(RTTNews) - Chocolate and confectionery products manufacturer Rocky Mountain Chocolate Factory, Inc. (RMCF: News ) Tuesday reported an increase in profit for the second quarter, reflecting lower administrative costs, despite a decline in revenues.

For the quarter, the Burnaby, British Columbia-based company's net earnings were $882 thousand, compared with $833 thousand in the prior-year period. On a per share basis, earnings were $0.14, flat with the previous year.

Chief operating officer Bryan Merryman attributed the rise in earnings to lower general and administrative expenses, due to decreased professional fees.

Revenues for the quarter slipped 3.2% to $6.09 million from $6.29 million in the second quarter of fiscal 2009.

Factory sales for the quarter was $3.93 million as against $4.21 million last year, revenues from royalty and marketing fees declined to $1.45 million from $1.51 million, and revenues from franchise fees were $44 thousand versus $106 thousand a year ago. However, retail sales surged to $670 thousand from $466 thousand in the previous year.

The company noted that same-store sales at franchised retail outlets was down 4.8%, when compared with the year-ago quarter, reflecting the current economic recession which negatively impacted retailing and regional shopping mall customer traffic. Same-store retail sales rose 2.6%, when compared with the prior year.

General and administrative costs incurred by Rocky Mountain during the quarter declined to $536 thousand from $600 thousand. Franchise costs for the period fell to $402 thousand from $499 thousand last year.
During the quarter, franchisees and licensees opened 10 new stores, including four cold stone co-branded stores.

For the first half of the year, the company's net income was $1.63 million or $0.26 per share, compared to $1.84 million or $0.30 per share in the same period last year. Revenues for the period slumped to $12.76 million from $13.35 million in the prior year.

During the six-month period, Rocky Mountain opened five new franchised stores in the US, three new international licensed stores, and five new cold stone co-branded stores.

Looking ahead to the full year, the company plans to open nearly 30 to 40 new stores, including 10 to 20 Cold Stone Creamery co-branded locations.

RMCF is currently trading at $9.00 per share, down 0.19%, on the Nasdaq.

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by RTT Staff Writer

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