Noble Roman's, Inc. · OTC:NROM
Noble Roman's — Shareholder Meeting (June 2015)
50 slides from Noble Roman's's shareholder meeting presentation, Jun 23, 2015
Slide 1: Annual Shareholder's Meeting June 23, 2015
Annual Shareholder’s Shareholder s Meeting June 23, 2015
Slide 2: Topics: business model, venues, macro factors, strategy
We W will ill examine i the h history, hi current status and d anticipated developments in the company's business strategy. strategy We will look at: The h Business Modeld l Developments in Primary Business Venues External Macro Factors Anticipated Strategic Direction Changes Moving into 201
Slide 3: Two Brands
Two Brands Noble Roman’s Pizza in 1972 (Nameplate Brand) Tuscano Tuscano’ss Subs in 1999 (Supporting Role) Originated as a Single Pizzeria in Bloomington, IN Focused on Development & Marketing of High Quality Products “The The Better Pizza People People” “Quality You can Taste!” 3
Slide 4: Traditional Pizza
Traditional Pizza Live Yeast or Fully‐Prepared High Protein Grain Content Develops Great Yeast Flavor & Aroma Tender Inside, Thinly Crisp Outer Shell America’s Favorite Crust Style y 4
Slide 5: Deep-Dish Sicilian Pizza
Deep‐Dish Sicilian Pizza Live Yeast Only Very “Active” Dough Rises Up Thick in a Pan Coated with Olive Oil Rectangular g Shape p ▪ Sauce on Top ▪ Caramelized Cheese Edge 5
Slide 6: SuperThin Pizza
SuperThin Pizza Fully Prepared (Live Yeast in R&D) About 3/32” Thin Bakes Crispy & Firm Accentuates Toppings pp g 6
Slide 7: Gluten Free Crust
Gluten Free Crust Thin Crust Uses Rice Flour & Potato Starch Made in Certified Facility Topped Edge‐to‐Edge Designed g for Lifestyle y Segment g 7
Slide 8: Breadsticks & Spicy Cheese Dip
Breadsticks & Spicy Cheese Dip Same Dough Formulation as Traditional Pizza Spicy Cheese Dip Addictive! ▪ Also Marinara or Buttery Garlic Prepared Simply ▪ Cornmeal Dusted Bottom ▪ Light Misting with Salt on Top 8
Slide 9: Additional Menu Items
Additional Menu Items Breakfast Line‐Up Chicken Wings ▪ Bone‐In and Boneless Chicken Wrap Baked Subs Lasagna Cinnamon Round Pastry 9
Slide 10: Non-Traditional Foodservice
Non‐Traditional d l Foodservice d Providing Pizza & Subs When and Where People Wantt tto C W Consume Food F d Not Confined to a Typical Stand‐Alone Facility Not Confined to Fully‐Prepared Fully Prepared or Cooked Food Often Inside Another Business Facility Often Sold Separate from or Wit
Slide 11: Venue Segmentation
Venue V Roughly R hl Correlates C l to the h Term T “Retail “R il Channel of Distribution” A Way of Segmenting Market Opportunities Segmentation Allows Improved Franchise/License Sales Targeting Segmentation Allows for Service & Product g g Targeting Venue Peaks & Troughs can Vary by Venue
Slide 12: Non-Traditional (Host Premise) Foodservice
Non‐Traditional N T di i l (Host (H Premise) P i ) Foodservice F d i Convenience Stores Bowling B li Centers C Entertainment Facilities Grocery Store Take‐n‐Bake Take n Bake Deli Pizza Component Program for Grocery Deli Departments Stand‐Alone “You Bake or We Bake” Facilities Dedicat
Slide 13: A Look at the Underlying Premise of Each Venue
A Look at the Underlying Premise off Each Venue Along with the Latest Developments with h Sample l Photographs h h & Materialsl 13
Slide 14: Noble Roman's Advantages
Noble Roman’s Advantages Serves as a Revenue and/or Services Center ▪ Attractive Way to Increase Profits and/or Provide Value‐Add Services More Revenue Sources ▪ Menu items for breakfast, lunch, snacks & dinner Excellent Cost Structure ▪ Low initial investment & good on‐going on going food c
Slide 15: Non-Traditional Venue Newer Products
Non-Traditional Venue Newer Products
Slide 16: Convenience Store Location, Ashland, OR
Convenience Store Location Ashland, OR
Slide 17: Rensellaer & Monticello, IN
Rensellaer & Monticello, IN 17
Slide 18: Consumer Rationale for Take-n-Bake
