Noble Roman's Announces First Quarter 2009 Net Income Up 30%
May 11, 2009 5:00:00 PM
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INDIANAPOLIS, May 11 /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 results for the quarterly period ended March 31, 2009. Net income was $416,761 or $.02 per share basic and diluted, on weighted average number of common shares outstanding of 19.4 million and diluted weighted average shares of 19.9 million. This was a 29.7% increase in net income over the quarterly period ended March 31, 2008 of $304,795, or $.02 per share basic and diluted, on weighted average number of common shares outstanding of 19.2 million, and diluted weighted average shares of 20.3 million. Total revenues for the quarterly period ending March 31, 2009 were $1.9 million compared to total revenues of $2.4 million for the comparable period in 2008. The net income for the three-month period ended March 31, 2009 was slightly better than anticipated in the 2009 Business Plan announced in the Form 10-Q for the period ended September 30, 2008.
The increase in earnings was primarily the result of implementing the strategy announced during the third quarter of 2008: intensifying the company's focus on non-traditional franchising and discontinuing company operation of restaurants except for the two locations used for training and demonstration purposes. This strategy has allowed the company to narrow its focus and decrease its overhead and operating expenses during this period of weakened consumer activity and severe dislocations in lending markets. The company continues to believe that during such troubled economic times as these it has a unique opportunity for increasing unit growth and revenue within its non-traditional venues such as hospitals, military bases, universities, convenience stores, attractions, entertainment facilities, casinos, airports, travel plazas, office complexes and hotels, while at the same time operating with reduced overhead and operating costs. Total overhead and operating costs for the three-month period ended March 31, 2009 were $1,081,000 compared to $1,709,000 for the corresponding period in 2008.
The decrease in total revenue was largely the result of selling fewer franchise agreements in the three-month period ended March 31, 2009 compared to the comparable period in 2008. Royalty and fee income from franchising decreased from $1.9 million in the quarterly period ended March 31, 2008 to $1.8 million for the comparable period in 2009. Royalty and fee income, less initial franchise fees and equipment commissions, was approximately $1.7 million in both the three-month periods ended March 31, 2008 and 2009.
To augment the company's sales opportunities within non-traditional venues, in October 2008 the company introduced the new Noble Roman's Bistro service system. The Bistro incorporates all of the ingredient qualities for which Noble Roman's Pizza is known, and retains simplicity by using largely ready-to-use ingredients that require only final assembly and baking on site. It features the SuperSlice pizza, one-fourth of a large pizza, along with hot entrees such as chicken parmesan, baked pastas, hot sub sandwiches, breadsticks and calzones plus fresh salads and snacks. The Bistro is also available with an optional breakfast expansion menu featuring a wide variety of standard breakfast favorites. Customers move along the food display counter and are served to order as they go.
Updating the previously announced lawsuit styled Kari Heyser, et al (Plaintiffs), vs. Noble Roman's, Inc., et al (Defendants), no substantive discovery has been completed. The company believes it has strong and meritorious legal and factual defenses to these claims and will vigorously defend its interest in the case. The company filed a Counter-Claim for Damages against all of the Plaintiffs and a Preliminary Injunction and Permanent Injunction against a majority of the Plaintiffs to remedy the Plaintiff's continuing breaches of the franchise agreements. The company's Motion for Preliminary Injunction was granted on October 7, 2008. None of the Plaintiffs fully complied with the Court's Order and the company believes several only minimally complied. The company filed a Motion to Require Full Compliance, To Show Cause why the Plaintiffs should not be held in contempt and for attorney's fees as sanctions.
The company subsequently filed a Motion to Revoke the Temporary Admission Pro Hac Vice of David M. Duree, Plaintiff's counsel, for filing fraudulent affidavits with the Court. The Court granted this motion on March 31, 2009. In the same ruling the Court: continued the Motion to Show Cause to allow parties time to conduct discovery, including depositions on the preliminarily enjoined Plaintiffs, on that issue; granted preliminary injunctions against Plaintiffs Gomes and Villasenor; dismissed claims against CIT Small Business Lending Corporation and PNC Bank with prejudice; and struck the fraudulent affidavits. The Court has granted Plaintiff's Motion for Continuance until May 14, 2009 to allow time for Plaintiffs to engage new counsel.
