10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended October 1, 2011

or

[  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________to __________

Commission File Number  1-6720

A. T. CROSS COMPANY

(Exact name of registrant as specified in its charter)

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)

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 (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

X Yes __ No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (S232.405 of this chapter) during the preceding 12 months (or such shorter period that the registrant was required to submit and post such files).

X Yes __ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.

Large accelerated filer	__	Accelerated filer	__
Non-accelerated filer	__	Smaller reporting company	X

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

__ Yes X No

Indicate the number of shares outstanding of each of the issuer's classes of common stock as of October 29, 2011:

Class A common stock -	11,132,968 shares
Class B common stock -	1,804,800 shares

PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements.

A. T. CROSS COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(THOUSANDS OF DOLLARS AND SHARES)	OCTOBER 1, 2011	JANUARY 1, 2011
ASSETS	(UNAUDITED)
Current Assets
Cash and cash equivalents	$13,184	$16,650
Short-term investments	367	2,514
Accounts receivable, gross	30,635	30,631
Allowance for doubtful accounts	(1,128)	(1,069)
Accounts receivable, net	29,507	29,562
Inventories	40,499	31,320
Deferred income taxes	5,229	5,590
Other current assets	6,843	4,883
Total Current Assets	95,629	90,519
Property, plant and equipment, gross	107,584	104,949
Accumulated depreciation	(93,331)	(89,867)
Property, Plant and Equipment, Net	14,253	15,082
Goodwill	15,279	15,279
Intangibles, Net	9,017	9,458
Deferred Income Taxes	9,820	11,318
Other Assets	2,725	2,970
Total Assets	$146,723	$144,626
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable, accrued expenses and other liabilities	$16,919	$19,564
Accrued compensation and related taxes	6,856	7,811
Retirement plan obligations	2,452	2,437
Income taxes payable	1,167	2,006
Total Current Liabilities	27,394	31,818
Long-Term Debt	21,221	19,221
Retirement Plan Obligations	14,501	16,274
Deferred Gain on Sale of Real Estate	2,346	2,737
Other Long-Term Liabilities	452	687
Accrued Warranty Costs	1,578	1,424
Commitments and Contingencies (Note K)	-	-
Total Liabilities	67,492	72,161
Shareholders' Equity
Common stock, par value $1 per share:
Class A - authorized 40,000 shares, 18,700 shares issued and
11,128 shares outstanding at October 1, 2011, and 18,439 shares
issued and 11,115 shares outstanding at January 1, 2011	18,700	18,439
Class B - authorized 4,000 shares, 1,805 shares issued and
outstanding at October 1, 2011 and January 1, 2011	1,805	1,805
Additional paid-in capital	28,682	26,014
Retained earnings	87,444	81,114
Accumulated other comprehensive loss	(12,628)	(12,659)
Treasury stock, at cost	(44,772)	(42,248)
Total Shareholders' Equity	79,231	72,465
Total Liabilities and Shareholders' Equity	$146,723	$144,626

See notes to condensed consolidated financial statements.

A. T. CROSS COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

(THOUSANDS OF DOLLARS AND SHARES,	THREE MONTHS ENDED		NINE MONTHS ENDED
EXCEPT PER SHARE AMOUNTS)	OCTOBER 1, 2011	OCTOBER 2, 2010	OCTOBER 1, 2011	OCTOBER 2, 2010
Net sales	$43,809	$38,156	$131,359	$114,277
Cost of goods sold	20,338	17,410	57,347	50,107
Gross Profit	23,471	20,746	74,012	64,170
Selling, general and administrative expenses	17,396	15,918	56,069	50,053
Service and distribution costs	2,325	1,897	6,020	5,366
Research and development expenses	746	694	2,024	2,067
Operating Income	3,004	2,237	9,899	6,684
Interest income	3	9	9	13
Interest expense	(168)	(251)	(555)	(844)
Other income	(492)	(195)	(464)	(22)
Interest and Other Expense	(657)	(437)	(1,010)	(853)
Income Before Income Taxes	2,347	1,800	8,889	5,831
Income tax provision	427	170	2,559	1,313
Net Income	$1,920	$1,630	$6,330	$4,518
Net Income Per Share:
Basic	$0.16	$0.13	$0.52	$0.35
Diluted	$0.15	$0.13	$0.49	$0.34
Weighted Average Shares Outstanding:
Denominator for Basic Net Income Per Share	12,244	12,124	12,183	12,929
Effect of dilutive securities	796	400	792	264
Denominator for Diluted Net Income Per Share	13,040	12,524	12,975	13,193

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

(THOUSANDS OF DOLLARS)	THREE MONTHS ENDED		NINE MONTHS ENDED
	OCTOBER 1, 2011	OCTOBER 2, 2010	OCTOBER 1, 2011	OCTOBER 2, 2010
Net Income	$1,920	$1,630	$6,330	$4,518
Other Comprehensive Income, Net of Tax:
Foreign currency translation adjustments	(242)	451	50	(79)
Unrealized (loss) gain on interest rate swap, net	(25)	(21)	(18)	98
Pension liability adjustment, net	71	(50)	(1)	22
Comprehensive Income	$1,724	$2,010	$6,361	$4,559

See notes to condensed consolidated financial statements.

