A.T. Cross Company Reports Third Quarter Results

Wed Oct 24, 2012 4:00pm EDT

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  • Third Quarter EPS of $0.15 is unchanged from 2011
  • Year-to-date 2012 EPS of $0.56, an increase of 14.3% from 2011
  • Revenue decreased 1% from the third quarter of 2011, year-to-date revenue increased 2.1%
  • Company repurchased $2.2 million of its common stock during the first nine months of 2012
  • Company reiterates 2012 EPS guidance of $0.70 to $0.75 per share

LINCOLN, R.I., Oct. 24, 2012 (GLOBE NEWSWIRE) -- A.T. Cross Company (Nasdaq:ATX) today announced financial results for the third quarter ended September 29, 2012.

David G. Whalen, President and Chief Executive Officer of A.T. Cross said, "Our third quarter performance kept us on track to deliver our 2012 EPS guidance. The Cross Optical Group continued to perform well and is expected to grow revenue 13% and deliver more than 15% operating margin in the full year 2012. The Cross Accessory Division, however, despite growth in the Americas and Asia was challenged in the European markets. Due to the programs that we have put in place, we believe that the Accessory Division trend will improve during the important fourth quarter selling season. On a consolidated basis, A.T. Cross continues to generate strong cash from operations, buy back stock and stay focused on creating shareholder value."

Third Quarter 2012 Results

Consolidated revenue for the third quarter of 2012 decreased 0.9% to $43.4 million compared to $43.8 million in the third quarter of 2011. The Cross Optical Group (COG) had third quarter revenue of $19.5 million, an 8.0% increase compared to last year. The Cross Accessory Division (CAD) had third quarter revenue of $23.9 million, a 7.2% decrease compared to $25.8 million last year.

Gross margin in the quarter was 53.3%, compared to last year's third quarter gross margin of 53.7%.

Operating income in the quarter was $2.6 million, as compared to $3.0 million in the third quarter of last year.

Net income for the third quarter was $2.0 million, or $0.15 per diluted share, compared to $1.9 million, or $0.15 per diluted share, last year.

Year-To-Date 2012 Results

Consolidated revenue for the first nine months of 2012 increased by 2.1% to $134.1 million compared to $131.4 million for the same period of 2011. CAD revenue was $67.2 million, 6.3% lower compared to last year, while COG revenue grew 12.2% to $66.9 million from $59.7 million in 2011.

Gross margin for the nine months of 2012 was 55.6% or 80 basis points below the 2011 nine month period.

Year-to-date operating income was $10.6 million or 6.5% higher than the 2011 operating income of $10.0 million.

Stock Repurchase

In the third quarter, the Company repurchased $0.7 million of its Class A common stock. Year-to-date, the Company has repurchased $2.2 million of its Class A common stock.

Guidance

The Company is reiterating its 2012 earnings per share guidance of $0.70 to $0.75 per share.

Conference Call

The Company's management will host a conference call today, October 24, 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 fourth quarter 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 October 24, 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) 
(unaudited) 
         
  Three Months Ended  Nine Months Ended 
  September 29,  October 1,  September 29,  October 1, 
  2012  2011  2012  2011 
         
Net sales   $ 43,396  $ 43,809  $ 134,149  $ 131,359
Cost of goods sold   20,249  20,300  59,618  57,288
Gross Profit   23,147  23,509  74,531  74,071
         
Selling, general and administrative expenses   17,699  17,396  55,528  56,069
Service and distribution costs   2,123  2,325  6,338  6,020
Research and development expenses   679  746  2,055  2,024
Operating Income   2,646  3,042  10,610  9,958
Interest and other expense   (147)  (657)  (558)  (1,010)
Income Before Income Taxes   2,499  2,385  10,052  8,948
Income tax provision   460  440  2,814  2,579
Net Income   $ 2,039  $ 1,945  $ 7,238  $ 6,369
         
Net Income per Share:         
Basic  $ 0.16  $ 0.16  $ 0.59  $ 0.52
Diluted  $ 0.15  $ 0.15  $ 0.56  $ 0.49
         
Weighted Average Shares Outstanding:         
Basic  12,729  12,244  12,357  12,183
Diluted  13,326  13,040  12,978  12,975
         
   
   
     
  Three Months Ended  Nine Months Ended 
  September 29,  October 1,  September 29,  October 1, 
   2012   2011   2012  2011 
Segment Data: Cross Accessory Division         
Net Sales   $ 23,947  $ 25,795  $ 67,197 $ 71,681
Operating Income (Loss)   182  786  (980)  (63)
         
Segment Data: Cross Optical Group         
Net Sales   $ 19,449  $ 18,014  $ 66,952 $ 59,678
Operating Income   2,464  2,256  11,590  10,021
         
 
A. T. CROSS COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, unaudited)
     
     
  September 29, 2012 October 1, 2011
Assets    
Cash and cash equivalents  $ 20,599  $ 13,184
Short-term investments 226 367
Accounts receivable 29,650 29,507
Inventories 39,449 43,787
Deferred income taxes 3,930 4,074
Other current assets 7,963 6,843
Total Current Assets 101,817 97,762
     
Property, plant and equipment, net 14,165 14,253
Goodwill 15,279 15,279
Intangibles and other assets 10,566 11,742
Deferred income taxes 11,325 9,820
     
Total Assets  $ 153,152  $ 148,856
     
Liabilities and Shareholders' Equity    
Line of credit  $ 17,000  $ 0
Accounts payable and other current liabilities 25,475 23,775
Retirement plan obligations 2,600 2,452
Income taxes payable 1,299 1,167
Total Current Liabilities 46,374 27,394
     
Long-term debt 0 21,221
Retirement plan obligations 17,974 14,501
Deferred gain on sale of real estate 1,825 2,346
Other long-term liabilities 469 452
Accrued warranty costs 1,347 1,578
Shareholders' equity 85,163 81,364
     
Total Liabilities and Shareholders' Equity  $ 153,152  $ 148,856
     
CONTACT: Company 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
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