[X]
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
|
[ ]
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Rhode Island
(State or other jurisdiction of incorporation or organization)
|
05-0126220
(IRS Employer Identification No.)
|
One Albion Road, Lincoln, Rhode Island
(Address of principal executive offices)
|
02865
(Zip Code)
|
X
|
Yes
|
__
|
No
|
X
|
Yes
|
__
|
No
|
Large accelerated filer
|
__
|
Accelerated filer
|
__
|
||
Non-accelerated filer
|
__
|
Smaller reporting company
|
X
|
__
|
Yes
|
X
|
No
|
Class A common stock -
|
10,542,414 shares
|
|
Class B common stock -
|
1,804,800 shares
|
(THOUSANDS OF DOLLARS AND SHARES)
|
JULY 2, 2011
|
JANUARY 1, 2011
|
|
ASSETS
|
(UNAUDITED)
|
||
Current Assets
|
|||
Cash and cash equivalents
|
$12,775
|
$16,650
|
|
Short-term investments
|
604
|
2,514
|
|
Accounts receivable, gross
|
31,097
|
30,631
|
|
Allowance for doubtful accounts
|
(1,046)
|
(1,069)
|
|
Accounts receivable, net
|
30,051
|
29,562
|
|
Inventories
|
41,837
|
31,320
|
|
Deferred income taxes
|
5,591
|
5,590
|
|
Other current assets
|
6,515
|
4,883
|
|
Total Current Assets
|
97,373
|
90,519
|
|
Property, plant and equipment, gross
|
106,680
|
104,949
|
|
Accumulated depreciation
|
(92,422)
|
(89,867)
|
|
Property, Plant and Equipment, Net
|
14,258
|
15,082
|
|
Goodwill
|
15,279
|
15,279
|
|
Intangibles, Net
|
9,209
|
9,458
|
|
Deferred Income Taxes
|
10,591
|
11,318
|
|
Other Assets
|
2,890
|
2,970
|
|
Total Assets
|
$149,600
|
$144,626
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|||
Current Liabilities
|
|||
Accounts payable, accrued expenses and other liabilities
|
$19,983
|
$19,564
|
|
Accrued compensation and related taxes
|
7,437
|
7,811
|
|
Retirement plan obligations
|
2,401
|
2,437
|
|
Income taxes payable
|
2,266
|
2,006
|
|
Total Current Liabilities
|
32,087
|
31,818
|
|
Long-Term Debt
|
21,221
|
19,221
|
|
Retirement Plan Obligations
|
14,381
|
16,274
|
|
Deferred Gain on Sale of Real Estate
|
2,476
|
2,737
|
|
Other Long-Term Liabilities
|
506
|
687
|
|
Accrued Warranty Costs
|
1,422
|
1,424
|
|
Commitments and Contingencies (Note K)
|
-
|
-
|
|
Total Liabilities
|
72,093
|
72,161
|
|
Shareholders' Equity
|
|||
Common stock, par value $1 per share:
|
|||
Class A - authorized 40,000 shares, 18,563 shares issued and
|
|||
11,038 shares outstanding at July 2, 2011, and 18,439 shares
|
|||
issued and 11,115 shares outstanding at January 1, 2011
|
18,563
|
18,439
|
|
Class B - authorized 4,000 shares, 1,805 shares issued and
|
|||
outstanding at July 2, 2011 and January 1, 2011
|
1,805
|
1,805
|
|
Additional paid-in capital
|
28,332
|
26,014
|
|
Retained earnings
|
85,524
|
81,114
|
|
Accumulated other comprehensive loss
|
(12,432)
|
(12,659)
|
|
Treasury stock, at cost
|
(44,285)
|
(42,248)
|
|
Total Shareholders' Equity
|
77,507
|
72,465
|
|
Total Liabilities and Shareholders' Equity
|
$149,600
|
$144,626
|
(THOUSANDS OF DOLLARS AND SHARES,
|
THREE MONTHS ENDED
|
SIX MONTHS ENDED
|
|||||
EXCEPT PER SHARE AMOUNTS)
|
JULY 2, 2011
|
JULY 3, 2010
|
JULY 2, 2011
|
JULY 3, 2010
|
|||
Net sales
|
$47,768
|
$41,748
|
$87,550
|
$76,121
|
|||
Cost of goods sold
|
20,382
|
17,843
|
37,009
|
32,697
|
|||
Gross Profit
|
27,386
|
23,905
|
50,541
|
43,424
|
|||
Selling, general and administrative expenses
|
19,721
|
17,435
|
38,673
|
34,135
|
|||
Service and distribution costs
|
2,116
|
1,841
|
3,695
|
3,469
|
|||
Research and development expenses
|
707
|
708
|
1,278
|
1,373
|
|||
Operating Income
|
4,842
|
3,921
|
6,895
|
4,447
|
|||
Interest income
|
3
|
2
|
6
|
