A.T. Cross Reports Third 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)--Oct. 24, 2001 A.T. Cross Company (AMEX AMEX See: American Stock Exchange : 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 financial results for the third quarter ended September September: see month. 29, 2001. Sales for the third quarter were $27.8 million, a decrease of 11.0%, versus $31.2 million in the same period of 2000. The revenue decline was attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to overall weakness in the global economy. Consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. was $1.7 million in the quarter compared to $2.9 million in last year's third quarter. The prior year quarter included pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta income of $555,000, due to a change in estimate for restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). costs. Net income for the quarter was $1.0 million, or 6 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 income of $2.1 million, or 13 cents per share, in the third quarter of 2000. Gross profit margin 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. improved in the third quarter to 51.2% compared to 47.6% in the prior year quarter, due largely to the impact of consolidating writing instrument manufacturing in 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. as well as strict cost controls. Consolidated third quarter operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. , excluding the impact of restructuring, were flat with the prior year quarter, as higher service and distribution costs distribution costs distribute npl → Vertriebskosten pl were offset by a 6.0% decrease in all other operating expenses. The increase in service and distribution costs is due to the global distribution of products that is now handled from Lincoln, RI. Excluding the impact of restructuring, operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: were 6.2% in the third quarter of 2001 compared to 7.5% in last year's quarter. Writing instrument revenue decreased 10.9% in the quarter to $27.2 million. Domestic writing instrument sales decreased 15.5% to $13.0 million. International revenues decreased 6.2% to $14.2 million. New product revenue was approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 29% of third quarter writing instrument sales compared to approximately 23% in the prior year quarter. New product revenue relates to products introduced during the trailing 24 months. Pen Computing See gesture recognition and tablet PC. Group revenue was $603,000 compared to $704,000 for the third quarter of 2000. The writing instrument division recorded a $2.2 million operating profit in the third quarter compared to $2.9 million in the prior year quarter. Excluding the impact of restructuring, writing instrument operating margins improved slightly to 8.0% in the quarter compared to 7.7% in the prior year period, due to improved gross profit margins and lower operating expenses. The Pen Computing Group recorded a $471,000 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. in the quarter compared to a $17,000 operating loss in the third quarter of 2000. The operating loss is primarily due to activities related to the Cross :Convergence(TM) pen. "Our business softened soft·en v. soft·ened, soft·en·ing, soft·ens v.tr. 1. To make soft or softer. 2. To undermine or reduce the strength, morale, or resistance of. 3. in the third quarter as a result of the slowing global economy," said David G. Whalen Whalen may be:
For the nine months ended September 29, 2001, revenue decreased 3.0% to $85.3 million. Consolidated 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. was $3.9 million compared to an operating loss of $10.8 million for the nine months ended September 30, 2000. The prior year period included pre-tax expense of $14.7 million for restructuring costs. The Company reported a net loss of $671,000, or 4 cents per share, compared to a net loss of $5.4 million, or 33 cents per share, for the nine months ended September 30, 2000. Gross profit margin improved approximately 2 percentage points, excluding the impact of restructuring, to 52.3%, due primarily to the consolidation of writing instrument manufacturing in the United States as well as strict cost controls. Writing instrument sales decreased 2.3% to $83.2 million. Domestic writing instrument sales decreased 4.0% to $39.1 million and international revenues decreased 0.8% to $44.1 million. New product revenue was approximately 27% of total writing instrument sales compared to approximately 15% in the prior year period. Sales of pen computing products were $2.1 million compared to $2.8 million for the 2000 period. The writing instrument division recorded a $5.2 million operating profit for the nine months ended September 29, 2001 compared to an operating loss of $10.8 million for the comparable prior year period. The prior year period included pre-tax expense of $14.7 million for restructuring costs. Excluding the impact of restructuring, writing instrument operating profit increased approximately 31% for the nine-month period; operating margins were 6.2% for the current nine-month period compared to 4.6% for the prior year period. The Pen Computing Group recorded an operating loss of $1.3 million for the nine-month period compared to a loss of $19,000 for the prior year period. Mr. Whalen continued, "In this challenging economic environment, we remain committed to improving the performance of our core quality writing instrument business. We are confident that the strategies we have developed to manage this business are sound, and when the economy rebounds, we will be well positioned to realize a stronger revenue performance as well as continued operating margin growth." 