A. T. CROSS COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(THOUSANDS OF DOLLARS)	NINE MONTHS ENDED
	OCTOBER 1, 2011	OCTOBER 2, 2010
Cash (Used in) Provided by Operating Activities:
Net Income	$6,330	$4,518
Adjustments to reconcile net income to net cash (used in)
provided by operating activities:
Depreciation	4,035	4,329
Amortization	567	738
Restructuring charges paid	-	(748)
Amortization of deferred gain	(391)	(391)
Provision for bad debts	104	85
Deferred income taxes	1,105	2,412
Provision for accrued warranty costs	592	569
Warranty costs paid	(572)	(527)
Stock-based compensation and directors' fees	1,432	1,559
Excess tax benefit from stock-based awards	(839)	-
Unrealized loss on short-term investments	118	310
Unrealized (gain) loss on foreign exchange contracts	(601)	633
Unrealized foreign currency transaction (gain) loss	(93)	41
Changes in operating assets and liabilities:
Accounts receivable	(54)	3,602
Inventories	(9,100)	(9,750)
Other assets	(1,008)	(1,326)
Accounts payable	(1,442)	730
Other liabilities	(3,508)	(2,423)
Net Cash (Used in) Provided by Operating Activities	(3,325)	4,361
Cash (Used in) Provided by Investing Activities:
Purchases of short-term investments	(18,059)	(11,295)
Sales of short-term investments	20,088	16,209
Additions to property, plant and equipment	(3,180)	(3,791)
Additions to trademarks and patents	(126)	(189)
Net Cash (Used in) Provided by Investing Activities	(1,277)	934
Cash Provided by (Used in) Financing Activities:
Borrowing on long-term debt	16,300	5,500
Repayment of long-term debt	(14,300)	(6,000)
Excess tax benefit from stock-based awards	839	-
Proceeds from sale of Class A common stock, net	(247)	13
Purchase of treasury stock	(1,619)	(77)
Purchase of treasury stock from related party	-	(5,612)
Net Cash Provided by (Used in) Financing Activities	973	(6,176)
Effect of exchange rate changes on cash and cash equivalents	163	20
Decrease in Cash and Cash Equivalents	(3,466)	(861)
Cash and cash equivalents at beginning of period	16,650	10,443
Cash and Cash Equivalents at End of Period	$13,184	$9,582
SUPPLEMENTAL INFORMATION
Income taxes paid (refunded), net	$661	$(598)
Interest paid	$526	$788

See notes to condensed consolidated financial statements.

A. T. CROSS COMPANY AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

October 1, 2011

(UNAUDITED)

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 October 1, 2011, the results of operations for the three-month and nine-month periods ended October 1, 2011 and October 2, 2010, and the cash flows for the nine-month periods ended October 1, 2011 and October 2, 2010.  The results of operations for the nine-month period ended October 1, 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.

NOTE B - Inventory

The components of inventory are as follows:

(THOUSANDS OF DOLLARS)	OCTOBER 1, 2011	JANUARY 1, 2011
Finished goods	$25,444	$18,379
Work in process	5,158	3,229
Raw materials	9,897	9,712
	$40,499	$31,320

NOTE C - Income Taxes

In the first nine months of 2011 the effective tax rate was 28.8%.  In the first nine months of 2010 the effective tax rate was 22.5%.  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.

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:

(THOUSANDS OF DOLLARS)	THREE MONTHS ENDED		NINE MONTHS ENDED
	OCTOBER 1, 2011	OCTOBER 2, 2010	OCTOBER 1, 2011		OCTOBER 2, 2010
Revenues from External Customers:
CAD	$25,795	$23,092	$71,681		$65,191
COG	18,014	15,064	59,678		49,086
Total	$43,809	$38,156	$131,359		$114,277
Depreciation and Amortization:
CAD	$1,162	$1,277	$3,535		$3,876
COG	388	406	1,067		1,191
Total	$1,550	$1,683	$4,602		$5,067
Operating Income (Loss):
CAD	$748	$248	$(122)		$(952)
COG	2,256	1,989	10,021		7,636
Total	$3,004	$2,237	$9,899		$6,684
Total Interest and Other Expense:	$(657)	$(437)	$(1,010)		$(853)
Total Income Before Income Taxes:	$2,347	$1,800	$8,889		$5,831
Expenditure for Long-Lived Assets:
CAD	$677	$679	$1,821		$3,147
COG	687	194	1,485		833
Total	$1,364	$873	$3,306		$3,980
			OCTOBER 1, 2011	JANUARY 1, 2011
Segment Assets:
CAD			$94,438		$96,472
COG			52,285		48,154
		Total	$146,723		$144,626
Goodwill:
CAD			$-		$-
COG			15,279		15,279
		Total	$15,279		$15,279

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 October 1, 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 first quarter and first nine months of 2011 due to changes in estimates and assumptions.  The following chart reflects the activity in aggregate accrued warranty costs:

(THOUSANDS OF DOLLARS)	THREE MONTHS ENDED		NINE MONTHS ENDED
	OCTOBER 1, 2011	OCTOBER 2, 2010	OCTOBER 1, 2011	OCTOBER 2, 2010
Accrued Warranty Costs - Beginning of Period	$1,862	$1,998	$1,998	$1,936
Warranty costs paid	(432)	(135)	(572)	(527)
Warranty costs accrued	588	115	818	569
Impact of changes in estimates and assumptions	-	-	(226)	-
Accrued Warranty Costs - End of Period	$2,018	$1,978	$2,018	$1,978

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 October 1, 2011, the outstanding balance of the Company's amended line of credit was $21.2 million, bearing an interest rate of approximately 2.0 %, and the unused and available portion, according to the terms of the amended agreement, was $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.