4
|
|||
Interest expense
|
(160)
|
(305)
|
(387)
|
(593)
|
|||
Other income
|
(6)
|
164
|
28
|
173
|
|||
Interest and Other Expense
|
(163)
|
(139)
|
(353)
|
(416)
|
|||
Income Before Income Taxes
|
4,679
|
3,782
|
6,542
|
4,031
|
|||
Income tax provision
|
1,527
|
1,068
|
2,132
|
1,143
|
|||
Net Income
|
$3,152
|
$2,714
|
$4,410
|
$2,888
|
|||
Net Income Per Share:
|
|||||||
Basic
|
$0.26
|
$0.20
|
$0.36
|
$0.22
|
|||
Diluted
|
$0.24
|
$0.20
|
$0.34
|
$0.21
|
|||
Weighted Average Shares Outstanding:
|
|||||||
Denominator for Basic Net Income Per Share
|
12,191
|
13,339
|
12,153
|
13,332
|
|||
Effect of dilutive securities
|
810
|
119
|
790
|
102
|
|||
Denominator for Diluted Net Income Per Share
|
13,001
|
13,458
|
12,943
|
13,434
|
(THOUSANDS OF DOLLARS)
|
THREE MONTHS ENDED
|
SIX MONTHS ENDED
|
|||||
JULY 2, 2011
|
JULY 3, 2010
|
JULY 2, 2011
|
JULY 3, 2010
|
||||
Net Income
|
$3,152
|
$2,714
|
$4,410
|
$2,888
|
|||
Other Comprehensive Income, Net of Tax:
|
|||||||
Foreign currency translation adjustments
|
34
|
55
|
292
|
(530)
|
|||
Unrealized (loss) gain on interest rate swap, net
|
(80)
|
78
|
7
|
119
|
|||
Pension liability adjustment, net
|
(19)
|
39
|
(72)
|
72
|
|||
Comprehensive Income
|
$3,087
|
$2,886
|
$4,637
|
$2,549
|
(THOUSANDS OF DOLLARS)
|
SIX MONTHS ENDED
|
||
JULY 2, 2011
|
JULY 3, 2010
|
||
Cash (Used in) Provided by Operating Activities:
|
|||
Net Income
|
$4,410
|
$2,888
|
|
Adjustments to reconcile net income to net cash
|
|||
used in operating activities:
|
|||
Depreciation
|
2,712
|
2,892
|
|
Amortization
|
340
|
492
|
|
Restructuring charges paid
|
-
|
(724)
|
|
Amortization of deferred gain
|
(261)
|
(261)
|
|
Provision for bad debts
|
(2)
|
14
|
|
Deferred income taxes
|
-
|
2,213
|
|
Provision for accrued warranty costs
|
4
|
454
|
|
Warranty costs paid
|
(140)
|
(392)
|
|
Stock-based compensation and directors' fees
|
1,043
|
949
|
|
Excess tax benefit from stock-based awards
|
(612)
|
-
|
|
Unrealized gain on short-term investments
|
5
|
45
|
|
Unrealized loss (gain) on foreign exchange contracts
|
221
|
(304)
|
|
Unrealized foreign currency transaction (gain) loss
|
(186)
|
159
|
|
Changes in operating assets and liabilities:
|
|||
Accounts receivable
|
(97)
|
231
|
|
Inventories
|
(10,220)
|
(7,654)
|
|
Other assets
|
(1,522)
|
(3,128)
|
|
Accounts payable
|
2,280
|
3,835
|
|
Other liabilities
|
(3,306)
|
(1,521)
|
|
Net Cash (Used in) Provided by Operating Activities
|
(5,331)
|
188
|
|
Cash (Used in) Provided by Investing Activities:
|
|||
Purchases of short-term investments
|
(10,010)
|
(8,439)
|
|
Sales of short-term investments
|
11,915
|
14,548
|
|
Additions to property, plant and equipment
|
(1,851)
|
(2,970)
|
|
Additions to trademarks and patents
|
(91)
|
(137)
|
|
Net Cash (Used in) Provided by Investing Activities
|
(37)
|
3,002
|
|
Cash Provided by (Used in) Financing Activities:
|
|||
Borrowing on long-term debt
|
11,000
|
-
|
|
Repayment of long-term debt
|
(9,000)
|
(4,500)
|
|
Excess tax benefit from stock-based awards
|
612
|
-
|
|
Proceeds from sale of Class A common stock, net
|
(118)
|
9
|
|
Purchase of treasury stock
|
(1,132)
|
(5)
|
|
Net Cash Provided by (Used in) Financing Activities
|
1,362
|
(4,496)
|
|
Effect of exchange rate changes on cash and cash equivalents
|
131
|
(116)
|
|
Decrease in Cash and Cash Equivalents
|
(3,875)
|
(1,422)
|
|
Cash and cash equivalents at beginning of period
|
16,650
|
10,443
|
|
Cash and Cash Equivalents at End of Period
|
$12,775
|
$9,021
|
|
SUPPLEMENTAL INFORMATION
|
|||
Income taxes paid, net
