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Rock of Ages Reports 97% Increase in Second Quarter
Business Wire
Aug 11, 2009
Rock of Ages Corporation (NASDAQ:ROAC) announced today that net income for the second quarter of 2009 increased 97% to $1,433,000, or $0.19 per diluted share, compared to net income of $727,000, or $0.10 per diluted share, for the second quarter of 2008. "The production improvements and cost-cutting measures we implemented last year are delivering the positive results we anticipated even in the midst of the current recession," said Chief Executive Officer Donald Labonte.
Total revenue for the second quarter of 2009 increased slightly to $14,424,000 from $14,326,000 for the second quarter of 2008, reflecting higher revenue in the Company's quarry segment partially offset by a decrease in the manufacturing segment.
Quarry revenue for the three months ended July 4, 2009 increased 24% to $6,912,000 compared to $5,560,000 for the second quarter of 2008. This growth was primarily the result of higher sales in the Company's Bethel White Quarry, a very popular granite for the building industry. Quarry segment operating income more than doubled to $1,163,000 compared to $539,000 a year earlier, reflecting higher sales, lower operating expenses, and higher productivity due to the production improvements undertaken in the past year. "Demand for our granites remains strong, and we continue to expect quarry sales for 2009 as a whole to meet or exceed last year's pace," Labonte said.
Manufacturing revenue for the second quarter of 2009 decreased 14% to $7,512,000 from $8,766,000 for the second quarter of 2008, and operating income decreased 14% to $1,373,000 from $1,592,000 a year ago. "Most of the decrease in manufacturing segment revenue and operating income reflected weakness in our precision products division, whose customers have been hard hit by the recession, as well as the decrease in the value of the Canadian dollar relative to the U.S. dollar compared to last year at this time. "Based on current orders, we expect manufacturing revenue for 2009 as a whole to be below 2008," Labonte said.
Unallocated corporate overhead decreased 22% to $692,000 for the second quarter of 2009 versus $889,000 for the second quarter of 2008. "We remain confident that unallocated corporate overhead for 2009 will be about 15% below last year," Labonte said.
Six Months Results
For the six months ended July 4, 2009, revenue decreased 10% to $20,362,000 from $22,716,000 for the first six months of 2008, but gross profit increased 11% to $4,055,000 from $3,639,000 for the same period a year ago.
SG&A for the first half of 2009 decreased 3%, to $3,156,000 from $3,257,000 for the first six months of 2008. Unallocated corporate overhead decreased 20% to $1,733,000 from $2,176,000 for the same period a year ago.
The net loss for the first six months of 2009 was $1,341,000, or $0.18 per share. This compares to a loss from continuing operations of $2,436,000, or $0.33 per share, for the same period in 2008.
The net loss for the first six months of 2008 was $2,578,000, or $0.35 per share, which included a loss from discontinued operations of $142,000, or $0.02 per share. There were no discontinued operations in 2009.
Balance Sheet Highlights
Total debt at July 4, 2009 decreased to $17 million, compared to $23.6 million at June 28, 2008, and $21.8 million at December 31, 2008, which resulted in a decrease in interest expense for the second quarter of 2009 of 6% compared to the second quarter of 2008. "We remain focused on reducing debt by maximizing cash flow, and we expect further significant debt reduction in the second half of 2009," Labonte said.
The Company elected to freeze its defined benefit pension plan in the first quarter of 2009. This was accounted for as a curtailment, and required the assets and liabilities to be revalued as of the date of the freeze. The revaluation resulted in a decrease in liabilities and an increase in stockholder's equity.
Stockholders' equity at July 4, 2009 was $23,684,000, or $3.19 per outstanding share. This compares to stockholders' equity at December 31, 2008 of $20,431,000, or $2.75 per outstanding share.
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; 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, 2008. 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.
