A.T. Cross Company Reports Second Quarter Results
- EPS increased 17% from $0.24 in 2011 to $0.28 in 2012
- Sales increased 2.2% to $48.8 million
- Operating income increased 14.9%
- Net cash grew $12.3 million
- Company repurchased $1.5 million of its common stock during the six months ended June 30, 2012
- Company reiterates 2012 EPS guidance of $0.70 to $0.75 per share
LINCOLN, R.I., July 25, 2012 (GLOBE NEWSWIRE) -- A.T. Cross Company (Nasdaq:ATX) today announced financial results for the second quarter ended June 30, 2012.
David G. Whalen, President and Chief Executive Officer of A.T. Cross said, "A.T. Cross delivered a good second quarter performance. Our business grew 2% and our net income improved 16% as we continued to generate operating leverage from increased sales. For the first six months of 2012, sales increased 4%; operating earnings increased 15% and net cash when compared to the second quarter of 2011 increased by over $12 million. I view this performance as a fine start to the year in light of all that is going on with the world economies, particularly Europe."
Second Quarter 2012 Results
Consolidated sales for the second quarter of 2012 increased by 2.2% to $48.8 million compared to $47.8 million in the second quarter of 2011. The Cross Optical Group (COG) reported second quarter sales of $27.5 million, an 11.2% increase compared to last year. The Cross Accessory Division (CAD) recorded sales of $21.3 million, a 7.5% decrease, compared to $23.0 million last year.
Gross margin in the quarter was 57.0%, compared to last year's second quarter gross margin of 57.4%.
Operating income in the quarter increased 14.9% to $5.6 million as compared to $4.9 million in the second quarter of last year.
Net income for the second quarter was $3.7 million, or $0.28 per diluted share, compared to $3.2 million, or $0.24 per diluted share, last year.
Year-To-Date 2012 Results
Consolidated sales for the first six months of 2012 increased by 3.7% to $90.8 million compared to $87.6 million for the same period of 2011. CAD recorded sales of $43.3 million, 5.7% lower as compared to last year while COG's sales grew 14.0% to $47.5 million from 2011's $41.7 million.
Gross margin for the six months of 2012 was 56.6% or 120 basis points below the 2011 six month period.
Year-to-date operating income was $8.0 million or 15.2% higher than the 2011 operating income of $6.9 million.
Mr. Whalen continued, "A.T. Cross delivered a solid first half of the year. The Cross Optical Group generated a 17.5% profit increase on a 14.0% sales improvement, as the strategies we have put in place to build our sunglass business are working well. As for the Cross Accessory Division, the business continued to be affected primarily by the economic problems in Europe. For the first six months, the Division's revenue was off 6% with the Americas and Asia growing, and business in Europe significantly declining. We expect this performance to improve, as we move into the peak season for our writing instrument business."
In the second quarter, the Company repurchased $0.9 million of its Class A common stock. Year-to-date, the Company has repurchased $1.5 million of its Class A common stock.
The Company is reiterating its 2012 earnings per share guidance of $0.70 to $0.75 per share.
The Company's management will host a conference call today, July 25, 2012 at 4:30 PM Eastern Time. Parties interested in participating in the conference call may dial-in at (877) 303-2912, while international callers may dial-in at (408) 427-3877. The conference call will be webcast and can be accessed at www.cross.com. A replay of the webcast will be archived on the Company's website for 60 days.
About A.T. Cross Company
Building on the rich tradition of its award-winning writing instruments and reputation for innovation and craftsmanship, A.T. Cross Company is a designer and marketer of branded personal and business accessories. A.T. Cross provides a range of distinctive products that appeal to a growing market of consumers seeking to enhance their image and facilitate their lifestyle. A.T. Cross products, including award-winning Cross-branded quality writing instruments, timepieces, business accessories and Costa and Native Eyewear sunglasses, are distributed in retail and corporate gift channels worldwide. For more information, visit the A.T. Cross website at www.cross.com, the Costa website at www.costadelmar.com and the Native website at www.nativeyewear.com.