|
$453
|
$780
|
|
Interest paid
|
$370
|
$521
|
(THOUSANDS OF DOLLARS)
|
JULY 2, 2011
|
JANUARY 1, 2011
|
|
Finished goods
|
$23,916
|
$18,379
|
|
Work in process
|
5,556
|
3,229
|
|
Raw materials
|
12,365
|
9,712
|
|
$41,837
|
$31,320
|
(THOUSANDS OF DOLLARS)
|
THREE MONTHS ENDED
|
SIX MONTHS ENDED
|
||||||
JULY 2, 2011
|
JULY 3, 2010
|
JULY 2, 2011
|
JULY 3, 2010
|
|||||
Revenues from External Customers:
|
||||||||
CAD
|
$23,046
|
$21,383
|
$45,886
|
$42,099
|
||||
COG
|
24,722
|
20,365
|
41,664
|
34,022
|
||||
Total
|
$47,768
|
$41,748
|
$87,550
|
$76,121
|
||||
Depreciation and Amortization:
|
||||||||
CAD
|
$1,229
|
$1,305
|
$2,373
|
$2,599
|
||||
COG
|
374
|
401
|
679
|
785
|
||||
Total
|
$1,603
|
$1,706
|
$3,052
|
$3,384
|
||||
Operating Income (Loss):
|
||||||||
CAD
|
$(547)
|
$(609)
|
$(870)
|
$(1,200)
|
||||
COG
|
5,389
|
4,530
|
7,765
|
5,647
|
||||
Total
|
$4,842
|
$3,921
|
$6,895
|
$4,447
|
||||
Total Interest and Other Expense:
|
$(163)
|
$(139)
|
$(353)
|
$(416)
|
||||
Total Income Before Income Taxes:
|
$4,679
|
$3,782
|
$6,542
|
$4,031
|
||||
Expenditure for Long-Lived Assets:
|
||||||||
CAD
|
$779
|
$1,449
|
$1,144
|
$2,468
|
||||
COG
|
326
|
437
|
798
|
639
|
||||
Total
|
$1,105
|
$1,886
|
$1,942
|
$3,107
|
||||
JULY 2, 2011
|
JANUARY 1, 2011
|
|||||||
Segment Assets:
|
||||||||
CAD
|
$92,070
|
$96,472
|
||||||
COG
|
57,530
|
48,154
|
||||||
Total
|
$149,600
|
$144,626
|
||||||
Goodwill:
|
||||||||
CAD
|
$-
|
$-
|
||||||
COG
|
15,279
|
15,279
|
||||||
Total
|
$15,279
|
$15,279
|
(THOUSANDS OF DOLLARS)
|
THREE MONTHS ENDED
|
SIX MONTHS ENDED
|
|||||
JULY 2, 2011
|
JULY 3, 2010
|
JULY 2, 2011
|
JULY 3, 2010
|
||||
Accrued Warranty Costs - Beginning of Period
|
$1,779
|
$1,962
|
$1,998
|
$1,936
|
|||
Warranty costs paid
|
(64)
|
(191)
|
(140)
|
(392)
|
|||
Warranty costs accrued
|
147
|
227
|
230
|
454
|
|||
Impact of changes in estimates and assumptions
|
-
|
-
|
(226)
|
-
|
|||
Accrued Warranty Costs - End of Period
|
$1,862
|
$1,998
|
$1,862
|
$1,998
|
(THOUSANDS OF DOLLARS)
|
THREE MONTHS ENDED
|
SIX MONTHS ENDED
|
|||||
JULY 2, 2011
|
JULY 3, 2010
|
JULY 2, 2011
|
JULY 3, 2010
|
||||
Service cost
|
$13
|
$11
|
$25
|
$22
|
|||
Interest cost
|
554
|
560
|
1,108
|
1,120
|
|||
Expected return on plan assets
|
(560)
|
(567)
|
(1,119)
|
(1,134)
|
|||
Amortization of unrecognized loss
|
239
|
117
|
478
|
234
|
|||
Amortization of prior service cost
|
3
|
3
|
6
|
6
|
|||
Net Periodic Benefit Cost
|
$249
|
$124
|
$498
|
$248
|
(THOUSANDS OF DOLLARS)
|
JULY 2, 2011
|
JANUARY 1, 2011
|
|||||
GROSS CARRYING AMOUNT
|
ACCUMULATED AMORTIZATION
|
OTHER INTANGIBLES, NET
|
GROSS CARRYING AMOUNT
|
ACCUMULATED AMORTIZATION
|
OTHER INTANGIBLES, NET
|
||
Amortized:
|
|||||||
Trademarks
|
$9,237
|
$8,899
|
$338
|
$9,201
|
$8,805
|
$396
|
|
Patents
|
3,416
|
3,185
|
231
|
3,361
|
3,124
|
237
|
|
Customer relationships
|
3,170
|
1,430
|
1,740
|
3,170
|
1,245
|
1,925
|
|
$15,823
|
$13,514
|
2,309
|
$15,732
|
$13,174
|
2,558
|
||
Not Amortized:
|
|||||||
Trade names
|
6,900
|
6,900
|
|||||
Intangibles, Net
|
$9,209
|
$9,458
|
(THOUSANDS OF DOLLARS)
|
2011
|
2012
|
2013
|
2014
|
2015
|
THEREAFTER
|
|||||
$375
|
$652
|
$596
|
$540
|
$146
|
$-
|
Level 1
|
Unadjusted quoted prices in active markets for identical assets and liabilities.
|
Level 2
|
Observable inputs other than those included in Level 1. For example, quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets.
|
Level 3
|
Unobservable inputs reflecting management's own assumptions about the inputs used in pricing the asset or liability.
