Noble Roman s Announces Second Quarter 2012 Earnings

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1 NEWS BULLETIN RE: NOBLE ROMAN'S, INC. 1 Virginia Avenue, Suite 300 Indianapolis, IN FOR ADDITIONAL INFORMATION, CONTACT: For Media Information: Scott Mobley, President 317/ For Investor Relations: Paul Mobley, Chairman & CEO 317/ Noble Roman s Announces Second Quarter 2012 Earnings (Indianapolis, Indiana) August 13, Noble Roman's, Inc. (OTC/BB: NROM), the Indianapolis based franchisor of Noble Roman s Pizza and Tuscano s Italian Style Subs, today announced results for the quarterly period ended June 30, A summary of results for the three months ended June 30, 2012 compared to the same period in 2011 follows: Total revenue was $1,893,590 compared to $1,880,490. Net income was $342,122, or $.02 per share, compared to $388,919, or $.02 per share. The slight drop in net income was primarily the result of interest expense being $101,485 more during this period in 2012 compared to The additional interest expense included $93,455 from expensing the unamortized loan closing cost from the origination of the old loan which was repaid and $29,760 to terminate the rate swap agreement related to the old loan. On May 15, 2012 the company obtained a new $5 million, 48-month term-loan and used the proceeds to repay existing bank indebtedness and borrowing from an officer of the company. This change lowered the effective rate on the company s debt from approximately 8% per annum to approximately 4.25%. Interest expense for future quarters will be approximately $61,000, or less as the new loan continues to amortize, compared to approximately $199,000 for the quarter just ended. Net income before taxes was $566,520, or $.03 per share, compared to $644,016, or $.03 per share. Although the company provides for income tax expense in its financial statements, it is currently not paying any income tax as a result of its deferred tax credits and will not pay any income tax on the next $25 million of net income. Operating margin on total revenue was 40.4% compared to 39.4%. Upfront franchisee fees and commissions were $63,489 compared to $83,339. Royalties and fees less upfront fees were $1,703,925 compared to $1,648,463. This included an increase in royalties and fees from grocery store take-n-bake pizza of $106,086, or 40%, an increase in royalties and fees from nontraditional locations other than grocery stores of $41,344, or approximately 4%, and decrease in royalties and fees from traditional locations of $91,967, or 34%. A summary of results for the six months ended June 30, 2012 compared to the same period in 2011 follows: Total revenue was $3,731,252 compared to $3,682,506. Net income was $707,201, or $.04 per share, compared to $756,933, or $.04 per share. The drop in net income was primarily the result of interest expense being $99,062 more during this period in 2012 compared to 2011, as discussed in the previous section above. Interest expense for the next six-month period will be approximately $120,000, or less as the new loan continues to amortize, compared to approximately $295,000 for the six-month period just ended. Net income before taxes was $1,171,057, or $.06 per share, compared to $1,253,411, or $.06 per share. Although the company provides for income tax expense in its financial statements, it is currently not paying any income tax as a result of its deferred tax credits and will not pay any income tax on approximately the next $25 million of net income.

2 Operating margin on total revenue was 39.4% for the six-month periods ended June 30, 2012 and Upfront franchisee fees and commissions were $147,667 compared to $145,963. Royalties and fees less upfront fees were $3,323,313 compared to $3,260,626. This included an increase in royalties and fees from grocery store take-n-bake pizza of $177,379, or 27%, an increase in royalties and fees from nontraditional locations other than grocery stores of $5,220, or less than 1%, and decrease in royalties and fees from traditional locations of $90,412, or 16%. Significant Achievements On May 15, 2012, the Company entered into a Credit Agreement with BMO Harris Bank, N.A. for a term loan in the amount of $5,000,000 which is repayable in 48 equal monthly principal installments of $104, plus interest which commenced on June 15, 2012 with a final payment due on May 15, Interest on the unpaid principal balance shall bear interest at a rate per annum of LIBOR plus 4%. The proceeds from the term loan, net of certain fees and expenses associated with obtaining the term loan, were used to repay existing indebtedness to Wells Fargo Bank, N.A. and to an officer of the company. By refinancing its debt, the company reduced its effective interest rate on outstanding debt from approximately 8% to 4.25%. On July 19, 2012, the Company entered into an agreement with an existing independent franchisee for three standalone take-n-bake prototype locations. The three units called for under this agreement are to open in three western suburbs of Indianapolis. Initial site work for the first location is nearly complete and is currently expected to open within the next three months. On August 7, 2012, the company entered into another franchise agreement with another independent franchisee for another stand-alone take-n-bake prototype location to be located in a northern suburb of Indianapolis. Site location work of this location has already begun as well. In 2012, the company has signed franchise agreements for 27 new non-traditional locations other than grocery stores including 12 locations with Huck s, a 110-unit convenience store chain located in five states, plus an agreement with The Pantry, Inc., a convenience store chain of over 1,650 locations. In 2012, the company has signed supply agreements for 267 additional grocery store take-n-bake locations. Since the company introduced take-n-bake pizza in grocery store chains in late 2009 through August 8, 2012, the company has signed agreements for 1,206 grocery store locations to operate the take-n-bake pizza program and has opened the taken-bake pizza program in approximately 945 of these locations. Update on Litigation: The Court granted summary judgment in favor of the company and against all of the Plaintiffs in a long-running lawsuit styled Kari Heyser, Fred Eric Heyser, Meck Enterprises, LLC, et al vs. Noble Roman s, Inc., et al, filed in Superior Court Hamilton County, Indiana in June Plaintiffs filed numerous motions and an appeal to the Indiana Court of Appeals, in an attempt to reverse the December 23, 2010 summary judgment. All of the motions failed and the Indiana Court of Appeals dismissed the appeal with prejudice. The fraud charges against the company and certain of its officers are dismissed entirely and the Plaintiffs have no appeal rights remaining. The company has also been granted partial summary judgment as to liability on the company s counter claims against the Plaintiffs in excess of $5 million. The Court determined that the Plaintiffs/Counterclaim-Defendants were liable to the company for direct damages and consequential damages, including future royalties for breach of their franchise agreements. In addition, the Court determined that, as a matter of law, the company was entitled to recover attorney s fees associated with obtaining preliminary injunctions, fees resulting from the prosecution of the company s counterclaims and fees for defending against the fraud claims. The amount of the award is to be determined at trial. The statements contained in this press release 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

