Core Viewpoint - Rocky Mountain Chocolate Factory, Inc. (RMCF) has experienced a significant decline in stock price following its fiscal third-quarter results, raising investor concerns about its financial performance and future prospects [1] Financial Performance - In the third quarter of fiscal 2025, RMCF reported total revenues of $7.9 million, a 2.5% increase from $7.7 million in the prior-year period [2] - Durango product sales increased by 4.9% to $6.4 million, while Royalty and marketing fees decreased by 11.5% to $1.1 million [2] - Total product and retail gross profit remained flat at $0.7 million, with gross margins slightly compressed from 10.2% to 10% due to higher supply and labor costs [3] - The company posted a net loss of $0.8 million, or $(0.11) per share, consistent with the previous year's net loss [3] - Adjusted EBITDA improved to $41,000 from a loss of $0.3 million in the prior year, indicating progress in operational efficiency [3] Cost Management - RMCF's total costs and expenses increased by 1.4% to $8.6 million, influenced by non-recurring professional expenses [5] - The company maintained stable gross profit despite margin pressures, reflecting effective cost management initiatives [5] Cash Flow and Inventory - RMCF ended the quarter with a cash balance of $1.1 million, down from $2.1 million, due to investments in operational improvements and inventory buildup [6] - Accounts receivable rose to $4.1 million from $2.2 million, and inventory increased to $5.7 million from $4.4 million, aligning with the strategy to support franchisee needs [6] Management Initiatives - Interim CEO Jeff Geygan highlighted the implementation of a new ERP system aimed at improving inventory management, production scheduling, and financial reporting [7] - The company is also focusing on rebranding efforts, including new store designs and updated packaging to enhance customer engagement [7] Market Factors - RMCF attributed margin pressures to increased supply and labor costs, alongside investments in strategic initiatives [8] - E-commerce sales nearly tripled year over year during the holiday season, driven by targeted marketing campaigns [8] Future Outlook - Management indicated that ongoing efforts to streamline operations and improve franchisee support would position the company for long-term growth, although near-term cost pressures remain [9] - RMCF secured a three-year $6 million credit facility to support investments in equipment and growth initiatives [10] - The company plans to open two new stores and a kiosk in Chicago, Charleston, and Brandon, demonstrating its commitment to expanding its franchise footprint [10]

Financial Data and Key Metrics Changes - Total revenue for Q3 2025 increased to $7.9 million compared to $7.7 million in the same period last year, representing a growth of approximately 2.6% [29] - Product sales rose to $6.4 million from $6.1 million year-over-year, while franchise and royalty fees decreased to $1.1 million from $1.2 million [29] - Total costs and expenses increased to $8.6 million from $8.5 million, driven by non-recurring professional expenses [31] - Net loss for the quarter was $0.8 million or negative $0.10 per share, an improvement from a net loss of $0.12 per share in the previous year [31] - EBITDA improved to a positive $41,000 compared to a negative $0.3 million a year ago [31] Business Line Data and Key Metrics Changes - The company fulfilled nearly 100% of franchisee and specialty market demand during the holiday season, a significant improvement from the previous year [13] - The e-commerce business, including RMCF and Amazon.com, saw sales nearly triple during the holiday months compared to last year [17] Market Data and Key Metrics Changes - The company ended the fiscal third quarter with a cash balance of $1.1 million, down from $2.1 million at the end of February 2024 [32] - Accounts receivable increased to $4.1 million from $2.2 million, reflecting increased demand across all channels [34] - Total inventories rose to $5.7 million from $4.3 million, indicating a strategic buildup to meet franchisee needs during the holiday season [34] Company Strategy and Development Direction - The company is focused on improving liquidity, revitalizing its franchise network, and executing key operational priorities as part of a transformational process [7] - New store openings are planned in Chicago, Charleston, and Brandon, with a focus on enhancing the franchise model and improving average unit volume [8][10] - A new ERP system was launched to improve cost management and decision-making through better data analytics [14][15] - The company is also expanding its loyalty program and utilizing customer engagement applications to drive sales [20] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing gross and operating margin pressures but believes these issues are transitory and anticipates improved results in the coming quarters [24] - The company is committed to continuous improvement and strategic investments to drive revenue growth and profitability [26][27] Other Important Information - The company secured a $6 million credit facility to support operations and growth initiatives [23] - Strategic hires were made to strengthen the executive management team, including new VPs for Franchise Business Support and Marketing [21][22] Q&A Session Summary Question: What kind of benefits do you expect to drive from the new ERP system? - The new ERP system will provide timely, accurate data and analytics to assist in managerial decisions aimed at driving profitability [38] Question: Can you provide an update on the rebranding initiative and its potential impact on franchisee interest? - Franchisee enthusiasm is high, with existing franchisees willing to open new stores, indicating positive reception of the new branding and store design [40] Question: What progress has been made on new store openings and targeted geographies? - There is a robust pipeline for new store openings, with three stores announced so far, and efforts are ongoing to create more opportunities [42]

