Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Nov. 30, 2015 | Dec. 31, 2015 | |
Entity Registrant Name | Rocky Mountain Chocolate Factory, Inc. | |
Entity Central Index Key | 1,616,262 | |
Trading Symbol | rmcf | |
Current Fiscal Year End Date | --02-29 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Current Reporting Status | Yes | |
Entity Voluntary Filers | No | |
Entity Well-known Seasoned Issuer | No | |
Entity Common Stock, Shares Outstanding (in shares) | 5,839,396 | |
Document Type | 10-Q | |
Document Period End Date | Nov. 30, 2015 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
Consolidated Statements of Inco
Consolidated Statements of Income (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Nov. 30, 2015 | Nov. 30, 2014 | Nov. 30, 2015 | Nov. 30, 2014 | |
Revenues | ||||
Sales | $ 8,024,803 | $ 8,583,981 | $ 22,480,092 | $ 23,108,761 |
Franchise and royalty fees | 1,782,510 | 1,977,581 | 6,965,797 | 7,232,455 |
Total revenues | 9,807,313 | 10,561,562 | 29,445,889 | 30,341,216 |
Costs and Expenses | ||||
Cost of sales, exclusive of depreciation and amortization expense of $100,831, $100,825, $202,721 and $190,452, respectively | 5,202,953 | 5,527,876 | 14,448,327 | 14,229,018 |
Franchise costs | 657,660 | 558,560 | 1,871,113 | 1,623,505 |
Sales and marketing | 593,793 | 608,536 | 1,832,828 | 1,838,395 |
General and administrative | 1,087,633 | 1,230,495 | 3,550,781 | 3,816,996 |
Retail operating | 669,961 | 724,608 | 2,318,404 | 2,697,163 |
Depreciation and amortization | 343,548 | 357,865 | 1,064,211 | 1,097,404 |
Restructuring and acquisition related charges | 709,212 | |||
Total costs and expenses | 8,555,548 | 9,007,940 | 25,085,664 | 26,011,693 |
Income from Operations | 1,251,765 | 1,553,622 | 4,360,225 | 4,329,523 |
Other Income (Expense) | ||||
Interest expense | (52,553) | (60,666) | (167,424) | (183,333) |
Interest income | 13,779 | 16,208 | 40,814 | 43,274 |
Other Income (Expense), net | (38,774) | (44,458) | (126,610) | (140,059) |
Income Before Income Taxes | 1,212,991 | 1,509,164 | 4,233,615 | 4,189,464 |
Income Tax Provision | 439,355 | 554,500 | 1,286,400 | 1,368,165 |
Consolidated Net Income | 773,636 | 954,664 | 2,947,215 | 2,821,299 |
Less: Net income (loss) attributable to non-controlling interest | 332,835 | (7,714) | 963,659 | 270,231 |
Net Income attributable to RMCF | $ 440,801 | $ 962,378 | $ 1,983,556 | $ 2,551,068 |
Basic Earnings per Common Share (in dollars per share) | $ 0.08 | $ 0.16 | $ 0.34 | $ 0.41 |
Diluted Earnings per Common Share (in dollars per share) | $ 0.07 | $ 0.15 | $ 0.32 | $ 0.40 |
Weighted Average Common Shares Outstanding - Basic (in shares) | 5,840,407 | 6,162,829 | 5,911,561 | 6,171,327 |
Dilutive Effect of Stock Options and Restricted Stock Units (in shares) | 181,742 | 218,027 | 209,173 | 265,153 |
Weighted Average Common Shares Outstanding - Diluted (in shares) | 6,022,149 | 6,380,856 | 6,120,734 | 6,436,480 |
Consolidated Statements of Inc3
Consolidated Statements of Income (Unaudited) (Parentheticals) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Nov. 30, 2015 | Nov. 30, 2014 | Nov. 30, 2015 | Nov. 30, 2014 | |
Cost of sales, depreciation and amortization | $ 100,831 | $ 100,825 | $ 202,721 | $ 190,452 |
Consolidated Balance Sheets (Cu
Consolidated Balance Sheets (Current Period Unaudited) - USD ($) | Nov. 30, 2015 | Feb. 28, 2015 |
Common Stock, before Reorganization [Member] | ||
Stockholders’ Equity | ||
Common stock value | $ 180,384 | |
Common Stock, after Reorganization [Member] | ||
Stockholders’ Equity | ||
Common stock value | $ 6,018 | |
Cash and cash equivalents | 5,153,920 | 7,157,371 |
Accounts receivable, less allowance for doubtful accounts of $825,118 and $696,798, respectively | 4,107,459 | 4,291,470 |
Notes receivable, current portion, less current portion of the valuation allowance of $2,262 and $3,762, respectively | 336,093 | 359,493 |
Refundable income taxes | 4,436 | 172,945 |
Inventories, less reserve for slow moving inventory of $205,967 and $197,658, respectively | 5,071,320 | 4,785,376 |
Deferred income taxes | 515,303 | 572,957 |
Other | 320,872 | 318,275 |
Total current assets | 15,509,403 | 17,657,887 |
Property and Equipment, Net | 6,564,819 | 6,797,536 |
Notes receivable, less current portion and valuation allowance of $30,000 and $28,500, respectively | 669,075 | 668,302 |
Goodwill, net | 2,977,473 | 2,977,473 |
Franchise Rights, net | 5,238,513 | 5,439,460 |
Intangible assets, net | 424,599 | 440,428 |
Other | 149,890 | 157,127 |
Total other assets | 9,459,550 | 9,682,790 |
Total Assets | 31,533,772 | 34,138,213 |
Current maturities of long term debt | 1,242,066 | 1,208,888 |
Accounts payable | 1,851,747 | 1,675,746 |
Accrued salaries and wages | 734,954 | 819,184 |
Other accrued expenses | 3,006,376 | 2,910,777 |
Dividend payable | 700,728 | 721,536 |
Deferred income | 604,238 | 951,241 |
Total current liabilities | 8,140,109 | 8,287,372 |
Long-term obligations | 4,148,741 | 5,083,479 |
Deferred Income Taxes | $ 1,071,961 | $ 1,029,507 |
Commitments and Contingencies | ||
Preferred stock, $.001 par value; 250,000 authorized; -0- shares issued and outstanding | $ 0 | $ 0 |
Additional paid-in capital | 7,225,711 | 7,163,092 |
Retained earnings | 11,391,255 | 11,524,708 |
Non-controlling interest in equity of subsidiary | 1,894,025 | 869,671 |
Treasury stock, 178,802 shares and 0 shares, at cost | (2,344,048) | 0 |
Total stockholders’ equity | 18,172,961 | 19,737,855 |
Total liabilities and stockholders’ equity | $ 31,533,772 | $ 34,138,213 |
Consolidated Balance Sheets (C5
Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($) | Nov. 30, 2015 | Feb. 28, 2015 |
Series A Preferred Stock [Member] | ||
Preferred stock, authorized (in shares) | 50,000 | 50,000 |
Undesignated Series [Member] | ||
Preferred stock, authorized (in shares) | 200,000 | 200,000 |
Common Stock, before Reorganization [Member] | ||
Common stock, par value (in dollars per share) | $ 0.03 | $ 0.03 |
Common stock, authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock issued (in shares) | 0 | 6,012,799 |
Common stock, outstanding (in shares) | 0 | 6,012,799 |
Common Stock, after Reorganization [Member] | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, authorized (in shares) | 46,000,000 | 46,000,000 |
Common stock issued (in shares) | 6,018,198 | 0 |
Common stock, outstanding (in shares) | 5,839,396 | 0 |
Accounts receivable, allowance for doubtful accounts | $ 825,118 | $ 696,798 |
Notes receivable, current portion of valuation allowance | 2,262 | 3,762 |
Inventories, reserve | 205,967 | 197,658 |
Notes receivable, valuation allowance | $ 30,000 | $ 28,500 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, authorized (in shares) | 250,000 | 250,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Preferred stock, outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.03 |
Treasury stock, shares (in shares) | 178,802 | 0 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Nov. 30, 2015 | Nov. 30, 2014 | |
Cash Flows From Operating activities | ||
Net income | $ 2,947,215 | $ 2,821,299 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 1,064,211 | 1,097,404 |
Provision for slow moving inventory | 68,175 | 33,251 |
Asset impairment and store closure losses | 178,000 | |
Provision for loss on accounts and notes receivable | 129,000 | 192,137 |
Loss (gain) on sale or disposal of property and equipment | 90,149 | (6,524) |
Expense recorded for stock compensation | 615,740 | 700,526 |
Deferred income | (430,043) | (491,115) |
Deferred income taxes | 100,108 | (250,075) |
Changes in operating assets and liabilities: | ||
Accounts receivable | 50,028 | 307,530 |
Inventories | 121,220 | (208,403) |
Other current assets | (9,182) | 23,649 |
Accounts payable | (321,489) | (190,245) |
Accrued liabilities | 179,878 | 278,639 |
Net cash provided by operating activities | 4,605,010 | 4,486,073 |
Cash Flows From Investing Activities | ||
Addition to notes receivable | (46,489) | (163,396) |
Proceeds received on notes receivable | 259,619 | 383,208 |
Purchase of intangible assets | (54,479) | |
Proceeds from sale of assets | 23,692 | 531,345 |
Purchases of property and equipment | (625,180) | (446,166) |
Decrease (increase) in other assets | (115,407) | (8,786) |
Net cash used in investing activities | (558,244) | 296,205 |
Cash Flows From Financing Activities | ||
Payments on long-term debt | (901,560) | |
Repurchase of common stock | (3,030,708) | (1,904,829) |
Issuance of common stock | 69,599 | |
Proceeds from issuance of common stock in subsidiary | 892,895 | |
Tax benefit of stock awards | 19,868 | 200,544 |
Dividends paid | (2,137,817) | (2,039,911) |
Net cash used in financing activities | (6,050,217) | (2,781,702) |
Net Increase (Decrease) in Cash and Cash Equivalents | (2,003,451) | 2,000,576 |
Cash and Cash Equivalents, Beginning of Period | 7,157,371 | 5,859,729 |
Cash and Cash Equivalents, End of Period | $ 5,153,920 | $ 7,860,305 |
Note 1 - Nature of Operations a
Note 1 - Nature of Operations and Basis of Presentation | 9 Months Ended |
Nov. 30, 2015 | |
Notes to Financial Statements | |
