Rocky Mountain Chocolate Factory Q2 net income up 25%

Staff Writer | October 12, 2016

Rocky Mountain Chocolate Factory reported its operating results for the second quarter ended August 31, 2016.

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Total revenue decreased 7.3 percent to $8.6 million in the second quarter of FY2017, compared with revenue of $9.3 million in Q2 2015.

Same-store pounds of product purchased from the company's factory by franchisees and co-branded licensees decreased 2.1% during the second quarter of FY2017 compared to the second quarter of FY2016.

Net income attributable to RMCF shareholders increased 25.0 percent to $975,000, or $0.17 per basic and $0.16 per diluted share, in the second quarter of FY2017, versus net income attributable to RMCF shareholders of $780,000, or $0.13 per basic and diluted share, in the second quarter of FY2016.

Operating income decreased 8.4 percent to $1,554,000 in the second quarter of FY2017, compared with operating income of $1,698,000 during the second quarter of FY2016.

Adjusted EBITDA (a non-GAAP measure defined later in this release) decreased 8.3 percent to $2,019,000 in the second quarter of FY2017, versus $2,201,000 in the second quarter of FY2016.

Factory sales declined 3.8 percent during the second quarter of FY2017, compared to the second quarter of FY2016 primarily due to a 44.5% decrease in shipments of product to customers outside our network of franchised retail stores.

Royalty and marketing fees decreased 8.4 percent in the second quarter of FY2017, primarily due to a 12.9 percent decrease in the number of franchised locations in operation compared to the second quarter of FY2016.

Franchise fees decreased 56.4 percent in the second quarter of FY2017, primarily due to fewer international license fees during the quarter and fewer U-Swirl openings compared to the second quarter of FY2016.

Retail sales declined 13.5 percent during the second quarter of FY2017, compared to the second quarter of FY2016, primarily the result of fewer units in operation. Same-store sales at company-owned stores and cafÃ©s increased 0.2 percent in the second quarter of FY2017 compared to the second quarter of FY2016.

The company's franchisees and licensees opened six international Rocky Mountain Chocolate Factory licensed stores, one domestic self-serve frozen yogurt cafÃ©, one international self-serve frozen yogurt cafÃ© and four co-branded Cold Stone Creamery stores during the second quarter of FY2017.

The company repurchased 20,686 shares of its common stock at an average price of $9.97 during the second quarter of FY2017.

On September 16, 2016, the company paid its 53rd consecutive quarterly cash dividend to shareholders, in the amount of $0.12 per share. ■

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Rocky Mountain Chocolate Factory Q2 net income up 25%

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