After-Tax Return on Beginning Shareholders' Equity of 29% Reflects Unit Growth, Increased Same-Store Sales and Higher Factory Product Shipments
Durango, Colorado (May 4, 2006)--Rocky Mountain Chocolate Factory, Inc. (Nasdaq/NMS: “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, 2006 (FY2006).
(Note: All per-share figures in this news release are adjusted for a 4-for-3 stock split in May 2005 and a 5% stock dividend that was distributed to shareholders in March 2005.)
“We are very pleased to report another year of record earnings, which increased 23% to approximately $4.1 million, or $0.61 per diluted share, in Fiscal 2006,” noted Bryan Merryman, Chief Operating Officer and Chief Financial Officer of Rocky Mountain Chocolate Factory, Inc. “Our revenues rose 14% to a record $28.1 million, while total system-wide sales of our franchised and company-owned stores rose 12% to $99.4 million, compared with $88.9 million in the previous fiscal year.”
“Our franchisees opened 38 new stores during Fiscal 2006,” continued Merryman. “This increased the total number of Rocky Mountain Chocolate Factory locations in operation to 308 as of February 28, 2006, and widened our lead as the largest chain of retail chocolate stores in the United States. We expect franchisees to open between 40 to 45 new stores in the current fiscal year, when the Company anticipates earnings growth of 17% to 22% 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, 2006, revenues increased 19% to $8.1 million, compared with $6.8 million in the fourth quarter of the previous fiscal year. Comparable-store sales at franchised retail locations rose 3.1% when compared with the fourth quarter of FY2005. We believe this reflects, among other things, increased customer traffic in retail venues where Rocky Mountain Chocolate Factory stores are located, along with increased recognition of our brand name among American consumers.”
Net earnings increased 26% to $1.1 million in the fourth quarter of FY2006, versus $850,000 in the corresponding period of the previous fiscal year. Basic and diluted earnings per share increased 21% and 23%, respectively, to $0.17 basic and $0.16 diluted, in the most recent quarter, compared with $0.14 basic and $0.13 diluted in the year-earlier period.
For the fiscal year ended February 28, 2006, revenues increased 14.5% to $28.1 million, compared with $24.5 million in the fiscal year ended February 28, 2005. Total pounds of confectionery products purchased from the factory by franchisees increased 6.4% in FY2006, due to a net increase of 24 franchised stores in operation. Same store pounds purchased from the factory in fiscal 2006 were approximately the same as the prior fiscal year. Comparable-store sales at franchised stores increased approximately 2.5%. Net income increased 23% to $4.1 million in FY2006, compared with $3.3 million in FY2005. Basic and diluted earnings per share increased 18% and 20%, respectively, to $0.65 basic and $0.61 diluted, in the most recent fiscal year, compared with earnings per share of $0.55 basic and $0.51 diluted in the previous fiscal year. After-tax return on beginning shareholders’ equity reached a record 29.3% in the fiscal year ended