Business Description and Accounting Policies [Text Block] | NOTE 1 – NATURE OF OPERATIONS AND BASIS OF PRESENTATION Nature of Operations The accompanying consolidated financial statements include the accounts of Rocky Mountain Chocolate Factory, Inc., a Delaware corporation, its wholly-owned subsidiaries, Rocky Mountain Chocolate Factory, Inc., a Colorado corporation (“RMCF”), Aspen Leaf Yogurt, LLC (“ALY”), and its 39%-owned subsidiary, U-Swirl, Inc. (“U-Swirl”), of which RMCF has financial and operational control (collectively, the “Company”). All intercompany balances and transactions have been eliminated in consolidation. The Company is an international franchisor, confectionery manufacturer and retail operator in the United States, Canada, Japan, South Korea and the United Arab Emirates. Founded in 1981, the Company is headquartered in Durango, Colorado and manufactures an extensive line of premium chocolate candies and other confectionery products. U-Swirl franchises and operates soft-serve frozen yogurt stores. The Company also sells its candy in selected locations outside of its system of retail stores and licenses the use of its brand with certain consumer products. Effective March 1, 2015, the Company was reorganized to create a holding company structure. The operating subsidiary with the same name, Rocky Mountain Chocolate Factory, Inc., a Colorado corporation, which was previously the public company, became a wholly-owned subsidiary of a newly formed entity, Rocky Mountain Chocolate Factory, Inc., a Delaware corporation (“Newco”), and all of the outstanding shares of common stock of RMCF, par value $0.03 per share, were exchanged on a one-for-one basis for shares of common stock, par value $0.001 per share, of Newco. The new holding company began trading on March 2, 2015 on the NASDAQ Global Market under the symbol “RMCF”, which was the same symbol used by RMCF prior to the holding company reorganization. In January 2013, through the Company’s wholly-owned subsidiaries, including ALY, the Company entered into two agreements to sell all of the assets of its ALY frozen yogurt stores, along with its interest in the self-serve frozen yogurt franchises and retail units branded as “Yogurtini” which the Company also acquired in January 2013, to U-Swirl, a publicly traded company (OTCQB: SWRL), in exchange for a 60% controlling equity interest in U-Swirl. Upon completion of these transactions, RMCF ceased to directly operate any Company-owned ALY locations or sell and support frozen yogurt franchise locations, which is now being supported by U-Swirl. As of November 30, 2015, the Company held approximately 39% of U-Swirl’s outstanding common stock. Additionally, the Company has the right to acquire approximately 29,290,700 shares of U-Swirl’s common stock as of November 30, 2015 through the conversion of outstanding debt owed by U-Swirl to the Company (see discussion of the U-Swirl Loan Agreement below). If the Company exercised this conversion right, the Company would hold approximately 74% of U-Swirl’s common stock. The U-Swirl Board of Directors is composed solely of Board members also serving on the Company’s Board of Directors. In fiscal year 2014, the Company entered into a promissory note with a third-party lender, and in turn, the Company entered into a loan and security agreement with U-Swirl (the “U-Swirl Loan Agreement”) pursuant to which U-Swirl could borrow up to $7.75 million from the Company to fund acquisitions . Borrowings under the U-Swirl Loan Agreement are payable in cash or conversion of the obligations into capital stock of U-Swirl, or a combination thereof, at the discretion of the Company. The U-Swirl Loan Agreement is secured by all of the assets of U-Swirl and its subsidiaries. U-Swirl is subject to various financial and leverage covenants under the U-Swirl Loan Agreement. U-Swirl was not compliant with the covenants at November 30, 2015. The loan covenants require U-Swirl to maintain consolidated adjusted EBITDA of $1,804,000 for the twelve months ended November 30, 2015. At November 30, 2015, U-Swirl reported $1,318,000 of adjusted EBITDA. Pursuant to the U-Swirl Loan Agreement, upon the occurrence and continuance of an event of default, among other remedies, the Company may charge interest on all amounts due under the loan at the default rate of 15% per annum, accelerate payment of all amounts due under the loan, foreclose on its security interest, and/or convert any amounts due under the loan to capital stock of U-Swirl at a premium. At November 30, 2015 we believe that the conversion of the loan into preferred stock as settlement of the obligation would result in 63% more preferred shares issued when compared to the amount issuable if U-Swirl was compliant with the loan covenants. In fiscal year 2014, U-Swirl acquired the franchise rights of frozen yogurt stores branded as “CherryBerry”, “Yogli Mogli Frozen Yogurt” and “Fuzzy Peach Frozen Yogurt”, and U-Swirl currently operates and franchises self-serve frozen yogurt cafés under the names “U-Swirl,” “Yogurtini,” “CherryBerry,” “Josie’s Frozen Yogurt,” “Yogli Mogli Frozen Yogurt,” “Fuzzy Peach Frozen Yogurt,” “Let’s Yo!,” and “Aspen Leaf Yogurt”. The Company’s revenues are currently derived from three principal sources: sales to franchisees and others of chocolates and other confectionery products manufactured by the Company; the collection of initial franchise fees, royalty and marketing fees from franchisees’ sales; and sales at Company-owned stores of chocolates, frozen yogurt, and other confectionery products. The following table summarizes the number of stores operated by the Company, its franchisees and licensees at November 30, 2015: Sold, Not Yet Open Open Total Rocky Mountain Chocolate Factory Company-owned stores - 3 3 Franchise stores – Domestic stores 3 191 194 Franchise stores – Domestic kiosks - 5 5 International License Stores 1 76 77 Cold Stone Creamery – co-branded 8 72 80 U-Swirl (Including all associated brands) Company-owned stores - 6 6 Company-owned stores – co-branded - 3 3 Franchise stores – Domestic stores * 194 194 Franchise stores – Domestic – co-branded * 15 15 International License Stores 1 8 9 Total 13 573 586 *U-Swirl cafés and the brands franchised by U-Swirl have historically utilized a development area sales model. The result is that many areas are under development, and the rights to open cafés within the development areas have been established, but there is no assurance that any individual development area will result in a determinable number of café openings. Basis of Presentation The accompanying consolidated financial statements have been prepared by the Company, without audit, and reflect all adjustments which are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented. The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial reporting and Securities and Exchange Commission regulations. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Certain amounts previously presented for prior periods have been reclassified to conform to the current presentation. The reclassifications had no effect on net income, working capital or equity previously reported. In the opinion of management, the consolidated financial statements reflect all adjustments (of a normal and recurring nature) which are necessary for a fair presentation of the financial position, results of operations and cash flows for the interim periods presented. The results of operations for the nine months ended November 30, 2015 are not necessarily indicative of the results to be expected for the entire fiscal year. These consolidated financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended February 28, 2015. Subsequent Events On January 5, 2015 U-Swirl, Inc filed Form 15, Certification and Notice of Termination of Registration Under Section 12(g) of the Securities Exchange Act of 1934 or Suspension of Duty to File Reports Under Sections 13 and 15(d) of the Securities Act of 1934. New Accounting Pronouncements In January 2016, Financial Accounting Standards Board ("FASB") issued Accounting Standards Update (“ASU”) No. 2016-01, Financial Instruments - Overall (Subtopic 825-10), Recognition and Measurement of Financial Assets and Financial Liabilities, which addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. ASU 2016-01 will be effective for us in the first quarter of our fiscal year 2019, and early adoption is not permitted. The Company is currently evaluating the impact that the standard will have on its consolidated financial statements. In November 2015, FASB issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes, which eliminates the current requirement to present deferred tax liabilities and assets as current and noncurrent in a classified balance sheet. Instead, entities will be required to classify all deferred tax assets and liabilities as noncurrent. This ASU will be effective for the Company beginning in its first quarter of fiscal year 2018 and early adoption is permitted. The Company is evaluating the timing of its adoption of this ASU. The Company does not expect this adoption to have a material impact on its financial statements. NOTES TO INTERIM (UNAUDITED) CONSOLIDATED FINANCIAL STATEMENTS In September 2015, FASB issued ASU 2015-16, Business Combinations (Topic 805), Simplifying the Accounting for Measurement-Period Adjustments, which requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The standard will be effective for us in the first quarter of our fiscal year 2017, although early adoption is permitted. The Company does not expect that the adoption of this ASU will have a significant impact on its consolidated financial statements. In July 2015, FASB issued ASU 2015-11, Inventory (Topic 330), Simplifying the Measurement of Inventory, which changes the measurement principle for inventory from the lower of cost or market to the lower of cost and net realizable value. ASU 2015-11 defines net realizable value as estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. The new guidance must be applied on a prospective basis and will be effective for us in the first quarter of our fiscal year 2017 with early adoption permitted. The Company does not believe the implementation of this standard will have a material impact on its consolidated financial statements. In April 2015, FASB issued ASU No. 2015-03, Interest-Imputation of Interest (Subtopic 835-30), Simplifying the Presentation of Debt Issuance Costs. ASU 2015-03 requires that debt issuance costs be presented in the balance sheet as a direct deduction from the carrying amount of debt liability, consistent with debt discounts or premiums. The recognition and measurement guidance for debt issuance costs would not be affected by the amendment. ASU 2015-03 will be effective for us in the first quarter of our fiscal year 2017, with early adoption permitted. When adopted, ASU 2015-03 is not expected to have a material impact on the Company’s consolidated financial statements. In May 2014, FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). ASU 2014-09 amends the guidance for revenue recognition to replace numerous, industry-specific requirements and converges areas under this topic with those of the International Financial Reporting Standards. The ASU implements a five-step process for customer contract revenue recognition that focuses on transfer of control, as opposed to transfer of risk and rewards. The amendment also requires enhanced disclosures regarding the nature, amount, timing and uncertainty of revenues and cash flows from contracts with customers. Other major provisions include the capitalization and amortization of certain contract costs, ensuring the time value of money is considered in the transaction price, and allowing estimates of variable consideration to be recognized before contingencies are resolved in certain circumstances. The amendments in this ASU are effective for reporting periods beginning after December 15, 2016; however, in August 2015, the FASB delayed the effective date by one year. For us the delayed effective date is for the first quarter of our fiscal year 2019. The deferral permits early adoption, but does not allow adoption any earlier than the original effective date of the standard. Entities can transition to the standard either retrospectively or as a cumulative-effect adjustment as of the date of adoption. The Company is currently assessing the impact the adoption of ASU 2014-09, including possible transition alternatives, will have on its consolidated financial statements. |
