FY 2011 FY 2012 FY 2013 YTD 2013 YTD 2014

Noble Roman’s Inc.
OTC BB: NROM
December 2014
4/23/2015
1
Safe Harbor
The statements contained in this presentation 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, non-renewal of franchise
agreements, shifts in market demand, general economic conditions, changes in
purchases of, or demand for, the Company's products, licenses or franchises, the
success or failure of individual franchisees and licensees, changes in prices or
supplies of food ingredients and labor, and the success or failure of its recently
developed stand-alone take-n-bake operation. Should one or more of these risks
or uncertainties materialize, or should underlying assumptions or estimates prove
incorrect, actual results may differ materially from those described herein as
“anticipated,” “believed,” “estimated,” “expected” or “intended.” The Company
undertakes no obligation to update the information in this presentation for
subsequent events.
4/23/2015
2
Investor Highlights
Sustainable Profitability, Accelerating Growth
FY 2013
FY 2012
FY 2011
Total Revenue
$7.53M
$6.90M
$6.36M
$6.11M
$5.81M
Operating Income
$2.85M
$2.42M
$1.90M
$2.49M
$2.30M
Operating Margin
37.9%
35.0%
29.9%
40.7%
39.6%
$2.65M
$2.00M
$1.51M
$2.35M
$2.15M
12/31/2013
12/31/2012
12/31/2011
9/30/2014
12/31/2013
$3.85M
$5.07M
$5.63M
$2.94M
$3.85M
Net income from
continuing operations
before income taxes
Outstanding debt plus
preferred stock
9Mo 2014 9Mo 2013
(1) Shown as net income before income taxes because the company will not pay any income tax on the next
$23 million in net income as a result of available deferred tax credits
*Throughout this presentation, all results are shown excluding all adjustments for the reserve for collectability of
receivables from the Heyser case Plaintiffs in 2011, 2012 and 2013 relating to locations that have not been in operation
since 2008.
4/23/2015
3
Investor Highlights
Sustainable Profitability, Accelerating Growth
Powerful
Business Model
Licensing-franchising business model
Superior financial performance while alleviating the
risk of owning and operating restaurants
Positioned in Fastest-Growing Industry Segment
Take-N-Bake (TNB) is a growth segment of the pizza
industry
Projecting Accelerating Growth
Projecting total revenue growth of ~16-17%:
•
5-7% growth in royalties/fees from non-traditional
•
10-15% growth in royalties/fees from grocery TNB
•
300-350% growth in royalties/fees from standalone TNB
4/23/2015
Diversified Platform
For Growth
Three Platforms for Growth
Non-Traditional Franchise Locations
• Non-traditional locations (expect revenue growth of
5% to 7% in 2014 vs. 2013)
Grocery Store Take-n-Bake
• Grocery store TNB (expect revenue growth of 7% to
15% in 2014 vs. 2013)
Stand-Alone Take-n-Bake
• Ramped from zero in 2012 to 25 franchised units
open as of 12/3/14
4
Who We Are
Well-Known Brand; Positioned in Industry Growth Area
4/23/2015
5
Revenue Sources
Take-N-Bake:
Grocery
Non-Traditional Franchise
$ in millions / % of total revenue
63.3%
$4.0
63.4%
56.8%
$4.4
$4.3
56.3%
$3.3
Take-N-Bake:
Stand Alone
$ in millions / % of total revenue
57.1%
$3.5
18.4%
$ in thousands / % of total revenue
19.7% 18.0%
$1.4
$1.4
18.1%
$1.2
$1.0
18.5%
10.1%
$614
$1.1
4.1%
$310
$164
0.0%
FY 2011 FY 2012 FY 2013
YTD
2013
YTD
2014
FY 2011 FY 2012 FY 2013
YTD
2013
YTD
2014
FY$10
2012
2.8%
FY 2013
YTD 2013 YTD 2014
Continual focus on profitable revenue expansion through three primary vehicles…
• Non-traditional franchising and licenses
• Licensing the Company’s Take-n-Bake Program in grocery stores
• Take-n-Bake Program for stand-alone locations
