On January 5, 2005, the Company reported record revenues and earnings for the third quarter and first nine months of FY '06. Revenues increased 12.7 percent to approximately $8.0 million, compared with $7.1 million in the third quarter of FY '05. Share-net increased 17.1% from $.41 for the nine months ended November 30, 2004, to $.48 for the nine months ended in the current year. Management attributes these gains primarily to growth in the average number of franchise stores in operation and favorable comparable-store sales at franchised retail outlets.
In the Company's press release, management did note that they did ship an order to a major warehouse club customer (Costco) that schedules a pre-Christmas promotion of Rocky Mountain candies each year. What they failed to mention, and it took the 10Q Detective to do some sleuthing to find out, was that Costco bought 39.6% more goods than last year--and that Costco is the largest single customer outside the Company’s system of franchised retail stores.
We do not find the confections of Rocky Mountain Chocolate so mouth-watering in light of this material dependence on one customer.