Note 2 - Earnings Per Share
Note 2 - Earnings Per Share | 9 Months Ended |
Nov. 30, 2015 | |
Notes to Financial Statements | |
Earnings Per Share [Text Block] | NOTE 2 - EARNINGS PER SHARE Basic earnings per share is calculated using the weighted-average number of shares of common stock outstanding. Diluted earnings per share reflects the potential dilution that could occur from common stock issuable through stock options and restricted stock units. For the three months ended November 30, 2015, there were 12,936 stock options excluded from the computation of earnings per share, compared with 12,936 stock options excluded from the computation of earnings per share for the three months ended November 30, 2014 because their effect would have been anti-dilutive. For the nine months ended November 30, 2015 and 2014, 12,936 and 12,936 stock options, respectively, were excluded from the computation of earnings per share because their effect would have been anti-dilutive. Restricted stock units become dilutive within the period granted and remain dilutive until the units vest and are issued as common stock. |
Note 3 - Inventories
Note 3 - Inventories | 9 Months Ended |
Nov. 30, 2015 | |
Notes to Financial Statements | |
Inventory Disclosure [Text Block] | NOTE 3 – INVENTORIES Inventories consist of the following: November 30, 2015 February 28, 2015 Ingredients and supplies $ 2,625,848 $ 2,755,232 Finished candy 2,549,952 2,130,133 U-Swirl, Inc. food and packaging 101,487 97,669 Reserve for slow moving inventory (205,967 ) (197,658 ) Total inventories $ 5,071,320 $ 4,785,376 |
Note 4 - Property and Equipment
Note 4 - Property and Equipment, Net | 9 Months Ended |
Nov. 30, 2015 | |
Notes to Financial Statements | |
Property, Plant and Equipment Disclosure [Text Block] | NOTE 4 - PROPERTY AND EQUIPMENT, NET Property and equipment consists of the following: November 30, 2015 February 28, 2015 Land $ 513,618 $ 513,618 Building 4,773,563 4,774,825 Machinery and equipment 9,920,470 10,120,865 Furniture and fixtures 1,194,855 1,224,433 Leasehold improvements 1,921,524 2,056,244 Transportation equipment 438,601 427,727 Asset Impairment (260,163 ) (290,640 ) 18,502,468 18,827,072 Less accumulated depreciation (11,937,649 ) (12,029,536 ) Property and equipment, net $ 6,564,819 $ 6,797,536 |
Note 5 - Stockholders' Equity
Note 5 - Stockholders' Equity | 9 Months Ended |
Nov. 30, 2015 | |
Notes to Financial Statements | |
Stockholders' Equity Note Disclosure [Text Block] | NOTE 5 - STOCKHOLDERS’ EQUITY Cash Dividend The Company paid a quarterly cash dividend of $0.12 per share of common stock on March 13, 2015 to stockholders of record on February 27, 2015. The Company paid a quarterly cash dividend of $0.12 per share of common stock on June 12, 2015 to stockholders of record on June 2, 2015. The Company paid a quarterly cash dividend of $0.12 per share of common stock on September 11, 2015 to stockholders of record on September 1, 2015. The Company declared a quarterly cash dividend of $0.12 per share of common stock on November 17, 2015 payable on December 11, 2015 to stockholders of record on November 27, 2015. Future declaration of dividends will depend on, among other things, the Company's results of operations, capital requirements, financial condition and on such other factors as the Company's Board of Directors may in its discretion consider relevant and in the best long term interest of the Company’s stockholders. Stock Repurchases On July 15, 2014, the Company publicly announced a plan to repurchase up to $3.0 million of its common stock in the open market or in private transactions, whenever deemed appropriate by management. On January 13, 2015, the Company announced a plan to purchase up to an additional $2,058,000 of its common stock under the repurchase plan, and on May 21, 2015, the Company announced a further increase to the repurchase plan by authorizing the purchase of up to an additional $2,090,000 of its common stock under the repurchase plan. During the three months ended May 31, 2015, the Company repurchased 75,968 shares under the repurchase plan at an average price of $13.62 per share. During the three months ended August 31, 2015, the Company repurchased 145,329 shares under the repurchase plan at an average price of $12.75 per share. During the three months ended November 30, 2015, the Company repurchased 12,005 shares under the repurchase plan at an average price of $12.00 per share. As of November 30, 2015, approximately $989,704 remains available under the repurchase plan for further stock repurchases. Stock-Based Compensation At November 30, 2015, the Company had stock-based compensation plans for employees and non-employee directors that authorized the granting of stock awards, including stock options and restricted stock units. The Company recognized $147,354 and $615,740 of stock-based compensation expense during the three and nine month periods ended November 30, 2015, respectively, compared to $166,843 and $700,526 during the three and nine month periods ended November 30, 2014, respectively. Compensation costs related to stock-based compensation are generally amortized over the vesting period of the stock awards. The following table summarizes stock option activity during the nine months ended November 30, 2015 and 2014: Nine Months Ended November 30, 2015 2014 Outstanding stock options as of February 28: 12,936 155,880 Granted - - Exercised - (142,944 ) Cancelled/forfeited - - Outstanding stock options as of November 30: 12,936 12,936 Weighted average exercise price $ 14.70 $ 14.70 Weighted average remaining contractual term (in years) 0.29 1.29 The following table summarizes restricted stock unit activity during the nine months ended November 30, 2015 and 2014: Nine Months Ended November 30, 2015 2014 Outstanding non-vested restricted stock units as of February 28: 237,641 295,040 Granted - - Vested (55,899 ) (56,199 ) Cancelled/forfeited - - Outstanding non-vested restricted stock units as of November 30: 181,742 238,841 Weighted average grant date fair value $ 12.22 $ 12.14 Weighted average remaining vesting period (in years) 3.47 4.33 During the nine months ended November 30, 2015, the Company granted 4,000 fully vested, unrestricted shares of common stock to non-employee directors compared with the grant of 4,000 fully vested, unrestricted shares of common stock to non-employee directors in the nine months ended November 30, 2014. There were no unrestricted shares of common stock granted during the three month periods ended November 30, 2015 or 2014. In connection with these non-employee director stock grants, the Company recognized $61,040 and $47,480 of stock-based compensation expense during the nine-month periods ended November 30, 2015 and 2014, respectively. During the three and nine month periods ended November 30, 2015, the Company recognized $147,353 and $307,846, respectively, of stock-based compensation expense related to non-vested, non-forfeited restricted stock unit grants. The restricted stock unit grants generally vest between 17% and 20% annually over a period of five to six years. During the nine month periods ended November 30, 2015 and 2014, 55,899 and 56,199 restricted stock units vested and were issued as common stock, respectively. Total unrecognized compensation expense of non-vested, non-forfeited restricted stock units granted as of November 30, 2015 was $2,011,819, which is expected to be recognized over the weighted-average period of 3.5 years. The Company recognized $0 and $99,250 of U-Swirl stock-based compensation expense during the three and nine months ended November 30, 2015, respectively, compared with $0 and $152,518 recognized during the three and nine months ended November 30, 2014, respectively. |
Note 6 - Supplemental Cash Flow
Note 6 - Supplemental Cash Flow Information | 9 Months Ended |
Nov. 30, 2015 | |
Notes to Financial Statements | |
Cash Flow, Supplemental Disclosures [Text Block] | NOTE 6 – SUPPLEMENTAL CASH FLOW INFORMATION Nine Months Ended November 30, 2015 2014 Cash paid for: Interest $ 128,881 $ 143,806 Income taxes 997,914 1,112,040 Non-Cash Operating Activities Accrued Inventory 497,190 477,176 Non-Cash Financing Activities Dividend Payable $ 700,728 $ 671,901 Sale of assets and inventory to buyers for notes receivable: Long-lived assets 127,500 446,353 Inventory - 17,301 Accounts receivable 5,000 17,043 Other assets 75,000 10,858 |
Note 7 - Operating Segments
Note 7 - Operating Segments | 9 Months Ended |
Nov. 30, 2015 | |
Notes to Financial Statements | |
