Note 9 - Operating Segments

12 Months Ended

Feb. 28, 2013

Segment Reporting Disclosure [Text Block]

NOTE 9 - OPERATING SEGMENTS

The Company classifies its business interests into five reportable segments: Rocky Mountain Chocolate Factory, Inc. Franchising, Manufacturing, Retail Stores, U-Swirl, Inc operations and Other.   The accounting policies of the segments are the same as those described in the summary of significant accounting policies in Note 1 to these consolidated financial statements. The Company evaluates performance and allocates resources based on operating contribution, which excludes unallocated corporate general and administrative costs and income tax expense or benefit.  The Company’s reportable segments are strategic businesses that utilize common merchandising, distribution, and marketing functions, as well as common information systems and corporate administration.  All inter-segment sales prices are market based.  Each segment is managed separately because of the differences in required infrastructure and the difference in products and services:

FY 2013	Franchising		Manufacturing			Retail			U-Swirl, Inc.			Other			Total
Total revenues	$	6,047,039	$	26,451,612		$	5,395,805		$	505,956		$	-		$	38,400,412
Intersegment revenues		-		(2,085,211	)		-			-			-			(2,085,211	)
Revenue from external customers		6,047,039		24,366,401			5,395,805			505,956			-			36,315,201
Segment profit (loss)		2,494,868		6,853,360			(2,251,581	)		(320,446	)		(4,192,707	)		2,583,494
Total assets		1,302,094		10,510,745			1,305,006			3,446,319			7,269,781			23,833,945
Capital expenditures		25,985		277,675			290,330			2,719			146,162			742,871
Total depreciation & amortization		39,029		290,076			383,550			70,146			152,577			935,378
FY 2012
Total revenues	$	5,751,263	$	25,723,144		$	5,438,911		$	-		$	-		$	36,913,318
Intersegment revenues		-		(2,286,426	)		-			-			-			(2,286,426	)
Revenue from external customers		5,751,263		23,436,718			5,438,911			-			-			34,626,892
Segment profit (loss)		2,572,926		6,704,333			(289,418	)		-			(3,076,064	)		5,911,777
Total assets		1,434,619		10,238,204			5,212,456			-			7,277,691			24,162,970
Capital expenditures		12,713		208,807			2,795,308			-			243,810			3,260,638
Total depreciation & amortization		59,947		293,804			255,575			-			141,535			750,861
FY 2011
Total revenues	$	5,783,892	$	23,837,108		$	3,716,511		$	-		$	-		$	33,337,511
Intersegment revenues		-		(2,209,540	)		-			-			-			(2,209,540	)
Revenue from external customers		5,783,892		21,627,568			3,716,511			-			-			31,127,971
Segment profit (loss)		2,859,433		6,227,366			(300,958	)		-			(2,776,782	)		6,009,059
Total assets		1,486,799		10,731,004			3,038,373			-			6,202,631			21,458,807
Capital expenditures		3,519		225,165			1,166,311			-			225,310			1,620,305
Total depreciation & amortization		78,101		340,552			108,437			-			143,231			670,321

The information reported in our “U-Swirl, Inc.” segment includes data from January 14, 2013 through February 28, 2013.

Revenue from one customer of the Company’s Manufacturing segment represents approximately $4.8 million of the Company’s revenues from external customers during year ended February 28, 2013.