EX-99.1 3 roac08pressfinal1.htm PRESS RELEASE DATED MARCH 10, 2009

 

Rock of Ages

FOR IMMEDIATE RELEASE

Company Contacts:

 Laura Plude, CFO

(802) 476‑2208

 www.RockofAges.com

 Kurt Swenson

 Chairman

 (603) 225-8397

 

Rock of Ages Reports 2008 Results
 

BARRE, VERMONT, March 10, 2009 . . . Rock of Ages Corporation (NASDAQ:ROAC) today reported a net loss from continuing operations for 2008 of $2,054,000, or $0.28 per share, which included a $3,930,000 charge for the write-off of second-grade granite block inventory at its three export quarries, the result of increased ocean and inland freight rates and changing economic conditions, and a $1,348,000 write-down of the Company's former headquarters building that was taken out of service when the Company consolidated its offices in Barre.  Excluding these non-cash charges, income from continuing operations for 2008 would have been $3,224,000, or $0.43 per share.  For 2007, the loss from continuing operations was $1,332,000, or $0.18 per share, which included a non-cash impairment charge of $1,361,000 for the write-down of the Company's investment in a granite quarry in Europe.  Excluding this charge, income from continuing operations for 2007 would have been $29,000, or $0.00 per share.  Revenue for 2008 was $55,869,000 compared to revenue of $55,545,000 for 2007.

 

Chief Executive Officer Donald Labonte said that no additional inventory write-downs related to second-grade granite block inventory at its export quarries or the Company's former headquarters building are anticipated in the future.

 

For the fourth quarter of 2008, the loss from continuing operations was $2,677,000, or $0.36 per share.  Excluding the write-downs of inventory and the Company's former headquarters building, income from continuing operations would have been $2,601,000, or $0.35 per share. For the fourth quarter of 2007, the loss from continuing operations was $317,000, or $0.04 per share.  Excluding the non-cash impairment charge, income from continuing operations for the fourth quarter of 2007 would have been $1,044,000, or $0.14 per share. Revenue for the fourth quarter of 2008 was $16,560,000 compared to revenue of $17,791,000 for the fourth quarter of 2007.

 

A reconciliation of GAAP to non-GAAP financial measures is provided in the reconciliation table attached to this press release.

 

Rock of Ages generated approximately $2.2 million of cash from operations in 2008, and reduced its total debt by approximately $8 million during the year to $21.8 million at December 31, 2008 compared to $29.8 million at December 31, 2007.

 

"We achieved our primary operating goals for 2008," said Chief Executive Officer Donald Labonte.  "Despite a $3 million decrease in sales of higher-margin mausoleums in 2008 versus 2007 due to the recession (partially offset by sales of $2.5 million to formerly owned retail outlets), we delivered an 11% increase in divisional operating earnings (net of the inventory write-down), lowered unallocated corporate overhead by 30%, and reduced total interest expense by 45% compared to 2007.

 

"Looking forward, we remain focused on reducing operating costs and improving productivity in both our quarrying and manufacturing operations.  Planned capital spending this year will be below depreciation expense.  While the recession makes it difficult to project 2009 revenue, we expect meaningful additional debt reduction in 2009," Labonte said.

Rock of Ages Reports 2008 Results

March 10, 2009

Page Two

 

Balance Sheet Item

The decrease in shareholders' equity at December 31, 2008 compared to December 31, 2007 primarily reflected the decrease in the market value of pension assets during the year and the resulting increase in the unfunded pension liability of approximately $5.7 million.
 

Waiver of Financial Covenants

As a result of the non-cash charges, at December 31, 2008 the Company was not in compliance with certain covenants of its lending agreement with CIT.  The Company has obtained a waiver from CIT.  In connection with the wavier the Company's interest rate structure has been changed.  The prime election of the revolver and term loans of the credit agreement increased by 3% and 3.25%, respectively, and the Libor elections are increasing by 2% on the revolver and 2.25% on the term, with a Libor floor of 2%.

 

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 Amounts)(Unaudited)

Three Months Ended

Twelve Months Ended

December 31,

December 31,

2008

2007

2008

2007

Net revenue

  Quarry

$  9,920 

$ 10,183 

$ 28,686 

$ 29,292 

  Manufacturing

6,640 

7,608 

27,183 

26,253 

     Total net revenue

16,560 

17,791 

55,869 

55,545 

Cost of goods sold

  Quarry

6,643 

7,318 

21,333 

22,889 

  Quarry inventory write-down

3,930 

--  

3,930 

--  

  Manufacturing

4,670 

5,439 

19,715 

18,036 

     Total cost of goods sold

15,243 

12,757 

44,978 

40,925 

Gross profit

  Quarry

(653)

2,865 

3,423 

6,403 

  Manufacturing

1,970 

2,169 

7,468 

8,217 

     Total gross profit

1,317 

5,034 

10,891 

14,620 

Selling, general and administrative expenses

  Quarry

520 

827 

2,267 

3,061 

  Manufacturing

1,325 

1,172 

4,383 

4,214 

     Total SG&A expenses

1,845 

1,999 

6,650 

7,275 

Divisional operating income

  Quarry

(1,173)

2,038 

1,156 

3,342 

  Manufacturing

645 

997 

3,085 

4,003 

     Divisional operating income (loss)

(528)