Segment Reporting Disclosure [Text Block] | NOTE 7 - OPERATING SEGMENTS The Company classifies its business interests into five reportable segments: Franchising, Manufacturing, Retail Stores, U-Swirl, Inc. and Other. 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 and Note 1 to the Company’s consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended February 28, 2015. The Company evaluates performance and allocates resources based on operating contribution, which excludes unallocated Three Months Ended November 30, 2015 Franchising Manufacturing Retail U-Swirl, Inc. Other Total Total revenues $ 1,159,250 $ 7,499,619 $ 248,164 $ 1,293,843 $ - $ 10,200,876 Intersegment revenues (1,238 ) (392,325 ) - - - (393,563 ) Revenue from external ustomers 1,158,012 7,107,294 248,164 1,293,843 - 9,807,313 Segment profit (loss) 277,663 2,029,847 (61,439 ) (158,478 ) (874,602 ) 1,212,991 Total assets 1,162,582 12,540,706 1,087,849 12,721,643 4,020,992 31,533,772 Capital expenditures - 120,302 1,716 12,847 167,943 302,808 Total depreciation & amortization 8,717 98,286 3,810 197,717 35,018 343,548 Three Months Ended November 30, 2014 Franchising Manufacturing Retail U-Swirl, Inc. Other Total Total revenues $ 1,244,732 $ 7,994,116 $ 350,261 $ 1,430,397 $ - $ 11,019,506 Intersegment revenues (1,407 ) (456,537 ) - - - (457,944 ) Revenue from external customers 1,243,325 7,537,579 350,261 1,430,397 - 10,561,562 Segment profit (loss) 438,160 2,189,548 (94,387 ) (100,978 ) (923,179 ) 1,509,164 Total assets 1,115,716 12,878,192 1,166,851 15,284,436 7,425,254 37,870,449 Capital expenditures 22,050 28,414 658 (7,505 ) 4,526 48,143 Total depreciation & amortization 10,661 102,699 6,083 199,787 38,635 357,865 Nine Months Ended November 30, 2015 Franchising Manufacturing Retail U-Swirl, Inc. Other Total Total revenues $ 4,291,383 $ 19,662,432 $ 1,082,279 $ 5,476,052 $ - $ 30,512,146 Intersegment revenues (3,953 ) (1,062,304 ) - - - (1,066,257 ) Revenue from external customers 4,287,430 18,600,128 1,082,279 5,476,052 - 29,445,889 Segment profit (loss) 1,787,646 4,815,854 (89,578 ) 528,166 (2,808,473 ) 4,233,615 Total assets 1,162,582 12,540,706 1,087,849 12,721,643 4,020,992 31,533,772 Capital expenditures 22,709 341,126 2,676 51,319 207,350 625,180 Total depreciation & amortization 28,288 302,145 14,406 599,267 120,105 1,064,211 Nine Months Ended November 30, 2014 Franchising Manufacturing Retail U-Swirl, Inc. Other Total Total revenues $ 4,290,060 $ 19,331,459 $ 1,445,444 $ 6,424,909 $ - $ 31,491,872 Intersegment revenues (2,917 ) (1,147,739 ) - - - (1,150,656 ) Revenue from external customers 4,287,143 18,183,720 1,445,444 6,424,909 - 30,341,216 Segment profit (loss) 1,922,482 5,045,608 (129,726 ) 131,461 (2,780,361 ) 4,189,464 Total assets 1,115,716 12,878,192 1,166,851 15,284,436 7,425,254 37,870,449 Capital expenditures 28,753 295,188 34,511 55,847 31,867 446,166 Total depreciation & amortization 31,393 294,204 23,224 632,622 115,961 1,097,404 Revenue from one customer of the Company’s Manufacturing segment represented approximately $3.1 million, or 10.5 percent, of the Company’s revenues from external customers during the nine months ended November 30, 2015, compared to $2.9 million, or 9.6 percent of the Company’s revenues from external customers during the nine months ended November 30, 2014. |
Note 8 - Goodwill and Intangibl
Note 8 - Goodwill and Intangible Assets | 9 Months Ended |
Nov. 30, 2015 | |
Notes to Financial Statements | |
Goodwill and Intangible Assets Disclosure [Text Block] | NOTE 8 – GOODWILL AND INTANGIBLE ASSETS Intangible assets consist of the following: November 30, 2015 February 28, 2015 Amortization Period (Years) Gross Carrying Value Accumulated Amortization Gross Carrying Value Accumulated Amortization Intangible assets subject to amortization Store design 10 $ 220,778 $ 209,277 $ 220,778 $ 208,152 Packaging licenses 3 - 5 120,830 120,830 120,830 120,830 Packaging design 10 430,973 430,973 430,973 430,973 Trademark/Non-competition agreements 5 - 20 459,340 46,242 459,340 31,538 Franchise Rights 20 5,904,771 666,258 5,850,290 410,830 Total 7,136,692 1,473,580 7,082,211 1,202,323 Intangible assets not subject to amortization Franchising segment- Company stores goodwill 1,122,328 267,020 1,122,328 267,020 Franchising goodwill 2,202,529 197,682 2,202,529 197,682 Manufacturing segment-Goodwill 295,000 197,682 295,000 197,682 Trademark 20,000 - 20,000 - Total Goodwill 3,639,857 662,384 3,639,857 662,384 Total Intangible Assets $ 10,776,549 $ 2,135,964 $ 10,722,068 $ 1,864,707 Effective March 1, 2002, under Accounting Standards Codification Topic 350, all goodwill with indefinite lives is no longer subject to amortization. Accumulated amortization related to intangible assets not subject to amortization is a result of amortization expense related to indefinite life goodwill incurred prior to March 1, 2002. Amortization expense related to intangible assets totaled $277,839 and $275,790 during the nine months ended November 30, 2015 and 2014, respectively. At November 30, 2015, annual amortization of intangible assets, based upon our existing intangible assets and current useful lives, is estimated to be the following: 2016 $ 100,077 2017 404,596 2018 420,696 2019 427,126 2020 413,969 Thereafter 3,896,648 Total $ 5,663,112 |
Note 9 - Other Accrued Liabilit
Note 9 - Other Accrued Liabilities | 9 Months Ended |
Nov. 30, 2015 | |
Notes to Financial Statements | |
Accounts Payable and Accrued Liabilities Disclosure [Text Block] | NOTE 9 – OTHER ACCRUED LIABILITIES Other accrued expenses consisted of the following as of November 30, 2015 and February 28, 2015: November 30, 2015 February 28, 2015 Gift card liabilities 2,645,255 2,571,525 Other accrued expenses 361,121 339,252 Total other accrued expenses $ 3,006,376 $ 2,910,777 |
Note 10 - Related Party Transac
Note 10 - Related Party Transactions | 9 Months Ended |
Nov. 30, 2015 | |
Notes to Financial Statements | |
Related Party Transactions Disclosure [Text Block] | NOTE 10 – RELATED PARTY TRANSACTIONS Our President and Chief Executive Officer has members of his immediate family with ownership interests in retail marketing businesses. These businesses have, on occasion, provided services to the Company and may provide services in the future. For the nine months ended November 30, 2015, the Company paid $68,130 and no amount was recorded to accounts payable that related to these businesses. Transactions with these businesses have been immaterial to our results of operations. In July 2015, we entered into stock purchase agreements with each of (i) Franklin Crail, the Company’s Chief Executive Officer, President and Chairman of the Board, (ii) Bryan Merryman, the Company’s Chief Operating Officer, Chief Financial Officer, Treasurer and a director, and (iii) Edward Dudley, the Company’s Senior Vice President - Sales and Marketing, pursuant to which the Company purchased an aggregate of 54,500 shares of the Company’s common stock from Messrs. Crail, Merryman and Dudley (the “Stock Purchase Agreements”) at an average price of $12.60 per share. The price the Company paid for the shares was at a 3% discount to the closing price of the Company’s common stock on the transaction date. |
Note 11 - Restructuring and Acq
Note 11 - Restructuring and Acquisition Related Charges | 9 Months Ended |
Nov. 30, 2015 | |
Notes to Financial Statements | |
Restructuring and Related Activities Disclosure [Text Block] | NOTE 11 – RESTRUCTURING AND ACQUISITION RELATED CHARGES In connection with the acquisitions of the assets of CherryBerry, Yogli Mogli and Fuzzy Peach in fiscal year 2014, the Company recorded net restructuring charges of $124,551 during the nine months ended November 30, 2014 associated with these acquisitions. These charges were primarily the result of professional fees for due diligence, valuation, audit and other activities in connection with these acquisitions. On September 4, 2014, Ulderico Conte, Henry E. Cartwright and Terry A. Cartwright resigned as directors and officers of U-Swirl. Also on September 4, 2014, the U-Swirl Board of Directors appointed Bryan J. Merryman as the Chairman of the Board, replacing Franklin E. Crail. Mr. Merryman currently serves as the Chief Operating Officer and Chief Financial Officer of the Company. In connection with these management changes, U-Swirl announced an operational restructuring designed to enhance U-Swirl’s operating efficiencies, improve its franchise support capabilities, and rationalize its cost structure. This restructuring resulted in expense associated with termination of certain employment agreements, severance payments for other employees and expense associated with the impairment of certain long-lived leasehold improvement, property and equipment. The Company recorded restructuring charges of $584,661 during the nine months ended November 30, 2014 associated with this operational restructuring. Total restructuring and acquisition charges incurred were comprised of the following for the nine months ended November 30, 2014: Professional fees $ 186,011 Severance/transitional compensation 212,027 Leasehold improvements, property and equipment impairment of long-lived assets 243,000 Acceleration of restricted stock unit vesting 65,049 Other 3,125 Total $ 709,212 The Company did not incur any restructuring charges during the nine months ended November 30, 2015. |
Note 12 - Sale or Distribution
Note 12 - Sale or Distribution of Assets | 9 Months Ended |
Nov. 30, 2015 | |
Notes to Financial Statements | |
Sale or Distribution of Assets [Text Block] | NOTE 12 – SALE OR DISTRIBUTION OF ASSETS During the nine months ended November 30, 2015, the Company sold one Company-owned Rocky Mountain Chocolate Factory location and financed the upgrade and reopening of a former franchised Rocky Mountain Chocolate Factory location. During the nine months ended November 30, 2014, the Company sold one Company-owned Rocky Mountain Chocolate Factory location and four U-Swirl Company–owned cafés. These locations were sold for a combination of cash and notes receivable. Associated with these asset disposal activities, the Company recorded the following in the nine months ended November 30, 2015 and 2014: 2015 2014 Cash received on asset sales $ - $ 525,000 Notes receivable 264,433 431,244 |
Note 13 - Note Payable
Note 13 - Note Payable | 9 Months Ended |
Nov. 30, 2015 | |
Notes to Financial Statements | |
Long-term Debt [Text Block] | NOTE 13 – NOTE PAYABLE The Company’s long-term debt is comprised of a promissory note, the proceeds of which were loaned to U-Swirl and used to finance U-Swirl’s business acquisitions (unpaid balance as of November 30, 2015, $5.4 million). As more fully described in Note 1, the Company and U-Swirl entered into the U-Swirl Loan Agreement pursuant to which U-Swirl could borrow up to $7.75 million from the Company to fund acquisitions . Pursuant to applicable accounting rules, the U-Swirl Loan Agreement is an intercompany balance and transaction that is eliminated in consolidation. As of November 30, 2015 and February 28, 2015, notes payable consisted of the following: November 30, 2015 February 28, 2015 Promissory note $ 5,390,807 $ 6,292,367 Less: current maturities (1,242,066 ) (1,208,888 ) Long-term obligations $ 4,148,741 $ 5,083,479 The following table summarizes annual maturities of our notes payable as of November 30, 2015: Amount 2016 $ 305,684 2017 1,254,007 2018 1,302,526 2019 1,352,921 Thereafter 1,175,669 Total minimum payments 5,390,807 Less: current maturities (1,242,066 ) Long-term obligations $ 4,148,741 |
