Noble Roman's Announces 4th Quarter & 12-Month 2021 Financial Data
Noble Roman's reported 2021 revenue of $13.9 million, up from $11.5 million in 2020. The company achieved net income before tax of $382,000, a significant improvement from a $4.5 million loss in 2020. Adjusted EBITDA rose slightly to $2.6 million. Company-owned CPP revenues increased to $8.9 million from $6.2 million, but franchising revenue fell to $4.4 million from $4.8 million. Challenges included labor shortages and COVID-19 disruptions, with net loss for Q4 2021 at $451,000, down from $4.9 million in 2020.
- Revenue increased to $13.9 million in 2021 from $11.5 million in 2020.
- Net income before tax improved to $382,000 from a loss of $4.5 million in 2020.
- Adjusted EBITDA increased to $2.6 million from $2.5 million in 2020.
- Company-owned CPP revenues grew to $8.9 million, up from $6.2 million in 2020.
- Franchising revenue declined to $4.4 million from $4.8 million in 2020.
- Net loss before taxes in Q4 2021 was $451,000, compared to a loss of $4.9 million in Q4 2020.
- Labor shortages and COVID-19 disruptions negatively impacted results.
- Margin contribution decreased from 16% to 11.3% for Q4 2021 compared to Q4 2020.
INDIANAPOLIS, IN / ACCESSWIRE / March 22, 2022 / Noble Roman's, Inc. (OTCQB:NROM), the Indianapolis based franchisor and licensor of Noble Roman's Pizza and Noble Roman's Craft Pizza & Pub ("CPP"), today announced results for the year 2021, results for the three-months ended December 31, 2021 and other strategic highlights.
Financial highlights from the year 2021 include:
- Revenues of
$13.9 million compared to revenues of$11.5 million in the same period in 2020 - Net income before tax of
$382,000 compared to a loss of$4.5 million in the same period in 2020. The$382,000 for the current year was negatively impacted by the expensing of$471,000 of pre-opening costs of new openings of additional Craft Pizza & Pub locations. During that period in 2020 the company expensed$4.9 million in valuation of receivables. The company recorded the$4.9 million reserve for collectability of all long-term receivables due to the uncertainty in the non-traditional long-term receivables from former franchisees because of the potential effect on the host facilities due to the COVID pandemic. - Adjusted EBITDA of
$2.6 million compared to$2.5 million in the same period in 2020 - Company-owned CPP revenues increased to
$8.9 million from$6.2 million in the same period in 2020 - Franchising revenue decreased to
$4.4 million from$4.8 million in the same period in 2020 - Slower than expected expansion of non-traditional units, largely because of labor shortages by the host businesses
Financial highlights from the fourth quarter 2021 include:
- Revenues of
$3.6 million compared to revenues of$3.3 million in the same period in 2020 - Net loss before taxes of
$451,000 compared to a net loss$4.9 million in the same period in 2020. See comments above regarding expensing of pre-opening costs and reserve for collectability of long-term franchise receivables. - Company-owned CPP revenues increased to
$2.5 million from$2.1 million in the same period in 2020 - Company franchising revenue nearly leveled to
$1.01 million from$1.03 million in the same period in 2020 - Labor shortages, a resurgence of COVID, and supply chain disruptions were challenges in both the CPP and non-traditional venues during the fourth quarter which negatively impacted results
Development highlights for Craft Pizza & Pub in the fourth quarter 2021 include:
- In October, the company opened an additional CPP location in north central Indianapolis
- In December, the company opened an additional CPP location in Franklin, Indiana
- The company is currently negotiating on a site for an additional company-owned CPP location
Scott Mobley, the company's President & CEO, stated, "Having come out of the difficult operating environment of the last many months, we continue to execute on our growth strategy by focusing more attention on our non-traditional franchising efforts and expanding our popular Craft Pizza & Pub concept. Taking into account the inflationary pressures from labor and ingredients, as well as the additional costs of managing supply chain emergencies, we remain extremely pleased with the financial performance of our existing Craft Pizza & Pub restaurants. At this time, given some relative relief in the emergency management status previously necessary to deal with labor, COVID and supply chain issues, we are able to redeploy human resources to the non-traditional venue while maintaining our management controls at CPP."