|
(THOUSANDS OF DOLLARS)
|
JULY 2, 2011
|
JANUARY 1, 2011
|
|||||||
LEVEL 1
|
LEVEL 2
|
LEVEL 3
|
TOTAL
|
LEVEL 1
|
LEVEL 2
|
LEVEL 3
|
TOTAL
|
||
Assets:
|
|||||||||
Money market funds (A)
|
$2,103
|
$-
|
$-
|
$2,103
|
$7,003
|
$-
|
$-
|
$7,003
|
|
Short-term investments (B)
|
604
|
-
|
-
|
604
|
2,514
|
-
|
-
|
2,514
|
|
$2,707
|
$-
|
$-
|
$2,707
|
$9,517
|
$-
|
$-
|
$9,517
|
||
(THOUSANDS OF DOLLARS)
|
JULY 2, 2011
|
JANUARY 1, 2011
|
|||||||
LEVEL 1
|
LEVEL 2
|
LEVEL 3
|
TOTAL
|
LEVEL 1
|
LEVEL 2
|
LEVEL 3
|
TOTAL
|
||
Liabilities
|
|||||||||
Derivatives designated as
|
|||||||||
hedging instruments:
|
|||||||||
Interest rate swaps (C)
|
$-
|
$173
|
$-
|
$173
|
$-
|
$184
|
$-
|
$184
|
|
Derivatives not designated as
|
|||||||||
hedging instruments:
|
|||||||||
Foreign exchange contracts (D)
|
-
|
221
|
-
|
221
|
-
|
154
|
-
|
154
|
|
$-
|
$394
|
$-
|
$394
|
$-
|
$338
|
$-
|
$338
|
(A)
|
Value is based on quoted market prices of identical instruments, fair value is included in cash and cash equivalents
|
(B)
|
Value is based on quoted market prices of identical instruments
|
(C)
|
Value is derived from a discounted cash flow analysis based on the terms of the contract and the interest rate curve, fair value is included in accounts payable, accrued expenses and other liabilities
|
(D)
|
Value is based on the present value of the forward rates less the contract rate multiplied by the notional amount, fair value is included in other current assets or accounts payable, accrued expenses and other liabilities
|
(THOUSANDS OF DOLLARS)
|
THREE MONTHS ENDED
|
SIX MONTHS ENDED
|
|||||
JULY 2, 2011
|
JULY 3, 2010
|
JULY 2, 2011
|
JULY 3, 2010
|
||||
Fair Value / Non-designated Hedges:
|
|||||||
Foreign exchange contracts (A)
|
$208
|
$264
|
$(221)
|
$304
|
|||
Cash Flow Hedges:
|
|||||||
Effective portion recognized in other
|
|||||||
comprehensive income:
|
|||||||
Interest rate swaps
|
$(86)
|
$247
|
$175
|
$438
|
|||
Effective portion reclassified from other
|
|||||||
comprehensive income:
|
|||||||
Interest rate swaps (B)
|
$(37)
|
$(127)
|
$(164)
|
$(255)
|
(A)
|
Included in selling, general and administrative expenses
|
(B)
|
Included in interest expense
|
(THOUSANDS OF DOLLARS)
|
THREE MONTHS ENDED
|
PERCENTAGE
|
|||
APRIL 2, 2011
|
APRIL 3, 2010
|
CHANGE
|
|||
Cross Accessories Division (CAD)
|
$22,840
|
$20,716
|
10.3%
|
||
Cross Optical Group (COG)
|
16,942
|
13,657
|
24.1%
|
||
Consolidated Net Sales
|
$39,782
|
$34,373
|
15.7%
|
(THOUSANDS OF DOLLARS)
|
THREE MONTHS ENDED
|
PERCENTAGE
|
|||
APRIL 2, 2011
|
APRIL 3, 2010
|
POINT CHANGE
|
|||
CAD
|
57.1%
|
57.7%
|
(0.6)
|
||
COG
|
59.7%
|
55.5%
|
4.2
|
||
Consolidated Gross Profit Margins
|
58.2%
|
56.8%
|
1.4
|
Covenant
Description
|
Covenant
Requirement
|
Calculated Company
Value July 2, 2011
|
|||
Consolidated
Tangible Net Worth
|
Cannot be less than $37.5 million plus 50% of Net Income for fiscal years after 2010,
or $39.7 million
|
$53 million
|
|||
Capital Expenditures
|
Cannot exceed the greater of $10 million in a year or $10 million plus prior year expenditures less the $10 million cap
|
$1.9 million
|
|||
Consolidated
Leverage Ratio
|
Cannot exceed 2.75 to 1
|
0.93:1
|
TOTAL NUMBER OF SHARES PURCHASED
|
AVERAGE PRICE PAID PER SHARE
|
TOTAL NUMBER OF SHARES PURCHASED AS PART OF PUBLICLY ANNOUNCED PLANS OR PROGRAMS
|
MAXIMUM NUMBER OF SHARES THAT MAY YET BE PURCHASED UNDER THE PLANS OR PROGRAMS
|
||||
April 3, 2011 - April 30, 2011
|
11,200
|
$10.94
|
-
|
495,200
|
|||
May 1, 2011 - May 28, 2011
|
16,000
|
$10.87
|
16,000
|
479,200
|
|||
May 29, 2011 - July 2, 2011
|
-
|
$0.00
|
-
|
479,200
|
|||
27,200
|
$10.90
|
16,000
|
Exhibit 31.1
|
Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
Exhibit 31.2
|
Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
Exhibit 32
|
Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
A. T. CROSS COMPANY
|
|
Date: August 16, 2011
|
By: DAVID G. WHALEN
David G. Whalen
Chief Executive Officer
|
Date: August 16, 2011
|
By: KEVIN F. MAHONEY
Kevin F. Mahoney
Senior Vice President, Finance and
Chief Financial Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q of A.T. Cross Company;
|
||
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
||
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
||
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
||
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
||
b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
||
c)
|
evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report, based on such evaluation; and
|
||
d)
|
disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
||
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
||
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
||
b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
||
Date: August 16, 2011
|
DAVID G. WHALEN
|
||
David G. Whalen
|
|||
President and Chief Executive Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q of A.T. Cross Company;
|
||
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
||
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
||
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
||
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
||
b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
||
c)
|
evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report, based on such evaluation; and
|
||
d)
|
disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
||
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
||
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
||
b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
||
Date: August 16, 2011
|
KEVIN F. MAHONEY
|
||
Kevin F. Mahoney
|
|||
Chief Financial Officer
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of A.T. Cross Company.
