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Proc-Type: 2001,MIC-CLEAR
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SECURITIES AND EXCHANGE
COMMISSION FORM 8-K CURRENT REPORT Date of Report (Date of earliest event
reported):
November 1, 2002 ROCK OF AGES
CORPORATION Delaware 0-29464 03-0153200 772 Graniteville Road,
Graniteville, Vermont 05654 (Registrant's Telephone Number, Including Area
Code) (802)
476-3121
FORM
8-K ITEM 1. CHANGES
IN CONTROL OF REGISTRANT. None. ITEM 2.
ACQUISITION OR DISPOSTION OF
ASSETS. None. ITEM 3.
BANKRUPTCY OR RECEIVERSHIP. None. ITEM 4. CHANGES
IN REGISTRANT'S CERTIFYING ACCOUNTANT. None. - 2 - ITEM 5. OTHER
EVENTS None. ITEM 6.
RESIGNATIONS OF REGISTRANT'S
DIRECTORS. None. ITEM 7. FINANCIAL
STATEMENTS AND EXHIBITS. Exhibit 99.1 - Press Release dated November 1, 2002. ITEM 8. NOT APPLICABLE. None. ITEM 9.
REGULATION FD DISCLOSURE On November 1, 2002, the Registrant issued a
press release announcing
third quarter results for fiscal 2002. A copy of the
press release is attached hereto as Exhibit 99.1. - 3 -
Washington, D.C. 20549
PURSUANT TO SECTION 13 OR 15(d)
OF
THE SECURITIES EXCHANGE ACT OF 1934
(Exact name of registrant as specified
in its charter)
(State or Other Jurisdiction of
Incorporation)
(Commission
File Number)
(Address of Principal Executive Office)
(Zip Code)
NONE
(Former Name or Former Address, if Changed Since Last
Report)
ROCK
OF AGES CORPORATION
ROCK
OF AGES CORPORATION
FORM 8-K
Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
ROCK OF AGES CORPORATION
Dated: November 1, 2002 | By: /s/Douglas
S. Goldsmith Douglas S. Goldsmith Vice President/Chief Financial Officer |
-4-
Exhibit 99.1
Rock of Ages FOR IMMEDIATE RELEASE |
Investor Contact: |
Company Contact: |
Rock of Ages Reports Third Quarter Results
CONCORD, NEW HAMPSHIRE, November 1, 2002 . . . ROCK OF AGES CORPORATION (NASDAQ/NMS:ROAC) announced today that net income for the third quarter of 2002 was $1,604,000, or $0.20 per diluted share, after a previously announced one-time severance charge of $750,000. This compares to a net loss for the third quarter of 2001 of $1,033,000, or $0.14 per share, after a loss on the sale of assets of $2,363,000. Revenue for this year's third quarter was $24,207,000 compared to $24,722,000 for the same period last year.
Before the severance charge, pre-tax income for the third quarter of 2002 was $2,958,000. This compares to pre-tax income for the third quarter of 2001 of $2,422,000 before amortization of goodwill and the loss on sale of assets.
For the first nine months of 2002, net income before the write-off of goodwill was $1,553,000, or $0.20 per share. After the write-off of goodwill, the net loss was $26,877,000, or $3.42 per share. For the first nine months of 2001, the net loss was $626,000, or $0.08 per share, after the loss on sale of assets. Revenue for the first nine months of 2002 was $65,355,000 compared to $69,337,000 for the same period of 2001.
Cash generated from operations totaled $2,631,000 for the third quarter and $4,711,000 for the first nine months of 2002. Debt was reduced by $4,310,000 since December 31, 2001 to $14,653,000 at September 30, 2002. Shortly after the close of the quarter, Rock of Ages entered into a five-year, $50,000,000 renewal financing agreement, consisting of a $30,000,000 acquisition term loan facility and a $20,000,000 revolving loan facility. As a result, $12,500,000 classified as short-term debt at December 31, 2001 was converted to a non-amortizing term note due December 31, 2007 and reclassified as long-term debt on the September 30, 2002 balance sheet. Stockholders' equity at September 30, 2002 was $62,769,000, or $7.98 per outstanding share.
