Rocky Mountain Chocolate Factory Reports 23% Increase in FY2007 Earnings Per Share
Fourth Quarter Diluted E.P.S. Rise 44% to $0.23 vs. $0.16
After-Tax Return on Beginning Shareholders' Equity Exceeds 30% for Fiscal Year
DURANGO, Colo., May 10 /PRNewswire-FirstCall/ -- Rocky Mountain Chocolate Factory, Inc. (Nasdaq: RMCF), which franchises gourmet chocolate and confection stores and manufactures an extensive line of premium chocolates and other confectionery products, today reported record earnings for the quarter and fiscal year ended February 28, 2007 (FY2007).
"We are very pleased to report another year of impressive net income growth, with diluted earnings per share increasing 23% to a record $0.75 in Fiscal 2007," noted Bryan Merryman, Chief Operating Officer and Chief Financial Officer of Rocky Mountain Chocolate Factory, Inc. "Our revenues rose over 12% to a record $31.6 million, while total system-wide sales of our franchised and company-owned stores increased 9% to $108.9 million, compared with $99.7 million in the previous fiscal year."
"Our franchisees opened 37 new stores during Fiscal 2007," continued Merryman. "This increased the total number of Rocky Mountain Chocolate Factory locations in operation to 322 as of February 28, 2007, and widened our lead as the largest chain of retail chocolate stores in the United States. We expect franchisees to open between 35 and 40 new stores in the current fiscal year, and the Company expects net income to increase 15 to 20 percent if current business and economic trends continue. Factors critical to the Company's anticipated earnings growth include, among others, unit openings, same-store sales and same-store pounds purchased from the factory."
For the three months ended February 28, 2007, revenues increased 10% to $8.9 million, compared with $8.1 million in the fourth quarter of the previous fiscal year. Comparable-store sales at franchised retail locations declined 1.9% when compared with the fourth quarter of FY2006.
Net earnings increased 34% to $1.4 million in the fourth quarter of FY2007, versus $1.1 million in the corresponding period of the previous fiscal year. Basic and diluted earnings per share increased 41% and 44%, respectively, to $0.24 basic and $0.23 diluted, in the most recent quarter, compared with $0.17 basic and $0.16 diluted in the year-earlier period.
For the fiscal year ended February 28, 2007, revenues increased 12.5% to $31.6 million, compared with $28.1 million in the fiscal year ended February 28, 2006. Total pounds of confectionery products purchased from the factory by franchisees increased 6% in FY2007, due to a net increase of 18 franchised stores in operation. Same-store pounds purchased from the factory declined 2.6% in FY2007, while comparable-store sales at franchised stores were unchanged relative to the previous fiscal year.
Net income increased 16.7% to a record $4.7 million in FY2007, compared with $4.1 million in FY2006. Basic and diluted earnings per share increased 18% and 23%, respectively, to $0.77 basic and $0.75 diluted, in the most recent fiscal year, compared with earnings per share of $0.65 basic and $0.61 diluted in the previous fiscal year. After-tax return on beginning shareholders' equity reached a record 30.6% in the fiscal year ended February 28, 2007.
"During Fiscal 2007, Rocky Mountain Chocolate Factory continued to generate an after-tax return on shareholders' equity that would, we believe, be the envy of most publicly traded companies, and our balance sheet remained strong at the end of the fiscal year," continued Merryman. "We had $2.8 million of cash in the bank as of February 28, 2007. The Company increased its quarterly cash dividend to a $0.36 annualized rate in November 2006, and the Board of Directors this week voted to increase the annualized quarterly cash dividend a further 11% to $0.40 per share. This will represent the ninth increase in quarterly dividend payout since September 2003."
In May 2006, the Company's Board of Directors authorized the repurchase of up to $2 million in common stock in the open market or in private transactions. On May 3, 2007 the Company completed this repurchase program, and the Board of Directors this week authorized the repurchase of an additional $5 million, or up to 350,000 shares, of common stock. During the past seven years, the Company has repurchased approximately 3,328,570 shares of its common stock under repurchase authorizations at an average price of $4.47 per share.
"Fiscal 2007 represented another year of progress towards our goal of building Rocky Mountain Chocolate Factory into the premier retail chocolatier in the United States, with systemwide sales breaking the $100 million mark for the first time in the Company's history," stated Frank Crail, Founder, Chairman and Chief Executive Officer of the Company. "We have continued to share our success with stockholders, as reflected in the recent announcement of our ninth quarterly cash dividend increase in less than four years. We expect the Board of Directors to consider further cash dividend increases in the future, so long as the Company's underlying financial performance and liquidity requirements support such distributions."
The Company will host a conference call Thursday, May 10 2007 at 4:15 p.m.
EDT to discuss year-end results in greater detail and the outlook for FY2008.