|
Date: August 16, 2011
|
DAVID G. WHALEN
|
|
David G. Whalen
|
||
Chief Executive Officer
|
||
KEVIN F. MAHONEY
|
||
Kevin F. Mahoney
|
||
Chief Financial Officer
|
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)
In Thousands, except Per Share data |
Jul. 02, 2011
|
Jan. 01, 2011
|
---|---|---|
Class A [Member]
|
 |  |
Shareholders' Equity | Â | Â |
Common stock, par value (in dollars per share) | $ 1 | $ 1 |
Common stock, shares authorized (in shares) | 40,000 | 40,000 |
Common stock, shares issued (in shares) | 18,563 | 18,439 |
Common stock, shares outstanding (in shares) | 11,038 | 11,115 |
Class B [Member]
|
 |  |
Shareholders' Equity | Â | Â |
Common stock, par value (in dollars per share) | $ 1 | $ 1 |
Common stock, shares authorized (in shares) | 4,000 | 4,000 |
Common stock, shares issued (in shares) | 1,805 | 1,805 |
Common stock, shares outstanding (in shares) | 1,805 | 1,805 |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (USD $)
In Thousands, except Per Share data |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jul. 02, 2011
|
Jul. 03, 2010
|
Jul. 02, 2011
|
Jul. 03, 2010
|
|
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) [Abstract] | Â | Â | Â | Â |
Net sales | $ 47,768 | $ 41,748 | $ 87,550 | $ 76,121 |
Cost of goods sold | 20,382 | 17,843 | 37,009 | 32,697 |
Gross Profit | 27,386 | 23,905 | 50,541 | 43,424 |
Selling, general and administrative expenses | 19,721 | 17,435 | 38,673 | 34,135 |
Service and distribution costs | 2,116 | 1,841 | 3,695 | 3,469 |
Research and development expenses | 707 | 708 | 1,278 | 1,373 |
Operating Income | 4,842 | 3,921 | 6,895 | 4,447 |
Interest income | 3 | 2 | 6 | 4 |
Interest expense | (160) | (305) | (387) | (593) |
Other income | (6) | 164 | 28 | 173 |
Interest and Other Expense | (163) | (139) | (353) | (416) |
Income Before Income Taxes | 4,679 | 3,782 | 6,542 | 4,031 |
Income tax provision | 1,527 | 1,068 | 2,132 | 1,143 |
Net Income | $ 3,152 | $ 2,714 | $ 4,410 | $ 2,888 |
Net Income Per Share: | Â | Â | Â | Â |
Basic (in dollars per share) | $ 0.26 | $ 0.20 | $ 0.36 | $ 0.22 |
Diluted (in dollars per share) | $ 0.24 | $ 0.20 | $ 0.34 | $ 0.21 |
Weighted Average Shares Outstanding: | Â | Â | Â | Â |
Denominator for Basic Net Income Per Share (in shares) | 12,191 | 13,339 | 12,153 | 13,332 |
Effect of dilutive securities (in shares) | 810 | 119 | 790 | 102 |
Denominator for Diluted Net Income Per Share (in shares) | 13,001 | 13,458 | 12,943 | 13,434 |
Document And Entity Information (USD $)
In Millions, except Share data |
6 Months Ended | |||
---|---|---|---|---|
Jul. 02, 2011
|
Jul. 03, 2010
|
Jul. 30, 2011
Class A [Member]
|
Jul. 30, 2011
Class B [Member]
|
|
Entity Information [Line Items] | Â | Â | Â | Â |
Entity Registrant Name | CROSS A T CO | Â | Â | Â |
Entity Central Index Key | 0000025793 | Â | Â | Â |
Current Fiscal Year End Date | --12-31 | Â | Â | Â |
Entity Well-known Seasoned Issuer | No | Â | Â | Â |
Entity Voluntary Filers | No | Â | Â | Â |
Entity Current Reporting Status | Yes | Â | Â | Â |
Entity Filer Category | Smaller Reporting Company | Â | Â | Â |
Entity Public Float | Â | $ 33 | Â | Â |
Entity Common Stock, Shares Outstanding | Â | Â | 10,542,414 | 1,804,800 |
Document Fiscal Year Focus | 2011 | Â | Â | Â |
Document Fiscal Period Focus | Q2 | Â | Â | Â |
Document Type | 10-Q | Â | Â | Â |
Amendment Flag | false | Â | Â | Â |
Document Period End Date | Jul. 02, 2011 |
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Line of Credit
|
6 Months Ended |
---|---|
Jul. 02, 2011
|
|
Line of Credit [Abstract] | Â |
Line of Credit | NOTE F - Line of Credit In 2010, the Company amended and restated its secured revolving line of credit with Bank of America, N.A. (the “Bank”), increasing it from $35 million to $40 million. Under the amended and restated line of credit agreement, the Bank agreed to make loans to the Company in an aggregate amount not to exceed $40.0 million, including up to $10.0 million equivalent in Eurocurrency loans denominated in pounds sterling or Euro (“Eurocurrency Loans”) and up to $30.0 million of other committed loans to the Company (“Committed Loans”) at any time. As part of the aggregate availability, the Bank may also issue up to $7.5 million in letters of credit. Subject to the limits on availability and the other terms and conditions of this credit agreement, amounts may be borrowed, repaid and reborrowed without penalty. This amended credit facility matures and amounts outstanding must be paid by July 28, 2013. The interest rate for the Committed Loans will be, at the Company's option, either (i) the London Interbank Offered Rate (“LIBOR”) plus an applicable margin or (ii) the higher of the federal funds rate plus 50 basis points or the Bank's prime rate plus an applicable margin. The interest rate for any Eurocurrency Loans will be an interest settlement rate for deposits in pounds sterling or Euro plus an applicable margin. The applicable margin for LIBOR and Eurocurrency loans will be an amount between 1.75% and 2.25%, and the applicable margin for federal funds or the Bank's prime rate will be an amount between 0.25% and 0.75%, which will vary from time to time based upon the Company's consolidated leverage ratio. Under the line of credit agreement, the Company has agreed to comply with certain affirmative and negative covenants. The most restrictive covenant requires the Company to maintain a maximum ratio of consolidated funded indebtedness to consolidated adjusted EBITDA over any four-quarter period. The agreement requires the Company to maintain a minimum consolidated tangible net worth, computed at each year end, a maximum level of capital expenditures, each of which is calculated in accordance with the agreement. Amounts due under the credit agreement are guaranteed by certain domestic and foreign subsidiaries of the Company. Amounts due are also secured by a pledge of the assets of the Company and those of certain of its domestic subsidiaries. At July 2, 2011, the outstanding balance of the Company's amended line of credit was $21.2 million, bearing an interest rate of approximately 1.9%, and the unused and available portion, according to the terms of the amended agreement, was $18.8 million. At January 1, 2011, the outstanding balance of the Company's amended line of credit was $19.2 million, bearing an interest rate of approximately 2.0%, and the unused and available portion, according to the terms of the amended agreement, was $20.8 million. |
