v3.26.3
Operating Segments
 6 Months Ended
Aug. 31, 2026
Segment Reporting [Abstract]  
Operating segments

NOTE 14 - OPERATING SEGMENTS

The Company classifies its business interests into three reportable segments: Rocky Mountain Chocolate Factory, Inc. Franchising, Manufacturing and Retail Stores. These categories, along with unallocated expenses, are 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 condensed 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.

 

Three Months Ended August 31, 2026

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

($'s in thousands)

 

Franchising

 

 

Manufacturing

 

 

Retail

 

 

Unallocated

 

 

Total

 

Total revenues

 

$

1,342

 

 

$

4,785

 

 

$

770

 

 

$

-

 

 

$

6,897

 

Intersegment revenues

 

 

-

 

 

 

(245

)

 

 

-

 

 

 

-

 

 

 

(245

)

Revenue from external customers

 

 

1,342

 

 

 

4,540

 

 

 

770

 

 

 

-

 

 

 

6,652

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs and Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of Sales

 

 

-

 

 

 

4,674

 

 

 

213

 

 

 

-

 

 

 

4,887

 

Labor costs

 

 

471

 

 

 

-

 

 

 

207

 

 

 

436

 

 

 

1,114

 

Operating expenses

 

 

108

 

 

 

-

 

 

 

228

 

 

 

310

 

 

 

646

 

Professional fees

 

 

126

 

 

 

-

 

 

 

-

 

 

 

245

 

 

 

371

 

Other general & administrative expenses

 

 

241

 

 

 

-

 

 

 

-

 

 

 

337

 

 

 

578

 

 

 

 

946

 

 

 

4,674

 

 

 

648

 

 

 

1,328

 

 

 

7,596

 

Depreciation and amortization, exclusive of depreciation and amortization expense of $232 included in cost of sales (manufacturing segment)

 

 

23

 

 

 

-

 

 

 

12

 

 

 

106

 

 

 

141

 

Total costs and expenses

 

 

969

 

 

 

4,674

 

 

 

660

 

 

 

1,434

 

 

 

7,737

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment profit (loss)

 

 

373

 

 

 

(134

)

 

 

110

 

 

 

(1,434

)

 

 

(1,085

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(211

)

 

 

(211

)

Interest income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

15

 

 

 

15

 

Other income (expense), net

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(196

)

 

 

(196

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) before income taxes

 

 

373

 

 

 

(134

)

 

 

110

 

 

 

(1,630

)

 

 

(1,281

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax provision

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated net income (loss)

 

$

373

 

 

$

(134

)

 

$

110

 

 

$

(1,630

)

 

$

(1,281

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Segment Disclosures

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

 

 

1,782

 

 

 

12,547

 

 

 

2,448

 

 

 

2,017

 

 

 

18,794

 

Capital expenditures

 

 

-

 

 

 

297

 

 

 

70

 

 

 

-

 

 

 

367

 

 

 

Three Months Ended August 31, 2025

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

($'s in thousands)

 

Franchising

 

 

Manufacturing

 

 

Retail

 

 

Unallocated

 

 

Total

 

Total revenues

 

$

1,640

 

 

$

4,907

 

 

$

433

 

 

$

-

 

 

$

6,980

 

Intersegment revenues

 

 

-

 

 

 

(157

)

 

 

-

 

 

 

-

 

 

 

(157

)

Revenue from external customers

 

 

1,640

 

 

 

4,750

 

 

 

433

 

 

 

-

 

 

 

6,823

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs and Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of Sales

 

 

-

 

 

 

5,106

 

 

 

110

 

 

 

-

 

 

 

5,216

 

Labor costs

 

 

521

 

 

 

-

 

 

 

100

 

 

 

402

 

 

 

1,023

 

Operating expenses

 

 

131

 

 

 

-

 

 

 

127

 

 

 

114

 

 

 

372

 

Professional fees

 

 

-

 

 

 

-

 

 

 

-

 

 

 

89

 

 

 

89

 

Other general & administrative expenses

 

 

123

 

 

 

-

 

 

 

-

 

 

 

371

 

 

 

494

 

 

 

 

775

 

 

 

5,106

 

 

 

337

 

 

 

976

 

 

 

7,194

 

Depreciation and amortization, exclusive of depreciation and amortization expense of $238 included in cost of sales (manufacturing segment)

 

 

4

 

 

 

-

 

 

 

4

 

 

 

100

 

 

 

108

 

Total costs and expenses

 

 

779

 

 

 

5,106

 

 

 

341

 

 

 

1,076

 

 

 

7,302

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment profit (loss)

 

 

861

 

 

 

(356

)

 

 

92

 

 

 

(1,076

)

 

 

(479

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(190

)

 

 

(190

)

Interest income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

7

 

 

 

7

 

Other income (expense), net

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(183

)

 

 

(183

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) before income taxes

 

 

861

 

 

 

(356

)

 

 

92

 

 

 

(1,259

)

 

 

(662

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax provision

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated net income (loss)

 

$

861

 

 

$

(356

)

 

$

92

 

 

$

(1,259

)

 

$

(662

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Segment Disclosures

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

 

 

2,048

 

 

 

14,059

 

 

 

1,527

 

 

