A.T. Cross Reports Second Quarter Results.Business Editors LINCOLN Lincoln, city and district, England Lincoln, city (1991 pop. 79,980) and district, Lincolnshire, E England, in the Parts of Kesteven, on the Witham River. , R.I.--(BUSINESS WIRE)--July 24, 2002 A.T. Cross Company (ASE (Adaptive Server Enterprise) A relational DBMS from Sybase that runs on Windows NT/2000, Linux and a variety of Unix platforms. ASE is a comprehensive and robust data management product with a long history dating back to the late 1980s. :ATX See ATX motherboard. (hardware, standard) ATX - An open PC motherboard specification by Intel. ATX is a development of the Baby AT specification with the motherboard rotated 90 degrees in the chassis. ) today reported results for the second quarter ended June June: see month. 29, 2002. Consolidated revenue for the quarter increased to $27.5 million compared to $27.3 million in the second quarter of 2001. The net loss in the quarter was $325,000, or 2 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. , compared to net loss of $3.3 million, or 19 cents per share, in the second quarter of 2001. The 2001 quarter included a pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta loss provision of $5.9 million relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the carrying value Carrying Value Also know as "book value," it is a company's total assets minus intangible assets and liabilities, such as debt. Notes: This is different than market value, as it can be higher or lower depending on the circumstances. of technology related investments. Total writing instrument revenue increased 2.1% to $27.5 million. Domestic writing instrument revenue increased 11.8% to $14.9 million, due to significant increases in the retail division and OEM (Original Equipment Manufacturer) The rebranding of equipment and selling it. The term initially referred to the company that made the products (the "original" manufacturer), but eventually became widely used to refer to the organization that buys the products and revenue. International writing instrument revenue decreased 7.3% to $12.6 million. Asia revenue declined 18.1% in the quarter, and EMEA (Europe, Middle East, Africa) Refers to that region of the world. For example, one might see products packaged differently for the UK, EMEA and Asia Pacific markets. revenue declined 3.3%. There was no significant pen computing See gesture recognition and tablet PC. activity during the second quarter 2002. Pen computing revenue was $402,000 for the same period of 2001. The Company recorded an operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. of $825,000 in the quarter compared to operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. of $341,000 in the prior year period, due to increased spending in marketing and selling support and lower gross profit margins Gross profit margin Gross profit divided by sales, which is equal to each sales dollar left over after paying for the cost of goods sold. gross profit margin A measure calculated by dividing gross profit by net sales. . David G. Whalen Whalen may be:
Cash provided by operations was $2.3 million in the second quarter of 2002 compared to $4.6 million used in the prior year quarter. Cash and short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. investments were $22.9 million at June 29, 2002 compared to $19.8 million at June 30, 2001. Due to continued strict controls over inventory levels, inventory declined 31% to $15.5 million at June 29, 2002 compared to $22.5 million at June 30, 2001. For the six months ended June 29, 2002, total revenue decreased 4.4% to $55.0 million. Net income for the six months ended June 29, 2002 was $279,000, or 2 cents per share, compared with a net loss of $1.7 million, or 10 cents per share, for the prior year period. For the six-month period, writing instrument revenue decreased 1.8% to $55.0 million. Domestic writing instrument sales increased 8.5% to $28.4 million. International revenue decreased 10.9% to $26.6 million. There was no significant pen computing activity during the period. Pen computing revenue was $1.5 million for the 2001 period. Consolidated income from operations was $11,000 for the six months ended June 29, 2002 compared to operating income of $2.2 million for the 2001 period. Mr. Whalen concluded, "We believe our prospects for 2002 remain positive. We continue to launch exciting new products like the Cross Matrix(TM) and our new line of watches. Each quarter we utilize new products to gain new points of distribution. The advertising market remains financially favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. for Cross. Some of the economies outside the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. are beginning to improve. We are optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op . At the beginning of 2002, we set out to grow our revenue and net income. With our peak season now upon us, we continue to believe that we will achieve these objectives." On April 26, 2001, the Company's Board of Directors authorized au·thor·ize tr.v. au·thor·ized, au·thor·iz·ing, au·thor·iz·es 1. To grant authority or power to. 2. To give permission for; sanction: the repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. of up to 10% of the Company's outstanding Class A common stock. The Company plans to purchase up to approximately 1.5 million shares from time to time depending on market conditions. From the inception of the program to June 29, 2002, the Company repurchased 1,097,400 shares for approximately $7.4 million at an average price of $6.75 per share. A.T. Cross' management will conduct a conference call on July 25, 2002 at 9:00 a.m. EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT to discuss company results for the second quarter and six months ended June 29, 2002. Investors and interested parties may listen to the call via a live webcast accessible on the Company's Web site at www.cross.com. To listen, please register and download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. audio software from the site at least 15 minutes prior to the start of the call. The webcast will be archived for 30 days on the site while a telephone replay of the call will be available beginning at 12:00 p.m. EDT July 25 through July 29 at 703/925-2533 or 888/266-2081 using password #6082588. A.T. Cross Company is a leading designer, manufacturer and marketer of fine writing instruments with distribution in major markets around the world. The Company also designs and markets timepieces and manufactures pen computing products. For information at A.T. Cross contact: John T. Ruggieri Senior Vice President and Chief Financial Officer 401/335-8470 jruggieri@cross.com Statements contained in this release that are not historical facts are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. made pursuant to the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995 (including but not limited to statements related to the anticipated success of new product introductions and new programs, the anticipated benefit of advertising, the anticipated effect of new distribution, and the anticipated recovery of the global economy). In addition, words such as "believes," "anticipates," "expects," and similar expressions are intended to identify forward-looking statements. These forward-looking statements are subject to risks and uncertainties, including but not limited to risks associated with the significant uncertainty of the global and domestic economies, consumer reaction to the Company's advertising, products and promotions, and customer support for the Company's strategic initiatives. The information contained in this document is as of July 24, 2002. The Company assumes no obligation to update any forward looking statements contained in this document as a result of new information or future events or developments. Additional discussion of factors that could cause actual results to differ materially from management's expectations is contained in the Company's filings under the Securities Exchange Act of 1934.
