$NROM. How hard is it running a micro cap restaurant chain during a pandemic?? Read this from their transcript..

A. Mobley

Okay. Well, thank you, Paul. I'll start by discussing some of the labor, supply chain and inflationary issues we experienced in the fourth quarter since, once again, that kind of absorbed an [ outside ] portion of our time. In fact, the period from about mid-November through mid-February was the toughest period yet to manage as it relates to both COVID and the supply chain issues. The peak problem period within that was just before Thanksgiving through the first week of January.

The Omicron variant hit Indiana hard, and it was obviously impacting manufacturing and distribution across the country. In fact, the situation in Central Indiana was severe enough that the Navy and the National Guard both assisted at least 2 area hospitals by providing additional staff and temporary patient facilities. The largest Indianapolis area hospital, for example, is at one point operating at 120% of capacity.

So with that in mind, let me just walk you through 2 examples of the types of crisis we are managing to kind of put a face to the issue, one relating to supply chain and one relating directly to COVID.

So we'll start with the supply chain case that occurred on Thursday prior to Christmas, we received an urgent call around 3:00 p.m. from our primary distributors saying they were completely out of Noble Roman's proprietary pizza sauce and that a trained railway car from California with some 12,000 bags of Noble Roman's pizza sauce is missing and had not been delivered. By missing, I mean completely lost somewhere. Their delivery trucks at the distributor were already loaded with everything else in Toledo, and they needed to leave to run to Indiana to deliver all the Central Indiana Noble Roman's locations with an hour -- within an hour and they wanted to know what they wanted us to do.

So obviously, that was a huge problem on 2 levels. First, we obviously can't make pizzas without pizza sauce. Secondly, taking 12,000 bags a sauce out of commission was a real issue since tomatoes are only harvested and made into sauce once a year, and that's in June. So taking 12,000 bags out of service could have been a real serious problem before we got to June.

So our crisis team met, and we quickly created 4 action steps. First sign up with our product development assistant, and I quickly worked to identify the closest possible substitute that the distributor had on hand and had the distributor of that product on the trucks to fill those outstanding orders. It is better to have some sauce even if it was the wrong sauce rather than risk no sauce at all. Second, we went to work identifying any reserves of Noble Roman's pizza sauce at other distributors, and they uncovered about a 10-day supply in Illinois. We were able to divert a truck from Chicago bound for Toledo that same day to make the extra hour trip to the warehouse to load this extra sauce and freight it back to Toledo.

For the third step, we went to work locating the missing railcar which we finally were able to locate the next morning, actually sitting in Ohio all by itself on a side spur railroad track. Over the Christmas Eve holiday, we were able to talk the switchyard controller directly into getting a freight engine to move the railcar into the unloading dock, and then we were able to track down a trucking company that was still operating and had manpower to go and remove the sauce from the railcar and haul it off to the distributor. The fourth and final stuff, we got our distributor to drive an additional truck to Indianapolis the following week with the Noble Roman's sauce we'd located, and then they went and picked -- dropped that off and picked up all the substitute sauce that we had delivered previously. So that's just one example of the manufacturing and distribution hurdles we faced. And during this time, there are typically multiple of these supply chain emergencies, similar types of problems that occur each week.

COVID was directly an issue during this time as well. Work absences were the highest ever in our restaurants during the pandemic where such events occurred just after Christmas and the entire 3-person management teams at 2 separate Craft Pizza & Pub restaurants became ill with COVID during the same time period. At the second unit, the problem was compounded by a loss of nearly all of the crew as well, and we also had simultaneous equipment failures at the unit. The primary HVAC unit, which is the heat, went down, and 2 of the 3 ovens went down with electronic failures as a result of that. We've been addressing isolations and quarantines with our staff during the pandemic by diverting and sending in our nontraditional field managers as well as volunteer office staff. But all of our field managers were out ill, 2 of our office staff volunteers were out as well. And in addition, our director of operations was also out with COVID.

So we were able to shift staff from other units to keep the first unit under full operation, but the second unit presented some insurmountable issues. We were actually closed for about 24 -- not quite 24 hours, and then we operated with Pizza Valet service for another couple of days until we could gear up full service.

Parts of the HVAC were backordered for 2 months from China. We ended up having to scavenge the area for the part we needed. And the oven service firms were also hit hard with COVID. So we had a difficult time finding someone to get out to service the oven, but we probably got one of the down oven started on our own. So with 2 of the 3 operating, we're able to get going once again.

But freight issues, they are a lot less, now we're running into certain types of manufacturing issues that relate to raw materials. For example, we have a supply chain emergency this week that we're dealing with. That has to do with the shortage of aluminum, and the remaining manufacturer of aluminum pans for take-and-bake -- pizza take-and-bake has had to cease operations because they've not been unable to obtain supply of raw aluminum. So we're having to do our work around with that.