| Operating segments |
NOTE 15 – OPERATING SEGMENTS The Company classifies its business interests into three reportable segments: Rocky Mountain Chocolate Factory, Inc. Franchising, Manufacturing, Retail Stores, and Unallocated, which is the basis upon which the Company’s Chief Operating Decision Maker (CODM), the interim chief executive officer, evaluates the Company’s performance. The CODM uses the segment information in the annual planning process and considers actual versus plan variances in evaluating the performance of the segments. The accounting policies of the segments are the same as those described in the summary of significant accounting policies in Note 1 to these consolidated financial statements. The Company evaluates performance and allocates resources based on the segment operating profit or loss, which excludes unallocated corporate general and administrative costs and income tax expense or benefit. The Company’s reportable segments are strategic businesses that utilize common information systems and corporate administration. All inter-segment sales prices are market based. Each segment is managed separately because of the differences in required infrastructure and the differences in products and services:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FY 2026 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($'s in thousands) |
|
Franchising |
|
|
Manufacturing |
|
|
Retail |
|
|
Unallocated |
|
|
Total |
|
Total revenues |
|
$ |
6,135 |
|
|
$ |
20,026 |
|
|
$ |
1,974 |
|
|
$ |
- |
|
|
$ |
28,135 |
|
Intersegment revenues |
|
|
- |
|
|
|
(638 |
) |
|
|
- |
|
|
|
- |
|
|
|
(638 |
) |
Revenue from external customers |
|
|
6,135 |
|
|
|
19,388 |
|
|
|
1,974 |
|
|
|
- |
|
|
|
27,497 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of Sales |
|
|
- |
|
|
|
20,048 |
|
|
|
595 |
|
|
|
- |
|
|
|
20,643 |
|
Labor costs |
|
|
2,081 |
|
|
|
- |
|
|
|
488 |
|
|
|
1,810 |
|
|
|
4,379 |
|
Operating expenses |
|
|
627 |
|
|
|
- |
|
|
|
630 |
|
|
|
499 |
|
|
|
1,756 |
|
Professional fees |
|
|
176 |
|
|
|
- |
|
|
|
- |
|
|
|
1,685 |
|
|
|
1,861 |
|
Other general & administrative expenses |
|
|
520 |
|
|
|
- |
|
|
|
- |
|
|
|
1,441 |
|
|
|
1,961 |
|
|
|
|
3,404 |
|
|
|
20,048 |
|
|
|
1,713 |
|
|
|
5,435 |
|
|
|
30,600 |
|
Depreciation and amortization, exclusive of depreciation and amortization expense of $921 included in cost of sales (manufacturing segment) |
|
|
51 |
|
|
|
- |
|
|
|
29 |
|
|
|
403 |
|
|
|
484 |
|
Total costs and expenses |
|
|
3,455 |
|
|
|
20,048 |
|
|
|
1,742 |
|
|
|
5,838 |
|
|
|
31,084 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment profit (loss) |
|
|
2,680 |
|
|
|
(660 |
) |
|
|
232 |
|
|
|
(5,838 |
) |
|
|
(3,587 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(840 |
) |
|
|
(840 |
) |
Interest income |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
54 |
|
|
|
54 |
|
Other income (expense), net |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(786 |
) |
|
|
(786 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before income taxes |
|
|
2,680 |
|
|
|
(660 |
) |
|
|
232 |
|
|
|
(6,624 |
) |
|
|
(4,373 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax provision |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
187 |
|
|
|
187 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) from continuing operations |
|
|
2,680 |
|
|
|
(660 |
) |
|
|
232 |
|
|
|
(6,811 |
) |
|
|
(4,560 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) from discontinued operations, net of tax |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
|
2,680 |
|
|
|
(660 |
) |
|
|
232 |
|
|
|
(6,811 |
) |
|
|
(4,560 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Segment Disclosures |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
|
1,698 |
|
|
|
14,394 |
|
|
|
1,792 |
|
|
|
2,328 |
|
|
|
20,212 |
|
Capital expenditures |
|
|
- |
|
|
|
195 |
|
|
|
281 |
|
|
|
258 |
|
|
|
734 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FY 2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($'s in thousands) |
|
Franchising |
|
|
Manufacturing |
|
|
Retail |
|
|
Unallocated |
|
|
Total |
|
Total revenues |
|
$ |
5,564 |
|
|
$ |
23,572 |
|
|
$ |
1,466 |
|
|
$ |
- |
|
|
$ |
30,602 |
|
Intersegment revenues |
|
|
- |
|
|
|
(1,023 |
) |
|
|
- |
|
|
|
- |
|
|
|
(1,023 |
) |
Revenue from external customers |
|
|
5,564 |
|
|
|
22,549 |
|
|
|
1,466 |
|
|
|
- |
|
|
|
29,579 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of Sales |
|
|
- |
|
|
|
23,463 |
|
|
|
453 |
|
|
|
- |
|
|
|
23,916 |
|
Labor costs |
|
|
2,483 |
|
|
|
- |
|
|
|
433 |
|
|
|
2,250 |
|
|
|
5,166 |
|
Operating expenses |
|
|
