updated 3/15/2011 6:17:30 PM ET 2011-03-15T22:17:30

INDIANAPOLIS, March 15, 2011 (GLOBE NEWSWIRE) -- Noble Roman's, Inc. (OTCBB:NROM), the Indianapolis based franchisor of Noble Roman's Pizza and Tuscano's Italian Style Subs, today announced results for the year 2010. Net income from continuing operations was $1.5 million, or $.08 per share basic and $.08 per share diluted, on weighted average number of common shares outstanding of 19.4 million and diluted weighted average shares of 20.1 million for the year ended December 31, 2010. This compares to a net income from continuing operations for the year ended December 31, 2009 of $1.7 million, or $.09 per share basic and $.08 per share diluted on weighted average number of shares outstanding of 19.4 million and diluted weighted average number of shares of 20.0 million. For the year ended December 31, 2010, the Company recorded a loss on discontinued operations in the amount of $1.2 million resulting in a net income for the year of $310 thousand, or $.02 per share basic and diluted. There was no loss on discontinued operations in 2009.

Total revenue decreased from $7.5 million in 2009 to $7.3 million in 2010. Royalties and fees less initial franchise fees and equipment commissions were approximately $6.7 million in 2009 and $6.3 million in 2010. Ongoing royalties and fees from non-traditional franchises decreased from $6.1 million in 2009 to $5.6 million in 2010 and ongoing royalties and fees from traditional franchises decreased from $578 thousand in 2009 to $281 thousand in 2010. However, ongoing royalties and fees from take-n-bake in grocery stores increased from $35 thousand in 2009 to $463 thousand in 2010. One-time fees for franchise fees and equipment commissions increased from $242 thousand in 2009 to $377 thousand in 2010. The decrease in ongoing fees from traditional franchises resulted from a decrease in the number of franchises in operation. The decrease in ongoing fees from non-traditional franchises was primarily the result of a decline in same store sales during the first half of 2010. The increase in ongoing royalties and fees from the take-n-bake program in grocery stores was a result of increasing the number of grocery locations from 46 at the beginning of 2010 to 404 at the end of 2010. As of today, the company has signed license agreements for 565 grocery store locations to operate the take-n-bake program.

In 2009, the company developed a take-n-bake pizza as an addition to its menu offering. The take-n-bake pizza is designed as an add-on component for new and existing convenience store franchisees or licensees and as a stand-alone offering for grocery stores. The program was launched in September of 2009, and in addition to the 565 locations now licensed to carry the program, the company is in discussions with numerous other grocery store owners and distributors. In January of 2011, the company introduced five carton-to-shelf retail items that require no assembly at the grocery store to compliment the take-n-bake program. These five items are Noble Roman's Pasta Sauce, Noble Roman's Flavor-Aged Parmesan Cheese, Noble Roman's Deep-Dish Lasagna with Italian Sausage, Noble Roman's Spicy Cheese Sauce and Noble Roman's Cheesy Stix. The take-n-bake program requires a supply agreement with the grocer as a means whereby the company can control the quality of its pizzas assembled in the grocer's deli. Since the new carton-to-shelf retail items require no on-site assembly, the company is offering them to any grocer without a supply agreement and regardless of whether they carry the take-n-bake program.

The company previously announced signing an agreement with a grocery distribution company which services primarily California, Washington, Oregon and Alaska. To date, the company has signed 156 of their grocers to the take-n-bake program, and is continuing to add additional locations on a regular basis. Early in 2011 the company signed an agreement with two other grocery distribution companies, one of which is located in Wisconsin and the other in Connecticut. In a very short time they have already signed 53 of their grocers. In addition, the company is currently in discussion with several other grocery distribution companies. The company's experience thus far indicates that if it is successful in obtaining additional grocery distributor agreements, it will further accelerate the company's growth in grocery stores licensed for the take-n-bake program.

The company believes that it has an opportunity for increasing unit growth and revenue within its non-traditional venues such as hospitals, military bases, universities, convenience stores, entertainment facilities, attractions and travel plazas during 2011. The growth in this area has been limited the last two years primarily due to the economic environment; however, the company is experiencing some renewed interest in these venues thus far in 2011.

As previously reported, in an order dated December 23, 2010, the Superior Court in Hamilton County, Indiana granted summary judgment in favor of the company and against all of the plaintiffs in a long-running lawsuit styled Kari Heyser, Fred Eric Heyser, Meck Enterprises, LLC, et al vs. Noble Roman's, Inc., et al, filed in Superior Court Hamilton County, Indiana on June 19, 2008. As a result, the plaintiff's allegations of fraud against the company and certain of its officers were determined to be without merit. In addition to the fraud claim, one group of franchisee plaintiffs asserted a separate claim under the Indiana Franchise Act. The court denied summary judgment on this claim finding the existence of genuine issue of material fact and did not render any opinion on the merits of that claim. The plaintiffs have filed a motion with the court asking it to correct errors and reconsider the order for summary judgment. The company has opposed that motion and a ruling by the court remains pending.

