Rocky Mountain Chocolate Factory Inc (Delaware) (RMCF) 2023 Q3 法說會逐字稿

Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to today's conference call to discuss the financial results for Rocky Mountain Chocolate Factory's fiscal third quarter, ended November 30, 2022.

女士們先生們，下午好。謝謝你的支持。歡迎參加今天的電話會議，討論落基山巧克力工廠截至 2022 年 11 月 30 日的第三財季財務業績。

(Operator Instructions) As a reminder, this conference is being recorded. Joining us on the call today are the company's CEO, Rob Sarlls; and CFO, Allen Arroyo.

（操作員說明）提醒一下，正在錄製此會議。今天與我們一起參加電話會議的還有該公司的首席執行官 Rob Sarrls；首席財務官艾倫·阿羅約 (Allen Arroyo)。

Please be advised this conference call will contain statements that are considered forward-looking statements under the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to certain known and unknown risks and uncertainties as well as assumptions that could cause actual results to differ materially from those reflected in these forward-looking statements.

請注意，本次電話會議將包含根據 1995 年《私人證券訴訟改革法案》被視為前瞻性陳述的陳述。這些前瞻性陳述受某些已知和未知的風險和不確定性以及可能導致實際結果的假設的影響與這些前瞻性陳述中反映的內容存在重大差異。

These forward-looking statements are also subject to other risks and uncertainties that are described from time to time in the company's filings with the SEC. Do not place undue reliance on any forward-looking statements, which are being made only as of the date of this call. Except as required by law, the company undertakes no obligation to revise or publicly release the results of any revision to any forward-looking statements.

這些前瞻性陳述還受到公司向美國證券交易委員會提交的文件中不時描述的其他風險和不確定性的影響。不要過分依賴任何前瞻性陳述，這些陳述僅在本次電話會議之日作出。除法律要求外，公司不承擔任何修改或公開發布任何前瞻性陳述的任何修改結果的義務。

Our presentation also includes certain non-GAAP financial measures, including adjusted EBITDA as supplemental measures of performance of our business. All non-GAAP measures have been reconciled to the most directly comparable GAAP measures in accordance with SEC rules.

我們的介紹還包括某些非 GAAP 財務指標，包括調整後的 EBITDA 作為我們業務績效的補充指標。根據 SEC 規則，所有非 GAAP 措施都已與最直接可比的 GAAP 措施進行了核對。

You will find reconciliation tables and other important information in the earnings press release and Form 8-K we furnished to the SEC earlier today, which will be available on the company's Investor Relations section of its website within approximately 24 hours after this call has ended.

您將在我們今天早些時候提供給美國證券交易委員會的收益新聞稿和 8-K 表格中找到調節表和其他重要信息，這些信息將在本次電話會議結束後大約 24 小時內在其網站的投資者關係部分提供。

And now I will turn the call over to the company's CEO, Rob Sarlls. Rob, please go ahead.

現在我將把電話轉給公司的首席執行官 Rob Sarrls。羅伯，請繼續。

Well, thank you, and good afternoon, everyone. Our fiscal third quarter was highlighted by our strongest third quarter of sales since 2017, as well as our strongest third quarter of adjusted EBITDA since 2020.

好的，謝謝大家，下午好。我們第三財季的亮點是我們自 2017 年以來最強勁的第三季度銷售額，以及自 2020 年以來我們最強勁的第三季度調整後 EBITDA。

The groundwork our team has put in place since I arrived in May of last year has begun to generate strong momentum as evidenced in part by our flagship Durango store, generating record sales in the fiscal third quarter, up 34% compared to the prior year. Although we are still early in the development and deployment of our strategic transformation, these initial wins are very encouraging. It may tell us that we're on the right path. The combination of our transformation plan and extensive dialogue with our franchisees will help us continue to foster growth at both the manufacturing and retail level.

自從我去年 5 月上任以來，我們的團隊已經打下的基礎已經開始產生強勁的勢頭，我們的杜蘭戈旗艦店在一定程度上證明了這一點，第三財季的銷售額創下歷史新高，比去年同期增長 34%。儘管我們仍處於戰略轉型的製定和部署的早期階段，但這些初步的勝利非常令人鼓舞。它可能會告訴我們，我們走在正確的道路上。我們的轉型計劃與與加盟商的廣泛對話相結合，將幫助我們繼續促進製造和零售層面的增長。

As we mentioned on our last earnings call, any business transformation starts with onboarding the right team. Earlier this fiscal year, we brought on a new Chief Financial Officer and Vice President, Sales and Marketing. And since our last conference call, we've made several key additional hires.

