EXHIBIT 99.1
Rock of Ages FOR IMMEDIATE RELEASE | Investor Contact: | Company Contact:
|
Rock of Ages Reports First Quarter Results
CONCORD, NEW HAMPSHIRE,May 1, 2007 . . . Rock of Ages Corporation (NASDAQ:ROAC) today announced a smaller net loss for the first quarter of 2007 compared to the first quarter of 2006, and reiterated its expectation of a profitable year for 2007 as a whole compared to a net loss from continuing operations of $6.0 million for 2006.
First Quarter Results
For the three months ended March 31, 2007, revenue declined 10.6% to $10,379,000 from $11,612,000 for the first quarter of 2006, as modestly higher quarry and manufacturing revenue was more than offset by lower retail revenue.
"The pronounced seasonal slowdown we always experience in retail in the first quarter was exacerbated this year by severe weather late in the period that made it impossible for many cemeteries to resume pouring the concrete foundations required to set memorials as they usually do in March, resulting in a delay in the resumption of normal activity in our retail business. We are confident that most of this revenue was simply deferred and not lost, however, as suggested by the $1.1 million increase in retail backlog to $8.5 million at March 31, 2007 compared to $7.4 million at the end of the first quarter in 2006. We expect a significant rebound in retail performance beginning in the current quarter," said Chairman and CEO Kurt Swenson.
SG&A expense declined 22.6% to $5,197,000 for the first quarter of 2007 compared to $6,716,000 for the first quarter of 2006, reflecting an 18.9% decline in quarry, a 24.6% decline in manufacturing and a 22.8% decline in retail.
The divisional operating loss decreased to $4,657,000 for this year's first quarter compared to a loss of $5,151,000 for the same period of the prior year, reflecting decreased operating losses in manufacturing and retail and an increase in operating loss in the quarries.
"We made the decision to continue drilling in our Bethel properties throughout the first quarter, even though no blocks could be quarried, to facilitate increased production beginning in the current quarter to meet strong demand we are continuing to experience for our granites. We also pulled most of the large blocks required for the Old Man in the Mountain project from our Barre quarries and repositioned a derrick there. These activities resulted in additional costs we did not incur last year, as reflected in the increased quarry loss for the quarter, but we expect them to enhance quarry performance in subsequent quarters," Swenson said.
Unallocated corporate overhead was $1,352,000 for the first quarter of 2007 versus $1,312,000 for the same period of 2006.
Loss from continuing operations for the first quarter of 2007 was $6,552,000, or $0.89 per share. This compares to loss from continuing operations for the first quarter of 2006 of $7,019,000, or $0.95 per share.
"Despite the impact of bad weather in March on our retail operations and stepped-up expenses in the quarries, the net loss for this year's first quarter was smaller than the net loss for the first quarter of 2006, primarily due to the lower SG&A structure we put in place in 2006. We continue to expect improved results in each of our business segments for the year as a whole compared to 2006, and Rock of Ages to be profitable for 2007 versus a substantial loss last year," Swenson said.
(more)
Rock of Ages Reports First Quarter Results
May 1, 2007
Page Two
Balance Sheet Item
The Company's credit facility with the CIT Group is scheduled to expire on October 27, 2007 and, accordingly, the entire amount due under the credit facility has been classified as a current liability as of March 31, 2007 and December 31, 2006. The Company plans to begin discussions with CIT on the renewal of the facility during the current quarter.
Conference Call
Rock of Ages has scheduled a conference call at 11:00 a.m. EDT today. A live webcast may be accessed from the Audio Presentations link at www.RockofAges.com/investor. A replay will be available after 1:00 p.m. EDT at this same Internet addresses, or at (800) 633-8284, reservation #21336437.
