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Marketwire  07/15/2014 8:00 AM ET
U-Swirl, Inc. Reports 124% Increase in First Quarter Net Income

HENDERSON, NV -- (Marketwired) -- 07/15/14 -- U-Swirl, Inc. (OTCQB: SWRL) ("U-Swirl" or "the Company"), parent to U-SWIRL International, Inc., through which it owns and franchises self-serve frozen yogurt cafés, today reported significantly improved operating results for the quarter ended May 31, 2014 (first quarter of FY2015).

FIRST QUARTER HIGHLIGHTS

  • First quarter revenue increased 46% to approximately $2.5 million, compared with approximately $1.7 million in the first quarter of the previous fiscal year, primarily due to the January 2014 acquisitions of three self-serve frozen yogurt franchising companies that more than tripled the number of cafés operated by the Company and its franchisees.

  • Net sales derived from Company-owned frozen yogurt cafés increased 7% to $1,478,188 in the most recent quarter, compared with $1,378,249 in the quarter ended May 31, 2013.

  • Franchise royalties and fees rose 202% to $1,022,891 in the first quarter of FY2015, compared with $339,157 in the first quarter of FY2014.

  • The Company recorded net income of $376,563, or $0.02 per basic and diluted share, for the quarter ended May 31, 2014, which represented a 124% increase when compared with net income of $168,079, or $0.01 per basic and diluted share, in the quarter ended May 31, 2013.

  • On a non-GAAP basis (excluding interest, depreciation and amortization, equity compensation and impairment and restructuring charges), the Company earned $812,000 in the most recent quarter, compared with non-GAAP adjusted net income of $316,000 in the year-earlier period.

  • Cash and cash equivalents on the Company's balance sheet increased almost five-fold to over $3.5 million as of May 31, 2014, compared with $701,748 at the end of its most recent fiscal year on February 28, 2014.

  • Subsequent to the end of the first quarter of FY2015, the Company paid $1,057,465 towards the convertible note outstanding with its parent company, Rocky Mountain Chocolate Factory, Inc. The Company has also entered into a definitive agreement to sell three company-owned cafés that were acquired in January 2014 as part of the Yogli Mogli acquisition. A deposit of $600,000 has already been received from the buyer to secure the rights to acquire the assets.

MANAGEMENT COMMENTS

"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."

 

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