EXHIBIT 99.1
| Rock of Ages FOR IMMEDIATE RELEASE | Investor Contact: | Company Contact:
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Rock of Ages Fourth Quarter Net Income
From Continuing Operations Doubles to A Record $0.50 Per Share
Board Doubles Regular Quarterly Dividend to $0.02 Per Share
CONCORD, NEW HAMPSHIRE, February 19, 2004 . . . Rock of Ages Corporation (NASDAQ/NMS:ROAC) today announced financial results for the fourth quarter and fiscal year ended December 31, 2003 that were well ahead of previous expectations.
Fourth Quarter Results
For the three months ended December 31, 2003, revenue was $25,589,000 compared to $25,743,000 for the fourth quarter of 2002. Pre-tax income from continuing operations for the 2003 fourth quarter increased to $4,326,000, or 16.9% of revenue, from $2,643,000, or 10.3% of revenue, for the same period of the prior year. Income from continuing operations for the fourth quarter of 2003 increased 87% to a record $3,587,000, or $0.50 per diluted share. This compares to income from continuing operations of $1,915,000, or $0.25 per diluted share, for the fourth quarter of 2002, which included pre-tax arbitration expenses of approximately $1,025,000, or $0.09 per share after tax.
Quarrying Division operating income increased to $4,267,000 from $2,283,000 for the prior year. Manufacturing Division operating income declined to $464,000 from $861,000 for the fourth quarter of 2002, while Retail Division operating income was $743,000 versus $782,000.
Fiscal Year Results
For the twelve months ended December 31, 2003, revenue was $84,395,000 compared to $87,692,000 for 2002. Income from continuing operations for 2003 was $1,110,000, or $0.15 per diluted share, which included pre-tax arbitration expenses of $2,441,000, or $0.22 per share after tax. This compares to a net loss for 2002 of $24,915,000, or $3.16 per share, which included pre-tax arbitration expenses of $1,725,000 and charges for the cumulative effect of changes in accounting principles of $28,710,000 net of tax. Income from continuing operations for 2002 before the cumulative effect of changes in accounting principles was $3,543,000.
Quarrying Division operating income for 2003 was $5,583,000 compared to $8,139,000 for 2002. Manufacturing Division operating income for 2003 was $1,980,000 versus $2,145,000 for 2002. The Retail Division reported an operating loss for 2003 of $712,000 compared to operating income of $418,000 for 2002.
Stockholders' equity at December 31, 2003 was $62,970,000, or $8.72 per outstanding share.
Operations Review
Chairman and CEO Kurt Swenson said, "The outstanding fourth quarter performance of our Quarrying Division drove our strong bottom-line results for the period. Operating income in our Retail Division also came in somewhat stronger than anticipated, partly as a result of the success of our efforts to reduce costs by consolidating certain sales and management and related functions. Order receipts through February 14, 2004 at our retail outlets and manufacturing plants were up $1,079,000 (or 55%) and $1,700,000 (or 68%) respectively over the same period in 2003, marking a very positive start to the new year."
Swenson added, "Our principal goal is to leverage the resources of our quarry, manufacturing and retail groups to enhance the profitability of our integrated distribution system and ultimately assure that every memorial customer in the United States has the opportunity to purchase a Rock of Ages product. Currently, we supply approximately 5% of the total market for stand-
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Rock of Ages Fourth Quarter Net Income From Continuing Operations
Doubles to A Record $0.50 Per Share
February 19, 2004
Page Two
alone memorials, so our growth opportunity is large. As we plan to discuss in detail on today's conference call, we are making important changes in our organization to take advantage of our opportunity, and are focused on creating the best management team to build and manage a national distribution system."
Dividend Doubled
Swenson also announced that the Board of Directors has approved an increase in the regular quarterly dividend to $0.02 per share from $0.01. The new, higher dividend is payable on March 30, 2004 to shareholders of record on March 1, 2004. "We plan to reassess the cash dividend periodically to reflect the Company's performance and our goal to build value for our shareholders," he said.
Eurimex Arbitration Update
On April 18, 2001, the Company received a Request for Arbitration from its former distributor outside the United States, Eurimex, S. A., in connection with the termination by Rock of Ages of the distribution agreements for certain of the Company's granite products. Pursuant to those agreements, the arbitration hearing took place in Luxembourg during the week of May 24, 2003.
