Rock of Ages Divests N.J. Retail

CONCORD, N.H. – Rock of Ages Corp. (ROAC) announced in early January that it sold four New Jersey retail locations, and also continued good sales of granite to China.
The quarrier/producer/retailer sold the four stores for approximately $850,000 in cash to the owner that originally sold three of the properties to the company in 1999. ROAC expected to report a gain on the sale in the current quarter of approximately $100,000.
“While the sale of these four locations will reduce revenue in our retail group by approximately $2.5 to $3 million annually, the locations lost money in 2003 and 2005, and the profit in 2004 represented less than a three-percent EBIT (earnings before interest and tax) margin,” said ROAC Chairman/CEO Kurt Swenson “We determined that these stores will not deliver the minimum 15-percent EBIT margin we require going forward.
“We expect that profitability in our retail group will improve in 2006 and beyond as a result of this sale and the many operating enhancements we announced in November,” he added.
The four New Jersey locations will be Rock of Ages authorized retailers, and the owner agreed to purchase a minimum of $200,000 of memorials annually from the ROAC’s manufacturing division for five years.
Swenson also reported that sales of granite blocks to China in the company’s fourth quarter are expected to be approximately $3.4 million.
“This is about 15-percent below sales to China in the fourth quarter of last year, but it represents a dramatic improvement from the first three quarters of 2005, when granite block sales to China were down by 50 percent or more each quarter,” he said. “This improvement in the fourth quarter is an encouraging development that is consistent with our belief that sales to China may be recovering from the cyclically depressed level we experienced there this year, a downturn which accounts for nearly the entire decline in revenue and the preponderance of the decline in earnings in our quarry segment for 2005.”