Consumer Rationale for f Take‐n‐Bake Fresh Made – Consumer watches their pizza being made Fresh baked – Consumer experiences the pizza at i peakk quality, its li straight i h ffrom the h oven Control – Consumer decides the moment they wish i h to t enjoy j the th pizza i Convenience – Purc
Slide 19: R&D and Test Pilots Evolving the Format
A Lot off Time and R&D has Been Spent in the Last 9 Months Continuing to Evolve the Format, Including l d a Number b off Test Pilots l that h Have Moved to Various Stages of Implementation. 19
Slide 20: Tested During 2014, Now Adopted
Tested During 2014 – Now Adopted by a Significant Number of Units Data Suggests that h a Significant f Percentage of Customers are Utilizing this Service Are Now Designing Ways to More Fully ll Integrate this Service into Operating Theme 20
Slide 21: Hand-Crafted Doughballs Test Marketed
g Test Marketed Move from Fully‐Prepared Began y p Crusts to Live‐Yeast Doughballs in Late 2014 Allows “Hand‐Crafting”g of Doughg in Front of Customers for Traditional Pizzas Fits Better with the Overall Theme of “Fresh Made, Fresh Baked ”Which is Important in the g Take‐n‐Bake Segment 21
Slide 22: Hand-Rolled Breadsticks
Started at the Same Time as the Hand‐Crafted Traditional Pizzas Uses the Same Doughballs Further adds to the “Artisan” Feel and the “Fresh” Theme that is Important to Take‐n‐Bake 22
Slide 23: Special Event Introducing Hand-Crafted Theme
Special Event Designed to Introduce the “Hand‐ Hand Crafted” and “Hand‐Rolled” Theme to the Communityy Saturday & Sunday Event Free Pizza to the 1st 100 People to attend 50% off Pizza Sale All Day Both Days Series of Special Events ▪ Costume Contest ▪ Hand‐Tossing Contest ▪ Box Folding Con
Slide 24: Roman Pizza Parties
Roman Pizza Parties sss. FZ to the ist to bring in this email 100 people *bingin is ena . : | ‘eae All day March 14th & 15th Win FREE Pizza for an Entire Year!
Slide 25: Roman Pizza Parties
Roman Pizza Parties
Slide 26: New 10" Lunch Pizza
New 10 10” Lunch Pizza Hand‐Crafted from Doughballs Offered Off d at a Value V l Price Pi “Jumbo Combo” Options ▪ With hSSoft f Drinkk ▪ With Hand‐Rolled Breadsticks 26
Slide 27: 12 New & Different Gourmet Pizzas
12 New & Different Gourmet Pizzas 1 New Pizza Each Month for 12 Months State Themed Customers Have a Road Map Passport Stamps and Prizes for Trying all 12 Pizzas 27
Slide 28: State-Themed Gourmet Pizzas
© vermont - ~ Mapte Glazed Pork Maple Syrup, Canadian Bacon, Sausag i Philly Steak 2 Cheese Steak. Green Pepper, Onion, Spic F ccorsia =limmy's Chickes Peanut Chicken, Red Beil Pepper, Peanuts, Cheddar Cheese 3 (ouisiana - Bayou S&rimp & Andesiile Garlic Butter Sauce, Louisiana Hot Sauce, Shrimp, An
Slide 29: Points of Differentiation
Noble Roman Roman’ss Points of Differentiation: Most programs are thaw and serve ▪ Qualityy issues, especially p y with tomato sauce ▪ Essentially frozen pizza that has been thawed Noble Roman’s program is component assembly ▪ Pizzas are made from Noble Roman’s ingredients on site ▪ “Made Fres
Slide 30: Grocery Distribution Product and Payment Flow
Noble — Grocery Roman's ai ti Distributors annette 4 Z — =—. Noble Roman’s, Inc. ———+» Product Flow => Payment Flow 30
Slide 31: New Grocery Merchandising
New Grocery Merchandising
Slide 32: Port Washington, WI and Woodbine, GA
Port Washington, WI Woodbine, GA 32
Slide 33: Typical Grocery Location, Odessa, TX
Typical Grocery Location Odessa, TX 33
Slide 34: Hot Program for Groceries
Hot Program for Groceries Award winning pizza made fresh for you! = wees vo lloreliae 34
Slide 35: Medford, WI Recent Take-n-Bake & Hot Installation
Recent Take-n-Bake & Hot Installation Medford, WI ATG Tee 35
Slide 36: Promotion Featuring Free Pizzas
Promotion Featuring 100 Free Pizzas Creates Initial Excitement & Customer Awareness Creates Initial Product Movement Promoted Through Bag Stuffers with Bounce‐Backs 36
Slide 37: Equipment and Graphics Fulfillment
