EXHIBIT 99.1 | Rock of Ages FOR IMMEDIATE RELEASE
| Company Contacts: Laura Plude Chief Financial Officer 802‑476‑2208 www.rockofages.com | Kurt Swenson Chairman (603) 225-8397 |
Rock of Ages Reports Second Quarter Results |
BARRE, VERMONT, August 5, 2008 . . . Rock of Ages Corporation (NASDAQ:ROAC) today announced operating results for the second quarter of 2008. Net income from continuing operations decreased to $727,000, or $0.10 per diluted share, compared to $1,890,000, or $0.25 per share, for the second quarter of 2007. Net revenues decreased to $14,326,000 compared to $16,450,000 for the second quarter of 2007. |
"As anticipated, the installation of new wire sawing technology at all of our quarries affected our second quarter performance. In addition, adverse weather forced a one-month delay in the opening of our Vermont quarries, which in turn delayed granite inspections by foreign customers, resulting in reduced quarry shipments in this year's second quarter compared to last. Timing was also a factor in our manufacturing division, as last year's shipments of larger and more profitable mausoleums took place in the first two quarters whereas this year our larger mausoleum shipments are scheduled in the third and fourth quarters. |
"We expect cost savings and improved productivity from the new wire saw technology that is now up and running in all of our quarries and in our Barre manufacturing plant to support solid growth in the second half of the year, driven by continued strong demand for our granite blocks and mausoleums," said Donald Labonte, Chief Executive Officer. |
"Unallocated corporate overhead decreased 24% for the second quarter compared to the prior year, and interest expense decreased 32%. We reduced borrowings under our line of credit by $1,625,000 and $764,000 since December 31, 2007, and March 31, 2008, respectively and we expect further reductions this year. With our strong second quarter operating cash flow, we reduced short-term debt even as we invested approximately $2,100,000 in capital improvements in our quarries and manufacturing plants. |
"We continue to believe that our divisional operating income will be higher than last year and that our previously provided 2008 estimates of unallocated corporate overhead of about $3.8 million and interest of $1.4 million will be met," Labonte said. |
Second Quarter Results |
For the three months ended June 28, 2008, net revenues decreased 12.9% to $14,326,000 compared to $16,450,000 for the second quarter of 2007, primarily reflecting a 27.6% decrease in quarry revenue to $5,560,000 from $7,683,000. Manufacturing revenue was unchanged. |
Gross profit for this year's second quarter decreased to $3,773,000 compared to $5,292,000 a year earlier. Quarry gross profit decreased to $1,154,000 compared to $1,942,000 for the second quarter of 2007, and manufacturing gross profit decreased to $2,619,000 from $3,350,000. |
SG&A expense decreased 7.9% to $1,642,000 for the second quarter of 2008 compared to $1,782,000 for the second quarter of 2007. Total divisional operating income decreased to $2,131,000 for this year's second quarter compared to $3,510,000 for the second quarter of 2007. |
(more) |
Rock of Ages Reports Second Quarter Results |
August 5, 2008 |
Page Two |
Unallocated corporate overhead decreased 24% to $889,000 for the second quarter of 2008 compared to $1,169,000 the previous year. Interest expense allocated to continuing operations decreased 31.7% to $351,000 from $514,000 last year. |
Income from continuing operations was $727,000, or $0.10 per diluted share, for the second quarter of 2008. This compares to income from continuing operations of $1,890,000, or $0.25 per diluted share, for the second quarter of 2007. |
Net income declined to $727,000, or $0.10 per diluted share, for the second quarter of 2008. This compares to net income of $3,942,000, or $0.53 per diluted share, for the second quarter of 2007, which included income from the Company's discontinued retail operations of $2,052,000, or $0.28 per diluted share. |
Six Months Results |
For the six months ended June 28, 2008, revenue decreased 6.9% to $22,716,000 compared to $24,397,000 for the first six months of 2007. Gross profit decreased to $3,639,000 compared to $4,914,000 for the same period a year ago. |
Total SG&A expenses declined 5.2% to $3,257,000 for the first half of 2008 compared to $3,436,000 for the first half of 2007. Unallocated corporate overhead decreased 13.7% to $2,176,000 from $2,521,000. Interest expense decreased 28% to $708,000 compared to $984,000 for the first half of last year. |
The loss from continuing operations for the first six months of 2008 was $2,436,000, or $0.33 per share, compared to a loss from continuing operations of $1,918,000, or $0.26 per share, for the same period in 2007. |
