A.T. Cross saw consolidated net sales for the first quarter of 2009 declined 14.9% to $30.9 million compared to $36.3 million in the first quarter of 2008. The Cross Accessory Division (CAD) recorded revenue of $18.8 million, a decline of 29.3% compared to last year. The Cross Optical segment reported sales of $12.1 million, up 24.1% from a year ago. This increase is largely due to Native Eyewear, acquired late in the first quarter 2008.
Gross margin in the first quarter of 2009 was 54.3% versus 55.8% last year. Operating expenses were $18.8 million, or 61.1% of net sales, compared to $19.2 million or 53.0% of net sales for the same period a year ago.
Net loss for the first quarter was $0.9 million or $0.06 per basic and diluted share, compared to net income of $0.6 million or $0.04 per basic and diluted share last year.
David G. Whalen, President and Chief Executive Officer of A.T. Cross said, “The business climate over the last two quarters has been extremely difficult and, like many other companies, A.T. Cross was not immune to the negative effects of the downturn. In response to what we believe are temporary trends, we took steps to reduce spending and manage our cash and inventory. More importantly, we remained committed to our core strategies of growing the Cross Optical segment, reshaping our approach to the writing instrument and accessory market and optimizing our writing instrument cost structure. These strategies were building momentum before the economic downturn and, given continued support, will result in a stronger company once the economy improves.”
The company will not provide specific 2009 guidance at this time. The time for that will most likely be at the end of July when second quarter results are announced. At that point, the peak sunglass season will have been completed and a clearer view of how the holiday season will shape up for the Cross brand will be available.
A. T. CROSS COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)
Three Months Ended
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April 4, March 29,
2009 2008
Net sales $30,840 $36,257
Cost of goods sold 14,084 16,036
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Gross Profit 16,756 20,221
Selling, general and administrative expenses 16,554 16,984
Service and distribution costs 1,612 1,651
Research and development expenses 619 573
Restructuring charges 60 --
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Operating (Loss) Income (2,089) 1,013
Interest and other expense (591) (47)
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(Loss) Income Before Income Taxes (2,680) 966
Income tax (benefit) provision (1,731) 364
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Net (Loss) Income $ (949) $ 602
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Net (Loss) Income per Share:
Basic $ (0.06) $ 0.04
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Diluted $ (0.06) $ 0.04
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Weighted Average Shares Outstanding:
Basic 14,847 15,070
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Diluted 14,847 15,423
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Three Months Ended
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Segment Data: April 4, March 29,
2009 2008
Cross Accessory Division
Net Sales $18,765 $26,529
Operating Loss (2,863) (17)
Cross Optical Group
Net Sales $12,075 $ 9,728
Operating Income 774 1,030