4/23/2015
6
Industry
• 2013 U.S. pizza sales: $37.4 billion
Top 5 U.S. Pizzeria’s by 2013 Sales
– 1.6% increase from 2012
• 53.2% of pizza outlets
independently owned and control
40.3% of total pizza industry sales
• Store unit count
– 71,387 as of September 2013, up 469
units from September 2012
• Take-N-Bake is one of the fastest
growing segments of the industry
• TNB can accept food stamps/EBT
Pizza Hut
$5.70
Domino's
$3.50
Papa John's
$2.40
Little Caesars
Papa Murphy's Take-'N'-Bake
$1.70
$0.700
$ in billions
– 1 of every 7 people in the U.S. using
food stamps/EBT
All data: October 2013 PMQ Magazine
4/23/2015
7
Market Share
Americans Enjoy Home-cooked Pizza
By Type
By Company
25%
36%
40%
45%
30%
Carry out
4/23/2015
24%
Delivery
Dine-in
"Big 4"
Independents
Other Chains
8
Take-n-Bake Category
Take-n-Bake concept consists primarily of two channels
Stand-Alone
Grocery
Take-n-Bake is the growth portion of the industry
Competition
•
Papa Murphy’s Take ‘n Bake is market leader with >$785 M in FY 2013 sales
― Operated 1,414 corporate-owned and franchised locations as of 12/31/13
― Average per store sales: $554,019
― 1,202 traditional locations operated for a full 12 months for year ending 1/1/2012
•
4/23/2015
“Big 4” unlikely to enter TNB…formulations not conducive to TNB and would compete with delivery franchises
9
Take-N-Bake: Grocery
Continual focus on revenue expansion
• Interest has increased
significantly after
displaying the new
packaging and new
products
$ in millions / % of total revenue
18.4%
19.7%
17.3%
$1.4
$1.4
18.0%
$1.2
$1.0
FY 2011
4/23/2015
FY 2012
FY 2013
YTD 2013
18.5%
$1.1
YTD 2014
• In discussions with
grocery store chains
representing ~7,000
locations…
• …And with two large
grocery store
distributors, if signed
would add several
thousand more locations
10
Take-N-Bake: Stand-Alone
• EBT: Advantage vs. other pizza chains
– Able to accept EBT (food stamp) payments in
all locations
– 1 in 6.5 Americans on food stamps
• Low-cost:
– Only $90-160k estimated total investment
after landlord allotments (approximately ½ of
the investment for Papa Murphy’s)
 Food cost: 31%-34% of sales (record high
commodity prices now)
 Very low labor requirements
 Minimal equipment requirement
 Only ~ 1,000 sq. ft of space required
4/23/2015
11
Take-N-Bake: Stand-Alone
Quarterly Growth
Locations
35
31
29
13
8
3
8
Mar-13
Aug-13
16
Nov-13
Locations Open
4/23/2015
22
25
Aug-14
Dec-14
• Development is still relatively
new. Continuing to look at
further enhancements to
improve sales and make
operation even more appealing
• Focusing our efforts on adding
new locations in markets
where existing franchises have
already been sold to aid in
market penetration
• Further enhancements to this
venue are ongoing
Locations To Open
12
Take-N-Bake: Stand-Alone
Business Model
UpfrontFee
Ongoing Fees
Annual Total
Per Unit
4/23/2015
$18K upfront fees
Approximately 11% royalty and fees in the aggregate
Expected gross revenues of $400-600K per unit per year.
Results in $44-66K in royalties to Noble Roman’s per location
per year
13
Royalties and Fees
Ongoing Royalties & Fees
Up-Front Fees
From Franchise/License
$6.0
$5.2
All Concepts
$6.2
$5.5
$883
$5.5
$736
$ in millions
$ in thousands
$4.7
$377
$374
$255
FY 2010
4/23/2015
FY 2011
FY 2012
FY 2013 9Mo 2013 9Mo 2014
$318
FY 2010 FY 2011 FY 2012 FY 2013 9Mo 20139Mo 2014
14
Marketing
Revenue
Expansion
Focus on revenue
expansion through
franchising
4/23/2015
R&D
Outreach
Leverage the results of
extensive research and
development , i.e., our unique,
proprietary dough, our tasty
menu items, etc.