NOTE G - Employee Benefit Plans

The following table illustrates the components of net periodic benefit cost:

(THOUSANDS OF DOLLARS)	THREE MONTHS ENDED		NINE MONTHS ENDED
	OCTOBER 1, 2011	OCTOBER 2, 2010	OCTOBER 1, 2011	OCTOBER 2, 2010
Service cost	$13	$11	$38	$33
Interest cost	554	560	1,662	1,680
Expected return on plan assets	(559)	(567)	(1,678)	(1,701)
Amortization of unrecognized loss	238	117	716	351
Amortization of prior service cost	3	3	9	9
Net Periodic Benefit Cost	$249	$124	$747	$372

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 in additional voluntary contributions.  With these additional voluntary contributions, the Company expects its defined benefit pension plans will be greater than 80% funded by the end of fiscal 2012.  The Company contributed $2.0 million to its defined benefit pension plans in the first quarter of 2011, and in October 2011 paid $1.5 million toward the $4 million additional voluntary contribution goal.  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.

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 October 1, 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:

(THOUSANDS OF DOLLARS)	OCTOBER 1, 2011			JANUARY 1, 2011
	GROSS CARRYING AMOUNT	ACCUMULATED AMORTIZATION	OTHER INTANGIBLES, NET	GROSS CARRYING AMOUNT	ACCUMULATED AMORTIZATION	OTHER INTANGIBLES, NET
Amortized:
Trademarks	$9,247	$8,947	$300	$9,201	$8,805	$396
Patents	3,441	3,209	232	3,361	3,124	237
Customer relationships	3,170	1,585	1,585	3,170	1,245	1,925
	$15,858	$13,741	2,117	$15,732	$13,174	2,558
Not Amortized:
Trade names			6,900			6,900
Intangibles, Net			$9,017			$9,458

Amortization expense for the three and nine month periods ended October 1, 2011 was approximately $0.3 million and $0.6 million, respectively.  The estimated future amortization expense for other intangibles remaining as of October 1, 2011 is as follows:

(THOUSANDS OF DOLLARS)	2011	2012	2013	2014	2015	THEREAFTER
	$155	$659	$603	$547	$153	$-

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 $43.0 million as of October 1, 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 October 1, 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:

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.

The fair values of our financial assets and liabilities are categorized as follows:

(THOUSANDS OF DOLLARS)	OCTOBER 1, 2011				JANUARY 1, 2011
	LEVEL 1	LEVEL 2	LEVEL 3	TOTAL	LEVEL 1	LEVEL 2	LEVEL 3	TOTAL
Assets:
Money market funds (A)	$5,103	$-	$-	$5,103	$7,003	$-	$-	$7,003
Short-term investments (B)	367	-	-	367	2,514	-	-	2,514
Derivatives not designated as
hedging instruments:
Foreign exchange contracts (C)	-	623	-	623	-	-	-	-
	$5,470	$623	$-	$6,093	$9,517	$-	$-	$9,517

Liabilities
Derivatives designated as
hedging instruments:
Interest rate swaps (D)	$-	$212	$-	$212	$-	$184	$-	$184
Derivatives not designated as
hedging instruments:
Foreign exchange contracts (C)	-	22	-	22	-	154	-	154
	$-	$234	$-	$234	$-	$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 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
(D)	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

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 nine month periods ended October 1, 2011 and October 2, 2010 are categorized in the following table:

(THOUSANDS OF DOLLARS)	THREE MONTHS ENDED		NINE MONTHS ENDED
	OCTOBER 1, 2011	OCTOBER 2, 2010	OCTOBER 1, 2011	OCTOBER 2, 2010
Fair Value / Non-designated Hedges:
Foreign exchange contracts (A)	$822	$(937)	$601	$(633)
Cash Flow Hedges:
Effective portion recognized in other
comprehensive income:
Interest rate swaps	$(1)	$96	$174	$534
Effective portion reclassified from other
comprehensive income:
Interest rate swaps (B)	$(39)	$(128)	$(203)	$(383)

(A)	Included in selling, general and administrative expenses
(B)	Included in interest expense

NOTE J - Short-Term Investments

At October 1, 2011, the Company had short-term investments of $0.4 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 $0.1 million at October 1, 2011.

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.  In 2010, the Company reached settlement of the case and paid a settlement amount of approximately $0.2 million.

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.  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.

NOTE L - Related Party Transactions

Pursuant to a Stock Redemption Agreement with Galal Doss, a director and major stockholder of the Company at that time, the Company purchased approximately 1.4 million shares of the Company’s Class A common stock in the third quarter of 2010 for approximately $5.6 million.

Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations.

Overview

A.T. Cross Company is a designer and marketer of branded personal accessories including writing instruments, reading glasses, personal and business accessories and sunglasses.  The Company has been operating in a difficult economic environment in mature as well as competitive categories.  The Company has challenged itself to build upon its unique attributes in order to develop a vibrant, diversified and forward-looking company poised for sustainable growth and long-term profit.

Cross Accessory Division ("CAD")

The Company has been a manufacturer and marketer of fine quality writing instruments since 1846.  Sold primarily under the Cross brand, ball-point, fountain and selectip rolling ball pens and mechanical pencils are offered in a variety of styles and finishes.  Cross also manufactures and markets a line of FranklinCovey® entry level price point refillable writing instruments.  Also under the Cross brand, CAD offers a variety of personal and business accessories including leather goods, reading glasses, watches, desk sets, cufflinks, and stationery.  This segment typically records its highest sales and operating income in the fourth quarter of the fiscal year.

Cross Optical Group ("COG")

The Company’s COG segment consists of its wholly-owned subsidiary Cross Optical Group, Inc.  This business designs, manufactures and markets high-quality, high-performance polarized sunglasses under the brand names Costa and Native.  This segment typically records its highest sales and operating income in the second quarter of the fiscal year.

Results of Operations Third quarter 2011 Compared to Third quarter 2010

In the third quarter of 2011, the Company reported net income of $1.9 million, or $0.16 per basic share and $0.15 per diluted share, compared to net income of $1.6 million, or $0.13 per basic and diluted share in the third quarter of 2010.

