Core Viewpoint - Rocky Mountain Chocolate Factory Inc. has appointed Carrie E. Cass as Chief Financial Officer, effective August 5, 2024, bringing extensive experience in financial management and strategic leadership to the company [1][3]. Group 1: Appointment Details - Carrie E. Cass previously served as CEO at Ballantine Communications, overseeing the company's long-term goals, growth, and profitability [2]. - Prior to her role at Ballantine Communications, Ms. Cass was CFO of Aeroscraft Corporation, responsible for accounting and administrative functions, and played a key role in the company's financial strategy [2]. - Ms. Cass has also been a Partner at Johnston & Co., an accounting, tax, and advisory firm [2]. Group 2: Executive Team Insights - Jeff Geygan, Interim CEO of RMCF, highlighted Ms. Cass's extensive background in manufacturing accounting and financial management as a valuable addition to the executive team [3]. - Ms. Cass's proven track record in driving financial performance and experience with cost accounting will be critical for executing the company's updated three-year strategic plan [3]. Group 3: Company Overview - Rocky Mountain Chocolate Factory is an international franchiser of premium chocolate and confection stores, producing a wide range of premium chocolates and confectionery products, including gourmet caramel apples [4]. - The company has over 260 stores across the United States and several international locations, and was recognized as one of America's Best Retailers in 2023 by Newsweek in the chocolate and candy stores category [4].

Core Viewpoint - Zacks Investment Research has initiated coverage of Rocky Mountain Chocolate Factory, Inc. (RMCF) with an "Underperform" recommendation due to concerns over financial performance and operational challenges [1] Financial Performance - Rocky Mountain's gross margins have decreased from 5.1% in Q1 fiscal 2024 to (5.8)% in Q1 fiscal 2025, primarily due to rising raw material and labor costs [2] - Cash reserves have fallen from $2.1 million at the end of February 2024 to $0.6 million by the end of May 2024, indicating a decline in liquidity [7] - The company's line of credit increased from $1.3 million to $2 million in Q1 fiscal 2025, reflecting a growing reliance on debt [7] - The stock has underperformed compared to industry peers and the broader market, trading at low valuation multiples, which suggests a lack of market confidence in the company's recovery [8] Operational Challenges - The company faces production and supply chain inefficiencies despite over $3 million in capital expenditures aimed at improving efficiency [5] - Heavy reliance on the franchise network and limited e-commerce revenues pose additional challenges [5] - The competitive landscape of the U.S. confectionery market and shifting consumer preferences towards health and wellness products further complicate growth prospects [5] Positive Aspects - Rocky Mountain benefits from a well-recognized brand and a loyal consumer base, along with a resilient franchise network [3] - Partnerships with specialty retailers like Costco and co-branding with Cold Stone Creamery are expected to enhance brand exposure and drive traffic to franchise stores [3] Company Overview - Rocky Mountain, headquartered in Durango, CO, operates as an international franchisor and confectionery producer, with 115 licensee-owned and 152 franchised stores across 36 states and the Philippines as of February 29, 2024 [4]

Core Viewpoint - Rocky Mountain Chocolate Factory, Inc. reported a wider loss per share of 26 cents in Q1 fiscal 2025 compared to a loss of 13 cents per share in the same quarter last year [1] Revenue Summary - Total revenues for the first quarter were $6.4 million, reflecting a decrease of 0.5% year over year [2] - Revenue sources include Durango product and retail sales, Franchise fees, and Royalty and marketing fees [5] - Durango product and retail sales generated $5.3 million, an increase of 5.2% year over year due to improved franchisee demand and inventory management [5] - Franchise fees totaled $0.1 million, up 55.6% year over year, attributed to store ownership transfer fees [6] - Royalty and marketing fees generated $1.1 million, down 23.1% year over year due to a decrease in the number of stores subject to royalty fees [6] Gross Margin Analysis - Gross margin decreased to (5.8)% from 5.1% in the year-ago quarter, primarily due to increased raw material and labor costs [7] Operating Expenses - Sales and marketing expenses decreased by 9.1% year over year to $0.4 million, driven by operational efficiencies and cost-cutting measures [8] - General and administrative expenses decreased by 35.9% year over year to $1.2 million, mainly due to a reduction in legal fees from the previous year [8] Profitability Metrics - The net loss for the first quarter was $1.7 million, wider than the net loss of $0.8 million in the same quarter last year [9] - Loss from operations totaled $1.6 million, compared to a loss of $1.5 million in the year-ago quarter [14] Liquidity and Debt Management - The company ended the first quarter with cash and cash equivalents of $0.6 million, down from $2.1 million at the end of fiscal 2024 [10] - Net cash used in operating activities of continuing operations was $2.2 million, compared to $0.4 million a year ago [10]