The A.T. Cross Company logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=5932
Statements contained in this release that are not historical facts are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 (including but not limited to statements relating to the expected continued operating results for COG and CAD during the second half of 2012 and the expected overall results for A.T. Cross). In addition, words such as "believes," "anticipates," "expects," and similar expressions are intended to identify forward-looking statements. These forward-looking statements are subject to risks and uncertainties, including but not limited to the potential effect of both domestic and international economic issues, particularly in Europe, on consumer confidence, as well as consumer preferences and consumers' willingness to purchase discretionary items, and are not guarantees since there are inherent difficulties in predicting future results. Actual results could differ materially from those expressed or implied in the forward-looking statements. The information contained in this document is as of July 25, 2012. The Company assumes no obligation to update any forward-looking statements contained in this document as a result of new information or future events or developments. Additional discussion of factors that could cause actual results to differ materially from management's expectations is contained in the Company's filings under the Securities Exchange Act of 1934.
|A. T. CROSS COMPANY|
|CONSOLIDATED STATEMENTS OF INCOME|
|(in thousands, except per share amounts)|
|Three Months Ended||Six Months Ended|
|June 30,||July 2,||June 30,||July 2,|
|Net sales||$ 48,807||$47,768||$90,753||$87,550|
|Cost of goods sold||20,993||20,371||39,369||36,988|
|Selling, general and administrative expenses||19,354||19,721||37,829||38,673|
|Service and distribution costs||2,167||2,116||4,215||3,695|
|Research and development expenses||716||707||1,376||1,278|
|Interest and other expense||(279)||(163)||(411)||(353)|
|Income Before Income Taxes||5,298||4,690||7,553||6,563|
|Income tax provision||1,637||1,531||2,354||2,139|
|Net Income||$ 3,661||$ 3,159||$ 5,199||$ 4,424|
|Net Income per Share:|
|Basic||$ 0.30||$ 0.26||$ 0.42||$ 0.36|
|Diluted||$ 0.28||$ 0.24||$ 0.40||$ 0.34|
|Weighted Average Shares Outstanding:|
|Three Months Ended||Six Months Ended|
|June 30||July 2,||June 30||July 2,|
|Segment Data: Cross Accessory Division|
|Net Sales||$ 21,321||$23,046||$43,250||$45,886|
|Segment Data: Cross Optical Group|
|Net Sales||$ 27,486||$24,722||$47,503||$41,664|
|A. T. CROSS COMPANY|
|CONDENSED CONSOLIDATED BALANCE SHEETS|
|(in thousands, unaudited)|
|June 30, 2012||July 2, 2011|
|Cash and cash equivalents||$ 22,615||$ 12,775|
|Deferred income taxes||4,161||4,450|
|Other current assets||7,554||6,515|
|Total Current Assets||106,982||99,481|
|Property, plant and equipment, net||12,909||14,258|
|Intangibles and other assets||11,295||12,099|
|Deferred income taxes||10,773||10,591|
|Total Assets||$ 157,238||$151,708|
|Liabilities and Shareholders' Equity|
|Accounts payable and other current liabilities||$ 29,055||$ 27,420|
|Retirement plan obligations||2,452||2,401|
|Income taxes payable||1,313||2,266|
|Total Current Liabilities||32,820||32,087|
|Retirement plan obligations||19,258||14,380|
|Deferred gain on sale of real estate||1,955||2,477|
|Other long-term liabilities||482||506|
|Accrued warranty costs||1,386||1,422|
|Total Liabilities and Shareholders' Equity||$ 157,238||$151,708|
CONTACT: Kevin F. Mahoney Senior Vice President, Finance and Chief Financial Officer 401-335-8470 Investor Relations: Dave Mossberg Three Part Advisors, LLC 817-310-0051