Noble Roman's Announces Results of 3rd Quarter 2021
Noble Roman's reported a 25% year-over-year revenue increase for Q3 2021, totaling $3.4 million. However, the company experienced a net loss of $79,000, contrasting with last year's profit of $83,000. EBITDA stood at $488,000, down from $589,000 in 2020. Company-owned Craft Pizza & Pub revenues rose to $2.1 million, while franchising revenue decreased to $1.2 million. Labor shortages and supply chain issues posed challenges. The company plans to open additional locations and has implemented a menu price increase to address inflationary pressures.
- 25% increase in Q3 revenues year-over-year to $3.4 million.
- Company-owned Craft Pizza & Pub revenues increased to $2.1 million.
- Nine-month revenues rose to $10.3 million, up from $8.3 million in 2020.
- Anticipated continued gains in revenue and EBITDA with expansion plans.
- Net loss of $79,000 in Q3 2021 compared to net income of $83,000 in Q3 2020.
- Franchising revenue decreased to $1.2 million from $1.3 million.
- Labor shortages and supply chain disruptions impacted operational performance.
Revenues Increased
INDIANAPOLIS, IN / ACCESSWIRE / November 11, 2021 / 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 three-month and nine-month periods ended September 30, 2021 along with other strategic highlights.
Financial highlights from the third quarter 2021 include:
- Revenues of
$3.4 million compared to revenues of$2.9 million in the same period in 2020 - Net income (loss) of
$(79,000) compared to$83,000 in the same period in 2020 - EBITDA of
$488,000 compared to$589,000 in the same period in 2020 - Company-owned CPP revenues increased to
$2.1 million from$1.6 million in the same period in 2020 - Company franchising revenue decreased to
$1.2 million from$1.3 million in the same period in 2020 - Labor shortages and supply chain disruptions were challenges in both the CPP and non-traditional venues during the third quarter which negatively impacted results
Financial highlights from the nine-months ended September 30, 2021 include:
- Revenues of
$10.3 million compared to revenues of$8.3 million in the same period in 2020 - Net income before tax of
$833,000 compared to$442,000 in the same period in 2020 - EBITDA of
$2.5 million compared to$2.5 million in the same period in 2020 - Company-owned CPP revenues increased to
$6.5 million from$4.1 million in the same period in 2020 - Franchising revenue decreased to
$3.4 million from$3.8 million in the same period in 2020 - Slower than expected expansion of non-traditional units, largely because of labor shortages by the host businesses
Development highlights for Craft Pizza & Pub subsequent to the third quarter 2021 include:
- In October, the company opened an additional CPP location in north central Indianapolis
- In November, the company announced plans to open an additional CPP location in Franklin, Indiana on December 6, 2021
- The company is currently negotiating on a site for an additional company-owned CPP location
Scott Mobley, the company's President & CEO, stated, "We continue to execute on our growth strategy by continuing 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 in managing supply chain emergencies, we remain extremely pleased with the financial performance of our existing Craft Pizza & Pub restaurants. Those restaurants open greater than one year had an average annual revenue per location of approximately
For the three-month and nine-month periods ended September 30, 2021, the company reported total revenues of
Net income (loss) for the three-month and nine-month periods ended September 30, 2021 was
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 September 30, | Nine Months ended September 30, | |||||||||||||||||||||||||
| Description | 2020 | 2021 | 2020 | 2021 | ||||||||||||||||||||||
Revenue | $ | 1,583,251 | $ | 2,122,352 | $ | 4,083,064 | $ | 6,495,788 | ||||||||||||||||||
Cost of sales | 356,683 | 22.5 | 444,831 | 21.0 | 871,312 | 21.3 | 1,355,148 | 20.9 | ||||||||||||||||||
Salaries and wages | 416,490 | 26.3 | 618,729 | 29.2 | 771,795 | 18.9 | 1,489,980 | 22.9 | ||||||||||||||||||
Facility cost including rent, common area and utilities | 269,369 | 17.0 | 353,382 | 16.7 | 657,725 | 16.1 | 808,134 | 12.4 | ||||||||||||||||||
