ROAC Rock of Ages (VT) (MM)

Rock of Ages Corporation (NASDAQ:ROAC) today announced net income for the third quarter of 2009 of $1.5 million, or $0.21 per diluted share, on revenue of $12.9 million. This compares to net income for the third quarter of 2008 of $3.1 million, or $0.41 per diluted share, on revenue of $16.6 million.

"The decrease in revenue and net income for the third quarter primarily reflected lower recovery rates in both our Bethel quarry, our most important export quarry, and our Barre quarry, our most important quarry for U.S. sales. As a result, the cost of saleable granite increased and we had less granite to sell. The good news is that recovery rates have improved in these quarries, and demand for our granites remains strong both domestically and internationally. Assuming no unusual weather-related disruptions between now and Thanksgiving, we expect quarry revenue and operating income to improve in the fourth quarter relative to the third quarter, which should also drive an increase in net income for the fourth quarter relative to the third," said Chief Executive Officer Donald Labonte.

Manufacturing revenue and operating income for the third quarter of 2009 compared to the third quarter of 2008 were affected by lower mausoleum sales and continued weakness in precision products sales.

Unallocated corporate overhead decreased 20% to $660,000 for the third quarter of 2009 versus $822,000 for the third quarter of 2008. "We remain confident that unallocated corporate overhead for 2009 will be about 15% below last year," Labonte said.

Nine Month Results

For the nine months ended September 30, 2009, net income was $193,000, or $0.03 per diluted share, on revenue of $33.2 million. This compares to income from continuing operations for the first nine months of 2008 of $623,000, or $0.08 per diluted share, on revenue of $39.3 million. Net income for the first nine months of 2008 was $481,000, or $0.06 per share, which included a loss from discontinued operations of $142,000, or $0.02 per share. There were no discontinued operations in 2009.

Balance Sheet Highlights

Total debt at October 3, 2009 was $16.7 million, 31% below total debt of $24.2 million at September 27, 2008, and 23% below the $21.8 million reported at December 31, 2008. "Based on forecasted cash flow, we plan to reduce debt to approximately $14 million by the end of 2009," Labonte said.

Stockholders' equity at October 3, 2009 was $25,986,000, or $3.50 per share. This compares to stockholders' equity at December 31, 2008 of $20,431,000, or $2.75 per share.

About Rock of Ages

Rock of Ages (www.RockofAges.com) is the largest integrated granite quarrier and manufacturer of finished granite memorials and granite blocks for memorial use in North America.

Forward-Looking Statements

This press release contains statements that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on current expectations, estimates and projections about our business or expected events based, in part, on assumptions made by management. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual events, results or outcomes may differ materially from what is expressed or forecasted in such forward-looking statements due to numerous factors, including the challenge of successfully implementing our strategic plan intended to enhance our overall profitability; unanticipated overhead or other expenses; and other risks discussed from time to time in the Company's Securities and Exchange Commission filings and reports including, but not limited to, the risks discussed in the Company's Annual Report on Form 10-K for the year ended December 31, 2008. Such forward-looking statements speak only as of the date on which they are made, and the Company does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this release.

 

ROCK OF AGES CORPORATION

Consolidated Statements of Operations

(In thousands, except per share amounts) (Unaudited)

 

 

 

       

Three Months Ended

   

 

   

Nine Months Ended

 

Oct. 3,

   

 

   

Sep. 27,

 

Oct. 3,

   

 

   

Sep. 27,

 

2009

 

2008

 

2009

 

2008

 

 

 

 

 

 

 

 

Net revenue

 

 

 

 

 

 

 

Quarry

$

5,914

 

$

8,537

 

$

15,949

 

$

18,766

Manufacturing

 

6,967

 

 

 

8,056

 

 

 

17,293

 

 

 

20,543

 

Total net revenue

 

12,881

 

 

 

16,593

 

 

 

33,242

 

 

 

39,309

 

 

 

 

 

 

 

 

 

Gross profit

 

 

 

 

 

 

 

Quarry

1,911

 

3,411

 

3,433

 

4,076

Manufacturing

 

2,022

 

 

 

2,523

 

 

 

4,556

 

 

 

5,498

 

Total gross profit

 

3,933

 

 

 

5,934

 

 

 

7,989

 

 

 

9,574

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

 

 

 

 

 

 

Quarry

503

 

523

 

1,633

 

1,747

Manufacturing

 

938

 

 

 

1,026

 

 

 

2,964

 

 

 

3,059

 

