Durango, Colorado, July 11, 2006 - Rocky Mountain Chocolate Factory, Inc., which franchises gourmet chocolate and confection stores and manufactures an extensive line of premium chocolates and other confectionery products, today reported record revenues and earnings for the first quarter of FY2007.
(Note: All per-share figures in this news release are adjusted for a 4-for-3 stock split effective June 13, 2005 and a 5% stock dividend that was distributed to shareholders on March 10, 2005).
For the three months ended May 31, 2006, revenues increased 26 percent to approximately $6.8 million, compared with revenues of approximately $5.4 million in the first quarter of FY2006. Same-store sales at franchised retail outlets increased 0.4 percent during the most recent quarter, while same-store pounds of confectionery products purchased from the Company’s factory by franchisees were approximately the same as the prior-year period.
Total retail sales for the Company’s network of stores increased 11.4 percent to approximately $24.4 million in the quarter ended May 31, 2006, compared with total retail sales of approximately $21.9 million in the corresponding period of the previous year.
Net earnings for the first quarter of FY2007 increased 24 percent to $931,000, compared with $753,000 in the three months ended May 31, 2005. Basic earnings per share increased 25 percent to $0.15, versus $0.12 in the first quarter of FY2006, while fully diluted earnings per share increased 27 percent to $0.14, compared with $0.11 in the prior-year quarter.
“We are pleased to report another quarter of record earnings, particularly in light of the fact that net income in the first quarter of last year was 27% higher than in the prior-year period,” noted Bryan Merryman, Chief Operating Officer and Chief Financial Officer of the Company. “Franchisees opened four (4) new stores during the three months ended May 31, 2006, and approximately ten (10) new stores are scheduled to come on line during the second quarter. For the fiscal year ending February 28, 2007, store openings should reach or exceed our target of 40-45 units, and we remain comfortable with our guidance that full-year earnings should rise 17 to 22 percent from the record levels reported in Fiscal 2006.”
During the first quarter of FY2007, franchisees opened new stores in Huntington Beach (Bella Terra), California; Kansas City (Legends at Village West), Kansas; Branson, Missouri; and in Dubai, United Arab Emirates.
On May 25, 2006, Rocky Mountain Chocolate Factory, Inc. announced that its Board of Directors had approved the repurchase of up to an additional $2.0 million of the Company’s common stock in the open market, or in private transactions, whenever deemed appropriate by management. On July 6, 2006, the Company repurchased 1,700 shares of common stock under this authorization.
On June 16, 2006, the Company paid its 12th consecutive quarterly cash dividend, in the amount of $0.08 per share, to shareholders of record June 2, 2006.