Rocky Mountain Chocolate Factory, Inc. · NASDAQ:RMCF
Rocky Mountain Chocolate Factory — Investor Presentation (August 2023)
32 slides from Rocky Mountain Chocolate Factory's investor presentation, Aug 16, 2023
Slide 1: Investor Presentation: Elevating Chocolate Experiences into Unforgettable Moments
<ocks MOUNT (HOCOLATE FACTORY | | Investor Presentation Elevating Chocolate Experiences into Unforgettable Moments NASDAQ: RMCF August 2023
Slide 2: Safe Harbor
Safe Harbor ‘This presentation is for informational purposes only and isnot an offer to sell securities ora solicitation of an offer to buy any securities and may not be relied upon in connection with the purchase or sale of any security. Sales and offers to sell Rocky Mountain Chocolate Factory Inc
Slide 3: Company History
Company History Deep Heritage in Premium Chocolate and Confectionary Products HS [22] Introduced Entered Divested Caramel Apples Frozen Yogurt Appointed New Frozen Yogurt aa ‘WocotaTeFACTORy] ney acon or Team Founded Went Public of store reven EARS SSooeoo Built out Partnered with Partnered with Est
Slide 4: Rocky Mountain Chocolate Factory Today
Rocky Mountain Chocolate Factory Today Deep network of 150+ franchisee stores and 100+ Cold At-a-Glance Stone Creamery licensed locations oot Business model focused on factory sales, royalty and marketing fees, franchise fees, retail sales (company- owned stores) and contract manufacturing $30M + Op
Slide 5: Executive Team
Executive Team Robert Sarlls Director & CEO “4 WyandetSnacks Andrew Ford VP - Sales & Marketing Donna Coupe VP - Franchise Support & Training am aT FACTOR Allen Arroyo cE MASTRO'S STEARHOUSE Ww Ee Ryan McGrath VP - Information Technology Frees OT SORTS HOCOLATE FACTORY, VRE. Scott Ouellet Senior Sup
Slide 6: A Rocky Setup
ARocky Setup Analyzing the Problem Consistently generates positive operating cash flow and is debt free, however revenue and profitability have deteriorated over the past 10+ years A lack of manufacturing discipline has contributed to ‘expenses and compressing margins A recognizable brand, but compe
Slide 7: Market Forecast & Drivers
Market Forecast & Drivers! + TAM - Chocolate and confectionery market + US confectionery sales reached $43B in 2022 (Euromonitor) ‘imated US Chocolate Sales? + US chocolate confectionery sales amounted to $52.86B in 2023 and is Gn Billions) expected to grow at a 3.5% CAGR through 2027?. Candy and Co
Slide 8: Strategic Transformation Plan
o “e Doe © PY STRATE © 7 @ ° @ TRANSFORMATION PLAN © a%broe eee, | °
Slide 9: Strategic Transformation Plan
Strategic Transformation Plan Three Key Imperatives to Revitalize Growth & Profitability Production Transportation and Logistics Franchise Development Franchise Operations Elevate chocolate experiences into unforgettable moments as Amer Exit Non-Core Frozen Yogurt Deemphasize co-branding Right size
Slide 10: Strategic Transformation Plan: Do More with Less
Strategic Transformation Plan Do More with Less Ps Franchise Development Production ‘Transportation and. Logistics Franchise Operations ‘Maximize throughput, Increase equipment tilzation and reduce improve franchisee telations thelr success wil Tead to our success ‘increase the investment ‘attractiv
Slide 11: Strategic Transformation Plan: Do More with Less
rock movi Strategic Transformation Plan (HOCOLATE F Do More with Less Exit Underperforming Stores and Revitalize the Franchisee Network + Shortly after joining Rocky Mountain, CEO Rob Sarlls pledged to visit 50 out of the Company's 150+ chocolate stores each year in order to build a stronger relatio
Slide 12: Do More with Less: Results to Date
Strategic Transformation Plan Do More with Less — *Results to Date* Transportation and Logistics + $400K p.a. in realized production savings + Asa result of fewer production errors, utility savings, and tighter inventory management + $300K p.a. in warehousing and transportation savings + Use of thir
Slide 13: Do More with Less: Results to Date
Strategic Transformation Plan Do More with Less - *Results to Date* Franchise Development and Operations + New Franchise Disclosure Document and Franchise Agreement launched in late June + Introduction of Multi-Unit Area Agreement + Opportunity to enjoy attractive Royalty Rate as low as 4% through e
Slide 14: Simplify and Focus - Short-Term
Strategic Transformation Plan Simplify and Focus - Short-Term + Recently Divested Non-Core Frozen Yogurt Business + Limited scale, declining to flat category, removed need for future investments + Right size the brick-and-mortar footprint + Established task force to improve stores or facilitate exit