The following chart details net sales performance:

(THOUSANDS OF DOLLARS)	THREE MONTHS ENDED		PERCENTAGE
	OCTOBER 1, 2011	OCTOBER 2, 2010	CHANGE
Cross Accessories Division (CAD)	$25,795	$23,092	11.7%
Cross Optical Group (COG)	18,014	15,064	19.6%
Consolidated Net Sales	$43,809	$38,156	14.8%

Consolidated net sales were $43.8 million in the third quarter of 2011 compared to $38.2 million in the third quarter of 2010.  The effect of foreign exchange was favorable to consolidated third quarter 2011 sales results by approximately $0.8 million, or 2.0 percentage points.

CAD sales increased 11.7% in the third quarter of 2011 compared to the third quarter of 2010.  The Americas and the Asia, Middle East & Africa regions reported increased sales compared to the third quarter of 2010.  COG grew by 19.6%, led by the Costa brand which increased 23.4% compared to the prior year third quarter.

The following chart details gross profit margins for both segments as well as the consolidated gross profit margins:

(THOUSANDS OF DOLLARS)	THREE MONTHS ENDED		PERCENTAGE
	OCTOBER 1, 2011	OCTOBER 2, 2010	POINT CHANGE
CAD	49.1%	51.4%	(2.3)
COG	60.1%	59.0%	1.1
Consolidated Gross Profit Margins	53.6%	54.4%	(0.8)

Consolidated operating expenses for the third quarter of 2011 were $20.5 million, or 46.7% of sales, as compared to $18.5 million, or 48.5% of sales a year ago, a decrease of 180 basis points.  The CAD segment operating expenses were 2.5% higher than the prior year’s third quarter.  The COG segment operating expenses were 24.2% higher than last year.  These increases were directly related to the higher sales volume in the quarter.

In the third quarter of 2011, the effective tax rate was 18.2%.  In the third quarter of 2010, the effective tax rate was 9.4 %.  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.

Results of Operations Nine months Ended October 1, 2011 Compared to Nine months Ended October 2, 2010

In the first nine months of 2011, the Company reported net income of $6.3 million, or $0.52 per basic and $0.49 per diluted share, compared to net income of $4.5 million, or $0.35 per basic share and $0.34 per diluted share in the first nine months of 2010.

The following chart details net sales performance:

(THOUSANDS OF DOLLARS)	NINE MONTHS ENDED		PERCENTAGE
	OCTOBER 1, 2011	OCTOBER 2, 2010	CHANGE
Cross Accessories Division (CAD)	$71,681	$65,191	10.0%
Cross Optical Group (COG)	59,678	49,086	21.6%
Consolidated Net Sales	$131,359	$114,277	14.9%

Consolidated net sales were $131.4 million in the first nine months of 2011 compared to $114.3 million in the first nine months of 2010.  The effect of foreign exchange was favorable to consolidated 2011 sales results by approximately $2.3 million, or 1.9 percentage points.

CAD sales increased 10.0% in the first nine months of 2011 compared to the first nine months of 2010.  Growth was across every region and among Distributors and Retailers as they are experiencing positive sell through this year compared to last.  Business Gift Channel sales also improved as businesses are reinstating gift programs that were put on hold during the recession.  COG grew by 21.6%, led by the Costa brand which increased 26.0% compared to the prior year first nine months.

The following chart details gross profit margins for both segments as well as the consolidated gross profit margins:

(THOUSANDS OF DOLLARS)	NINE MONTHS ENDED		PERCENTAGE
	OCTOBER 1, 2011	OCTOBER 2, 2010	POINT CHANGE
CAD	53.4%	54.1%	(0.7)
COG	59.8%	58.8%	1.0
Consolidated Gross Profit Margins	56.3%	56.2%	0.1

Consolidated gross margins were 56.3% in the first nine months of 2011, 10 basis points improved from the same period last year.  CAD gross margins declined in the first nine months of 2011 to 53.4%, 70 basis points lower than 2010.  COG margins in the first nine months of 2011 were 59.8%, above last year by 100 basis points.

Consolidated operating expenses for the first nine months of 2011 were $64.1 million, or 48.8% of sales, as compared to $57.5 million, or 50.3% of sales a year ago, a decrease of 150 basis points.  The CAD segment operating expenses were 6.0% higher than the prior year’s first nine months.  The COG segment operating expenses were 20.9% higher than last year, in line with the higher sales volume.

In the first nine months of 2011 the effective tax rate was 28.8%.  In the first nine months of 2010 the effective tax rate was 22.5%.  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.

Liquidity and Sources of Capital

Historically, the Company's sources of liquidity and capital resources have been its cash and cash equivalents (“cash”), short-term investments, cash generated from operations and amounts available under the Company's line of credit.  These sources have been sufficient in the past to support the Company's routine operating requirements, capital projects, contributions to the retirement plans, stock repurchase programs and debt service.  The Company expects its future cash needs in 2011 will be met by these historical sources of liquidity and capital.

The Company's cash and short-term investment balance of $13.6 million at October 1, 2011 decreased $5.6 million from January 1, 2011.  The most significant factors affecting the Company's cash balance are discussed in this section.

Inventory was $40.5 million at October 1, 2011, an increase of $9.2 million since January 1, 2011.  CAD inventory increased $5.6 million and COG inventory levels increased by $3.6 million from year end 2010.  The increase in CAD segment inventory was to support anticipated higher sales volumes, product cost inflation and changes in distribution.  The increase in COG inventory was to support anticipated higher sales volumes from new product offerings.

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 in additional voluntary contributions.  With these additional voluntary contributions, the Company expects its defined benefit pension plans will be greater than 80% funded by the end of fiscal 2012.  The Company contributed $2.0 million to its defined benefit pension plans in the first quarter of 2011, and in October 2011 paid $1.5 million toward the $4 million additional voluntary contribution goal.  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.