正如我們在上次財報電話會議上提到的那樣，任何業務轉型都始於招募合適的團隊。本財年早些時候，我們任命了新的首席財務官兼銷售和營銷副總裁。自上次電話會議以來，我們又招聘了幾名重要的員工。

In October, we announced the appointment of Scott Ouellet as our Senior Supply Chain Advisor. Scott brings more than two decades of supply chain and strategic planning experience to our team and over 10 years of which were with Hershey. His strong track record of identifying operating improvements and processes that expand margins and increase quality, flexibility, and efficiency will serve us well and enable us to handle greater volumes in the future.

10 月，我們宣布任命 Scott Ouellet 為我們的高級供應鏈顧問。 Scott 為我們的團隊帶來了超過 20 年的供應鍊和戰略規劃經驗，其中超過 10 年是在 Hershey 工作的。他在確定可擴大利潤並提高質量、靈活性和效率的運營改進和流程方面的良好記錄將為我們提供良好的服務，並使我們能夠在未來處理更大的數量。

Just this last week, we hired two additional operations experts who are in the process of relocating to Durango to enhance our business. For the first time ever, Rocky Mountain Chocolate Factory will have a resident, trained R&D expert who will help us not only with product formulation and new product development, but also with quality and regulatory compliance.

就在上週，我們又聘請了兩名運營專家，他們正在調往杜蘭戈以加強我們的業務。 Rocky Mountain Chocolate Factory 將有史以來第一次擁有一名訓練有素的常駐研發專家，他們不僅會幫助我們進行產品配方和新產品開發，還會幫助我們進行質量和法規遵從性方面的工作。

Additionally, we hired a Senior Director of Manufacturing with extensive operational efficiency expertise with the financial background as a major plus. Both these new hires are critical to the first phase of our strategic plan, which includes the improvement of our operations in the factory and the enhancement of our end-to-end supply chain.

此外，我們還聘請了一位具有廣泛運營效率專業知識的高級製造總監，並且具有財務背景作為主要優勢。這兩名新員工對我們戰略計劃的第一階段至關重要，其中包括改善我們在工廠的運營和加強我們的端到端供應鏈。

Separately, in November, we announced the appointment of Kelsey Smith as Flagship Operations Manager to oversee the conversion of our Durango, Colorado store into our world-class operation and a reinvigorated beacon for the Durango community. She's been working closely with various colleagues representing all aspects of the business, including operations, marketing, business development, franchise support, and training. We're excited to see the growth she will bring to our hometown of Durango in the year ahead and the potential scope of impact it could have throughout our network.

另外，在 11 月，我們宣布任命凱爾西·史密斯 (Kelsey Smith) 為旗艦運營經理，負責監督我們科羅拉多州杜蘭戈商店的轉型，使其成為我們世界一流的運營商，並成為杜蘭戈社區重新煥發活力的燈塔。她一直與代表業務各個方面的各種同事密切合作，包括運營、營銷、業務開發、特許經營支持和培訓。我們很高興看到她將在未來一年為我們的家鄉杜蘭戈帶來增長，以及它可能對我們整個網絡產生的潛在影響範圍。

Thinking about our franchise network. When I joined the company last May, I pledged to visit 50 franchisees in 50 weeks during my first year as CEO.

考慮我們的特許經營網絡。當我去年 5 月加入公司時，我承諾在我擔任首席執行官的第一年的 50 週內拜訪 50 家加盟商。

I'm proud to say I'm well on the way to accomplishing my goal, having visited 27 stores so far. I can say confidently that our network feels more connected and energized with our team than they have in years. And the dialogue and feedback I have received during my business has already led to small but meaningful improvements.

我很自豪地說我正在實現我的目標，到目前為止我已經訪問了 27 家商店。我可以自信地說，與過去幾年相比，我們的網絡與我們的團隊感覺更加緊密和充滿活力。我在業務期間收到的對話和反饋已經帶來了微小但有意義的改進。

A small example of this is when I learned in our stores, we're only getting one delivery by the company truck in December, one of our busiest months of the year. We added a second delivery by the company truck last month, and store feedback on easing replenishment during this crucial selling season was well received. I look forward to completing the 50 visits in the spring where I will go coast to coast, visiting all our great airport locations.

