Noble Roman’s, Inc. reported its financial results for the third quarter and the nine months ended September 30, 2024, highlighting a mixed performance in revenue and profitability compared to the previous fiscal period.

For the third quarter of 2024, total revenue increased to $3.88 million, up from $3.74 million in Q3 2023. This growth was driven by a slight rise in restaurant revenue, which reached $2.20 million, compared to $2.18 million in the same quarter of the prior year. Franchising revenue also saw an increase, rising to $1.44 million from $1.31 million. However, for the nine-month period, total revenue grew to $11.45 million from $11.04 million, despite a decline in restaurant revenue from $6.64 million to $6.41 million, indicating challenges in same-store sales due to consumer spending weaknesses.

Operating income for Q3 2024 decreased to $416,623 from $513,947 in Q3 2023, while net income rose to $193,314 from $154,516, benefiting from a lack of current and deferred tax expenses. For the nine months ended September 30, 2024, net income significantly dropped to $163,695 from $1.35 million in the same period of 2023, which had included a $1.46 million reimbursement from the Employee Retention Tax Credit (ERTC). Without this refund, the company would have reported a net loss for the nine months ended September 30, 2023.

Total operating expenses increased for both the third quarter and the nine-month period, with Q3 expenses rising to $2.79 million from $2.61 million, and nine-month expenses increasing from $6.44 million to $8.01 million. The increase in costs was attributed to higher product costs, particularly cheese, and increased labor costs due to a competitive labor market.

Strategically, Noble Roman’s has focused on expanding its non-traditional franchise operations, opening 51 new locations in 2024, with plans for an additional 20 to 25 franchise locations by year-end. The company entered a Development Agreement with Majors Management, LLC to develop 100 franchise locations over three years, with 43 already operational.

The company is also pursuing new financing to repay existing loans, aiming for a reduction in effective interest rates. As of September 30, 2024, Noble Roman’s had approximately $6.9 million in variable interest-bearing debt, with a current ratio of 0.3-to-1, down from 1.1-to-1 at the end of 2023.

Overall, while Noble Roman’s experienced revenue growth in certain areas, profitability was impacted by increased operating expenses and the absence of significant tax credits that had bolstered prior year results.