Commitments and Contingencies
|
6 Months Ended |
---|---|
Jul. 02, 2011
|
|
Commitments and Contingencies [Abstract] | Â |
Commitments and Contingencies | NOTE K - Commitments and Contingencies The Company was named as one of approximately ninety defendants in a contribution suit brought by CCL/Unilever relating to the J.M. Mills Landfill Site (the “Site”), which is part of the Peterson/Puritan Superfund Site in Cumberland, Rhode Island. These complaints alleged that the Company was liable under the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA") for contribution for Site investigation costs. The Company has reached settlement of the case and paid a settlement amount of approximately $0.2 million in 2010. The Company expects that the Federal Environmental Protection Agency ("EPA") will select a remedy for the Site in 2011. At that time, the EPA will initiate an administrative process (the "Special Notice Process") pursuant to CERCLA whereby the EPA will request that those entities that the EPA contends arranged for the disposal of hazardous materials at the Site (the PRPs), undertake the selected remedy at the Site. The EPA contends that the Company is a PRP at the Site. During the Special Notice Process, the Company and the other PRPs will engage in negotiations with the EPA regarding the remedy, and among themselves regarding the contribution of each PRP to overall remediation costs. Neither the cost of the remedy nor the identity of all PRPs is known at this time. Therefore it is not possible to assess the outcome of the Special Notice Process as it may relate to the Company's contribution to remediation costs. The Pension Benefit Guaranty Corporation (“PBGC”) has asserted that it believes that the Company has had a triggering event under Section 4062(e) of ERISA, which, had such an event occurred, would lead to an acceleration of funding contributions to the Company's defined benefit plan in the amount of $11.9 million. The PBGC has indicated that such contributions, if required, could be satisfied over a period of several years via a variety of funding alternatives. Specifically, during 2010, the PBGC asserted that the Company closed a facility in the USA when it completed the transfer of a significant portion of its manufacturing operations offshore. The Company maintains that the facility did not close, and therefore no triggering event occurred. Currently, the Company employs approximately 170 employees in the facility at issue. Notwithstanding the foregoing, the Company intends to ensure that its defined benefit plan remains viable and healthy and intends to continue to make all legally required contributions under the plan. Ongoing communications continue between the Company and PBGC. The Company further believes that it has sufficient liquidity to meet any required contributions to the Plan, up to and including the $11.9 million. The Company is involved in various other litigation and legal matters that have arisen in the ordinary course of business. To its knowledge, management believes that the ultimate resolution of any of those existing matters will not have a material adverse effect on the Company's consolidated financial position or results of operations. |
Inventory
|
6 Months Ended | ||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jul. 02, 2011
|
|||||||||||||||||||||
Inventory [Abstract] | Â | ||||||||||||||||||||
Inventory | NOTE B - Inventory The components of inventory are as follows:
|
Goodwill and Other Intangible Assets
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jul. 02, 2011
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Other Intangible Assets [Abstract] | Â | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Other Intangible Assets | NOTE H - Goodwill and Other Intangible Assets Goodwill and indefinite-lived intangible assets are not amortized but are subject to annual impairment tests, more frequently if events or circumstances occur that would indicate a potential decline in their fair value. The Company has identified two reporting units, consisting of the CAD and COG segments. The Company performs the assessments annually during the fourth quarter or on an interim basis if potential impairment indicators arise. The fair value of the reporting unit's goodwill is determined using established income and market valuation approaches and the fair value of other indefinite-lived intangible assets, consisting of two COG segment trade names, is determined using a forward relief from royalty method. For further discussion about impairment analysis, see the "Impairment Analysis" section of Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations," included in our Form 10-K for the fiscal year ended January 1, 2011. At July 2, 2011 and January 1, 2011, the approximate $15.3 million carrying value of goodwill, $11.9 million of which is expected to be tax deductible, related entirely to the COG segment. Other intangibles consisted of the following:
Amortization expense for the three and six month periods ended July 2, 2011 was approximately $0.2 million and $0.3 million, respectively. The estimated future amortization expense for other intangibles remaining as of July 2, 2011 is as follows:
|
Financial Instruments
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jul. 02, 2011