The following table sets forth the revenue, expense and margin contribution of the company's Craft Pizza & Pub venue and the percent relationship to its revenue:
| Three Months ended December 31, | Year-Ended December 31, | |||||||||||||||||||||||||||||||
Description | 2020 | 2021 | 2020 | 2021 | ||||||||||||||||||||||||||||
Revenue | $ | 2,126,214 | 100 | % | $ | 2,443,781 | 100 | % | $ | 6,209,279 | 100 | % | $ | 8,939,569 | 100 | % | ||||||||||||||||
Cost of sales | 476,772 | 22.4 | 513,848 | 21.0 | 1,348,084 | 21.7 | 1,868,997 | 20.9 | ||||||||||||||||||||||||
Salaries and wages | 583,000 | 27.4 | 743,396 | 30.5 | 1,354,795 | 21.8 | 2,233,376 | 25.0 | ||||||||||||||||||||||||
Facility cost including rent, common area and utilities | 289,845 | 13.6 | 379,851 | 15.5 | 947,571 | 15.3 | 1,187,984 | 13.3 | ||||||||||||||||||||||||
Packaging | 58,792 | 2.8 | 87,317 | 3.6 | 176,267 | 2.8 | 271,507 | 3.0 | ||||||||||||||||||||||||
All other operating expenses | 376,600 | 17.7 | 442,063 | 18.1 | 1,111,416 | 17.9 | 1,662,969 | 18.6 | ||||||||||||||||||||||||
Total expenses | 1,785,009 | 84.0 | 2,166,475 | 88.7 | 4,938,133 | 79.5 | 7,224,833 | 80.8 | ||||||||||||||||||||||||
Margin contribution | $ | 341,205 | 16.0 | % | $ | 277,306 | 11.3 | % | $ | 1,271,146 | 20.5 | % | $ | 1,714,736 | 19.2 | % | ||||||||||||||||
The revenue from this venue increased from
Margin contribution decreased from
The following table sets forth the revenue, expense and margin contribution of the company's franchising venue and the percent relationship to its revenue:
| Three Months ended December 31, | Year Ended December 31, | |||||||||||||||||||||||||||||||
Description | 2020 | 2021 | 2020 | 2021 | ||||||||||||||||||||||||||||
Royalties and fees franchising | $ | 845,509 | 81.8 | % | $ | 860,192 | 84.8 | % | $ | 4,102,304 | 84.7 | % | $ | 3,816,164 | 85.8 | % | ||||||||||||||||
Royalties and fees grocery | 187,494 | 18.2 | 153,639 | 15.2 | 738,925 | 15.3 | 628,662 | 14.2 | ||||||||||||||||||||||||
Total royalties and fees | 1,033,003 | 100 | % | 1,013,831 | 100 | % | 4,841,229 | 100 | % | 4,444,826 | 100 | % | ||||||||||||||||||||
Salaries and wages | 205,631 | 19.9 | 215,656 | 21.3 | 625,954 | 12.9 | 719,252 | 16.2 | ||||||||||||||||||||||||
Trade show expense | 105,000 | 10.2 | 105,000 | 10.4 | 420,000 | 8.7 | 399,000 | 9.0 | ||||||||||||||||||||||||
Travel and auto | 16,348 | 1.6 | 21,446 | 2.1 | 86,323 | 1.8 | 73,270 | 1.6 | ||||||||||||||||||||||||
All other op. expenses | 169,512 | 16.4 | 154,789 | 15.2 | 604,592 | 12.5 | 618,841 | 13.9 | ||||||||||||||||||||||||
Total expenses | 496,491 | 48.1 | 496,891 | 49.0 | 1,736,869 | 35.9 | 1,810,363 | 40.7 | ||||||||||||||||||||||||
Margin contribution | $ | 536,512 | 51.9 | % | $ | 516,940 | 51.0 | % | $ | 3,104,359 | 64.1 | % | $ | 2,634,463 | 59.3 | % | ||||||||||||||||
Total revenue from this venue declined from
Margin in this venue decreased from
The following table sets forth the revenue, expense and margin contribution of the company-owned non-traditional venue and the percent relationship to its revenue:
| Three Months ended December 31, | Year Ended December 31, | ||||||||||||||||||||||||||||||
Description | 2020 | 2021 | 2020 | 2021 | ||||||||||||||||||||||||||||
Revenue | $ | 105,474 | 100 | % | $ | 131,978 | 100 | % | $ | 470,846 | 100 | % | $ | 485,595 | 100 | % | ||||||||||||||||
Total expenses | 108,880 | 103.2 | 131,890 | 99.9 | 447,040 | 94.9 | 466,469 | 96.1 | ||||||||||||||||||||||||
Margin contribution | $ | (3,406 | ) | (3.2 | )% | $ | 88 | .1 | % | $ | 23,806 | 5.1 | % | $ | 19,126 | 3.9 | % | |||||||||||||||
Revenue from this venue increased from
Total expenses increased from
Corporate Expenses
Depreciation and amortization increased from
General and administrative expenses increased from
Interest expense increased from
Net income (loss) before income tax improved to
The company's current ratio was 2.3-to-1 as of December 31, 2021 compared to 2.6-to-1 as of December 31, 2020. The current ratio was improved significantly with the PPP funding in February 2021 and the net income from operations.
