NOBLE ROMAN’S ANNOUNCES NINTH COMPANY OPERATED “CRAFT PIZZA AND PUB” LOCATION

Noble Roman’s (NROM) announced today a lease signing for their ninth company operated Noble Roman’s Craft Pizza and Pub location, to open in Franklin, Indiana, just south of Indianapolis.

While NROM is relatively small, among publicly held restaurant chains, this forty year old brand has been re-invented over the last five years, in particular with the creation of its flagship Noble Roman’s Craft Pizza and Pub (NRCPP). Our previous write-ups, describing the Company, its history and its prospects, can be accessed using the SEARCH function on our Home Page.  As we have previously suggested, the public valuation of NROM should follow, as the Company produces  steady fundamental progress

Recall that Noble Roman’s (NROM), with the first NRCPP location, in Westfield, IN now over four years old, opened three highly successful units during 2020, bringing the current total to seven. The Franklin unit will be the second of three expected during the balance of 2021. There are three franchised locations also operating, so NROM will enter 2022 with thirteen units in their expanding NRCPP system, all within a ninety minute drive from  Indianapolis.

The latest location will be about 3,600 square feet, representing the somewhat smaller  (10-20%) version of the first NRCPPs, and this size location (costing about $750k) and including their innovative curbside “pizza valet” carry-out service,  has shown a capability of generating  annualized volumes  over $1.5M with a store level EBITDA margin at 20% or more. It is worth noting that the Pizza Valet service, introduced over a year before Covid-19, served the Company well during 2020 and should alleviate the traffic risk from any sort of resurgence concern.

The recovery from the pandemic affected 2020, including their 650 franchised non-traditional locations, and new unit growth of the NRCPP system should allow for expanding cash flow and earnings. The stock has moved up materially (from about $0.50 to $0.80-0.90) but the Enterprise Value, still under $30M, continues to be modest relative to the prospective earnings and cash flow.

Roger Lipton