A.T. Cross Company, which owns the Native Eyewear and Costa Del Mar eyewear brands, among others, reported net income for the second quarter of 2009 was $600,000, or 4 cents per basic and diluted share, compared to net income of $1.9 million, or 12 cents per basic and diluted share last year.
Consolidated net sales for the second quarter of 2009 declined 13.7% to $37.3 million compared to $43.2 million in the second quarter of 2008. The Cross Accessory Division (CAD) revenue totaled $20.8 million, a decline of 19.8% compared to last year. The Cross Optical Group (COG) revenue totaled $16.5 million, a decline of 4.4% from a year ago.
Gross margin in the second quarter of 2009 was 54.7% versus 56.4% last year. Operating expenses were $18.9 million compared to $21.2 million for the same period a year ago. Year-to-date 2009 gross margin was 54.5% compared to 55.8% for the comparable period last year.
Consolidated net sales for the six months ended July 4, 2009 were $68.1 million, a decline of 14.2% from the prior year.
The net loss for the six-month period ended July 4, 2009 was $300,000, or 2 cents per basic and diluted share, compared to $2.5 million of net income, or 16 cents per basic and diluted share, for the six-month period ended June 28, 2008.
Included in the 2009 six-month results were 4 cents per share of one-time restructuring charges related to the consolidation of the company's Lincoln manufacturing operations and European support structure.
For the first six months of 2009, CAD sales of $39.5 million declined 24.6% from last year. COG sales of $28.6 million improved 5.8% due to the growth of Costa Del Mar and incremental Native Eyewear sales. Native Eyewear, which is part of COG, was acquired in March 2008.
Changes in foreign exchange rates negatively impacted gross margins by 180 basis points in the first half of 2009 compared to 2008. Operating expenses for the six-month period were $37.8 million, including $0.8 million of restructuring charges, compared to $40.1 million for the six month 2008 comparable period.
David G. Whalen, President and CEO of A.T. Cross said, “During the second quarter, the recession continued and consumers and retailers remained very conservative with regard to purchasing discretionary products. Importantly, we continued to invest in our brands and manage our inventory and expenses appropriately. We are confident that this approach is building share and will result in growth in revenue and profit once the economy turns.”
A.T. CROSS COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)
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Three Months Ended Six Months Ended
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July 4, June 28, July 4, June 28,
2009 2008 2009 2008
Net sales $ 37,306 $ 43,208 $ 68,146 $ 79,465
Cost of goods sold 16,904 18,835 30,988 35,121
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Gross Profit 20,402 24,373 37,158 44,344
Selling, general and
administrative expenses 15,909 18,664 32,463 35,398
Service and distribution costs 1,727 1,867 3,339 3,518
Research and development
expenses 576 639 1,195 1,212
Restructuring charges 737 -- 797 --
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Operating Income (Loss) 1,453 3,203 (636) 4,216
Interest and other expense (183) (322) (774) (369)
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Income (Loss) Before Income
Taxes 1,270 2,881 (1,410) 3,847
Income tax provision (benefit) 635 1,008 (1,096) 1,372
-------- -------- -------- --------
Net Income (Loss) $ 635 $ 1,873 $ (314) $ 2,475
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Net Income (Loss) per Share:
Basic $ 0.04 $ 0.12 $ (0.02) $ 0.16
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Diluted $ 0.04 $ 0.12 $ (0.02) $ 0.16
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Weighted Average Shares
Outstanding:
Basic 14,581 14,987 14,835 15,043
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Diluted 14,581 15,383 14,835 15,426
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