LINCOLN, R.I., July 23, 2009 (GLOBE NEWSWIRE) -- A.T. Cross Company (Nasdaq:ATX) today announced financial results for the second quarter ended July 4, 2009.
Net income for the second quarter was $0.6 million or $0.04 per basic and diluted share, compared to net income of $1.9 million or $0.12 per basic and diluted share last year. The net loss for the six-month period ended July 4, 2009 was $0.3 million, or $0.02 per basic and diluted share, compared to $2.5 million of net income, $0.16 per basic and diluted share, for the six-month period ended June 28, 2008. Included in the 2009 six-month results were $0.04 per share of one-time restructuring charges related to the consolidation of the Company's Lincoln manufacturing operations and European support structure.
Consolidated net sales for the second quarter of 2009 declined 13.7% to $37.3 million compared to $43.2 million in the second quarter of 2008. The Cross Accessory Division (CAD) revenue totaled $20.8 million, a decline of 19.8% compared to last year. The Cross Optical Group (COG) revenue totaled $16.5 million, a decline of 4.4% from a year ago. Consolidated net sales for the six months ended July 4, 2009 were $68.1 million, a decline of 14.2% from the prior year. For the first six months of 2009, CAD sales of $39.5 million declined 24.6% from last year. COG sales of $28.6 million improved 5.8% due to the growth of Costa Del Mar and incremental Native Eyewear sales. Native Eyewear, which is part of COG, was acquired in March 2008.
Gross margin in the second quarter of 2009 was 54.7% versus 56.4% last year. Operating expenses were $18.9 million compared to $21.2 million for the same period a year ago. Year-to-date 2009 gross margin was 54.5% compared to 55.8% for the comparable period last year. Changes in foreign exchange rates negatively impacted gross margins by 180 basis points in the first half of 2009 compared to 2008. Operating expenses for the six-month period were $37.8 million, including $0.8 million of restructuring charges, compared to $40.1 million for the six month 2008 comparable period.
David G. Whalen, President and Chief Executive Officer of A.T. Cross said, "During the second quarter, the recession continued and consumers and retailers remained very conservative with regard to purchasing discretionary products. Importantly, we continued to invest in our brands and manage our inventory and expenses appropriately. We are confident that this approach is building share and will result in growth in revenue and profit once the economy turns."
Guidance
The Company expects to generate a profit and grow its net cash position this year, but given the uncertain economic climate, will not provide specific guidance at this time.
Conference Call
The Company's management will host a conference call today, July 23, 2009 at 4:30 PM Eastern Time. Parties interested in participating in the conference call may dial-in at (877) 681-3370, while international callers may dial-in at (719) 325-4928. 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 July 23, 2009 through July 31, 2009 at (888) 203-1112 or (719) 457-0820 for international callers, and entering the pass code of 1402694.
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. 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 Del Mar website at www.costadelmar.com and the Native Eyewear 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 impact of the Company's core strategies once the economy stabilizes). 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 depth and severity 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 July 23, 2009. 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)
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Three Months Ended Six Months Ended
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July 4, June 28, July 4, June 28,
2009 2008 2009 2008
Net sales $ 37,306 $ 43,208 $ 68,146 $ 79,465
Cost of goods sold 16,904 18,835 30,988 35,121
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Gross Profit 20,402 24,373 37,158 44,344
Selling, general and
administrative expenses 15,909 18,664 32,463 35,398
Service and distribution costs 1,727 1,867 3,339 3,518
Research and development
expenses 576 639 1,195 1,212
Restructuring charges 737 -- 797 --
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Operating Income (Loss) 1,453 3,203 (636) 4,216
Interest and other expense (183) (322) (774) (369)
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Income (Loss) Before Income
Taxes 1,270 2,881 (1,410) 3,847
Income tax provision (benefit) 635 1,008 (1,096) 1,372
-------- -------- -------- --------
Net Income (Loss) $ 635 $ 1,873 $ (314) $ 2,475
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Net Income (Loss) per Share:
Basic $ 0.04 $ 0.12 $ (0.02) $ 0.16
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Diluted $ 0.04 $ 0.12 $ (0.02) $ 0.16
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Weighted Average Shares
Outstanding:
Basic 14,581 14,987 14,835 15,043
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Diluted 14,581 15,383 14,835 15,426
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Three Months Ended Six Months Ended
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July 4, June 28, July 4, June 28,
2009 2008 2009 2008
Segment Data: Cross Accessory
Division
Net Sales $ 20,762 $ 25,895 $ 39,527 $ 52,424
Operating Loss (2,069) (1,289) (4,932) (1,306)
Segment Data: Cross Optical
Group
Net Sales $ 16,544 $ 17,313 $ 28,619 $ 27,041
Operating Income 3,522 4,492 4,296 5,522
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A.T. CROSS COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, unaudited)
July 4, 2009 June 28, 2008
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Assets
Cash and cash equivalents $ 11,998 $ 14,424
Short-term investments 3,483 0
Accounts receivable 26,979 30,260
Inventories 32,704 31,077
Deferred income taxes 4,337 5,245
Other current assets 5,581 8,147
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Total Current Assets 85,082 89,153
Property, plant and equipment, net 15,717 17,349
Goodwill 15,279 17,209
Intangibles and other assets 12,697 13,663
Deferred income taxes 11,490 8,444
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Total Assets $ 140,265 $ 145,818
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Liabilities and Shareholders' Equity
Accounts payable and other current
liabilities $ 20,737 $ 22,548
Retirement plan obligations 2,407 2,297
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Total Current Liabilities 23,144 24,845
Long-term debt 21,721 21,721
Retirement plan obligations 14,552 4,551
Deferred gain on sale of real estate 3,520 4,041
Other long term liabilities 2,044 3,340
Accrued warranty costs 1,333 1,343
Shareholders' equity 73,951 85,977
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Total Liabilities and Shareholders'
Equity $ 140,265 $ 145,818
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