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Instruments [Abstract] | Â | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Instruments | NOTE I - Financial Instruments The Company is exposed to market risks arising from adverse changes in foreign exchange and interest rates. In the normal course of business, the Company manages these risks through a variety of strategies, including the use of derivatives. Certain derivatives are designated as cash flow hedges and qualify for hedge accounting treatment, while others do not qualify and are marked to market through earnings. Gains or losses from derivatives used to manage foreign exchange are classified as selling, general and administrative expenses. For cash flow hedges, changes in fair value are deferred in accumulated other comprehensive loss within shareholders' equity until the underlying hedged item is recognized in net income. For fair value hedges, changes in fair value are recognized immediately in earnings, consistent with the underlying hedged item. Hedging transactions are limited to an underlying exposure. As a result, any change in the value of the derivative instruments would be substantially offset by an opposite change in the value of the underlying hedged items. Hedging ineffectiveness and a net earnings impact occur when the change in the value of the hedge does not offset the change in the value of the underlying hedged item. Ineffectiveness of the Company's hedges is not material. If the derivative instrument is terminated, the Company continues to defer the related gain or loss and include it as a component of the cost of the underlying hedged item. Upon determination that the underlying hedged item will not be part of an actual transaction, the Company recognizes the related gain or loss in the statement of income immediately. The Company also uses derivatives that do not qualify for hedge accounting treatment. The Company accounts for such derivatives at market value with the resulting gains and losses reflected in the statements of income. The Company enters into arrangements with individual counterparties that it believes are creditworthy and generally settles such arrangements on a net basis. In addition, the Company performs a quarterly assessment of counterparty credit risk, including a review of credit ratings, credit default swap rates and potential nonperformance of the counterparty. Based on the most recent quarterly assessment of counterparty credit risk, the Company considers this risk to be low. Foreign Exchange The Company enters into derivatives, primarily forward foreign exchange contracts with terms of no more than one year, to manage risk associated with exposure to certain foreign currency denominated balance sheet positions, primarily intercompany accounts receivable. Gains or losses resulting from the translation of certain foreign currency balance sheet positions are recognized in the statement of income as incurred. Foreign currency derivatives had a total notional value of $32.5 million as of July 2, 2011 and $28.5 million as of January 1, 2011. Gains and losses on the derivatives were generally offset by changes in U.S. dollar value of the underlying hedged items. Interest Rates In the third quarter of 2010, the Company entered into a forward interest rate swap agreement with an initial notional amount of $15.0 million and a term of three years. This swap effectively fixes the interest rate on a portion of the Company's line of credit at approximately 1.2%. The item being hedged is the first interest payment to be made on $15.0 million of principal expected to occur each month beginning March 31, 2011. The Company measures hedge ineffectiveness using the “hypothetical” derivative method. This swap has been designated a cash flow hedge and the effect of the mark-to-market valuation is recorded as an adjustment, net of tax, to accumulated other comprehensive loss. From inception to July 2, 2011, the effect of the mark-to-market valuation, net of tax, was not material and was included as a component of accumulated other comprehensive loss. Fair Value Measurements The fair value framework requires the categorization of assets and liabilities into three levels based upon the assumptions (inputs) used to price the assets or liabilities. Level 1 provides the most reliable measure of fair value, whereas Level 3 generally requires significant management judgment. The three levels are defined as follows:
The fair values of our financial assets and liabilities are categorized as follows:
Accounts receivable are recorded at net realizable value, which approximates fair value. Accounts payable, included in accounts payable, accrued expenses and other current liabilities, are recorded at historical cost, which approximates fair value due to the short-term nature of the liabilities. Long-term debt is recorded at historical cost, which approximates fair value due to the variable interest rate. The effective portion of the pre-tax gains (losses) on our derivative instruments for the three and six month periods ended July 2, 2011 and July 3, 2010 are categorized in the following table:
|
Employee Benefit Plans
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jul. 02, 2011
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Employee Benefit Plans [Abstract] | Â | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Employee Benefit Plans | NOTE G - Employee Benefit Plans The following table illustrates the components of net periodic benefit cost:
The Company contributed $2.0 million to its defined benefit pension plans in the first quarter of 2011. The Company expects to contribute $6.1 million in total to its defined benefit pension plans in 2011, $2.1 million to meet minimum required contributions and $4.0 million as an additional voluntary contribution. With this additional voluntary contribution, the Company expects its defined benefit pension plans will be approximately 90% funded by the end of fiscal 2012. The Company expects to contribute $0.8 million to its defined contribution retirement plans and $0.2 million to its excess benefit plan in 2011. |