The net loss for the first six months of 2008 was $2,578,000, or $0.35 per share, which included a loss from discontinued operations of $142,000, or $0.02 per share. The net loss for the first six months of 2007 was $2,610,000, or $0.35 per share, which included a loss from discontinued operations of $692,000, or $0.09 per share. |
About Rock of Ages |
Rock of Ages 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; changes in demand for our products due to general economic 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, 2007. 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 | |||||||||
Consolidated Statements of Operations | |||||||||
(In thousands, except per share data) (Unaudited) | |||||||||
Three Months Ended | Six Months Ended | ||||||||
June 28, | June 30, | June 28, | June 30, | ||||||
2008 | 2007 | 2008 | 2007 | ||||||
Net revenue | |||||||||
Quarry | $ 5,560 | $ 7,683 | $ 10,229 | $ 11,672 | |||||
Manufacturing | 8,766 | 8,767 | 12,487 | 12,725 | |||||
Total net revenue | 14,326 | 16,450 | 22,716 | 24,397 | |||||
Gross profit | |||||||||
Quarry | 1,154 | 1,942 | 664 | 832 | |||||
Manufacturing | 2,619 | 3,350 | 2,975 | 4,082 | |||||
Total gross profit | 3,773 | 5,292 | 3,639 | 4,914 | |||||
Selling, general and administrative expenses | |||||||||
Quarry | 615 | 769 | 1,224 | 1,495 | |||||
Manufacturing | 1,027 | 1,013 | 2,033 | 1,941 | |||||
Total SG&A expenses | 1,642 | 1,782 | 3,257 | 3,436 | |||||
Divisional operating income (loss) | |||||||||
Quarry | 539 | 1,173 | (560) | (663) | |||||
Manufacturing | 1,592 | 2,337 | 942 | 2,141 | |||||
Total divisional operating income | 2,131 | 3,510 | 382 | 1,478 | |||||
Unallocated corporate overhead | 889 | 1,169 | 2,176 | 2,521 | |||||
Insurance recovery - quarry asset | -- | (212) | -- | (212) | |||||
Other income, net | (59) | (56) | (123) | (90) | |||||
Income (loss) from continuing | |||||||||
operations before interest and taxes | 1,301 | 2,609 | (1,671) | (741) | |||||
Interest expense, net | 351 | 514 | 708 | 984 | |||||
Income (loss) from continuing | |||||||||
operations before income taxes | 950 | 2,095 | (2,379) | (1,725) | |||||
Income tax expense | 223 | 205 | 57 | 193 | |||||
Income (loss) from continuing operations | 727 | 1,890 | (2,436) | (1,918) | |||||
Income (loss) from discontinued operations | -- | 2,052 | (142) | (692) | |||||
Net income (loss) | $ 727 | $ 3,942 | $ (2,578) | $ (2,610) | |||||
Net income (loss) per share - basic and diluted: | |||||||||
Income (loss) from continuing operations | $ 0.10 | $ 0.25 | $ (0.33) | $ (0.26) | |||||
Income (loss) from discontinued operations | -- | 0.28 | (0.02) | (0.09) | |||||
Net income (loss) per share - basic and diluted | $ 0.10 | $ 0.53 | $ (0.35) | $ (0.35) | |||||
Weighted average common shares | |||||||||
outstanding - basic and diluted | 7,416 | 7,399 | 7,416 | 7,399 |
ROCK OF AGES CORPORATION | |||||
Consolidated Balance Sheets | |||||
(in thousands, except per share amounts)(Unaudited) | |||||
June 28, | December 31, | ||||
Assets | 2008 | 2007 | |||
Current assets: | |||||
Cash and cash equivalents | $ 832 | $ 1,961 | |||
Trade receivables, net | 9,871 | 11,713 | |||
Inventories | 21,395 | 21,680 | |||
Other current assets | 1,808 | 1,867 | |||
Assets of discontinued operations | -- | 14,266 | |||
Total current assets | 33,906 | 51,487 | |||
Property, plant and equipment, net | 32,995 | 31,786 | |||
Cash surrender value of life insurance | 128 | 186 | |||
Intangibles, net | 691 | 383 | |||
Goodwill | 387 | 387 | |||
Long term investments | 228 | 242 | |||
Other | 180 | 174 | |||
Total assets | $ 68,515 | $ 84,645 | |||
Liabilities and Stockholders' Equity | |||||
Current liabilities: | |||||
Borrowings under line of credit | $ 8,873 | $ 10,498 | |||
Current installments of long-term debt | 41 | 5,191 | |||
Current installments of retirement benefits | 570 | 584 | |||
Trade payables | 1,296 | 1,794 | |||
Accrued expenses | 1,874 | 2,303 | |||
Customer deposits | 1,114 | 747 | |||
Liabilities of discontinued operations | -- | 6,748 | |||
Total current liabilities | 13,768 | 27,865 | |||
Long-term debt, excluding current installments | 14,655 | 14,158 | |||
Salary continuation | 5,430 | 5,531 | |||
Accrued pension cost | 3,860 | 3,668 | |||
Other | 3,032 | 2,897 | |||
Deferred tax liability | 54 | 55 | |||
Total liabilities | 40,799 | 54,174 | |||
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 and 4,677,467 shares issued and outstanding | |||||
as of June 28, 2008 and December 31, 2007, respectively | 48 | 47 | |||
Common stock Class B, 0.01 par value; authorized 15,000,000 | |||||
shares; 2,603,721 and 2,738,596 shares issued and outstanding | |||||
as of June 28, 2008 and December 31, 2007, respectively | 26 | 27 | |||
Additional paid-in capital | 65,664 | 65,657 | |||
Accumulated deficit | (35,931) | (33,352) | |||
Accumulated other comprehensive loss | (2,091) | (1,908) | |||
Total stockholders' equity | 27,716 | 30,471 | |||
Total liabilities and stockholders' equity | $ 68,515 | $ 84,645 |