Rock of Ages Reports 2006 Second Quarter Results.CONCORD, N.H. -- Rock of Ages Corporation (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :ROAC ROAC Roosevelt Academy (Honors University College of Utrecht University, The Netherlands) ROAC Russian Orthodox Autonomous Church ROAC Return On Allocated Capital ROAC Rex Oasis of Arts and Culture (Foundation) ): --Retail Operating Margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: before Charges Improved to 9.8% from 7.5% --Pre-Tax Income before Charges Increased 15.2% --Net Loss Decreased to $0.04 Per Share Compared to a Net Loss of $1.10 Per Share Rock of Ages Corporation (NASDAQ:ROAC) today announced financial results for the second quarter of 2006, highlighted by a 15.2% increase in pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta income before previously announced restructuring charges restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. , compared to the same period of 2005. "Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. margin in our retail business improved by 230 basis points for this year's second quarter to 9.8% before charges from 7.5% last year. Operating income margin also increased in our quarrying quarrying, open, or surface, excavation of rock used for various purposes, including construction, ornamentation, road building, and as an industrial raw material. Rock that has been quarried is commonly called stone. and manufacturing operations Manufacturing operations concern the operation of a facility, as opposed to maintenance, supply and distribution, health, and safety, emergency response, human resources, security, information technology and other infrastructural support organizations. versus the second quarter of 2005," said Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. Kurt Kurt is a given name. Its principal English variant is Curt, while others include Cord, Curd, and Kort. It originated as a short form of Curtis, Konrad (Conrad), and Kunibert. Swenson. "Contributing to these gains was the dramatic decline in SG&A expense versus prior year that has resulted from our successful cost reduction programs, highlighted by a 32.5% decline in retail SG&A." Swenson continued, "Quarrying revenue increased slightly and manufacturing revenue was about flat for this year's second quarter versus prior year, in line with our expectations. We also had anticipated a decline in retail revenue, partially reflecting our decisions over the past year to close or sell certain retail locations that we determined would not meet our store-level target of 15% EBIT EBIT See: Earnings Before Interest and Taxes EBIT See earnings before interest and taxes (EBIT). margin, a target we continue to expect to come very close to achieving in 2006. Revenue for the quarter also was affected by disruptions associated with the change in senior management in our retail group announced in May 2006. We are encouraged that current retail order backlog Backlog The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. is comparable to last year's, on a same-store basis. Rich Urbach Urbach may refer to several places in Germany:
The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. of Retail Operations, and his team are focused on continuing to improve our retail operations and restoring momentum lost during the changeover (programming) changeover - The time when a new system has been tested successfully and replaces the old system. . We are optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op that we will begin to see the benefits of these efforts in the current quarter, which would nicely complement the gains we already have achieved in our cost structure and return on sales Return on sales A measurement of operational efficiency equalingnet pre-tax profits divided by net sales expressed as a percentage. return on sales The portion of each dollar of sales that a firm is able to turn into income. ." Second Quarter Results For the three months ended July July: see month. 