During 2002, pre-tax expenses associated with the Eurimex arbitration, which were included in quarry selling, general and administrative expenses for that period, totaled $1,725,000 as compared to $2,441,000 in 2003. With the arbitration hearing now completed, the Company believes that it has established adequate reserves to cover all further legal and other costs of the arbitration with the exception of any adverse judgment for which no reserve has been accrued, based on management's expectation that the Company will prevail in this matter.
The Company recently was informed that the tribunal has extended the deadline for its decision from February 28, 2004 until May 31, 2004.
Conference Call
Rock of Ages has scheduled a conference call at 11:00 a.m. ET. A live Webcast may be accessed from the Audio Presentations link at www.RockofAges.com/investor. A replay will be available at these same Internet addresses, or at (800) 633-8284, reservation #21185539.
About Rock of Ages
Rock of Ages (www.RockofAges.com) is the largest integrated granite quarrier, manufacturer and retailer 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 Arbitration Reform Act of 1995. These statements are based on current expectations, estimates and projections about the Company's business 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 outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements due to numerous factors, including those described above and the following: changes in demand for the Company's products, product mix, the timing of customer orders and deliveries, the impact of competitive products and pricing, the success of the Company's branding programs; the excess or shortage of production capacity, difficulties encountered in the integration of acquired businesses; weather conditions and other risks discussed from time to time in the Company's Securities and Exchange Commission filings and reports. In addition, such statements could be affected by general industry and market conditions and growth rates, and general domestic and international economic conditions. 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.
(tables attached)
ROCK OF AGES CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS) (Unaudited)
Three Months Ended | Twelve Months Ended | |||||||||
December 31, | December 31, | |||||||||
2003 | 2002 | 2003 | 2002 | |||||||
Net revenues: | ||||||||||
Quarrying | $ | 9,653 | $ | 8,804 | $ | 28,359 | $ | 29,518 | ||
Manufacturing | 5,394 | 5,412 | 20,373 | 19,726 | ||||||
Retailing | 10,542 | 11,527 | 35,663 | 38,448 | ||||||
Total net revenues | 25,589 | 25,743 | 84,395 | 87,692 | ||||||
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Gross profit: |
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Quarrying | 5,157 | 4,258 | 11,179 | 13,132 | ||||||
Manufacturing | 1,568 | 1,738 | 5,774 | 5,521 | ||||||
Retailing | 6,247 | 6,402 | 20,388 | 21,314 | ||||||
Total gross profit | 12,972 | 12,398 | 37,341 | 39,967 | ||||||
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Selling, general and administrative expenses: |
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Quarrying | 890 | 1,975 | 5,596 | 4,993 | ||||||
Manufacturing | 1,104 | 877 | 3,794 | 3,376 | ||||||
Retailing | 5,504 | 5,620 | 21,100 | 20,896 | ||||||
Total SG&A expenses | 7,498 | 8,472 | 30,490 | 29,265 | ||||||
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Divisional operating income (loss): |
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Quarrying | 4,267 | 2,283 | 5,583 | 8,139 | ||||||
Manufacturing | 464 | 861 | 1,980 | 2,145 | ||||||
Retailing | 743 | 782 | (712 | ) | 418 | |||||
Divisional operating income | 5,474 | 3,926 | 6,851 | 10,702 | ||||||
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Unallocated corporate overhead | 998 | 1,141 | 4,692 | 5,273 | ||||||
Earnings from continuing operations before interest and taxes | 4,476 | 2,785 | 2,159 | 5,429 | ||||||
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Interest expense | 150 | 142 | 471 | 522 | ||||||
Income from continuing operations before income taxes | 4,326 | 2,643 | 1,688 | 4,907 | ||||||
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Income tax expense | 739 | 728 | 578 | 1,364 | ||||||
Income from continuing operations before |
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cumulative effect of changes in accounting principles | 3,587 | 1,915 | 1,110 | 3,543 | ||||||
Discontinued operations, net of income taxes | 477 | 81 | 337 | 252 | ||||||
Income before cumulative effect of changes in accounting principles | 4,064 | 1,996 | 1,447 | 3,795 | ||||||
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Cumulative effect in prior years of changes in accounting principles, net | — | — | — | (28,710 | ) | |||||
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Net Income (Loss) | 4,064 | 1,996 | 1,447 | (24,915 | ) | |||||
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Net Income (Loss) per share - basic |
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Income from continuing operations |
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before cumulative effect of changes in accounting principles | $ | 0.50 | $ | 0.25 | $ | 0.15 | $ | 0.45 | ||
Discontinued operations | 0.07 | 0.01 | 0.05 | 0.03 | ||||||
Cumulative effect of changes in accounting principles | 0.00 | 0.00 | 0.00 | (3.65 | ) | |||||
Net Income (Loss) per share - basic | $ | 0.57 | $ | 0.26 | $ | 0.20 | $ | (3.17 | ) | |
