Noble Roman's Announces Continued Growth, Profitability for Third Quarter 2012

Noble Roman's Announces Continued Growth, Profitability for Third Quarter 2012

First Stand-Alone Take-n-Bake Location Opens, Representing Additional Growth
Engine

Grocery Take-n-Bake Program Expanding, Reaching 1,350 Grocery Licensees and 14
Distributors

PR Newswire

INDIANAPOLIS, Nov. 8, 2012

INDIANAPOLIS, Nov. 8, 2012 /PRNewswire/ --Noble Roman's, Inc. (OTC/BB: NROM),
the Indianapolis based franchisor and licensor of Noble Roman's Pizza and
Tuscano's Italian Style Subs, today announced results for the quarterly period
ended September 30, 2012.

Third Quarter 2012 Financial and Operational Highlights

  oTotal revenue was $1.845 million, up 4.5% compared to $1.766 million in
    the year-ago period.
  oUpfront franchisee fees and commissions were $163,356 compared to
    $39,527.
  oRoyalties and fees less upfront fees were $1.6 million compared to $1.6
    million.
  oOperating margin on total revenue was 39.4% compared to 36.3%.
  oNet income was $401,573, or $0.02 per share, compared to $11,581, or $0.00
    per share.
  oNet income from continuing operations was $401,573 or $0.02 per share,
    compared to $327,603 or $0.02 per share.
  oNet income before taxes was $664,965, or $0.03 per share, compared to
    $542,479, or $0.03 per share.
  oThe first stand-alone take-n-bake location opened in Greenwood, IN, a
    suburb of Indianapolis, on October 29, 2012; six more are already under
    agreement and in various stages of development, several of which are
    expected to open soon.

Nine Months Year-to-Date 2012 Financial and Operational Highlights

  oTotal revenue was $5.6 million, up 2.3% compared to $5.4 million in the
    same period last year.
  oUpfront franchisee fees and commissions were $311,022 compared to
    $185,491.
  oRoyalties and fees less upfront fees were $4.9 million compared to $4.8
    million.
  oOperating margin on total revenue was 39.3% compared to 38.4% in the same
    period last year.
  oNet income was $1.1 million, or $0.06 per share, compared to $768,518, or
    $0.04 per share.
  oNet income from continuing operations was $1.1 million, or $0.06 per share
    compared to $1.1 million, or $0.06 per share, for the first nine months of
    last year.
  oNet income before taxes was $1.8 million, or $0.09 per share, compared to
    $1.8 million, or $0.09 per share.
  oIn 2012, the company has signed franchise agreements for 34 new
    non-traditional locations other than grocery stores.
  oIn 2012, the company has signed supply agreements for 411 additional
    grocery store take-n-bake locations.

"We continue to successfully leverage the opportunities we see for increasing
unit growth and revenue within our non-traditional venues, while adding
additional growth engines through our Take-n-Bake initiative," said Paul
Mobley, Chairman and CEO of Noble Roman's, Inc. "This success is reflected in
our positive operating metrics and by the increase in franchise agreements
we've signed for new, non-traditional locations other than grocery stores as
well as for additional grocery store take-n-bake locations. In addition,
subsequent to the quarter end, we opened our first stand-alone take-n-bake
franchise that taps into this fast growing segment of the pizza industry with
our high-quality, great tasting pizza offerings adapted for this market, and
we already have six more take-n-bake locations under agreement and in various
stages of development and construction."

Third Quarter 2012 Financial Results
Total revenue was $1.845 million up 4.5% compared to $1.766 million in the
third quarter of 2011. Upfront franchisee fees and commissions were $163,356
compared to $39,527. Royalties and fees less upfront fees were $1.6 million
compared to $1.6 million. This included an increase in royalties and fees
from grocery store take-n-bake pizza of $24,607, an increase in royalties and
fees from non-traditional locations other than grocery stores of $64,600 and a
decrease in royalties and fees from traditional locations of $108,772.