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 staff productivity improvements and sales and marketing programs; our ability to form and maintain relationships with funeral directors and other death care professionals; our ability to maintain compliance with our covenants in our credit facility; our ability to maintain and expand our relationships with independent retailers; changes in demand for our products; the timing of customer orders and deliveries; the impact of competitive products and pricing; the success of our branding programs; the excess or shortage of production capacity; 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, 2006. 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)
#4338
ROCK OF AGES CORPORATION
Consolidated Statements of Operations
(in thousands, except per share data)(Unaudited)
Three Months Ended | ||||||||
|
|
| March 31, |
| April 1, | |||
|
|
| 2007 |
| 2006 | |||
Net revenue: |
|
|
| |||||
| Quarry | $ | 3,989 |
| $ | 3,756 | ||
| Manufacturing | 3,958 |
| 3,920 | ||||
| Retail | 2,432 |
| 3,936 | ||||
|
| Total net revenue | 10,379 |
| 11,612 | |||
|
|
|
| |||||
Gross profit (loss): |
|
|
| |||||
| Quarry | (1,110 | ) | (662 | ) | |||
| Manufacturing | 732 |
| 634 | ||||
| Retail | 918 |
| 1,593 | ||||
|
| Total gross profit | 540 |
| 1,565 | |||
|
|
|
| |||||
Selling, general and administrative expenses |
|
|
| |||||
| Quarry | 726 |
| 895 | ||||
| Manufacturing | 928 |
| 1,231 | ||||
| Retail | 3,543 |
| 4,590 | ||||
|
| Total SG&A expenses | 5,197 |
| 6,716 | |||
|
|
|
| |||||
Divisional operating loss |
|
|
| |||||
| Quarry | (1,836 | ) | (1,557 | ) | |||
| Manufacturing | (196 | ) | (597 | ) | |||
| Retail | (2,625 | ) | (2,997 | ) | |||
|
| Total divisional operating loss | (4,657 | ) | (5,151 | ) | ||
|
|
|
|
|
| |||
Corporate overhead | 1,352 |
| 1,312 | |||||
Other income, net | 65 |
| 50 | |||||
|
|
|
| |||||
Loss from continuing operations before interest and taxes | (5,944 | ) | (6,413 | ) | ||||
|
|
|
|
|
| |||
Interest expense, net | 620 |
| 641 | |||||
Loss from continuing operations before income taxes | (6,564 | ) | (7,054 | ) | ||||
|
|
|
|
|
| |||
Benefit for income taxes | (12 | ) | (35 | ) | ||||
Loss from continuing operations | (6,552 | ) | (7,019 | ) | ||||
|
|
|
| |||||
Discontinued operations | — |
| (29 | ) | ||||
|
|
|
| |||||
|
| Net loss | $ | (6,552 | ) | $ | (7,048 | ) |
|
| |||||||
Net income per share - basic and diluted: |
|
|
| |||||
| Income from continuing operations | $ | (0.89 | ) | $ | (0.95 | ) | |
| Discontinued operations | 0.00 |
| 0.00 | ||||
| $ | (0.89 | ) | $ | (0.95 | ) | ||
|
| |||||||
|
|
|
|
|
| |||
Weighted average common shares outstanding - basic and diluted | 7,399 |
| 7,399 |
ROCK OF AGES CORPORATION
Consolidated Balance Sheets
(in thousands, except per share amounts)(Unaudited)
|
|
| Mar 31, |
| Dec 31, | |||
| 2007 |
| 2006 | |||||
Assets | ||||||||
Current assets: |
|
|
| |||||
Cash and cash equivalents | $ | 2,220 | $ | 3,345 | ||||
| Restricted cash | 953 |
| 945 | ||||
| Trade receivables, net | 10,289 |
| 13,962 | ||||
| Inventories | 25,642 |
| 24,932 | ||||
| Other current assets | 2,402 |
| 2,035 | ||||
|
| Total current assets | 41,506 |
| 45,219 | |||
|
|
|
| |||||
Property, plant and equipment, net | 45,590 |
| 46,263 | |||||
Cash surrender value of life insurance | 168 |
| 168 | |||||
Intangibles, net | 473 |
| 498 | |||||
Goodwill | 387 |
| 387 | |||||
Long term investments | 646 |
| 704 | |||||
Other | 1,210 |
| 1,149 | |||||
Total assets | $ | 89,980 | $ | 94,388 | ||||
|
|
|
|
|
| |||
Liabilities and Stockholders' Equity | ||||||||
Current liabilities: |
|
|
| |||||
Borrowings under line of credit | $ | 14,442 | $ | 13,218 | ||||
| Current installments of long-term debt | 19,667 |
| 20,726 | ||||
| Current installments of retirement benefits | 567 |
| 567 | ||||
| Trade payables | 2,110 |
| 2,425 | ||||
| Accrued expenses | 1,998 |
| 3,193 | ||||
| Customer deposits | 10,052 |
| 6,866 | ||||
|
| Total current liabilities | 48,836 |
| 46,995 | |||
|
|
|
| |||||
Long‑term debt, excluding current installments | 248 |
| 251 | |||||
Salary continuation | 5,808 |
| 5,818 | |||||
Accrued pension cost | 5,753 |
| 5,545 | |||||
Deferred tax liability | 56 |
| 56 | |||||
Other | 3,287 |
| 3,222 | |||||
|
| Total liabilities | 63,988 |
| 61,887 | |||
|
|
|
| |||||
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; 4,660,800 issued and outstanding |
|
|
| ||||
| as of March 31, 2007 and December 31, 2006 | 47 |
| 47 | ||||
| Common stock - Class B, 0.01 par value. Authorized |
|
|
| ||||
| 15,000,000 shares; 2,738,596 issued and outstanding |
|
|
| ||||
| as of March 31, 2007 and December 31, 2006 | 27 |
| 27 | ||||
| Additional paid‑in capital | 65,551 |
| 65,551 | ||||
| Accumulated deficit | (33,348 | ) | (26,796 | ) | |||
| Accumulated other comprehensive loss | (6,285 | ) | (6,328 | ) | |||
Total stockholders' equity | 25,992 | 32,501 | ||||||
Total liabilities and stockholders' equity | $ | 89,980 | $ | 94,388 | ||||