Third Quarter Operations Review
Operating income for Rock of Ages' Quarrying Division increased 25% for the third quarter on a 23% increase in revenue. Operating income for the Manufacturing Division increased 144% on lower revenue as the divestiture program completed last year to reduce manufacturing capacity continued to have a positive impact on profitability as anticipated. Operating income for the Cemetery Division rose to $363,000 for this year's third quarter versus a loss of $205,000 last year on a 66% increase in revenue. In the Retail Division, operating income fell to $188,000 from $1,016,000 a year earlier as revenue declined 17%.
Noting that retail order backlog increased to $15,625,000 at September 30, 2002 compared to $14,800,000 at the same time last year and $14,384,000 at June 30, 2002, Chairman and Chief Executive Officer Kurt Swenson said, "We are encouraged by the incipient signs of an upturn in our retail operations. Order receipts are recovering from the decline we experienced earlier in the year. Year to date, orders are running slightly better than last year on a same-store basis, reflecting the closure of certain unprofitable stores last year. Our new retail management team, led by President Terry Shipp, is working hard to achieve the high returns we believe are attainable in this division. Our goal is to build our retail operations into a significant profit center and growth engine to complement the continued strong performance of our core quarry and manufacturing operations.
(more)
Rock of Ages Reports Third Quarter Results
November 1, 2002
Page Two
With the appointment of five new members, Terry has completed the staffing of our regional management team, which now consists of four regional operating managers and four regional sales managers responsible for the performance of our sixteen retail profit centers. He is also implementing his proven sales activity and results management system, and fine-tuning our branded and unbranded price and procurement policies. In addition, we are implementing an aggressive program to increase referrals from funeral directors and cemeterians, and have established a five-person team with responsibility for carrying out our new store and acquisition program. We are pleased by the team's progress in rebuilding our new store and acquisition pipeline for future growth."
2002 Earnings Guidance
Assuming normal winter weather conditions, Swenson said that the Company currently expects net income for 2002 to be at about the midpoint of the previously announced range of $0.40 to $0.50 per diluted share before the write-off of goodwill.
Impact of FASB 142
Rock of Ages adopted FASB 142 effective January 1, 2002. The new FASB standard eliminates the amortization of goodwill and requires an annual review for impairment. Had the standard been implemented at the beginning of 2001, net income for the third quarter of that year would have increased by approximately $227,000, or approximately $0.03 per diluted share.
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.
Conference Call
Rock of Ages has scheduled a conference call today at 11:00 AM EDT. A live Webcast may be accessed at http://www.CompanyBoardroom.com/company.asp?client=cb&ticker=roac or at http://www.RockofAges.com/investor/audio.html?ticker=ROAC&script=1100. A Webcast replay will be available after 1:00 PM EDT at these same Internet addresses. For a telephone replay, dial (800) 633-8284, reservation #20992997, after 1:00 PM EDT.