1, 2006, revenue declined to $24,753,000 from $28,561,000 for the second quarter of 2005, primarily because of a decline in revenue at the Company's retail operations to $10,068,000 from $14,108,000. SG&A expense was $7,759,000 for this year's second quarter, which included a non-recurring charge of $1,686,000 for the restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). of the retail group. This compares to SG&A expense of $8,899,000 a year earlier. Before the restructuring charge, SG&A decreased 31.8% versus the second quarter of 2005. Divisional operating income was $1,925,000 for the second quarter of 2006 compared to $3,231,000 a year earlier. Before the restructuring charge, divisional operating income increased to $3,611,000 for the second quarter of 2006 from $3,231,000 for the second quarter of 2005. Unallocated corporate overhead declined to $1,289,000 for the second quarter of 2006 versus $1,429,000 for the same period a year earlier. The pre-tax loss for this year's second quarter was $103,000. Excluding the restructuring charge, pre-tax income would have been $1,583,000. This compares to pre-tax income of $1,374,000 for the second quarter of 2005. "Given the decline in revenue, this increase in pre-tax income before restructuring charge is clear evidence of the progress we have made in improving profitability," Swenson said. The net loss for the second quarter of 2006 was $307,000, or $0.04 per share, including the restructuring charge and income tax expense of $205,000. This compares to a net loss for the second quarter of 2005 of $8,144,000, or $1.10 per share, which included a charge to tax expense of $9,194,000 to fully reserve for the Company's entire net U.S. deferred tax asset. First Half Results For the six months ended July 1, 2006, revenue was $36,365,000. This compares to revenue of $39,696,000 for the first six months of 2005. The net loss for this year's first half was $7,355,000, or $0.99 per share. This compares to a net loss for the first six months of 2005 of $15,099,000, or $2.04 per share. Results for the second quarter and first six months of 2005 are shown as restated to reflect the freight expense In accounting, the concept of a freight expense account can be generalized as a payment for sending out a product to a customer. It falls under the umbrella category of Expenses and is treated like other expense accounts in relation to the accounting equation. change the Company reported at year-end 2005 to reflect freight in cost of goods sold Cost of goods sold The total cost of buying raw materials, and paying for all the factors that go into producing finished goods. cost of goods sold rather than as a deduction deduction, in logic, form of inference such that the conclusion must be true if the premises are true. For example, if we know that all men have two legs and that John is a man, it is then logical to deduce that John has two legs. in reporting net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight . Conference Call Rock of Ages has scheduled a conference call at 11:00 a.m. EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT . 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 address There are two kinds of addresses that are widely used on the Internet. One is a person's e-mail address, and the other is the address of a Web site, which is known as a URL. Following is an explanation of Internet e-mail addresses only. For more on URLs, see URL and Internet domain name. , or at 800-633-8284, reservation #21298283. About Rock of Ages Rock of Ages (www.RockofAges.com) is the largest integrated granite granite, coarse-grained igneous rock of even texture and light color, composed chiefly of quartz and feldspars. It usually contains small quantities of mica or hornblende, and minor accessory minerals may be present. quarrier quar·ry 1 n. pl. quar·ries 1. a. A hunted animal; prey. b. Hunted animals considered as a group; game. 2. , manufacturer and retailer of finished granite memorials and granite blocks for memorial use in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. . Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. This press release contains statements that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and 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 Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December 31, 2005. In addition, such statements could be affected by general industry and market conditions and growth rates Growth Rates The compounded annualized rate of growth of a company's revenues, earnings, dividends, or other figures. Notes: Remember, historically high growth rates don't always mean a high rate of growth looking into the future. , 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 CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or after the date of this release.
ROCK OF AGES CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