Packaging | 42,096 | 2.7 | 69,792 | 3.3 | 117,474 | 2.9 | 184,191 | 2.8 | ||||||||||||||||||
Third-party delivery fees | 71,036 | 4.5 | 97,998 | 4.6 | 179,367 | 4.4 | 284,215 | 4.4 | ||||||||||||||||||
All other operating expenses | 221,080 | 14.0 | 308,989 | 14.6 | 555,449 | 13.6 | 936,690 | 14.4 | ||||||||||||||||||
Total expenses | 1,376,753 | 87.0 | 1,893,721 | 89.4 | 3,153,122 | 77.2 | 5,058,358 | 77.8 | ||||||||||||||||||
Margin contribution | $ | 206,498 | $ | 228,631 | $ | 929,942 | $ | 1,437,430 | ||||||||||||||||||
Margin contribution from this venue was decreased
Total revenue from this venue was
Gross margin contribution from this venue was
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 September 30, | Nine Months ended September 30, | |||||||||||||||||||||||||
| Description | 2020 | 2021 | 2020 | 2021 | ||||||||||||||||||||||
Royalties and fees franchising | $ | 1,063,864 | $ | 1,019,883 | $ | 3,256,796 | $ | 2,955,974 | ||||||||||||||||||
Royalties and fees grocery | 188,639 | 15.1 | 157,893 | 13.4 | 551,430 | 14.5 | 475,021 | 13.9 | ||||||||||||||||||
Total royalties and fees | 1,252,503 | 100.0 | 1,177,776 | 100.0 | 3,808,226 | 100.0 | 3,430,995 | 100.0 | ||||||||||||||||||
Salaries and wages | 205,127 | 16.4 | 207,046 | 17.6 | 420,322 | 11.1 | 503,596 | 14.7 | ||||||||||||||||||
Trade show expense | 105,000 | 8.4 | 105,000 | 8.9 | 315,000 | 8.3 | 294,000 | 8.6 | ||||||||||||||||||
Travel and auto | 21,720 | 1.7 | 13,539 | 1.1 | 69,975 | 1.8 | 51,823 | 1.5 | ||||||||||||||||||
All other operating expenses | 150,548 | 12.0 | 166,213 | 14.2 | 435,081 | 11.4 | 464,053 | 13.5 | ||||||||||||||||||
Total expenses | 482,395 | 38.5 | 491,798 | 41.8 | 1,240,379 | 32.6 | 1,313,472 | 38.3 | ||||||||||||||||||
Margin contribution | $ | 770,108 | $ | 685,978 | $ | 2,567,847 | $ | 2,117,523 | ||||||||||||||||||
Total revenue from this venue decreased from
Gross margin, as described in the paragraph above, 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 September 30, | Nine Months ended September 30, | |||||||||||||||||||||||||
| Description | 2020 | 2021 | 2020 | 2021 | ||||||||||||||||||||||
Revenue | $ | 99,255 | $ | 120,316 | $ | 365,372 | $ | 353,617 | ||||||||||||||||||
Total expenses | 108,935 | 109.8 | 126,765 | 105.4 | 338,161 | 92.6 | 334,579 | 94.6 | ||||||||||||||||||
Margin contribution | $ | (9,679) | (9.8)% | $ | (6,449) | (5.4)% | $ | 27,211 | $ | 19,038 | ||||||||||||||||
Gross revenue from this single-unit venue increased from
Total expenses increased from
Corporate Expenses
Depreciation and amortization was
General and administrative expenses were
Interest expense increased from
Net income (loss) before income tax decreased from
The company's current ratio was 4.6-to-1 as of September 30, 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 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 with rapidly rising cases attributed to the ‘Delta variant' of COVID-19, which the company believes impacted consumer, employee and supplier behavior. Additionally, the rising cost of labor and ingredients as well as the costs associated with managing supply chain emergencies are likely to persist. A menu price increase was implemented on November 10, 2021 to help mitigate these cost pressures on company-owned Craft Pizza & Pub restaurants.
Said Scott Mobley, "I believe that the third quarter of 2021 ranks as the most challenging operational period in the last 30 years. Not only were we continuing to deal with government and health advisory restrictions on our operations, commodity shortages and inflation, manufacturing disruptions and dislocations in distribution, we believe government policies put into place early this year and announced further in August resulted in additional and immediate staffing difficulties already associated with the pandemic directly. Additionally, many non-traditional franchisees operate their Noble Roman's foodservice within an underlying small business that sometimes lacks the capitalization or liquidity necessary to manage through these pandemic disruptions, and are most affected by the labor shortage which adversely impact their ability to 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 announce the continuing growth plans for CPP as well as our non-traditional franchising efforts."
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.
