8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 5, 2005

Rocky Mountain Chocolate Factory, Inc.

(Exact name of registrant as specified in is charter)

Colorado	0-14749	84-0910696
(State or other jurisdiction	(Commission	(IRS Employer
of incorporation)	File Number)	Identification No.)

265 Turner Drive
Durango, Colorado 81303
(Address, including zip code, of principal executive offices)

Registrant’s telephone number, including area code: (970) 259-0554

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o      Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o      Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o      Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o      Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition.

     The Company has issued a press release concerning its second quarter ended August 31, 2005. The press release includes information regarding its results of operations and financial condition for the quarter, and is furnished as an exhibit to this Form 8-K.

Item 7.01 Regulation FD Disclosure.

     The Company has issued a press release giving guidance concerning, among other things, its estimated full-year earnings. The Company has elected to furnish the press release as an exhibit to this Form 8-K.

Item 9.01 Financial Statements and Exhibits.

(c) Exhibits

Item	Exhibit
99.1	Press Release dated October 5, 2005.

2

SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	ROCKY MOUNTAIN CHOCOLATE FACTORY, INC.
Date: October 5, 2005	By:	/s/ Bryan J. Merryman
		Bryan J. Merryman, Chief Operating
		Officer, Chief Financial Officer, Treasurer and Director

3

INDEX TO EXHIBITS

Item
Number	Exhibit
99.1	Press Release, dated October 5, 2005

EX-99.1

EXHIBIT 99.1

FOR IMMEDIATE RELEASE

ROCKY MOUNTAIN CHOCOLATE FACTORY, INC. REPORTS RECORD SECOND
QUARTER REVENUES AND EARNINGS

COMPANY REITERATES GUIDANCE FOR FISCAL YEAR, ANTICIPATING 20 TO 25 PERCENT
EARNINGS INCREASE

DURANGO, Colorado (October 5, 2005) — Rocky Mountain Chocolate Factory, Inc. (Nasdaq/NMS: RMCF) (the “Company”), which franchises gourmet chocolate and confection stores and manufactures an extensive line of premium chocolates and other confectionery products, today reported record revenues and earnings for the second quarter and first half of FY2006.

(Note: All per-share figures in this news release are adjusted for a 5% stock dividend that was distributed to shareholders in March 2005 and a 4-for-3 stock split distributed to shareholders June 13, 2005.).

For the three months ended August 31, 2005, revenues increased 12.2 percent to approximately $6.6 million, compared with revenues of approximately $5.9 million in the second quarter of FY2005. Comparable-store sales at franchised retail outlets decreased approximately 0.8 percent during the most recent quarter when measured against the three months ended August 31, 2004. The Company believes that the decrease in comparable-store sales reflects an unseasonably hot summer in many regions of the country, along with a modest softening in the retail sector of the economy. Historically, retail sales of chocolate products suffer when weather conditions are unusually hot in particular markets.

Net earnings for the second quarter of FY2006 increased 12.0 percent to $1,124,000, compared with $1,003,000 in the prior-year period. Basic earnings per share increased 5.9 percent to $0.18 in the most recent quarter, compared with $0.17 in the second quarter of FY2005. Diluted earnings per share increased 6.3 percent to $0.17 in the second quarter of FY2006, versus $0.16 in the prior-year period.

“We are proud to report our ninth consecutive quarter of record earnings when compared with prior-year periods,” stated Frank Crail, Chairman and Chief Executive Officer of Rocky Mountain Chocolate Factory, Inc. “Our earnings rose 12.0 percent and 17.6 percent in the second quarter and first half of Fiscal 2006, respectively, despite the negative impact of unusually hot weather in many of our markets during the summer months. We are pleased with this performance, especially in light of the fact that we are comparing against very strong prior-year numbers. During the first half of Fiscal 2005, net income rose 50.4 percent versus the comparable period in the previous fiscal year.”

“Our franchisees opened 7 new stores in the second quarter and 12 new stores during the first half of the fiscal year,” observed Bryan Merryman, Chief Operating Officer and Chief Financial Officer of the Company. “While store openings during the second quarter were fewer than the 10 to 15 originally anticipated due to permitting and construction delays, franchisees have opened another 6 stores since the end of the quarter, and we expect a total of 15 to 20 new stores to come on line during the third quarter. We still expect new store openings for the fiscal year ending February 28, 2006 to reach or exceed our target of 40 units.”