這方面的一個小例子是，當我在我們的商店了解到，我們只有在 12 月通過公司卡車送貨，這是我們一年中最繁忙的月份之一。上個月，我們增加了公司卡車的第二次送貨，在這個關鍵的銷售季節，商店對放鬆補貨的反饋很受歡迎。我期待著在春季完成 50 次訪問，屆時我將從一個海岸到另一個海岸，參觀我們所有偉大的機場地點。

Furthering our commitment to our franchisee network, in December, we officially established our Franchisee Advisory Council and recently held our first meeting just this past Monday in Arizona. The council was formed to foster timely, consistent, and transparent dialogue among franchisees at Rocky Mountain Chocolate Factory, which is critically important given the transformation underway. Our goal with the council is to more fully align Durango with the franchisee network to collaborate on the changes needed for gradual, mutual success, and a superior experience for our customers.

為了進一步履行我們對加盟商網絡的承諾，我們於 12 月正式成立了加盟商諮詢委員會，並於上週一在亞利桑那州召開了我們的第一次會議。該委員會的成立是為了促進落基山巧克力工廠特許經營商之間及時、一致和透明的對話，鑑於正在進行的轉型，這一點至關重要。我們與理事會的目標是使 Durango 與加盟商網絡更充分地保持一致，以合作進行漸進、共同成功和為我們的客戶提供卓越體驗所需的變革。

During the meeting this week, we previewed the working aspects of our developing strategic plan, which were well received. The council also agreed to meet every other month to weigh in and advise the company on significant transformation changes coming down the pipe over the next 12 to 24 months.

在本週的會議上，我們預覽了我們發展戰略計劃的工作方面，受到了好評。該委員會還同意每隔一個月召開一次會議，就未來 12 到 24 個月內即將發生的重大轉型變革發表意見並向公司提出建議。

We will be holding our next convention and the first annual convention in decades in San Antonio in late September. Planning is already underway on making this highly impactful and very well attended, and the Franchisee Advisory Council is partnering with us on this.

我們將於 9 月下旬在聖安東尼奧舉行下一次大會和幾十年來的第一次年度大會。計劃已經在進行中，以使這個具有高度影響力和非常多的人參加，並且特許經營商諮詢委員會正在與我們合作。

While our financial results this quarter were a strong step in the right direction, we're still facing some level of macroeconomic pressure resulting in labor and supply chain challenges, albeit not as bad as the pressure we faced earlier in calendar 2022. And as I mentioned in our last conference call, we were dealing with labor shortages at our Durango manufacturing facility, which impacted productivity.

雖然我們本季度的財務業績是朝著正確方向邁出的重要一步，但我們仍然面臨著一定程度的宏觀經濟壓力，導致勞動力和供應鏈挑戰，儘管沒有我們在 2022 年早些時候面臨的壓力那麼嚴重。而且正如我在上次電話會議中提到，我們正在處理杜蘭戈製造工廠的勞動力短缺問題，這影響了生產力。

During our fiscal third quarter, however, we rolled out several new hiring and retention policies at the factory, which included enhanced new hire retention bonuses, resulting in a 150% increase in applications versus the third quarter last year. We have an active strategic planning committee wholly focused on rebuilding our culture, which we believe will improve the attractiveness to new potential hires while also improving retention.

然而，在我們的第三財季，我們在工廠推出了幾項新的招聘和留用政策，其中包括提高新員工留用獎金，使申請數量比去年第三季度增加了 150%。我們有一個活躍的戰略規劃委員會，完全專注於重建我們的文化，我們相信這將提高對新的潛在僱員的吸引力，同時也提高保留率。

Outside of Durango, I'm happy to announce that we increased pay for our truck drivers, bringing them up to market to balance out the impact that inflation has had on so many Americans. Keeping our fleet of drivers happy has allowed us to deliver products on time and ensure an efficient cadence for our manufacturing facility to each of our franchise stores. The benefit of this improved productivity far outweighs the cost of raising these truck driver wages.

在杜蘭戈之外，我很高興地宣布我們增加了卡車司機的工資，將他們帶到市場以平衡通貨膨脹對這麼多美國人的影響。讓我們的司機車隊滿意使我們能夠按時交付產品，並確保我們的製造工廠到我們的每個特許經營店的高效節奏。這種提高生產率的好處遠遠超過提高這些卡車司機工資的成本。

With respect to the supply chain, subsequent to the quarter, we met with our largest chocolate supplier to discuss opportunities for synergies and other process enhancements that can help us both reduce costs. They will be critical to our future growth, not only in terms of pound volume but in collaborating with our team and new R&D Head on innovation. It's worth noting, while we raised prices early in this fiscal year, which helped to offset inflationary cost pressure, our volumes have held up relatively well and are flat to slightly higher compared to the year-ago quarter, which I believe speaks to the quality of our products and the loyalty of our customers.

