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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