1,338 |
|
|
|
- |
|
|
|
283 |
|
|
|
545 |
|
|
|
2,166 |
|
Professional fees |
|
|
403 |
|
|
|
- |
|
|
|
- |
|
|
|
2,335 |
|
|
|
2,738 |
|
Other general & administrative expenses |
|
|
185 |
|
|
|
- |
|
|
|
- |
|
|
|
1,175 |
|
|
|
1,360 |
|
|
|
|
4,409 |
|
|
|
23,463 |
|
|
|
1,169 |
|
|
|
6,305 |
|
|
|
35,346 |
|
Depreciation and amortization, exclusive of depreciation and amortization expense of $775 included in cost of sales (manufacturing segment) |
|
|
50 |
|
|
|
- |
|
|
|
13 |
|
|
|
112 |
|
|
|
175 |
|
Total costs and expenses |
|
|
4,459 |
|
|
|
23,463 |
|
|
|
1,182 |
|
|
|
6,417 |
|
|
|
35,521 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment profit (loss) |
|
|
1,105 |
|
|
|
(914 |
) |
|
|
284 |
|
|
|
(6,417 |
) |
|
|
(5,942 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(454 |
) |
|
|
(454 |
) |
Interest income |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
27 |
|
|
|
27 |
|
Gain on sale of assets |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
247 |
|
|
|
247 |
|
Other income (expense), net |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(180 |
) |
|
|
(180 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before income taxes |
|
|
1,105 |
|
|
|
(914 |
) |
|
|
284 |
|
|
|
(6,597 |
) |
|
|
(6,122 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax provision |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) from continuing operations |
|
|
1,105 |
|
|
|
(914 |
) |
|
|
284 |
|
|
|
(6,597 |
) |
|
|
(6,122 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) from discontinued operations, net of tax |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
|
1,105 |
|
|
|
(914 |
) |
|
|
284 |
|
|
|
(6,597 |
) |
|
|
(6,122 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Segment Disclosures |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
|
2,213 |
|
|
|
14,867 |
|
|
|
803 |
|
|
|
3,292 |
|
|
|
21,175 |
|
Capital expenditures |
|
|
16 |
|
|
|
2,543 |
|
|
|
7 |
|
|
|
1,196 |
|
|
|
3,762 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FY 2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($'s in thousands) |
|
Franchising |
|
|
Manufacturing |
|
|
Retail |
|
|
Unallocated |
|
|
Total |
|
Total revenues |
|
$ |
5,928 |
|
|
$ |
21,833 |
|
|
$ |
1,319 |
|
|
$ |
- |
|
|
$ |
29,080 |
|
Intersegment revenues |
|
|
- |
|
|
|
(1,129 |
) |
|
|
- |
|
|
|
- |
|
|
|
(1,129 |
) |
Revenue from external customers |
|
|
5,928 |
|
|
|
20,704 |
|
|
|
1,319 |
|
|
|
- |
|
|
|
27,951 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of Sales |
|
|
- |
|
|
|
20,200 |
|
|
|
456 |
|
|
|
- |
|
|
|
20,656 |
|
Labor costs |
|
|
1,947 |
|
|
|
- |
|
|
|
337 |
|
|
|
3,373 |
|
|
|
5,657 |
|
Operating expenses |
|
|
1,732 |
|
|
|
- |
|
|
|
335 |
|
|
|
599 |
|
|
|
2,666 |
|
Professional fees |
|
|
714 |
|
|
|
- |
|
|
|
- |
|
|
|
1,675 |
|
|
|
2,389 |
|
Other general & administrative expenses |
|
|
321 |
|
|
|
- |
|
|
|
- |
|
|
|
1,026 |
|
|
|
1,347 |
|
|
|
|
4,714 |
|
|
|
20,200 |
|
|
|
1,128 |
|
|
|
6,673 |
|
|
|
32,715 |
|
Depreciation and amortization, exclusive of depreciation and amortization expense of $750 included in cost of sales (manufacturing segment) |
|
|
32 |
|
|
|
6 |
|
|
|
8 |
|
|
|
92 |
|
|
|
138 |
|
Total costs and expenses |
|
|
4,746 |
|
|
|
20,206 |
|
|
|
1,136 |
|
|
|
6,765 |
|
|
|
32,853 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment profit (loss) |
|
|
1,182 |
|
|
|
498 |
|
|
|
183 |
|
|
|
(6,765 |
) |
|
|
(4,902 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(53 |
) |
|
|
(53 |
) |
Interest income |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
79 |
|
|
|
79 |
|
Other income (expense), net |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
26 |
|
|
|
26 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before income taxes |
|
|
1,182 |
|
|
|
498 |
|
|
|
183 |
|
|
|
(6,739 |
) |
|
|
(4,876 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax provision |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) from continuing operations |
|
|
1,182 |
|
|
|
498 |
|
|
|
183 |
|
|
|
(6,739 |
) |
|
|
(4,876 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings from discontinued operations, net of tax |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
704 |
|
|
|
704 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
|
1,182 |
|
|
|
498 |
|
|
|
183 |
|
|
|
(6,035 |
) |
|
|
(4,172 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Segment Disclosures |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
|
1,255 |
|
|
|
11,989 |
|
|
|
510 |
|
|
|
6,823 |
|
|
|
20,577 |
|
Capital expenditures |
|
|
135 |
|
|
|
2,297 |
|
|
|
42 |
|
|
|
543 |
|
|
|
3,017 |
|
|