在供應鏈方面，本季度之後，我們會見了我們最大的巧克力供應商，討論了協同增效和其他流程改進的機會，這可以幫助我們雙方降低成本。它們對我們未來的增長至關重要，不僅在磅數方面，而且在與我們的團隊和新研發負責人的創新合作方面。值得注意的是，雖然我們在本財年早些時候提高了價格，這有助於抵消通脹成本壓力，但我們的銷量保持相對良好，與去年同期相比持平或略高，我認為這說明了質量我們的產品和客戶的忠誠度。

As another step in our business transformation, we have been actively identifying opportunities throughout the organization for margin and profitability improvements. Specifically, we've been working through an SKU rationalization to reduce our broad portfolio by at least 20%, removing products that account for an insignificant amount of revenue.

作為我們業務轉型的另一步，我們一直在積極尋找整個組織的機會，以提高利潤率和盈利能力。具體來說，我們一直在努力通過 SKU 合理化，將我們的廣泛產品組合減少至少 20%，移除收入微不足道的產品。

Moving forward, our new R&D team will work to replace some of these SKUs with new innovative products throughout calendar 2023. We look forward to bringing exciting new products to the menu for our customers.

展望未來，我們新的研發團隊將努力在整個 2023 年用新的創新產品替換其中一些 SKU。我們期待為我們的客戶帶來令人興奮的新產品。

While the transformation of the business is still in its infancy, a very solid third quarter and recent holiday season has proved us not only that we are on the right track with our plan, but that our commitment to extensive dialogue with the franchisee network and other stakeholders have begun to bear fruit. We look forward to sharing the exciting results from the holiday season on our next call, as well as the full details of our new strategic transformation plan.

雖然業務轉型仍處於起步階段，但非常穩健的第三季度和最近的假期證明我們不僅在我們的計劃上走在正確的軌道上，而且我們致力於與加盟商網絡和其他方面進行廣泛對話利益攸關方已開始取得成果。我們期待在下一次電話會議上分享假日季令人興奮的結果，以及我們新戰略轉型計劃的全部細節。

I will now hand it over to our CFO, Allen Arroyo to discuss the financial highlights of the quarter. Allen?

我現在將其交給我們的首席財務官 Allen Arroyo 討論本季度的財務亮點。艾倫？

Thank you, Rob. Jumping right into our financial results, please note that all variants commentary is on a year-over-year basis, unless stated otherwise.

謝謝你，羅布。直接進入我們的財務業績，請注意，除非另有說明，否則所有變體評論都是按年計算的。

Total revenue increased 11% to a $9.5 million for the three months ended November 30, 2022, compared to $8.5 million. Breaking down our revenue, total factory sales for the third quarter increased 14% to $7.3 million compared to $6.4 million, primarily due to higher shipments of product to our franchised and licensed retail stores as well as higher sales to customers outside of the Rocky Mountain franchisee network.

截至 2022 年 11 月 30 日止三個月，總收入增長 11% 至 950 萬美元，而同期為 850 萬美元。細分我們的收入，第三季度工廠總銷售額從 640 萬美元增長 14% 至 730 萬美元，這主要是由於我們的特許經營和特許零售店的產品出貨量增加以及落基山特許經營商以外客戶的銷售額增加網絡。

Same-store sales at all domestic Rocky Mountain Chocolate Factory locations increased 3% during the three months ended November 30, 2022. And same-store sales at the company's domestic frozen yogurt cafes increased 14%.

截至 2022 年 11 月 30 日的三個月內，落基山巧克力工廠所有國內門店的同店銷售額增長了 3%。該公司國內冷凍酸奶咖啡館的同店銷售額增長了 14%。

Retail sales increased 7% to approximately $679,000 compared to $636,000 in the fiscal third quarter of '23. Royalty and marketing revenue for the quarter was relatively flat at approximately $1.5 million.

