Noble Roman's Announces Earnings for 2007 Up 31% Over 2006

    INDIANAPOLIS, March 12 /PRNewswire-FirstCall/ -- Noble Roman's, Inc.
 (OTC Bulletin Board:   NROM), the Indianapolis based franchisor of Noble
 Roman's Pizza and Tuscano's Italian Style Subs, today announced earnings
 for the year 2007, which increased 31.3% over the year 2006.
 
     Net income was $2.5 million, or $.14 per share basic, on weighted
 average number of common shares outstanding of l7.7 million, or $.13 per
 share diluted, on weighted average common shares outstanding of 19.0
 million. This compares to net income for the year ended December 31, 2006
 of $1.9 million, or $.12 per share basic, on weighted average number of
 common shares outstanding of 16.4 million, or $.10 per share diluted, on
 weighted average number of common shares outstanding of 19.7 million. Total
 revenues for the year ended December 31, 2007 were $11.6 million compared
 to total revenues of $9.5 million in 2006.
 
     Royalty and fee income from franchising increased to $10.4 million in
 2007 compared to $8.1 million in 2006, or an increase of 28.8%. Royalty and
 fee income, less initial franchise fees and fees for area development
 agreements, increased to $7.7 million in 2007 compared to $6.4 million in
 2006, or an increase of 19.3%.
 
     The company also announced that it temporarily assumed the operations
 and management of six suburban Indianapolis area franchises on February 1,
 2008. The six locations had been operated by a single franchisee and were
 experiencing management and supervision difficulties. The company's intent
 is to improve the operations, increase the sales and then re-franchise the
 operations under new ownership. During the first five weeks under the
 company's management and supervision, average weekly sales for the six
 locations were improved by 33.3% over the weekly average sales of the
 preceding six weeks.
 
     The company is continuing its efforts to market franchises for non-
 traditional locations which began in 1997, for traditional dual-brand
 locations which began in early 2006, and for area development territories
 which began in the third quarter of 2006. Area developers pay a fee for the
 exclusive right to market the dual-branded traditional concept in their
 acquired territory, subject to company approval of each franchisee and
 location, and subject to their continuing compliance with their minimum
 development schedule. Area developers who maintain their development
 schedule share in the franchise fees of new units in their territory, and
 in the royalty income from previously developed units in its territory. If
 an area developer does not meet its required minimum development schedule,
 the developer loses the right to the development area as well as their
 share of royalty income on any of the units that were developed.
 
     In late November 2007, the company created and filled the new position
 of National Director of Non-Traditional Franchising and will seek to
 accelerate the company's growth of non-traditional franchise sales. Though
 there can be no assurance of accelerated growth, management's assessment of
 market conditions indicated what it considered to be substantial potential
 for new development. As previously announced on November 26, 2007, the
 company also instituted more rigorous franchisee selection criteria for
 potential franchisees of its traditional dual-brand concept, which among
 other things now includes psychological screening tests and a longer
 training process. The company also refocused its marketing efforts for
 potential franchisees of its dual branded concept to candidates with more
 business or restaurant experience.
 
     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, shifts in market demand, the
 ability to successfully operate certain franchises on a temporary basis and
 to re-franchise them, 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, the
 success or failure of area developers who may or may not maintain their
 minimum development schedule, and the impact of competitors' actions.
 Should one or more of these risks or uncertainties adversely affect the
 company or should underlying assumptions or estimates prove incorrect,
 actual results may vary materially from those described herein as
 anticipated, believed, estimated, expected or intended.
 