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 the Company's business 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 outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements due to numerous factors, including those described above and the following: 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. 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)
#3144
ROCK OF AGES CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OPERATIONS
($ in thousands except per share amounts)(unaudited)
Three Months Ended |
Nine Months Ended |
|||||||||||
Sep. 30, |
Sep. 30, |
|||||||||||
|
|
|||||||||||
2002 |
2001 |
2002 |
2001 |
|||||||||
|
|
|
|
|||||||||
Net revenues: |
|
|
|
|
|
|
||||||
Quarrying |
$ |
8,243 |
$ |
6,692 |
$ |
20,879 |
$ |
18,468 |
||||
Manufacturing |
5,342 |
6,053 |
|
14,314 |
|
17,583 |
||||||
Retailing |
9,369 |
11,221 |
|
26,922 |
|
30,949 |
||||||
Cemeteries |
1,253 |
756 |
|
3,240 |
|
2,337 |
||||||
|
|
|
|
|||||||||
Total net revenues |
24,207 |
24,722 |
|
65,355 |
|
69,337 |
||||||
|
|
|
|
|
|
|
||||||
Gross profit: |
|
|
|
|
|
|
||||||
Quarrying |
4,026 |
3,357 |
|
8,457 |
|
7,524 |
||||||
Manufacturing |
1,706 |
1,530 |
|
3,783 |
|
4,085 |
||||||
Retailing |
5,194 |
6,682 |
|
14,912 |
|
18,137 |
||||||
Cemeteries |
653 |
144 |
|
1,409 |
|
652 |
||||||
|
|
|
|
|||||||||
Total gross profit |
11,579 |
11,713 |
|
28,561 |
|
30,398 |
||||||
|
|
|
|
|
|
|
||||||
Selling, general and administrative expenses: |
|
|
||||||||||
Quarrying |
1,283 |
1,162 |
|
3,018 |
|
2,831 |
||||||
Manufacturing |
860 |
1,184 |
|
2,499 |
|
3,532 |
||||||
Retailing |
5,006 |
5,666 |
|
15,276 |
|
16,257 |
||||||
Cemeteries |
290 |
349 |
|
957 |
|
733 |
||||||
|
|
|
|
|||||||||
Total SG&A expenses |
7,439 |
8,361 |
|
21,750 |
|
23,353 |
||||||
|
|
|
|
|
|
|
||||||
Divisional operating income: |
|
|
|
|
|
|
||||||
Quarrying |
2,743 |
2,195 |
|
5,439 |
|
4,693 |
||||||
Manufacturing |
846 |
346 |
|
1,284 |
|
553 |
||||||
Retailing |
188 |
1,016 |
|
(364 |
) |
|
1,880 |
|||||
Cemeteries |
363 |
(205 |
) |
|
452 |
|
(81 |
) | ||||
|
|
|
|
|||||||||
Divisional operating income |
4,140 |
3,352 |
|
6,811 |
|
7,045 |
||||||
|
|
|
|
|
|
|
||||||
Unallocated corporate overhead |
1,757 |
811 |
|
4,136 |
|
2,595 |
||||||
|
|
|
|
|
|
|
||||||
Gain (Loss) on Sale of Assets |
|
(2,363 |
) |
|
|
|
(2,561 |
) | ||||
|
|
|
|
|||||||||
Earnings before interest and taxes |
2,383 |
178 |
|
2,675 |
|
1,889 |
||||||
|
|
|
|
|
|
|
||||||
Interest expense |
175 |
396 |
|
537 |
|
1,486 |
||||||
|
|
|
|
|||||||||
|
|
|
|
|
|
|
||||||
Income (Loss) from operations |
2,208 |
(218 |
) |
|
2,138 |
|
403 |
|||||
|
|
|
|
|
|
|
||||||
Income tax (benefit) |
604 |
815 |
|
585 |
|
1,029 |
||||||
|
|
|
|
|||||||||
|
|
|
|
|
|
|
||||||
Income (Loss) before change in accounting principle |
1,604 |
(1,033 |
) |
|
1,553 |
|
(626 |
) | ||||
|
|
|
|
|
|
|
||||||
Effect of change in accounting principle, net of tax |
|
|
|
(28,430 |
) |
|
|
|||||
|
|
|
|
|||||||||
Net income (loss) |
$ |
1,604 |
$ |
(1,033 |
) |
$ |
(26,877 |
) |
$ |
(626 |
) | |
|
|
|
|
|||||||||
Per share information: |