As part of the acquisition of Native Eyewear, the Company assumed the liability of future payments associated with a "settlement in lieu of future royalties."  The payments are $0.2 million annually each January through 2012.

The Company has a $40 million secured line of credit with a bank.  Under this agreement, the Company has the option to borrow at various interest rates depending upon the type of borrowings made and the Company's consolidated leverage ratio.  At October 1, 2011, the outstanding balance of the Company's amended line of credit was $21.2 million, bearing an interest rate of approximately 2.0%, and the unused and available portion, according to the terms of the amended agreement, was $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.  The Company was in compliance with its various debt covenants as of October 1, 2011.  The agreement requires the Company to maintain a minimum consolidated tangible net worth, computed at each year end, a maximum level of capital expenditures and a minimum ratio of adjusted EBITDA to required debt service payments over any four-quarter period, each of which is calculated in accordance with the agreement:

Covenant Description	Covenant Requirement	Calculated Company Value October 1, 2011
Consolidated Tangible Net Worth	Cannot be less than $37.5 million plus 50% of Net Income for fiscal years after 2010, or $40.7 million	$55 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	$3.2 million
Consolidated Leverage Ratio	Cannot exceed 2.75 to 1	0.95:1

The Company believes that existing cash and cash provided by operations, supplemented as appropriate by the Company's borrowing arrangements, will be adequate to finance its foreseeable operating and capital requirements, the stock repurchase plan and contributions to the retirement plans.  Should operating cash flows in 2011 not materialize as projected, the Company has a number of planned alternatives to ensure that it will have sufficient cash to meet its operating needs.  These alternatives include implementation of strict cost controls on discretionary spending and delaying non-critical research and development, capital projects and completion of the stock repurchase plan.

At October 1, 2011, cash and short-term investments available for domestic operations was approximately $9.3 million, while cash held offshore was approximately $4.3 million.

Critical Accounting Policies

There have been no changes to our critical accounting policies and estimates from the information provided in 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.

Forward-Looking Statements

Statements contained herein that are not historical fact are forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.  In addition, words such as "believes," "anticipates," "expects," "intends," "will" and similar expressions are intended to identify forward-looking statements, including but not limited to statements related to the expected accounting treatment applicable to the carrying value of goodwill related to COG; availability of sufficient liquidity and sources of capital; compliance with laws and regulations (including in respect to contributions to the Company’s defined benefit plan); anticipated higher sales volumes within CAD and COG and higher product cost inflation and changes in distribution within CAD; statements related to the outcome of the EPA’s Special Notice Process and anticipated sufficiency of available working capital.  The Company cautions that a number of important factors could cause the Company's actual results for fiscal 2011 and beyond to differ materially from those expressed in any forward-looking statements made by, or on behalf of, the Company.  Forward-looking statements involve a number of risks and uncertainties.  For a discussion of certain of other of those risks, see "Risk Factors" in Item 1A of the Company's 2010 Annual Report on Form 10-K.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk.

Refer to the Company's Annual Report on Form 10-K for the fiscal year ended January 1, 2011 for a complete discussion of the Company's market risk.  There have been no material changes to the market risk information included in the Company's 2010 Annual Report on Form 10-K.

Item 4.  Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Our Chief Executive Officer and Chief Financial Officer have evaluated our disclosure controls and procedures as of October 1, 2011 and have concluded that these disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities and Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms.  These disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports we file or submit is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the third quarter of 2011 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1.  Legal Proceedings.

Refer to Item 3 in the Company's Form 10-K Annual Report for the fiscal year ended January 1, 2011 for a complete discussion of the Company's legal proceedings.  No material developments have occurred in the Legal Proceedings described in such Item 3.

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.

Item 1A.  Risk Factors.

Natural disasters in certain regions, such as the recent tsunami and earthquake in Japan, could adversely affect our supply chain or customer base, which in turn, could have a negative impact on our business, the cost and demand for our products, and our results of operations.  Refer to Item 1A in the Company's Form 10-K Annual Report for the fiscal year ended January 1, 2011 for a complete discussion of the risk factors which could materially affect the Company's business, financial condition or future results.

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds.

Issuer Purchases of Equity Securities:

	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
July 3, 2011 - July 30, 2011	2,667	$11.32	-	479,200
July 31, 2011 - August 27, 2011	11,200	$10.51	8,000	471,200
August 28, 2011 - October 1, 2011	34,000	$9.97	34,000	437,200
	47,867	$10.17	42,000

In 2008, the Company's Board of Directors authorized management to repurchase up to 1.0 million shares of the Company's outstanding Class A common stock, depending on market conditions.  Cumulatively, through October 1, 2011, the Company purchased approximately 0.6 million shares under this plan for approximately $2.4 million at an average price per share of $4.29.

Item 3.  Defaults Upon Senior Securities.

None

Item 4.  (Removed and Reserved)

Item 5.  Other Information.

None

Item 6.  Exhibits.

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

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:  November 15, 2011	By:  DAVID G. WHALEN David G. Whalen Chief Executive Officer
Date:  November 15, 2011	By:  KEVIN F. MAHONEY Kevin F. Mahoney Senior Vice President, Finance and Chief Financial Officer

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, David G. Whalen, certify that:

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:   November  15,  2011			DAVID G. WHALEN
			David G. Whalen
			President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, Kevin F. Mahoney, certify that:

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: November 15, 2011			KEVIN F. MAHONEY
			Kevin F. Mahoney
			Chief Financial Officer

EX-32

Exhibit 32

FORM OF 906 CERTIFICATION

The certification set forth below is being submitted in connection with the Quarterly Report on Form

10-Q for the quarter ended October 1, 2011 (the "Report") for the purpose of complying with Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934 (the "Exchange Act") and Section 1350 of Chapter 63 of Title 18 of the United States Code.

