A.T. Cross Co., the parent of Native Eyewear, reported sales declined 5.3% in the fourth quarter to $39.5 million from $41.7 million a year ago. Sales in its Cross Optical segment rose 0.7% to 9.4 million, driven by continued growth of the Costa brand. Sales in the Cross Accessory division slid 7% to $30.1 million.
Gross margin in the fourth quarter was 54.7% compared to 54.5% in last year’s fourth quarter.
Operating expenses, excluding $0.8 million and $6.3 million of restructuring and impairment charges in 2009 and 2008, respectively, were $19.1 million, or 48.3% of sales in the 2009 fourth quarter, versus $19.6 million, or 47.0% of sales for the same period a year ago.
Operating income in the fourth quarter of 2009 was $1.7 million, as compared to an operating loss of $3.1 million in the fourth quarter of last year. In last year’s fourth quarter, the Company recorded a non-cash goodwill impairment charge of $3.9 million.
Net income for the fourth quarter was $1.2 million, or $0.09 per share, compared to a net loss of $3.7 million, or $0.25 per share, last year.
Full Year 2009 Results
Consolidated sales in 2009 decreased 11.5% to $141.8 million compared to $160.1 million in 2008. Cross Accessory Division revenue was $90.9 million, down 18.4% from prior year. The Cross Optical segment reported a sales increase of 4.5% to $50.9 million.
Gross margin for 2009 was 54.1% compared to 55.8% in 2008 due to unfavorable foreign exchange rates and shifts in product and channel mix.
Operating expenses, excluding restructuring and impairment charges, were $73.6 million, or 51.9% of sales, in 2009 compared to $79.3 million, or 49.5% of sales, in 2008.
For 2009, net income was $1.9 million or $0.13 per share, compared to $0.5 million or $0.03 per share in 2008. Included in 2009 and 2008 results are restructuring and impairment charges of $1.9 million and $6.5 million, respectively.
David G. Whalen, President and Chief Executive Officer of A.T. Cross, said, “2009 was a difficult but productive year. We battled the recession, generated profit and cash, lowered our cost base, repurchased 10% of the Company, entered an important licensing arrangement with Franklin Covey and positioned our brands – Cross, Costa and Native to grow revenue and profit as the global economy recovers. We are in a good position and look forward to achieving our business objectives in 2010.”
As previously announced, the company has provided 2010 guidance of earnings between $0.33 and $0.35 per share.
|A. T. CROSS COMPANY|
|CONSOLIDATED SUMMARY OF OPERATIONS|
|(in thousands, except per share amounts)|
|Three Months Ended||Twelve Months Ended|
|January 2,||January 3,||January 2,||January 3,|
|Net sales||$ 39,489||$ 41,707||$141,764||$160,146|
|Cost of goods sold||17,874||18,972||65,046||70,834|
|Selling, general and administrative expenses||16,425||17,234||63,978||69,793|
|Service and distribution costs||1,760||1,753||6,763||7,054|
|Research and development expenses||877||627||2,817||2,444|
|Goodwill impairment charge||—||3,944||—||3,944|
|Operating Income (Loss)||1,742||(3,130)||1,300||3,551|
|Interest and other expense||(564)||(170)||(930)||(782)|
|Income (Loss) Before Income Taxes||1,178||(3,300)||370||2,769|
|Income tax (benefit) provision||(65)||441||(1,485)||2,275|
|Net Income (Loss)||$ 1,243||$ (3,741)||$ 1,855||$494|
|Net Income (Loss) per Share:|
|Basic||$ 0.09||$ (0.25)||$ 0.13||$ 0.03|
|Diluted||$ 0.09||$ (0.25)||$ 0.13||$ 0.03|
|Weighted Average Shares Outstanding:|