Total operating income was $726,176, or 39.4% operating margin, compared to
$641,444, or 36.3% operating margin in the year-ago period.

Net income was $401,573, or $0.02 per share, compared to $11,581, or $0.00 per
share for the same period in 2011, which included a $316,022 loss from
discontinued operations, net of tax benefit. Net income from continuing
operations was $401,572 compared to $327,603 in 2011 or $0.02 per share in the
same period in 2011. The increase in net income was primarily the result of
the growth in total revenue in addition to the reduced interest expense as a
result of the company's re-financing of its debt during the second quarter
resulting in a lower effective interest rate. Net income before taxes was
$664,965, or $0.03 per share, compared to $542,479, or $0.03 per share.
Although the company provides for income tax expense in its financial
statements, it is currently not paying any income tax as a result of its
deferred tax credits and will not pay any income tax on the next $25 million
of net income.

Year-to-Date 2012 Financial Results
Total revenue was $5.6 million for the nine months ended September 30, 2012
compared to $5.4 million for the same period last year. Upfront franchisee
fees and commissions were $311,022 compared to $185,491. Royalties and fees
less upfront fees were $4.9 million compared to $4.8 million. This included an
increase in royalties and fees from grocery store take-n-bake pizza of
$171,986, an increase in royalties and fees from non-traditional locations
other than grocery stores of $69,820 and a decrease in royalties and fees from
traditional locations of $198,684.

Operating income was $2.2 million, or 39.3% operating margin, compared to $2.1
million, or 38.4% operating margin, in the same period last year.

Net income was $1.1 million, or $0.06 per share, compared to $768,518, or
$0.04 per share in the same period in 2011, which included a $316,022 loss
from discontinued operations, net of tax benefit. Net income from continuing
operations was $1.1 million or $0.06 per share, compared to $1.1 million, or
$0.06 per share, in the year-ago period. The increase in net income was
primarily the result of the increase in total revenue partially offset by an
increase in interest expense. The increase in interest expense was primarily
the result of the company expensing $93,000 for the unamortized loan closing
costs from the origination of the former bank loan at the time the loan was
repaid and recording expense of $30,000 to terminate the former interest rate
swap agreement related to the loan which was repaid, partially offset by the
lower effective interest rate during the third quarter on the refinanced loan.
Net income before taxes was $1.8 million, or $0.09 per share, compared to $1.8
million, or $0.09 per share, in the same period in 2011. Although the company
provides for income tax expense in its financial statements, it is currently
not paying any income tax as a result of its deferred tax credits and will not
pay any income tax on approximately the next $25 million of net income.

Mr. Mobley concluded, "The credit agreement we entered into in May, 2012 has
had the effect of reducing our interest rate on debt to approximately 4.25%
from approximately 8%, which is reflected in the decrease to our interest
expense this quarter and positively affected net income compared to last
year."

The company has entered into agreements with three existing independent
franchisees for seven stand-alone take-n-bake locations. The first stand-alone
take-n-bake location opened in Greenwood, Indiana, a suburb of Indianapolis,
on October 29, 2012 and the other six are under various stages of development.
The company uses the same high-quality pizza ingredients for its take-n-bake
pizzas as with its standard pizza, with slight modifications to portioning for
increased home baking performance. The company's stand-alone take-n-bake pizza
program features the chain's popular traditional Hand-Tossed Style pizza,
Deep-Dish Sicilian pizza, SuperThin pizza and Noble Roman's famous breadsticks
with spicy cheese sauce, all in a convenient cook-at-home format. Additional
menu items include such items as fresh salads, cookie dough, cinnamon rounds,
bake-able pasta and more.

