Rocky Mountain Chocolate Factory, Inc. (Nasdaq: RMCF) yesterday announced higher revenues and earnings for the second quarter and first half of FY2002.
For the quarter ended August 31, 2001, non-retail revenues increased 23 percent to $4.3 million, compared with $3.5 million in the second quarter of FY2001. Retail revenues decreased 82 percent to $384,000, reflecting the successful execution of the Company’s strategy to exit its Company-owned store program. On May 1, 2001, the Company completed the conversion of substantially all of its Company-owned stores to franchised-owned stores in order to focus its resources on supporting and growing its franchise base. Comparable-store sales at franchised stores were approximately the same when compared with the second quarter of FY2001.
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Net earnings for the second quarter of FY2002 increased 20 percent to a record $608,000, compared with $505,000 in the second quarter of the previous fiscal year. Basic earnings per share increased 27 percent to a record $0.33 in the most recent quarter, compared with $0.26 in the second quarter of FY2001. Diluted earnings per share rose 19 percent to a record $0.31 in the second quarter of FY2002, compared with $0.26 in the prior-year period.
For the six months ended August 31, 2001, non-retail revenues increased 18 percent to $8.0 million, versus $6.7 million in the corresponding period of the previous fiscal year. Retail revenues decreased 76 percent to $961,000 as a result of the Company’s strategy to exit its Company-owned store program. Comparable-store sales at franchised stores for the six-month period ended August 31, 2001 were approximately the same when compared with the first half of FY2001.
Net earnings increased 32 percent to a record $959,000 for the six months ended August 31, 2001, compared with $724,000 during the same period in FY2001. Basic earnings per share improved 50 percent to a record $0.51 during the first half of FY2002, compared with $0.34 in the six months ended August 31, 2000. Diluted earnings per share totaled a record $0.49 in the six months ended August 31, 2001, which represented a 44 percent increase when compared with $0.34 in the corresponding period of the previous fiscal year.
“We are pleased to report continued growth in factory product sales and other non-retail revenues during the second quarter and first half of fiscal 2002,” stated Bryan J. Merryman, Chief Operating Officer of Rocky Mountain Chocolate Factory, Inc. “Following the successful conversion of our remaining Company-owned stores to franchised retail outlets, we have been able to focus on new merchandising and marketing programs in support of our franchisees.”
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By GlobalData“We recently unveiled a new retail store concept that has been greeted with enthusiasm by patrons of the four Rocky Mountain Chocolate Factory stores that incorporate the new contemporary look,” continued Merryman. “We have also redesigned our corporate logo and the packaging for our gift line of chocolates and confections. The opening of thirteen new franchised stores during the first half of fiscal 2002 was in line with corporate objectives, and we expect to exceed our goal of 20 new store openings for the full year.”
STORE INFORMATION
New stores opened
during the six months Stores open as of
ended August 31, 2001 August 31, 2001
United States:
Franchised Stores 13 196
Company-owned Stores 0 4
13 200
International Licensed Stores 0 28
Total 13 228
STATEMENTS OF INCOME
(in millions, except per share data)
Three Months Ended Three Months Ended
August 31, August 31,
2001 2000 2001 2000
Revenues
Factory sales $3,264 $2,580 69.6% 46.2%
Royalty and
marketing fees 926 821 19.7% 14.7%
Franchise fees 116 108 2.5% 1.9%
Retail sales 384 2,076 8.2% 37.2%
Total revenues 4,690 5,585 100.0% 100.0%
Costs and Expenses
Cost of sales 2,125 2,262 45.3% 40.5%
Franchise costs 363 269 7.7% 4.8%
Sales and marketing 323 281 6.9% 5.0%
General and
administrative 408 408 8.7% 7.3%
Retail operating 219 1,048 4.7% 18.8%
Depreciation and
amortization 229 312 4.9% 5.6%
Total costs
and expenses 3,667 4,580 78.2% 82.0%
Income from Operations 1,022 1,005 21.8% 18.0%
Other Income (Expense)
Interest expense (125) (195) (2.7%) (3.5%)
Interest income 80 14 1.7% 0.2%
Other, net (45) (181) (1.0%) (3.3%)
Income Before
Income Taxes 977 824 20.8% 14.7%
Provision for
Income Taxes 369 319 7.9% 5.7%
Net Income $608 $505 12.9% 9.0%
Basic Earnings
per Common Share $0.33 $0.26
Diluted Earnings
per Common Share $0.31 $0.26
Weighted Average
Common Shares
Outstanding 1,848,164 1,956,784
Dilutive Effect
of Employee
Stock Options 112,687 5,571
Weighted Average
Common Shares
Outstanding,
Assuming Dilution 1,960,851 1,962,355
STATEMENTS OF INCOME
(in millions, except per share data)
Six Months Ended Six Months Ended
August 31, August 31,
2001 2000 2001 2000
Revenues
Factory sales $5,850 $5,011 65.6% 46.3%
Royalty and
marketing fees 1,708 1,539 19.1% 14.2%
Franchise fees 403 198 4.5% 1.8%
Retail sales 962 4,075 10.8% 37.7%
Total revenues 8,923 10,823 100.0% 100.0%
Costs and Expenses
Cost of sales 4,011 4,523 44.9% 41.8%
Franchise costs 684 528 7.7% 4.9%
Sales and marketing 611 569 6.8% 5.3%
General and
administrative 925 861 10.4% 7.9%
Retail operating 577 2,202 6.5% 20.3%
Depreciation and
amortization 454 640 5.1% 5.9%
Total costs
and expenses 7,262 9,322 81.4% 86.1%
Income from Operations 1,661 1,501 18.6% 13.9%
Other Income (Expense)
Interest expense (244) (344) (2.7%) (3.2%)
Interest income 125 24 1.4% 0.2%
Other, net (119) (320) (1.3%) (3.0%)
Income Before
Income Taxes 1,542 1,181 17.3% 10.9%
Provision for
Income Taxes 583 457 6.5% 4.2%
Net Income $959 $724 10.8% 6.7%
Basic Earnings
per Common Share $0.51 $0.34
Diluted Earnings
per Common Share $0.49 $0.34
Weighted Average
Common Shares
Outstanding 1,863,125 2,100,349
Dilutive Effect
of Employee
Stock Options 83,660 9,704
Weighted Average
Common Shares
Outstanding,
Assuming Dilution 1,946,785 2,110,053
SELECTED BALANCE SHEET DATA
(in millions)
August 31, 2001 February 28, 2001
(audited)
Current Assets $6,866 $5,607
Total assets $16,814 $15,042
Current Liabilities $3,657 $4,358
Long-Term Debt,
Less Current Maturities $4,912 $3,297
Stockholders’ Equity $7,528 $7,062
Rocky Mountain Chocolate Factory, Inc., headquartered in Durango, Colorado, is an international franchiser of gourmet chocolate and confection stores and a manufacturer of an extensive line of premium chocolates and other confectionery products. The Company’s common stock is listed on The Nasdaq National Market under the symbol “RMCF”.
This press release contains forward-looking information that involves risks and uncertainties, and the Company undertakes no obligation to update any forward-looking information. Risks and uncertainties that could cause actual results to differ materially include, without limitation, seasonality, consumer interest in the Company’s products, general economic conditions, consumer trends, costs and availability of raw materials, competition and the effect of government regulations.