3,035 

4,241 

7,345 

Unallocated corporate overhead

637 

1,437 

3,636 

5,187 

Insurance recovery - quarry asset

--  

--  

--  

(212)

Impairment of long-lived assets

1,348 

1,361 

1,348 

1,361 

Other (income) expense, net

(273)

62 

(452)

(39)

Income (loss) from continuing operations before interest and taxes

(2,240)

175 

(291)

1,048 

Interest expense

322 

413 

1,368 

1,844 

Loss from continuing operations before income taxes

(2,562)

(238)

(1,659)

(796)

Income tax expense

115 

79 

395 

536 

Loss from continuing operations

(2,677)

(317)

(2,054)

(1,332)

Income (loss) from discontinued operations

--  

797 

(119)

1,358 

Interest allocated to discontinued operations

--  

(150)

(23)

(674)

Impairment charge on discontinued operations

--  

(5,816)

--  

(5,908)

Net loss

$ (2,677)

$ (5,486)

$  (2,196)

$  (6,556)

Per share information:

Net loss per share -basic and diluted

  Loss from continuing operations

$   (0.36)

$   (0.04)

$    (0.28)

$    (0.18)

  Loss from discontinued operations

--  

(0.70)

(0.02)

(0.70)

     Net loss per share

$   (0.36)

$   (0.74)

$    (0.30)

$    (0.88)

Weighted average number of common shares outstanding

  Basic and diluted

7,416 

7,416 

7,416 

7,416 

ROCK OF AGES CORPORATION

 

Consolidated Balance Sheets

( in thousands, except share amounts) (Unaudited)

December 31,

Assets

2008

2007

Current assets:

  Cash and cash equivalents

$      888 

$   1,961 

  Trade receivables, net

13,314 

11,713 

  Inventories

16,839 

21,680 

  Other current assets

1,561 

1,867 

  Assets held for sale

477 

--  

  Assets of discontinued operation

--  

14,266 

     Total current assets

33,079 

51,487 

Property, plant and equipment, net

29,998 

31,786 

Cash surrender value of life insurance

132 

186 

Intangibles, net

571 

383 

Goodwill

387 

387 

Long-term investments

25 

242 

Other

250 

174 

     Total assets

$ 64,442 

$ 84,645 

Liabilities and Stockholders' Equity

 

Current liabilities:

  Borrowings under line of credit

$   7,428 

$ 10,498 

  Current installments of long-term debt 

40 

5,191 

  Current installments of retirement benefits

567 

584 

  Trade payables

1,334 

1,794 

  Accrued expenses

2,226 

2,303 

  Customer deposits

454 

747 

  Liabilities of discontinued operation

--  

6,748 

     Total current liabilities

12,049 

27,865 

Long-term debt, excluding current installments

14,381 

14,158 

Salary continuation

5,382 

5,531 

Accrued pension cost 

9,026 

3,668 

Deferred tax liabilities

27 

55 

Other

3,146 

2,897 

     Total liabilities

44,011 

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 issued as of December 31, 2008 and 2007, respectively

48 

47 

  Common stock Class B, $0.01 par value; authorized 15,000,000 shares; 2,603,721

    and 2,738,596 issued as of December 31, 2008 and 2007, respectively

26 

27 

  Additional paid-in capital

65,688 

65,657 

  Accumulated deficit

(35,548)

(33,352)

  Accumulated other comprehensive loss

(9,783)

(1,908)

     Total stockholders' equity

20,431 

30,471 

     Total liabilities and stockholders' equity

$ 64,442 

$ 84,645 

 


ROCK OF AGES CORPORATION

RECONCILIATION OF NON-GAAP MEASURES

($ in thousands) (Unaudited)

Non-GAAP Measures
 

The Company utilizes certain non-GAAP measures to evaluate its performance and considers these measures important indicators of its success.  The non-GAAP financial measures should not be considered a substitute for any measure derived in accordance with GAAP.  The non-GAAP financial measures may also be inconsistent with the manner in which similar measures are derived or used by other companies.  Management believes that the presentation of such non-GAAP financial measures, when considered in conjunction with the most directly comparable GAAP financial measures, provides additional useful information concerning the Company's operating performance.

 

The following sets forth a reconciliation of the Company's loss from continuing operations to income from continuing operations before Quarry inventory write-down and impairment of long‑lived assets.
 

Three Months Ended

  

Twelve Months Ended

December 31,

December 31

2008

2007

2008

2007

Loss from continuing operations - GAAP

$ (2,677)

$    (317)

$  (2,054)

$  (1,332)

Quarry inventory write-down

3,930 

--  

3,930 

--  

Impairment of long-lived assets

1,348 

1,361 

1,348 

1,361 

Income from continuing operations before Quarry

  inventory write-down and impairment of long-lived assets

$   2,601 

$   1,044 

$   3,224 

$        29 

 

 

The following sets forth a reconciliation of the Company's divisional operating income to the divisional operating income before the Quarry inventory write-down:

 

Three Months Ended

Twelve Months Ended

December 31,

December 31

2008

2007

2008

2007

Divisional operating income (loss) - GAAP

$    (528)

$   3,035 

$   4,241 

$   7,345 

Quarry inventory write-down

3,930 

--  

3,930 

--  

Divisional operating income before Quarry inventory write-down

$   3,402 

$   3,035 

$   8,171 

$   7,345