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A.T. Cross Company Reports Fourth Quarter And Fiscal 2012 Results

Stocks in this article: ATX

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.


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 . 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 , the Costa website at and the Native website at .

The A.T. Cross Company logo is available at

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)

 (in thousands, except per share amounts) 
   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
(in thousands, unaudited)
  December 29, 2012 December 31, 2011
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
         Investor Relations:
         Dave Mossberg
         Three Part Advisors, LLC

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