EXHIBIT 99.1
ROCK OF AGES
[Logo Graphic
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Rock of Ages Investor Contact: Company Contact:
Neil G Berkman Kurt Swenson
FOR IMMEDIATE RELEASE Berkman Associates Chairman & CEO
(310) 277-5162 (603) 225-8397
info@BerkmanAssociates.com www.RockofAges.com
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ROCK OF AGES REPORTS SECOND QUARTER AND FIRST HALF RESULTS
CONCORD, NEW HAMPSHIRE, July 30, 2004 . . . Rock of Ages Corporation
(NASDAQ/NMS:ROAC) today announced financial results for the second quarter and
first half of 2004.
Second Quarter and First Half Results
For the three months ended July 3, 2004, revenue increased 7% to
$28,034,000 from $26,109,000 for the second quarter of 2003. Gross profit
increased 11%, and divisional operating income increased 33%. The net loss for
this year's second quarter was $1,050,000, or $0.14 per share, which included
$6,500,000 pre-tax for the adverse judgment in the Eurimex arbitration announced
on June 10, 2004. For the second quarter of 2003, net income was $1,353,000, or
$0.19 per diluted share, which included pre-tax legal expenses of $1,855,000
related to the Eurimex matter.
For the six months ended July 3, 2004, revenue increased 13% to
$40,196,000 from $35,681,000 for the first six months of 2003. Gross profit
increased 23%, and divisional operating income increased to $3,100,000 from
$189,000. The net loss for this year's first half was $4,475,000, or $0.62 per
share, which included the Eurimex expenses mentioned above. This compares to a
net loss for the same period last year of $3,528,000, or $0.49 per share,
which included pre-tax Eurimex expenses of $2,441,000.
Non-GAAP Financial Measures
Management believes that the expenses associated with the Eurimex
litigation are unusual, and that income excluding those expenses provides a
better measure of Rock of Ages' operating performance for the quarter and year
to date. Excluding the Eurimex expenses, income was $3,539,000, or $0.49 per
diluted share, for the second quarter of 2004, and $114,000, or $0.01 per
diluted share, for the first half of 2004. For the second quarter of 2003,
income excluding Eurimex expenses was $2,652,000, or $0.37 per diluted share.
For the first half of 2003, the net loss excluding Eurimex expenses was
$1,819,000, or $0.25 per share. The following table reconciles net income (loss)
to income (loss) excluding the expenses associated with the Eurimex lawsuit:
Three Months Ended Six Months Ended
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July 3, June 28, July 3, June 28,
($ In Thousands Except per Share Amounts) 2004 2003 2004 2003
--------- ---------- --------- -----------
Net income (loss) $(1,050) $ 1,353 $ (4,475) $(3,528)
Eurimex expenses, net of taxes 4,589 1,299 4,589 1,709
--------- ---------- --------- -----------
Income (loss) excluding Eurimex expenses 3,539 2,652 114 (1,819)
Per Share-Diluted
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Net income (loss) (0.14) 0.19 (0.62) (0.49)
Eurimex expenses, net of taxes 0.63 0.18 0.63 0.24
--------- ---------- --------- -----------
Net income (loss) excluding Eurimex expenses $ 0.49 $ 0.37 $ 0.01 $ (0.25)
Operations Review
Noting that operating income increased for each of the Company's Divisions
in the second quarter, Chairman and CEO Kurt Swenson said, "We are beginning to
see the benefits we anticipated from our efforts over the past year to optimize
the performance of each of our business units. With demand for our granites
strong, the outlook is for continued solid performance by our Quarrying and
Manufacturing Divisions for the rest of 2004.
(more)
Rock of Ages Reports Second Quarter and First Half Results
July 30, 2004
Page Two
"In our Retail Division, we are pleased by the $900,000 reduction in the
operating loss for the first half, which puts us on track to eliminate the
operating loss for 2004. Retail order backlog increased to about $13.5 million
at the end of the second quarter from about $13 million at the same time last
year. Rick Wrabel, who joined the company in May as President and COO of our
Memorials Division (which includes manufacturing and retail), has begun making
the changes necessary to focus our organization on market share gains by
empowering our people to drive revenue and operating margin from the local level
and partnering with funeral homes and cemeteries to sell our products. We also
were pleased to announce the closing of our $3.5 million investment in FFS
Holdings, Inc., the new parent company of Forethought Financial Services, Inc.,
a leading provider of pre-need insurance currently marketed through funeral
homes and cemeteries. We see significant opportunities to market our memorials
in cooperation with Forethought through its extensive customer base of funeral
homes and cemeteries. These are encouraging developments, and we are
increasingly optimistic improving execution will help us achieve the growth
potential of our Retail Division."
For the second quarter, Quarrying Division operating income increased 34%
to $3,420,000 on a 16% increase in revenue to $9,455,000; Manufacturing Division
operating income doubled to $1,080,000 on a 17% revenue gain to $6,323,000; and
Retailing Division operating income increased 10% to $1,680,000 despite a slight
decline in revenue to $12,256,000 from $12,551,000 last year.
Dividend Declared
The company also announced that its Board of Directors has declared a
quarterly cash dividend of $0.02 per common share, payable on September 15, 2004
to shareholders of record on August 16, 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 #21202563.