|
|
|
|
|
|
||||||
Net Income -basic |
|
|
||||||||||
Income before cumulative effects of changes in accounting principle |
0.20 |
(0.14 |
) |
|
0.20 |
|
(0.08 |
) | ||||
Cumulative effect of change in accounting principle |
0.00 |
0.00 |
|
(3.62 |
) |
|
0.00 |
|||||
|
|
|
|
|||||||||
Net loss - basic |
$ |
0.20 |
$ |
(0.14) |
$ |
(3.42) |
$ |
(0.08) |
||||
|
|
|
|
|||||||||
|
|
|
|
|
|
|
||||||
Net Income -diluted |
|
|
|
|
|
|
||||||
Income before cumulative effects of changes in accounting principle |
0.20 |
(0.14 |
) |
|
0.20 |
|
(0.08 |
) | ||||
Cumulative effect of change in accounting principle |
0.00 |
0.00 |
|
(3.60 |
) |
|
0.00 |
|||||
|
|
|
|
|||||||||
Net loss - diluted |
$ |
0.20 |
$ |
(0.14 |
) |
$ |
(3.40 |
) |
$ |
(0.08 |
) | |
|
|
|
|
|
|
|
||||||
Weighted average number of common shares outstanding |
|
|
|
|
|
|
||||||
basic |
7,862 |
7,603 |
|
7,856 |
|
7,575 |
||||||
diluted |
7,862 |
7,603 |
|
7,899 |
|
7,575 |
ROCK OF AGES CORPORATION
COMPARATIVE BALANCE SHEET
(US $ IN THOUSANDS)
Sep.30, |
Dec. 31, |
|||||
2002 |
2001 |
|||||
|
|
|||||
ASSETS |
(unaudited) |
(audited) |
||||
CURRENT ASSETS: | ||||||
Cash & Cash Equivalents |
$ |
3,156 |
$ |
3,435 |
||
Trade Receivables |
18,195 |
16,119 |
||||
Inventories |
23,416 |
22,680 |
||||
Other Current Assets |
5,850 |
4,914 |
||||
Current Assets to be Disposed of |
|
|
|
2,546 |
||
|
|
|||||
TOTAL CURRENT ASSETS |
|
50,617 |
|
49,694 |
||
|
|
|||||
|
|
|
|
|||
OTHER ASSETS: |
|
|
|
|
||
C.S.V. Life Insurance |
|
749 |
|
811 |
||
Goodwill |
|
|
|
33,782 |
||
Other Intangibles |
|
617 |
|
761 |
||
Deferred Tax Assets - Long Term |
|
6,365 |
|
873 |
||
Prearranged Receivables |
|
15,059 |
|
15,388 |
||
Cemetery Property |
|
6,043 |
|
5,998 |
||
Other |
|
2,865 |
|
3,343 |
||
|
|
|||||
TOTAL OTHER ASSETS |
|
31,698 |
|
60,956 |
||
|
|
|||||
|
|
|
|
|
||
FIXED ASSETS: |
|
|
|
|
||
Property and Equipment |
|
69,825 |
|
66,902 |
||
Less Accumulated Depreciation |
|
26,192 |
|
23,759 |
||
|
|
|||||
NET FIXED ASSETS |
|
43,633 |
|
43,143 |
||
|
|
|||||
|
|
|
|
|
||
TOTAL ASSETS |
$ |
125,948 |
$ |
153,793 |
||
|
|
|||||
|
|
|
|
|
||
LIABILITIES AND EQUITY |
|
|
|
|
||
|
|
|
|
|
||
CURRENT LIABILITIES: |
|
|
|
|
||
Borrowings under Line of Credit |
$ |
1,618 |
$ |
3,970 |
||
Current Portion LTD |
|
213 |
|
14,671 |
||
Deferred Compensation Payable |
|
279 |
|
279 |
||
Accounts Payable |
|
2,112 |
|
1,946 |
||
Accrued Expenses |
|
5,817 |
|
5,237 |
||
Income Taxes Payable |
|
4 |
|
86 |
||
Customer Deposits |
|
10,187 |
|
6,711 |
||
|
|
|||||
TOTAL CURRENT LIABILITIES |
|
20,230 |
|
32,900 |
||
|
|
|||||
Long-Term Debt, Excluding Current Portion |
|
12,822 |
|
323 |
||
Deferred Compensation |
|
4,379 |
|
4,070 |
||
Prearranged Deferred Revenue |
|
23,276 |
|
24,224 |
||
Other Liabilities |
|
2,472 |
|
2,606 |
||
|
|
|||||
TOTAL LIABILITIES |
|
63,179 |
|
64,123 |
||
|
|
|||||
STOCKHOLDERS 'EQUITY: |
|
|
|
|
||
Common Stock |
|
79 |
|
78 |
||
Additional Paid In Capital |
|
69,329 |
|
69,067 |
||
Retained Earnings |
|
(5,404 |
) |
|
21,473 |
|
Cumulative Translation Adjustment |
|
(886 |
) |
|
(948 |
) |
Treasury Stock - at cost - 81,800 shares of Class A |
(348 |
) |
|
|||
|
|
|||||
TOTAL EQUITY |
|
62,769 |
|
89,670 |
||
|
|
|||||
TOTAL LIABILITIES & EQUITY |
|
$125,948 |
|
$153,793 |
||
|
|