The dial-in number for the conference call is 877-715-5282
(international/local participants dial 973-582-2850) and the access code is
8784081. Parties interested in participating in the conference call should
dial in approximately five minutes prior to 4:15 PM EDT. The call will also
be broadcast live on the Internet at
http://www.videonewswire.com/event.asp?id=39745. A replay of the call will be
available through May 17, 2007 by dialing 877-519-4471 or for international
callers by dialing 973-341-3080, the replay Access Code is 8784081. The call
will also be archived through August 9, 2007 at
http://www.videonewswire.com/event.asp?id=39745
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 Global 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, the effect of government regulations, and other risks disclosed in the Company's filings with the Securities and Exchange Commission.
For Further Information, Contact Bryan J. Merryman COO/CFO (970) 259-0554
STORE INFORMATION
New stores opened during
the year ended Stores open as of
February 28, 2007 February 28, 2007
United States:
Franchised Stores 32 279
Company-owned Stores 0 5
International Licensed Stores 5 38
Total 37 322
STATEMENTS OF INCOME
(in thousands, except per share data)
Three Months Ended Three Months Ended
February 28, February 28,
2007 2006 2007 2006
Revenues
Factory sales $6,365 $5,534 71.3% 68.1%
Royalty and marketing
fees 1,676 1,502 18.8% 18.5%
Franchise fees 173 159 1.9% 1.9%
Retail sales 717 932 8.0% 11.5%
Total revenues 8,931 8,127 100.0% 100.0%
Costs and Expenses
Cost of sales 4,442 4,250 49.7% 52.3%
Franchise costs 423 404 4.7% 5.0%
Sales and marketing 466 409 5.2% 5.0%
General and
administrative 748 657 8.4% 8.1%
Retail operating 359 469 4.0% 5.8%
Depreciation and
amortization 191 238 2.2% 2.9%
Total costs and
expenses 6,629 6,427 74.2% 79.1%
Income from Operations 2,302 1,700 25.8% 20.9%
Other Income (Expense)
Interest expense -- -- -- --
Interest income 18 25 0.2% 0.3%
Other, net 18 25 0.2% 0.3%
Income Before Income
Taxes 2,320 1,725 26.0% 21.2%
Provision for Income
Taxes 877 652 9.8% 8.0%
Net Income $1,443 $1,073 16.2% 13.2%
Basic Earnings per
Common Share $0.24 $0.17
Diluted Earnings per
Common Share $0.23 $0.16
Weighted Average
Common Shares
Outstanding 6,112,102 6,296,207
Dilutive Effect of
Employee Stock
Options 193,643 308,038
Weighted Average
Common Shares
Outstanding,
Assuming Dilution 6,305,745 6,604,245
STATEMENTS OF INCOME
(in thousands, except per share data)
Year ended February 28, Year ended February 28,
2007 2006 2007 2006
Revenues
Factory sales $22,709 $19,297 71.9% 68.7%
Royalty and marketing
fees 5,604 5,048 17.8% 18.0%
Franchise fees 634 683 2.0% 2.4%
Retail sales 2,626 3,046 8.3% 10.9%
Total revenues 31,573 28,074 100.0% 100.0%
Costs and Expenses
Cost of sales 15,989 13,957 50.6% 49.7%
Franchise costs 1,570 1,466 5.0% 5.2%
Sales and marketing 1,538 1,321 4.9% 4.7%
General and
administrative 2,539 2,239 8.0% 8.0%
Retail operating 1,502 1,756 4.8% 6.3%
Depreciation and
amortization 874 876 2.8% 3.1%
Total costs and
expenses 24,012 21,615 76.1% 77.0%
Income from Operations 7,561 6,459 23.9% 23.0%
Other Income (Expense)
Interest expense -- (20) --% (0.1%)
Interest income 67 96 0.2% 0.4%
Other, net 67 76 0.2% 0.3%
Income Before Income
Taxes 7,628 6,535 24.1% 23.3%
Provision for Income
Taxes 2,883 2,470 9.1% 8.8%
Net Income $4,745 $4,065 15.0% 14.5%
Basic Earnings per
Common Share $0.77 $0.65
Diluted Earnings per
Common Share $0.75 $0.61
Weighted Average Common
Shares Outstanding 6,125,831 6,268,202
Dilutive Effect of
Employee Stock Options 216,524 407,411
Weighted Average Common
Shares Outstanding,
Assuming Dilution 6,342,355 6,675,613
SELECTED BALANCE SHEET DATA
(in thousands)
February 28, 2007 February 28, 2006
Current Assets $10,759 $10,440
Total assets $18,456 $19,057
Current Liabilities $3,256 $2,908
Stockholders' Equity $14,515 $15,486
SOURCE Rocky Mountain Chocolate Factory, Inc.
Released May 10, 2007