Noble Roman's, Inc. (BULLETIN BOARD: NROM) , the Indianapolis based franchisor of Noble Roman's Pizza and Tuscano's Italian Style Subs, today announced earnings for the quarter ended March 31, 2007, which increased 74% over the comparable period in 2006.
For the quarter ended March 31, 2007, the company reported a net income of $703,003, or $.04 per share, on 16.7 million weighted shares outstanding. This compares to a net income of $404,565, or $.02 per share, on 16.3 million weighted shares outstanding for the quarter ended March 31, 2006. Total revenues for the quarter ended March 31, 2007 were $2.9 million compared to $2.3 million for the same period in 2006. The company's pre-tax income for the first quarter 2007 was $1,065,157 compared to $612,978 for first quarter 2006. Although the company recognizes income tax expense on its financial statements, it will not pay any income taxes on approximately the next $22 million of pre-tax income due to its available tax credits.
Royalty and fee income from franchising increased 38% from the first quarter of 2006 to the first quarter of 2007. The Company expects its royalty and fee income to increase significantly over the next few years as it continues to open more of its dual-branded franchises in traditional locations. The company has now sold 12 territories to area developers and is currently in discussions with several other potential area developers. The development schedules for the 12 territories sold thus far call for 429 locations over the next six years. In addition the company has sold 70 dual- branded franchises for traditional locations, 31 of which were sold through area developers.
The company is marketing development territories to area developers for the growth of its traditional dual-branded concept. Area developers have the exclusive right to develop the dual-branded traditional concept in their territory, subject to company approval of each franchisee and location. The area developers pay a development fee of $.05 per population in their development area, and receive 30% of the initial franchise fee and 2/7ths of the royalty from the locations developed pursuant to those agreements. In order to maintain the rights to develop the territory, each area developer must meet the minimum development schedule stipulated in the Area Development Agreement. In addition to losing their investment in the territory, if an area developer does not meet the required development schedule, they lose their right to develop the territory and their share of the royalty income on any locations already open.
Noble Roman's has sold franchises in 45 states from coast-to-coast within the United States. In addition, it has sold franchise agreements for military bases in Puerto Rico, Guam and Italy, and for entertainment facilities and convenience stores in Canada. As in the past several years, the company plans to maintain its focus on awarding franchise agreements for both Noble Roman's Pizza and Tuscano's Italian Style Subs in non-traditional venues such as hospitals, military bases, universities, convenience stores, attractions, entertainment facilities, water parks, casinos, airports, travel plazas, office complexes and hotels. However, in addition, the company is now marketing dual-branded Noble Roman's and Tuscano's for stand-alone, traditional locations for more rapid growth.
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