Noble Roman’s, Inc. 2nd Quarter Earnings Increased 61%; Year-To-Date Earnings Increased 68%

Noble Roman’s, Inc. 2nd Quarter Earnings Increased 61%; Year-To-Date Earnings Increased 68%

INDIANAPOLIS, Aug. 9 /PRNewswire-FirstCall/ — 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 three-month period and the six-month period ended June 30, 2007, which increased 61% and 68%, respectively, over the comparable periods in 2006.

For the quarter ended June 30, 2007, the company reported a net income of $703,506, or $.04 per share, on 17.0 million weighted shares outstanding. This compares to a net income of $435,870, or $.03 per share, on 16.3 million weighted shares outstanding for the quarter ended June 30, 2006. Total revenues for the quarter ended June 30, 2007 were $3.1 million compared to $2.3 million for the same period in 2006. The company’s pre-tax income for the second quarter 2007 was $1,065,918 compared to $660,408 for second 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.

For the six-month period ended June 30, 2007, the company reported a net income of $1,406,509, or $.08 per share, on 16.8 million weighted shares outstanding. This compares to a net income of $840,435, or $.05 per share, on 16.3 million weighted shares outstanding for the six-month period ended June 30, 2006. Total revenues for the six-month period ended June 30, 2007 were $5.9 million compared to $4.6 million for the same period in 2006. The company’s pre-tax income for the six-month period was $2,131,075 compared to $1,273,387 for the same period in 2006.

Royalty and fee income from franchising increased 43.3% and 40.9%, respectively, for the three-month and six-month periods ended June 30, 2007 compared to the same periods in 2006. The company expects its royalty and fee income to continue to increase over the next few years as it continues to open more of its dual-branded franchises in traditional locations. The company has now sold 19 territories to area developers and is currently in discussions with several other potential area developers. The development schedules for the 19 territories sold thus far call for 685 locations over the next five to seven years. In addition the company has sold 84 dual-branded franchises for traditional locations, 37 of which were sold through area developers. Royalty and fee income, less initial franchise fees and fees for area development agreements, increased 13.1% and 13.6%, respectively, for the three-month and six-month periods ended June 30, 2007 compared to the same periods in 2006.

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.

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, 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 the impact of competitors’ actions. Should one or more of these risks or uncertainties adversely affect the company 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, June 30,
2006 2007
Current assets:
Cash $920,590 $1,618,857
Accounts and notes receivable (net
of allowances of $136,462 as of
December 31, 2006 and June 30, 2007) 1,505,444 1,791,811
Inventories 215,557 201,494
Assets held for resale 381,768 394,661
Prepaid expenses 136,167 373,676
Current portion of long-term notes receivable 187,898 195,540
Deferred tax asset - current portion 1,971,875 1,971,875
Total current assets 5,319,299 6,547,914

Property and equipment:
Equipment 1,183,655 1,258,555
Leasehold improvements 105,928 107,729
1,289,583 1,366,284
Less accumulated depreciation and
amortization 653,336 702,154
Net property and equipment 636,247 664,130
Deferred tax asset (net of current portion) 8,300,244 7,854,929
Other assets including long-term portion of
notes receivable 1,882,173 1,846,608
Total assets $16,137,963 $16,913,581

Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued expenses $396,046 $349,634
Current portion of long-term note payable 1,500,000 1,500,000
Total current liabilities 1,896,046 1,849,634

Long-term obligations:
Note payable to bank (net of current
portion) 5,625,000 4,875,000
Total long-term liabilities 5,625,000 4,875,000

Stockholders' equity:
Common stock -no par value (25,000,000
shares authorized, 16,602,601 issued and
outstanding as of December 31, 2006 and
17,874,276 issued and outstanding as of
June 30, 2007) 21,393,360 21,926,497
Preferred stock (5,000,000 shares
authorized and 51,000 issued and
outstanding as of December 31, 2006 and
43,700 issued and outstanding as of
June 30, 2007) 1,978,800 1,686,800
Accumulated deficit (14,755,243) (13,424,350)
Total stockholders' equity 8,616,917 10,188,947
Total liabilities and
stockholders' equity $16,137,963 $16,913,581



Noble Roman's, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited)

Three Months Ended Six Months Ended
June 30, June 30,
2006 2007 2006 2007

Royalties and fees $1,944,822 $2,787,232 $3,812,259 $5,372,640
Administrative fees and other 18,992 18,639 34,178 36,985
Restaurant revenue 351,807 274,276 764,740 525,861
Total revenue 2,315,620 3,080,147 4,611,177 5,935,486

Operating expenses:
Salaries and wages 310,309 422,067 584,853 799,612
Trade show expense 116,906 136,048 223,636 273,834
Travel expense 96,731 122,522 192,337 201,762
Sales commissions 0 242,592 0 357,579
Other operating expenses 177,785 221,325 374,694 447,345
Restaurant expenses 341,018 255,025 737,018 489,432
Depreciation and amortization 20,857 24,359 41,616 45,707
General and administrative 393,642 423,385 788,447 848,415
Operating income 858,373 1,232,824 1,668,577 2,471,800

Interest and other expense 197,964 166,906 395,190 340,725
Income before
income taxes 660,408 1,065,918 1,273,387 2,131,075

Income tax expense 224,539 362,412 432,951 724,566
Net income 435,870 703,506 840,435 1,406,509

Cumulative preferred
dividends 40,241 34,481 81,377 75,616

Net income available
to common
stockholders $395,628 $669,025 $759,059 $1,330,893


Earnings per share - basic:
Net income $.03 $.04 $.05 $.08
Weighted average number of
common shares outstanding 16,322,136 17,009,825 16,322,136 16,839,866


Diluted earnings per share:
Net income $.03 $.04 $.05 $.07
Weighted average number of
common shares outstanding 16,963,051 19,580,118 16,963,051 19,410,159