Business news : Cross Optical Sales Up Nearly 20 Percent in First Quarter

A.T. Cross Company reported sales of its Cross Optical Group (COG), which owns the Costa and Native eyewear brands, reached $23.8 million in the first quarter, an increase of 19.1 percent compared to last year's first quarter.

Overall sales at the company increased by 5.9 percent to $44.4 million compared to $41.9 million in the first quarter of 2012. The Cross Accessory Division (CAD) recorded revenue of $20.6 million, down 6.2 percent from last year.

Gross margin was 56.1 percent in 2013, versus 56.2 percent in 2012. Operating expenses were $22.3 million, or 50.2 percent of sales in the 2013 first quarter, versus $21.2 million, or 50.5 percent of sales for the same period a year ago. Operating income in the first quarter of 2013 was $2.6 million, compared to $2.4 million in the first quarter of last year.

Net income for the first quarter was $1.6 million, or $0.13 per diluted share, compared to net income of $1.5 million, or $0.12 per diluted share, last year.

"As our sunglass business enters its peak selling season, it is clear that it has maintained its momentum from 2012 and we expect a strong performance as we move through the spring," said David G. Whalen, president and CEO of A.T. Cross.

Whalen said two third of the decline at CAD was related to the substantially weaker Japanese Yen and decreased sales of low margin discontinued product. Having said that, while our trend in the European market improved in Q1, we did experience softness in the America and Asia markets which we are addressing."

On Feb. 4, 2013, the company announced that it is exploring strategic alternatives for its Cross Accessory Division. Costs associated with the process totaled approximately $240,000, or $0.01 per share, in the first quarter of 2013.

A.T. Cross confirmed its January guidance of earnings between $0.78 and $0.82 per share. The guidance will be reviewed again in July, once the peak sunglass season concludes.

A. T. CROSS COMPANY
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share amounts)
(unaudited)
	Three Months Ended
	March 30, 2013	March 31, 2012
Net sales	$44,401	$41,946
Cost of goods sold	19,476	18,376
Gross Profit	24,925	23,570
Selling, general and administrative expenses	19,600	18,475
Service and distribution costs	2,000	2,048
Research and development expenses	707	660
Operating Income	2,618	2,387
Interest and other expense	(132)	(132)
Income Before Income Taxes	2,486	2,255
Income tax provision	846	717
Net Income	$1,640	$1,538
Net Income per Share:
Basic	$ 0.13	$ 0.13
Diluted	$ 0.13	$ 0.12
Weighted Average Shares Outstanding:
Basic	12,246	12,288
Diluted	12,979	12,893
	Three Months Ended
	March 30, 2013	March 31, 2012
Segment Data: Cross Accessory Division
Net Sales	$20,565	$21,929
Operating Loss	(1,066)	(462)
Segment Data: Cross Optical Group
Net Sales	$23,836	$20,017
Operating Income	3,684	2,849

Source Cross Optical Group ( COG) Through SportsOneSource