(Unaudited)
Three Months Ended Six Months Ended
------------------- -------------------
July 1, July 2, July 1, July 2,
2006 2005 2006 2005
------- --------- ------- ---------
(Restated) (Restated)
Net revenue:
Quarry $ 7,041 $ 6,722 $10,797 $ 10,938
Manufacturing 7,644 7,731 11,564 10,595
Retail 10,068 14,108 14,004 18,163
------- --------- ------- ---------
Total net revenue 24,753 28,561 36,365 39,696
Gross profit:
Quarry 1,756 1,673 1,094 821
Manufacturing 2,369 2,626 3,003 2,825
Retail 5,559 7,831 7,152 9,660
------- --------- ------- ---------
Total gross profit 9,684 12,130 11,249 13,306
Selling, general and
administrative expenses
Quarry 592 852 1,462 1,746
Manufacturing 912 1,276 2,136 2,483
Retail 4,569 6,771 9,137 12,858
Retail restructuring costs 1,686 -- 1,686 --
------- --------- ------- ---------
Total SG&A expenses 7,759 8,899 14,421 17,087
Divisional operating income
(loss)
Quarry 1,164 821 (368) (925)
Manufacturing 1,457 1,350 867 342
Retail (696) 1,060 (3,671) (3,198)
------- --------- ------- ---------
Divisional operating
income (loss) 1,925 3,231 (3,172) (3,781)
Unallocated corporate overhead 1,289 1,429 2,601 2,795
Impairment of long-lived
assets 100 -- 100 --
Foreign exchange loss 16 -- 16 --
------- --------- ------- ---------
Income (loss) from continuing
- - -
operations before interest
and taxes 520 1,802 (5,889) (6,576)
Interest expense 623 428 1,268 745
------- --------- ------- ---------
Income (loss) from continuing
operations before taxes (103) 1,374 (7,157) (7,321)
Income tax expense 205 9,505 170 7,740
------- --------- ------- ---------
Net income (loss) from
continuing operations (308) (8,131) (7,327) (15,061)
Discontinued operations, net
of income taxes 1 (13) (28) (38)
------- --------- ------- ---------
Net income (loss) $ (307) $ (8,144) $(7,355) $ (15,099)
------- --------- ------- ---------
Per share information:
Net income (loss) per share -
basic and diluted
Income (loss) from continuing
operations $ (0.04) $ (1.10) $ (0.99) $ (2.04)
Discontinued operations $ 0.00 $ 0.00 $ 0.00 $ 0.00
------- --------- ------- ---------
Net income (loss) per
share - basic and
diluted $ (0.04) $ (1.10) $ (0.99) $ (2.04)
Weighted average number of
common shares outstanding -
basic and diluted 7,399 7,396 7,399 7,396
ROCK OF AGES CORPORATION
COMPARATIVE BALANCE SHEET
(US $ IN THOUSANDS)
(Unaudited)
----------------------------------------------------------------------
July 1, December 31,
ASSETS 2006 2005
---------------- --------------
CURRENT ASSETS
Cash & Cash Equivalents $ 2,135 $ 2,824
Trade Receivables, net 11,954 14,720
Inventories 24,363 24,478
Other Current Assets 1,548 2,686
Assets of Discontinued Operations
-- Held for Sale 282 --
--------------- --------------
TOTAL CURRENT ASSETS 40,282 44,708
Property, Plant and Equipment, net 47,969 49,634
C.S.V. Life Insurance 781 731
Goodwill 387 387
Other Intangibles 548 598
Intangible Pension Asset 574 574
Long-term Investments 726 728
Other 1,167 1,252
--------------- --------------
TOTAL ASSETS $ 92,434 $ 98,612
--------------- --------------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Borrowings under Line of Credit $ 11,142 $ 10,499
Current Portion Long-Term Debt 649 661
Current Installments of Deferred
Compensation 467 469
Accounts Payable 1,749 2,006
Accrued Expenses 3,997 3,443
Customer Deposits 7,273 7,059
--------------- --------------
TOTAL CURRENT LIABILITIES 25,277 24,137
Long-Term Debt, Excluding Current
Portion 20,653 21,445
Deferred Compensation 6,068 6,070
Accrued Pension Cost 3,708 3,550
Deferred Tax Liability 74 70
Other Liabilities 2,099 1,864
--------------- --------------
TOTAL LIABILITIES 57,879 57,136
STOCKHOLDERS' EQUITY
Preferred stock - $.01 par value;
2,500,000 shares authorized, no
shares issued or outstanding -- --
Common stock - Class A, $.01 par
value; 30,000,000 shares
authorized, 4,660,800 shares
issued and outstanding as of July
1, 2006 and December 31, 2005 47 47
Common stock - Class B, $.01 par
value; 15,000,000 shares
authorized, 2,738,596 shares
issued and outstanding as of July
1, 2006 and December 31, 2005 27 27
Additional Paid In Capital 65,551 65,551
Retained Earnings (28,786) (21,431)
Other Comprehensive Loss (2,284) (2,718)
---------------- --------------
TOTAL STOCKHOLDERS' EQUITY 34,555 41,476
---------------- --------------
TOTAL LIABILITIES &
STOCKHOLDERS' EQUITY $ 92,434 $ 98,612
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