Accounting Policies, by Policy (Policies) | 6 Months Ended |
Aug. 31, 2014 |
Accounting Policies [Abstract] | ' |
Business Description and Basis of Presentation [Text Block] | ' |
Nature of Operations |
|
The accompanying unaudited consolidated financial statements include the accounts of Rocky Mountain Chocolate Factory, Inc. (“RMCF”), its wholly-owned subsidiary, Aspen Leaf Yogurt, LLC (“ALY”) and its 40%-owned subsidiary, U-Swirl, Inc. (“U-Swirl”), of which RMCF has financial control (collectively, the “Company”). All intercompany balances and transactions have been eliminated in consolidation. As of August 31, 2014, RMCF held approximately 40% of U-Swirl’s outstanding common stock. Additionally, RMCF has the right to acquire approximately 24,520,000 shares of U-Swirl’s common stock through the conversion of outstanding debt owed by U-Swirl to RMCF. If RMCF exercised this conversion right, RMCF would hold approximately 72% of U-Swirl’s common stock. Certain directors of RMCF constitute a majority of the directors of U-Swirl. Pursuant to a voting agreement among RMCF, ALY and certain shareholders of U-Swirl, the parties agree to vote their shares such that certain designees of RMCF shall constitute a majority of U-Swirl’s board of directors so long as RMCF or its affiliates own greater than 10% of U-Swirl’s outstanding common stock. |
|
RMCF is an international franchisor, confectionery manufacturer and retail operator in the United States, Canada, Japan, South Korea, and the United Arab Emirates. RMCF manufactures an extensive line of premium chocolate candies and other confectionery products. |
|
ALY was a franchisor and retail operator of self-serve frozen yogurt retail units until the sale of substantially all of its assets in January 2013 to U-Swirl. As of January 2013, RMCF ceased to operate any company-owned Aspen Leaf Yogurt locations, or sell and support franchise locations. |
|
On January 14, 2013, RMCF, through a newly formed wholly-owned subsidiary of RMCF (“Newco”), entered into an agreement to acquire substantially all of the franchise rights of YHI, Inc. and Yogurtini International, LLC (collectively, “Yogurtini”), which are the franchisors of self-serve frozen yogurt retail units branded as “Yogurtini.” In addition, on January 14, 2013, the Company entered into two agreements to sell all of its membership interests in Newco and substantially all of its assets in ALY to U-Swirl, a publicly traded company (OTCQB: SWRL), in exchange for a 60% controlling equity interest in U-Swirl. U-Swirl is in the business of offering consumers frozen desserts such as yogurt and sorbet. U-Swirl launched a national chain of self-serve frozen yogurt cafés called U-Swirl Frozen Yogurt and are franchising this concept. U-Swirl operates cafés owned and operated by U-Swirl (“Company-owned”) and franchises to others the right to own and operate U-Swirl cafés. It also franchises and operates self-serve frozen yogurt cafes under the names “Yogurtini,” “CherryBerry,” “Josie’s Frozen Yogurt,” “Yogli Mogli Frozen Yogurt,” “Fuzzy Peach Frozen Yogurt,” and “Aspen Leaf Yogurt.” |
|
On January 17, 2014, U-Swirl entered into an Asset Purchase Agreement with CherryBerry, a franchisor of self-serve frozen yogurt cafés branded as “CherryBerry,” pursuant to which U-Swirl purchased certain assets of CherryBerry used in its business of franchising frozen yogurt cafés, including all of its franchise rights and one company-owned café. The assets were acquired for approximately $4.25 million in cash and 4 million shares of U-Swirl common stock. On January 17, 2014, U-Swirl also entered into an Asset Purchase Agreement with Yogli Mogli LLC, a franchisor of self-serve frozen yogurt cafés branded as “Yogli Mogli,” pursuant to which U-Swirl purchased certain assets of Yogli Mogli used in its business of franchising frozen yogurt cafés, including all of its franchise rights and four company-owned cafés. The assets were acquired for approximately $2.15 million in cash and $200,000 in shares of U-Swirl common stock. On February 20, 2014, U-Swirl entered into an Asset Purchase Agreement to acquire the business assets of Fuzzy Peach Franchising, LLC, including the acquisition of all intellectual property and worldwide franchise and license rights associated with 17 Fuzzy Peach Frozen Yogurt stores. The assets were acquired for $481,000 in cash, plus an earn-out that could increase the purchase price by up to an additional $349,000 in cash based upon royalty income generated by Fuzzy Peach stores in the twelve months following the acquisition. |
|
The Company’s revenues are currently derived from three principal sources: sales to franchisees and others of chocolates and other confectionery products manufactured by RMCF; 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 operating under RMCF and its subsidiaries at August 31, 2014: |
|
| | Sold, Not Yet | | | Open | | | Total | |
Open |
Rocky Mountain Chocolate Factory | | | | | | | | | | | | |
Company-owned stores | | | - | | | | 5 | | | | 5 | |
Franchise stores – Domestic stores | | | 4 | | | | 206 | | | | 210 | |
Franchise stores – Domestic kiosks | | | - | | | | 6 | | | | 6 | |
International License Stores | | | - | | | | 72 | | | | 72 | |
Cold Stone Creamery – co-branded | | | 5 | | | | 66 | | | | 71 | |
U-Swirl (Including all associated brands) | | | | | | | | | | | | |