Total SG&A expenses

 

1,441

 

 

 

1,549

 

 

 

4,597

 

 

 

4,806

 

 

 

 

 

 

 

 

 

Divisional operating income

 

 

 

 

 

 

 

Quarry

1,408

 

2,888

 

1,800

 

2,329

Manufacturing

 

1,084

 

 

 

1,497

 

 

 

1,592

 

 

 

2,439

 

Total divisional operating income

2,492

 

4,385

 

3,392

 

4,768

 

 

 

 

 

 

 

 

Unallocated corporate overhead

660

 

822

 

2,393

 

2,998

Effect of pension curtailment

--

 

--

 

95

 

--

Other income, net

 

(76

)

 

 

(56

)

 

 

(219

)

 

 

(179

)

Income from continuingoperations before interest and income taxes

 

1,908

 

 

 

3,619

 

 

 

1,123

 

 

 

1,949

 

 

 

 

 

 

 

 

 

Interest expense, net

 

334

 

 

 

337

 

 

 

871

 

 

 

1,046

 

 

 

 

 

 

 

 

 

Income from continuing operations before income taxes

1,574

 

3,282

 

252

 

903

 

 

 

 

 

 

 

 

Income tax expense

 

40

 

 

 

223

 

 

 

59

 

 

 

280

 

 

 

 

 

 

 

 

 

Income from continuing operations

1,534

 

3,059

 

193

 

623

 

 

 

 

 

 

 

 

Loss from discontinued operations

 

--

 

 

 

--

 

 

 

--

 

 

 

(142

)

 

 

 

 

 

 

 

 

Net income

$

1,534

 

 

$

3,059

 

 

$

193

 

 

$

481

 

 

 

 

 

 

 

 

 

Net income (loss) per share - basic and diluted:

 

 

 

 

 

 

 

Income from continuing operations

$

0.21

 

$

0.41

 

$

0.03

 

$

0.08

Loss from discontinued operations

 

--

 

 

 

--

 

 

 

--

 

 

 

(0.02

)

Net income (loss) per share - basic and diluted

$

0.21

 

 

$

0.41

 

 

$

0.03

 

 

$

0.06

 

 

 

 

 

 

 

 

 

Weighted average common sharesoutstanding - basic and diluted

 

 

 

7,416

 

 

 

 

 

 

7,416

 

 

 

 

 

 

7,416

 

 

 

 

 

 

7,416

 

    ROCK OF AGES CORPORATION Consolidated Balance Sheets ( in thousands, except per share amounts) (Unaudited)               Oct. 3,             Dec. 31, Assets   2009     2008     Current assets: Cash and cash equivalents $ 842 $ 888 Trade receivables, net 9,215 13,314 Inventories 15,597 16,840 Other current assets 1,417 1,561 Assets held for sale   759     477     Total current assets   27,830     33,080     Property, plant and equipment, net 30,701 29,998 Cash surrender value of life insurance 132 132 Intangibles, net 503 571 Goodwill 387 387 Long term investments 129 25 Other   481     249     Total assets $ 60,163   $ 64,442       Liabilities and Stockholders' Equity   Current liabilities: Borrowings under line of credit $ 2,565 $ 7,428 Current maturities of long-term debt 800 517 Salary continuation and other post-employment benefits 690 567 Trade payables 1,214 1,334 Accrued expenses 1,721 2,226 Customer deposits   801     454     Total current liabilities 7,791 12,526   Long-term debt, excluding current installments 13,372 13,904 Salary continuation liability, net of current portion 5,151 5,382 Accrued pension cost 4,705 9,026 Deferred salary liability 1,504 1,523 Other post-employment benefits, net of current portion 1,623 1,623 Deferred tax liability   31     27     Total liabilities   34,177     44,011     Stockholders' equity: Preferred stock 0.01 par value. Authorized 2,500,000 shares; issued and outstanding no shares -- -- Common stock Class A, $0.01 par value. Authorized 30,000,000 shares; 4,812,342 issued and outstanding at October 3, 2009 and December 31, 2008 48 48 Common stock Class B, $0.01 par value. Authorized 15,000,000 shares; 2,603,721 issued and outstanding at October 3, 2009 and December 31, 2008 26 26 Additional paid-in capital 65,735 65,688 Accumulated deficit (35,355 ) (35,548 ) Accumulated other comprehensive loss   (4,468 )   (9,783 )   Total stockholders' equity   25,986     20,431     Total liabilities and stockholders' equity $ 60,163   $ 64,442