A. T. CROSS COMPANY
CONSOLIDATED SUMMARY OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)
Three Months Ended Six Months Ended
------------------ ----------------
June 29, June 30, June 29, June 30,
2002 2001 2002 2001
-------- -------- -------- ---------
Net sales $ 27,491 $ 27,332 $ 54,971 $ 57,524
Cost of goods sold 13,193 12,466 26,347 27,110
-------- -------- -------- ---------
Gross Profit 14,298 14,866 28,624 30,414
Selling, general
and administrative
expenses 13,708 13,350 25,916 26,012
Research and
development
expenses 553 516 1,117 1,003
Service and distribution
costs 862 699 1,580 1,244
Restructuring charges
and loss on impairment
of assets 0 (40) 0 (72)
-------- -------- -------- ---------
Operating Income (Loss) (825) 341 11 2,227
Interest and other 325 (5,727) 418 (5,353)
-------- -------- -------- ---------
Income (Loss) From
Continuing Operations
Before Income Tax (500) (5,386) 429 (3,126)
Income tax (benefit)
expense (175) (2,085) 150 (1,407)
-------- -------- -------- ---------
Income (Loss) From
Continuing
Operations (325) (3,301) 279 (1,719)
Income (loss) from
discontinued operations
(net of income taxes) 0 30 0 30
-------- -------- -------- ---------
Net Income (Loss) $ (325) $ (3,271) $ 279 $ (1,689)
======== ======== ======== =========
Basic and diluted earnings
(loss) per share:
Continuing operations $ (0.02) $ (0.19) $ 0.02 $ (0.10)
Discontinued
operations 0.00 0.00 0.00 0.00
-------- -------- -------- ---------
Net Income (Loss)
Per Share $ (0.02) $ (0.19) $ 0.02 $ (0.10)
======== ======== ======== =========
Weighted average
shares outstanding 16,028 16,753 16,129 16,768
======== ======== ======== =========
----------------------------------------------------------------------
Segment Data
Quality Writing Instruments:
Net sales $ 27,491 $ 26,930 $ 54,971 $ 55,977
Operating Income (Loss) (825) 941 11 3,027
Interest and other 325 188 418 562
Income (Loss) From
Continuing
Operations Before
Income Taxes (500) 1,129 429 3,589
Pen Computing Products: (a)
Net sales $ 402 $ 1,547
Operating Loss (600) (800)
Interest and other (5,915) (5,915)
Loss From Continuing
Operations Before
Income Taxes (6,515) (6,715)
(a) Effective for 2002, pen computing results are no longer
reported as a separate segment.
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CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, unaudited)
June 29, June 30,
2002 2001
---------- -----------
Assets
Cash and short-term investments $ 22,888 $ 19,757
Accounts receivable 19,047 20,051
Inventories 15,549 22,509
Deferred income taxes 5,303 8,127
Other current assets 4,525 4,223
---------- -----------
Total Current Assets 67,312 74,667
Property, plant and equipment, net 28,911 30,691
Deferred income taxes 2,428 308
Intangibles and other assets 6,027 6,312
---------- -----------
Total Assets $ 104,678 $ 111,978
========== ===========
Liabilities and Shareholders' Equity
Current liabilities 27,731 31,919
Accrued warranty costs 4,686 4,688
Shareholders' equity 72,261 75,371
---------- -----------
Total Liabilities and
Shareholders' Equity $ 104,678 $ 111,978
========== ===========
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