A.T. Cross profit falls in 4Q, rises over year

A.T. CROSS CO. saw its profits fall slightly during the fourth quarter of 2012, but rise 10.1 percent for 2012 as a whole, the company announced Wednesday.
Posted 2/20/13

LINCOLN – A.T. Cross Co. saw profit fall 1.6 percent in the fourth quarter of 2012 but rise 10.1 percent for the year as a whole, the personal- and business-accessories maker said late Wednesday.

The company saw its net income fall to $1.91 million, or 14 cents per diluted share, during the three months ended Dec. 29, 2012, from $1.94 million, or 15 cents per diluted share, during the same quarter in 2011.

Sales for the quarter rose 7.1 percent to $46.4 million, from $43.3 million during the same period in 2011.

For the year as a whole, A.T. Cross saw its bottom line rise 10.1 percent to $9.1 million, or 70 cents per diluted share, from $8.3 million, or 64 cents per diluted share. Net sales increased 3.4 percent to $180.5 million.

“In 2012, we grew revenue and leveraged it to even greater profit growth,” David G. Whalen, president and CEO of A.T. Cross, said in a statement. “Driving performance in 2012 continued to be the Cross Optical Group.” The company’s optics division saw revenue grow 14.9 percent to $83.3 million during 2012.

The company’s Cross Accessory Division – which comprises the company’s signature pens, as well as other related products – saw sales decline 4.8 percent in 2012.

“As discussed last year, we had originally expected flat year-over-year performance based upon stable economic conditions in Europe,” said Whalen. “As European economic conditions worsened, sales in that region declined 17 percent and were only partially offset by 3 percent increases in both the Americas and Asia.” Whalen added that the company expects “increasingly positive revenue performance in all three regions and success in extending the Cross brand into adjacent categories.”

On Feb. 4, A.T. Cross announced its decision to explore “strategic alternatives” for its Cross Accessories Division.

At the time of the announcement, Kevin F. Mahoney, the company’s senior vice president of finance and chief financial officer, declined to comment further on the matter, but told Providence Business News that “given the circumstances,” he and company CEO David G. Whalen wanted to “limit to what is stated in the press release.”

In the release announcing the decision, Whalen said: “We constantly look for ways to build shareholder value. At this point in our history, we think it is important to fully understand the different ways that the Cross brand can help us achieve that goal.”

The company engaged C.W. Downer & Co. to assist in the evaluation, but said that it has “not made a decision to pursue any specific transaction or any other strategic alternative,” and added that there is no timetable set for the strategic review process.

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