Income Taxes
|
6 Months Ended |
---|---|
Jul. 02, 2011
|
|
Income Taxes [Abstract] | Â |
Income Taxes | NOTE C - Income Taxes In the first six months of 2011 the effective tax rate was 32.6%. In the first six months of 2010 the effective tax rate was 28.3%. The increase is the result of the expiration of a tax holiday in China effective January 1, 2011 and a shift in the percentage of forecasted profitability to tax jurisdictions with higher tax rates. |
Segment Information
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Jul. 02, 2011
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Segment Information [Abstract] | Â | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | NOTE D - Segment Information The Company has two reportable business segments: Cross Accessory Division ("CAD") and Cross Optical Group ("COG"). The Company evaluates segment performance based upon operating profit or loss. Following is the segment information for the Company:
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Warranty Costs
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 02, 2011
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Warranty Costs [Abstract] | Â | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Warranty Costs | NOTE E - Warranty Costs CAD's Cross-branded writing instruments are sold with a full warranty of unlimited duration against mechanical failure. CAD's accessories are sold with a one-year warranty against mechanical failure and defects in workmanship and timepieces are warranted for a period of two years. Costa and Native sunglasses are sold with a lifetime warranty against defects in materials and workmanship. Estimated warranty costs are accrued at the time of sale. The most significant factors in the estimation of warranty cost liabilities include the operating efficiency and related cost of the service department, unit sales and the number of units that are eventually returned for warranty repair. The current portions of accrued warranty costs were $0.4 million at July 2, 2011 and $0.6 million January 1, 2011, and were recorded in accounts payable, accrued expenses and other liabilities. The COG segment revised their estimate of warranty liabilities in the second quarter and first six months of 2011 due to changes in estimates and assumptions. The following chart reflects the activity in aggregate accrued warranty costs:
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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) (USD $)
In Thousands |
3 Months Ended | 6 Months Ended | ||
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Jul. 02, 2011
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Jul. 03, 2010
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Jul. 02, 2011
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Jul. 03, 2010
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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) [Abstract] | Â | Â | Â | Â |
Net Income | $ 3,152 | $ 2,714 | $ 4,410 | $ 2,888 |
Other Comprehensive Income, Net of Tax: | Â | Â | Â | Â |
Foreign currency translation adjustments | 34 | 55 | 292 | (530) |
Unrealized (loss) gain on interest rate swap, net | (80) | 78 | 7 | 119 |
Pension liability adjustment, net | (19) | 39 | (72) | 72 |
Comprehensive Income | $ 3,087 | $ 2,886 | $ 4,637 | $ 2,549 |
Basis of Presentation
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6 Months Ended |
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Jul. 02, 2011
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Basis of Presentation [Abstract] | Â |
Basis of Presentation | NOTE A - Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("US GAAP") 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 US GAAP for financial statements. The preparation of financial statements requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. In the opinion of the Company's management, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting of items of a normal and recurring nature) necessary to present fairly the financial position as of July 2, 2011, the results of operations for the three-month and six-month periods ended July 2, 2011 and July 3, 2010, and the cash flows for the six-month periods ended June 2, 2011 and July 3, 2010. The results of operations for the six-month period ended July 2, 2011 are not necessarily indicative of the results to be expected for the full year. The Company considers events or transactions that occur after the balance sheet date but before the financial statements are issued to provide additional evidence relative to certain estimates or to identify matters that require additional disclosure. Subsequent events have been evaluated to the date of issuance of these financial statements. These financial statements should be read in conjunction with the Company's Annual Report on Form 10-K for the year ended January 1, 2011, which includes consolidated financial statements and notes thereto for the years ended January 1, 2011, January 2, 2010 and January 3, 2009. The Company operates on a 52/53 week fiscal year, ending on the last Saturday closest to December 31, and consists of 13 week fiscal quarters. |
Short-Term Investments
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6 Months Ended |
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Jul. 02, 2011
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Short-Term Investments [Abstract] | Â |
Short-Term Investments | NOTE J - Short-Term Investments At July 2, 2011, the Company had short-term investments of $0.6 million classified as trading securities. Realized and unrealized gains or losses on these short-term investments are included in other income. The amount of unrealized loss on these short-term investments was not material at July 2, 2011. |