A.T. Cross Company Reports Fourth Quarter and Fiscal 2012 Results
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http://pdf.reuters.com/htmlnews/8knews.asp?i=43059c3bf0e37541&u=urn:newsml:reuters.com:20130220:nGNXUXFCTa * 2012 net sales increased 3% to $181 million * 2012 EPS increased 9% to $0.70 vs. $0.64 in 2011 * 4Q2012 net sales and operating income increased 7% and 28%, respectively * 4Q2012 Cross Optical Group sales and operating income grew 27% and 126%, respectively * 2013 EPS guidance $0.78 to $0.82 LINCOLN, R.I., Feb. 20, 2013 (GLOBE NEWSWIRE) -- A.T. Cross Company (Nasdaq:ATX) today announced financial results for the fourth quarter and full year ended December 29, 2012. David G. Whalen, President and Chief Executive Officer of A.T. Cross said, "In 2012, we grew revenue and leveraged it to even greater profit growth. Driving performance in 2012 continued to be the Cross Optical Group (COG). In 2012 COG grew revenue by 14.9% to $83.3 million and grew its operating income by 24% to $13.4 million. Importantly, in what is often an uneventful quarter, COG had its strongest fourth quarter to date, growing revenue by 27% and operating income by 126%. The COG business entered 2013 with significant momentum." Mr. Whalen continued, "The Cross Accessory Division's (CAD) revenue declined by 4.8% in 2012. As discussed last year, we had originally expected flat year-over-year performance based upon stable economic conditions in Europe. As European economic conditions worsened, sales in that region declined 17% and were only partially offset by 3% increases in both the Americas and Asia regions. For 2013 we expect increasingly positive revenue performance in all three regions and success in extending the Cross brand into adjacent categories." Fourth Quarter 2012 Results Net sales for the fourth quarter of 2012 increased by 7.1% to $46.4 million compared to $43.3 million in the fourth quarter of 2011. The Cross Optical Group (COG) reported fourth quarter sales of $16.3 million, a 27.3% increase compared to last year. COG's operating income grew 126% from $0.8 million to $1.9 million. The Cross Accessory Division (CAD) recorded sales of $30.0 million, a 1% decline from 2011. Gross margin in the quarter was 53.4%, 40 basis points higher than last year's fourth quarter. Consolidated operating income of $2.7 million was 27.7% higher than 2011. Net income for the fourth quarter was $1.9 million, or $0.14 per share, compared to $1.9 million, or $0.15 per share, last year. The effective tax rate in the fourth quarter of 2012 was 29.4% vs. 11.8% for the same period last year. 2012 Results Consolidated sales for the full year 2012 increased by 3.4% to $180.5 million compared to $174.6 million in 2011. CAD recorded sales of $97.2 million, a 4.8% decline versus 2011. COG sales grew 14.9% to $83.3 million from $72.5 million in 2011. Gross margin for the year was 55.0%, down 60 basis points in comparison with last year's gross margin of 55.6%. Operating expenses increased by $1.0 million, or 1.2%, to $86.0 million as compared to $85.0 million last year. As a percentage of sales, operating expenses improved by 100 basis points to 47.7% of sales. Net income for 2012 increased 10.1% to $9.1 million, or $0.70 per share, compared to $8.3 million, or $0.64 per share, last year. The effective tax rate for 2012 was 28.3% versus 25.5% in 2011. Strategic Alternatives On February 4, 2013, the Company announced that it is exploring strategic alternatives for its Cross Accessory Division. Guidance The Company reiterated its previously announced 2013 earnings guidance of between $0.78 to $0.82 per share. Conference Call The Company's management will host a conference call today, February 20, 2013 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 http://www.globenewswire.com/newsroom/ctr?d=10022474&l=19&a=www.cross.com&u=http%3A%2F%2Fwww.cross.com%2F . 