David G. Whalen, the Chief Executive Officer and Kevin F. Mahoney, the Chief Financial Officer of A.T. Cross Company, each certifies that, to the best of his knowledge:

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:  November 15, 2011	DAVID G. WHALEN
	David G. Whalen
	Chief Executive Officer
	KEVIN F. MAHONEY
	Kevin F. Mahoney
	Chief Financial Officer

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) In Thousands, except Per Share data	Oct. 01, 2011	Jan. 01, 2011
Class A [Member]
Shareholders' Equity
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)	18,700	18,439
Common stock, shares outstanding (in shares)	11,128	11,115
Class B [Member]
Shareholders' Equity
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

XML

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (USD $) In Thousands, except Per Share data	3 Months Ended		9 Months Ended
	Oct. 01, 2011	Oct. 02, 2010	Oct. 01, 2011	Oct. 02, 2010
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) [Abstract]
Net sales	$ 43,809	$ 38,156	$ 131,359	$ 114,277
Cost of goods sold	20,338	17,410	57,347	50,107
Gross Profit	23,471	20,746	74,012	64,170
Selling, general and administrative expenses	17,396	15,918	56,069	50,053
Service and distribution costs	2,325	1,897	6,020	5,366
Research and development expenses	746	694	2,024	2,067
Operating Income	3,004	2,237	9,899	6,684
Interest income	3	9	9	13
Interest expense	(168)	(251)	(555)	(844)
Other income	(492)	(195)	(464)	(22)
Interest and Other Expense	(657)	(437)	(1,010)	(853)
Income Before Income Taxes	2,347	1,800	8,889	5,831
Income tax provision	427	170	2,559	1,313
Net Income	$ 1,920	$ 1,630	$ 6,330	$ 4,518
Net Income Per Share:
Basic (in dollars per share)	$ 0.16	$ 0.13	$ 0.52	$ 0.35
Diluted (in dollars per share)	$ 0.15	$ 0.13	$ 0.49	$ 0.34
Weighted Average Shares Outstanding:
Denominator for Basic Net Income Per Share (in shares)	12,244	12,124	12,183	12,929
Effect of dilutive securities (in shares)	796	400	792	264
Denominator for Diluted Net Income Per Share (in shares)	13,040	12,524	12,975	13,193

XML

Document And Entity Information (USD $) In Millions, except Share data	9 Months Ended
	Oct. 01, 2011	Jul. 03, 2010	Oct. 29, 2011 Class A [Member]	Oct. 29, 2011 Class B [Member]
Entity Information [Line Items]
Entity Registrant Name	CROSS A T CO
Entity Central Index Key	0000025793
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Smaller Reporting Company
Entity Public Float		$ 33
Entity Common Stock, Shares Outstanding			11,132,968	1,804,800
Document Fiscal Year Focus	2011
Document Fiscal Period Focus	Q3
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Oct. 01, 2011

XML

Line of Credit

9 Months Ended

Oct. 01, 2011

Line of Credit [Abstract]

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 October 1, 2011, the outstanding balance of the Company's amended line of credit was $21.2 million, bearing an interest rate of approximately 2.0 %, and the unused and available portion, according to the terms of the amended agreement, was $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.

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Commitments and Contingencies

9 Months Ended

Oct. 01, 2011

Commitments and Contingencies [Abstract]

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.  In 2010, the Company reached settlement of the case and paid a settlement amount of approximately $0.2 million.

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.  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.

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Inventory

9 Months Ended

Oct. 01, 2011

Inventory [Abstract]

Inventory

NOTE B - Inventory

The components of inventory are as follows:

(THOUSANDS OF DOLLARS)	OCTOBER 1, 2011	JANUARY 1, 2011
Finished goods	$25,444	$18,379
Work in process	5,158	3,229
Raw materials	9,897	9,712
	$40,499	$31,320

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Goodwill and Other Intangible Assets

9 Months Ended

Oct. 01, 2011

Goodwill and Other Intangible Assets [Abstract]

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 October 1, 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:

(THOUSANDS OF DOLLARS)	OCTOBER 1, 2011			JANUARY 1, 2011
	GROSS CARRYING AMOUNT	ACCUMULATED AMORTIZATION	OTHER INTANGIBLES, NET	GROSS CARRYING AMOUNT	ACCUMULATED AMORTIZATION	OTHER INTANGIBLES, NET
Amortized:
Trademarks	$9,247	$8,947	$300	$9,201	$8,805	$396
Patents	3,441	3,209	232	3,361	3,124	237
Customer relationships	3,170	1,585	1,585	3,170	1,245	1,925
	$15,858	$13,741	2,117	$15,732	$13,174	2,558
Not Amortized:
Trade names			6,900			6,900
Intangibles, Net			$9,017			$9,458

Amortization expense for the three and nine month periods ended October 1, 2011 was approximately $0.3 million and $0.6 million, respectively.  The estimated future amortization expense for other intangibles remaining as of October 1, 2011 is as follows:

(THOUSANDS OF DOLLARS)	2011	2012	2013	2014	2015	THEREAFTER
	$155	$659	$603	$547	$153	$-

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Financial Instruments

9 Months Ended

Oct. 01, 2011

Financial Instruments [Abstract]

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 $43.0 million as of October 1, 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 October 1, 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:

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.

