Hello and welcome to the Rocky Mountain Chocolate Factory First Quarter Earnings Conference Call. All participants will be in a listen-only mode. There will be an opportunity for you to ask questions at the end of today’s presentation. An operator will give instructions on how to ask your questions at that time. Some of the statements made during this call may be considered forward-looking statements that involve a number of risks and uncertainties. There are several factors that could cause actual results of Rocky Mountain Chocolate Factory to differ materially from these forward-looking statements. These factors include, but are not limited to the potential need for additional financing, the availability of suitable locations for new stores, and the availability of qualified franchises to support new stores, customer acceptance of new products, dependence upon major customers, economic and consumer spending trends, and such other factors listed from time-to-time in public announcements and in Rocky Mountain Chocolate Factory's SEC reports. In addition, please be advised that the financial results for the fiscal periods presented in this call do not necessarily indicate the results that may be expected for any future quarters or the upcoming fiscal year. To Rocky Mountain Chocolate Factory's knowledge the information relayed in this conference call is correct as of the date of its transmission the Company does not undertake any obligation to update the information in the future. [Operator Instructions] Please note that today's conference call is being recorded. At this time I’d like to turn the conference call over to Mr. Franklin Crail, Chief Executive Officer. Please go ahead.

Thank you operator. Good afternoon everyone and welcome to Rocky Mountain Chocolate Factory’s first quarter of fiscal 2016 conference call. I am Frank Crail, President of Rocky Mountain Chocolate Factory and with me here today is Bryan Merryman, the Company’s Chief Operating Officer. We are going to start the call today with Bryan giving you a summary of our first quarter operating result and at the conclusion of this presentation we’ll be happy to answer any questions that you may have. So at this time I’ll turn the call over to Bryan.

Thanks Frank. I would also like to welcome everyone to our call today. I’m going to start with some detailed information on the operating results for the quarter and then I’ll turn it back over to Frank for questions-and-answers. Total revenues in the first quarter were up four-tenths of 1%, excluding retail sales revenues were up 7.3%. This was driven by a 7.7% increase in factory revenues. Factory revenues increased due to a 32.5% increase in shipments to customers outside our network of franchise stores. A portion of this increase in outside customer sales was due to easy comparisons in the prior year first quarter and was partially offset by a 1% decrease in same-store pounds purchased by franchisees and licensees and a decline of 5.7% in the average number of domestic Rocky Mountain Chocolate Factory franchise stores in operation. Retail sales decreased 28.7% this was the result of the sale of certain U-Swirl locations and the closure of an underperforming U-Swirl location. Same-store sales at all company-owned stores and cafes declined 3.4%, royalty and marketing fees decreased 2.3%. This was due to a 9% decrease in domestic franchise units, same-store sales at domestic Rocky Mountain Chocolate Factory franchise stores increased 1.3% while same-store sales at domestic U-Swirl franchise cafes declined 4.2%. Total same-store domestic franchise sales across all brands declined 1.1%. Franchise fees increased 371%, this was due to an international license fee for the Province of Ontario, Canada being recorded in the current year with no international license fee recorded in the prior year. Factory margins declined 320 basis points to 25.6% versus 28.8% in the prior year. This was due to higher commodity prices primarily cocoa, dairy and nut meats which have caused our cost of materials to increase, and the higher portion of our factory sales…

Thanks Bryan. Hi operator, at this point we’ll be glad to answer any questions.

Ladies and gentlemen, at this time we begin the question-and-answer session. [Operator Instructions] And our first question comes from Timothy Call from Capital Management Corp. Please go ahead with your question.

Could you expand on any sales you have of new products such as candy bars and to new distribution platforms such as the Kroger subsidiaries? Thanks.

Yes, we continued to sell to some new major customers including City Market and King Soopers which are Kroger brands. We also have a test that's going in Target right now. We are going to be in approximately 180 Targets with our product, primarily Totes which are our key sort of types of chocolate that we’re known for like bears and toffee and caramels. So that continues.

[Operator Instructions] Your next question comes from George Whiteside from SWS Financial Services. Please go ahead with your question.

You had come in at about a 300 basis point in your most recent quarter, your factory's gross margins and you have had a policy of not passing that type of increase through to the franchisees. Are you going to modify that practice and can we expect margins to further decline in the future?

Thanks, George. I hate to speculate on what's going to happen with commodities for the balance of the year. Not only we're seeing record high prices for cocoa, dairy and nut meats. It's just so hard, we've contracted for cocoa for the balance of this fiscal year and our contract was at a lower amount than the cocoa futures are right now. And so there shouldn't be any more margin pressure for the balance of the year because of cocoa prices because we're contracted and we are covered there. As far as dairy goes and nut meats it just depends what happens with those commodities. Hopefully we will see some relief there and we won't see any further margin deterioration for the year. We have no intention of raising prices again this fiscal year, we do that annually and that continues to be our policy.

[Operator Instructions] And we do have one additional question, David Luebke from J.P. Turner & Company. Please go ahead with your question.

Yes. This is David Luebke and again for the record I'm a registered representative, not an analyst. Can you -- are you able to give us an update on the stock buyback after the quarter-end?

We haven't -- we had seen very well volume and activity since the quarter ended in the stock and haven't been able to purchase much in the way of stock back.

So we still have a bulk of that 3 million available?

Rounded, we still have 3 million available.

[Operator Instructions] At this time we're showing no additional questions. I'd like to turn the conference call back over to management for any closing remarks.

Okay, thank you operator. Again thank you very much for attending our first quarter conference call and we look forward to talking with you again at the end of our second quarter. Have a nice day and thank you again. Bye-bye.

And ladies and gentlemen, that does end today's conference call. To access the digital replay of this conference, you may dial 1877-344-7529 or 1412-317-0088 beginning at 6 PM Eastern Time today. You'll be prompted to enter a conference number which will be 10068413, again that is 10068413. You will be prompted to record your name and company when joining. Today's conference call has now concluded. Thank you for attending today's presentation. You may now disconnect your telephone lines.