Rocky Mountain Chocolate Factory, Inc. (NASDAQ:RMCF) (the “Company,” “we” or “RMCF”), a leading manufacturer and international franchiser of gourmet chocolates and other confectionary products, today announced it has completed the sale of the franchise rights and associated intellectual property of U-Swirl International, Inc. (“U-Swirl”), the Company’s yogurt franchise business, to U Swirl, LLC, a related company of Fosters Freeze led by the team of Neal Dahya, Nimesh Dahya, and Kishan Patel. The transaction closed on May 1, 2023.
The Company’s sale of all remaining U-Swirl franchise-related assets, along with the separate sale of three formerly corporate-owned frozen yogurt stores to a third party in February 2023, represents the Company’s complete exit from frozen yogurt operations. In Fiscal Year 2022, the Company’s frozen yogurt operations segment generated approximately $2.9 million of revenue and $0.7 million of adjusted EBITDA (a non-GAAP measure defined below). Between Fiscal Year 2017 and Fiscal Year 2022, revenue and adjusted EBITDA for the Company’s frozen yogurt operations segment declined 45% and 60%, respectively.
“The yogurt business has been a part of the Rocky Mountain Chocolate Factory family for over a decade, beginning with the launch of Aspen Leaf in 2010 and then our acquisition of U-Swirl in 2013,” said CEO Rob Sarlls. “This final divestiture enables us to focus on our core operations of manufacturing and marketing premium chocolate products for a consistently growing marketplace, while strengthening our commitment to RMCF franchisees. The proceeds from the sale will be reinvested into our factory and equipment to drive operational efficiencies, product development, and improve product quality and consistency.”
Sarlls added, “I want to thank our U-Swirl franchisees for their contributions over the years. We are excited for their future prospects with Fosters Freeze and wish them well.”
North Point Mergers and Acquisitions, Inc. served as financial advisor and Venable LLP acted as legal advisor to RMCF on this transaction.
Corporate Strategy Update
The Company will hold a conference call in the coming weeks to discuss its Fiscal Fourth Quarter and Full Year 2023 results and to introduce its new strategic transformation plan. Details for the conference call will be provided in a separate press release.