與 2023 年第三財季的 636,000 美元相比，零售額增長了 7%，達到約 679,000 美元。本季度的特許權使用費和營銷收入相對持平，約為 150 萬美元。

Franchise fee revenue was also relatively flat at approximately $60,000 compared to a year-ago period. Total gross profit for the fiscal third quarter increased 17% to $2.1 million compared to $1.8 million. Total gross margin increased 50 basis points to 26.3% compared to 25.8% in the year-ago period -- the year-ago quarter, with the increase -- primarily due to increased pricing, which was partially offset by higher labor, material, and inventory costs.

與去年同期相比，特許經營費收入也相對持平，約為 60,000 美元。第三財季的總毛利從 180 萬美元增長 17% 至 210 萬美元。總毛利率增長 50 個基點至 26.3%，而去年同期為 25.8%，同比增長主要是由於定價上漲，部分被更高的勞動力、材料和存貨成本。

Looking at our operating expenses for the quarter. Total OpEx decreased to $9.7 million compared to $10.5 million in the year-ago period. Operating loss was reduced to $216,000 for the three months ended November 30, 2022, compared to a loss of $2 million in the year-ago period. The decrease in OpEx and operating loss was primarily driven by lower costs associated with the contested solicitation of proxies as well as increased operational efficiencies.

看看我們本季度的運營費用。總運營支出從去年同期的 1050 萬美元降至 970 萬美元。截至 2022 年 11 月 30 日止三個月，營業虧損減少至 216,000 美元，而去年同期為虧損 200 萬美元。運營支出和運營損失的減少主要是由於與有爭議的代理徵集相關的成本降低以及運營效率的提高。

Net loss in the third -- in the fiscal third quarter improved significantly to $212,000 or $0.03 per share compared to a net loss of $1.5 million or $0.24 per share. Our adjusted EBITDA increased nearly 30% to $1.3 million for the three months ended November 30, 2022, compared to $1 million in the year-ago quarter.

第三財季淨虧損大幅改善至 212,000 美元或每股 0.03 美元，而淨虧損為 150 萬美元或每股 0.24 美元。截至 2022 年 11 月 30 日止三個月，我們調整後的 EBITDA 增長近 30% 至 130 萬美元，而去年同期為 100 萬美元。

Now turning to the balance sheet. We ended the quarter with a cash balance of $3.2 million compared to $7.6 million at the end of our last fiscal year, which was February 28, 2022. The decrease in our cash position was driven by an increase in inventory as we stockpiled finished goods to prepare for the seasonally strong demand in the holidays. As of November 30, 2022, the company continues to remain debt free.

現在轉向資產負債表。本季度結束時，我們的現金餘額為 320 萬美元，而上一財年末（即 2022 年 2 月 28 日）為 760 萬美元。我們現金頭寸的減少是由於庫存增加，因為我們將成品儲存到為假期的季節性旺盛需求做準備。截至 2022 年 11 月 30 日，公司繼續保持無債務狀態。

With that, I'll turn the call back over to Rob.

有了這個，我會把電話轉回給 Rob。

Thanks, Allen. Overall, we were pleased with our results this quarter. We've made great progress in improving company culture and round out our executive team, and we are nearly complete with the development of our strategic plan.

謝謝，艾倫。總體而言，我們對本季度的業績感到滿意。我們在改善公司文化和完善我們的執行團隊方面取得了長足的進步，我們的戰略計劃的製定也接近完成。

We already have a few early wins under our belts, which is great to see and validates that we are on the right path. I firmly believe that the best phase for RMCF are ahead as we improve value to our customers, our franchisees, our employees, and shareholders.

我們已經取得了一些早期的勝利，很高興看到並證實我們走在正確的道路上。我堅信，隨著我們為客戶、特許經營商、員工和股東提高價值，RMCF 的最佳階段即將到來。

This concludes our prepared remarks, and we will now open it up for questions from those participating in the call. Operator, back to you.

我們準備好的發言到此結束，現在我們將公開發言，聽取電話會議參與者的提問。接線員，回到你身邊。

Thank you very much. We will now begin the question-and-answer session. (Operator Instructions) At this time we will pause momentarily to assemble our roster.

非常感謝。我們現在開始問答環節。 （操作員說明）此時我們將暫停片刻以組裝我們的花名冊。

Thank you, ladies and gentlemen, this concludes today's conference call. You may disconnect your phone lines at this time and have a wonderful day. Thank you for your participation.

女士們先生們，謝謝你們，今天的電話會議到此結束。此時您可以斷開電話線，度過美好的一天。感謝您的參與。