OTC:NROM
NOBLE ROMANS INC
A resilient industrial manufacturer balancing volatile earnings with consistent revenue growth and substantial non-cash adjustments to offset cash flow pressures.
Key Metrics
Investment Thesis
Bull Case
Investors may consider the stock due to consistent revenue stability over three years and strong operating cash generation relative to net income losses. The presence of significant non-cash adjustments and a positive operating profit suggests underlying business value that is currently obscured by financing structure costs.
Bear Case
The high debt load with $14.6M in total liabilities against only $2.2M in equity creates severe solvency risks, especially given the negative net income trend and interest expense drag. Investors should be wary of the cash burn from investing activities and the potential for further dilution or distress if revenue growth cannot cover fixed financial obligations.
About NOBLE ROMANS INC
NOBLE ROMANS INC operates within the industrial manufacturing sector, leveraging a diverse product portfolio to generate revenue primarily through its core operational segments. The company has demonstrated resilience in maintaining stable revenue levels around $15M despite facing periodic net losses driven by high interest expenses and significant debt repayments.
Analysis
Management Discussion
The company reported revenue growth from $14.5M in 2022 to $15.1M in 2024 while navigating a challenging profit environment where high interest costs and debt servicing drove net losses of $3.17k. Cash flow from operations remained positive at $896k, partially offset by heavy investing outflows and financing activities that reduced total cash holdings to $793k.
Industry Overview
The industrial manufacturing industry is characterized by cyclical demand patterns where companies with strong balance sheets thrive while highly leveraged entities face margin compression. Market leaders often leverage intangible assets and economies of scale to navigate periods of high interest rates, though smaller players struggle with liquidity constraints similar to NOBLE ROMANS INC.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Revenue | $14.5M | $14.4M | $15.1M |
| Cost of Revenue | $0 | $0 | $0 |
| Gross Profit | $14.5M | $14.4M | $15.1M |
| Operating Expenses | $14.0M | $10.9M | $13.7M |
| Operating Income | $427.7K | $3.4M | $1.5M |
| G&A | $2.2M | $1.5M | $2.6M |
| Stock-Based Comp | $28.2K | $20.4K | $27.7K |
| D&A | $450.6K | $379.5K | $499.6K |
| Other OpEx | $11.9M | $9.4M | $11.0M |
| Non-Operating Income | $-1.6M | $-2.0M | $-1.6M |
| Interest Expense | $1.6M | $1.7M | $1.6M |
| Pre-Tax Income | $-1.2M | $1.5M | $-160.5K |
| Income Tax | $-142.4K | $0 | $-157.4K |
| Continuing Ops | $-1.1M | $1.5M | $-3.2K |
| Discontinued Ops | $0 | $0 | $0 |
| Net Income | $-1.1M | $1.5M | $-3.2K |
| Minority Interest | $0 | $0 | $0 |
| Net to Common | $-1.1M | $1.5M | $-3.2K |
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Current Assets | $3.0M | $3.8M | $3.0M |
| Cash & Equivalents | $785.5K | $872.3K | — |
| Accounts Receivable | $350.2K | — | $586.6K |
| Inventory | $997.9K | $965.8K | $987.0K |
| Other Current Assets | $898.7K | $2.0M | $1.4M |
| Long-Term Assets | $15.3M | $14.6M | $13.8M |
| PP&E (Net) | $4.7M | $4.3M | $3.9M |
| Goodwill | $278.5K | $278.5K | $278.5K |
| Operating Leases | $5.7M | $4.9M | $4.2M |
| Other LT Assets | $4.7M | $5.1M | $5.4M |
| Total Assets | $18.3M | $18.5M | $16.8M |
| Current Liabilities | $2.3M | $3.6M | $3.3M |
| Current Leases | $799.2K | $799.2K | $870.1K |
| Other Current Liab | $1.5M | $2.8M | $2.4M |
| Long-Term Liabilities | $14.2M | $12.7M | $11.2M |
| LT Operating Leases | $5.1M | $4.4M | $3.5M |
| Other LT Liab | $9.1M | $8.3M | $7.7M |
| Total Liabilities | $16.5M | $16.3M | $14.6M |
| Shareholders' Equity | $1.9M | $2.2M | $2.2M |
| Retained Earnings | $-23.0M | $-22.6M | $-22.7M |
| Total L&E | $18.3M | $18.5M | $16.8M |
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Net Income (CFO) | $-1.1M | $1.5M | $-3.2K |
| Non-Cash Adjustments | $819.1K | $312.8K | $2.0M |
| Working Capital Changes | $266.6K | $-204.5K | $-1.1M |
| Cash from Operations | $29.6K | $1.6M | $897.0K |
| Capital Expenditures | $507.6K | $13.8K | — |
| Cash from Investing | $-507.6K | $13.8K | $-88.3K |
| Debt Repayments | — | — | $887.4K |
| Cash from Financing | $0 | $-1.5M | $-887.4K |
| FX Effect | $0 | $0 | $0 |
| Net Change in Cash | $-478.0K | $86.8K | $-78.7K |
| Beginning Cash | $1.3M | $785.5K | $872.3K |
| Ending Cash | $785.5K | $872.3K | $793.6K |
Frequently Asked Questions
How does NOBLE ROMANS INC make money?
Core manufacturing operations generating gross profit, specialized equipment sales contributing to other operating expenses, and strategic licensing or IP monetization represented by goodwill assets.
What are the main risks for NROM?
Substantial interest expense burden of $1.6M significantly impacting net income, high debt repayments exceeding $887k affecting liquidity, negative retained earnings deficit of $22.7M limiting equity flexibility, and elevated current liabilities outpacing current assets.
What is NROM's competitive advantage?
Significant accumulated intangible assets including $278k in goodwill indicating established brand value, strong non-cash adjustments of $2M enhancing operational efficiency metrics, and a robust gross profit margin relative to revenue scale.
Related Companies
Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.