8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

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): February 20, 2007 (February 15, 2007)

ROCK OF AGES CORPORATION
(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of incorporation) 0-29464
(Commission File Number) 03-0153200(I.R.S. Employer
Identification Number)

772 Graniteville Road, Graniteville Vermont   05654
    (Address of principal executive offices)    (Zip Code)   

(802) 476-3121
(Registrant's telephone number, including area code)

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 1.01	Entry Into a Material Definitive Agreement
	2007 Incentive Plan
	On February 15, 2007, the Compensation Committee adopted a cash incentive plan for 2007 (the "2007 Incentive Plan") covering the Corporation's executive officers, officers and certain other key employees, including Kurt M. Swenson, Chairman/CEO, Richard M. Urbach, President and COO/Retail Division, Donald Labonte, President and COO/North American Manufacturing, Nancy Rowden Brock, Senior Vice President/Chief Financial Officer, Douglas S. Goldsmith, President and COO/Quarry Division and Michael B. Tule, Senior Vice President/General Counsel. Pursuant to the 2007 Incentive Plan, the aforementioned  executive officers may earn a cash bonus of between 10% and 50% of their respective base salaries, based upon the attainment of certain levels of earnings before income taxes ("pretax income") by the operating unit(s) for which they are responsible, as well as by the Corporation, except that in the cases of Mr. Swenson, Mr. Tule and Ms. Brock, the cash bonus will be determined solely upon the attainment of certain levels of pretax income by the Corporation.
	Discretionary Cash Bonus Grants
	On February 15, 2007, the Compensation Committee of the Board of Directors of Rock of Ages Corporation (the "Corporation") granted discretionary cash bonuses of $25,000 each to Mr. Labonte and Mr. Urbach for their 2006 performance. No other bonuses were granted to any other executive officers.
Item 2.02	Results of Operation and Financial Condition
	The following information is being furnished by Rock of Ages as required by this Item 2.02 and shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.
	On February 20, 2007, Rock of Ages issued a press release regarding its results of operations for the fourth quarter and year ended December 31, 2006.  A copy of the press release is furnished (not filed) as Exhibit 99.1 to this Report.
Item 9.01	Financial Statements and Exhibits
	Exhibit Number	Description
	00.1	Press Release dated February 20, 2007

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: February 20, 2007	By: /s/Michael B. Tule        Michael B. Tule        Senior Vice President/General Counsel

3

Exhibit Index

Number	Description
99.1	Press Release dated February 20, 2007

4

EX-99

EXHIBIT 99.1

Rock of Ages FOR IMMEDIATE RELEASE Investor Contact:
Neil G Berkman
Berkman Associates
(310) 826-5051
info@BerkmanAssociates.com Company Contact:
Kurt Swenson
Chairman & CEO
(603) 225-8397
www.RockofAges.com

Rock of Ages Fourth Quarter Income From Continuing Operations
Increased to $0.20 Per Share From $0.09 Per Share

Retail Operating Profit Improved to $890,000 Versus A Loss of $555,000
Fourth Quarter Net Income Increased to $0.28 Per Share Versus $0.09 Per Share

    CONCORD, NEW HAMPSHIRE, February 20, 2007 . . . Rock of Ages Corporation (NASDAQ:ROAC) today announced financial results for the fourth quarter and 2006.
    "Highlighting our fourth quarter results was a dramatic improvement in the performance of our retail business, which delivered operating income of $890,000 compared to an operating loss of $555,000 for the fourth quarter of 2005. This performance, which exceeded our expectations, was the direct result of the restructuring of our retail operations during the year, including a new management team, the closure or sale of twelve unprofitable stores in late 2005 and early 2006, and other cost reductions.
    "Also as we anticipated, our manufacturing business posted improved fourth quarter results, with operating income for the fourth quarter of 2006 increasing to $892,000 compared to $230,000 for the fourth quarter last year.
    "In the quarries, operating income for the fourth quarter of 2006 improved compared to the depressed third quarter pace, but as expected was below the fourth quarter of 2005. We are pleased to report that the production issues in our Gardenia and Bethel properties that affected quarry performance during 2006 have been resolved. Demand for our granite blocks remains strong, and we anticipate considerable improvement in our quarry operations in 2007.
    "With our SG&A costs down, the restructuring of our retail business complete, a solid book of orders in manufacturing, and the quarry production issues now behind us, we expect a profitable year in 2007," said Chairman and CEO Kurt Swenson.
 

