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 Third Quarter Net Income From Continuing Operations |
Increased 262% to $0.41 Per Share Versus $0.11 Per Share As Revenue Increased 24% |
Nine Month Net Income From Continuing Operations Increased to $0.08 Per Share Versus A Loss of $0.15 Per Share |
BARRE, VERMONT, October 30, 2008 . . . Rock of Ages Corporation (NASDAQ:ROAC) today announced operating results for the third quarter of 2008, highlighted by a 262% increase in net income from continuing operations to $3,059,000, or $0.41 per diluted share, compared to $845,000, or $0.11 per share, for the third quarter of 2007. Revenue from continuing operations increased 24% for this year's third quarter to $16,593,000 compared to $13,357,000 for the same period a year earlier.
"Gross profit in our quarries rose 26% to $3,411,000 compared to $2,706,000 and gross profit margin increased by four full percentage points to 40% for the third quarter of 2008 compared to the third quarter of 2007, as we began to reap the benefits we anticipated from our investments in new diamond wire saw technology and other production improvements we implemented earlier this year," said Chief Executive Officer Donald Labonte. "Demand for our granites remains strong, and we are optimistic about the outlook for our quarries in the fourth quarter."
Rock of Ages' manufacturing division reported a 36% increase in revenue for this year's third quarter compared to last year, primarily driven by sales to the Company's formerly owned retail outlets which are now included in manufacturing revenue. Gross profit increased 28% to $2,523,000 compared to $1,966,000, while gross margin decreased to 31% from 33% because fewer high-margin mausoleums were sold this year than last. "We believe that uncertainty in the financial markets led to the postponement of mausoleum orders from several pre-need customers," Labonte said.
Unallocated corporate overhead and interest expense each decreased 33% for the third quarter of 2008 compared to last year's third quarter. "We are on track to meet our previously disclosed targets for unallocated corporate overhead of approximately $3,800,000 and interest expense of approximately $1,400,000 million for 2008. So far this year, we have reduced total debt by approximately $6 million, and we anticipate a further reduction in the fourth quarter," Labonte added.
"While slower mausoleum sales will likely result in lower operating income in the manufacturing division for 2008 versus 2007, we continue to believe the strong performance of the quarrying division means that divisional operating income from continuing operations for 2008 will exceed 2007. In addition, as a result of sharply reduced overhead and interest expense, we expect to report much improved income from continuing operations for 2008 as compared to 2007," Labonte concluded.
Third Quarter Results
For the three months ended September 27, 2008, net revenue increased 24% to $16,593,000 compared to $13,357,000 for the third quarter of 2007. Gross profit for this year's third quarter increased 27% to $5,934,000 compared to $4,672,000 a year earlier. Quarry gross profit increased to $3,411,000 compared to $2,706,000 for the third quarter of 2007, and manufacturing gross profit increased to $2,523,000 from $1,966,000.
(more) |
Rock of Ages Third Quarter Net Income From Continuing Operations Increased 262% to $0.41 Per Share October 29, 2008 Page Two |
SG&A expense decreased 16% to $1,549,000 for the third quarter of 2008 compared to $1,840,000 for the third quarter of 2007. Total divisional operating income increased to $4,385,000 for this year's third quarter compared to $2,832,000 for the third quarter of 2007.
Unallocated corporate overhead decreased 33% to $822,000 for the third quarter of 2008 compared to $1,229,000 the previous year. Interest expense allocated to continuing operations also decreased 33% to $337,000 from $506,000 last year. Income from continuing operations was $3,059,000, or $0.41 per diluted share, for the third quarter of 2008. This compares to income from continuing operations of $845,000, or $0.11 per diluted share, for the third quarter of 2007.
Net income increased to $3,059,000, or $0.41 per diluted share, for the third quarter of 2008. This compares to net income of $1,541,000, or $0.20 per diluted share, for the third quarter of 2007, which included income from the Company's discontinued retail operations of $696,000, or $0.09 per diluted share.
Nine Months Results
For the nine months ended September 27, 2008, net revenue increased 4% to $39,309,000 compared to $37,754,000 for the first nine months of 2007. Gross profit was essentially unchanged at $9,574,000.
Total SG&A expenses decreased 9% to $4,806,000 for the first nine months of 2008 compared to $5,276,000 for the same period of 2007. Unallocated corporate overhead decreased 20% to $2,998,000 from $3,750,000. Interest expense decreased 30% to $1,046,000 compared to $1,489,000 for the first nine months of last year.
Income from continuing operations for the first nine months of 2008 was $623,000, or $0.08 per share, compared to a loss from continuing operations of $1,073,000, or $0.15 per share, for the same period in 2007. The net income for the first nine months of 2008 was $481,000, or $0.06 per share, which included a loss from discontinued operations of $142,000, or $0.02 per share. The net loss for the first nine months of 2007 was $1,069,000, or $0.15 per share, which included discontinued operations that were basically break even.