Company-owned stores | | | - | | | | 6 | | | | 6 | |
Company-owned stores – co-branded | | | - | | | | 3 | | | | 3 | |
Franchise stores – Domestic stores | | | - | | | | 269 | | | | 269 | |
Franchise stores – Domestic – co-branded | | | 2 | | | | 12 | | | | 14 | |
International License Stores | | | - | | | | 6 | | | | 6 | |
Total | | | 11 | | | | 651 | | | | 662 | |
Basis of Accounting, Policy [Policy Text Block] | ' |
Basis of Presentation |
|
The accompanying unaudited consolidated financial statements have been prepared by the Company, 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. 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 six months ended August 31, 2014 are not necessarily indicative of the results to be expected for the entire fiscal year. |
|
These unaudited 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, 2014. |
Subsequent Events, Policy [Policy Text Block] | ' |
Subsequent Events |
|
On September 4, 2014, Ulderico Conte, Henry E. Cartwright and Terry A. Cartwright resigned as directors of U-Swirl, Inc.. In addition, Messrs. Conte, H. Cartwright and T. Cartwright resigned as officers of U-Swirl, Inc. effective October 6, 2014. Their resignations were not due to a disagreement with the Company. Also on September 4, 2014, the Board of Directors of the Company 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’s parent, Rocky Mountain Chocolate Factory, Inc. |
Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block] | ' |
Stock-Based Compensation |
|
At August 31, 2014, 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 $166,843 and $381,165 of stock-based compensation expense during the three and six-month periods ended August 31, 2014, respectively, compared to $125,653 and $268,462 during the three and six-month periods ended August 31, 2013, respectively. Compensation costs related to stock-based compensation are generally amortized over the vesting period. |
|
The following table summarizes stock option transactions for common stock during the six months ended August 31, 2014 and 2013: |
|
| | Six Months Ended | | | | | |
| | August 31, | | | | | |
| | 2014 | | | 2013 | | | | | |
Outstanding stock options as of February 28: | | | 155,880 | | | | 270,945 | | | | | |
Granted | | | - | | | | - | | | | | |
Exercised | | | (142,944 | ) | | | (2,000 | ) | | | | |
Cancelled/forfeited | | | - | | | | (88,725 | ) | | | | |
Outstanding stock options as of August 31: | | | 12,936 | | | | 180,220 | | | | | |
| | | | | | | | | | | | |
Weighted average exercise price | | $ | 14.7 | | | $ | 7.93 | | | | | |
Weighted average remaining contractual term (in years) | | | 1.54 | | | | 0.92 | | | | | |
|
The following table summarizes non-vested restricted stock unit transactions for common stock during the six months ended August 31, 2014 and 2013: |
|
| | Six Months Ended | | | | | |
| | August 31, | | | | | |
| | 2014 | | | 2013 | | | | | |
Outstanding non-vested restricted stock units as of February 28: | | | 295,040 | | | | 57,030 | | | | | |
Granted | | | - | | | | 280,900 | | | | | |
Vested | | | (56,199 | ) | | | (41,390 | ) | | | | |
Cancelled/forfeited | | | - | | | | - | | | | | |
Outstanding non-vested restricted stock units as of August 31: | | | 238,841 | | | | 296,540 | | | | | |
| | | | | | | | | | | | |
Weighted average grant date fair value | | $ | 12.14 | | | $ | 12.09 | | | | | |
Weighted average remaining vesting period (in years) | | | 4.58 | | | | 5.49 | | | | | |
|
During the six months ended August 31, 2014, the Company issued 4,000 fully vested, unrestricted shares of stock to non-employee directors compared with 4,000 fully vested, unrestricted shares of stock to non-employee directors in the six months ended August 31, 2013. There were no unrestricted shares of stock issued during the three-month periods ended August 31, 2014 or August 31, 2013. In connection with these non-employee director stock issuances, the Company recognized $47,480 and $48,400 of stock-based compensation expense during the six-month periods ended August 31, 2014 and 2013, respectively. |
|
During the three and six month periods ended August 31, 2014, the Company recognized $166,843 and $333,685, 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 three and six month periods ended August 31, 2014 and 2013, 56,199 and 41,390 restricted stock units vested and were issued as common stock, respectively. Total unrecognized compensation expense of non-vested, non-forfeited shares granted as of August 31, 2014 was $2,814,176, which is expected to be recognized over the weighted-average period of 4.6 years. |
|
The Company recognized $69,929 and $152,519 of U-Swirl, Inc. stock-based compensation expense during the three and six months ended August 31, 2014, respectively, compared with $13,302 and $41,525 recognized during the three and six month months ended August 31, 2013, respectively. |
New Accounting Pronouncements, Policy [Policy Text Block] | ' |
New Accounting Pronouncements |
|
In May 2014, FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers,” which supersedes the revenue recognition requirements in “Revenue Recognition (Topic 605),” and requires entities to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. ASU 2014-09 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016, and is to be applied retrospectively, with early application not permitted. The Company is currently evaluating the new standard. |