| ROCK OF AGES CORPORATION | ||||||||||||||||||
| Consolidated Statements of Operations | ||||||||||||||||||
| (In thousands, except per share amounts) (Unaudited) | ||||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||||
| July 4, | June 28, | July 4, | June 28, | |||||||||||||||
| 2009 | 2008 | 2009 | 2008 | |||||||||||||||
| Net revenue | ||||||||||||||||||
| Quarry | $ | 6,912 | $ | 5,560 | $ | 10,036 | $ | 10,229 | ||||||||||
| Manufacturing | 7,512 | 8,766 | 10,326 | 12,487 | ||||||||||||||
| Total net revenue | 14,424 | 14,326 | 20,362 | 22,716 | ||||||||||||||
| Gross profit | ||||||||||||||||||
| Quarry | 1,746 | 1,154 | 1,521 | 664 | ||||||||||||||
| Manufacturing | 2,431 | 2,619 | 2,534 | 2,975 | ||||||||||||||
| Total gross profit | 4,177 | 3,773 | 4,055 | 3,639 | ||||||||||||||
| Selling, general and administrative expenses | ||||||||||||||||||
| Quarry | 583 | 615 | 1,130 | 1,224 | ||||||||||||||
| Manufacturing | 1,058 | 1,027 | 2,026 | 2,033 | ||||||||||||||
| Total SG&A expenses | 1,641 | 1,642 | 3,156 | 3,257 | ||||||||||||||
| Divisional operating income (loss) | ||||||||||||||||||
| Quarry | 1,163 | 539 | 391 | (560 | ) | |||||||||||||
| Manufacturing | 1,373 | 1,592 | 508 | 942 | ||||||||||||||
| Total divisional operating income | 2,536 | 2,131 | 899 | 382 | ||||||||||||||
| Unallocated corporate overhead | 692 | 889 | 1,733 | 2,176 | ||||||||||||||
| Effect of pension curtailment | -- | -- | 95 | -- | ||||||||||||||
| Other income, net | (55 | ) | (59 | ) | (144 | ) | (123 | ) | ||||||||||
|
Income (loss) from continuing operations before interest and income taxes |
1,899 | 1,301 | (785 | ) | (1,671 | ) | ||||||||||||
| Interest expense, net | 331 | 351 | 537 | 708 | ||||||||||||||
|
Income (loss) from continuing operations before income taxes |
1,568 | 950 | (1,322 | ) | (2,379 | ) | ||||||||||||
| Income tax expense | 135 | 223 | 19 | 57 | ||||||||||||||
| Income (loss) from continuing operations | 1,433 | 727 | (1,341 | ) | (2,436 | ) | ||||||||||||
| Loss from discontinued operations | -- | -- | -- | (142 | ) | |||||||||||||
| Net income (loss) | $ | 1,433 | $ | 727 | $ | (1,341 | ) | $ | (2,578 | ) | ||||||||
| Net income (loss) per share - basic and diluted: | ||||||||||||||||||
| Income (loss) from continuing operations | $ | 0.19 | $ | 0.10 | $ | (0.18 | ) | $ | (0.33 | ) | ||||||||
| Loss from discontinued operations | -- | -- | -- | (0.02 | ) | |||||||||||||
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|
|
Net income (loss) per share - basic and diluted |
$ |
0.19 |
|
$ |
0.10 |
|
$ |
(0.18 |
) |
|
$ |
(0.35 |
) |
|||
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Weighted average common shares outstanding - basic and diluted |
7,416 | 7,416 | 7,416 | 7,416 | ||||||||||||||
| ROCK OF AGES CORPORATION | ||||||||||
| Consolidated Balance Sheets | ||||||||||
| ( in thousands, except per share amounts) (Unaudited) | ||||||||||
| July 4, | Dec. 31, | |||||||||
| Assets | 2009 | 2008 | ||||||||
| Current assets: | ||||||||||
| Cash and cash equivalents | $ | 315 | $ | 888 | ||||||
| Trade receivables, net | 8,789 | 13,314 | ||||||||
| Inventories | 15,273 | 16,840 | ||||||||
| Other current assets | 1,379 | 1,561 | ||||||||
| Assets held for sale | 831 | 477 | ||||||||
| Total current assets | 26,587 | 33,080 | ||||||||
| Property, plant and equipment, net | 30,732 | 29,998 | ||||||||
| Cash surrender value of life insurance | 132 | 132 | ||||||||
| Intangibles, net | 519 | 571 | ||||||||
| Goodwill | 387 | 387 | ||||||||
| Long term investments | 121 | 25 | ||||||||
| Other | 504 | 249 | ||||||||
| Total assets | $ | 58,982 | $ | 64,442 | ||||||
| Liabilities and Stockholders' Equity | ||||||||||
| Current liabilities: | ||||||||||
| Borrowings under line of credit | $ | 2,715 | $ | 7,428 | ||||||
| Current maturities of long-term debt | 872 | 517 | ||||||||
| Salary continuation and other post-employment benefits | 689 | 567 | ||||||||
| Trade payables | 1,428 | 1,334 | ||||||||
| Accrued expenses | 1,648 | 2,226 | ||||||||
| Customer deposits | 781 | 454 | ||||||||
| Total current liabilities | 8,133 | 12,526 | ||||||||
| Long-term debt, excluding current installments | 13,415 | 13,904 | ||||||||
| Salary continuation liability, net of current portion | 5,163 | 5,382 | ||||||||
| Accrued pension cost | 5,438 | 9,026 | ||||||||
| Deferred salary liability | 1,504 | 1,523 | ||||||||
| Other post-employment benefits, net of current portion | 1,616 | 1,623 | ||||||||
| Deferred tax liability | 29 | 27 | ||||||||
| Total liabilities | 35,298 | 44,011 | ||||||||
| 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 issued and outstanding as of July 4, 2009 and December 31, 2008 |
48 | 48 | ||||||||
|
Common stock Class B, 0.01 par value. Authorized 15,000,000 shares; 2,603,721 issued and outstanding as of July 4, 2009 and December 31, 2008 |
26 | 26 | ||||||||
| Additional paid-in capital | 65,719 | 65,688 | ||||||||
| Accumulated deficit | (36,889 | ) | (35,548 | ) | ||||||
| Accumulated other comprehensive loss | (5,220 | ) | (9,783 | ) | ||||||
| Total stockholders' equity | 23,684 | 20,431 | ||||||||
| Total liabilities and stockholders' equity | $ | 58,982 | $ | 64,442 | ||||||
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