With a name like Rock of Ages Corporation (NASDAQ: ROAC), you know the company must be a tombstone and memorial marker maker. Correct. But the company also supplies granite for products unrelated to memorial purposes, such as countertops, landscape and/or sidewalk designs, and various types of plaques and awards. The company operates its own quarry in New England, and has spent the last year restructuring itself back towards profitability. A combination of cost control measure plus enhanced productivity initiatives seems to be helping Rock of Ages carve a niche for itself in the granite products industry. In recent 2Q 2007 earnings, CEO Kurt Swenson stated the company will return to profitability for 2007 as a whole. If the recent quarter is any indication, Swenson is correct. Rock of Ages narrowed its losses by 60% in the first half of 2007. The company posted revenues of $3.9 million in 2Q 2007, very welcome news from the $307,000 net loss posted in 2Q 2006.

Profit margins are up and the company's retail backlog is up by almost $1 million, meaning it has more work coming in that it can handle immediately. Gross profit increased almost 20% for the quarter, with all three business segments - quarry operations, manufacturing (products) and retail sales (memorials) - posting double digit profit margins. Winter weather stayed late this spring, so the company lost some ground due to inability to fully utilize quarry operations. But the introduction of more efficient equipment means the company can make up some of that loss. Administrative expenses declined and the company did not incur any additional restructuring charges this quarter. Income from continuing operations was a healthy $0.53 per diluted share, a vast improvement over a $0.04 diluted share loss one year ago. The stock currently trades at just under $6 per share. Every portfolio needs a few oddball investments. This one qualifies as that.

Rock of Ages (ROAC) not quite rock solid yet originally appeared on BloggingStocks on Thu, 30 Aug 2007 17:29:00 EST. Please see our terms for use of feeds.

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Analyst downgrades 3-14-07: Fore! Golfsmith cut to Neutral at JP Morgan originally appeared on BloggingStocks on Wed, 14 Mar 2007 11:23:00 EST. Please see our terms for use of feeds.