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 quality writing instruments, timepieces, non prescription reading glasses, 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 http://www.globenewswire.com/newsroom/ctr?d=10022474&l=21&a=www.cross.com&u=http%3A%2F%2Fwww.cross.com%2F , the Costa website at www.costadelmar.com http://www.globenewswire.com/newsroom/ctr?d=10022474&l=21&a=www.costadelmar.com&u=http%3A%2F%2Fwww.costadelmar.com%2F and the Native website at www.nativeyewear.com http://www.globenewswire.com/newsroom/ctr?d=10022474&l=21&a=www.nativeyewear.com&u=http%3A%2F%2Fwww.nativeyewear.com%2F . The A.T. Cross Company logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=5932 http://www.globenewswire.com/newsroom/ctr?d=10022474&l=22&u=http%3A%2F%2Fwww.globenewswire.com%2Fnewsroom%2Fprs%2F%3Fpkgid%3D5932 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 exploration of strategic alternatives for the Cross Accessory Division and the overall continued 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, in particular, international economic issues on consumer confidence, as well as 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 February 20, 2013. 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. (Tables to follow) A. T. CROSS COMPANY CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per share amounts) (unaudited) Three Months Ended Twelve Months Ended December 29, December 31, December 29, December 31, 2012 2011 2012 2011 Net sales $ 46,359 $ 43,278 $ 180,508 $ 174,637 Cost of goods sold 21,580 20,325 81,198 77,613 Gross Profit 24,779 22,953 99,310 97,024 Selling, general and administrative expenses 19,626 18,382 75,154 74,451 Service and distribution costs 1,836 1,810 8,174 7,830 Research and development expenses 653 673 2,708 2,697 Operating Income 2,664 2,088 13,274 12,046 Interest and other income (expense) 43 113 (515) (897) Income Before Income Taxes 2,707 2,201 12,759 11,149 Income tax provision 797 260 3,611 2,839 Net Income $ 1,910 $ 1,941 $ 9,148 $ 8,310 Net Income per Share: Basic $ 0.15 $ 0.16 $ 0.74 $ 0.68 Diluted $ 0.14 $ 0.15 $ 0.70 $ 0.64 Weighted Average Shares Outstanding: Basic 12,612 12,229 12,335 12,195 Diluted 13,323 13,026 13,049 13,005 Three Months Ended Twelve Months Ended December 29, December 31, December 29, December 31, 2012 2011 2012 2011 Segment Data: Cross Accessory Division Net Sales $ 30,025 $ 30,450 $ 97,222 $ 102,131 Operating Income (Loss) 809 1,268 (171) 1,205 Segment Data: Cross Optical Group Net Sales $ 16,334 $ 12,828 $ 83,286 $ 72,506 Operating Income 1,855 820 13,445 10,841 A. T. CROSS COMPANY CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, unaudited) December 29, 2012 December 31, 2011 Assets Cash and cash equivalents $ 27,120 $ 25,991 Short-term investments 227 0 Accounts receivable 32,877 29,110 Inventories 38,020 36,482 Deferred income taxes 3,417 4,206 Other current assets 8,072 7,954 Total Current Assets 109,733 103,743 Property, plant and equipment, net 14,376 13,706 Goodwill 15,279 15,279 Intangibles and other assets 10,381 11,572 Deferred income taxes 11,570 11,115 Total Assets $ 161,339 $ 155,415 Liabilities and Shareholders' Equity Accounts payable and other current liabilities $ 34,531 $ 26,614 Line of credit 15,000 0 Retirement plan obligations 2,731 2,508 Income taxes payable 567 712 Total Current Liabilities 52,829 29,834 Long-term debt 0 21,221 Retirement plan obligations 19,808 22,636 Deferred gain on sale of real estate 1,695 2,216 Other long-term liabilities 662 464 Accrued warranty costs 1,267 1,391 Shareholders' equity 85,078 77,653 Total Liabilities and Shareholders' Equity $ 161,339 $ 155,415 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