Financial Data and Key Metrics Changes - The company is targeting a return to a 20% gross margin by the end of fiscal '25 and aims for gross margins in the range of 25% to 30% by the end of fiscal '27, driven by consistent revenue growth and disciplined expense control [25][46] - The company expects to return to adjusted EBITDA profitability as it exits fiscal '25 [25][46] Business Line Data and Key Metrics Changes - The company has initiated agreements for several new stores and a newly designed kiosk concept, targeting net store growth for fiscal year '25, ending a multi-year pattern of store contraction [17][18] - E-commerce currently accounts for only 3% of total revenue, with expectations to significantly increase this mix over the next three years [39] Market Data and Key Metrics Changes - The company is focusing on expanding its presence in strategic markets such as Boston, New York City, Atlanta, and Seattle, which have favorable demographics and distribution routes [31][38] - The company is also enhancing its partnerships with specialty market retailers and co-branded partners like Cold Stone Creamery to drive brand awareness and throughput [40] Company Strategy and Development Direction - The company is undergoing a strategic realignment to improve operational turnaround, focusing on enhancing store-level profitability and sales growth through data-driven insights [15][34] - The company plans to improve its liquidity position through non-core asset sales and a new term loan agreement [23][46] Management's Comments on Operating Environment and Future Outlook - Management acknowledges recent challenges due to execution missteps and supply chain inefficiencies, but expresses confidence in the strategic plan to return to sustainable growth [22][27] - The company is committed to investing in production efficiency and upgrading its ERP system to improve operational insights and responsiveness [42][43] Other Important Information - The company is in the final stages of appointing a new CFO and expects to announce this shortly [12][29] - The company has deployed over $3 million in capital expenditures towards new equipment and production efficiency investments [22] Q&A Session Summary Question: What is the current status of the search for both a permanent CEO and CFO? - The company is moving forward with both searches and expects to have announcements shortly [29] Question: Can you expand upon the product mix that you believe will help to reinvigorate sales and expand gross margins? - The company is focused on developing markets with favorable demographics and easily expandable distribution lanes [31] Question: What are the highest priorities for capital allocation in the next 12 to 36 months? - The company plans to invest in production facilities to improve cost efficiency and expand its distribution system [50]

- Company to Host Conference Call Today at 5:00 p.m. ET - "Our revised strategy will more effectively align sales, marketing, and production to drive the expansion of our store network and increase factory throughput with targeted capital investments. This alignment will ensure timely delivery of products and services across all of our sales channels, including specialty market retail and co-brand partners, E-Commerce, and most importantly, our franchisee network. "Looking ahead, we have set ambitious finan ...

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 operates over 260 stores across the United States and has several international locations [4] - Rocky Mountain Chocolate Factory was recognized as one of America's Best Retailers 2023 in the chocolate and candy stores category by Newsweek [4] Upcoming Conference Call - The company will host a conference call on July 15, 2024, at 5:00 p.m. Eastern time to discuss its fiscal first quarter 2025 results [1] - A press release with the results will be issued prior to the call [1] - Attendees can submit questions in advance via email to the investor relations team [2] Conference Call Details - The conference call will include a question-and-answer period following the management team's presentation [2] - Participants are encouraged to dial in 5-10 minutes before the start time for registration [2] - The call will be available for live broadcast and replay on the company's investor relations website [3]

DURANGO, Colo., July 08, 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, will host a conference call on Monday, July 15, 2024 at 5:00 p.m. Eastern time to discuss its fiscal first quarter 2025 results. The Company's results will be reported in a press release prior to the call. The RMCF management team will host the ...

Group 1 - Rocky Mountain Chocolate Factory Inc. has appointed Charles Arnold to its Board of Directors, where he will serve as Chair of the Audit Committee [1][3] - Charles Arnold has over 20 years of experience in corporate finance, including roles in public and private companies, and has served as CFO of Abernathy Holdings since June 2021 [2][3] - The appointment follows the resignation of Brett Seabert, and the Board expressed gratitude for his contributions over the past seven years [3] Group 2 - Rocky Mountain Chocolate Factory is an international franchiser and producer of premium chocolates and confectionery products, with over 260 stores in the U.S. and several international locations [5] - The company was recognized as one of America's Best Retailers 2023 by Newsweek in the chocolate and candy stores category [5]

DURANGO, Colo., June 28, 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, today announced that Charles Arnold has been appointed to the Company's Board of Directors ("the Board"), where he will serve as Chair of the Audit Committee. Mr. Arnold is a seasoned corporate finance executive with over 20 years of experience ...