In 2012, the company has signed franchise agreements for 34 new
non-traditional locations other than grocery stores including 12 locations
with Huck's, a 110-unit convenience store chain located in five states, plus
an agreement with The Pantry, Inc., a convenience store chain of more than
1,650 locations. Management is in discussions with several other significant
convenience store chains. In 2012, the company has signed supply agreements
for 411 additional grocery store take-n-bake locations. Since the company
introduced take-n-bake pizza in grocery store chains in late 2009 through
November 6, 2012, the company has signed agreements for 1,350 grocery store
locations to operate the take-n-bake pizza program and has opened the
take-n-bake pizza program in approximately 1,010 of these locations. In
addition, the company has 14 distributors under contract to distribute
take-n-bake pizzas to grocery stores, a sequential increase of 2 compared to
the 12 as of the end of the second quarter.

"Consumers continue to embrace the convenience of our Take-n-Bake offering,
which allows busy families to enjoy a hot, great-tasting meal in the comfort
of their home at an affordable price," Mr. Mobley continued. "Our take-n-bake
offerings taste better and are ready more quickly than a delivery pizza, and
this message is resonating with groceries, convenience stores and now,
franchisees, as evidenced by the opening of our first stand-alone take-n-bake
store. Take-n-bake is a fast growing segment of the pizza industry, and with
Noble Roman's brand reputation and a growing network of locations consumers
can visit to purchase a take-n-bake meal, we believe this initiative will
provide an additional growth engine for the company."

Balance Sheet Summary
Cash and cash equivalents totaled approximately $162,768 as of September 30,
2012 compared to $233,296 as of December 31, 2011. Total stockholders' equity
as of September 30, 2012 was approximately $12.9 million compared to $11.7
million as of December 31, 2011.

Update on Litigation:

The Court granted summary judgment in favor of the Company and against all of
the Plaintiffs in a long-running lawsuit filed in Superior Court Hamilton
County, Indiana in June 2008. Plaintiffs filed numerous motions and an appeal
to the Indiana Court of Appeals, in an attempt to reverse the December 23,
2010 summary judgment. All of the motions failed and the Indiana Court of
Appeals dismissed the appeal with prejudice. The fraud charges against the
Company and certain of its officers are dismissed entirely and the Plaintiffs
have no appeal rights remaining. The Company has also been granted partial
summary judgment as to liability on the Company's counter claims against the
Plaintiffs in excess of $5 million. The Court determined that the
Plaintiffs/Counterclaim-Defendants were liable to the Company for direct
damages and consequential damages, including future royalties for breach of
their franchise agreements. In addition, the Court determined that, as a
matter of law, the Company was entitled to recover attorney's fees associated
with obtaining preliminary injunctions, fees resulting from the prosecution of
the Company's counterclaims and fees for defending against the fraud claims.
The amount of the award is to be determined at trial, which is proceeding
currently.

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, non-renewal of franchise agreements, shifts in market demand,
general economic conditions, changes in purchases of or demand for the
company's products, licenses or franchises, the success or failure of
individual franchisees and licensees, changes in prices or supplies of food
ingredients and labor, and the success or failure of its recently developed
stand-alone take-n-bake operation. Should one or more of these risks or
uncertainties materialize, or should underlying assumptions or estimates prove
incorrect, actual results may differ 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)


 December 31,  September
Assets                                                   2011         30,
                                                                      2012
Current assets:
 Cash                                                  $ 233,296   $ 162,768
 Accounts and notes receivable - net                   884,811      1,212,115
 Inventories                                           338,447      424,136
 Assets held for resale                                252,552      252,552
 Prepaid expenses                                      278,718      507,284
 Deferred tax asset - current portion                  1,400,000    1,400,000
 Total current assets                          3,387,824    3,958,855
Property and equipment:
 Equipment                                             1,147,109    1,160,824
 Leasehold improvements                                12,283       12,283
                                                         1,159,392    1,173,107
 Less accumulated depreciation and amortization        851,007      892,343
 Net property and equipment                     308,385      280,764
Deferred tax asset (net of current portion)              9,613,399    8,920,666
Other assets                                             3,914,523    4,453,865
 Total assets                $ 17,224,131 $ 17,614,150
Liabilities and Stockholders' Equity
Current liabilities:
 Current portion of long-term note payable to bank     $ 3,575,000 1,250,000
 Accounts payable and accrued expenses                 665,054      170,267
 Total current liabilities                4,240,054    1,420,267
Long-term obligations:
 Note payable to bank (net of current portion)         -            3,333,333
 Note payable to officer                           1,255,821    -
 Total long-term liabilities               1,255,821    3,333,333
Stockholders' equity:
 Common stock – no par value (25,000,000 shares
authorized, 19,469,317                                               

