-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, qBpB6ukpNcRnr6IQGRTGykAxfIUQ3hbnqyfuCAkfkOoS4QdafbqDCP2cRvFCg2pE n4u4qjF6nUkg3W9m0tq2bw== 0000025793-95-000009.txt : 19950511 0000025793-95-000009.hdr.sgml : 19950511 ACCESSION NUMBER: 0000025793-95-000009 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950510 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: CROSS A T CO CENTRAL INDEX KEY: 0000025793 STANDARD INDUSTRIAL CLASSIFICATION: PENS, PENCILS & OTHER ARTISTS' MATERIALS [3950] IRS NUMBER: 050126220 STATE OF INCORPORATION: RI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-06720 FILM NUMBER: 95535960 BUSINESS ADDRESS: STREET 1: ONE ALBION RD CITY: LINCOLN STATE: RI ZIP: 02865 BUSINESS PHONE: 4013331200 MAIL ADDRESS: STREET 1: ONE ALBION ROAD STREET 2: 50 KENNEDY PLAZA CITY: LINCOLN STATE: RI ZIP: 02865 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED] For the quarterly period ended March 31, 1995 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES ACT OF 1934 [NO FEE REQUIRED] For the transition period from __________to __________ Commission File No. 1-6720 A. T. CROSS COMPANY (Exact name of registrant as specified in its charter) Rhode Island 05-0126220 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) One Albion Road, Lincoln, Rhode Island 02865 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (401) 333-1200 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes X No______ Indicate the number of shares outstanding of each of the issuer's classes of common stock as of March 31, 1995: Class A common stock - 14,725,302 shares Class B common stock - 1,804,800 shares PART I. FINANCIAL INFORMATION A. T. CROSS COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS March 31 December 31 1995 1994 1994 ASSETS (Thousands of Dollars) CURRENT ASSETS Cash and Cash Equivalents $ 13,645 $ 73,906 $ 15,690 Short-Term Investments 60,924 7,882 56,331 Accounts Receivable 21,877 22,197 37,436 Inventories - Note B 22,234 22,601 16,725 Other Current Assets 6,975 3,287 4,545 Total Current Assets 125,655 129,873 130,727 PROPERTY, PLANT AND EQUIPMENT 87,070 78,346 84,979 Less Allowances for Depreciation 52,903 46,998 51,029 34,167 31,348 33,950 INTANGIBLES AND OTHER ASSETS 15,671 16,745 15,692 $175,493 $177,966 $180,369 LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Accounts Payable, Accrued Expenses and Other Liabilities $ 23,360 $ 21,590 $ 26,599 Compensation and Related Taxes 4,831 5,500 5,158 Cash Dividends Payable 0 0 2,644 Contributions Payable to Employee Benefit Plans 8,310 8,584 8,055 Income Taxes Payable 2,773 884 4,302 Total Current Liabilities 39,274 36,558 46,758 ACCRUED WARRANTY COSTS 4,984 4,684 4,909 SHAREHOLDERS' EQUITY Common Stock, Par Value $1 Per Share: Class A, Authorized 40,000,000 Shares; 15,200,302 Shares Issued and 14,725,302 Outstanding in 1995, 15,179,467 Shares Issued and Outstanding in March 1994, and 15,194,293 Shares Issued and 14,719,293 Outstanding in December 1994 15,200 15,179 15,194 Class B, Authorized 4,000,000 Shares; Issued and Outstanding 1,804,800 Shares 1,805 1,805 1,805 Capital in Excess of Par Value 10,798 10,138 10,722 Retained Earnings 109,513 109,523 107,959 Accumulated Foreign Currency Translation Adjustment 1,225 79 328 138,541 136,724 136,008 Treasury Stock, at Cost (7,306) - (7,306) Total Shareholders' Equity 131,235 136,724 128,702 $175,493 $177,966 $180,369 See notes to condensed consolidated financial statements. A. T. CROSS COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME THREE MONTHS ENDED MARCH 31 1995 1994 (Thousands of Dollars Except per Share Data) Net Sales $35,407 $35,193 Cost of Goods Sold 17,810 18,507 17,597 16,686 Selling, General and Administrative Expenses 14,453 13,296 Service and Distribution Costs 1,021 1,105 Research and Development Expenses 628 468 Operating Income 1,495 1,817 Interest and Other Income 991 587 Income Before Income Taxes 2,486 2,404 Income Taxes 932 1,043 Net Income $ 1,554 $ 1,361 Net Income Per Share - Note C $0.09 $ 0.08 See notes to condensed consolidated financial statements. A. T. CROSS COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS THREE MONTHS ENDED MARCH 31 1995 1994 (Thousands of Dollars) Cash Provided By (Used In): Operating Activities: Net Cash Provided By Operating Activities $ 7,104 $ 14,157 Investing Activities: Additions to Property, Plant and Equipment (2,088) (863) Additional Acquisition Payment - (69) Purchase of Short-Term Investments (4,856) (3,077) Sale or Maturity of Short-Term Investments 263 13,508 Net Cash Provided By (Used In) Investing Activities (6,681) 9,499 Financing Activities: Cash Dividends Paid (2,644) (2,709) Other 83 62 Net Cash Used in Financing Activities (2,561) (2,647) Effect of Exchange Rate Changes on Cash and Cash Equivalents 93 75 Increase (Decrease) in Cash and Cash Equivalents (2,045) 21,084 Cash and Cash Equivalents at Beginning of Period 15,690 52,822 Cash and Cash Equivalents at End of Period $13,645 $73,906 See notes to condensed consolidated financial statements. A. T. CROSS COMPANY AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS March 31, 1995 NOTE A - Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 1995 are not necessarily indicative of the results that may be expected for the year ending December 31, 1995. The Company typically records its highest sales and earnings in the fourth quarter. