Biggest Loser of the Day: Rock of Ages Corp.

Rock of Ages Corporation (NASDAQ:ROAC) shares are down 20% today, now trading under $2 and despite the company being around since 1885, I can't get past the name.  Que the tight white pants, freshen up your mullet, and let's get to it. 

Rock of Ages Corporation is an "integrated granite quarrier and manufacturer" whose principal product is granite memorials used primarily in cemeteries.

It's been a tough year for ROAC, shares are down 62%.  Don't confuse ROAC for the Russian Orthodox Autonomous Church of America, it happens. 

Strike 2 on the company name, 1st Def Leppard, now we throw in the Russian Orthodox community, didn't anyone running the company Google themselves since 1885?

Did you lose interest already, I know I almost did, hold on. 

Rock on, Rock on...

Let's get serious here, before we go any further, just take one look at how many shares of ROAC trade on a daily basis:

Why even bother, there's no point on this stock, besides, we wear short, shorts.

No, you wear short, shorts!

God Bless the 80's.

Right, but Rock of Ages, sorry.

Hold on, insiders of Rock of Ages own 50% of the stock, if they want shares to move, they can do it.

They have been increasing revenue (see below) and even made a profit last quarter, but let's face it, they aren't a growth company.

Here's what the CEO said last month:

"Gross profit in our quarries rose 26% to $3,411,000 compared to $2,706,000 and gross profit margin increased by four full percentage points to 40% for the third quarter of 2008 compared to the third quarter of 2007, as we began to reap the benefits we anticipated from our investments in new diamond wire saw technology and other production improvements we implemented earlier this year," said Chief Executive Officer Donald Labonte. "Demand for our granites remains strong, and we are optimistic about the outlook for our quarries in the fourth quarter."

Rock of Ages' manufacturing division reported a 36% increase in revenue for this year's third quarter compared to last year, primarily driven by sales to the Company's formerly owned retail outlets which are now included in manufacturing revenue. Gross profit increased 28% to $2,523,000 compared to $1,966,000, while gross margin decreased to 31% from 33% because fewer high-margin mausoleums were sold this year than last. "We believe that uncertainty in the financial markets led to the postponement of mausoleum orders from several pre-need customers," Labonte said.

Unallocated corporate overhead and interest expense each decreased 33% for the third quarter of 2008 compared to last year's third quarter. "We are on track to meet our previously disclosed targets for unallocated corporate overhead of approximately $3,800,000 and interest expense of approximately $1,400,000 million for 2008. So far this year, we have reduced total debt by approximately $6 million, and we anticipate a further reduction in the fourth quarter," Labonte added.

"While slower mausoleum sales will likely result in lower operating income in the manufacturing division for 2008 versus 2007, we continue to believe the strong performance of the quarrying division means that divisional operating income from continuing operations for 2008 will exceed 2007. In addition, as a result of sharply reduced overhead and interest expense, we expect to report much improved income from continuing operations for 2008 as compared to 2007," Labonte concluded.

Okay, rock on again, this time sticky sweet!

Disclaimer: No positions in ROAC.