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UNITED
STATES FORM 8-K CURRENT
REPORT Pursuant
to Section 13 or 15(d) of the Securities and Exchange Act of 1934 Date of Report (Date of earliest
event reported): November 2, 2004 Delaware 0-29464 03-0153200 772 Graniteville Road, Graniteville Vermont
05654 (802) 476-3121 Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of registrant under any of the
following provisions: o Written communications pursuant to Rule 425 under
the Securities Act (17 CFR 230.425) o Soliciting material pursuant to Rule 14a-12 under
the Exchange Act (17 CFR 240.14a-12) o Pre-commencement communications pursuant to Rule
14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) o Pre-commencement communications pursuant to Rule
13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ROCK OF
AGES CORPORATION FORM 8-K Item 2.02 Results of Operations and Financial
Condition On November 2, 2004, Rock of Ages issued a press
release announcing its financial results for the fiscal quarter ended October
2, 2004. The press release is being furnished to the Securities and Exchange
Commission pursuant to Item 2.02 of Form 8-K and is attached hereto as
Exhibit 99.1. Item 8.01 Other Events On October 29, 2004, the Board of Directors of Rock
of Ages Corporation declared a quarterly cash dividend of $0.02 for each
share of common stock, payable on December 15, 2004 to shareholders of record
on November 15, 2004. Item 9.01 Financial Statements and Exhibits Exhibit Number Description 99.1 Press Release dated November 2, 2004 2 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 2, 2004 By: /s/ Michael B. Tule 3 Exhibit
Index Number Description 99.1 Press Release dated November 2, 2004 4 EXHIBIT 99.1 Rock of Ages FOR IMMEDIATE RELEASE Investor Contact: Company Contact: Rock of Ages
Reports Improved Third Quarter Results CONCORD, NEW HAMPSHIRE, November 2, 2004 . . . Rock of Ages Corporation
(NASDAQ/NMS:ROAC) today announced financial results for the third quarter
and first nine months of 2004. Financial
Results For
the three months ended October 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 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 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. 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 charge for the adverse judgment in the Eurimex arbitration announced on
June 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 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 $0.10 per share. The following
table reconciles net income (loss) to income (loss) excluding the expenses
associated with the Eurimex lawsuit: Three Months Ended Oct. 2, Sep. 27, Oct. 2, Sep. 27, ($ In Thousands Except per Share Amounts) 2004 2003 2004 2003 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 and manufacturing operations 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 Kurt
Swenson. (more) Rock of Ages Reports Improved Third Quarter Results "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 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 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 that was rolled
out at the same time. We are encouraged that our retail backlog 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
$500,000 during the transition, most of which will fall into the fourth quarter
of this year. Dividend Declared The Company also
announced that its Board of Directors has declared a quarterly cash dividend of
$0.02 per share payable on December 15, 2004 to shareholders of record on
November 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, or at (800) 633-8284, reservation #21210211. 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. 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 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 for the quarter ended July 3, 2004. 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) ROCK OF AGES CORPORATION
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
ROCK OF AGES CORPORATION
(Exact
name of registrant as specified in its charter)
(State or other
jurisdiction of incorporation)
(Commission File Number)
(I.R.S. Employer
Identification Number)
(Address of principal executive
offices) (Zip Code)
(Registrant's telephone
number, including area code)
Michael B. Tule
Vice President/General Counsel
Neil G Berkman
Berkman Associates
(310) 277-5162
info@BerkmanAssociates.com
Kurt Swenson
Chairman & CEO
(603) 225-8397
www.RockofAges.com
Nine Months Ended
)
)
)
November 2, 2004
Page Two
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 |
|||||||||
2004 |
2003 |
2004 |
2003 |
|||||||||
|
|
|
|
|||||||||
Net Revenue: | ||||||||||||
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, |
|
|
|
2004 |
|
|
2003 |
|
|
|
|||||
ASSETS | ||||||
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 |
||
|
|
|||||