First Quarter 2015 Financial Results:
- Revenue increased 46% to approximately $2.5 million, compared with approximately $1.7 million in the first quarter of the previous fiscal year.
- Non-GAAP EPS of $0.03 compared to $0.01 in prior year.
"We are very pleased to report that U-Swirl's net income increased 124%, on a 46% increase in revenue, during the first quarter of Fiscal 2015 as compared to the first quarter of Fiscal 2014," stated Rico Conte, Chief Executive Officer of U-Swirl, Inc. "These impressive results reflect the closure of underperforming units and the acquisitions of the CherryBerry, Yogli Mogli and Fuzzy Peach frozen yogurt franchising companies, which more than tripled the number of cafés in our retail network in the fourth quarter of our previous fiscal year. We are beginning to realize the anticipated economies of scale and cost savings inherent in our strategy of consolidation within the self-serve frozen yogurt segment of the $6 billion away-from-home frozen desserts industry and look forward to further progress during the balance of the current fiscal year. While we continue to pursue discussions related to potential further acquisitions, our emphasis during Fiscal 2015 will be upon the realization of additional cost savings and operating efficiencies within our current operating parameters."
"We now have 298 franchised and/or company-owned frozen yogurt cafés operating in 37 states and 4 foreign countries, compared with 71 cafés in 23 states at the end of the first quarter of the prior year, only 12 months ago," continued Conte. "U-Swirl's competitive position within the industry has improved dramatically in recent months, and the total number of cafés currently operating under U-Swirl-owned brands now ranks us as the fourth-largest chain within the $750 million (estimated) self-serve frozen yogurt industry. We continue to believe that the industry is far too fragmented, with many small, undercapitalized chains whose owners lack 'critical mass', the ability to expand and/or do not have a viable exit strategy. This will continue to present opportunities for U-Swirl, with the support of its parent company, Rocky Mountain Chocolate Factory, Inc. (NASDAQ: RMCF), to bring together under one corporate umbrella the world's largest network of frozen yogurt cafés over the next few years."
"Our first quarter operating results, while substantially improved from prior-year levels, do not reflect the full benefits we anticipate once the acquisitions completed during Fiscal 2014 are fully integrated under the U-Swirl corporate umbrella. In addition to cost savings resulting from volume purchasing discounts and the elimination of redundant corporate overhead, we are enthusiastic regarding prospects for new store openings and the ability of our co-branding initiative with Rocky Mountain Chocolate Factory to increase same-store sales, while reducing the seasonal fluctuations that characterize the performance of cafés that are dependent upon yogurt products alone. New store concepts include U-Swirl-n-Go, which requires a much lower investment by franchisees and is designed for non-traditional locations such as convenience stores, airports hotels and other mass gathering areas. The first U-Swirl-n-Go store will open in Reno, Nevada during the current quarter."
"We added a new revenue stream to our business model in March 2014 with the acquisition of Moxie USA, LLC, which sells beverages, toppings and other consumer products, including a popular beverage that meets the more strict criteria for 'allowable sugar' in products sold in schools and other educational facilities. The Moxie Consumer Products subsidiary plans to supply significant amounts of toppings and beverages to our frozen yogurt cafés, allowing U-Swirl to broaden its sources of revenue while delivering excellent value to our franchisee network."
"In summary, we look forward to the balance of Fiscal 2015, which should further confirm the potential of our industry consolidation strategy. Based upon information currently available, we expect to report record revenue and earnings for the current fiscal year, which ends in less than eight months (February 2015)," concluded Conte.
