• Total Revenue: $7.9 million, up from $7.7 million year-over-year.
• Product Sales: $6.4 million, compared to $6.1 million last year.
• Franchise and Royalty Fees: $1.1 million, down from $1.2 million last year.
• Gross Margin: 10%, slightly down from 10.2% last year.
• Total Costs and Expenses: $8.6 million, up from $8.5 million last year.
• Net Loss: $0.8 million or negative $0.10 per share, compared to a net loss of $8 million or negative $0.12 per share last year.
• EBITDA: Improved to $41,000 from a negative $0.3 million last year.
• Cash Balance: $1.1 million, down from $2.1 million at February 28, 2024.
• Accounts Receivable: $4.1 million, up from $2.2 million at February 28, 2024.
• Total Inventories: $5.7 million, up from $4.3 million at February 28, 2024.
• Accounts Payable: $2.1 million, down from $3.4 million at February 28, 2024.
• Current Ratio: 2.6x, compared to 1.2x at February 28, 2024.
• Long Term Debt: $6 million, with no long term debt at February 29, 2024.

• Warning! GuruFocus has detected 4 Warning Signs with RMCF.

Release Date: January 14, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Rocky Mountain Chocolate Factory Inc (NASDAQ:RMCF) announced plans for new store openings in key U.S. markets, indicating growth and expansion.
• The company successfully fulfilled nearly 100% of franchisee and specialty market demand during the holiday season, showcasing operational efficiency.
• RMCF launched a new ERP system to improve cost management and strategic decision-making, which is expected to enhance profitability.
• E-commerce sales nearly tripled during the holiday season, driven by improved marketing efforts and data analytics.
• Strategic hires were made to strengthen the executive management team, positioning the company for future growth.

Negative Points

• Total revenue for the third quarter showed only a slight increase, indicating slow growth.
• Gross margins decreased due to higher supply, third-party vendor, and labor costs, impacting profitability.
• The company reported a net loss for the quarter, highlighting ongoing financial challenges.
• Accounts receivable increased significantly, reflecting potential cash flow management issues.
• Long-term debt increased to $6 million, indicating a higher financial burden.

Q & A Highlights

Q: What benefits do you expect to drive from the new ERP system? A: Jeff Geygan, Interim CEO: The new ERP system will provide timely and accurate data and analytics, assisting in managerial decisions to drive profitability as we move forward.

Q: Can you provide an update on the rebranding initiative and its potential impact on franchisee interest? A: Jeff Geygan, Interim CEO: The franchisee advisory council has shown high enthusiasm for the rebranding. Three existing franchisees are opening new stores, indicating strong interest and excitement about the new logo and store design.

Q: What progress has been made on new store openings, and are there any specific geographies you are targeting? A: Jeff Geygan, Interim CEO: We have announced three new store openings and have a robust pipeline. Kara Conklin is actively working to expand this pipeline.

Q: How did the holiday season performance compare to last year? A: Jeff Geygan, Interim CEO: We fulfilled nearly 100% of franchisee and specialty market demand, a significant improvement from last year, highlighting our ability to deliver under pressure.

Q: What strategic hires have been made to support the franchise network? A: Jeff Geygan, Interim CEO: We hired a new VP of Franchise Business Support, Lizzie Mae Kerr, and a VP of Marketing, Jeremy Garcia, both bringing valuable experience to strengthen our executive management team.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.