Rocky Mountain Chocolate Factory, Inc. · NASDAQ:RMCF
Rocky Mountain Chocolate Factory — Investor Presentation (November 2023)
33 slides from Rocky Mountain Chocolate Factory's investor presentation, Nov 16, 2023
Slide 1: Investor Presentation: Elevating Chocolate Experiences into Unforgettable Moments
Investor Presentation Elevating Chocolate Experiences into Unforgettable Moments NASDAQ:RMCF * November 2023
Slide 2: Safe Harbor
Safe Harbor ‘Thi presentations for informations purposes only andis not an oer to sll secuttieso¢ @ soltation of an offer to buy any securities and may nt be relied upon in connection swith the purchase or sal of any secur, Sales nd offers to sell Racky Mountain Chocolate Factory, ne. the “Company”
Slide 3: Company History
Company History Deep Heritage in Premium Chocolate and Confectionary Products eles BES jyoouRt fe Introduced : tony Entered . ton ee ees.) Frozen Yogurt Appointed New Divested Founded ‘Went Public Tore revenve Business Management Team Frozen Yogurt Business Built out Partnered with Partnered with Es
Slide 4: Rocky Mountain Chocolate Factory Today
Rocky Mountain Chocolate Factory Today Deep network of 150+ franchisee stores and 100+ Cold Stone Creamery licensed locations Business model focused on factory sales, royalty and marketing fees, franchise fees, retail sales (company-owned stores) and contract manufacturing Operates in a US confectio
Slide 5: Executive Team
Executive Team Robert Sarlls Director & CEO Allen Arroyo Scott Ouellet Donna Coupe CFO ‘SVP ~ Manufacturing & Supply Chain \VP ~ Franchise Support & Training von c A same HERSHEN BA bsg & Andrew Ford Ryan McGrath Kara Conklin VP — Sales & Marketing VP — Information Technology VP — Franchise Developm
Slide 6: A Rocky Setup
A Rocky Setup Analyzing the Problem Consistently generated positive operating cash flow with no debt, however revenue and profitability have deteriorated over the past 10+ years Alack of manufacturing discipline has contributed to rising operating expenses and compressing margins, as did underi inp
Slide 7: Market Forecast & Drivers
Market Forecast & Drivers! + TAM — Chocolate and confectionery market + US confectionery sales reached $438 in 2022 (Euromonitor) Estimated US Chocolate Sales? ions) + US chocolate confectionery sales amounted to $52.868 in 2023 and is expected to grow at a 3.5% CAGR through 20277, + Candy and Confe
Slide 8: Transformation Plan
Transformation Plan
Slide 9: Three Key Imperatives to Revitalize Growth & Profitability
Strategic Transformation Plan Three Key Imperatives to Revitalize Growth & Profitability Do More with Less Simplify and Focus Amplify and Elevate Production Exit Non-Core Frozen Yogurt Update brand and image Transportation and Logistics Deemphasize co-branding Revitalize customer experience Franchis
Slide 10: Do More with Less
Strategic Transformation Plan Do More with Less
Slide 11: Do More with Less
Strategic Transformation Plan Do More with Less Exit Underperforming Stores and Revitalize the Franchisee Network Shortly after joining Rocky Mountain, CEO Rob Sarlls pledged to visit 50 ut of the Company's 150+ chocolate stores each year in order to build a stronger relationship with the franchisee
Slide 12: Do More with Less — Recent Highlights
Strategic Transformation Plan Do More with Less — *Recent Highlights* Transportation and Logistics * 33% reduction in overall transportation fleet while maintaining shipment volumes *+ Fewer drivers needed to transport the same volume of pounds from the Durango production facility Factory Operations
Slide 13: Do More with Less — Recent Highlights
Strategic Transformation Plan Do More with Less — *Recent Highlights* Franchise Development and Operations * New Franchise Disclosure Document and Franchi: June + Introduction of Multi-Unit Area Agreement + Opportunity to enjoy attractive Royalty Rate as low as 4% through encouragement of higher pur