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; 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 | Nine Months Ended | ||||||||
Sep. 27, | Sep. 29, | Sep. 27, | Sep. 29, | ||||||
2008 | 2007 | 2008 | 2007 | ||||||
Net revenue | |||||||||
Quarry | $ 8,537 | $ 7,437 | $ 18,766 | $ 19,109 | |||||
Manufacturing | 8,056 | 5,920 | 20,543 | 18,645 | |||||
Total net revenue | 16,593 | 13,357 | 39,309 | 37,754 | |||||
Gross profit | |||||||||
Quarry | 3,411 | 2,706 | 4,076 | 3,538 | |||||
Manufacturing | 2,523 | 1,966 | 5,498 | 6,048 | |||||
Total gross profit | 5,934 | 4,672 | 9,574 | 9,586 | |||||
Selling, general and administrative expenses | |||||||||
Quarry | 523 | 739 | 1,747 | 2,234 | |||||
Manufacturing | 1,026 | 1,101 | 3,059 | 3,042 | |||||
Total SG&A expenses | 1,549 | 1,840 | 4,806 | 5,276 | |||||
Divisional operating income | |||||||||
Quarry | 2,888 | 1,967 | 2,329 | 1,304 | |||||
Manufacturing | 1,497 | 865 | 2,439 | 3,006 | |||||
Total divisional operating income | 4,385 | 2,832 | 4,768 | 4,310 | |||||
Unallocated corporate overhead | 822 | 1,229 | 2,998 | 3,750 | |||||
Insurance recovery - quarry asset | -- | -- | -- | (212) | |||||
Foreign exchange loss | -- | 37 | -- | 37 | |||||
Other income, net | (56) | (49) | (179) | (138) | |||||
Income from continuing operations before interest and taxes | 3,619 | 1,615 | 1,949 | 873 | |||||
Interest expense, net | 337 | 506 | 1,046 | 1,489 | |||||
Income (loss) from continuing operations before income taxes | 3,282 | 1,109 | 903 | (616) | |||||
Income tax expense | 223 | 264 | 280 | 457 | |||||
Income (loss) from continuing operations | 3,059 | 845 | 623 | (1,073) | |||||
Income (loss) from discontinued operations | -- | 696 | (142) | 4 | |||||
Net income (loss) | $ 3,059 | $ 1,541 | $ 481 | $ (1,069) | |||||
Net income (loss) per share - basic and diluted: | |||||||||
Income (loss) from continuing operations | $ 0.41 | $ 0.11 | $ 0.08 | $ (0.15) | |||||
Income (loss) from discontinued operations | -- | 0.09 | (0.02) | 0.00 | |||||
Net income (loss) per share - basic and diluted | $ 0.41 | $ 0.20 | $ 0.06 | $ (0.15) | |||||
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) | |||||
Sep. 27, | Dec. 31, | ||||
Assets | 2008 | 2007 | |||
Current assets: | |||||
Cash and cash equivalents | $ 1,068 | $ 1,961 | |||
Trade receivables, net | 11,786 | 11,713 | |||
Inventories | 22,773 | 21,680 | |||
Other current assets | 1,690 | 1,867 | |||
Assets of discontinued operations | -- | 14,266 | |||
Total current assets | 37,317 | 51,487 | |||
Property, plant and equipment, net | 33,047 | 31,786 | |||
Cash surrender value of life insurance | 128 | 186 | |||
Intangibles, net | 650 | 383 | |||
Goodwill | 387 | 387 | |||
Long term investments | 87 | 242 | |||
Other | 273 | 174 | |||
Total assets | $ 71,889 | $ 84,645 | |||
Liabilities and Stockholders' Equity | |||||
Current liabilities: | |||||
Borrowings under line of credit | $ 9,506 | $ 10,498 | |||
Current installments of long-term debt | 41 | 5,191 | |||
Current installments of retirement benefits | 569 | 584 | |||
Trade payables | 1,679 | 1,794 | |||
Accrued expenses | 2,734 | 2,303 | |||
Customer deposits | 540 | 747 | |||
Liabilities of discontinued operations | -- | 6,748 | |||
Total current liabilities | 15,069 | 27,865 | |||
Long-term debt, excluding current installments | 14,644 | 14,158 | |||
Salary continuation | 5,419 | 5,531 | |||
Accrued pension cost | 3,207 | 3,668 | |||
Other | 3,074 | 2,897 | |||
Deferred tax liability | 53 | 55 | |||
Total liabilities | 41,466 | 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 September 27, 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 September 27, 2008 and December 31, 2007, respectively | 26 | 27 | |||
Additional paid-in capital | 65,674 | 65,657 | |||
Accumulated deficit | (32,871) | (33,352) | |||
Accumulated other comprehensive loss | (2,454) | (1,908) | |||
Total stockholders' equity | 30,423 | 30,471 | |||
Total liabilities and stockholders' equity | $ 71,889 | $ 84,645 | |||