 

 
 
                          Consolidated Balance Sheets
                      Noble Roman's, Inc. and Subsidiaries
 
                                                              December 31,
                       Assets                              2006         2007
     Current assets:
       Cash                                              $920,590     $832,207
       Accounts and notes receivable (net of
        allowances of $136,462 as of December 31,
        2006 and $106,712 as of December 31, 2007)      1,505,444    1,770,994
       Inventories                                        215,557      310,362
       Assets held for resale                             381,768      643,915
       Prepaid expenses                                   136,167      175,022
       Current portion of long-term notes receivable      187,898      133,736
       Deferred tax asset - current portion             1,971,875    1,971,875
         Total current assets                           5,319,299    5,838,111
 
     Property and equipment:
       Equipment                                        1,183,655    1,289,795
       Leasehold improvements                             105,928      107,729
                                                        1,289,583    1,397,524
       Less accumulated depreciation and amortization     653,336      755,987
         Net property and equipment                       636,247      641,537
     Deferred tax asset (net of current portion)        8,300,244    9,106,008
     Other assets including long-term portion of
      notes receivable less a valuation allowance
      of $500,000 and $550,000 at December 31, 2006
      and 2007                                          1,882,173    1,883,644
             Total assets                             $16,137,963  $17,469,300
 
               Liabilities and Stockholders' Equity
     Current liabilities:
       Accounts payable and accrued expenses             $396,046     $532,264
       Current portion of long-term note payable        1,500,000    1,500,000
         Total current liabilities                      1,896,046    2,032,264
 
     Long-term obligations:
       Note payable to bank (net of current portion)    5,625,000    4,125,000
         Total long-term liabilities                    5,625,000    4,125,000
 
     Stockholders' equity:
       Common stock - no par value (25,000,000 shares
        authorized, 16,602,601 issued and outstanding
        at December 31, 2006 and 19,187,449 issued
        and outstanding as of December 31, 2007)       21,393,360   22,905,617
       Preferred stock (5,000,000 shares authorized
        and 51,000 issued and outstanding as of
        December 31, 2006 and 20,625 issued and
        outstanding as of December 31, 2007)            1,978,800      800,250
       Accumulated deficit                            (14,755,243) (12,393,830)
         Total stockholders' equity                     8,616,917   11,312,036
             Total liabilities and stockholders'
              equity                                  $16,137,963  $17,469,300
 
 
 
                     Consolidated Statements of Operations
                      Noble Roman's, Inc. and Subsidiaries
 
                                                  Year Ended December 31,
                                             2005          2006         2007
 
     Royalties and fees                  $7,269,868    $8,084,175  $10,411,326
     Administrative fees and other           72,177        63,072       67,467
     Restaurant revenue                   1,088,783     1,339,555    1,088,022
           Total revenue                  8,430,828     9,486,802   11,566,815
 
     Operating expenses:
       Salaries and wages                 1,139,502     1,278,319    1,642,529
       Trade show expense                   474,555       447,303      554,574
       Travel expense                       333,617       380,763      527,455
       Sales commissions                          -        72,343      621,928
       Other operating expenses             678,231       742,104    1,024,399
       Restaurant expenses                1,059,396     1,283,702    1,011,146
     Depreciation and amortization           69,964        84,353       96,682
     General and administrative           1,491,243     1,550,030    1,680,284
           Operating income               3,184,320     3,647,887    4,407,818
 
     Interest and other expense             817,357       776,028      650,802
     Other income                         2,800,830             -            -
         Income before income taxes
          from continuing operations      5,167,793     2,871,859    3,757,016
 
     Income tax expense                   1,757,051       976,432    1,268,489
         Net income from continuing
          operations                      3,410,742     1,895,427    2,488,527
 
     Loss from discontinued operations
      net of tax benefit of $387,603
      for 2005                             (560,153)            -            -
         Net income                       2,850,589     1,895,427    2,488,527
     Cumulative preferred dividends          16,096       163,200      127,116
         Net income available to common
          stockholders                   $2,834,493    $1,732,227   $2,361,411
 
     Earnings per share - basic:
       Net income                              $.17          $.12         $.14
       Net income available to common
        stockholders                            .17           .11          .13
     Weighted average number of common
      shares outstanding                 16,848,932    16,405,995   17,675,834
 
     Diluted earnings per share:
       Net income                              $.16          $.10         $.13
     Weighted average number of common
      shares outstanding                 18,313,035    19,702,988   18,973,291
 
 
 

SOURCE Noble Roman's, Inc.