Rock of Ages sells four N.J. stores
Rock of Ages Corporation has sold its four retail locations in New Jersey in a cash deal worth $850,000. Three of the stores were acquired by the stores’ original owner, which sold them in 1999.
The Concord-based headstone and granite products producer said it expects to realize a $100,000 gain from the sale in the first quarter of 2006.
“While the sale of these four locations will reduce revenue in our retail group by approximately $2.5 million to $3 million annually, the locations lost money in 2003 and 2005, and the profit in 2004 represented less than a 3 percent EBIT (earnings before interest and taxes) margin,” said Kurt Swenson, Rock of Ages’ chairman and CEO. “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.”
Swenson added that, as part of the sales agreement, the four New Jersey locations will be authorized retailers of Rock of Ages products and that the owner also has agreed to purchase a minimum of $200,000 in memorials annually from the company’s manufacturing division for five years.
In other company news, Swenson said that granite sales to China in the fourth quarter of 2005 totaled $3.4 million, about 15 percent below sales in the fourth quarter of 2004.
“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. 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,” he said. — CINDY KIBBE