- Q1 Revenue up 16%
- Cross Optical Group Revenue up 24%
- Cross Accessory Division Revenue up 10%
- Operating Income improves to $2.1 million from $0.5 million
- EPS grows from $0.01 to $0.10
LINCOLN, R.I., April 28, 2011 (GLOBE NEWSWIRE) -- A.T. Cross Company (Nasdaq:ATX) today announced financial results for the first quarter ended April 2, 2011.
David G. Whalen, President and Chief Executive Officer of A.T. Cross, said, "A. T. Cross delivered an excellent first quarter performance. Revenue growth in both businesses was strong and our bottom line improved significantly. The Cross Accessory Division's (CAD) revenue increased over 10% and the business generated growth in every region of the world. CAD revenue growth, combined with the cost reductions we have put in place over the past several years, resulted in improved operating results for CAD."
Mr. Whalen continued, "The Cross Optical Group (COG) had a powerful first quarter with revenue up from last year by over 24%. Operating income of $2.4 million more than doubled from Q1 2010. Our sunglass business is entering its peak season with momentum and we expect very strong results as we move through the spring."
First Quarter 2011 Results
Consolidated sales for the first quarter of 2011 increased by 15.7% to $39.8 million compared to $34.4 million in the first quarter of 2010. The Cross Accessory Division recorded revenue of $22.8 million, an increase of 10.3%, compared to last year. The Cross Optical segment reported sales of $16.9M, a 24.1% increase compared to last year.
Gross margin in the first quarter was 58.2% compared to 56.8% in last year's first quarter. The expansion of gross margin was driven by COG as its gross margin grew from 55.5% to 59.7%. Both the Costa and Native brands grew margin from the prior year.
Operating expenses were $21.1 million, or 53.0% of sales in the 2011 first quarter, versus $19.0 million, or 55.3% of sales for the same period a year ago.
Operating income in the first quarter of 2011 was $2.1 million, as compared to $0.5 million in the first quarter of last year.
Net income for the first quarter was $1.3 million, or $0.10 per basic and diluted share, compared to net income of $0.2 million, or $0.01 per basic and diluted share, last year.
Mr. Whalen concluded, "A. T. Cross is off to a very strong start. Both businesses are executing their strategies and plans with precision. We are excited about the direction in which the Company is moving and expect further gains as 2011 moves forward."
Guidance
In February, the Company provided 2011 guidance of earnings between $0.56 and $0.60 per share. Given first quarter results, the Company is now guiding to the top end of that range. The guidance will be reviewed again in July once the peak sunglass season concludes.
Conference Call
The Company's management will host a conference call today, April 28, 2011 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 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 operating results for COG during the spring season 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 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 April 28, 2011. 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 | ||
| April 2, 2011 | April 3, 2010 | |
| Net sales | $ 39,782 | $ 34,373 |
| Cost of goods sold | 16,627 | 14,854 |
| Gross Profit | 23,155 | 19,519 |
| Selling, general and administrative expenses | 18,952 | 16,700 |
| Service and distribution costs | 1,579 | 1,628 |
| Research and development expenses | 571 | 665 |
| Operating Income | 2,053 | 526 |
| Interest and other expense | (190) | (277) |
| Income Before Income Taxes | 1,863 | 249 |
| Income tax provision | 605 | 75 |
| Net Income | $ 1,258 | $ 174 |
| Net Income per Share: | ||
| Basic | $ 0.10 | $ 0.01 |
| Diluted | $ 0.10 | $ 0.01 |
| Weighted Average Shares Outstanding: | ||
| Basic | 12,113 | 13,269 |
| Diluted | 12,891 | 13,355 |
| Three Months Ended | ||
| April 2, 2011 | April 3, 2010 | |
| Segment Data: | ||
| Cross Accessory Division | ||
| Net Sales | $ 22,840 | $ 20,716 |
| Operating Loss | (323) | (591) |
| Cross Optical Group | ||
| Net Sales | $ 16,942 | $ 13,657 |
| Operating Income | 2,376 | 1,117 |
| A. T. CROSS COMPANY | ||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||
| (in thousands, unaudited) | ||
| April 2, 2011 | April 3, 2010 | |
| Assets | ||
| Cash and cash equivalents | $ 8,132 | $ 10,015 |
| Short-term investments | 803 | 0 |
| Accounts receivable | 29,850 | 24,958 |
| Inventories | 37,772 | 30,367 |
| Deferred income taxes | 5,584 | 4,351 |
| Other current assets | 5,716 | 7,240 |
| Total Current Assets | 87,857 | 76,931 |
| Property, plant and equipment, net | 14,595 | 15,601 |
| Goodwill | 15,279 | 15,279 |
| Intangibles and other assets | 12,172 | 11,650 |
| Deferred income taxes | 11,302 | 10,936 |
| Total Assets | $ 141,205 | $ 130,397 |
| Liabilities and Shareholders' Equity | ||
| Short-term debt | $ 0 | $ 15,221 |
| Accounts payable and other current liabilities | 24,717 | 21,685 |
| Retirement plan obligations | 2,361 | 2,198 |
| Income taxes payable | 2,443 | 243 |
| Total Current Liabilities | 29,521 | 39,347 |
| Long-term debt | 19,221 | 0 |
| Retirement plan obligations | 14,341 | 13,573 |
| Deferred gain on sale of real estate | 2,607 | 3,129 |
| Other long-term liabilities | 495 | 1,042 |
| Accrued warranty costs | 1,339 | 1,467 |
| Shareholders' equity | 73,681 | 71,839 |
| Total Liabilities and Shareholders' Equity | $ 141,205 | $ 130,397 |