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, the current litigation with certain former traditional franchisees, 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, the impact of competitors' actions and changes in prices or supplies of food ingredients and labor as well as the factors discussed above under "Risk Factors." Should one or more of these risks or uncertainties materialize, or should underlying assumptions or estimates prove incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated, expected or intended. The company undertakes no obligations to update the information in this press release for subsequent events.
Noble Roman's, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(Unaudited)
Assets December 31, March 31,
2008 2009
Current assets:
Cash $450,968 $330,396
Accounts and notes receivable - net 1,046,545 1,282,705
Inventories 223,024 236,872
Assets held for resale 242,690 242,690
Prepaid expenses 222,095 208,379
Current portion of long-term notes
receivable 5,810 33,926
Deferred tax asset - current portion 1,050,500 1,050,500
Total current assets 3,241,632 3,385,468
Property and equipment:
Equipment 1,206,979 1,225,364
Leasehold improvements 96,512 96,512
1,303,491 1,321,876
Less accumulated depreciation and
Amortization 821,422 840,760
Net property and equipment 482,069 481,116
Deferred tax asset (net of current portion) 11,802,637 11,529,282
Other assets including long-term portion of
notes receivable 1,752,102 1,733,219
Total assets $17,278,440 $17,129,085
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of long-term note payable $1,500,000 $1,500,000
Accounts payable and accrued expenses 1,191,116 1,001,419
Total current liabilities 2,691,116 2,501,419
Long-term obligations:
Note payable to bank (net of current
portion) 5,625,000 5,250,000
Total long-term liabilities 5,625,000 5,250,000
Stockholders' equity:
Common stock - no par value (25,000,000
shares authorized, 19,412,499 issued and
outstanding as of December 31, 2008 and
March 31, 2009) 23,023,250 23,038,467
Preferred stock (5,000,000 shares
authorized and 20,625 issued and
outstanding as of December 31, 2008 and
March 31, 2009) 800,250 800,250
Accumulated deficit (14,861,176) (14,461,051)
Total stockholders' equity 8,962,324 9,377,666
Total liabilities and
stockholders' equity $17,278,440 $17,129,085
Noble Roman's, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited)
Three Months Ended
March 31,
2008 2009
Royalties and fees $1,948,153 $1,759,614
Administrative fees and other 13,441 12,563
Restaurant revenue 388,841 118,891
Total revenue 2,350,435 1,891,068
Operating expenses:
Salaries and wages 381,092 274,149
Trade show expense 123,473 75,617
Travel expense 113,581 44,532
Sales commissions 31,688 3,627
Other operating expenses 237,474 191,949
Restaurant expenses 374,426 118,023
Depreciation and amortization 25,318 19,338
General and administrative 422,302 353,402
Total expenses 1,709,355 1,080,637
Operating income 641,080 810,431
Interest and other expense 154,064 120,315
Income before income taxes 487,016 690,116
Income tax expense 165,586 273,355
Net income 321,431 416,761
Cumulative preferred dividends 16,636 16,636
Net income available to common
stockholders $304,795 $400,125
Earnings per share - basic:
Net income $.02 $.02
Net income available to common stockholders .02 .02
Weighted average number of common shares
outstanding 19,196,395 19,412,499
Diluted earnings per share:
Net income $.02 $.02
Weighted average number of common shares
outstanding 20,297,994 19,854,863
SOURCE Noble Roman's, Inc
----------------------------------------------
Media: Scott Mobley
President
+1-317-634-3377
or Investor Relations: Paul Mobley
Chairman & CEO
+1-317-634-3377
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