Note 14 - Contingencies
Note 14 - Contingencies | 9 Months Ended |
Nov. 30, 2015 | |
Notes to Financial Statements | |
Contingencies Disclosure [Text Block] | NOTE 14 - CONTINGENCIES In January 2014, U-Swirl entered into an Asset Purchase Agreement (the “CherryBerry Purchase Agreement”) with CherryBerry Enterprises LLC, CherryBerry Corporate LLC, CherryBerry LLC, and their respective owners (collectively, the CherryBerry Selling Parties”), pursuant to which U-Swirl acquired the franchise rights of frozen yogurt stores branded as “CherryBerry” (the “CherryBerry Acquisition”). As a part of the consideration for the CherryBerry Acquisition, U-Swirl agreed to issue an aggregate of 4,000,000 shares of U-Swirl common stock (the “CB Shares”) to the CherryBerry Selling Parties, which were subject to a one-year lock-up agreement. The CB Shares were issued to the CherryBerry Selling Parties in February 2015. Pursuant to the terms of the CherryBerry Purchase Agreement, following expiration of the lock-up period, if any of the CherryBerry Selling Parties desired to sell their CB Shares, they must first offer such shares to U-Swirl and RMCF prior to any sale of the CB Shares on the open market. If the proceeds from the sale of any of the CB Shares is less than $0.50 per share and the CherryBerry Selling Parties comply with other terms of the CherryBerry Purchase Agreement, U-Swirl agreed to pay a shortfall payment equal to the difference of the sale price of the CB Shares and $0.50 per share, multiplied by the number of shares sold by the CherryBerry Selling Parties. If U-Swirl was required to pay the shortfall payment at November 30, 2015, the shortfall payment would approximate $1,760,000. U-Swirl determined the likelihood of incurring the liability to be less than probable and has not recorded a contingent liability at November 30, 2015. In July and August 2015, the CherryBerry Selling Parties submitted to U-Swirl several requests for payment of approximately $205,000 of shortfall payments based on the sale of a portion of the CB Shares. On August 25, 2015, U-Swirl filed a lawsuit against the CherryBerry Selling Parties, a former officer and director of U-Swirl and unknown other parties, in the District Court for La Plata County, Colorado, alleging wrongful actions on their part to cause the price of U-Swirl’s common stock to decline and thereafter making an improper demand for the shortfall payment described above, and certain other actions in violation of various provisions of the CherryBerry Purchase Agreement. U-Swirl seeks unspecified damages, attorneys’ fees, other costs, and a determination that the shortfall payment arrangement is void. On September 30, 2015, the CherryBerry Selling Parties filed an answer and counterclaim to the lawsuit in the U.S. District Court for the District of Colorado, and moved the lawsuit to federal court in the U.S. District Court for the District of Colorado. The counterclaim added RMCF to the lawsuit, and alleges that U-Swirl materially breached the CherryBerry Purchase Agreement by not paying the shortfall payment, that U-Swirl is the alter ego of RMCF and RMCF is liable for any obligations of U-Swirl, and that the U-Swirl Loan Agreement should be recharacterized as equity. The CherryBerry Selling Parties seek payment in full of the shortfall payment under the CherryBerry Purchase Agreement, declaratory judgements that U-Swirl is the alter ego of RMCF and the U-Swirl Loan Agreement should be recharacterized as equity, and interest, attorneys’ fees, costs and other equitable relief. The lawsuit is currently in the early stages of litigation. U-Swirl and RMCF intend to defend the counterclaim vigorously. It is not possible at this time to predict the outcome of this matter or reasonably estimate any potential loss. |
Significant Accounting Policies
Significant Accounting Policies (Policies) | 9 Months Ended |
Nov. 30, 2015 | |
Accounting Policies [Abstract] | |
Basis of Accounting, Policy [Policy Text Block] | Basis of Presentation The accompanying consolidated financial statements have been prepared by the Company, without audit, and reflect all adjustments which are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented. The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial reporting and Securities and Exchange Commission regulations. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Certain amounts previously presented for prior periods have been reclassified to conform to the current presentation. The reclassifications had no effect on net income, working capital or equity previously reported. In the opinion of management, the consolidated financial statements reflect all adjustments (of a normal and recurring nature) which are necessary for a fair presentation of the financial position, results of operations and cash flows for the interim periods presented. The results of operations for the nine months ended November 30, 2015 are not necessarily indicative of the results to be expected for the entire fiscal year. These consolidated financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended February 28, 2015. |
Subsequent Events, Policy [Policy Text Block] | Subsequent Events Management evaluated all activity of the Company through the issue date of the financial statements and concluded that no subsequent events have occurred that would require recognition or disclosure in the financial statements. On January 5, 2015 U-Swirl, Inc filed Form 15, Certification and Notice of Termination of Registration Under Section 12(g) of the Securities Exchange Act of 1934 or Suspension of Duty to File Reports Under Sections 13 and 15(d) of the Securities Act of 1934. |
New Accounting Pronouncements, Policy [Policy Text Block] | New Accounting Pronouncements In January 2016, Financial Accounting Standards Board ("FASB") issued Accounting Standards Update (“ASU”) No. 2016-01, Financial Instruments - Overall (Subtopic 825-10), Recognition and Measurement of Financial Assets and Financial Liabilities, which addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. ASU 2016-01 will be effective for us in the first quarter of our fiscal year 2019, and early adoption is not permitted. The Company is currently evaluating the impact that the standard will have on its consolidated financial statements. In November 2015, FASB issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes, which eliminates the current requirement to present deferred tax liabilities and assets as current and noncurrent in a classified balance sheet. Instead, entities will be required to classify all deferred tax assets and liabilities as noncurrent. This ASU will be effective for the Company beginning in its first quarter of fiscal year 2018 and early adoption is permitted. The Company is evaluating the timing of its adoption of this ASU. The Company does not expect this adoption to have a material impact on its financial statements. In September 2015, FASB issued ASU 2015-16, Business Combinations (Topic 805), Simplifying the Accounting for Measurement-Period Adjustments, which requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The standard will be effective for us in the first quarter of our fiscal year 2017, although early adoption is permitted. The Company does not expect that the adoption of this ASU will have a significant impact on its consolidated financial statements. In July 2015, FASB issued ASU 2015-11, Inventory (Topic 330), Simplifying the Measurement of Inventory, which changes the measurement principle for inventory from the lower of cost or market to the lower of cost and net realizable value. ASU 2015-11 defines net realizable value as estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. The new guidance must be applied on a prospective basis and will be effective for us in the first quarter of our fiscal year 2017 with early adoption permitted. The Company does not believe the implementation of this standard will have a material impact on its consolidated financial statements. In April 2015, FASB issued ASU No. 2015-03, Interest-Imputation of Interest (Subtopic 835-30), Simplifying the Presentation of Debt Issuance Costs. ASU 2015-03 requires that debt issuance costs be presented in the balance sheet as a direct deduction from the carrying amount of debt liability, consistent with debt discounts or premiums. The recognition and measurement guidance for debt issuance costs would not be affected by the amendment. ASU 2015-03 will be effective for us in the first quarter of our fiscal year 2017, with early adoption permitted. When adopted, ASU 2015-03 is not expected to have a material impact on the Company’s consolidated financial statements. In May 2014, FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). ASU 2014-09 amends the guidance for revenue recognition to replace numerous, industry-specific requirements and converges areas under this topic with those of the International Financial Reporting Standards. The ASU implements a five-step process for customer contract revenue recognition that focuses on transfer of control, as opposed to transfer of risk and rewards. The amendment also requires enhanced disclosures regarding the nature, amount, timing and uncertainty of revenues and cash flows from contracts with customers. Other major provisions include the capitalization and amortization of certain contract costs, ensuring the time value of money is considered in the transaction price, and allowing estimates of variable consideration to be recognized before contingencies are resolved in certain circumstances. The amendments in this ASU are effective for reporting periods beginning after December 15, 2016; however, in August 2015, the FASB delayed the effective date by one year. For us the delayed effective date is for the first quarter of our fiscal year 2019. The deferral permits early adoption, but does not allow adoption any earlier than the original effective date of the standard. Entities can transition to the standard either retrospectively or as a cumulative-effect adjustment as of the date of adoption. The Company is currently assessing the impact the adoption of ASU 2014-09, including possible transition alternatives, will have on its consolidated financial statements. |