Financial Performance - Total revenue for the fiscal year ended February 29, 2024, was $27,950,687, a decrease of 8.1% from $30,432,352 in 2023[238] - Sales decreased to $22,022,310 in 2024 from $24,456,910 in 2023, representing a decline of 9.9%[238] - The company reported a net loss of $4,171,883 for 2024, compared to a net loss of $5,680,778 in 2023, indicating an improvement of 26.5%[238] - Loss from operations was $4,902,156 in 2024, slightly higher than the loss of $4,891,003 in 2023[238] - The company experienced recurring losses and negative cash flows from operations, raising substantial doubt about its ability to continue as a going concern[224] - The segment profit (loss) for FY 2024 was reported at $(4,875,717), compared to $(4,874,513) in FY 2023, indicating a slight deterioration in performance[367] Expenses and Costs - Cost of sales increased to $20,655,629 in 2024 from $20,455,373 in 2023, reflecting a rise of 1.0%[238] - General and administrative expenses decreased significantly to $6,673,929 in 2024 from $10,325,633 in 2023, a reduction of 35.0%[238] - The Company incurred total severance compensation costs of $692,295 in FY 2024, down from $928,938 in FY 2023, and $1,344,813 in FY 2022[381] - The total depreciation and amortization expense for FY 2024 was $887,299, compared to $765,263 in FY 2023, reflecting higher asset utilization[367] - The company incurred approximately $4.1 million in costs related to contested proxy solicitations during FY 2023, up from $1.7 million in FY 2022[370] Assets and Liabilities - Total assets decreased from $21,986,827 in 2023 to $20,577,218 in 2024, a decline of approximately 6.4%[241] - Current assets fell from $11,204,976 in 2023 to $9,602,650 in 2024, representing a decrease of about 14.3%[241] - Cash and cash equivalents decreased significantly from $4,717,068 in 2023 to $2,082,014 in 2024, a drop of approximately 55.9%[246] - Total liabilities increased from $7,616,663 in 2023 to $9,941,059 in 2024, an increase of about 30.5%[241] - The Company had lease liabilities totaling $1,694,471 as of February 29, 2024, with total estimated future minimum lease payments of $1.9 million[340] Inventory and Sales - Inventories increased from $3,639,780 in 2023 to $4,358,401 in 2024, a rise of approximately 19.7%[241] - Retail sales increased to $1,318,901 in 2024 from $1,084,777 in 2023, an increase of 21.6%[313] - Durango product sales recognized at a point in time decreased to $20,703,409 in 2024 from $23,372,133 in 2023, a decrease of 11.4%[313] Equity and Capital - The company’s retained earnings decreased from $4,906,032 in 2023 to $734,149 in 2024, a decline of about 85%[241] - The company’s total stockholders' equity decreased from $14,370,164 in 2023 to $10,636,159 in 2024, a decline of about 26.1%[241] - The company’s additional paid-in capital increased from $9,457,875 in 2023 to $9,895,704 in 2024, an increase of approximately 4.6%[241] Cash Flow and Financing - The company reported a net cash used in operating activities of $2,434,947 for 2024, compared to $2,102,491 in 2023, indicating a decline in cash flow[246] - The Company had a $4.0 million revolving credit line, with $2.75 million available for borrowing as of February 29, 2024[321] - The Company's current ratio as of February 29, 2024, was 1.19 to 1, below the required 1.5 to 1 under its credit agreement[257] Taxation - The effective tax rate for FY 2024 was zero, primarily due to reported losses and a full valuation allowance against deferred tax assets[353] - The Company incurred an income tax expense of $613,843 for FY 2023 despite a pretax loss, mainly due to an increase in reserves for deferred tax assets[354] Strategic Initiatives - The Company plans to sell an unused parcel of land and cut overhead for manufacturing to strengthen its liquidity position[258] - The Company intends to increase profits and gross margins through raising chocolate prices to its franchising system and Specialty Market customers[258] Discontinued Operations - Total revenue from discontinued operations for FY 2024 was $212,242, a significant decrease from $3,128,368 in FY 2023[384] - The Company completed the sale of U-Swirl for total consideration of $2.75 million, including $1.75 million in cash and a $1 million promissory note[382] - The Company filed a certificate of dissolution for U-Swirl on October 31, 2023, effectively ending its legal existence[384]