The fair values of our financial assets and liabilities are categorized as follows:

(THOUSANDS OF DOLLARS)	OCTOBER 1, 2011				JANUARY 1, 2011
	LEVEL 1	LEVEL 2	LEVEL 3	TOTAL	LEVEL 1	LEVEL 2	LEVEL 3	TOTAL
Assets:
Money market funds (A)	$5,103	$-	$-	$5,103	$7,003	$-	$-	$7,003
Short-term investments (B)	367	-	-	367	2,514	-	-	2,514
Derivatives not designated as
hedging instruments:
Foreign exchange contracts (C)	-	623	-	623	-	-	-	-
	$5,470	$623	$-	$6,093	$9,517	$-	$-	$9,517

Liabilities
Derivatives designated as
hedging instruments:
Interest rate swaps (D)	$-	$212	$-	$212	$-	$184	$-	$184
Derivatives not designated as
hedging instruments:
Foreign exchange contracts (C)	-	22	-	22	-	154	-	154
	$-	$234	$-	$234	$-	$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 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
(D)	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

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 nine month periods ended October 1, 2011 and October 2, 2010 are categorized in the following table:

(THOUSANDS OF DOLLARS)	THREE MONTHS ENDED		NINE MONTHS ENDED
	OCTOBER 1, 2011	OCTOBER 2, 2010	OCTOBER 1, 2011	OCTOBER 2, 2010
Fair Value / Non-designated Hedges:
Foreign exchange contracts (A)	$822	$(937)	$601	$(633)
Cash Flow Hedges:
Effective portion recognized in other
comprehensive income:
Interest rate swaps	$(1)	$96	$174	$534
Effective portion reclassified from other
comprehensive income:
Interest rate swaps (B)	$(39)	$(128)	$(203)	$(383)

(A)	Included in selling, general and administrative expenses
(B)	Included in interest expense

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Employee Benefit Plans

9 Months Ended

Oct. 01, 2011

Employee Benefit Plans [Abstract]

Employee Benefit Plans

NOTE G - Employee Benefit Plans

The following table illustrates the components of net periodic benefit cost:

(THOUSANDS OF DOLLARS)	THREE MONTHS ENDED		NINE MONTHS ENDED
	OCTOBER 1, 2011	OCTOBER 2, 2010	OCTOBER 1, 2011	OCTOBER 2, 2010
Service cost	$13	$11	$38	$33
Interest cost	554	560	1,662	1,680
Expected return on plan assets	(559)	(567)	(1,678)	(1,701)
Amortization of unrecognized loss	238	117	716	351
Amortization of prior service cost	3	3	9	9
Net Periodic Benefit Cost	$249	$124	$747	$372

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 in additional voluntary contributions.  With these additional voluntary contributions, the Company expects its defined benefit pension plans will be greater than 80% funded by the end of fiscal 2012.  The Company contributed $2.0 million to its defined benefit pension plans in the first quarter of 2011, and in October 2011 paid $1.5 million toward the $4 million additional voluntary contribution goal.  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.

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (USD $) In Thousands	9 Months Ended
	Oct. 01, 2011	Oct. 02, 2010
Cash (Used in) Provided by Operating Activities:
Net Income	$ 6,330	$ 4,518
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Depreciation	4,035	4,329
Amortization	567	738
Restructuring charges paid	0	(748)
Amortization of deferred gain	(391)	(391)
Provision for bad debts	104	85
Deferred income taxes	1,105	2,412
Provision for accrued warranty costs	592	569
Warranty costs paid	(572)	(527)
Stock-based compensation and directors' fees	1,432	1,559
Excess Tax Benefit from stock-based awards	(839)	0
Unrealized loss on short-term investments	118	310
Unrealized (gain) loss on foreign exchange contracts	(601)	633
Unrealized foreign currency transaction (gain) loss	(93)	41
Changes in operating assets and liabilities:
Accounts Receivable	(54)	3,602
Inventories	(9,100)	(9,750)
Other Assets	(1,008)	(1,326)
Accounts payable	(1,442)	730
Other liabilities	(3,508)	(2,423)
Net Cash (Used in) Provided by Operating Activities	(3,325)	4,361
Cash (Used in) Provided by Investing Activities:
Purchases of short-term investments	(18,059)	(11,295)
Sales of short-term investments	20,088	16,209
Additions to property, plant and equipment	(3,180)	(3,791)
Additions to trademarks and patents	(126)	(189)
Net Cash (Used in) Provided by Investing Activities	(1,277)	934
Cash Provided by (Used in) Financing Activities:
Borrowing on long-term debt	16,300	5,500
Repayment of long-term debt	(14,300)	(6,000)
Excess tax benefit from stock-based awards	839	0
Proceeds from sale of Class A common stock, net	(247)	13
Purchase of treasury stock	(1,619)	(77)
Purchase of treasury stock from related party	0	(5,612)
Net Cash Provided by (Used in) Financing Activities	973	(6,176)
Effect of exchange rate changes on cash and cash equivalents	163	20
Decrease in Cash and Cash Equivalents	(3,466)	(861)
Cash and cash equivalents at beginning of period	16,650	10,443
Cash and Cash Equivalents at End of Period	13,184	9,582
SUPPLEMENTAL INFORMATION
Income taxes paid (refunded), net	661	(598)
Interest paid	$ 526	$ 788

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Income Taxes

9 Months Ended

Oct. 01, 2011

Income Taxes [Abstract]

Income Taxes

NOTE C - Income Taxes

In the first nine months of 2011 the effective tax rate was 28.8%.  In the first nine months of 2010 the effective tax rate was 22.5%.  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.