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's annual report on Form 10-K for the year ended December 31, 1994. NOTE B - Inventories The components of inventory at March 31, 1995 and December 31, 1994 were as follows: March 31 December 31 1995 1994 Finished goods $12,952 $ 9,612 Work in process 4,465 2,832 Raw materials 4,817 4,281 $22,234 $16,725 NOTE C - Net Income Per Share Net income per share has been determined based upon the weighted average number of Class A and Class B common shares outstanding of 16,527,823 and 16,935,455 for the first quarter ended March 31, 1995 and 1994, respectively. Common stock equivalents related to outstanding stock options have not been included in the calculations of earnings per share because the result is not dilutive. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION Results of Operations Net sales for the first quarter ended March 31, 1995 were essentially flat compared to the first quarter of 1994. Domestic writing instruments sales of $14.8 million were 3.0% greater than last year, while foreign sales of $16.9 million improved 2.7% over 1994. Domestic writing instrument sales were favorably affected by higher Townsend sales, the Company's wide-girth product line. This impact of Townsend sales was offset somewhat by a slow- down in orders from customers anticipating the introduction of the Company's new lower-priced Solo line which will begin sales in the second quarter. The increase in foreign sales was largely due to favorable exchange rates against the dollar. Leather sales of $3.6 million were down 15.5% from last year due to the consolidation of major department store companies. The gross profit margin for the first quarter of 1995 was 49.7%, as compared to 47.4% in 1994. The gross margin improvement was due in part to the price increase implemented on July 1, 1994 and to lower average costs this year as compared to the same period in 1994. Selling, general and administrative expenses increased 8.7% to $14.5 million in the first quarter of 1995 as a result of planned increases in Marketing support expenditures and the effect of the weaker U.S. dollar when translating foreign operations' expenses. Research and Development expenses were 34.2% higher than the first quarter of 1994 because of new product development projects. The Company expects an increase in R&D expenditures in 1995 in excess of 50%. Interest and other income rose 68.8% for the first three months of 1995 due to an increase in interest income as a result of higher interest rates. The effective income tax rate for the first quarter of 1995 was 37.5% as compared to 43.4% for the first quarter of last year. The Company implemented a reorganization of certain of its European operations at the end of 1994 to lower its overall effective corporate income tax rate. Liquidity and Sources of Capital Cash, cash equivalents and short-term investments increased $2.5 million from December 31, 1994 to $74.6 million at March 31, 1995. Most of this increase, and the corresponding decrease in accounts receivable, resulted from cash collected in January 1995 from customers who took advantage of the 1994 promotion that allowed qualifying domestic customers to defer payments on their 1994 purchases. This promotion was similar to programs that have been offered in past years. Cash available for domestic operations approximated $18.6 million while cash held off-shore approximated $56.0 million. The Company has available a $50 million line of credit with Fleet National Bank which provides an additional source of working capital on a short-term basis. The highest amount borrowed as of December 31, 1994 and March 31, 1995 was $2.0 million. The increase in inventory since December 31, 1994 is in support of a number of recent and forthcoming new product introductions. PART II. OTHER INFORMATION Item 6. No reports have been filed on Form 8-K pursuant to item 6(b) and no other items are applicable for three months ended March 31, 1995. SIGNATURES Pursuant to the requirement of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. A. T. CROSS COMPANY Date: May 9, 1995 By: JOHN E. BUCKLEY John E. Buckley Executive Vice President Chief Operating Officer Date: May 9, 1995 By: MICHAEL EL-HILLOW Michael El-Hillow Vice President, Finance, Treasurer Chief Financial Officer EX-27 2
5 1,000 3-MOS DEC-31-1994 MAR-31-1995 4,682 69,887 23,705 1,828 22,234 125,655 87,070 52,903 175,493 39,274 0 17,005 0 0 114,230 175,493 35,407 36,435 17,810 0 16,062 40 37 2,486 932 1,554 0 0 0 1,554 .09 .09
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