• Thru 3rd Party Vendor • Using Leasing Company • Shipped Direct to Licensee • Noble Roman’s as the Middleman to Coordinate and Expedite • Graphics ship with marketing kit; installed on opening set‐up 37
Slide 38: General Economic Factors, Commodities, Retail Gas Margins
General Economic Factors Sluggish First Quarter GDP Forecasts Better for Remainder 2015 Commodities More Contained in General vs 2014 Retail Gas Margins Only Slightly Less Attractive than Last Year 38
Slide 39: Commodity Price Changes
Last Year Last 12 Months Year‐to‐Date Beef +18.0% +2.4% ‐14.1% Pork +43 1% +43.1% ‐30 30.1% 1% +5 9% +5.9% Wheat ‐5.1% ‐35.7% ‐13.4% Crude Oil +11.6% ‐40.9% +31.7% Eggs +50% est Source: www.indexmundi.com on June 14, 2015 39
Slide 40: Retail Gas Margins and Volumes
Current C Margin M i Year Y Average A per Gallon Price per Gallon Last Year $.16 $3.44 This Year $.15 $2.36 • Retail Gas Volumes Down Slightly 2015 vs 2014 • Retail Gas Volumes Down 7.9% from High in 2005 • Retail Gas Volumes about Equal to 1998 Volumes • Gas Volume Per Capita Down 21.7% from High i
Slide 41: Cheese Prices Current & Historical
Current & Historical $ per # $2.04 $2.00 $1.80 $1.74 $1.70 $1.65 $1.60 $1.48 $1.40 $1 20 $1.20 Last Year This Year 2015 Low 2015 High 10 Yr Avg Source: www.cheesereporter.com on June 19, 2015 41
Slide 42: Cost of Pepperoni on 14" Pizza
Cost o 4 Pepperoni of 14" eppe o Pizza a $3.70 $3.65 $3.60 6 $3.55 $3.50 $3.45 $3.40 $ $3.35 $3.30 $3.25 At 10 Yr Avg At $2.04/lb At $1.70/lb At $1.48/lb Last Year Current This Year Low Traditional Venue Using Indy‐Based Distributed Costs; Assumes Use of Fully‐Prepared Crust. 42
Slide 43: Maintain 3 Venue Approach with Refinements
Maintain 3 Venue Approach with Refinements f Intensify Operational Contact with Franchisees h & Licensees Set Capability for Accelerated Ramp‐Up in Revenue Growth h 43
Slide 44: Refinement of Stand-Alone You Bake, We Bake Venue
Refinement f off the Stand‐Alone “You Bake, We Bake” Venue Fuller ll Integration off Baking k Service Data shows significant percentages of consumers opting for baking service where offered Should allow for significant regional opportunities with i h established bli h d brand b d name and d
Slide 45: New Operational Structure by Geographic Service
Establish New Operational Structure Focused on Geographic Service to Franchisees and Licensees Relationship model Fixed geographic territories in areas of concentration ▪ Grocery Venue ▪ Non Non‐Traditional Traditional Venue Goal of expanding average relationship and driving additional p per
Slide 46: Expansion of Franchise & License Sales Capacity
Significant f Expansion off Franchise & License Sales Capacity Add sales force – near/mid term expansion Examine broker representation 46
Slide 47: 2015 Revenue Growth Estimate by Category
Category Growth Estimate Royalties & Fees from Host Premise Venue 4% to 6% Royalties & Fees from Grocery Venue 70% to 90% Royalties & Fees from Stand‐Alone Venue 17% to 25% Total 2015 Revenue Growth Estimate Approx. 20% Up $1.4m to $2.0m Total $9.3m to $9.9m 47
Slide 48: Operating Expenses + Interest
Operating O i Expenses E + Interest I (in Thousands) $5,600 $5,400 $5,200 $5,000 $4,800 $4,600 $4,400 $4,200 $4,000 $3,800 $3 600 $3,600 2011 2012 2013 2014 2015 est 48
Slide 49: Debt Balances and Blended Rate
Balance Rate Blended Rate June 30, 2012 Bank Loan $ 4,895,833 4.25% Note: Preeferred Stock redem Preferred Stock 825,000 12.0% Total June 30, 2012 $ 5,720,833 5.37% June 30, 2013 Bank Loan $ 3,645,833 4.20% mption effective Occtober 31, 2013 Preferred Stock 825,000 12.0% Total June 30, 2013 $ 4,470,
Slide 50: Forward-looking statements
The statements contained in this presentation concerning the company company'ss future revenues, revenues profitability, profitability financial resources, market demand and product & venue development are forward‐looking statements (as such term is defined in the Private Securities Litigation Refor