A.T. Cross reported its Cross Optical segment saw sales improve 24.1% to $16.9 million in the first quarter, which helped drive consolidated revenue to $39.8 million, up 15.7 percent from the first quarter of 2010.


The Cross Accessory Division recorded revenue of $22.8 million, an increase of 10.3%, compared to last year.


Consolidated gross margin in the first quarter was 58.2% compared to 56.8% in last year’s first quarter. The expansion of gross margin was driven by COG as its gross margin grew from 55.5% to 59.7%. Both the Costa and Native brands grew margin from the prior year.

Operating expenses for the entire company were $21.1 million, or 53.0% of sales in the 2011 first quarter, versus $19.0 million, or 55.3% of sales for the same period a year ago.


Operating income in the first quarter of 2011 was $2.1 million, as compared to $0.5 million in the first quarter of last year.


Net income for the first quarter was $1.3 million, or $0.10 per basic and diluted share, compared to net income of $0.2 million, or $0.01 per basic and diluted share, last year.


“A. T. Cross delivered an excellent first quarter performance,” said David G. Whalen, president and CEO. “Revenue growth in both businesses was strong and our bottom line improved significantly. The Cross Accessory Division’s (CAD) revenue increased over 10% and the business generated growth in every region of the world. CAD revenue growth, combined with the cost reductions we have put in place over the past several years, resulted in improved operating results for CAD.”

 

Whalen continued, “The Cross Optical Group (COG) had a powerful first quarter with revenue up from last year by over 24%. Operating income of $2.4 million more than doubled from Q1 2010. Our sunglass business is entering its peak season with momentum and we expect very strong results as we move through the spring.”

 

Guidance

In February, the Company provided 2011 guidance of earnings between 56 cents and 60 cents per share. Given first quarter results, the Company is now guiding to the top end of that range. The guidance will be reviewed again in July once the peak sunglass season concludes.












































































































 

CONSOLIDATED STATEMENTS OF INCOME


(in thousands, except per share amounts)


(unaudited)

Three Months Ended
April 2, 2011 April 3, 2010
Net sales $ 39,782 $ 34,373
Cost of goods sold 16,627 14,854
Gross Profit 23,155 19,519
Selling, general and administrative expenses 18,952 16,700
Service and distribution costs 1,579 1,628
Research and development expenses 571 665
Operating Income 2,053 526
Interest and other expense (190) (277)
Income Before Income Taxes 1,863 249
Income tax provision 605 75
Net Income $ 1,258 $ 174

Net Income per Share:

Basic $ 0.10 $ 0.01
Diluted $ 0.10 $ 0.01

Weighted Average Shares Outstanding:

Basic 12,113 13,269
Diluted 12,891 13,355