Revenue and Sales Performance - Revenues increased by 2.5% from $7.7 million for the three months ended November 30, 2023, to $7.9 million for the same period in 2024[118]. - Durango product and retail sales rose by 4.6%, or $0.3 million, primarily due to price increases[120]. - Franchise fees increased by 97.6% to $81,000 compared to $41,000 in the prior year[119]. - Total revenues remained consistent at $20.7 million for both periods, with Durango product and retail sales increasing by 2.8% to $16.9 million[134][135]. Cost and Expenses - Total cost of sales increased by 4.8% to $6.0 million from $5.8 million in the previous year[122]. - Total gross margin was $675,000, with a gross margin percentage of 10.0%, slightly down from 10.2% in the prior year[125]. - General and administrative expenses increased to 18.1% of total revenues, up from 17.3% in the previous year[128]. - Total gross margin decreased to $936,000, representing a gross margin percentage of 5.5%, down from 7.9% in the prior year[137][140]. - Franchise costs increased to 56.0% of total royalty and marketing fees and franchise fee revenue, up from 44.1% in the previous year[141]. Profitability and Loss - The company reported a basic loss per share of $(0.11) for the three months ended November 30, 2024, compared to $(0.12) in the prior year[118]. - Basic loss per share improved from $(0.51) for the nine months ended November 30, 2023 to $(0.47) for the nine months ended November 30, 2024[133]. - The Company reported a consolidated net loss of $3.2 million for the nine months ended November 30, 2024, compared to a net loss of $2.6 million in the prior year[150]. - Operating loss decreased slightly from $3.3 million for the nine months ended November 30, 2023 to $3.2 million for the same period in 2024[133]. Cash Flow and Financing - Cash flows from financing activities increased to $6.9 million for the nine months ended November 30, 2024, compared to $1.0 million in the same period of 2023[153]. - Working capital improved to $6.9 million as of November 30, 2024, up from $1.5 million as of February 29, 2024[148]. - The Company entered into a New Credit Agreement for $6.0 million, with part of the proceeds used to repay a previous credit agreement[155][157]. - Cash and cash equivalents decreased from $2.1 million to $1.1 million primarily due to cash used in operating activities during slow selling periods[149]. - The Company entered into a securities purchase agreement on August 5, 2024, issuing 1,250,000 shares at $1.75 per share, totaling approximately $2.2 million in proceeds[159]. Operational Challenges - Total other income (expense) was $(0.1) million, primarily due to interest expense on the new credit agreement[131]. - As of November 30, 2024, the Company had purchase obligations of approximately $3.2 million, primarily for future purchases of commodities for manufacturing[162]. - Inflationary factors, including rising costs of ingredients and labor, directly impact the Company's operations, with no assurance of passing these costs to customers[163]. - The Company experiences seasonal fluctuations in sales, with the strongest sales typically occurring during key holidays and the summer vacation season[165]. Strategic Actions - The company completed the sale of its U-Swirl subsidiary for $2.75 million, focusing on enhancing its confectionery franchise business[109].

Core Viewpoint - Rocky Mountain Chocolate Factory Inc. is focused on strengthening its foundation for long-term success through improved liquidity, executive team rebuilding, franchise network expansion, and a return to sustainable growth and profitability [3][5]. Financial Performance - Total revenue for the third quarter of 2025 increased to $7.9 million compared to $7.7 million in the year-ago quarter [8]. - Total product and retail gross profit remained flat at $0.7 million, with a gross margin of 10.0%, down from 10.2% in the previous year due to higher supply and labor costs [8]. - Total costs and expenses rose to $8.6 million from $8.5 million in the year-ago quarter [8]. - The net loss for the third quarter was $0.8 million or $(0.11) per share, compared to a net loss of $0.8 million or $(0.12) per share in the year-ago quarter [8]. - Adjusted EBITDA improved to $41,000 from a loss of $0.3 million in the year-ago period [8]. Strategic Initiatives - The company secured a three-year $6 million credit agreement to replace its prior facility and fund growth initiatives [4]. - Key hires were made in franchise support and marketing, and two prominent executives were added to the Board [4]. - Plans for two new stores and a kiosk location were announced across three U.S. markets [4]. - A new ERP system was launched in January to enhance operational visibility and decision-making [5]. Market Position - Rocky Mountain Chocolate Factory operates nearly 260 stores across the U.S. and has several international locations, ranking among Entrepreneur's Franchise 500 and Franchise Times' Franchise 400 for 2024 [10].