The company's counter-claims against the defendants in the approximate amount of $3.6 million plus attorney fees, cost of collection and prejudgment interest, as well as punitive damages in certain instances, continue to be pending.  The company intends to prosecute the counter-claims and execute on any judgments against all counter-claim defendants.

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 market acceptance of recently introduced products, competitive factors and pricing pressures, the current litigation with certain former traditional franchisees, non-renewal of franchise agreements, 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 changes in prices or supplies of food ingredients and labor as well. In addition, the company has no previous experience selling its products to retail channels and there can be no assurance that grocers will stock them or that customers will buy them. 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.

Consolidated Balance Sheets
Noble Roman's, Inc. and Subsidiaries
     
   December 31, 
Assets 2009 2010
Current assets:    
Cash  $333,204 $337,044
Accounts and notes receivable - net  1,343,500 920,304
Inventories 239,006 316,913
Assets held for resale 243,527 246,278
Prepaid expenses 241,852 235,778
Deferred tax asset - current portion 1,050,500 1,400,000
Total current assets 3,451,589 3,456,317
     
Property and equipment:    
Equipment 1,133,312 1,139,050
Leasehold improvements 96,512 12,283
  1,229,824 1,151,333
Less accumulated depreciation and amortization 790,134 784,282
Net property and equipment 439,690 367,051
Deferred tax asset (net of current portion) 10,703,594 10,150,558
Other assets including long-term portion of notes receivable - net 2,087,644 2,920,853
Total assets  $16,682,517 $16,894,779
Liabilities and Stockholders' Equity    
Current liabilities:    
Current portion of long-term note payable $1,500,000 $1,875,000
Accounts payable  119,938 394,843
Accrued expenses 314,728 259,476
Total current liabilities 1,934,366 2,529,319
     
Long-term obligations:    
Note payable to bank (net of current portion) 4,125,000 2,625,000
Note payable to officer   -- 855,821
Total long-term liabilities 4,125,000 3,480,821
     
Stockholders' equity:    
Common stock – no par value (25,000,000 shares authorized, 19,412,499 issued and outstanding as of December 31, 2009 and 19,419,317 as of December 31, 2010) 23,074,160 23,116,317
Preferred stock (5,000,000 shares authorized, 20,625 issued and outstanding as of December 31, 2009 and December 31, 2010) 800,250 800,250
Accumulated deficit (13,251,559) (13,031,928)
Total stockholders' equity  10,622,851 10,884,639
Total liabilities and stockholders' equity $16,682,517 $16,894,779
       
Consolidated Statements of Operations      
Noble Roman's, Inc. and Subsidiaries
  Year Ended December 31,  
  2008 2009 2010
Royalties and fees $7,561,440 $6,949,192 $6,725,769
Administrative fees and other 48,084 63,503 40,312
Restaurant revenue 1,432,435 536,885 505,022
Total revenue  9,041,959 7,549,580 7,271,103
       
Operating expenses:      
Salaries and wages 1,366,861 1,057,675 970,652
Trade show expense 488,012 309,827 301,940
Travel expense 386,018 134,350 157,973
Sales commissions 62,960 3,627 --
Other operating expenses 880,464 741,749 719,316
Restaurant expenses 1,369,139 496,614 501,976
Depreciation and amortization 91,736 78,777 66,578
General and administrative  1,624,022 1,485,356 1,610,123
Operating income  2,772,747 3,241,605 2,942,545
       
Interest and other expense 616,333 466,944 440,512
 Income before income taxes from continuing operations  2,156,414  2,744,661  2,502,033
       
Income tax expense  733,180 1,099,044 991,056
 Net income from continuing operations 1,423,234 1,675,617 1,510,977
       
Loss from discontinued operations net of tax benefit of $2,508,433 for 2008 and $787,520 for 2010 (3,824,397)  -- (1,200,664)
Net income (loss)  (2,401,163) 1,675,617 310,313
Cumulative preferred dividends 66,181 66,000 90,682
Net income (loss) available to common stockholders $(2,467,344) $1,609,617 $219,631
       
Earnings per share - basic:
Net income from continuing operations $.07 $.09 $.08
Net loss from discontinued operations net of tax benefit $(.20) $ --  $(.06)
Net income (loss) $(.13) $.09 $.02
Net income (loss) available to common stockholders $(.13) $.08 $.01
Weighted average number of common shares outstanding 19,213,522 19,412,499 19,414,367
       
Diluted earnings per share:      
Net income from continuing operations $.07 $.08 $.08
Net loss from discontinued operations net of tax benefit  $(.19) $ -- $(.06)
Net income (loss) $(.12) $.08 $.02
Weighted average number of common shares outstanding 20,147,150 19,950,027 20,094,961
CONTACT: For Media Information:
         Scott Mobley, President
         317/634-3377
         
         For Investor Relations:
         Paul Mobley, Chairman & CEO
         317/634-3377

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