A.T. Cross Company Delivers Excellent Second Quarter Performance

  • Sales Grow 11.9%
  • EPS of $0.20 vs. $0.04 in 2009
  • EPS Guidance Increased from $0.34 to $0.45
  • Company Repurchases 1.25 Million Shares, or 9% of Outstanding Shares for $5.0 Million
  • Company Establishes New $40 Million Credit Facility

LINCOLN, R.I., July 28, 2010 (GLOBE NEWSWIRE) -- A.T. Cross Company (Nasdaq:ATX) today announced financial results for the second quarter ended July 3, 2010.

David G. Whalen, President and Chief Executive Officer of A.T. Cross, said, "We were very pleased with our second quarter performance. Our business grew at a double digit rate and our bottom line improved dramatically. The Cross Optical Group powered through its second quarter peak season with both brands generating strong, double digit revenue growth and operating income up significantly. The Cross Accessory Division continued to see top line year-to-date growth in every region of the world. Importantly, due to work done in 2009 to reduce its cost base, the higher Accessory Division revenue resulted in significantly improved operating earnings."

Second Quarter 2010 Results

Consolidated sales for the second quarter of 2010 increased by 11.9% to $41.7 million compared to $37.3 million in the second quarter of 2009.  The Cross Accessory Division (CAD) recorded revenue of $21.4 million, an increase of 3.0%, compared to last year.  The Cross Optical segment reported a second quarter sales increase of 23.1% to $20.3 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 quarter was 57.3% compared to 54.7% in last year's second quarter.

Operating income in the quarter was $3.9 million as compared to $1.5 million in the second quarter of last year.

Net income for the second quarter was $2.7 million, or $0.20 per share, compared to $0.6 million, or $0.04 per share, last year.

Year-To-Date 2010 Results

Consolidated sales for the first six months of 2010 increased by 11.7% to $76.1 million compared to $68.1 million for the same period of 2009. CAD recorded revenue of $42.1 million or 6.5% higher compared to last year while COG's revenue grew 18.9% to $34.0 million from 2009's $28.6 million. Both Costa and Native reported double digit revenue growth.

Gross margin for the six months 2010 was 57.0% or 250 basis points higher than the 2009 six-month period.

Year-to-date operating income was $4.4 million or $5.1 million higher than the six month 2009 operating loss of $0.6 million.

Mr. Whalen continued, "We delivered a very successful first half of 2010. As a result, the Company is increasing its EPS guidance by over 30%. The outlook for A.T. Cross is very favorable. That is why, as announced earlier this month, we initiated the repurchase of 9% of our outstanding shares. In 2009 and the first half of 2010, we continued to invest in our strategies and we are now realizing the benefits of that resolve.  We are excited by our position and will work to enhance it as the year moves forward."

Guidance

The Company has raised 2010 earnings per share guidance from $0.34 to $0.45.

New Credit Facility

The Company has agreed with its senior lender to a new three-year credit facility for $40 million at rates favorable to its prior facility.

Stock Repurchase

As announced on July 8, 2010, the Company repurchased 1.25 million shares of its Class A common stock for approximately $5 million. Since December 2009, when the Company acquired 1.5 million shares, a total of 2.75 million of 18% of the outstanding shares have been repurchased for approximately $10.2 million.

Conference Call

The Company's management will host a conference call today, July 28, 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 July 28, 2010 through     August 4, 2010 by dialing (800) 642-1687 or (706) 645-9291 for international callers, and entering the pass code of 87335673.

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 the expected sales and earnings performance for 2010 due to both a lowered cost base and strategic investments in the business made in 2009). 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 ability to deliver products as planned, the ability to maintain a substantially reduced cost base, and the continued effect of the economic climate on 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 28, 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   Six Months Ended   
   July 3, 2010    July 4,  2009   July 3,  2010   July 4,  2009   
           
 Net sales   $ 41,748 $ 37,306 $ 76,121 $ 68,146  
 Cost of goods sold   17,843  16,904  32,697  30,988  
 Gross Profit   23,905  20,402  43,424  37,158  
 Selling, general and administrative expenses   17,435  15,909  34,135  32,463  
 Service and distribution costs   1,841  1,727  3,469  3,339  
 Research and development expenses   708  576  1,373  1,195  
 Restructuring charges   --   737  --   797  
 Operating Income (Loss)   3,921  1,453  4,447  (636)  
 Interest and other expense   (139)  (183)  (416)  (774)  
 Income (Loss) Before Income Taxes   3,782  1,270  4,031  (1,410)  
 Income tax provision (benefit)   1,068  635  1,143  (1,096)  
 Net Income (Loss)  $ 2,714 $ 635 $ 2,888 $ (314)  
           
 Net Income (Loss) per Share:           
 Basic   $ 0.20  $ 0.04  $ 0.22  $ (0.02)  
 Diluted   $ 0.20  $ 0.04  $ 0.21  $ (0.02)  
           
 Weighted Average Shares Outstanding:           
 Basic   13,339  14,581  13,332  14,835  
 Diluted   13,458  14,593  13,434  14,835  
           
           
   Three Months Ended   Six Months Ended 
   July 3,  2010   July 4, 2009    July 3, 2010    July 4,  2009   
 Segment Data: Cross Accessory Division           
 Net Sales  $ 21,383 $ 20,762 $ 42,099 $ 39,527  
 Operating Loss   (609)  (2,069)  (1,200)  (4,932)  
           
 Segment Data: Cross Optical Group           
 Net Sales  $ 20,365 $ 16,544 $ 34,022  $ 28,619  
 Operating Income   4,530  3,522  5,647  4,296  
 
 
A. T. CROSS COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, unaudited)
           
           
           
    July 3, 2010     July 4, 2009
Assets          
Cash and cash equivalents    $ 9,021      $ 11,998
Short-term investments   1,063     3,483
Accounts receivable   28,933     26,979
Inventories   32,769     32,704
Deferred income taxes   4,151     4,337
Other current assets   9,681     5,581
Total Current Assets   85,618     85,082
           
Property, plant and equipment, net   15,944     15,717
Goodwill   15,379     15,279
Intangibles and other assets   11,122     12,697
Deferred income taxes   10,425     11,490
           
 Total Assets       $ 138,488          $140,265
           
Liabilities and Shareholders' Equity          
Accounts payable and other current liabilities    $ 26,661      $ 20,737
Retirement plan obligations   2,310     2,407
Total Current Liabilities   28,971     23,144
           
Long-term debt   15,221     21,721
Retirement plan obligations   13,750     14,552
Deferred gain on sale of real estate   2,998     3,520
Other long-term liabilities   1,091     2,044
Accrued warranty costs   1,504     1,333
Shareholders' equity   74,953     73,951
           
 Total Liabilities and Shareholders' Equity       $ 138,488          $140,265
CONTACT:  A.T. Cross Company            Kevin F. Mahoney, Senior Vice President, Finance and           Chief Financial Officer          401-335-8470          Three Part Advisors, LLC          Investor Relations          Dave Mossberg          817-310-0051

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