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.