Continuing Impact of the COVID-19 Pandemic & Government Actions
The uncertainty and disruption in the U.S. economy directly and indirectly caused by the pandemic and the government response are likely to continue adversely impacting the volume and resources of both the company's CPP locations and especially that of existing and potential franchisees of non-traditional locations, at least until greater normalcy stabilizes over a significant period. This return to normalcy was interrupted during the third quarter of 2021 with the introduction of the ‘Delta variant' of COVID-19, which the company believes impacted consumer, employee and supplier behavior. This disruption was further magnified by the introduction of the ‘Omicron variant' of COVID-19 in the fourth quarter of 2021, which was the most business-disruptive variant yet. Additionally, the rising cost of labor and ingredients as well as the costs associated with managing supply chain emergencies rose dramatically in the fourth quarter of 2021 and the first half of the first quarter of 2022 and are likely to persist at abnormal levels into the future. Menu price increases were implemented on November 10, 2021 and on March 3, 2022 to help mitigate these cost pressures on company-owned Craft Pizza & Pub restaurants.
Said Scott Mobley, "There have been many periods of very difficult operating conditions during the pandemic, but the fourth quarter of 2021 continuing through the first month or so of 2022 brought the most challenging operating environment I have experienced in the last thirty years. In particular, the period from mid-November 2021 through mid-January 2022 required operating on a constant emergency footing as we responded almost daily to pricing issues, ingredient shortages, personnel shortages, COVID-19 isolations and quarantines, disruptions to distribution, and shortages of equipment parts and service. Additionally, many non-traditional franchisees operate their Noble Roman's foodservice within an underlying small business that sometimes lack the capitalization or liquidity necessary to manage through these pandemic disruptions and are most affected by the labor shortages which adversely impact their ability to operate or add a franchise to their small business. With all of that in mind, we are very pleased with our progress in new revenue generation, and we are excited to continue growth plans for CPP as well as our non-traditional franchising efforts, where we have recently been able to redeploy increased management and staffing focus."
The statements contained above 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 indicated by the forward-looking statements due to risks and uncertainties that exist in the company's operations and business environment, including, but not limited to the effects of the COVID-19 pandemic, the availability of hourly and management labor to adequately staff company-operated and franchise operations, competitive factors and pricing pressures, accelerating inflation and the cost of labor, food items and supplies, non-renewal of franchise agreements, shifts in market demand, the success of new franchise programs, including the Noble Roman's Craft Pizza & Pub format, the company's ability to successfully operate an increased number of company-owned restaurants, general economic conditions, changes in demand for the company's products or franchises, the company's ability to service its loans, the impact of franchise regulation, the success or failure of individual franchisees and changes in prices or supplies of food ingredients and labor as well as the factors discussed under "Risk Factors" contained in the company's annual report on Form 10-K. 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.
