Rocky Mountains
Chocolate Factory (NASDAQ:RMCF) is a low-risk small cap stock but it has
struggled with growth and has failed to recover after the financial crisis.
More importantly, there are serious question marks over the company’s ability
to deliver long term growth.
Rocky Mountains Chocolate Factory (RMCF) is a 30 year old
international franchiser, manufacturer and retailer of chocolate candies and
other confectionery products from Colorado. The company, with a market cap of
$82 million, operates through 457 stores and kiosks located in the United
States, Canada, Japan, South Korea and the United Arab Emirates. The company
manufactures its products at its 53,000 square foot factory which are then
supplied to its franchisees. Most of these stores are located in the United
States. The business delivers its products using its fleet of refrigerated
trucks to its franchise stores.
In its most recent fiscal year (FY-2013), Rocky Mountain
Chocolate Factory's production facility produced 2.67 million pounds of
chocolate candies, up 2% from in FY-2012. The company's annual production
capacity is 5.3 million pounds. The company has expanded in international
markets and has significantly increased its store count after the U-Swirl
transaction. However, it has struggled with no organic growth and an average of
just a 3% increase in annual revenues in the last five years.
U-Swirl Transaction
Rocky Mountain Chocolate Factory was also the founder and
owner of Aspen Leaf Yogurt, a franchiser and retailer of frozen yogurt. Earlier
in January, Rocky Mountain Chocolate Factory acquired all of the franchise
rights of YHI Inc and Yogurtini International who are the franchisers of the
brand "Yogurtini". Then two weeks later, Rocky Mountain Chocolate
Factory sold Aspen Leaf Yogurt's assets to U-Swirl (OTCQB:SWRL)
for a 60% controlling stake … read full article at Seeking Alpha