“We continue to experience strong demand for new store locations from both new and existing franchisees,” continued Merryman. “During the first half of Fiscal 2006, approximately 50 percent of new stores were opened by existing franchisees.”

During the second quarter of FY2006, franchisees opened new stores in Glendale, California; Long Branch, New Jersey; Provo, Utah; Salt Lake City (International Airport), Utah; Halifax, Nova Scotia; Delta, British Columbia and London, Ontario. Subsequent to August 31, 2005, franchisees have opened new stores in Gurnee (Gurnee Mills), Illinois; Burlington, Ontario; Raleigh, North Carolina; Aurora, Colorado; Fresno (The Piazza), California and Commerce (Citadel Outlets), California.

For the six months ended August 31, 2005, revenues rose 12.8 percent to approximately $11.9 million, versus approximately $10.6 million in the corresponding period of the previous fiscal year. Comparable-store sales at franchised retail outlets for the six-month period ended August 31, 2005 increased approximately 2.3 percent when measured against the first half of FY2005.

Net earnings increased 17.6 percent to $1,876,000 in the six months ended August 31, 2005, compared with $1,595,000 during the same period in FY2005. Basic earnings per share increased 11.1 percent to $0.30 during the first half of FY2006, versus $0.27 in the six months ended August 31, 2004. Diluted earnings per share increased 12.0 percent to $0.28 for the six-month period ended August 31, 2005, versus $0.25 in the first half of the previous fiscal year.

“As we enter the cooler autumn months, we expect store sales and pounds of product purchased from our factory to strengthen,” continued Merryman. “We are optimistic that year-over-year earnings comparisons in the third and fourth quarters will be stronger than in the first half of the year, and we remain comfortable with our previous guidance that full-year earnings should rise 20 to 25 percent from the record levels reported in Fiscal 2005.”

“Our financial condition remains very strong. We retired the remainder of our outstanding debt in the first half of Fiscal 2006 and ended the second quarter with $2.2 million of cash in the bank and a healthy current ratio of 4.3 to1.0,” concluded Merryman.

The Company will host a conference call Wednesday, October 5, 2005 at 4:15 p.m. EDT to discuss second quarter results in greater detail and the outlook for the balance of Fiscal 2006. The dial-in number for the conference call is 800-370-0740 international/local participants dial 973-409-9259, and entering the access code 6543028. Parties interested in participating in the conference call should dial in approximately five minutes prior to 4:15 PM EST. The call will also be broadcast live on the Internet at http://phx.corporate-ir.net/playerlink.zhtml?c=97007&s=wm&e=1140194. A replay of the call will be available through October 12, 2005 by dialing 877-519-4471 or for international callers by dialing 973-341-3080, the replay Access Code is 6543028. The call will also be archived through January 3, 2006 at http://phx.corporate-ir.net/playerlink.zhtml?c=97007&s=wm&e=1140194.

Rocky Mountain Chocolate Factory, Inc., headquartered in Durango, Colorado, is an international franchiser of gourmet chocolate and confection stores and a manufacturer of an extensive line of premium chocolates and other confectionery products. The Company and its franchisees currently operate 297 stores in 41 states, Canada, Guam and the United Arab Emirates. The Company’s common stock is listed on The Nasdaq National Market under the symbol “RMCF”.

This press release contains forward-looking information that involves risks and uncertainties, and the Company undertakes no obligation to update any forward-looking information. Risks and uncertainties that could cause actual results to differ materially include, without limitation, seasonality, consumer interest in the Company’s products, general economic conditions, consumer trends, costs and availability of raw materials, competition, the effect of government regulations, and other risks. Readers are referred to the Company’s periodic reports filed with the SEC, specifically the most recent reports which identify important risk factors that could cause actual results to differ from those contained in the forward-looking statements. The information contained in this press release is a statement of the Company’s present intentions, beliefs or expectations and is based upon, among other things, the existing business environment, industry conditions, market conditions and prices, the economy in general and the Company’s assumptions. The Company may change its intentions, beliefs or expectations at any time and without notice, based upon any changes in such factors, in its assumptions or otherwise. The cautionary statements contained or referred to in this press release should be considered in connection with any subsequent written or oral forward-looking statements that the Company or persons acting on its behalf may issue.