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Net Income (Loss) per share - diluted |
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Income from continuing operations |
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before cumulative effect of changes in accounting principles | $ | 0.50 | $ | 0.25 | $ | 0.15 | $ | 0.45 | ||
Discontinued operations | 0.06 | 0.01 | 0.05 | 0.03 | ||||||
Cumulative effect of changes in accounting principles | 0.00 | 0.00 | 0.00 | (3.64 | ) | |||||
Net Income (Loss) per share - diluted | $ | 0.56 | $ | 0.26 | $ | 0.20 | $ | (3.16 | ) | |
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Weighted average number of common shares outstanding - basic | 7188 | 7823 | 7182 | 7848 | ||||||
Weighted average number of common shares outstanding - diluted | 7210 | 7823 | 7219 | 7880 | ||||||
ROCK OF AGES CORPORATION
COMPARATIVE BALANCE SHEET
(US $ IN THOUSANDS) (Unaudited)
| December 31, |
| December 31, | ||||||||
2003 |
| 2002 | |||||||||
ASSETS | |||||||||||
CURRENT ASSETS: |
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Cash & Cash Equivalents |
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| $ | 3,227 | $ | 6,185 | ||||
Trade Receivables |
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| 15,587 |
| 17,671 | |||||
Inventories |
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| 21,152 |
| 21,654 | ||||
Other Current Assets |
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| 10,261 |
| 5,198 | |||||
Assets of Discontinued Operations - Held for sale | 817 |
| — | ||||||||
TOTAL CURRENT ASSETS |
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| 51,044 |
| 50,708 | ||||||
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OTHER ASSETS: |
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C.S.V. Life Insurance |
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| 728 |
| 766 | |||||
Other Intangibles |
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| 438 |
| 574 | |||||
Deferred Tax Assets - Long Term |
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| 5,236 |
| 6,249 | ||||||
Prearranged Receivables |
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| — |
| 14,013 | |||||
Intangible Pension Asset |
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| 904 |
| 1,136 | |||||
Cemetery Property |
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| — |
| 6,056 | |||||
Other |
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| 1,616 |
| 2,411 | |||
TOTAL OTHER ASSETS |
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| 8,922 |
| 31,205 | ||||||
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FIXED ASSETS: |
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Property and Equipment |
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| 69,657 |
| 69,328 | |||||
Less Accumulated Depreciation |
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| 27,162 |
| 25,407 | ||||||
NET FIXED ASSETS |
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| 42,495 |
| 43,921 | |||||
| TOTAL ASSETS |
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| $ | 102,461 | $ | 125,834 | |||
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LIABILITIES AND EQUITY |
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CURRENT LIABILITIES: |
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Borrowings under Line of Credit |
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| $ | 4,751 | $ | 4,386 | |||||
Current Portion LTD |
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| 38 |
| 205 | |||||
Deferred Compensation Payable |
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| 327 |
| 324 | ||||||
Accounts Payable |
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| 1,651 |
| 1,966 | |||||
Accrued Expenses |
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| 4,311 |
| 5,001 | |||||
Customer Deposits |
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| 7,105 |
| 7,318 | |||||
Liabilities of Discontinued Operations |
| 17 |
| — | |||||||
TOTAL CURRENT LIABILITIES |
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| 18,200 |
| 19,200 | ||||||
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Long-Term Debt, Excluding Current Portion |
| 12,794 |
| 12,832 | |||||||
Deferred Compensation |
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| 5,483 |
| 4,649 | |||||
Prearranged Deferred Revenue |
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| — |
| 21,846 | ||||||
Accrued Pension Cost |
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| 1,490 |
| 2,691 | |||||
Other Liabilities |
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| 1,524 |
| 1,970 | ||||
TOTAL LIABILITIES |
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| 39,491 |
| 63,188 | |||||
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STOCKHOLDERS' EQUITY: |
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Common Stock |
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| 72 |
| 77 | ||||
Additional Paid In Capital |
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| 65,878 |
| 68,574 | |||||
Retained Earnings |
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| (2,066 | ) |
| (3,442 | ) | |||
Other Comprehensive Income |
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| (914 | ) |
| (2,563 | ) | ||||
TOTAL EQUITY |
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| 62,970 |
| 62,646 | |||||
| TOTAL LIABILITIES & EQUITY |
| $ | 102,461 | $ | 125,834 | |||||