ROAC Rock of Ages (VT) (MM)

Rock of Ages Corporation (NASDAQ:ROAC) today announced financial results for the fourth quarter and 2009, highlighted by a return to profitability for the quarter and year versus losses for the prior year periods, an increase in cash generated from operations to approximately $10,800,000 for 2009 compared to about $2,300,000 for 2008, and the reduction of total debt by an additional $7,500,000 in 2009 following the $8,000,000 debt reduction achieved in 2008.

Net income for the fourth quarter of 2009 was $609,000, or $0.08 per diluted share, on revenue of $12,279,000. This compares to a net loss for the fourth quarter of 2008 of $2,677,000, or $0.36 per diluted share, on revenue of $16,560,000. Results for the fourth quarter of 2008 included a $3,930,000 charge for the write-off of second-grade granite block inventory and a $1,348,000 write-down of the Company's former headquarters building.

"Contrary to our expectations last November, the quarry yield issues that bedeviled us in the third quarter continued to be a problem in the fourth quarter. The decrease in fourth quarter revenue was a direct result of the poor recovery in our export quarries. Demand for our stone remains extremely high in our key export markets; we simply did not have enough of the desired inventory to satisfy it. We are taking steps to rectify this situation. During the fourth quarter we launched a development program in new areas in our Barre, Bethel and White Gardenia quarries in order to increase production and decrease unit costs beginning in 2010," said Chief Executive Officer Donald Labonte.

"Also encouraging was the improved performance of our manufacturing segment in the fourth quarter of 2009. Revenue was flat with the prior year level, following negative revenue comparisons in each of the first three quarters, and operating income increased 15%, reflecting improved fourth quarter sales from our authorized dealers and of mausoleums," Labonte said.

"We are optimistic that we can grow both our quarry and manufacturing segments in 2010, even as we maintain our tight control over operating costs and continue deleveraging our balance sheet," the CEO added.

Net income from continuing operations for 2009 was $802,000, or $0.11 per diluted share. This compares to a loss from continuing operations for 2008 of $2,054,000, or $0.28 per diluted share, which included the inventory charge and write-down of the Company's former headquarters building mentioned above. Revenue for 2009 decreased to $45,521,000 compared to $55,869,000 for 2008.

SG&A expenses decreased 7% for 2009 compared to 2008, and unallocated corporate overhead decreased 16%. Interest expense for 2009 decreased to $1,158,000 from $1,368,000 for 2008.

Balance Sheet Highlights

Total debt at December 31, 2009 was $14.4 million, 34% below total debt of $21.8 million reported at December 31, 2008.

Stockholders' equity at December 31, 2009 was $26,504,000, or $3.57 per diluted share. This compares to stockholders' equity at December 31, 2008 of $20,431,000, or $2.75 per diluted 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           Twelve Months Ended December 31, December 31,   2009               2008     2009               2008   Net revenue Quarry $ 5,733 $ 9,920 $ 21,682 $ 28,686 Manufacturing   6,546     6,640     23,839     27,183   Total net revenue   12,279     16,560     45,521     55,869     Cost of goods sold Quarry 4,154 6,643 16,670 21,333 Quarry inventory impairment -- 3,930 -- 3,930 Manufacturing   4,835     4,670     17,572     19,715   Total cost of goods sold   8,989     15,243     34,242     44,978     Gross profit Quarry 1,579 (653 ) 5,012 3,423 Manufacturing   1,711     1,970     6,267     7,468   Total gross profit 3,290 1,317 11,279 10,891   Selling, general and administrative expenses Quarry 610 520 2,243 2,267 Manufacturing   970     1,325     3,933     4,383   Total SG&A expenses 1,580 1,845 6,176 6,650   Divisional operating income Quarry 969 (1,173 ) 2,769 1,156 Manufacturing   741     645     2,334     3,085   Total divisional operating income 1,710 (528 ) 5,103 4,241   Unallocated corporate overhead 649 637 3,042 3,636 Foreign exchange loss (gain) 131 (27 ) 131 (27 ) Effect of pension curtailment -- -- 95 -- Impairment of long-lived assets -- 1,348 -- 1,348 Other income, net   (187 )   (246 )   (405 )   (425 )  

Income (loss) from continuing operations before interest and income taxes

1,117 (2,240 ) 2,240 (291 )   Interest expense, net   287     322     1,158     1,368     Income (loss) from continuing operations before income taxes 830 (2,562 ) 1,082 (1,659 )   Income tax expense   221     115     280     395     Income (loss) from continuing operations 609 (2,677 ) 802 (2,054 )   Loss from discontinued operations -- -- -- (119 ) Interest allocated to discontinued operations   --     --     --     (23 )   Net income (loss) $ 609   $ (2,677 ) $ 802   $ (2,196 )   Net income per share - basic and diluted Income (loss) from continuing operations $ 0.08 $ (0.36 ) $ 0.11 $ (0.28 ) Loss from discontinued operations   --     --     --     (0.02 )

Net income (loss) per share - basic and diluted

 

0.08

 

 

 

(0.36

)

 

 

0.11

 

 

 

(0.30

)

  Weighted average number of common shares outstanding Basic 7,416 7,416 7,416 7,416 Diluted   7,416     7,416     7,416     7,416       ROCK OF AGES CORPORATION Consolidated Balance Sheets (In thousands, except per share amounts) (Unaudited)             December 31, Assets   2009               2008     Current assets: Cash and cash equivalents $ 1,713 $ 888 Trade receivables, net 7,241 13,314 Inventories 15,077 16,839 Other current assets 1,423 1,561 Assets held for sale   759     477     Total current assets   26,213     33,079     Property, plant and equipment, net 30,559 29,998 Cash surrender value of life insurance 137 132 Intangibles, net 582 571 Goodwill 387 387 Long term investments 57 25 Other   281     250     Total assets $ 58,216   $ 64,442       Liabilities and Stockholders' Equity   Current liabilities: Borrowings under line of credit $ 214 $ 7,428 Current maturities of long-term debt 801 517 Salary continuation and other post-employment benefits 691 567 Trade payables 1,285 1,334 Accrued expenses 1,264 2,226 Customer deposits   774     454     Total current liabilities 5,029 12,526   Long-term debt, net of current maturities 13,361 13,904 Salary continuation liability, net of current portion 5,386 5,382 Accrued pension cost 4,810 9,026 Deferred salary liability 1,504 1,523 Other post-employment benefits, net of current portion 1,622 1,623 Deferred tax liability   --       27     Total liabilities   31,712     44,011     Stockholders' equity:

Preferred stock, $0.01 par value. Authorized 2,500,000 shares; 0 shares issued and outstanding

-- --

Common stock Class A, $0.01 par value. Authorized 30,000,000 shares; 4,812,342 issued and outstanding at December 31, 2009 and 2008

48 48

Common stock Class B, $0.01 par value. Authorized 15,000,000 shares; 2,603,721 issued and outstanding at December 31, 2009 and 2008

26 26 Additional paid-in capital 65,751 65,688 Accumulated deficit (34,746 ) (35,548 ) Accumulated other comprehensive loss   (4,575 )   (9,783 )   Total stockholders' equity   26,504     20,431     Total liabilities and stockholders' equity $ 58,216   $ 64,442