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| Statement |
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| In time, we anticipate the alignment of product offerings with consumer preference will result in higher sales, cost savings through reduced waste and lower storage expenses as well as an improved experience for our customers and better store economics for our franchisees |
| We're insanely excited about the store refresh and with the new brand and new packaging come on, that gives us a lot of opportunity in specialty retail that we're bringing something to a buyer that's going to be really exciting |
| These initiatives are expected to generate material revenue growth in the quarters ahead as we enter the holiday season |
| Specifically, the improvements we have made to our e-commerce business and the strong demand for products during the holidays are expected to lead to outsized results in the back half of our fiscal year |
| Again, with a strong position we came in the year and with the back half of the year, the cash we're going to generate we should end the year in great shape |
| However, we believe with the cash on hand and with the cash coming in, in the last 6 months of the year, we still feel strongly about our cash position |
| So our E-com can benefit from this |
| And you know from your experience, a well-run store with a great store experience which is what we deliver and offer and seek to do consistently across the network |
| During the quarter, we increased our employee compensation structure at the Durango production facility to reduce turnover and help establish a long-term foundation for more efficient and ultimately higher throughput |
| We continue to position Rocky Mountain Chocolate for long-term growth and profitability and we're building a strong foundation to execute our plan as we progress through the remainder of this fiscal year |
| With the new management, sales for August were up 48% versus the prior year and has since remained well above 20% |
| We increased sales by 7% year-over-year at our Durango retail store for the quarter, driven by higher average revenue per customer transaction |
| Our strategy implementation is yielding strong operational improvements and we can continue to expect these initiatives to result in short and long-term financial benefits |
| While some short-term pain was necessary to solidify the foundation for the future of our business, we are confident in our plan and believe we have laid solid groundwork to build a great company into the future |
| We believe this empowers our top franchisees to deliver even more sales of Rocky Mountain Chocolate products, while also incentivizing franchisees to become multiunit operators |
| But we feel very confident about our cash balance |
| As I mentioned earlier, we made significant improvements to our e-commerce experience, including the removal of shipping fees at checkout |
| This has helped us to manage attrition and enabled us to attract former Rocky Mountain Chocolate employees to return to the company which provides a quicker ramp for productivity compared to new hires |
| This has resulted in a more transparent online shopping experience leading to higher volumes |
| Since joining as an adviser last October, Scott's strong background in the confectionery industry has made him an invaluable asset to our leadership team |
| In our fiscal second half to exceed the sales from these channels for all of fiscal 2023 |
| Same-store sales for our company-owned store in Durango were up 7% year-over-year |
| And that's going to be a meaningful lift for our franchisees |
| We're making continued progress towards our 25% SKU reduction target as we work to sunset underperforming SKUs and increase production of our most popular items |
| We benefited from the reopening of the Corpus Christi store in July which mostly offset lower shipments of products related to the planned exit of two out-of-network customers earlier this year |
| This store exemplifies how our Rocky Mountain Chocolate store should be run, clean and well lit, fully stocked with fresh product, ample sampling and a passionate caring staff attending to our local customers |
| One Allen, can you speak to, so your cash on hand, your cash burn and any need for future financing at this point? Allen Arroyo So we started the year in good, great cash position |
| We expect these initiatives will support our return to growth as we enter the all-important holiday season |
| Our brand refresh provides a streamlined trade name and logo, building upon our rich history of bringing the Rocky Mountain Chocolate experience to customers for over 40 years |
| This was partially offset by higher retail gross margins primarily attributable to cost, better cost management following the creation of the flagship operations manager role in our Durango store |
| Statement |
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| Labor has been a continuing challenge in Durango and we accelerated this planned move to handle not only this year's base holiday volumes but also to remove any labor constraints as our future Durango production volumes increase |
| And as I noted in my remarks, Gift2day [ph] was prohibitive or impossible from Durango |
| Adjusted EBITDA loss was $600,000 compared to adjusted EBITDA of $700,000 |
| The decrease was primarily due to lower production volume and higher costs related to wages and inflation as we resolved a labor shortage |
| Excluding the planned exit of 2 wholesale customers during our prior fiscal year, second quarter sales from our Durango facility increased modestly, despite headwinds from record high temperatures over the summer which impacted consumer demand for chocolate and confectionery products |
| Despite the increase in base pay for our processing team, we experienced a 16% reduction in labor salaries per pound produced compared to our fiscal first quarter |
| During the quarter, we reduced our driver fleet by 33%, while maintaining consistent and ever-increasing pound volume shipped from our Durango facility |
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