EXHIBIT 99.1
Rock of Ages FOR IMMEDIATE RELEASE | Investor Contact: | Company Contact: |
Rock of Ages Reports First Quarter Results
CONCORD, NEW HAMPSHIRE, May 10, 2005 . . . Rock of Ages Corporation (NASDAQ/NMS:ROAC) today announced financial results for the first quarter of 2005.
"Because winter snows and freezing temperatures affect virtually every aspect of our business, the first quarter historically is the seasonally weakest quarter of the year for Rock of Ages. As we last experienced in 2003, heavy snow and rain in March exacerbated this seasonal pattern again this year by delaying by several weeks the return to normal market conditions. This had an especially dramatic impact on our quarrying operations, although manufacturing and retailing also were affected to a lesser extent," said Chairman and CEO Kurt Swenson.
"The company's first quarter results also reflected planned increases in personnel, sales and marketing and other expenses associated with the implementation of our strategy to grow our Memorials division, which includes our retail and manufacturing segments. Our staffing program is now nearly complete. Rick Wrabel, President of the Memorials division, has assembled an outstanding team of industry veterans and professionals from outside our industry with extensive experience in building retail businesses. We believe our team has the right mix of skills and experience successfully to implement our aggressive growth plan.
"We are making significant strides in our Outreach program, which is designed to expand our retail distribution capability by establishing mutually beneficial relationships with funeral homes and cemeteries that complement our owned and authorized store network. Our new branding and marketing programs have been well-received by our retailers, who also are enthusiastic about our plans to expand the range of products we offer as we roll out our 'total memorialization' concept in the months to come. We plan to support our expanding retail capabilities with a print advertising program in leading media that will be launched in the second half of this year. We are confident that these and other investments we are making will deliver growth in our Memorials division beginning later this year and accelerating in 2006 and beyond," Swenson added.
First Quarter Results
For the three months ended March 31, 2005, revenue decreased to $10,471,000 from $12,162,000 for the first quarter of 2004. For the first quarter of 2003, revenue was $9,572,000. The net loss for the first quarter of 2005 was $6,954,000, or $0.94 per share. This compares to a net loss of $3,424,000, or $0.47 per share, for the first quarter of 2004, and a net loss of $4,881,000, or $0.68 per share, for the first quarter of 2003.
At March 31, 2005, cash and equivalents amounted to $2,555,000, and shareholders' equity was $52,932,000, or $7.16 per outstanding share.
(more)
Rock of Ages Reports First Quarter Results
May 10, 2005
Page Two
As a result of the first quarter results this year, the company was in violation of the Cash Flow to Debt Service covenant on its credit facility as modified in the first quarter of 2005. The Company is in the process of obtaining a waiver from its lenders for the first quarter violation and expects to obtain that waiver prior to the filing of its 10Q. The Company and its lenders have not modified any of the required covenants for the balance of 2005 but the Company believes it is probable that it will either be in compliance with those covenants or will be able to cure any default under those covenants for the balance 2005.
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 #21231468.
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 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 following: our ability to successfully execute our strategy to expand our business through acquisitions, opening new stores, maintaining our relationships with independent retailers, and forming and maintaining relationships with other death care professionals; changes in demand for the Company's product; 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 including, but not limited to, the risks discussed in the Company's Annual Report on Form 10-K for the year ended December 31, 2004. 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)
#3873
ROCK OF AGES CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands Except Per Share Amounts)(Unaudited)
Three Months Ended | |||||||||
| April 2, |
| April 3, |
| March 31, | ||||
| 2005 |
| 2004 |
| 2003 | ||||
Net revenue: |
|
|
|
|
| ||||
Quarrying | $ | 3,566 | $ | 4,532 | $ | 2,856 | |||
