- Q1 2013 net sales increased 6%
- Q1 2013 operating income increased 10%
- Q1 2013 EPS increased from $0.12 to $0.13
- Cross Optical Group revenue and operating income increased 19% and 29%, respectively
LINCOLN, R.I., April 25, 2013 (GLOBE NEWSWIRE) -- A.T. Cross Company (Nasdaq:ATX) today announced financial results for the first quarter ended March 30, 2013.
David G. Whalen, President and Chief Executive Officer of A.T. Cross said, "A. T. Cross continued to grow in the first quarter of 2013 with revenue up 6% and operating income higher by 10%. The Cross Optical Group (COG) continued its strong performance as its revenue and operating income increased 19% and 29%, respectively. As our sunglass business enters its peak selling season, it is clear that it has maintained its momentum from 2012 and we expect a strong performance as we move through the spring."
Mr. Whalen continued, "The Cross Accessory Division's (CAD) revenue declined 6% in the first quarter. Two-thirds of the decline was related to the substantially weaker Japanese Yen and decreased sales of low margin discontinued product. Having said that, while our trend in the European market improved in Q1, we did experience softness in the America and Asia markets which we are addressing."
First Quarter 2013 Results
Sales for the first quarter of 2013 increased by 5.9% to $44.4 million compared to $41.9 million in the first quarter of 2012. The Cross Optical Group reported sales of $23.8 million, an increase of 19.1% compared to last year's first quarter. The Cross Accessory Division recorded revenue of $20.6 million, down 6.2% from last year.
Gross margin was 56.1% in 2013, versus 56.2% in 2012.
Operating expenses were $22.3 million, or 50.2% of sales in the 2013 first quarter, versus $21.2 million, or 50.5% of sales for the same period a year ago.
Operating income in the first quarter of 2013 was $2.6 million, compared to $2.4 million in the first quarter of last year.
Net income for the first quarter was $1.6 million, or $0.13 per diluted share, compared to net income of $1.5 million, or $0.12 per diluted share, last year.
Strategic Alternatives
On February 4, 2013, the Company announced that it is exploring strategic alternatives for its Cross Accessory Division. Costs associated with the process totaled approximately $240,000, or $0.01 per share, in the first quarter of 2013.
Guidance
In January, the Company provided 2013 guidance of earnings between $0.78 and $0.82 per share. The Company is confirming that guidance. 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 25, 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. 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 premium sports 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 Eyewear website at www.nativeyewear.com.
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 the continued success of the Optical Group's business model, the expectation that CAD will address revenue weakness in Asia, the potential effect of economic uncertainty on consumer confidence and, consumers' willingness to continue to participate in the writing instrument category and to purchase discretionary items. These forward-looking statements 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 25, 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.
| A. T. CROSS COMPANY | ||||
| CONSOLIDATED STATEMENTS OF INCOME | ||||
| (in thousands, except per share amounts) | ||||
| (unaudited) | ||||
| Three Months Ended | ||||
| March 30, 2013 | March 31, 2012 | |||
| Net sales | $44,401 | $41,946 | ||
| Cost of goods sold | 19,476 | 18,376 | ||
| Gross Profit | 24,925 | 23,570 | ||
| Selling, general and administrative expenses | 19,600 | 18,475 | ||
| Service and distribution costs | 2,000 | 2,048 | ||
| Research and development expenses | 707 | 660 | ||
| Operating Income | 2,618 | 2,387 | ||
| Interest and other expense | (132) | (132) | ||
| Income Before Income Taxes | 2,486 | 2,255 | ||
| Income tax provision | 846 | 717 | ||
| Net Income | $1,640 | $1,538 | ||
| Net Income per Share: | ||||
| Basic | $ 0.13 | $ 0.13 | ||
| Diluted | $ 0.13 | $ 0.12 | ||
| Weighted Average Shares Outstanding: | ||||
| Basic | 12,246 | 12,288 | ||
| Diluted | 12,979 | 12,893 | ||
| Three Months Ended | ||||
| March 30, 2013 | March 31, 2012 | |||
| Segment Data: Cross Accessory Division | ||||
| Net Sales | $20,565 | $21,929 | ||
| Operating Loss | (1,066) | (462) | ||
| Segment Data: Cross Optical Group | ||||
| Net Sales | $23,836 | $20,017 | ||
| Operating Income | 3,684 | 2,849 | ||
| A. T. CROSS COMPANY | ||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||
| (in thousands, unaudited) | ||
| March 30, 2013 | March 31, 2012 | |
| Assets | ||
| Cash and cash equivalents | $12,630 | $14,817 |
| Short-term investments | 271 | 202 |
| Accounts receivable | 34,106 | 32,173 |
| Inventories | 42,391 | 40,354 |
| Deferred income taxes | 3,409 | 4,154 |
| Other current assets | 8,933 | 7,476 |
| Total Current Assets | 101,740 | 99,176 |
| Property, plant and equipment, net | 13,964 | 13,206 |
| Goodwill | 15,279 | 15,279 |
| Intangibles and other assets | 10,308 | 11,151 |
| Deferred income taxes | 10,994 | 10,894 |
| Total Assets | $152,285 | $149,706 |
| Liabilities and Shareholders' Equity | ||
| Accounts payable and other current liabilities | $25,150 | $25,205 |
| Line of credit | 15,000 | 0 |
| Retirement plan obligations | 2,577 | 2,405 |
| Income taxes payable | 178 | 267 |
| Total Current Liabilities | 42,905 | 27,877 |
| Long-term debt | 0 | 18,221 |
| Retirement plan obligations | 19,737 | 19,703 |
| Deferred gain on sale of real estate | 1,564 | 2,086 |
| Other long-term liabilities | 706 | 473 |
| Accrued warranty costs | 1,256 | 1,430 |
| Shareholders' equity | 86,117 | 79,916 |
| Total Liabilities and Shareholders' Equity | $152,285 | $149,706 |