3 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 taken-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 obligations to update the information in this press release for subsequent events. - END

4 Noble Roman's, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (Unaudited) Assets December 31, 2011 June 30, 2012 Current assets: Cash $ 233,296 $ 240,763 Accounts and notes receivable - net 884,811 1,125,052 Inventories 338, ,649 Assets held for resale 252, ,552 Prepaid expenses 278, ,951 Deferred tax asset - current portion 1,400,000 1,400,000 Total current assets 3,387,824 3,831,967 Property and equipment: Equipment 1,147,109 1,155,906 Leasehold improvements 12,283 12,283 1,159,392 1,168,189 Less accumulated depreciation and amortization 851, ,249 Net property and equipment 308, ,940 Deferred tax asset (net of current portion) 9,613,399 9,184,058 Other assets 3,914,523 4,283,492 Total assets $ 17,224,131 $ 17,588,457 Liabilities and Stockholders' Equity Current liabilities: Current portion of long-term note payable to bank $ 3,575,000 $ 1,250,000 Accounts payable and accrued expenses 665, ,209 Total current liabilities 4,240,054 1,498,209 Long-term obligations: Note payable to bank (net of current portion) - 3,645,833 Note payable to officer 1,255,821 - Total long-term liabilities 1,255,821 3,645,833 Stockholders' equity: Common stock no par value (25,000,000 shares authorized, 19,469,317 issued and outstanding as of December 31, 2011 and 19,489,317 as of June 30, 2012) 23,239,976 23,298,570 Preferred stock (5,000,000 shares authorized and 20,625 issued and outstanding as of December 31, 2011 and June 30, 2012) 800, ,250 Accumulated deficit (12,311,970) (11,654,405) Total stockholders' equity 11,728,256 12,444,415 Total liabilities and stockholders equity $ 17,224,131 $ 17,588,457

5 Noble Roman's, Inc. and Subsidiaries Condensed Consolidated Statements of Operations (Unaudited) Three Months Ended Six Months Ended June 30, June 30, Royalties and fees $ 1,731,802 $ 1,767,414 $3,406,589 $3,470,980 Administrative fees and other 11,018 5,496 19,395 12,743 Restaurant revenue 137, , , ,529 Total revenue 1,880,490 1,893,590 3,682,506 3,731,252 Operating expenses: Salaries and wages 247, , , ,983 Trade show expense 93, , , ,124 Travel expense 52,589 45,459 99,474 94,374 Other operating expenses 176, , , ,209 Restaurant expenses 129, , , ,272 Depreciation and amortization 36,311 28,561 49,860 59,225 General and administrative 403, , , ,387 Total expenses 1,139,267 1,128,378 2,233,236 2,265,574 Operating income 741, ,212 1,449,270 1,465,678 Interest and other expense 97, , , ,621 Income before income taxes 644, ,520 1,253,411 1,171,057 Income tax expense 255, , , ,856 Net income 388, , , ,201 Cumulative preferred dividends 24,411 24,683 49,364 49,636 Net income available to common stockholders $ 364,508 $ 317,439 $ 707,569 $ 657,565 Earnings per share basic: Net income $.02 $.02 $.04 $.04 Net income available to common stockholders $.02 $.02 $.04 $.03 Weighted average number of common shares outstanding 19,469,317 19,489,317 19,446,113 19,483,383 Diluted earnings per share: Net income $.02 $.02 $.04 $.04 Net income available to common stockholders $.02 $.02 $.04 $.03 Weighted average number of common shares outstanding 20,183,876 20,041,048 20,160,672 20,035,114