Rock of Ages Reports Improved Third 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) ) today announced financial results for the third quarter and first nine months of 2004. Financial Results For the three months ended October October: see month. 2, 2004, revenue increased 1% to $23,455,000 from $23,144,000 for the third quarter of 2003. Gross profit increased 4%, and divisional 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. increased 12%, reflecting slightly higher revenue and improved margins. Net income for this year's third quarter increased 46% to $1,331,000, or $0.18 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share. This compares to net income for the third quarter of 2003 of $912,000, or $0.13 per diluted share, which included a loss of $0.01 per share from discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. . For the nine months ended October 2, 2004, revenue increased 8% to $63,651,000 from $58,825,000 for the same period last year. Gross profit increased 15%, and divisional operating income increased 88%. The net loss for the first nine months of 2004 was $3,143,000, or $0.43 per share, which included a loss of $0.01 from discontinued operations and a $6,500,000 pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta charge for the adverse judgment in the Eurimex arbitration arbitration Process of resolving a dispute or a grievance outside a court system by presenting it for decision to an impartial third party. Both sides in the dispute usually must agree in advance to the choice of arbitrator and certify that they will abide by the announced on June June: see month. 10, 2004. This compares to a net loss for the first nine months of 2003 of $2,617,000, or $0.36 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 An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. are unusual, and that income excluding those expenses provides a better measure of Rock of Ages' operating performance for the nine-month period to date. Excluding the Eurimex expenses, income was $1,901,000, or $0.26 per diluted share, for the first nine months of 2004. For the first nine months of 2003, the net loss excluding Eurimex expenses was $723,000, or $0.10 per share. The following table reconciles net income (loss) to income (loss) excluding the expenses associated with the Eurimex lawsuit lawsuit: see procedure; tort. :
Three Months Nine Months
Ended Ended
Oct. 2, Sep. 27, Oct. 2, Sep. 27,
($ In Thousands Except per Share 2004 2003 2004 2003
Amounts)
Net income (loss) $1,331 $912 $(3,143) $(2,617)
Eurimex expenses, net of taxes -- -- 5,044 1,894
Income (loss) excluding Eurimex
expenses $1,331 $912 1,901 (723)
Per Share - Diluted
Net income (loss) $0.18 $0.13 (0.43) (0.36)
Eurimex expenses, net of taxes -- -- 0.69 0.26
Net income (loss) excluding Eurimex
expenses $0.18 $0.13 $0.26 $(0.10)
Operations Review "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. generally continued to track our expectations in the third quarter, generating solid growth and cash flow. Demand for our granites remains strong, so we are comfortable with the outlook for these operations for the balance of 2004," 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. "The primary focus in our retail operation is to implement systems and procedures that will position the business for sustained growth in sales and improved operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: in the years ahead. Rick Wrabel, the new President of our Memorials Division, which includes our retail and manufacturing segments, is moving quickly to articulate articulate /ar·tic·u·late/ (ahr-tik´u-lat) 1. to pronounce clearly and distinctly. 2. to make speech sounds by manipulation of the vocal organs. 3. to express in coherent verbal form. 4. a clear vision for the future and, as detailed in our press release of October 7, assemble the management team required to achieve it. "Among other significant steps, earlier this month Rick and his team launched a new retail compensation plan that eliminated the commission program that had been in place for most of our retail sales force and replaced it with a salary-and-performance-bonus system. This brings a uniform compensation system to all the retail operations we acquired over the years. In addition, by providing appropriate monetary incentives for our sales staff to expand distribution through partners in their regions, the new compensation system also will play an important role in our program to promote and sell our products through funeral homes and cemeteries This is a list of famous cemeteries, mausoleums and other places people are buried, world-wide. It may never be fully completed or, depending on its its nature, it may be that it can never be completed. However, new and revised entries in the list are always welcome. that was rolled out at the same time. We are encouraged that our retail 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. was higher at the end of this year's third quarter than it was at the same time last year, even before these and other initiatives begin to affect our retail operations in 2005," Swenson said. Swenson added that the Company will have additional sales expense during the transition to the new compensation plan, since commission expense will be recognized on previous commission-based orders as they are set in cemeteries at the same time that the Company begins to pay salaries to its sales counselors. The Company estimates that the additional sales expense will amount to approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $500,000 during the transition, most of which will fall into the fourth quarter of this year. Dividend Declared de·clare v. de·clared, de·clar·ing, de·clares v.tr. 1. To make known formally or officially. See Synonyms at announce. 