Noble Roman's, Inc. 2nd Quarter Earnings Increased 61%; Year-To-Date Earnings Increased 68%
INDIANAPOLIS, Aug. 9 /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 three-month period and the six-month period ended June 30, 2007, which increased 61% and 68%, respectively, over the comparable periods in 2006. For the quarter ended June 30, 2007, the company reported a net income of $703,506, or $.04 per share, on 17.0 million weighted shares outstanding. This compares to a net income of $435,870, or $.03 per share, on 16.3 million weighted shares outstanding for the quarter ended June 30, 2006. Total revenues for the quarter ended June 30, 2007 were $3.1 million compared to $2.3 million for the same period in 2006. The company's pre-tax income for the second quarter 2007 was $1,065,918 compared to $660,408 for second quarter 2006. Although the company recognizes income tax expense on its financial statements, it will not pay any income taxes on approximately the next $22 million of pre-tax income due to its available tax credits. For the six-month period ended June 30, 2007, the company reported a net income of $1,406,509, or $.08 per share, on 16.8 million weighted shares outstanding. This compares to a net income of $840,435, or $.05 per share, on 16.3 million weighted shares outstanding for the six-month period ended June 30, 2006. Total revenues for the six-month period ended June 30, 2007 were $5.9 million compared to $4.6 million for the same period in 2006. The company's pre-tax income for the six-month period was $2,131,075 compared to $1,273,387 for the same period in 2006. Royalty and fee income from franchising increased 43.3% and 40.9%, respectively, for the three-month and six-month periods ended June 30, 2007 compared to the same periods in 2006. The company expects its royalty and fee income to continue to increase over the next few years as it continues to open more of its dual-branded franchises in traditional locations. The company has now sold 19 territories to area developers and is currently in discussions with several other potential area developers. The development schedules for the 19 territories sold thus far call for 685 locations over the next five to seven years. In addition the company has sold 84 dual-branded franchises for traditional locations, 37 of which were sold through area developers. Royalty and fee income, less initial franchise fees and fees for area development agreements, increased 13.1% and 13.6%, respectively, for the three-month and six-month periods ended June 30, 2007 compared to the same periods in 2006. The company is marketing development territories to area developers for the growth of its traditional dual-branded concept. Area developers have the exclusive right to develop the dual-branded traditional concept in their territory, subject to company approval of each franchisee and location. The area developers pay a development fee of $.05 per population in their development area, and receive 30% of the initial franchise fee and 2/7ths of the royalty from the locations developed pursuant to those agreements. In order to maintain the rights to develop the territory, each area developer must meet the minimum development schedule stipulated in the Area Development Agreement. In addition to losing their investment in the territory, if an area developer does not meet the required development schedule they lose their right to develop the territory and their share of the royalty income on any locations already open. 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, 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 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. Noble Roman's, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (Unaudited) Assets December 31, June 30, 2006 2007 Current assets: Cash $920,590 $1,618,857 Accounts and notes receivable (net of allowances of $136,462 as of December 31, 2006 and June 30, 2007) 1,505,444 1,791,811 Inventories 215,557 201,494 Assets held for resale 381,768 394,661 Prepaid expenses 136,167 373,676 Current portion of long-term notes receivable 187,898 195,540 Deferred tax asset - current portion 1,971,875 1,971,875 Total current assets 5,319,299 6,547,914 Property and equipment: Equipment 1,183,655 1,258,555 Leasehold improvements 105,928 107,729 1,289,583 1,366,284 Less accumulated depreciation and amortization 653,336 702,154 Net property and equipment 636,247 664,130 Deferred tax asset (net of current portion) 8,300,244 7,854,929 Other assets including long-term portion of notes receivable 1,882,173 1,846,608 Total assets $16,137,963 $16,913,581 Liabilities and Stockholders' Equity Current liabilities: Accounts payable and accrued expenses $396,046 $349,634 Current portion of long-term note payable 1,500,000 1,500,000 Total current liabilities 1,896,046 1,849,634 Long-term obligations: Note payable to bank (net of current portion) 5,625,000 4,875,000 Total long-term liabilities 5,625,000 4,875,000 Stockholders' equity: Common stock -no par value (25,000,000 shares authorized, 16,602,601 issued and outstanding as of December 31, 2006 and 17,874,276 issued and outstanding as of June 30, 2007) 21,393,360 21,926,497 Preferred stock (5,000,000 shares authorized and 51,000 issued and outstanding as of December 31, 2006 and 43,700 issued and outstanding as of June 30, 2007) 1,978,800 1,686,800 Accumulated deficit (14,755,243) (13,424,350) Total stockholders' equity 8,616,917 10,188,947 Total liabilities and stockholders' equity $16,137,963 $16,913,581 Noble Roman's, Inc. and Subsidiaries Condensed Consolidated Statements of Operations (Unaudited) Three Months Ended Six Months Ended June 30, June 30, 2006 2007 2006 2007 Royalties and fees $1,944,822 $2,787,232 $3,812,259 $5,372,640 Administrative fees and other 18,992 18,639 34,178 36,985 Restaurant revenue 351,807 274,276 764,740 525,861 Total revenue 2,315,620 3,080,147 4,611,177 5,935,486 Operating expenses: Salaries and wages 310,309 422,067 584,853 799,612 Trade show expense 116,906 136,048 223,636 273,834 Travel expense 96,731 122,522 192,337 201,762 Sales commissions 0 242,592 0 357,579 Other operating expenses 177,785 221,325 374,694 447,345 Restaurant expenses 341,018 255,025 737,018 489,432 Depreciation and amortization 20,857 24,359 41,616 45,707 General and administrative 393,642 423,385 788,447 848,415 Operating income 858,373 1,232,824 1,668,577 2,471,800 Interest and other expense 197,964 166,906 395,190 340,725 Income before income taxes 660,408 1,065,918 1,273,387 2,131,075 Income tax expense 224,539 362,412 432,951 724,566 Net income 435,870 703,506 840,435 1,406,509 Cumulative preferred dividends 40,241 34,481 81,377 75,616 Net income available to common stockholders $395,628 $669,025 $759,059 $1,330,893 Earnings per share - basic: Net income $.03 $.04 $.05 $.08 Weighted average number of common shares outstanding 16,322,136 17,009,825 16,322,136 16,839,866 Diluted earnings per share: Net income $.03 $.04 $.05 $.07 Weighted average number of common shares outstanding 16,963,051 19,580,118 16,963,051 19,410,159
SOURCE Noble Roman's, Inc.
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