Fourth Quarter Results
    For the three months ended December 31, 2006, revenue declined 9% to $23,377,000 from $25,549,000 for the fourth quarter of 2005.
    Driven by a 30% decrease in retail SG&A, total SG&A expense declined 28% to $5,570,000 for the fourth quarter of 2006. This compares to SG&A expense of $7,743,000 for the fourth quarter of 2005.
    Divisional operating income doubled to $3,527,000 for the fourth quarter of 2006 compared to $1,761,000 for the same period of the prior year.
    Unallocated corporate overhead was $1,240,000 for the fourth quarter of 2006 versus $937,000 for the same period of 2005.
    Pre-tax income from continuing operations for this year's fourth quarter was $1,606,000. This compares to pre-tax income for the fourth quarter of 2005 of $473,000.
    Income from continuing operations for the fourth quarter of 2006 was $1,510,000, or $0.20 per diluted share, including income tax expense of $96,000 as a result of profits in the Company's Canadian operations. This compares to income from continuing operations for the fourth quarter of 2005 of $672,000, or $0.09 per share, which included an income tax benefit of $199,000.
    Results for the fourth quarter and full year 2005 present the Kershaw quarries, which were sold in December 2006, as discontinued operations. Income from discontinued operations for the fourth quarter of 2006 was $590,000, or $0.08 per diluted share, including a $615,000 gain on the previously announced sale of the Kershaw quarries net of a $25,000 loss on discontinued operations. Income from discontinued operations for the fourth quarter of 2005 was $2,000, or $0.00 per share.

(more)

Rock of Ages Fourth Quarter Income From Continuing Operations
Increased to $0.20 Per Share From $0.09 Per Share
February 20, 2007
Page Two

    Net income for the fourth quarter of 2006 was $2,100,000, or $0.28 per diluted share. This compares to net income for the fourth quarter of 2005 of $674,000, or $0.09 per diluted share.

Twelve Months Results
    For the twelve months ended December 31, 2006, revenue declined 9% to $80,964,000 compared to $89,043,000 for 2005. The loss from continuing operations for 2006 was $5,981,000, or $0.81 per share, which included a charge of $1,685,000 for the restructuring of the retail business. This compares to a loss from continuing operations for 2005 of $16,076,000, or $2.17 per share, which included a charge to tax expense of $9,194,000 to fully reserve for the Company's entire net U.S. deferred tax asset.

Balance Sheet Items
    The Company's credit facility with the CIT Group is scheduled to expire on October 27, 2007 and, accordingly, the entire amount due under the credit facility has been classified as a current liability as of December 31, 2006. The Company plans to begin discussions with CIT on the renewal of the facility in the first quarter of 2007.
    Stockholders' equity at December 31, 2006 reflected the implementation of SFAS No. 158, "Employers' Accounting for Defined Benefit Pension and Other Post-Retirement Plans," which requires all companies to place on their books certain previously unrecognized and unfunded retirement liabilities without reflecting the changes through the income statement. The Company recognized a reduction in stockholder's equity of $3.5 million as a result of its implementation of this new accounting requirement.

Conference Call

Rock of Ages has scheduled a conference call at 11:00 a.m. EST today. A live webcast may be accessed from the Audio Presentations link at www.RockofAges.com/investor. A replay will be available after 1:00 p.m. EST at this same Internet addresses, or at (800) 633-8284, reservation #21324808.

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 staff productivity improvements and sales and marketing programs; our ability to form and maintain relationships with funeral directors and other death care professionals; our ability to maintain compliance with our covenants in our credit facility; our ability to maintain and expand our relationships with independent retailers; changes in demand for our products; the timing of customer orders and deliveries; the impact of competitive products and pricing; the success of our branding programs; the excess or shortage of production capacity; 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 Annual Report on Form 10-K for the year ended December 31, 2005, and the Company's Quarterly Report on Form 10-Q for the period ended September 30, 2006. 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
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands except per share amounts)(Unaudited)