Slide 15: Simplify and Focus - Long-Term
Strategic Transformation Plan Simplify and Focus - Long-Term + Upgrade technological infrastructure & enhance reporting tools + New ERP implementation budgeted for calendar 2024 + Enables better data-driven decisions + New singular POS system implementation in calendar 2024 + New in-house MIS tools/
Slide 16: Amplify and Elevate
Strategic Transformation Plan Amplify and Elevate + Update brand and image by end of 2023 + Over the next several years, add up to 100 new stores in highly visible and trafficked locations operated by multi-unit developers with improved economics + Revitalize the in-store experience ‘Modest investme
Slide 17: Amplify and Elevate: Recent Developments
Strategic Transformation Plan Amplify and Elevate - *Recent Developments* + RMCF.com orders now inclusive of shipping + Significant decline in cart abandonment, higher dollar order volume, and higher total items purchased per order + Should provide significant lift to upcoming 2023 holiday sales + S
Slide 18: Amplify and Elevate
Strategic Transformation Plan Amplify and Elevate + Create an omnichannel customer experience Revamp company website for user friendly digital shopping Build a social media and influencer presence Roll out a Rocky Mountain Chocolate app Outsourcing e-commerce logistics to provide additional distribu
Slide 19: Capital Expenditures and Allocation
Capital Expenditures and Allocation Primary and first use of free cash flow is to invest in the business toward building the capabilities to execute on the strategic plan + Invest in production to eliminate roadblocks to maximize output toward more than doubling pound volume over the next several ye
Slide 20: Multi-Year Outcomes
Strategic Transformation Plan Multi-Year Outcomes Firmly establish Rocky Mountain Chocolate as America’s #1 premium chocolatier with first-class manufacturing and omnichannel retail More than double chocolate revenue and factory pound volume A network of 250+ revitalized chocolate shops doing over $
Slide 21: Investment Highlights
Investment Highlights Aleading manufacturer of premium chocolate products with a deep network of 150+ franchise stores, a debt free balance sheet and a history of steady free cash flow generation Operating in a highly fragmented US chocolate and candy shop market, which continues to benefit from ove
Slide 22: Company Contact
Company Contact Allen Arroyo Chief Financial Officer aarroyo@rmcf.net Investor Relations Contact Sean Mansouri, CFA Elevate IR 720-330-2829 RMCF@elevate-ir.com
Slide 23: Appendix
Slide 24: Balance Sheet Summary
Balance Sheet Summary FY 2023 FQt 2024 Assets Cash & Equivalent $4,717 $5,149 ‘acct Receivable $2,056 $1,829 inventory $3,640 $2,721 Other Assets $11,574 $11,100 Total Assets $21,987 $20,799 bilities ‘acct Payable $2,190 $2,007 Total Dest $0 $0 ‘Other Liabilities $5,427 $5,044 Total Liabilities 37.6
Slide 25: Board of Directors
Board of Directors Robert Sarlls Director & CEO wyandetsns ts SNE: Starlette Johnson Director &. @ © RB Brett Seabert Director Jeffrey Geygan Chairman of the Board %UDS CLIMB Mark Riegal Director Mrattfoods IMIFFODO Russell Stover
Slide 26: Key Stats
Key Stats! Stock Price Shares Outstanding Market Cap $5.73 6.29M $36.0M FINANCIAL HIGHLIGHTS (TTM F91"24) $3.4M 1.0x Total Revenue Adj EBITDA Gros oft ene $30.0M $1.8M $6.7M 16.3 Netineome From EVIAEBITDA TM) Continuing Ops Cash & Equivalents Total Debt $5.1M $omM wisn, | 2° ‘Source: Capital 1Q (@ 7
Slide 27: Financial Performance
Financial Performance Key Performance Metrics! 20.9% FEED Toa Fy 2021 Fy 2022 mmRevenue MMLAEBITDA ~9~Gross Margin Fv 2023 5.0%
Slide 28: Ramping Store Productivity
Ramping Store Productivity RMCF Average Unit Volume 31% AUV Growth vs Pre-COVID levels, Fv2019 Fy2020 Fy2021 Fr2022 Fr2023 mEERICF AUVs, —Stores eee, | 2°
Slide 29: Product Sales
Product Sales Average Product Sales to Franchisees . F019 Fr2020 Fy2021 Fy2022. Fy2023,
Slide 30: Our Products
Our Products Rocky Mountain Assorted Favorites Soa wea), | 3°
Slide 31: Durango Production Facility
Durango Production Facility + Examine all processes from procurement to production to distribution Improve efficiencies to increase throughput on highest value SKUs ~ (rationalizing SKUs, upgrading equipment, product quality, etc.) Find automation opportunities to deal with tight labor market Look a
Slide 32: Thank You
oe Boe ~ i — THANKYOU le CS ) @ Sb ep mo Be 22) Co 8 CS es |=
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