2. To state emphatically or authoritatively; affirm. 3. The Company also announced that its Board of Directors has declared a quarterly cash dividend of $0.02 per share payable on December December: see month. 15, 2004 to shareholders of record on November November: see month. 15, 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 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 #21210211. 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 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 Form 10-Q See 10-Q. for the quarter ended July July: see month. 3, 2004. 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 Nine Months Ended
----------------- -----------------
Oct. 2, Sep. 27, Oct. 2, Sep. 27,
Net revenue: 2004 2003 2004 2003
-------- -------- -------- --------
Quarrying $8,050 $7,710 $22,037 $18,724
Manufacturing 6,328 6,000 15,883 14,979
Retailing 9,077 9,434 25,731 25,122
-------- -------- -------- --------
Total net revenue 23,455 23,144 63,651 58,825
Gross profit:
Quarrying 4,282 3,307 8,912 6,021
Manufacturing 1,759 1,890 4,435 4,206
Retailing 5,110 5,504 14,584 14,140
-------- -------- -------- --------
Total gross profit 11,151 10,701 27,931 24,367
Selling, general and administrative
expenses
Quarrying 868 747 2,570 2,264
Manufacturing 934 952 2,743 2,690
Retailing 5,292 5,372 15,461 15,596
-------- -------- -------- --------
Total SG&A expenses 7,094 7,071 20,774 20,550
Divisional operating income (loss)
Quarrying 3,414 2,560 6,342 3,757
Manufacturing 825 938 1,692 1,516
Retailing (182) 132 (877) (1,456)
-------- -------- -------- --------
Total Divisional operating
income (loss) 4,057 3,630 7,157 3,817
Unallocated corporate overhead 1,356 1,188 3,959 3,694
Adverse judgment and legal
expenses -- -- 6,500 2,441
-------- -------- -------- --------
Income (loss) from continuing
operations before interest and
taxes 2,701 2,442 (3,302) (2,318)
Interest expense 194 148 454 458
-------- -------- -------- --------
Income (loss) from continuing
operations before taxes 2,507 2,294 (3,756) (2,776)
Income tax expense (benefit) 1,166 1,335 (675) (188)
-------- -------- -------- --------
Income (loss) from continuing
operations 1,341 959 (3,081) (2,588)
Discontinued operations, net of
income taxes (10) (47) (62) (29)
-------- -------- -------- --------
Net Income (loss) $1,331 $912 $(3,143) $(2,617)
-------- -------- -------- --------
Per share information:
Net Income (loss) per share -basic
Income (loss) from continuing
operations $0.18 $0.14 $(0.42) $(0.36)
Discontinued operations (0.00) (0.01) (0.01) (0.00)
-------- -------- -------- --------
Net Income (loss) per share -
basic 0.18 0.13 (0.43) (0.36)
-------- -------- -------- --------
Net Income (loss) per share
-diluted
Income (loss) from continuing
operations 0.18 0.14 (0.42) (0.36)
Discontinued operations (0.00) (0.01) (0.01) (0.00)
-------- -------- -------- --------
Net Income (loss) per share -
diluted $0.18 $0.13 $(0.43) $(0.36)
-------- -------- -------- --------
Weighted average number of common
shares outstanding:
Basic 7,386 7,177 7,293 7,179
Diluted 7,471 7,215 7,293 7,179
ROCK OF AGES CORPORATION
COMPARATIVE BALANCE SHEETS
(US $ in thousands) (Unaudited)
Oct. 2, Dec. 31,
ASSETS 2004 2003
CURRENT ASSETS
Cash & Cash Equivalents $4,220 $3,227
Trade Receivables, net 16,281 15,587
Inventories 23,139 21,152
Other Current Assets 6,454 10,261
Assets of Discontinued Operations - Held for sale 744 817
TOTAL CURRENT ASSETS 50,838 51,044
OTHER ASSETS
C.S.V. Life Insurance 728 728
Goodwill 163 --
Other Intangibles 408 438
Deferred Tax Assets - Long Term 5,236 5,236
Intangible Pension Asset 904 904
Long-term Investments 4,159 501
Other 983 1,115
TOTAL OTHER ASSETS 12,581 8,922
FIXED ASSETS
Property and Equipment 75,313 69,657
Less Accumulated Depreciation 29,802 27,162
NET FIXED ASSETS 45,511 42,495
TOTAL ASSETS $108,930 $102,461
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Borrowings under Line of Credit $5,891 $4,751
Current Portion LTD 40 38
Current Installments of Deferred Compensation 327 327
Accounts Payable 1,715 1,651
Accrued Expenses 4,546 4,312
Customer Deposits 10,520 7,104
Liabilities of Discontinued Operations -- 17
TOTAL CURRENT LIABILITIES 23,039 18,200
Long-Term Debt, Excluding Current Portion 16,296 12,794
Deferred Compensation 6,493 5,999
Accrued Pension Cost 1,539 1,491
Deferred Tax Liability 109 107
Other Liabilities 873 901
TOTAL LIABILITIES 48,349 39,492
STOCKHOLDERS' EQUITY
Common Stock 74 72
Additional Paid In Capital 66,415 65,878
Retained Earnings (5,210) (2,067)
Other Comprehensive Income (698) (914)
TOTAL EQUITY 60,581 62,969
TOTAL LIABILITIES & EQUITY $108,930 $102,461
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