		Three Months Ended					Twelve Months Ended
		December 31,					December 31,
		2006		2005			2006			2005
Net revenue:
Quarry	$	8,701	$	9,580		$	26,088		$	28,870
Manufacturing		6,022		5,964			24,069			23,533
Retail		8,654		10,005			30,807			36,640
Total net revenue		23,377		25,549			80,964			89,043
Gross profit:
Quarry		2,515		2,888			5,326			6,062
Manufacturing		1,821		1,633			6,499			6,770
Retail		4,761		4,983			16,196			19,099
Total gross profit		9,097		9,504			28,021			31,931
Selling, general and administrative expenses:
Quarry		770		802			2,968			3,505
Manufacturing		929		1,403			4,073			5,191
Retail		3,871		5,538			17,066			24,986
Retail restructuring costs		—		—			1,685			—
Total SG&A expenses		5,570		7,743			25,792			33,682
Divisional operating income (loss):
Quarry		1,745		2,086			2,358			2,557
Manufacturing		892		230			2,426			1,579
Retail		890		(555	)		(2,555	)		(5,887	)
Divisional operating income (loss)		3,527		1,761			2,229			(1,751	)
Unallocated corporate overhead		1,240		937			5,007			5,090
Impairment of note receivable		—		—			100			—
Gain on sale of investment		—		(350	)		—			(350	)
Foreign exchange loss		12		50			28			50
Income (loss) from continuing
operations before interest and taxes		2,275		1,124			(2,906	)		(6,541	)
Interest expense		669		651			2,602			1,924
Income (loss) from continuing operations before taxes		1,606		473			(5,508	)		(8,465	)
Income tax expense (benefit)		96		(199	)		473			7,611
Income (loss) from continuing operations		1,510		672			(5,981	)		(16,076	)
Discontinued operations, net of income taxes		590		2			616			(67	)
Net income (loss)	$	2,100	$	674		$	(5,365	)		(16,143	)
Per share information:
Income (loss) from continuing operations	$	0.20	$	0.09		$	(0.81	)	$	(2.17	)
Discontinued operations		0.08		0.00			0.08			(0.01	)
Net income (loss) per share - basic and diluted	$	0.28	$	0.09		$	(0.73	)	$	(2.18	)
Weighted average number of common
shares outstanding - basic and diluted		7,399		7,399			7,399			7,399

ROCK OF AGES CORPORATION
Consolidated Balance Sheets
(Dollars in thousands except per share amounts)(Unaudited)

				December 31,
Assets				2006			2005
Current assets:
	Cash and cash equivalents		$	4,290		$	2,824
	Trade receivables, net			13,962			14,720
	Inventories			24,932			24,478
	Other current assets			2,035			2,686
		Total current assets		45,219			44,708
Property, plant and equipment, net				46,263			49,634
Cash surrender value of life insurance				168			731
Intangibles, net				498			598
Goodwill				387			387
Intangible pension asset				—			574
Long term investments				704			728
Other				1,149			1,252
		Total assets	$	94,388		$	98,612
Liabilities and Stockholders' Equity
Current liabilities:
	Borrowings under line of credit		$	13,218		$	10,499
	Current installments of long-term debt			20,726			661
	Current installments of retirement benefits			567			469
	Trade payables			2,425			2,006
	Accrued expenses			3,193			3,443
	Customer deposits			6,866			7,059
		Total current liabilities		46,995			24,137
Long-term debt, excluding current installments				251			21,445
Salary continuation				5,818			6,070
Accrued pension cost				5,545			3,550
Deferred tax liability				56			70
Other				3,222			1,864
		Total liabilities		61,887			57,136
Stockholders' equity:
	Preferred stock $0.01 par value
		Authorized 2,500,000 shares; no shares issued and outstanding		—			—
	Common stock Class A, $0.01 par value; Authorized 30,000,000 shares;
		4,660,800 issued and outstanding as of December 31, 2006 and 2005		47			47
	Common stock Class B, $0.01 par value; Authorized 15,000,000 shares;
		2,738,596 issued and outstanding as of December 31, 2006 and 2005		27			27
	Additional paid-in capital			65,551			65,551
	Accumulated deficit			(26,796	)		(21,431	)
	Accumulated other comprehensive loss			(6,328	)		(2,718	)
		Total stockholders' equity		32,501			41,476
		Total liabilities and stockholders' equity	$	94,388		$	98,612