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 lat category, removed need for future investments + Right size the brick-and-mortar footprint '* Established task force to improve stores or facilitate exi
Slide 15: Simplify and Focus — Long-Term
Strategic Transformation Plan Simplify and Focus — Long-Term RMC in October formally outsourced 100% of its consumer packaging needs to a nationwide fulfillment and co-packing partner at its Salt Lake City operations + Company is 60+ year industry leader in working with CPG brands of all stripes, in
Slide 16: Amplify and Elevate
Strategic Transformation Plan Amplify and Elevate 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 investment by franchisees to upgrade store flow and f
Slide 17: Amplify and Elevate — Recent Highlights
Strategic Transformation Plan Amplify and Elevate — *Recent Highlights* Unveiled transformational brand refresh and trade name at the 2023 Annual National Franchisee Convention New primary logo incorporates the Rocky Mountains into the actual distinctive R and M ‘The word “Factory” will be removed f
Slide 18: Amplify and Elevate — Recent Highlights
Strategic Transformation Plan Amplify and Elevate — *Recent Highlights* Newly announced partnership with and international award-winning retail and hospitality design firm, Design Well Spent Co., to create a new aesthetic for the Company's storefronts Awealth of design experience + Led by Tobi Wray,
Slide 19: 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 20: Capital Expenditures and Allocation
Capital Expenditures and Allocation + Primary and fist use of free cash flow isto invest inthe business toward building the capabilities to execute on the strategic plan + westn preductionoeaninat roadblocks to maximise output toward mare than doubling pound vlume over the next several years while p
Slide 21: Multi-Year Outcomes
Z sock 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 Anetwork of 250+ revitalized chocolate shops doing
Slide 22: 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
Slide 23: Contact Us
Contact Us Company Contact Allen Arroyo Chief Financial Officer aarroyor et Investor Relations Contact Sean Mansouri, CFA Elevate IR 720-330-2829 RMCF@elevate-ir.com A\wown 23
Slide 24: Appendix
Slide 25: Balance Sheet Summary
Balance Sheet Summary FY 2023 FQ2 2024 Assets ‘cash & Equvaen $4,717 $3,985 ect Recehvable $2,056 $1,962 inventory $3,640 $3,233 ‘ther Asete $11,574 $11,355 Total Assets $21,987 $20,535, Liabilities ‘ect Payable $2,190 $2,406 Total Debt $0 $0 ‘Other abies $5,427 $5,257 Total Liabilities $7,617 $7,66
Slide 26: Board of Directors
Board of Directors Robert Sarlls Jeffrey Geygan Director & CEO Chairman of the Board Wyandetsnacks te SNE EEE US CLIMB Starlette Johnson Mark Riegel Director Director Maattioods MIFreDo Ruud Stover Brett Seabert Director B..... SMS Ole TANAMERA, Arwoorrnovstanenocoure | 26
Slide 27: Key Stats
Key Stats! stock Price shares Outstanding Market Cap $4.45 6.29M $28.0M FINANCIAL HIGHLIGHTS (77M Fa224) $2.8M om Total Revenue ‘Adj EBITDA eee oe $30.0M SoM $(4.6)M N/A Neticomefrom ——_-EVAEBTOACTIMY Conta Oo Cash & Equivalents Total Debt $4.0M som ‘Source: Capital (@ 10/18/2023) Arwoorrnovstanenoc
Slide 28: Financial Performance
Financial Performance Key Performance Metrics! $350 25.0% 20.9% $300 20.0% oeA, Ta3% Fr sso $200 3150 100% $100 5.0% $5.0 7 00% $(5.0) 5.0% Fv2021 Fy 2022 Fy 2023, mRevenue MMEAEBITDA “@-Gross Margin DES ec ticryearendetFerunry 28, ions Us ex arin tems Arvocerwournnenocoun | 28
Slide 29: Ramping Store Productivity
Ramping Store Productivity RMCF Average Unit Volume 3600 180 $550 cl 170 ~ 165 $450 160 155, 400 150 $350 | an $300 140 Fy2019 F¥2020 Fr2021 Fy2022 Fy2023 mmEAMCE ALS. —Stores Arsocermourrscnocorare | 29
Slide 30: Product Sales
Product Sales Average Product Sales to Franchisees $80 $60 . : Fy2022 Fr2023 Arsocermourrscnocorare | 30
Slide 31: Our Products
Our Products Rocky Mountain Assorted Favorites
Slide 32: 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
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