Note 1 - Nature of Operations22
Note 1 - Nature of Operations and Basis of Presentation (Tables) | 9 Months Ended |
Nov. 30, 2015 | |
Notes Tables | |
Number of Stores [Table Text Block] | Sold, Not Yet Open Open Total Rocky Mountain Chocolate Factory Company-owned stores - 3 3 Franchise stores – Domestic stores 3 191 194 Franchise stores – Domestic kiosks - 5 5 International License Stores 1 76 77 Cold Stone Creamery – co-branded 8 72 80 U-Swirl (Including all associated brands) Company-owned stores - 6 6 Company-owned stores – co-branded - 3 3 Franchise stores – Domestic stores * 194 194 Franchise stores – Domestic – co-branded * 15 15 International License Stores 1 8 9 Total 13 573 586 |
Note 3 - Inventories (Tables)
Note 3 - Inventories (Tables) | 9 Months Ended |
Nov. 30, 2015 | |
Notes Tables | |
Schedule of Inventory, Current [Table Text Block] | November 30, 2015 February 28, 2015 Ingredients and supplies $ 2,625,848 $ 2,755,232 Finished candy 2,549,952 2,130,133 U-Swirl, Inc. food and packaging 101,487 97,669 Reserve for slow moving inventory (205,967 ) (197,658 ) Total inventories $ 5,071,320 $ 4,785,376 |
Note 4 - Property and Equipme24
Note 4 - Property and Equipment, Net (Tables) | 9 Months Ended |
Nov. 30, 2015 | |
Notes Tables | |
Property, Plant and Equipment [Table Text Block] | November 30, 2015 February 28, 2015 Land $ 513,618 $ 513,618 Building 4,773,563 4,774,825 Machinery and equipment 9,920,470 10,120,865 Furniture and fixtures 1,194,855 1,224,433 Leasehold improvements 1,921,524 2,056,244 Transportation equipment 438,601 427,727 Asset Impairment (260,163 ) (290,640 ) 18,502,468 18,827,072 Less accumulated depreciation (11,937,649 ) (12,029,536 ) Property and equipment, net $ 6,564,819 $ 6,797,536 |
Note 5 - Stockholders' Equity (
Note 5 - Stockholders' Equity (Tables) | 9 Months Ended |
Nov. 30, 2015 | |
Notes Tables | |
Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block] | Nine Months Ended November 30, 2015 2014 Outstanding stock options as of February 28: 12,936 155,880 Granted - - Exercised - (142,944 ) Cancelled/forfeited - - Outstanding stock options as of November 30: 12,936 12,936 Weighted average exercise price $ 14.70 $ 14.70 Weighted average remaining contractual term (in years) 0.29 1.29 |
Schedule of Share-based Compensation, Restricted Stock Units Award Activity [Table Text Block] | Nine Months Ended November 30, 2015 2014 Outstanding non-vested restricted stock units as of February 28: 237,641 295,040 Granted - - Vested (55,899 ) (56,199 ) Cancelled/forfeited - - Outstanding non-vested restricted stock units as of November 30: 181,742 238,841 Weighted average grant date fair value $ 12.22 $ 12.14 Weighted average remaining vesting period (in years) 3.47 4.33 |
Note 6 - Supplemental Cash Fl26
Note 6 - Supplemental Cash Flow Information (Tables) | 9 Months Ended |
Nov. 30, 2015 | |
Notes Tables | |
Schedule of Cash Flow, Supplemental Disclosures [Table Text Block] | Nine Months Ended November 30, 2015 2014 Cash paid for: Interest $ 128,881 $ 143,806 Income taxes 997,914 1,112,040 Non-Cash Operating Activities Accrued Inventory 497,190 477,176 Non-Cash Financing Activities Dividend Payable $ 700,728 $ 671,901 Sale of assets and inventory to buyers for notes receivable: Long-lived assets 127,500 446,353 Inventory - 17,301 Accounts receivable 5,000 17,043 Other assets 75,000 10,858 |
Note 7 - Operating Segments (Ta
Note 7 - Operating Segments (Tables) | 9 Months Ended |
Nov. 30, 2015 | |
Notes Tables | |
Schedule of Segment Reporting Information, by Segment [Table Text Block] | Three Months Ended November 30, 2015 Franchising Manufacturing Retail U-Swirl, Inc. Other Total Total revenues $ 1,159,250 $ 7,499,619 $ 248,164 $ 1,293,843 $ - $ 10,200,876 Intersegment revenues (1,238 ) (392,325 ) - - - (393,563 ) Revenue from external ustomers 1,158,012 7,107,294 248,164 1,293,843 - 9,807,313 Segment profit (loss) 277,663 2,029,847 (61,439 ) (158,478 ) (874,602 ) 1,212,991 Total assets 1,162,582 12,540,706 1,087,849 12,721,643 4,020,992 31,533,772 Capital expenditures - 120,302 1,716 12,847 167,943 302,808 Total depreciation & amortization 8,717 98,286 3,810 197,717 35,018 343,548 Three Months Ended November 30, 2014 Franchising Manufacturing Retail U-Swirl, Inc. Other Total Total revenues $ 1,244,732 $ 7,994,116 $ 350,261 $ 1,430,397 $ - $ 11,019,506 Intersegment revenues (1,407 ) (456,537 ) - - - (457,944 ) Revenue from external customers 1,243,325 7,537,579 350,261 1,430,397 - 10,561,562 Segment profit (loss) 438,160 2,189,548 (94,387 ) (100,978 ) (923,179 ) 1,509,164 Total assets 1,115,716 12,878,192 1,166,851 15,284,436 7,425,254 37,870,449 Capital expenditures 22,050 28,414 658 (7,505 ) 4,526 48,143 Total depreciation & amortization 10,661 102,699 6,083 199,787 38,635 357,865 Nine Months Ended November 30, 2015 Franchising Manufacturing Retail U-Swirl, Inc. Other Total Total revenues $ 4,291,383 $ 19,662,432 $ 1,082,279 $ 5,476,052 $ - $ 30,512,146 Intersegment revenues (3,953 ) (1,062,304 ) - - - (1,066,257 ) Revenue from external customers 4,287,430 18,600,128 1,082,279 5,476,052 - 29,445,889 Segment profit (loss) 1,787,646 4,815,854 (89,578 ) 528,166 (2,808,473 ) 4,233,615 Total assets 1,162,582 12,540,706 1,087,849 12,721,643 4,020,992 31,533,772 Capital expenditures 22,709 341,126 2,676 51,319 207,350 625,180 Total depreciation & amortization 28,288 302,145 14,406 599,267 120,105 1,064,211 Nine Months Ended November 30, 2014 Franchising Manufacturing Retail U-Swirl, Inc. Other Total Total revenues $ 4,290,060 $ 19,331,459 $ 1,445,444 $ 6,424,909 $ - $ 31,491,872 Intersegment revenues (2,917 ) (1,147,739 ) - - - (1,150,656 ) Revenue from external customers 4,287,143 18,183,720 1,445,444 6,424,909 - 30,341,216 Segment profit (loss) 1,922,482 5,045,608 (129,726 ) 131,461 (2,780,361 ) 4,189,464 Total assets 1,115,716 12,878,192 1,166,851 15,284,436 7,425,254 37,870,449 Capital expenditures 28,753 295,188 34,511 55,847 31,867 446,166 Total depreciation & amortization 31,393 294,204 23,224 632,622 115,961 1,097,404 |
Note 8 - Goodwill and Intangi28
Note 8 - Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Nov. 30, 2015 | |
Notes Tables | |
Schedule of Intangible Assets and Goodwill [Table Text Block] | November 30, 2015 February 28, 2015 Amortization Period (Years) Gross Carrying Value Accumulated Amortization Gross Carrying Value Accumulated Amortization Intangible assets subject to amortization Store design 10 $ 220,778 $ 209,277 $ 220,778 $ 208,152 Packaging licenses 3 - 5 120,830 120,830 120,830 120,830 Packaging design 10 430,973 430,973 430,973 430,973 Trademark/Non-competition agreements 5 - 20 459,340 46,242 459,340 31,538 Franchise Rights 20 5,904,771 666,258 5,850,290 410,830 Total 7,136,692 1,473,580 7,082,211 1,202,323 Intangible assets not subject to amortization Franchising segment- Company stores goodwill 1,122,328 267,020 1,122,328 267,020 Franchising goodwill 2,202,529 197,682 2,202,529 197,682 Manufacturing segment-Goodwill 295,000 197,682 295,000 197,682 Trademark 20,000 - 20,000 - Total Goodwill 3,639,857 662,384 3,639,857 662,384 Total Intangible Assets $ 10,776,549 $ 2,135,964 $ 10,722,068 $ 1,864,707 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block] | 2016 $ 100,077 2017 404,596 2018 420,696 2019 427,126 2020 413,969 Thereafter 3,896,648 Total $ 5,663,112 |
Note 9 - Other Accrued Liabil29
Note 9 - Other Accrued Liabilities (Tables) | 9 Months Ended |
Nov. 30, 2015 | |
Notes Tables | |
Schedule of Accrued Liabilities [Table Text Block] | November 30, 2015 February 28, 2015 Gift card liabilities 2,645,255 2,571,525 Other accrued expenses 361,121 339,252 Total other accrued expenses $ 3,006,376 $ 2,910,777 |
Note 11 - Restructuring and A30
Note 11 - Restructuring and Acquisition Related Charges (Tables) | 9 Months Ended |
Nov. 30, 2015 | |
Notes Tables | |
Restructuring and Related Costs [Table Text Block] | Professional fees $ 186,011 Severance/transitional compensation 212,027 Leasehold improvements, property and equipment impairment of long-lived assets 243,000 Acceleration of restricted stock unit vesting 65,049 Other 3,125 Total $ 709,212 |
Note 12 - Sale or Distributio31
Note 12 - Sale or Distribution of Assets (Tables) | 9 Months Ended |
Nov. 30, 2015 | |
Notes Tables | |
Schedule of Sale or Distribution of Assets [Table Text Block] | 2015 2014 Cash received on asset sales $ - $ 525,000 Notes receivable 264,433 431,244 |
Note 13 - Note Payable (Tables)
Note 13 - Note Payable (Tables) | 9 Months Ended |
Nov. 30, 2015 | |
Notes Tables | |
Schedule of Long-term Debt Instruments [Table Text Block] | November 30, 2015 February 28, 2015 Promissory note $ 5,390,807 $ 6,292,367 Less: current maturities (1,242,066 ) (1,208,888 ) Long-term obligations $ 4,148,741 $ 5,083,479 |
Schedule of Maturities of Long-term Debt [Table Text Block] | Amount 2016 $ 305,684 2017 1,254,007 2018 1,302,526 2019 1,352,921 Thereafter 1,175,669 Total minimum payments 5,390,807 Less: current maturities (1,242,066 ) Long-term obligations $ 4,148,741 |
Note 1 - Nature of Operations33
Note 1 - Nature of Operations and Basis of Presentation (Details Textual) - USD ($) | 9 Months Ended | 12 Months Ended | |||
Nov. 30, 2015 | Nov. 30, 2015 | Feb. 28, 2015 | Feb. 28, 2014 | Jan. 31, 2013 | |
USwirl Inc [Member] | U-Swirl Loan Agreement [Member] | |||||
Debt Agreement, Maximum Borrowing Capacity | $ 7,750,000 | $ 7,750,000 | $ 7,750,000 | ||
USwirl Inc [Member] | |||||
Noncontrolling Interest, Ownership Percentage by Parent | 39.00% | 39.00% | |||
Equity Method Investment, Ownership Percentage | 60.00% | ||||
Investment, Right to Acquire Shares | 29,290,700 | 29,290,700 | |||
EBITDA Requirement | $ 1,318,000 | $ 1,804,000 | |||
Debt Instrument Default Interest Rate | 15.00% | ||||
Debt Conversion, Additional Percentage of Preferred Stock Issued | 63.00% | ||||
USwirl Inc [Member] | Shares Acquired [Member] | |||||
Equity Method Investment, Ownership Percentage | 74.00% | 74.00% | |||
Common Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 | $ 0.03 |