Manufacturing | 2,850 |
| 3,232 |
| 3,579 | ||||
Retailing | 4,055 |
| 4,398 |
| 3,137 | ||||
Total net revenue | 10,471 |
| 12,162 |
| 9,572 | ||||
|
|
|
|
|
| ||||
Gross profit: |
|
|
|
|
| ||||
Quarrying | (877 | ) | 350 |
| (618 | ) | |||
Manufacturing | 199 |
| 644 |
| 873 | ||||
Retailing | 1,829 |
| 2,203 |
| 1,224 | ||||
Total gross profit | 1,151 |
| 3,197 |
| 1,479 | ||||
|
|
|
|
|
| ||||
Selling, general and administrative expenses: |
|
|
|
|
| ||||
Quarrying | 894 |
| 842 |
| 743 | ||||
Manufacturing | 1,207 |
| 857 |
| 837 | ||||
Retailing | 6,086 |
| 4,577 |
| 4,343 | ||||
Total SG&A expenses | 8,187 |
| 6,276 |
| 5,923 | ||||
|
|
|
|
|
| ||||
Divisional operating income (loss): |
|
|
|
|
| ||||
Quarrying | (1,771 | ) | (492 | ) | (1,361 | ) | |||
Manufacturing | (1,008 | ) | (213 | ) | 36 | ||||
Retailing | (4,257 | ) | (2,374 | ) | (3,119 | ) | |||
Divisional operating income (loss) | (7,036 | ) | (3,079 | ) | (4,444 | ) | |||
|
|
|
|
|
| ||||
Unallocated corporate overhead | 1,366 |
| 1,291 |
| 1,246 | ||||
Adverse judgment and legal expenses | — |
| — |
| 586 | ||||
|
|
|
|
|
| ||||
Loss from continuing operations before interest and taxes | (8,402 | ) | (4,370 | ) | (6,276 | ) | |||
Interest expense | 317 |
| 136 |
| 149 | ||||
|
|
|
|
|
| ||||
Loss from continuing operations before taxes | (8,719 | ) | (4,506 | ) | (6,425 | ) | |||
Income tax benefit | (1,765 | ) | (1,120 | ) | (1,543 | ) | |||
|
|
|
|
|
| ||||
Loss from continuing operations | (6,954 | ) | (3,386 | ) | (4,882 | ) | |||
Discontinued operations, net of income taxes | — |
| (38 | ) | 1 | ||||
|
|
|
|
|
| ||||
Net Loss | $ | (6,954 | ) | $ | (3,424 | ) | $ | (4,881 | ) |
|
|
|
|
|
| ||||
Per share information: |
|
|
|
|
| ||||
Net Loss per share ‑basic |
|
|
|
|
| ||||
Loss from continuing operations | $ | (0.94 | ) | $ | (0.47 | ) | $ | (0.68 | ) |
Discontinued operations | — |
| — |
| — | ||||
Net Loss per share ‑ basic | $ | (0.94) | $ | (0.47 | ) | $ | (0.68 | ) | |
|
|
|
|
|
| ||||
Net Loss per share ‑diluted |
|
|
|
|
| ||||
Loss from continuing operations | $ | (0.94 | ) | $ | (0.47 | ) | $ | (0.68 | ) |
Discontinued operations | — |
| — |
| — | ||||
Net Loss per share ‑ diluted | $ | (0.94 | ) | $ | (0.47 | ) | $ | (0.68 | ) |
|
|
|
|
|
| ||||
Weighted average number of common shares outstanding ‑ basic | 7,396 |
| 7,215 |
| 7,186 | ||||
Weighted average number of common shares outstanding ‑ diluted | 7,396 |
| 7,215 |
| 7,186 |
ROCK OF AGES CORPORATION
COMPARATIVE CONSOLIDATED BALANCE SHEETS
(US $ In Thousands) (Unaudited)
April 2, | December 31, | |||||
2005 |
| 2004 |
| |||
ASSETS | ||||||
CURRENT ASSETS: |
|
|
|
| ||
Cash & Cash Equivalents | $ | 2,555 |
| $ | 4,298 |
|
Trade Receivables, net | 11,440 |
| 15,017 |
| ||
Inventories | 26,472 |
| 23,858 |
| ||
Other Current Assets | 7,113 |
| 5,501 |
| ||
TOTAL CURRENT ASSETS | 47,580 |
| 48,674 |
| ||
|
|
|
| |||
OTHER ASSETS: |
|
|
|
| ||
C.S.V. Life Insurance | 743 |
| 743 |
| ||
Goodwill | 318 |
| 163 |
| ||
Other Intangibles | 369 |
| 388 |
| ||
Deferred Tax Assets ‑ Long Term | 6,740 |
| 6,740 |
| ||
Intangible Pension Asset | 739 |
| 739 |
| ||
Long‑term Investments | 4,110 |
| 4,112 |
| ||
Other | 825 |
| 888 |
| ||
TOTAL OTHER ASSETS | 13,844 |
| 13,773 |
| ||
|
|
|
| |||
FIXED ASSETS: |
|
|
|
| ||
Property and Equipment | 81,891 |
| 76,289 |
| ||
Less Accumulated Depreciation | 31,106 |
| 30,159 |
| ||
NET FIXED ASSETS | 50,785 | 46,130 | ||||
TOTAL ASSETS | $ | 112,209 | $ | 108,577 | ||
|
|
|
|
| ||
|
|
|
|
| ||
LIABILITIES AND EQUITY |
|
|
|
| ||
|
|
|
| |||
CURRENT LIABILITIES: |
|
|
|
| ||
Borrowings under Line of Credit | $ | 11,621 |
| $ | 7,287 |
|
Current Portion LTD | 316 |
| 36 |
| ||
Current Installments of Deferred Compensation | 369 |
| 372 |
| ||
Accounts Payable | 2,530 |
| 2,433 |
| ||
Accrued Expenses | 3,632 |
| 4,234 |
| ||
Customer Deposits | 11,470 |
| 8,173 |
| ||
TOTAL CURRENT LIABILITIES | 29,938 |
| 22,535 |
| ||
|
|
|
| |||
Long‑Term Debt, Excluding Current Portion | 19,429 |
| 16,289 |
| ||
Deferred Compensation | 6,715 |
| 6,620 |
| ||
Accrued Pension Cost | 2,209 |
| 1,993 |
| ||
Deferred Tax Liability | 30 |
| 30 |
| ||
Other Liabilities | 956 |
| 924 |
| ||
TOTAL LIABILITIES | 59,277 |
| 48,391 |
| ||
|
|
|
| |||
STOCKHOLDERS' EQUITY: |
|
|
|
| ||
Common Stock | 74 |
| 74 |
| ||
Additional Paid In Capital | 66,106 |
| 66,267 |
| ||
Accumulated Deficit | (12,242 | ) | (5,288 | ) | ||
Other Comprehensive Loss | (1,006 | ) | (867 | ) | ||
TOTAL STOCKHOLDER'S EQUITY | 52,932 | 60,186 | ||||
TOTAL LIABILITIES & STOCKHOLDER'S EQUITY | $ | 112,209 | $ | 108,577 | ||