 

4,620

 

 

 

22,254

 

Capital expenditures

 

 

-

 

 

 

13

 

 

 

177

 

 

 

6

 

 

 

196

 

 

Six Months Ended August 31, 2026

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

($'s in thousands)

 

Franchising

 

 

Manufacturing

 

 

Retail

 

 

Unallocated

 

 

Total

 

Total revenues

 

$

2,574

 

 

$

9,308

 

 

$

1,331

 

 

$

-

 

 

$

13,213

 

Intersegment revenues

 

 

-

 

 

 

(448

)

 

 

-

 

 

 

-

 

 

 

(448

)

Revenue from external customers

 

 

2,574

 

 

 

8,860

 

 

 

1,331

 

 

 

-

 

 

 

12,765

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs and Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of Sales

 

 

-

 

 

 

9,237

 

 

 

352

 

 

 

-

 

 

 

9,589

 

Labor costs

 

 

956

 

 

 

-

 

 

 

359

 

 

 

939

 

 

 

2,254

 

Operating expenses

 

 

223

 

 

 

-

 

 

 

393

 

 

 

401

 

 

 

1,017

 

Professional fees

 

 

168

 

 

 

-

 

 

 

-

 

 

 

738

 

 

 

906

 

Other general & administrative expenses

 

 

280

 

 

 

-

 

 

 

-

 

 

 

530

 

 

 

810

 

 

 

 

1,627

 

 

 

9,237

 

 

 

1,104

 

 

 

2,608

 

 

 

14,576

 

Depreciation and amortization, exclusive of depreciation and amortization expense of $459 included in cost of sales (manufacturing segment)

 

 

47

 

 

 

-

 

 

 

23

 

 

 

210

 

 

 

280

 

Total costs and expenses

 

 

1,674

 

 

 

9,237

 

 

 

1,127

 

 

 

2,818

 

 

 

14,856

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment profit (loss)

 

 

900

 

 

 

(377

)

 

 

204

 

 

 

(2,818

)

 

 

(2,091

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(419

)

 

 

(419

)

Interest income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

61

 

 

 

61

 

Other income (expense), net

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(358

)

 

 

(358

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) before income taxes

 

 

900

 

 

 

(377

)

 

 

204

 

 

 

(3,176

)

 

 

(2,449

)

Income tax provision

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated net income (loss)

 

$

900

 

 

$

(377

)

 

$

204

 

 

$

(3,176

)

 

$

(2,449

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Segment Disclosures

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

 

 

1,782

 

 

 

12,547

 

 

 

2,448

 

 

 

2,017

 

 

 

18,794

 

Capital expenditures

 

 

-

 

 

 

525

 

 

 

95

 

 

 

26

 

 

 

646

 

 

Six Months Ended August 31, 2025

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

($'s in thousands)

 

Franchising

 

 

Manufacturing

 

 

Retail

 

 

Unallocated

 

 

Total

 

Total revenues

 

$

3,296

 

 

$

9,448

 

 

$

752

 

 

$

-

 

 

$

13,496

 

Intersegment revenues

 

 

-

 

 

 

(300

)

 

 

-

 

 

 

-

 

 

 

(300

)

Revenue from external customers

 

 

3,296

 

 

 

9,148

 

 

 

752

 

 

 

-

 

 

 

13,196

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs and Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of Sales

 

 

-

 

 

 

9,413

 

 

 

195

 

 

 

-

 

 

 

9,608

 

Labor costs

 

 

1,017

 

 

 

-

 

 

 

184

 

 

 

848

 

 

 

2,049

 

Operating expenses

 

 

224

 

 

 

-

 

 

 

249

 

 

 

135

 

 

 

608

 

Professional fees

 

 

94

 

 

 

-

 

 

 

-

 

 

 

385

 

 

 

479

 

Other general & administrative expenses

 

 

241

 

 

 

-

 

 

 

-

 

 

 

609

 

 

 

850

 

 

 

 

1,576

 

 

 

9,413

 

 

 

628

 

 

 

1,977

 

 

 

13,594

 

Depreciation and amortization, exclusive of depreciation and amortization expense of $465 included in cost of sales (manufacturing segment)

 

 

19

 

 

 

-

 

 

 

7

 

 

 

200

 

 

 

226

 

Total costs and expenses

 

 

1,595

 

 

 

9,413

 

 

 

635

 

 

 

2,177

 

 

 

13,820

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment profit (loss)

 

 

1,701

 

 

 

(265

)

 

 

117

 

 

 

(2,177

)

 

 

(624

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(378

)

 

 

(378

)

Interest income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

16

 

 

 

16

 

Other income (expense), net

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(362

)

 

 

(362

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) before income taxes

 

 

1,701

 

 

 

(265

)

 

 

117

 

 

 

(2,539

)

 

 

(986

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax provision

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated net income (loss)

 

$

1,701

 

 

$

(265

)

 

$

117

 

 

$

(2,539

)

 

$

(986

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Segment Disclosures

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

 

 

2,048

 

 

 

14,059

 

 

 

1,527

 

 

 

4,620

 

 

 

22,254

 

Capital expenditures

 

 

-

 

 

 

112

 

 

 

177

 

 

 

76

 

 

 

365