Rocky Mountain Chocolate Factory Secures New $6 Million Credit
Rocky Mountain Chocolate Factory Secures New $6 Million Credit
Rocky Mountain Chocolate Factory Inc. (NASDAQ: RMCF), a renowned international producer and franchisor of premium chocolates and confectionery items, has announced the initiation of a new three-year credit facility valued at $6 million. This new agreement with RMC Credit Facility, LLC marks a significant opportunity for the company to boost its operational efficiency and investment capabilities.
Overview of the Credit Agreement
This credit facility is designed to enhance Rocky Mountain Chocolate Factory's capital structure by allowing for strategic investments into equipment and machinery. Interim CEO Jeff Geygan expressed optimism, stating that this arrangement will improve liquidity and enable the company to execute its strategic initiatives successfully over the next few years.
Benefits of the New Credit Facility
The new credit agreement will require only interest payments until it matures on September 30, 2027, accruing interest at an annual rate of 12%. This structure allows the company to retain liquidity while focusing on its growth plans and capital investments.
Strategic Financial Moves
Part of the proceeds from this credit agreement will be allocated to retiring an existing $4 million revolving credit facility, which had approximately $3.45 million outstanding. Such a move not only consolidates debt but also sets the stage for targeted investments in working capital and expansion opportunities.
Future Growth Plans
The credit facility supports Rocky Mountain Chocolate Factory's broader three-year strategic plan aimed at achieving sustainable growth and profitability. The company's management believes that by strengthening their financial foundation, they will be more agile in responding to market opportunities and consumer trends.
About Rocky Mountain Chocolate Factory
Founded in Durango, Colorado, Rocky Mountain Chocolate Factory, Inc. is known for its exquisite range of chocolates and confectionery products, including gourmet caramel apples. The company has made notable rankings in the Franchise 500 by Entrepreneur Magazine and Franchise 400 by Franchise Times in 2024. With over 260 locations across the United States complemented by several international stores, Rocky Mountain Chocolate Factory continues to expand its brand presence.
Operational Insights
The company's diverse product line and franchise model have allowed it to thrive in various markets. This strategic initiative with the new credit facility underlines its commitment to fortifying its operations and delivering high-quality products to customers worldwide.
Investor Contact Information
For investors seeking further details, Sean Mansouri, CFA at Elevate IR, provides insights and information regarding the company’s financials. He can be reached at 720-330-2829, or you can email him at RMCF@elevate-ir.com.
Frequently Asked Questions
What is the purpose of the new credit facility?
The new credit facility aims to provide funding for equipment investments and growth initiatives while improving the company's liquidity.
What is the interest rate on the new credit facility?
The facility carries an interest rate of 12% per annum until maturity.
How will Rocky Mountain Chocolate Factory utilize the funds?
Funds from the facility will primarily retire existing debt and support ongoing capital investment and working capital needs.
Where is Rocky Mountain Chocolate Factory headquartered?
The company is headquartered in Durango, Colorado.
How many stores does Rocky Mountain Chocolate Factory operate?
Rocky Mountain Chocolate Factory operates over 260 stores in the United States and several international locations.
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