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 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 and results 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 and
maintaining our relationships with independent retailers, 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 including, but not
limited to, the risks discussed in the Company's Quarterly Report on Form 10-Q
for the quarter ended March 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)
#3640
ROCK OF AGES CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands Except per Share Amounts)(Unaudited)
Three Months Ended Six Months Ended
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July 3, June 28, July 3, June 28,
Net revenue: 2004 2003 2004 2003
----------- ---------- ---------- ----------
Quarrying $ 9,455 $ 8,158 $ 13,987 $ 11,014
Manufacturing 6,323 5,400 9,555 8,979
Retailing 12,256 12,551 16,654 15,688
----------- ---------- ---------- ----------
Total net revenue 28,034 26,109 40,196 35,681
Gross profit:
Quarrying 4,280 3,332 4,630 2,715
Manufacturing 2,032 1,443 2,676 2,316
Retailing 7,271 7,412 9,474 8,637
----------- ---------- ---------- ----------
Total gross profit 13,583 12,187 16,780 13,668
Selling, general and administrative expenses
Quarrying 860 773 1,702 1,517
Manufacturing 952 901 1,809 1,738
Retailing 5,591 5,881 10,169 10,224
----------- ---------- ---------- ----------
Total SG&A expenses 7,403 7,555 13,680 13,479
Divisional operating income (loss)
Quarrying 3,420 2,559 2,928 1,198
Manufacturing 1,080 542 867 578
Retailing 1,680 1,531 (695) (1,587)
----------- ---------- ---------- ----------
Divisional operating income 6,180 4,632 3,100 189
Unallocated corporate overhead 1,312 1,261 2,603 2,507
Adverse judgment and legal expenses 6,500 1,855 6,500 2,441
----------- ---------- ---------- ----------
Income (loss) from continuing operations before interest and taxes (1,632) 1,516 (6,003) (4,759)
Interest expense 125 161 261 310
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Income (loss) from continuing operations before taxes (1,757) 1,355 (6,264) (5,069)
Income tax expense (benefit) (721) 21 (1,841) (1,523)
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Income (loss) from continuing operations (1,036) 1,334 (4,423) (3,546)
Discontinued operations, net of income taxes (14) 19 (52) 18
----------- ---------- ---------- ----------
Net Income (loss) $ (1,050) $ 1,353 $ (4,475) $ (3,528)
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Per share information:
Net Income (loss) per share -basic
Income (loss) from continuing operations $ (0.14) $ 0.19 $ (0.61) $ (0.49)
Discontinued operations (0.00) 0.00 (0.01) 0.00
----------- ---------- ---------- ----------
Net Income (loss) per share - basic (0.14) 0.19 (0.62) (0.49)
=========== ========== ========== ==========
Net Income (loss) per share -diluted
Income (loss) from continuing operations (0.14) 0.19 (0.61) (0.49)
Discontinued operations (0.00) 0.00 (0.01) 0.00
----------- ---------- ---------- ----------
Net Income (loss) per share - diluted $ (0.14) $ 0.19 $ (0.62) $ (0.49)
=========== ========== ========== ==========
Weighted average number of common shares outstanding - basic 7,281 7,175 7,247 7,181
Weighted average number of common shares outstanding - diluted 7,281 7,226 7,247 7,181
ROCK OF AGES CORPORATION
COMPARATIVE BALANCE SHEET
(US $ IN THOUSANDS)(Unaudited)
July 3, December 31,
ASSETS 2004 2003
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CURRENT ASSETS:
Cash & Cash Equivalents $ 3,488 $ 3,227
Trade Receivables, net 15,341 15,587
Inventories 21,906 21,152
Other Current Assets 7,901 10,261
Assets of Discontinued Operations - Held for sale 745 817
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TOTAL CURRENT ASSETS 49,381 51,044
OTHER ASSETS
C.S.V. Life Insurance 728 728
Other Intangibles 419 438
Deferred Tax Assets - Long Term 5,236 5,236
Intangible Pension Asset 904 904
Long-term Investments 4,151 501
Other 1,080 1,115
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TOTAL OTHER ASSETS 12,518 8,922
FIXED ASSETS
Property and Equipment 73,243 69,657
Less Accumulated Depreciation 28,710 27,162
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NET FIXED ASSETS 44,533 42,495
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TOTAL ASSETS $ 106,432 $ 102,461
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LIABILITIES AND EQUITY
CURRENT LIABILITIES
Borrowings under Line of Credit $ -- $ 4,751
Current Portion LTD 30 38
Current Installments of Deferred Compensation 325 327
Accounts Payable 2,213 1,651
Accrued Expenses 3,925 4,312
Customer Deposits 9,565 7,104
Accrued Legal Settlement 6,500 --
Liabilities of Discontinued Operations -- 17
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TOTAL CURRENT LIABILITIES 22,558 18,200
Long-Term Debt, Excluding Current Portion 16,280 12,794
Deferred Compensation 6,328 5,999
Accrued Pension Cost 1,530 1,491
Deferred tax liability 104 107
Other Liabilities 896 901
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TOTAL LIABILITIES 47,592 39,492
STOCKHOLDERS' EQUITY
Common Stock 74 72
Additional Paid In Capital 66,334 65,878
Retained Earnings (6,541) (2,067)
Other Comprehensive Income (1,131) (914)
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TOTAL EQUITY 58,736 62,969
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TOTAL LIABILITIES & EQUITY $ 106,432 $ 102,461
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