 issued and outstanding as of December 31, 2011                
and 19,516,589 as of
                                                         23,239,976   23,337,814
 September 30, 2012)
 Preferred stock (5,000,000 shares authorized and
20,625 issued and                                                    

 outstanding as of December 31, 2011 and September 800,250      800,250
30, 2012)
 Accumulated deficit                                   (12,311,970) (11,277,514)
 Total stockholders' equity               11,728,256   12,860,550
 Total liabilities and              $ 17,224,131 $ 17,614,150
stockholders' equity







Noble Roman's, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(Unaudited)


                           Three Months Ended        Nine Months Ended
                           September 30,             September 30,
                           2011         2012         2011         2012
Royalties and fees         $1,623,943   1,728,207    $5,030,533   $ 5,199,187
Administrative fees and    3,107        5,202        22,502       17,944
other
Restaurant revenue         138,601      111,259      395,122      358,788
 Total      1,765,651    1,844,668    5,448,157    5,575,919
revenue
Operating expenses:
 Salaries and wages    251,790      250,216      736,929      747,199
 Trade show expense    77,112       128,357      260,359      372,481
 Travel expense        50,919       46,234       150,393      140,607
 Other operating       165,286      170,488      520,516      520,697
expenses
 Restaurant expenses   137,508      100,514      385,975      332,789
Depreciation and           36,311       28,561       86,170       87,786
amortization
General and administrative 405,281      394,122      1,217,099    1,182,508
 Total        1,124,207    1,118,492    3,357,441    3,384,067
expenses
 Operating    641,444      726,176      2,090,716    2,191,852
income
Interest and other expense 98,965       61,211       294,823      355,831
                                                              

 Income       542,479      664,965      1,795,893    1,836,021
before income taxes
Income tax expense         214,876      263,393      711,353      727,247
 Net income   327,603      401,572      1,084,540    1,108,774
from continuing operations
Loss from discontinued
operations net of
                                                               
 tax benefit of
$207,280 for 2011          (316,022)    -            (316,022)    -


 Net income   11,581       401,572      768,518      1,108,774
 Cumulative   24,682       24,682       74,047       74,318
preferred dividends
 Net income
(loss) available to common                                     

         $(13,101)    $376,890     $ 694,471   $1,034,456
stockholders
Earnings per share –
basic:
 Net income from       $    .02 $    .02 $    .06 $    .06
continuing operations
 Net loss from         (.02)        -            (.02)        -
discontinued operations
 Net income            -            .02          .04          .06
 Net income (loss)     $     
available to common        -           $    .02 $    .04 $    .05
stockholders
Weighted average number of                                     
common shares
                           19,469,317   19,506,886   19,453,932   19,491,274
 outstanding
Diluted earnings per
share:
 Net income from       $    .02 $    .02 $    .05 $    .06
continuing operations
 Net loss from         (.02)        -            (.02)        -
discontinued operations
 Net income            -            .02          .04          .06
 Net income available  $       $    .02 $    .03 $    .05
to common stockholders     -
Weighted average number of                                     
common shares
                           20,159,153   20,070,990   20,143,768   20,055,378
 outstanding







FOR ADDITIONAL INFORMATION, CONTACT:
For Media Information: Scott Mobley, President 317/634-3377
For Investor Relations: Paul Mobley, Chairman & CEO 317/634-3377
 or Brett Maas, Hayden IR, 646/536-7331or brett@haydenir.com

SOURCE Noble Roman's, Inc.