For Further Information, Contact Bryan J. Merryman COO/CFO (970) 259-0554

STORE INFORMATION

	New stores opened
	during the
	six months ended		Stores open as of
	August 31, 2005		August 31, 2005
United States:
Franchised Stores		9		247
Company-owned Stores		1		10
International Licensed Stores		3		34
Total		13		291

INTERIM UNAUDITED
STATEMENTS OF INCOME
(in thousands, except per share data)

	Three Months Ended August 31,					Three Months Ended August 31,
	2005		2004			2005			2004
Revenues
Factory sales	$	4,294	$	3,731			62.5	%		63.6	%
Royalty and marketing fees		1,274		1,175			19.4	%		20.0	%
Franchise fees		200		153			3.0	%		2.6	%
Retail sales		815		809			12.4	%		13.8	%
Total revenues		6,583		5,868			100.0	%		100.0	%
Costs and Expenses
Cost of sales		3,018		2,559			45.8	%		43.6	%
Franchise costs		307		317			4.7	%		5.4	%
Sales and marketing		285		272			4.3	%		4.6	%
General and administrative		507		525			7.7	%		9.0	%
Retail operating		473		379			7.2	%		6.5	%
Depreciation and amortization		204		202			3.1	%		3.4	%
Total costs and expenses		4,794		4,254			72.8	%		72.5	%
Income from Operations		1,789		1,614			27.2	%		27.5	%
Other Income (Expense)
Interest expense		—		(24	)		—			(0.4	%)
Interest income		17		23			0.3	%		0.4	%
Other, net		17		(1	)		0.3	%		(0.0	%)
Income Before Income Taxes		1,806		1,613			27.5	%		27.5	%
Provision for Income Taxes		683		610			10.4	%		10.4	%
Net Income	$	1,123	$	1,003			17.1	%		17.1	%
Basic Earnings per Common Share	$	0.18	$	0.17
Diluted Earnings per Common Share	$	0.17	$	0.16
Weighted Average Common Shares Outstanding		6,270,974		5,969,852
Dilutive Effect of Stock Options		469,741		460,608
Weighted Average Common Shares Outstanding, Assuming Dilution		6,740,715		6,430,460

Interim Unaudited
STATEMENTS OF INCOME
(in thousands, except per share data)

	Six Months Ended August 31,						Six Months Ended August 31,
	2005			2004			2005			2004
Revenues
Factory sales	$	7,684		$	6,763			64.3	%		63.9	%
Royalty and marketing fees		2,447			2,175			20.5	%		20.5	%
Franchise fees		362			295			3.0	%		2.8	%
Retail sales		1,457			1,360			12.2	%		12.8	%
Total revenues		11,950			10,593			100.0	%		100.0	%
Costs and Expenses
Cost of sales		5,416			4,704			45.3	%		44.4	%
Franchise costs		645			612			5.4	%		5.8	%
Sales and marketing		591			547			4.9	%		5.2	%
General and administrative		1,036			1,034			8.7	%		9.8	%
Retail operating		862			726			7.2	%		6.8	%
Depreciation and amortization		414			403			3.5	%		3.8	%
Total costs and expenses		8,964			8,026			75.0	%		75.8	%
Income from Operations		2,986			2,567			25.0	%		24.2	%
Other Income (Expense)
Interest expense		(20	)		(51	)		(0.2	%)		(.5	%)
Interest income		50			49			0.4	%		.5	%
Other, net		30			(2	)		0.2	%		.0	%
Income Before Income Taxes		3,016			2,565			25.2	%		24.2	%
Provision for Income Taxes		1,140			970			9.5	%		9.1	%
Net Income		1,876			1,595			15.7	%		15.1	%
Basic Earnings per Common Share	$	0.30		$	0.27
Diluted Earnings per Common Share	$	0.28		$	0.25
Weighted Average Common Shares Outstanding		6,218,478			5,985,715
Dilutive Effect of Stock Options		490,423			444,807
Weighted Average Common Shares Outstanding, Assuming Dilution		6,708,901			6,430,522

SELECTED BALANCE SHEET DATA
(in thousands)

	August 31, 2005		February 28, 2005
			(audited)
Current Assets	$	9,993	$	11,125
Total assets	$	18,477	$	19,248
Current Liabilities	$	2,315	$	3,117
Long-Term Debt, Less Current Maturities	$	—	$	1,539
Stockholders’ Equity	$	15,535	$	13,894