Note 1 - Nature of Operations34
Note 1 - Nature of Operations and Basis of Presentation - Number of Stores (Details) | Nov. 30, 2015 |
Sold Not Yet Open [Member] | Company Owned Stores [Member] | Parent Company [Member] | |
Number of stores | 0 |
Sold Not Yet Open [Member] | Company Owned Stores [Member] | USwirl Inc [Member] | |
Number of stores | 0 |
Sold Not Yet Open [Member] | Franchise Stores - Domestic Stores [Member] | Parent Company [Member] | |
Number of stores | 3 |
Sold Not Yet Open [Member] | Franchise Stores - Domestic Kiosks [Member] | Parent Company [Member] | |
Number of stores | 0 |
Sold Not Yet Open [Member] | International License Stores [Member] | Parent Company [Member] | |
Number of stores | 1 |
Sold Not Yet Open [Member] | International License Stores [Member] | USwirl Inc [Member] | |
Number of stores | 1 |
Sold Not Yet Open [Member] | Cold Stone Creamery - Co-Branded [Member] | Parent Company [Member] | |
Number of stores | 8 |
Sold Not Yet Open [Member] | Company Owned Stores Co-branded [Member] | USwirl Inc [Member] | |
Number of stores | 0 |
Sold Not Yet Open [Member] | |
Number of stores | 13 |
Open [Member] | Company Owned Stores [Member] | Parent Company [Member] | |
Number of stores | 3 |
Open [Member] | Company Owned Stores [Member] | USwirl Inc [Member] | |
Number of stores | 6 |
Open [Member] | Franchise Stores - Domestic Stores [Member] | Parent Company [Member] | |
Number of stores | 191 |
Open [Member] | Franchise Stores - Domestic Stores [Member] | USwirl Inc [Member] | |
Number of stores | 194 |
Open [Member] | Franchise Stores - Domestic Kiosks [Member] | Parent Company [Member] | |
Number of stores | 5 |
Open [Member] | International License Stores [Member] | Parent Company [Member] | |
Number of stores | 76 |
Open [Member] | International License Stores [Member] | USwirl Inc [Member] | |
Number of stores | 8 |
Open [Member] | Cold Stone Creamery - Co-Branded [Member] | Parent Company [Member] | |
Number of stores | 72 |
Open [Member] | Company Owned Stores Co-branded [Member] | USwirl Inc [Member] | |
Number of stores | 3 |
Open [Member] | Franchise Stores Co-branded [Member] | USwirl Inc [Member] | |
Number of stores | 15 |
Open [Member] | |
Number of stores | 573 |
Company Owned Stores [Member] | Parent Company [Member] | |
Number of stores | 3 |
Company Owned Stores [Member] | USwirl Inc [Member] | |
Number of stores | 6 |
Franchise Stores - Domestic Stores [Member] | Parent Company [Member] | |
Number of stores | 194 |
Franchise Stores - Domestic Stores [Member] | USwirl Inc [Member] | |
Number of stores | 194 |
Franchise Stores - Domestic Kiosks [Member] | Parent Company [Member] | |
Number of stores | 5 |
International License Stores [Member] | Parent Company [Member] | |
Number of stores | 77 |
International License Stores [Member] | USwirl Inc [Member] | |
Number of stores | 9 |
Cold Stone Creamery - Co-Branded [Member] | Parent Company [Member] | |
Number of stores | 80 |
Company Owned Stores Co-branded [Member] | USwirl Inc [Member] | |
Number of stores | 3 |
Franchise Stores Co-branded [Member] | USwirl Inc [Member] | |
Number of stores | 15 |
Number of stores | 586 |
Note 2 - Earnings Per Share (De
Note 2 - Earnings Per Share (Details Textual) - shares | 3 Months Ended | 9 Months Ended | ||
Nov. 30, 2015 | Nov. 30, 2014 | Nov. 30, 2015 | Nov. 30, 2014 | |
Employee Stock Option [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 12,936 | 12,936 | 12,936 | 12,936 |
Note 3 - Inventories - Inventor
Note 3 - Inventories - Inventories (Details) - USD ($) | Nov. 30, 2015 | Feb. 28, 2015 |
Ingredients and supplies | $ 2,625,848 | $ 2,755,232 |
Finished candy | 2,549,952 | 2,130,133 |
U-Swirl, Inc. food and packaging | 101,487 | 97,669 |
Reserve for slow moving inventory | (205,967) | (197,658) |
Total inventories | $ 5,071,320 | $ 4,785,376 |
Note 4 - Property and Equipme37
Note 4 - Property and Equipment, Net - Property and Equipment (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Nov. 30, 2015 | Feb. 28, 2015 | |
Land [Member] | ||
Property, plant and equipment, gross | $ 513,618 | $ 513,618 |
Building [Member] | ||
Property, plant and equipment, gross | 4,773,563 | 4,774,825 |
Machinery and Equipment [Member] | ||
Property, plant and equipment, gross | 9,920,470 | 10,120,865 |
Furniture and Fixtures [Member] | ||
Property, plant and equipment, gross | 1,194,855 | 1,224,433 |
Leasehold Improvements [Member] | ||
Property, plant and equipment, gross | 1,921,524 | 2,056,244 |
Transportation Equipment [Member] | ||
Property, plant and equipment, gross | 438,601 | 427,727 |
Property, plant and equipment, gross | 18,502,468 | 18,827,072 |
Asset Impairment | (260,163) | (290,640) |
Less accumulated depreciation | (11,937,649) | (12,029,536) |
Property and equipment, net | $ 6,564,819 | $ 6,797,536 |
Note 5 - Stockholders' Equity38
Note 5 - Stockholders' Equity (Details Textual) - USD ($) | Nov. 17, 2015 | Sep. 11, 2015 | Jun. 12, 2015 | Mar. 13, 2015 | Nov. 30, 2015 | Aug. 31, 2015 | May. 31, 2015 | Nov. 30, 2014 | Nov. 30, 2015 | Nov. 30, 2014 | May. 21, 2015 | Jan. 13, 2015 | Jul. 15, 2014 |
Unrestricted Shares of Stock [Member] | |||||||||||||
Stock Issued During Period, Shares, Share-based Compensation, Gross | 0 | 0 | 4,000 | 4,000 | |||||||||
Allocated Share-based Compensation Expense | $ 61,040 | $ 47,480 | |||||||||||
Restricted Stock Units (RSUs) [Member] | Minimum [Member] | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 17.00% | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 5 years | ||||||||||||
Restricted Stock Units (RSUs) [Member] | Maximum [Member] | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 20.00% | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 6 years | ||||||||||||
Restricted Stock Units (RSUs) [Member] | |||||||||||||
Stock Issued During Period, Shares, Share-based Compensation, Gross | 55,899 | 56,199 | |||||||||||
Allocated Share-based Compensation Expense | $ 147,353 | $ 307,846 | |||||||||||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized | 2,011,819 | $ 2,011,819 | |||||||||||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 3 years 182 days | ||||||||||||
USwirl Inc [Member] | |||||||||||||
Allocated Share-based Compensation Expense | $ 0 | $ 0 | $ 99,250 | $ 152,518 | |||||||||
Common Stock, Dividends, Per Share, Cash Paid | $ 0.12 | $ 0.12 | $ 0.12 | ||||||||||
Common Stock, Dividends, Per Share, Declared | $ 0.12 | ||||||||||||
Stock Repurchase Program, Authorized Amount | $ 2,058,000 | $ 3,000,000 | |||||||||||
Stock Repurchase Program, Additional Authorized Amount | $ 2,090,000 | ||||||||||||
Stock Repurchased and Retired During Period, Shares | 12,005 | 145,329 | 75,968 | ||||||||||
Treasury Stock Acquired, Average Cost Per Share | $ 12 | $ 12.75 | $ 13.62 | ||||||||||
Stock Repurchase Program, Remaining Authorized Repurchase Amount | $ 989,704 | 989,704 | |||||||||||
Allocated Share-based Compensation Expense | $ 147,354 | $ 166,843 | $ 615,740 | $ 700,526 |
Note 5 - Stock Option Transacti
Note 5 - Stock Option Transaction for Common Stock (Details) - $ / shares | 9 Months Ended | |
Nov. 30, 2015 | Nov. 30, 2014 | |
Outstanding stock options as of February 28: (in shares) | 12,936 | 155,880 |
Granted (in shares) | 0 | 0 |
Exercised (in shares) | 0 | (142,944) |
Cancelled/forfeited (in shares) | 0 | 0 |
Outstanding stock options as of November 30: (in shares) | 12,936 | 12,936 |
Weighted average exercise price (in dollars per share) | $ 14.70 | $ 14.70 |
Weighted average remaining contractual term (in years) | 105 days | 1 year 105 days |
Note 5 - Non-vested Restricted
Note 5 - Non-vested Restricted Stock Unit Transactions for Common Stock (Details) - $ / shares | 9 Months Ended | |
Nov. 30, 2015 | Nov. 30, 2014 | |
Outstanding non-vested restricted stock units as of February 28: (in shares) | 237,641 | 295,040 |
Granted (in shares) | 0 | 0 |
Vested (in shares) | (55,899) | (56,199) |
Cancelled/forfeited (in shares) | 0 | 0 |
Outstanding non-vested restricted stock units as of November 30: (in shares) | 181,742 | 238,841 |
Weighted average grant date fair value (in dollars per share) | $ 12.22 | $ 12.14 |
Weighted average remaining vesting period (in years) | 3 years 171 days | 4 years 120 days |
Note 6 - Supplemental Cash Fl41
Note 6 - Supplemental Cash Flow Information - Supplemental Cash Flow Information (Details) - USD ($) | 9 Months Ended | |
Nov. 30, 2015 | Nov. 30, 2014 | |
Sale of Inventory [Member] | ||
Notes receivable | $ 17,301 | |
Sale of Accounts Receivable [Member] | ||
Notes receivable | $ 5,000 | 17,043 |
Sale of Other Assets [Member] | ||
Notes receivable | 75,000 | 10,858 |
Interest | 128,881 | 143,806 |
Income taxes | 997,914 | 1,112,040 |
Accrued Inventory | 497,190 | 477,176 |
Dividend Payable | 700,728 | 671,901 |
Notes receivable | $ 264,433 | $ 431,244 |
Note 7 - Operating Segments (De
Note 7 - Operating Segments (Details Textual) | 3 Months Ended | 9 Months Ended | ||
Nov. 30, 2015USD ($) | Nov. 30, 2014USD ($) | Nov. 30, 2015USD ($) | Nov. 30, 2014USD ($) | |
Sales Revenue, Net [Member] | Customer Concentration Risk [Member] | Manufacturing [Member] | ||||
Number of Major Customers | 1 | |||
Revenues | $ 3,100,000 | $ 2,900,000 | ||
Concentration Risk, Percentage | 10.50% | 9.60% | ||
Manufacturing [Member] | ||||
Revenues | $ 7,107,294 | $ 7,537,579 | $ 18,600,128 | $ 18,183,720 |
Number of Reportable Segments | 5 | |||
Revenues | $ 9,807,313 | $ 10,561,562 | $ 29,445,889 | $ 30,341,216 |
Note 7 - Operating Segments - S
Note 7 - Operating Segments - Segment Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Nov. 30, 2015 | Nov. 30, 2014 | Nov. 30, 2015 | Nov. 30, 2014 | |
Revenue Before Intersegment Eliminations [Member] | Franchising [Member] | ||||
Total revenues | $ 1,159,250 | $ 1,244,732 | $ 4,291,383 | $ 4,290,060 |
Revenue Before Intersegment Eliminations [Member] | Manufacturing [Member] | ||||
Total revenues | 7,499,619 | 7,994,116 | 19,662,432 | 19,331,459 |
Revenue Before Intersegment Eliminations [Member] | Retail [Member] | ||||
Total revenues | 248,164 | 350,261 | 1,082,279 | 1,445,444 |
Revenue Before Intersegment Eliminations [Member] | USwirl Inc [Member] | ||||
Total revenues | 1,293,843 | 1,430,397 | 5,476,052 | 6,424,909 |
Revenue Before Intersegment Eliminations [Member] | Other Segments [Member] | ||||
Total revenues | 0 | 0 | 0 | 0 |
