I happen to have a soft spot in my heart for the Rocky Mountains, and, like many of you, I have difficulty resisting chocolate. And so, while until recently I had been unfamiliar with confectionary company Rocky Mountain Chocolate Factory
Anyway, this is an interesting company that has grown impressively, and whose board of directors obviously expects more of the same, given the relative scope of the company's share buyback program. Indeed, just a year ago, the board authorized the repurchase of up to $2 million of common stock. And this month, the program was expanded through the authorization of another $5 million, to a maximum of 350,000 shares.
Beyond that, the company obviously is doing well. For the quarter ended Feb. 28, its net income increased 34% to $1.4 million, or $0.23 per share, versus $1.1 billion, or $0.16 a share a year ago. Its revenues were $8.9 million, up 10% from the $8.1 million in the final quarter of the fiscal 2006 year.
In announcing the earnings, Bryan Merryman, Rocky Mountain's chief operating officer -- who also doubles as its chief financial offer -- said, "Our franchisees opened 37 new stores during fiscal 2007. This increased the total number of Rocky Mountain Chocolate Factory locations in operation to 322 as of February 28, 2007, and widened our lead as the largest chain of retail chocolate stores in the United States. We expect franchisees to open between 35 and 40 new stores in the current fiscal year, and the company expects net income to increase 15% to 20% if current business and economic trends continue."
I must admit that I'm intrigued by Rocky Mountain Chocolate Factory. While the company's clearly not a Hershey
I suggest that Fools with an appetite for chocolate and for small franchise-related companies take a careful look at this one. I also wonder whether my wife would enjoy running a chocolate store franchise. I'll have to ask her.
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Fool contributor David Lee Smith, an admitted and long-standing chocoholic, does not own shares in either of the companies mentioned. He welcomes your questions or comments. The Motley Fool has a disclosure policy.