Core Viewpoint - Rocky Mountain Chocolate Factory Inc. will host a conference call on January 14, 2025, to discuss its fiscal third quarter 2025 results, with a press release to be issued prior to the call [1]. Group 1: Conference Call Details - The conference call will take place on January 14, 2025, at 5:00 p.m. Eastern time [2]. - Attendees can submit questions in advance via email to the investor relations team [2]. - The call will be accessible via a live webcast and will be available for replay on the company's investor relations website [3]. Group 2: Company Overview - Rocky Mountain Chocolate Factory, Inc. is an international franchiser and producer of premium chocolates and confectionery products, including gourmet caramel apples [4]. - The company is headquartered in Durango, Colorado, and operates nearly 260 stores across the United States, along with several international locations [4]. - The company's stock is listed on the Nasdaq Global Market under the symbol "RMCF" and is recognized in Entrepreneur's Franchise 500 and Franchise Times' Franchise 400 for 2024 [4].

Core Insights - Rocky Mountain Chocolate Factory Inc. has announced the opening of two new stores and one kiosk in three U.S. markets, reflecting its growth strategy and commitment to franchisee success [1][4]. Franchise Expansion - The company is expanding its franchise network with new locations in Chicago, Illinois; Charleston, South Carolina; and Brandon, Florida [2][4]. - Tyson Minnick, a franchisee with eleven years of experience, will open his third store in Downtown Chicago, leveraging his local ties to attract customers [2]. - Ross Theesen, a franchisee for nine years, will open his fifth store on King Street in Charleston, highlighting the support from the RMCF team in achieving this milestone [4]. - Willie and Alex Zamora will launch a kiosk in Brandon, Florida, marking their second location and catering to shoppers in a popular retail area [3]. Company Overview - Rocky Mountain Chocolate Factory, Inc. is an international franchiser and producer of premium chocolates and confectionery products, including gourmet caramel apples [5]. - The company operates nearly 260 stores across the United States and has several international locations, indicating a strong market presence [5]. - RMCF was ranked in the Franchise 500 by Entrepreneur Magazine for 2024, showcasing its recognition in the franchise industry [5].

DURANGO, Colo., Oct. 15, 2024 (GLOBE NEWSWIRE) -- Rocky Mountain Chocolate Factory Inc. (Nasdaq: RMCF) (the "Company", "we", or "RMCF"), an international franchisor and producer of premium chocolates and other confectionery products including gourmet caramel apples, is reporting financial and operating results for its fiscal second quarter ended August 31, 2024. "We are pleased with our progress this quarter as we begin executing our multi-year strategic plan," said Jeff Geygan, Interim CEO of RMCF. "We hav ...

Core Viewpoint - Rocky Mountain Chocolate Factory Inc. has secured a new three-year $6 million credit agreement to enhance its capital structure and support growth initiatives [1][2]. Financial Details - The credit facility allows for interest-only payments until the maturity date of September 30, 2027, with an interest rate of 12% per annum [2]. - Proceeds from the new credit agreement will be used to retire an existing $4 million revolving credit facility, of which $3.45 million was outstanding as of September 30, 2024 [3]. Company Overview - Rocky Mountain Chocolate Factory is an international franchiser and producer of premium chocolates and confectionery products, including gourmet caramel apples [5]. - The company operates over 260 stores across the United States and has several international locations, with its stock listed on the Nasdaq under the symbol "RMCF" [5].

DURANGO, Colo., Sept. 11, 2024 (GLOBE NEWSWIRE) -- Rocky Mountain Chocolate Factory Inc. (Nasdaq: RMCF) (the "Company", "we", or "RMCF"), an international franchisor and producer of premium chocolates and other confectionery products, including gourmet caramel apples, announced today that it will host an Investor Day on Thursday, September 12, 2024, with presentations given by members of the executive management team. Event Details Date: Thursday, September 12, 2024 Time: 9:00 a.m. – 11:30 a.m. (Mountain Ti ...

DURANGO, Colo., Aug. 06, 2024 (GLOBE NEWSWIRE) -- Rocky Mountain Chocolate Factory Inc. (Nasdaq: RMCF) (the "Company", "we", or "RMCF"), an international franchisor and producer of premium chocolates and other confectionery products, including gourmet caramel apples, has closed a securities purchase agreement for a private investment in public equity ("PIPE") financing that resulted in gross proceeds of approximately $2.2 million to the Company, before deducting offering expenses. Pursuant to the terms of t ...