Noble Roman's, Inc. 3rd Quarter Earnings Increased 42%; Year-To-Date Earnings Increased 58%

    INDIANAPOLIS, Nov. 8 /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 nine-month period ended September 30, 2007,
 which increased 42.3% and 58.2%, respectively, over the comparable periods
 in 2006.
     For the quarter ended September 30, 2007, the company reported a net
 income of $693,655, or $.04 per share, on 18.2 million weighted shares
 outstanding. This compares to a net income of $487,345, or $.03 per share,
 on 16.4 million weighted shares outstanding for the quarter ended September
 30, 2006. Total revenues for the quarter ended September 30, 2007 were $3.0
 million compared to $2.4 million for the same period in 2006. The company's
 pre-tax income for the third quarter 2007 was $1,198,334 compared to
 $933,278 for third 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 nine-month period ended September 30, 2007, the company
 reported a net income of $2,100,166, or $.12 per share, on 17.3 million
 weighted shares outstanding. This compares to a net income of $1,327,781,
 or $.08 per share, on 16.3 million weighted shares outstanding for the
 nine-month period ended September 30, 2006. Total revenues for the
 nine-month period ended September 30, 2007 were $8.9 million compared to
 $7.0 million for the same period in 2006. The company's pre-tax income for
 the nine-month period was $3,166,172 compared to $2,011,789 for the same
 period in 2006.
     Royalty and fee income from franchising increased 31% and 37%,
 respectively, for the three-month and nine-month periods ended September
 30, 2007 compared to the same periods in 2006. Royalty and fee income, less
 initial franchise fees and fees for area development agreements, increased
 28% and 19%, respectively, for the three-month and nine-month periods ended
 September 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 24 territories to area
 developers and is currently in discussions with several other potential
 area developers. The development schedules for the 24 territories sold thus
 far call for 868 locations over the next three to eight years. In addition
 the company has sold 98 dual-branded franchises for traditional locations,
 46 of which were sold through area developers. There were 10 franchised
 dual-branded traditional locations open during the quarter ended September
 30, 2007. While sales of dual-branded franchises and sales of development
 agreements continue to exceed expectations, the unit openings themselves
 are proceeding at a slower than expected pace, primarily due to required
 plan approvals and inspections. However, the company continues to build a
 backlog of sold but unopened franchise locations, which are all progressing
 toward opening.
     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. There can be no assurance that all of the area
 developers will meet their required schedules. If an area developer does
 not meet their required schedule, the developer loses the right to the
 development area, their investment in the development area and their share
 of franchise fee income on any of the units that were developed.
     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,  September 30,
                                                       2006          2007
     Current assets:
        Cash                                         $920,590    $ 1,531,458
        Accounts and notes receivable
        (net of allowances of $136,462 as of
        December 31, 2006 and September 30, 2007)   1,505,444      2,113,622
        Inventories                                   215,557        221,812
        Assets held for resale                        381,768        390,402
        Prepaid expenses                              136,167        442,764
        Current portion of long-term notes
         receivable                                   187,898        182,125
        Deferred tax asset - current portion        1,971,875      1,971,875
           Total current assets                     5,319,299      6,854,058
 
     Property and equipment:
        Equipment                                   1,183,655      1,280,706
        Leasehold improvements                        105,928        107,729
                                                    1,289,583      1,388,435
        Less accumulated depreciation and
         amortization                                 653,336        727,567
           Net property and equipment                 636,247        660,868
     Deferred tax asset (net of current portion)    8,300,244      7,850,458
     Other assets including long-term portion
      of notes receivable                           1,882,173      1,836,514
           Total assets                           $16,137,963    $17,201,898
 
 
              Liabilities and Stockholders' Equity
     Current liabilities:
        Accounts payable and accrued expenses        $396,046       $346,810
        Current portion of long-term note payable   1,500,000      1,500,000
           Total current liabilities                1,896,046      1,846,810
 
     Long-term obligations:
        Note payable to bank (net of
         current portion)                           5,625,000      4,500,000
           Total long-term liabilities              5,625,000      4,500,000
 
     Stockholders' equity:
        Common stock - no par value
         (25,000,000 shares authorized,
         16,602,601 issued and outstanding
         as of December 31, 2006 and
         18,284,993 issued and outstanding
         as of September 30, 2007)                 21,393,360     22,820,396
        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 September 30, 2007)                     1,978,800        800,250
     Accumulated deficit                          (14,755,243)   (12,765,558)
        Total stockholders' equity                  8,616,917     10,855,088
           Total liabilities and
           stockholders' equity                  $ 16,137,963   $ 17,201,898
 
 
 
                      Noble Roman's, Inc. and Subsidiaries
                Condensed Consolidated Statements of Operations
                                  (Unaudited)
 
                                   Three Months Ended      Nine Months Ended
                                      September 30,          September 30,
                                   2006        2007        2006        2007
 
     Royalties and fees         $2,049,948   2,679,313  $5,862,207  $8,051,953
     Administrative fees
      and other                     14,332      18,581      48,510      55,567
     Restaurant revenue            307,260     261,428   1,072,000     787,288
        Total revenue            2,371,540   2,959,322   6,982,717   8,894,808
 
     Operating expenses:
        Salaries and wages         325,961     422,161     910,814   1,221,773
        Trade show expense         118,064     138,197     341,700     412,030
        Travel expense              94,862     172,328     287,199     374,089
        Sales commissions           25,093     108,988      25,093     466,567
        Other operating
         expenses                  176,546     253,909     551,240     701,255
        Restaurant expenses        292,442     240,311   1,029,460     729,743
     Depreciation and
      amortization                  20,857      24,359      62,473      70,066
     General and administrative    384,437     400,735   1,172,883   1,249,151
           Operating income        933,278   1,198,334   2,601,855   3,670,134
 
     Interest and other
      expense                      194,876     163,237     590,066     503,962
           Income before income
            taxes                  738,402   1,035,097   2,011,789   3,166,172
 
     Income tax expense            251,057     341,442     684,008   1,066,006
           Net income              487,345     693,655   1,327,781   2,100,166
 
           Cumulative preferred
            dividends               40,688      34,864     122,065     110,481
 
           Net income available
            to common
            stockholders          $446,657    $658,791  $1,205,716  $1,989,685
 
 
     Earnings per share - basic:
        Net income                    $.03        $.04        $.08        $.12
        Net income available
         to common stockholders       $.03        $.04        $.07        $.12
     Weighted average number
      of common shares
      outstanding               16,396,303  18,208,358  16,347,130  17,301,043
 
 
     Diluted earnings per share:
        Net income                    $.03        $.03        $.07        $.10
     Weighted average number
      of common shares
      outstanding               19,125,397  21,100,540  19,076,224  20,193,225
 
 

SOURCE Noble Roman's, Inc.