-END-
Consolidated Balance Sheets
Noble Roman's, Inc. and Subsidiaries
| December 31, | ||||||||
Assets | 2020 | 2021 | ||||||
| Current assets: | ||||||||
Cash | $ | 1,194,363 | $ | 1,263,513 | ||||
Accounts receivable - net | 879,502 | 904,474 | ||||||
Inventories | 890,556 | 994,085 | ||||||
Prepaid expenses | 395,918 | 415,309 | ||||||
Total current assets | 3,360,339 | 3,577,381 | ||||||
Property and equipment: | ||||||||
Equipment | 3,708,689 | 4,216,246 | ||||||
Leasehold improvements | 2,319,445 | 3,065,644 | ||||||
Construction and equipment in progress | 510,225 | 235,051 | ||||||
| 6,538,359 | 7,516,941 | |||||||
Less accumulated depreciation and amortization | 1,989,209 | 2,366,927 | ||||||
Net property and equipment | 4,549,150 | 5,150,014 | ||||||
Deferred tax asset | 3,104,904 | 3,232,406 | ||||||
Deferred contract costs | 834,018 | 810,044 | ||||||
Goodwill | 278,466 | 278,466 | ||||||
Operating lease right of use assets | 6,088,101 | 6,003,044 | ||||||
Other assets including long-term portion of accounts receivable - net | 201,962 | 324,402 | ||||||
Total assets | $ | 18,416,940 | $ | 19,375,757 | ||||
Liabilities and Stockholders' Equity | ||||||||
Current liabilities: | ||||||||
Accounts payable and accrued expenses | $ | 878,099 | $ | 919,157 | ||||
Current portion of operating lease liability | 412,005 | 656,146 | ||||||
Total current liabilities | 1,290,104 | 1,575,303 | ||||||
Long-term obligations: | ||||||||
Loan payable to Corbel | 7,468,709 | 7,898,941 | ||||||
Corbel warrant value | 29,037 | 29,037 | ||||||
Convertible notes payable | 574,479 | 597,229 | ||||||
Operating lease liabilities - net of current portion | 5,863,615 | 5,570,639 | ||||||
Deferred contract income | 834,018 | 810,044 | ||||||
Total long-term liabilities | 14,769,858 | 14,905,890 | ||||||
Stockholders' equity: | ||||||||
Common Stock - no par value (40,000,000 shares authorized, 22,215,512 issued and outstanding as of December 31, 2020 and December 31, 2021) | 24,763,447 | 24,791,568 | ||||||
Accumulated deficit | (22,406,469 | ) | (21,897,004 | ) | ||||
Total stockholders' equity | 2,356,978 | 2,894,564 | ||||||
Total liabilities and stockholders' equity | $ | 18,416,940 | $ | 19,375,757 | ||||
Consolidated Statements of Operations
Noble Roman's, Inc. and Subsidiaries
| Year Ended December 31, | ||||||||||||
| 2019 | 2020 | 2021 | ||||||||||
Restaurant revenue - company-owned restaurants | $ | 4,830,199 | $ | 6,209,279 | $ | 8,939,569 | ||||||
Restaurant revenue - company-owned non-traditional | 673,647 | 470,846 | 485,595 | |||||||||
Franchising revenue | 6,162,576 | 4,841,229 | 4,444,826 | |||||||||
Administrative fees and other | 38,202 | 14,310 | 14,898 | |||||||||
Total revenue | 11,704,624 | 11,535,664 | 13,884,888 | |||||||||
Operating expenses: | ||||||||||||
Restaurant expenses - company-owned restaurants | 4,250,406 | 4,938,133 | 7,224,833 | |||||||||
Restaurant expenses - company-owned non-traditional | 626,453 | 447,040 | 466,469 | |||||||||
Franchising expenses | 2,092,001 | 1,736,870 | 1,810,363 | |||||||||
Total operating expenses | 6,968,860 | 7,122,043 | 9,501,665 | |||||||||
Depreciation and amortization | 382,793 | 382,368 | 848,913 | |||||||||
General and administrative | 1,739,383 | 1,717,209 | 1,790,722 | |||||||||
Total expenses | 9,091,036 | 9,221,620 | 12,141,300 | |||||||||
Operating income | 2,613,588 | 2,314,044 | 1,743,588 | |||||||||
Interest expense | 774,565 | 1,914,344 | 1,361,625 | |||||||||
Adjust valuation of receivables | 1,300,000 | 4,941,718 | - | |||||||||
Net (loss) income before income taxes | 539,023 | (4,542,018 | ) | 381,963 | ||||||||
Income tax expense (benefit) | 917,088 | 839,928 | (127,502 | ) | ||||||||
Net (loss) income | $ | (378,065 | ) | $ | (5,381,946 | ) | $ | 509,465 | ||||
Income (loss) per share - basic: | ||||||||||||
Net income (loss) | $ | (.02 | ) | $ | (.24 | ) | $ | .02 | ||||
Weighted average number of common shares outstanding | 22,052,859 | 22,215,512 | 22,215,512 | |||||||||
Diluted income (loss) per share: | ||||||||||||
Net income (loss) (1) | $ | (.02 | ) | $ | (.24 | ) | $ | .02 | ||||
Weighted average number of common shares outstanding | 23,315,695 | 23,465,512 | 23,641,678 | |||||||||
- Net loss per share is shown the same as basic loss per share because the underlying dilutive securities have anti-dilutive effect.
SOURCE: Noble Romans, Inc.
View source version on accesswire.com:
https://www.accesswire.com/694187/Noble-Romans-Announces-4th-Quarter-12-Month-2021-Financial-Data
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