Rocky Mountain Chocolate Factory, Inc. · NASDAQ:RMCF
Rocky Mountain Chocolate Factory — Investor Presentation (June 2023)
28 slides from Rocky Mountain Chocolate Factory's investor presentation, Jun 1, 2023
Slide 1: Investor Presentation
foes MOUNTA CHOCOLATE FACTORY | | Investor Presentation Elevating Chocolate Experiences into Unforgettable Moments NASDAQ: RMCF # May 2023
Slide 2: Safe Harbor
Safe Harbor This presentation is for Informational purposes only and js rot an offer to sell securities or a 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, I
Slide 3: Company History
Company History Deep Heritage in Premium Chocolate and Confectionary Products 2393 rectatea Introduced uta Entered Caramel Apples frozen Yogurt Appointed New gone new aceouts for “20% 25% of tore revere Business Management Team Le Founded Went Pul yey Built out Hit Partnered with Partnered with Esta
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 $30M + Operates in a US c
Slide 5: Executive Team
Executive Team Robert Sarlls Allen Arroyo Director & CEO, CFO! iene SNOQ@: ~~ STEAKHOUSE x 4 WyandetSnacks Ww Andrew Ford Ryan McGrath vp - Sales & Marketing VP - Information Technology fos a caren] PAIR ¥ \ (HocoLATE FACTORY. EAPHESS. Donna Coupe Scott Ouellet VP — Franchise Support & Training Seni
Slide 6: A Rocky Setup: Analyzing the Problem
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 rising operating expenses and compressing margins A recognizable
Slide 7: Market Forecast & Drivers
Market Forecast & Drivers! + TAM - Chocolate and confectionery market + US confectionery sales reached $43B in 2022 (Euromonitor) Estimated US Chocolate Sale: (in Billions) + US chocolate confectionery sales amounted to $52.86B in 2023 and is expected to grow at a 3.5% CAGR through 2027 Candy and Co
Slide 8: Strategic Transformation Plan
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Slide 9: Strategic Transformation Plan
. Strategic Transformation Plan Three Key Imperatives to Revitalize Growth & Profitability Do More with Less Simplify and Focus Amplify and Elevate Exit Non-Core Frozen 2 Update brand/and image Factory Operations Yogurt + Revitalize customer experience + Product innovation Transportation and Logisti
Slide 10: Strategic Transformation Plan: Do More with Less
Strategic Transformation Plan Do More with Less Franchise ‘Transportation and Development Factory Operations Logistics “Maximize throughput, increace equipment Ullzation and reduce waste suslize cross dock ‘increase the investment ‘companies to reduce “Enhance training and staff evelopment increase
Slide 11: Strategic Transformation Plan: 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 out of the Company's 150+ chocolate stores each year in order to build a stronger relationship with the franchise
Slide 12: Simplify and Focus - Short-Term
Strategic Transformation Plan Simplify and Focus - Short-Term + Recently Divested Non-Core Frozen Yogurt Business + Limited scale, human capital intensive, untrue to brand + Right size the brick-and-mortar footprint + Established task force to improve stores or facilitate exits (25 to 35 stores) + F
Slide 13: Simplify and Focus - Long-Term
Strategic Transformation Plan Simplify and Focus - Long-Term + Upgrade technological infrastructure & enhance reporting tools + New ERP implementation in calendar 2024 + Enables better data-driven decisions + New singular POS system implementation in calendar 2024 + New in-house MIS tools/systems cu
Slide 14: 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 better economics + Revitalize the in-store experience + Modest investmen
Slide 15: 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 distri
Slide 16: 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 17: Investment Highlights
Investment Highlights A leading 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 ov
Slide 18: 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 Media Contact Rob Swadosh SwadoshGroup 908-723-2845 ea, | 1° al
Slide 19: Appendix
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Slide 20: Balance Sheet Summary
Balance Sheet Summary n Thou FY2022 FY2023 Assets Cash & Equivalent $7,587 $4,717 ‘Acct Receivable $1,906 $2,056 Taventory $4,298 $3,640 ‘Other Assets $13,090 $11,574 Total Assets $26,881 $21,987 Liabilities “Acct Payable $1,496 $2,190 Total Debt $0 so Other Liabilities $5,985 $5,427 Total Liabiliti
Slide 21: Board of Directors
Board of Directors Robert Sarlls Jeffrey Geygan Director & CEO Chairman of the Board WyandetSnacks | a c.oeat valuc AOS CLIMB Starlette Johnson Mark Riegal Director Director & i © @ or eMrattfoods MIFFoDo Russell Stover Brett Seabert Director == STRSAMERA Eas sec, | *
Slide 22: Key Stats
Key Stats! Stock Price $5.84 Shares Outstanding 6.25M Market Cap $36.5M FINANCIAL HIGHLIGHTS (FY 2023) Total Revenue $30.4M Adj EBITDA $2.6M $4.0M Factory/Retail Gross Profit $(6.0)M Net income 1.0x Evisales (FY'23) 12.2x EVIAEBITDA (FY'23), Cash & Equivalents $4.7M *Source: Capital 1Q (@ 5/23/2023)
Slide 23: Financial Performance
Financial Performance Key Performance Metrics" $35.0 25.0% 209% ee 20.0% $25.0 13.3% 16.4% 15.0% $20.0 Yo $15.0 10.0% #108 5.0% $5.0 ee 0.0% $15.0) 5.0% Fy 2021 Fy 2022 Fy 2023 mmRevenue MM@AEBITDA ~9=Gross Margin PBR i cat yar ended February 28, n ilons USD exc, margin tems ey
Slide 24: Ramping Store Productivity
Ramping Store Productivity $600 $550 $500 $450 $400 $350 $300 Fv2019 RMCF Average Unit Volume Fy2020, 31% AUV Growth vs Pre-COVID levels Fy2021 MEEAMICE AUVs —Stores Fy2022, F2023, 180 ws a0 165, 160 185 150 as 140 et, | *
Slide 25: Factory Sales
Factory Sales $120 Average Factory Sales to Franchisees 28% Growth vs Pre-COVID levels Fy2019, Fy2020 Fy2021, Fv2022, Fy2023,
Slide 26: Our Products
Our Products Rocky Mountain Assorted pbples Favorites GBAOS 4 —— i 4, Truffles
Slide 27: Durango Manufacturing Plant
Durango Manufacturing Plant + Examine all processes from procurement to manufacturing 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 Loo
Slide 28: Thank You
D S eJoe® > STHANK YO, f 2 © 8B @ et ay.
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