| Noble Roman's, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (Unaudited) | ||||||||
Assets | December 31, 2020 | September 30, 2021 | ||||||
Current assets: | ||||||||
Cash | $ | 1,194,363 | $ | 1,789,270 | ||||
Accounts receivable - net | 879,502 | 930,955 | ||||||
Inventories | 890,556 | 919,168 | ||||||
Prepaid expenses | 395,918 | 371,848 | ||||||
Total current assets | 3,360,339 | 4,011,241 | ||||||
Property and equipment: | ||||||||
Equipment | 3,708,689 | 3,905,644 | ||||||
Leasehold improvements | 2,319,445 | 2,478,385 | ||||||
Construction and equipment in progress | 510,225 | 530,430 | ||||||
| 6,538,359 | 6,914,459 | |||||||
Less accumulated depreciation and amortization | 1,989,209 | 2,272,498 | ||||||
Net property and equipment | 4,549,150 | 4,641,961 | ||||||
Deferred tax asset | 3,104,904 | 3,104,904 | ||||||
Deferred contract cost | 834,018 | 826,258 | ||||||
Goodwill | 278,466 | 278,466 | ||||||
Operating lease right of use assets | 6,088,101 | 5,667,679 | ||||||
Other assets including long-term portion of receivables - net | 201,962 | 281,878 | ||||||
Total assets | $ | 18,416,940 | $ | 18,812,387 | ||||
Liabilities and Stockholders' Equity | ||||||||
Current liabilities: | ||||||||
Accounts payable and accrued expenses | $ | 878,099 | $ | 482,585 | ||||
Current portion of operating lease liability | 412,005 | 393,473 | ||||||
Total current liabilities | 1,290,104 | 876,058 | ||||||
Long-term obligations: | ||||||||
Term loan payable to Corbel | 7,468,709 | 7,789,992 | ||||||
Warrant value | 29,037 | 29,037 | ||||||
Convertible notes payable | 574,479 | 591,167 | ||||||
Operating lease liabilities - net of short-term portion | 5,863,615 | 5,488,876 | ||||||
Deferred contract income | 834,018 | 826,258 | ||||||
Total long-term liabilities | 14,769,858 | 14,725,330 | ||||||
Stockholders' equity: | ||||||||
Common stock - no par value (40,000,000 shares authorized, 22,215,512 issued and outstanding as of December 31, 2020 and as of September 30, 2021) | 24,763,447 | 24,784,310 | ||||||
Accumulated deficit | (22,406,469 | ) | (21,573,311 | ) | ||||
Total stockholders' equity | 2,356,978 | 3,210,999 | ||||||
Total liabilities and stockholders' equity | $ | 18,416,940 | $ | 18,812,387 | ||||
| Noble Roman's, Inc. and Subsidiaries Condensed Consolidated Statements of Operations (Unaudited) | ||||||||||||||||
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
| 2020 | 2021 | 2020 | 2021 | |||||||||||||
Revenue: | ||||||||||||||||
Restaurant revenue - company-owned restaurants | $ | 1,583,251 | $ | 2,122,352 | $ | 4,083,064 | $ | 6,495,788 | ||||||||
Restaurant revenue - company-owned non-traditional | 99,255 | 120,316 | 365,372 | 353,617 | ||||||||||||
Franchising revenue | 1,252,503 | 1,177,776 | 3,808,226 | 3,430,995 | ||||||||||||
Administrative fees and other | 3,073 | 3,734 | 11,191 | 10,803 | ||||||||||||
Total revenue | 2,938,082 | 3,424,178 | 8,267,853 | 10,291,203 | ||||||||||||
Operating expenses: | ||||||||||||||||
Restaurant expenses - company-owned restaurants | 1,376,754 | 1,893,721 | 3,153,123 | 5,058,358 | ||||||||||||
Restaurant expenses - company-owned non-traditional | 108,935 | 126,765 | 338,161 | 334,579 | ||||||||||||
Franchising expenses | 482,394 | 491,798 | 1,240,379 | 1,313,472 | ||||||||||||
Total operating expenses | 1,968,083 | 2,512,284 | 4,731,662 | 6,706,409 | ||||||||||||
Depreciation and amortization | 98,279 | 142,133 | 262,505 | 448,892 | ||||||||||||
General and administrative expenses | 460,392 | 505,992 | 1,254,186 | 1,286,530 | ||||||||||||
Total expenses | 2,526,753 | 3,160,409 | 6,248,353 | 8,441,831 | ||||||||||||
Operating income | 411,329 | 263,769 | 2,019,500 | 1,849,372 | ||||||||||||
Interest expense | 327,831 | 343,184 | 1,577,285 | 1,016,214 | ||||||||||||
Income (loss) before income taxes | 83,498 | (79,415 | ) | 442,215 | 833,158 | |||||||||||
Income tax expense (benefit) | - | - | (81,983 | ) | - | |||||||||||
Net income (loss) | $ | 83,498 | (79,415 | ) | $ | 524,198 | $ | 833,158 | ||||||||
Earnings per share - basic: | ||||||||||||||||
Net income (loss) before income tax | $ | .00 | $ | .00 | $ | .02 | $ | .04 | ||||||||
Net income (loss) | $ | .00 | $ | .00 | $ | .02 | $ | .04 | ||||||||
Weighted average number of common shares outstanding | 22,215,512 | 22,215,512 | 22,215,512 | 22,215,512 | ||||||||||||
Diluted earnings per share: | ||||||||||||||||
Net income (loss) before income tax | $ | .00 | $ | .00 | $ | .02 | $ | .04 | ||||||||
Net income (loss) | $ | .00 | $ | .00 | $ | .03 | $ | .04 | ||||||||
Weighted average number of common shares outstanding | 23,765,512 | 23,522,028 | 23,765,512 | 23,522,028 | ||||||||||||
FOR ADDITIONAL INFORMATION, CONTACT:
For Media Information:
Scott Mobley, President & CEO
smobley@nobleromans.com
For Investor Relations:
Paul Mobley, Executive Chairman
pmobley@nobleromans.com
Mike Cole, Investor Relations
949-444-1341
mike.cole@mzgroup.us
SOURCE: Noble Romans, Inc.
View source version on accesswire.com:
https://www.accesswire.com/672252/Noble-Romans-Announces-Results-of-3rd-Quarter-2021
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