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Segment Information

9 Months Ended

Oct. 01, 2011

Segment Information [Abstract]

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:

(THOUSANDS OF DOLLARS)	THREE MONTHS ENDED		NINE MONTHS ENDED
	OCTOBER 1, 2011	OCTOBER 2, 2010	OCTOBER 1, 2011		OCTOBER 2, 2010
Revenues from External Customers:
CAD	$25,795	$23,092	$71,681		$65,191
COG	18,014	15,064	59,678		49,086
Total	$43,809	$38,156	$131,359		$114,277
Depreciation and Amortization:
CAD	$1,162	$1,277	$3,535		$3,876
COG	388	406	1,067		1,191
Total	$1,550	$1,683	$4,602		$5,067
Operating Income (Loss):
CAD	$748	$248	$(122)		$(952)
COG	2,256	1,989	10,021		7,636
Total	$3,004	$2,237	$9,899		$6,684
Total Interest and Other Expense:	$(657)	$(437)	$(1,010)		$(853)
Total Income Before Income Taxes:	$2,347	$1,800	$8,889		$5,831
Expenditure for Long-Lived Assets:
CAD	$677	$679	$1,821		$3,147
COG	687	194	1,485		833
Total	$1,364	$873	$3,306		$3,980
			OCTOBER 1, 2011	JANUARY 1, 2011
Segment Assets:
CAD			$94,438		$96,472
COG			52,285		48,154
		Total	$146,723		$144,626
Goodwill:
CAD			$-		$-
COG			15,279		15,279
		Total	$15,279		$15,279

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Related Party Transactions

9 Months Ended

Oct. 01, 2011

Related Party Transactions [Abstract]

Related Party Transactions

NOTE L - Related Party Transactions

Pursuant to a Stock Redemption Agreement with Galal Doss, a director and major stockholder of the Company at that time, the Company purchased approximately 1.4 million shares of the Company’s Class A common stock in the third quarter of 2010 for approximately $5.6 million.

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Warranty Costs

9 Months Ended

Oct. 01, 2011

Warranty Costs [Abstract]

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 October 1, 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 first quarter and first nine months of 2011 due to changes in estimates and assumptions.  The following chart reflects the activity in aggregate accrued warranty costs:

(THOUSANDS OF DOLLARS)	THREE MONTHS ENDED		NINE MONTHS ENDED
	OCTOBER 1, 2011	OCTOBER 2, 2010	OCTOBER 1, 2011	OCTOBER 2, 2010
Accrued Warranty Costs - Beginning of Period	$1,862	$1,998	$1,998	$1,936
Warranty costs paid	(432)	(135)	(572)	(527)
Warranty costs accrued	588	115	818	569
Impact of changes in estimates and assumptions	-	-	(226)	-
Accrued Warranty Costs - End of Period	$2,018	$1,978	$2,018	$1,978

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) (USD $) In Thousands	3 Months Ended		9 Months Ended
	Oct. 01, 2011	Oct. 02, 2010	Oct. 01, 2011	Oct. 02, 2010
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) [Abstract]
Net Income	$ 1,920	$ 1,630	$ 6,330	$ 4,518
Other Comprehensive Income, Net of Tax:
Foreign currency translation adjustments	(242)	451	50	(79)
Unrealized (loss) gain on interest rate swap, net	(25)	(21)	(18)	98
Pension liability adjustment, net	71	(50)	(1)	22
Comprehensive Income	$ 1,724	$ 2,010	$ 6,361	$ 4,559

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Basis of Presentation

9 Months Ended

Oct. 01, 2011

Basis of Presentation [Abstract]

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 October 1, 2011, the results of operations for the three-month and nine-month periods ended October 1, 2011 and October 2, 2010, and the cash flows for the nine-month periods ended October 1, 2011 and October 2, 2010.  The results of operations for the nine-month period ended October 1, 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.

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Short-Term Investments

9 Months Ended

Oct. 01, 2011

Short-Term Investments [Abstract]

Short-Term Investments

NOTE J - Short-Term Investments

At October 1, 2011, the Company had short-term investments of $0.4 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 $0.1 million at October 1, 2011.

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CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) In Thousands	Oct. 01, 2011	Jan. 01, 2011
Current Assets
Cash and cash equivalents	$ 13,184	$ 16,650
Short-term investments	367	2,514
Accounts receivable, gross	30,635	30,631
Allowance for doubtful accounts	(1,128)	(1,069)
Accounts receivable, net	29,507	29,562
Inventories	40,499	31,320
Deferred income taxes	5,229	5,590
Other current assets	6,843	4,883
Total Current Assets	95,629	90,519
Property, plant and equipment, gross	107,584	104,949
Accumulated depreciation	(93,331)	(89,867)
Property, Plant and Equipment, Net	14,253	15,082
Goodwill	15,279	15,279
Intangibles, Net	9,017	9,458
Deferred Income Taxes	9,820	11,318
Other Assets	2,725	2,970
Total Assets	146,723	144,626
Current Liabilities
Accounts payable, accrued expenses and other liabilities	16,919	19,564
Accrued compensation and related taxes	6,856	7,811
Retirement plan obligations	2,452	2,437
Income taxes payable	1,167	2,006
Total Current Liabilities	27,394	31,818
Long-Term Debt	21,221	19,221
Retirement Plan Obligations	14,501	16,274
Deferred Gain on Sale of Real Estate	2,346	2,737
Other Long-Term Liabilities	452	687
Accrued Warranty Costs	1,578	1,424
Commitments and Contingencies (Note K)	0	0
Total Liabilities	67,492	72,161
Shareholders' Equity
Additional paid-in capital	28,682	26,014
Retained earnings	87,444	81,114
Accumulated other comprehensive loss	(12,628)	(12,659)
Treasury stock, at cost	(44,772)	(42,248)
Total Shareholders' Equity	79,231	72,465
Total Liabilities and Shareholders' Equity	146,723	144,626
Class A [Member]
Shareholders' Equity
Common stock	18,700	18,439
Class B [Member]
Shareholders' Equity
Common stock	$ 1,805	$ 1,805