Costa Inc., which owns the Costa and Native sunglass brands, reported sales increased by 26.3 percent during the third quarter of 2013 to $24.6 million, compared to $19.4 million in the third quarter of 2012. Sunglass sales increased by 24.1 percent, while sales of accessories and apparel increased by 46.6 percent.


Gross margins in the third quarter of 2013 were 58.6 percent, compared to 59.0 percent in the third quarter of 2012.

 

“We are certainly pleased with our third quarter and year to date performance,” said David G. Whalen, CEO of Costa Inc, formerly known as the Cross Optical Division of A.T. Cross Company. “Our sunglass business has momentum as it enters the fourth quarter as all of the Costa brand's revenue sources; including prescription and non-prescription sunglasses, as well as apparel and accessories are performing very well. As we move through the last quarter of this year and head into 2014, our confidence in our business model and its growth potential is high. Every day, our authentic brands and products are attracting new consumers in both existing markets as well as new ones.”


Operating income in the third quarter of 2013 decreased to $0.2 million, compared to $1.4 million in the third quarter of 2012. Included in the 2013 third quarter results for continuing operations was approximately $2.1 million of non-cash compensation expense associated with equity awards that vested upon the sale of the Cross Accessory Division.
Net loss from continuing operations for the third quarter of 2013 was a loss of $0.2 million or $0.01 per basic share compared to net income from continuing operations of $0.9 million, or $0.07 per basic and diluted share in the third quarter of 2012.

Net loss from discontinued operations, net of tax, for the third quarter of 2013 was $10.1 million, or $0.81 per basic share, compared to net income from discontinued operations, net of tax, of $1.1 million, or $0.09 per basic share and $0.08 per diluted share in the third quarter of 2012. Loss from discontinued operations primarily includes the operating results of the former Cross Accessories Division, as well as certain tax related items associated with the divestiture.
Net loss for the third quarter of 2013 was $10.2 million, or $0.82 per basic share, compared to net income of $2.0 million, or $0.16 per basic share and $0.15 per diluted share, in the third quarter of 2012.

Nine Month 2013 Results
Sales by Costa Inc., the former Cross Optical Group, increased by 20.7 percent during the nine months ended September 28, 2013 to $80.8 million compared to $67.0 million for the same period of 2012. Sunglass sales increased by 17.2 percent while sales of accessories and apparel increased by 55.2 percent.

Gross margins during the nine month 2013 period were 58.9 percent, similar to the same period in 2012.
Operating income during the nine month 2013 period was $8.9 million, compared to $8.4 million for the same period in 2012. Included in the nine month 2013 period for continuing operations was approximately $2.1 million of non-cash compensation expense associated with equity awards that vested upon the sale of the Cross Accessory Division.

Net income from continuing operations for the nine month 2013 period was $5.4 million, or $0.43 per basic share and $0.40 per diluted share, compared to net income of $5.3 million, or $0.43 per basic share and $0.40 per diluted share, for the same period in 2012.

Net loss from discontinued operations, net of tax, for the nine month 2013 period was $10.9 million, or $0.88 per basic share, compared to net income from discontinued operations, net of tax, of $2.0 million, or $0.16 per basic and diluted share for the same period in 2012. Loss from discontinued operations primarily includes the operating results of the former Cross Accessories Division, as well as certain tax related items associated with the divestiture.

Net loss for the nine month 2013 period was $5.5 million, or $0.45 per basic share and $0.42 per diluted share, compared to net income of $7.2 million, or $0.59 per basic share and $0.56 per diluted share, for the same period in 2012.




























































































































COSTA INC.
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share amounts)
(unaudited)






Three Months Ended Nine Months Ended

September 28, September 29, September 28, September 29,

2013 2012 2013 2012
Net sales $ 24,569 $ 19,449 $ 80,824 $ 66,952
Cost of goods sold 10,156 7,978 33,187 27,493
Gross Profit 14,413 11,471 47,637 39,459
Selling, general and administrative expenses 12,328 8,722 33,648 27,049
Service and distribution costs 1,519 1,063 4,000 3,225
Research and development expenses 373 255 1,106 813
Operating Income 193 1,431 8,883 8,372
Interest and other expense (128) (102) (404) (522)
Income Before Income Taxes 65 1,329 8,479 7,850
Income tax provision 240 432 3,123 2,597
Net (Loss) Income From Continuing Operations (175) 897 5,356 5,253



Net (Loss) Income From Discontinued Operations, net of Taxes (10,064) 1,142 (10,867) 1,984
Net (Loss) Income $ (10,239) $ 2,039 $ (5,511) $ 7,237