Aggressively communicate the
Company's competitive advantages
to its target market of potential
franchisees. Expand franchising by
promoting our concepts, by
attending trade shows, direct mail
and by advertising on various webbased lead generation
15
Expenses
Expenses remain relatively flat as top-line is accelerating
$4.845
$4.898
$4.879
Interest Expense
$3.659
$3.760
G&A
$ in millions
Depr. & Amort.
Restaurant Expenses
Other Op Expenses
Sales Commissions
Travel
Trade Shows
Salaries & Wages
2011
4/23/2015
2012
2013
-
YTD 2013 YTD 2014
16
Historical EBITDA
$2.96
$ in millions
$2.53
$2.02
2011
4/23/2015
$2.39
$2.57
2012
2013
YTD 2013
YTD 2014
17
Historical Income
from Continuing Operations Before Income Taxes
Due to deferred tax credits, the Company will not pay any income taxes on
approximately the next $23 million in net income before taxes
$ in millions
$2.65
$1.51
2011
4/23/2015
$2.15
$2.00
$2.35
2012
2013
YTD 2013
YTD 2014
18
Balance Sheet Summary
9/30/14 12/31/13 12/31/12 12/31/11
Assets
Cash
Accounts & Notes Receivable - Net
Inventories
Other
Total Current Assets
207
2,105
337
1,845
4,495
158
1,269
338
1,722
3,487
144
1,080
461
2,040
3,725
233
885
339
1,931
3,388
443
487
273
308
8,425
3,918
17,281
9,332
3,068
16,374
9,239
3,924
17,161
9,613
3,915
17,224
Accounts Payable & Accrued Expenses
Notes Payable
Total Stockholders' Equity
937
2,939
13,405
819
3,851
11,703
511
4,271
12,379
665
4,831
11,728
Total Liabilities & Stockholder's Equity
17,281
16,374
17,161
17,224
Net Property & Equipment
Deferred Tax Asset (net of current portion)
Other Assets
Total Assets
Liabilities & Stockholders' Equity
4/23/2015
19
Capital Structure
9/30/2014
4/23/2015
Weighted Average Common Stock
19,813,618
Dilution as a result of options
1,312,634
Diluted weighted average common shares
21,126,252
20
Management
Paul W. Mobley – Executive Chairman and Chief Financial Officer
1991 – 2014: Chairman of the Board, CEO, CFO
1974 – present: Director
1981 – 1997: President, CEO and CFO of the Company
A. Scott Mobley - Chief Executive Officer and President
1997 – 2014: President and Chief Operating Officer
1992 – present: Director
1986-1997 Vice President Marketing
Troy Branson - Executive Vice President of Franchising
1997 – present: EVP of Franchising
1992 – 1997: Director of Business Development
1987 – 1992: Owner of Branson-Yoder Marketing Group
Mitchell Grunat - Vice President of Franchise Services
2002– present: VP of Franchise Services
2001– 2002: Chief Operating Officer of Lanter Eye Care
2000-2001: Business Development Officer for Midwest Bankers
James D. Bales - Vice President of Operations
2008– present: VP of Operations
2004– 2008: Various positions at Noble Roman’s with increasing responsibility
1989 – 2004: Management roles in marketing and operations with TCBY Yogurt
Michael Lauren – National Director, Franchise Sales
2012- present: National Director, Franchise Sales
4/23/2015
21
Investor Summary
Business model that
delivers solid
financial
performance while
mitigating risk
4/23/2015
Sustainable
profitability;
accelerating growth
Positioned in the
fastest growing
segment of the
pizza industry –
Take ’N Bake
Experienced
management
team
22