Revenue Before Intersegment Eliminations [Member] | ||||
Total revenues | 10,200,876 | 11,019,506 | 30,512,146 | 31,491,872 |
Intersegment Eliminations [Member] | Franchising [Member] | ||||
Total revenues | (1,238) | (1,407) | (3,953) | (2,917) |
Intersegment Eliminations [Member] | Manufacturing [Member] | ||||
Total revenues | (392,325) | (456,537) | (1,062,304) | (1,147,739) |
Intersegment Eliminations [Member] | Retail [Member] | ||||
Total revenues | 0 | 0 | 0 | 0 |
Intersegment Eliminations [Member] | USwirl Inc [Member] | ||||
Total revenues | 0 | 0 | 0 | 0 |
Intersegment Eliminations [Member] | Other Segments [Member] | ||||
Total revenues | 0 | 0 | 0 | 0 |
Intersegment Eliminations [Member] | ||||
Total revenues | (393,563) | (457,944) | (1,066,257) | (1,150,656) |
Franchising [Member] | ||||
Total revenues | 1,158,012 | 1,243,325 | 4,287,430 | 4,287,143 |
Segment profit (loss) | 277,663 | 438,160 | 1,787,646 | 1,922,482 |
Total assets | 1,162,582 | 1,115,716 | 1,162,582 | 1,115,716 |
Capital expenditures | 0 | 0 | 0 | 0 |
Total depreciation & amortization | 8,717 | 10,661 | 28,288 | 31,393 |
Manufacturing [Member] | ||||
Total revenues | 7,107,294 | 7,537,579 | 18,600,128 | 18,183,720 |
Segment profit (loss) | 2,029,847 | 2,189,548 | 4,815,854 | 5,045,608 |
Total assets | 12,540,706 | 12,878,192 | 12,540,706 | 12,878,192 |
Capital expenditures | 120,302 | 28,414 | 341,126 | 295,188 |
Total depreciation & amortization | 98,286 | 102,699 | 302,145 | 294,204 |
Retail [Member] | ||||
Total revenues | 248,164 | 350,261 | 1,082,279 | 1,445,444 |
Segment profit (loss) | (61,439) | (94,387) | (89,578) | (129,726) |
Total assets | 1,087,849 | 1,166,851 | 1,087,849 | 1,166,851 |
Capital expenditures | 1,716 | 658 | 2,676 | 34,511 |
Total depreciation & amortization | 3,810 | 6,083 | 14,406 | 23,224 |
USwirl Inc [Member] | ||||
Total revenues | 1,293,843 | 1,430,397 | 5,476,052 | 6,424,909 |
Segment profit (loss) | (158,478) | (100,978) | 528,166 | 131,461 |
Total assets | 12,721,643 | 15,284,436 | 12,721,643 | 15,284,436 |
Capital expenditures | 12,847 | (7,505) | 51,319 | 55,847 |
Total depreciation & amortization | 197,717 | 199,787 | 599,267 | 632,622 |
Other Segments [Member] | ||||
Total revenues | 0 | 0 | 0 | 0 |
Segment profit (loss) | (874,602) | (923,179) | (2,808,473) | (2,780,361) |
Total assets | 4,020,992 | 7,425,254 | 4,020,992 | 7,425,254 |
Capital expenditures | 167,943 | 4,526 | 207,350 | 31,867 |
Total depreciation & amortization | 35,018 | 38,635 | 120,105 | 115,961 |
Total revenues | 9,807,313 | 10,561,562 | 29,445,889 | 30,341,216 |
Segment profit (loss) | 1,212,991 | 1,509,164 | 4,233,615 | 4,189,464 |
Total assets | 31,533,772 | 37,870,449 | 31,533,772 | 37,870,449 |
Capital expenditures | 302,808 | 48,143 | 625,180 | 446,166 |
Total depreciation & amortization | $ 343,548 | $ 357,865 | $ 1,064,211 | $ 1,097,404 |
Note 8 - Goodwill and Intangi44
Note 8 - Goodwill and Intangible Assets (Details Textual) - USD ($) | 9 Months Ended | |
Nov. 30, 2015 | Nov. 30, 2014 | |
Amortization of Intangible Assets | $ 277,839 | $ 275,790 |
Note 8 - Goodwill and Intangi45
Note 8 - Goodwill and Intangible Assets - Indefinite-Lived Intangible Assets (Details) - USD ($) | 9 Months Ended | |
Nov. 30, 2015 | Feb. 28, 2015 | |
Store Design [Member] | ||
Intangible assets subject to amortization | ||
Amortization Period | 10 years | |
Gross Carrying Value | $ 220,778 | $ 220,778 |
Accumulated Amortization | $ 209,277 | 208,152 |
Packaging Licenses [Member] | Minimum [Member] | ||
Intangible assets subject to amortization | ||
Amortization Period | 3 years | |
Packaging Licenses [Member] | Maximum [Member] | ||
Intangible assets subject to amortization | ||
Amortization Period | 5 years | |
Packaging Licenses [Member] | ||
Intangible assets subject to amortization | ||
Gross Carrying Value | $ 120,830 | 120,830 |
Accumulated Amortization | $ 120,830 | 120,830 |
Packaging Design [Member] | ||
Intangible assets subject to amortization | ||
Amortization Period | 10 years | |
Gross Carrying Value | $ 430,973 | 430,973 |
Accumulated Amortization | $ 430,973 | 430,973 |
Trademarks and Non Competition Agreement [Member] | Minimum [Member] | ||
Intangible assets subject to amortization | ||
Amortization Period | 5 years | |
Trademarks and Non Competition Agreement [Member] | Maximum [Member] | ||
Intangible assets subject to amortization | ||
Amortization Period | 20 years | |
Trademarks and Non Competition Agreement [Member] | ||
Intangible assets subject to amortization | ||
Gross Carrying Value | $ 459,340 | 459,340 |
Accumulated Amortization | $ 46,242 | 31,538 |
Franchise Rights [Member] | ||
Intangible assets subject to amortization | ||
Amortization Period | 20 years | |
Gross Carrying Value | $ 5,904,771 | 5,850,290 |
Accumulated Amortization | 666,258 | 410,830 |
Company Stores Goodwill [Member] | ||
Intangible assets not subject to amortization | ||
Gross Goodwill | 1,122,328 | 1,122,328 |
Accumulated Goodwill Amortization | 267,020 | 267,020 |
Franchising Goodwill [Member] | ||
Intangible assets not subject to amortization | ||
Gross Goodwill | 2,202,529 | 2,202,529 |
Accumulated Goodwill Amortization | 197,682 | 197,682 |
Manufacturing Segment Goodwill [Member] | ||
Intangible assets not subject to amortization | ||
Gross Goodwill | 295,000 | 295,000 |
Accumulated Goodwill Amortization | 197,682 | 197,682 |
Trademarks [Member] | ||
Intangible assets not subject to amortization | ||
Gross Goodwill | 20,000 | 20,000 |
Gross Carrying Value | 7,136,692 | 7,082,211 |
Accumulated Amortization | 1,473,580 | 1,202,323 |
Gross Goodwill | 3,639,857 | 3,639,857 |
Accumulated Goodwill Amortization | 662,384 | 662,384 |
Total Intangible Assets | 10,776,549 | 10,722,068 |
Total Intangible Assets | $ 2,135,964 | $ 1,864,707 |
Note 8 - Goodwill and Intangi46
Note 8 - Goodwill and Intangible Assets - Estimated Future Amortization Expense (Details) | Nov. 30, 2015USD ($) |
2,016 | $ 100,077 |
2,017 | 404,596 |
2,018 | 420,696 |
2,019 | 427,126 |
2,020 | 413,969 |
Thereafter | 3,896,648 |
Total | $ 5,663,112 |
Note 9 - Other Accrued Expenses
Note 9 - Other Accrued Expenses (Details) - USD ($) | Nov. 30, 2015 | Feb. 28, 2015 |
Gift card liabilities | $ 2,645,255 | $ 2,571,525 |
Other accrued expenses | 361,121 | 339,252 |
Total other accrued expenses | $ 3,006,376 | $ 2,910,777 |
Note 10 - Related Party Trans48
Note 10 - Related Party Transactions (Details Textual) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2015 | Nov. 30, 2015 | Aug. 31, 2015 | May. 31, 2015 | Nov. 30, 2015 | |
Accounts Payable and Accrued Liabilities [Member] | Immediate Family Member of Management or Principal Owner [Member] | |||||
Related Party Transaction, Expenses from Transactions with Related Party | $ 0 | ||||
Immediate Family Member of Management or Principal Owner [Member] | |||||
Related Party Transaction, Expenses from Transactions with Related Party | $ 68,130 | ||||
Messrs. Crail, Merryman and Dudley [Member] | |||||
Treasury Stock, Shares, Acquired | 54,500 | ||||
Treasury Stock Acquired, Average Cost Per Share | $ 12.60 | ||||
Stock Purchase Agreements, Discount from Market Price | 3.00% | ||||
Treasury Stock Acquired, Average Cost Per Share | $ 12 | $ 12.75 | $ 13.62 |
Note 11 - Restructuring and A49
Note 11 - Restructuring and Acquisition Related Charges (Details Textual) - USD ($) | 9 Months Ended | |
Nov. 30, 2015 | Nov. 30, 2014 | |
CherryBerry, Yogli Mogli LLC, and Fuzzy Peach Franchising, LLC[Member] | ||
Restructuring Charges | $ 124,551 | |
USwirl Inc [Member] | ||
Restructuring Charges | 584,661 | |
Restructuring Charges | $ 0 | $ 709,212 |
Note 11 - Restructuring and A50
Note 11 - Restructuring and Acquisition Related Charges - Restructuring Charges Incurred (Details) | 9 Months Ended |
Nov. 30, 2014USD ($) | |
Professional Fees [Member] | |
Restructuring Charges | $ 186,011 |
Employee Severance [Member] | |
Restructuring Charges | 212,027 |
Leasehold Improvements Property and Equipment Impairment of Long-Lived Assets [Member] | |
Restructuring Charges | 243,000 |
Acceleration of Restricted Stock Unit Vesting [Member] | |
Restructuring Charges | 65,049 |
Other Restructuring [Member] | |
Restructuring Charges | 3,125 |
Restructuring Charges | $ 709,212 |
Note 12 - Sale or Distributio51
Note 12 - Sale or Distribution of Assets (Details Textual) | 9 Months Ended | |
Nov. 30, 2015 | Nov. 30, 2014 | |
USwirl Inc [Member] | ||
Number of Restaurants Sold | 4 | |
Number of Restaurants Sold | 1 | 1 |
Note 12 - Sale or Distributio52
Note 12 - Sale or Distribution of Assets - Asset Disposal Activity (Details) - USD ($) | 9 Months Ended | |
Nov. 30, 2015 | Nov. 30, 2014 | |
Cash received on asset sales | $ 525,000 | |
Notes receivable | $ 264,433 | $ 431,244 |
Note 13 - Note Payable (Details
Note 13 - Note Payable (Details Textual) - USD ($) | Nov. 30, 2015 | Feb. 28, 2014 |
USwirl Inc [Member] | U-Swirl Loan Agreement [Member] | ||
Debt Agreement, Maximum Borrowing Capacity | $ 7,750,000 | $ 7,750,000 |
Notes Payable | $ 5,400,000 |
Note 13 - Note Payable - Long-t
Note 13 - Note Payable - Long-term Note Payable (Details) - USD ($) | Nov. 30, 2015 | Feb. 28, 2015 |
Promissory note | $ 5,390,807 | $ 6,292,367 |
Less: current maturities | (1,242,066) | (1,208,888) |
Long-term obligations | $ 4,148,741 | $ 5,083,479 |
Note 13 - Note Payable - Annual
Note 13 - Note Payable - Annual Maturities of Notes Payable (Details) | Nov. 30, 2015USD ($) |
2,016 | $ 305,684 |
2,017 | 1,254,007 |
2,018 | 1,302,526 |
2,019 | 1,352,921 |
Thereafter | 1,175,669 |
Total minimum payments | 5,390,807 |
Less: current maturities | (1,242,066) |
Long-term obligations | $ 4,148,741 |
Note 14 - Contingencies (Detail
Note 14 - Contingencies (Details Textual) - USD ($) | 1 Months Ended | 2 Months Ended | |
Feb. 28, 2015 | Aug. 31, 2015 | Nov. 30, 2015 | |
CherryBerry [Member] | USwirl Inc [Member] | |||
Business Combination, Contingent Consideration, Liability | $ 0 | ||
Stock Issued During Period, Shares, Acquisitions | 4,000,000 | ||
Lock-up Agreement | 1 year | ||
Business Combination, Contingent Consideration, Sale of Stock, Price Per Share | $ 0.50 | ||
Requested Shortfall Payment | $ 205,000 | ||
USwirl Inc [Member] | Purchase Commitment [Member] | |||
Loss Contingency Accrual | 0 | ||
Business Combination Shortfall Payment | $ 1,760,000 |