- Sales Grow 11.5%
- Operating Income Improves $2.6 Million Compared to Prior Year
- Earnings of $0.01 in First Quarter 2010 Versus Loss of $0.06 in 2009
LINCOLN, R.I., April 22, 2010 (GLOBE NEWSWIRE) -- A.T. Cross Company (Nasdaq:ATX) today announced financial results for the first quarter ended April 3, 2010.
David G. Whalen, President and Chief Executive Officer of A.T. Cross, said, "We are very pleased with our first quarter performance. Revenue growth was strong and our bottom line improved dramatically. In the Cross Accessory Division, we saw growth in every region of the world and the business gift segment snapped back with orders and inquiries growing at a double digit rate. Combined with the cost reductions we put in place last year this revenue growth provided significantly improved operating results."
Mr. Whalen continued, "The Cross Optical Group (COG) also had an impressive first quarter with revenue for both Costa and Native up and operating income 44% higher than last year. Our sunglass business is moving into its peak season with momentum and we expect strong results as we move through the spring."
First Quarter 2010 Results
Consolidated sales for the first quarter of 2010 increased by 11.5% to $34.4 million compared to $30.8 million in the first quarter of 2009. The Cross Accessory Division (CAD) recorded revenue of $20.7 million, an increase of 10.4%, compared to last year. The Cross Optical segment reported a first quarter sales increase of 13.1% to $13.7 million, compared to last year. The Optical Group's revenue growth was driven by growth of both the Costa and Native brands.
Gross margin in the first quarter was 56.8% compared to 54.3% in last year's first quarter.
Operating expenses were $19.0 million, or 55.3% of sales in the 2010 first quarter, versus $18.8 million, or 61.1% of sales for the same period a year ago.
Operating income in the quarter was $0.5 million, as compared to an operating loss of $2.1 million in the first quarter of last year.
Net income for the first quarter was $0.2 million, or $0.01 per share, compared to a net loss of $0.9 million, or $0.06 per share, last year. In the first quarter of 2009 previously recorded tax liabilities were released lowering the estimated tax by approximately $0.9 million or $0.06 per share.
Mr. Whalen concluded, "Our year is off to a good start. In 2009, we continued to invest in our strategies and we are now realizing the benefits of that resolve. We are encouraged by our position and will work to enhance it as the year moves forward."
Guidance
As previously announced, the Company has provided 2010 guidance of earnings between $0.33 and $0.35 per share.
Conference Call
The Company's management will host a conference call today, April 22, 2010 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. A live webcast of the call will be accessible on the Company's website at www.cross.com . The webcast will be archived for 30 days on this site, while a telephone replay of the call will be available beginning at 7:30 PM Eastern Time on April 22, 2010 through April 29, 2010 by dialing (800) 642-1687 or (706) 645-9291 for international callers, and entering the pass code of 68607731.
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 Del Mar 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 a lowered cost base and the expected growth of the Company as the economy recovers). 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 effect of the economic crisis 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 22, 2010. 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 OPERATIONS | ||
| (in thousands, except per share amounts) | ||
|
(unaudited) |
||
| Three Months Ended | ||
| April 3, 2010 | April 4, 2009 | |
| Net sales | $34,373 | $30,840 |
| Cost of goods sold | 14,854 | 14,084 |
| Gross Profit | 19,519 | 16,756 |
| Selling, general and administrative expenses | 16,700 | 16,554 |
| Service and distribution costs | 1,628 | 1,612 |
| Research and development expenses | 665 | 619 |
| Restructuring charges | -- | 60 |
| Operating Income (Loss) | 526 | (2,089) |
| Interest and other expense | (277) | (591) |
| Income (Loss) Before Income Taxes | 249 | (2,680) |
| Income tax provision (benefit) | 75 | (1,731) |
| Net Income (Loss) | $174 | $(949) |
| Net Income (Loss) per Share: | ||
| Basic | $ 0.01 | $ (0.06) |
| Diluted | $ 0.01 | $ (0.06) |
| Weighted Average Shares Outstanding: | ||
| Basic | 13,269 | 14,847 |
| Diluted | 13,355 | 14,847 |
| Three Months Ended | ||
| April 3, 2010 | April 4, 2009 | |
| Segment Data: | ||
| Cross Accessory Division | ||
| Net Sales | $ 20,716 | $ 18,765 |
| Operating Loss | (591) | (2,863) |
| Cross Optical Group | ||
| Net Sales | $ 13,657 | $ 12,075 |
| Operating Income | 1,117 | 774 |
| A. T. CROSS COMPANY | ||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||
| (in thousands, unaudited) | ||
| April 3, 2010 | April 4, 2009 | |
| Assets | ||
| Cash and cash equivalents | $ 10,015 | $ 14,227 |
| Short-term investments | 0 | 2,495 |
| Accounts receivable | 24,958 | 22,967 |
| Inventories | 30,367 | 31,191 |
| Deferred income taxes | 4,351 | 4,332 |
| Other current assets | 7,240 | 8,838 |
| Total Current Assets | 76,931 | 84,050 |
| Property, plant and equipment, net | 15,601 | 15,380 |
| Goodwill | 15,279 | 15,279 |
| Intangibles and other assets | 11,650 | 12,913 |
| Deferred income taxes | 10,936 | 11,501 |
| Total Assets | $ 130,397 | $ 139,123 |
| Liabilities and Shareholders' Equity | ||
| Short-term debt | $ 15,221 | $ 0 |
| Accounts payable and other current liabilities | 21,928 | 21,254 |
| Retirement plan obligations | 2,198 | 2,276 |
| Total Current Liabilities | 39,347 | 23,530 |
| Long-term debt | 0 | 21,721 |
| Retirement plan obligations | 13,573 | 14,384 |
| Deferred gain on sale of real estate | 3,129 | 3,650 |
| Other long-term liabilities | 1,042 | 2,023 |
| Accrued warranty costs | 1,467 | 1,332 |
| Shareholders' equity | 71,839 | 72,483 |
| Total Liabilities and Shareholders' Equity | $ 130,397 | $ 139,123 |