A.T. Cross Company (ATX) today announced financial results for the second quarter ended July 3, 2010.
David G. Whalen, President and Chief Executive Officer of A.T. Cross, said, "We were very pleased with our second quarter performance. Our business grew at a double digit rate and our bottom line improved dramatically. The Cross Optical Group powered through its second quarter peak season with both brands generating strong, double digit revenue growth and operating income up significantly. The Cross Accessory Division continued to see top line year-to-date growth in every region of the world. Importantly, due to work done in 2009 to reduce its cost base, the higher Accessory Division revenue resulted in significantly improved operating earnings."
Second Quarter 2010 Results
Consolidated sales for the second quarter of 2010 increased by 11.9% to $41.7 million compared to $37.3 million in the second quarter of 2009. Â The Cross Accessory Division (CAD) recorded revenue of $21.4 million, an increase of 3.0%, compared to last year. Â The Cross Optical segment reported a second quarter sales increase of 23.1% to $20.3 million, compared to last year. Â The Optical Group's revenue growth was driven by growth of both the Costa and Native brands.
Gross margin in the quarter was 57.3% compared to 54.7% in last year's second quarter.
Operating income in the quarter was $3.9 million as compared to $1.5 million in the second quarter of last year.
Net income for the second quarter was $2.7 million, or $0.20 per share, compared to $0.6 million, or $0.04 per share, last year.
Year-To-Date 2010 Results
Consolidated sales for the first six months of 2010 increased by 11.7% to $76.1 million compared to $68.1 million for the same period of 2009. CAD recorded revenue of $42.1 million or 6.5% higher compared to last year while COG's revenue grew 18.9% to $34.0 million from 2009's $28.6 million. Both Costa and Native reported double digit revenue growth.
Gross margin for the six months 2010 was 57.0% or 250 basis points higher than the 2009 six-month period.
Year-to-date operating income was $4.4 million or $5.1 million higher than the six month 2009 operating loss of $0.6 million.
Mr. Whalen continued, "We delivered a very successful first half of 2010. As a result, the Company is increasing its EPS guidance by over 30%. The outlook for A.T. Cross is very favorable. That is why, as announced earlier this month, we initiated the repurchase of 9% of our outstanding shares. In 2009 and the first half of 2010, we continued to invest in our strategies and we are now realizing the benefits of that resolve. We are excited by our position and will work to enhance it as the year moves forward."
Guidance
The Company has raised 2010 earnings per share guidance from $0.34 to $0.45.
New Credit Facility
The Company has agreed with its senior lender to a new three-year credit facility for $40 million at rates favorable to its prior facility.
Stock Repurchase
As announced on July 8, 2010, the Company repurchased 1.25 million shares of its Class A common stock for approximately $5 million. Since December 2009, when the Company acquired 1.5 million shares, a total of 2.75 million of 18% of the outstanding shares have been repurchased for approximately $10.2 million.
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