 |
| Total current liabilities | 2,529,319 | $ 4,240,054 |
| Long-term obligations: | ||
| Note payable to bank (net of current portion) | 2,625,000 | -- |
| Note payable to officer | 855,821 | 1,255,821 |
| Total long-term liabilities | 3,480,821 | 1,255,821 |
| 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 December 31, 2011) |
23,116,317 |
23,239,976 |
| Preferred stock (5,000,000 shares authorized, 20,625 issued and outstanding as of December 31, 2010 and December 31, 2011) |
800,250 |
800,250 |
| Accumulated deficit | (13,031,928) | (12,311,970) |
| Total stockholders' equity | 10,884,639 | 11,728,256 |
| Total liabilities and stockholders' equity | $ 16,894,779 | $ 17,224,131 |
| Consolidated Statements of Operations | |||
| Noble Roman's, Inc. and Subsidiaries | |||
| Year Ended December 31, | |||
| 2009 | 2010 | 2011 | |
| Royalties and fees | $ 6,949,192 | $ 6,725,769 | $ 6,813,946 |
| Administrative fees and other | 63,503 | 40,312 | 44,448 |
| Restaurant revenue | 536,885 | 505,022 | 517,679 |
| Total revenue | 7,549,580 | 7,271,103 | 7,376,073 |
| Operating expenses: | |||
| Salaries and wages | 1,057,675 | 970,652 | 970,966 |
| Trade show expense | 309,827 | 301,940 | 351,907 |
| Travel expense | 134,350 | 157,973 | 191,695 |
| Other operating expenses | 745,376 | 719,316 | 687,519 |
| Restaurant expenses | 496,614 | 501,976 | 507,838 |
| Depreciation and amortization | 78,777 | 66,578 | 124,009 |
| General and administrative | 1,485,356 | 1,610,123 | 1,619,778 |
| Operating income | 3,241,605 | 2,942,545 | 2,922,361 |
| Interest and other expense | 466,944 | 440,512 | 390,858 |
|
Income before income taxes from continuing operations |
2,774,661 | 2,502,033 | 2,531,503 |
| Income tax expense | 1,099,044 | 991,056 | 1,002,729 |
| Net income from continuing operations | 1,675,617 | 1,510,977 | 1,528,774 |
| Loss from discontinued operations net of tax benefit of $787,520 for 2010 and $465,570 for 2011 | -- | (1,200,664) | (709,816) |
| Net income | 1,675,617 | 310,313 | 818,958 |
| Cumulative preferred dividends | 66,000 | 90,682 | 99,000 |
| Net income available to common stockholders | $1,609,617 | $ 219,631 | $ 719,958 |
|
Earnings per share - basic: |
|||
| Net income from continuing operations | $ .09 | $ .08 | $ .08 |
| Net loss from discontinued operations net of tax benefit |
$ -- |
$ (.06) |
$ (.04) |
| Net income | $ .09 | $ .02 | $ .04 |
| Net income available to common stockholders |
$ .08 |
$ .01 |
$ .04 |
|
Weighted average number of common shares outstanding |
19,412,499 |
19,414,367 |
19,457,810 |
| Diluted earnings per share: | |||
| Net income from continuing operations | $ .08 | $ .08 | $ .08 |
| Net loss from discontinued operations net of tax benefit | $ -- | $ (.06) | $ (.04) |
| Net income | $ .08 | $ .02 | $ .04 |
| Weighted average number of common shares outstanding |
19,950,027 |
20,094,961 |
20,112,278 |