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. During the third quarter of 2001, the Company repurchased 206,800 shares for approximately $1,489,000 at an average price of $7.20 per share. As of September 29, 2001, the Company repurchased 297,000 shares for approximately $2,172,000 at an average price of $7.31 per share. A.T. Cross' management will conduct a conference call on October October: see month. 25, 2001 at 9:00 a.m. Eastern Time to discuss results for the third quarter and nine months ended September 29, 2001. Investors and interested parties may listen to the call via a live webcast accessible on the "Financial Information" page under "About Cross" 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 on the site, while a telephone replay of the call will be available beginning at 11:00 a.m. Eastern Time on October 25 through November November: see month. 1 at 800-633-8284 or 858-812-6440 (international callers) using reservation A clause in a deed of real property whereby the grantor, one who transfers property, creates and retains for the grantor some right or interest in the estate granted, such as rent or an Easement ,a right of use over the land of another. no. 19771412. 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 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, the anticipated benefit of controlling and managing costs, and the expected 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 uncertainty of the global and domestic economies, the inherent uncertainty of foreign markets, consumer reaction to the Company's advertising and promotions, and customer support for the Company's strategic initiatives. 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 Nine Months Ended
----------------------- ---------------------
Sept. 29, Sept. 30, Sept. 29, Sept. 30,
2001 2000 2001 2000
---------- ---------- ---------- ----------
Net sales $ 27,805 $ 31,227 $ 85,329 $ 88,011
Cost of goods sold 13,574 16,356 40,684 44,185
---------- ---------- ---------- ----------
Gross Profit 14,231 14,871 44,645 43,826
Selling, general and
administrative expenses 10,801 11,482 36,819 37,472
Research and development
expenses 516 548 1,519 1,364
Service and distribution
costs 1,198 513 2,436 1,581
Restructuring charges and
loss on impairment of
assets 10 (555) (62) 14,236(a)
----------- ---------- ---------- ----------
Operating Income
(Loss) 1,706 2,883 3,933 (10,827)
Interest and other 146 524 (5,207) 4,717
----------- ---------- ---------- ----------
Income (Loss) From
Continuing Operations
Before Income Taxes 1,852 3,407 (1,274) (6,110)
Income tax expense (benefit) 834 1,292 (573) (611)
----------- ---------- ---------- ----------
Income (Loss) From
Continuing Operations 1,018 2,115 (701) (5,499)
Income from discontinued
operations (net of income
taxes) 0 15 30 71
----------- ---------- ----------- ----------
Net Income (Loss) $ 1,018 $ 2,130 $ (671) $ (5,428)
=========== ========== =========== ==========
Basic and diluted
earnings (loss) per share:
Continuing
operations $ 0.06 $ 0.13 $ (0.04) $ (0.33)
Discontinued
operations 0.00 0.00 0.00 0.00
----------- ---------- ----------- ---------
Net Income (Loss)
Per Share $ 0.06 $ 0.13 $ (0.04) $ (0.33)
=========== ========== =========== =========
Weighted average shares
outstanding 16,674 16,719 16,752 16,628
=========== ========== =========== =========
(a) Reclassified $509 to Cost of goods sold for inventory
write-down to conform to presentation in 2000 annual report.
Segment Data
Quality Writing
Instruments:
Net sales $ 27,202 $ 30,523 $ 83,179 $ 85,172
Operating Income
(Loss) 2,177 2,900 5,204 (10,808)
Interest and other 158 524 720 1,430
Income (Loss) From
Continuing Operations
Before Income Taxes 2,335 3,424 5,924 (9,378)
Pen Computing Products:
Net sales $ 603 $ 704 $ 2,150 $ 2,839
Operating Loss (471) (17) (1,271) (19)
Interest and other (12) 0 (5,927) 3,287
Income (Loss) From
Continuing Operations
Before Income Taxes (483) (17) (7,198) 3,268
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, unaudited)
Sept. 29, Sept. 30,
2001 2000
----------- ----------
Assets
Cash and short-term investments $ 21,299 $ 25,194
Accounts receivable 21,096 22,390
Inventories 21,836 22,243
Deferred income taxes 8,127 8,738
Other current assets 3,658 4,423
----------- ----------
Total Current Assets 76,016 82,988
Property, plant and equipment, net 30,727 31,673
Investments 0 5,000
Intangibles and other assets 6,795 6,441
----------- ----------
Total Assets $ 113,538 $ 126,102
=========== ==========
Liabilities and Shareholders'
Equity
Current liabilities 33,871 39,794
Accrued warranty costs 4,688 5,821
Shareholders' equity 74,979 80,487
----------- ----------
Total Liabilities and
Shareholders' Equity $ 113,538 $ 126,102
=========== ==========
|
|
||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion