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EX-10 - COSTA INCexhibit10.htm
EX-32 - COSTA INCexhibit32.htm
EX-31.2 - COSTA INCexhibit31-2.htm
EX-31.1 - COSTA INCexhibit31-1.htm

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
 
FORM 10-Q
 
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended July 3, 2010
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).
 
__
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
 X
 
Smaller reporting company
__
     
 
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 July 30, 2010:
 
Class A common stock -
Class B common stock -
  10,542,414 shares
    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)
 
July 3, 2010
   
January 2, 2010
 
ASSETS
 
(UNAUDITED)
       
Current Assets
           
Cash and cash equivalents
  $ 9,021     $ 10,443  
Short-term investments
    1,063       7,217  
Accounts receivable, less allowance for doubtful accounts of
               
$1,032 at July 3, 2010 and $1,129 at January 2, 2010
    28,933       29,546  
Inventories
    32,769       25,329  
Deferred income taxes
    4,151       5,092  
Other current assets
    8,217       5,895  
Total Current Assets
  $ 84,154     $ 83,522  
                 
Property, Plant and Equipment less accumulated depreciation of
               
$89,323 at July 3, 2010 and $86,863 at January 2, 2010
    15,944       15,953  
Goodwill
    15,279       15,279  
Intangibles, Net
    10,028       10,383  
Deferred Income Taxes
    10,425       11,778  
Other Assets
    2,658       1,504  
Total Assets
  $ 138,488     $ 138,419  
                 
LIABILITIES AND SHAREHOLDERS' EQUITY
               
Current Liabilities
               
Accounts payable, accrued expenses and other liabilities
  $ 20,583     $ 18,709  
Accrued compensation and related taxes
    6,078       5,504  
Retirement plan obligations
    2,310       2,378  
Total Current Liabilities
  $ 28,971     $ 26,591  
                 
Long-Term Debt
    15,221       19,721  
Retirement Plan Obligations
    13,750       14,726  
Deferred Gain on Sale of Real Estate
    2,998       3,259  
Other Long-Term Liabilities
    1,091       1,231  
Accrued Warranty Costs
    1,504       1,441  
Commitments and Contingencies (Note L)
    -       -  
Total Liabilities
  $ 63,535     $ 66,969  
Shareholders' Equity
               
Common stock, par value $1 per share:
               
Class A - authorized 40,000 shares, 17,692 shares issued and
               
11,780 shares outstanding at July 3, 2010, and 17,660 shares
               
issued and 11,854 shares outstanding at January 2, 2010
  $ 17,692     $ 17,660  
Class B - authorized 4,000 shares, 1,805 shares issued and
               
outstanding at July 3, 2010 and January 2, 2010
    1,805       1,805  
Additional paid-in capital
    25,538       23,574  
Retained earnings
    77,629       74,741  
Accumulated other comprehensive loss
    (11,337 )     (10,998 )
Treasury stock, at cost
    (36,374 )     (35,332 )
Total Shareholders' Equity
  $ 74,953     $ 71,450  
Total Liabilities and Shareholders' Equity
  $ 138,488     $ 138,419  

See notes to condensed consolidated financial statements.

 
 
 
 
 
 
 

 
 


 
A. T. CROSS COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)


     
THREE MONTHS ENDED
   
SIX MONTHS ENDED
   
(THOUSANDS, EXCEPT PER SHARE AMOUNTS)
 
July 3, 2010
   
July 4, 2009
   
July 3, 2010
   
July 4, 2009
   
                             
Net sales
  $ 41,748     $ 37,306     $ 76,121     $ 68,146    
Cost of goods sold
    17,843       16,904       32,697       30,988    
Gross Profit
    23,905       20,402       43,424       37,158    
                                     
Selling, general and administrative expenses
    17,435       15,909       34,135       32,463    
Service and distribution costs
    1,841       1,727       3,469       3,339    
Research and development expenses
    708       576       1,373       1,195    
Restructuring charges
    -       737       -       797    
Operating Income (Loss)
    3,921       1,453       4,447       (636 )  
                                     
Interest income
    2       18       4       28    
Interest expense
    (305 )     (362 )     (593 )     (618 )  
Other income (expense)
    164       161       173       (184 )  
Interest and Other Expenses
    (139 )     (183 )     (416 )     (774 )  
                                     
Income (Loss)Before Income Taxes
    3,782       1,270       4,031       (1,410 )  
                                     
Income tax provision (benefit)
    1,068       635       1,143       (1,096 )  
                                     
Net Income (Loss)
  $ 2,714     $ 635     $ 2,888     $ (314 )  
                                     
                                     
Net Income (Loss) Per Share:
                                 
Basic
    $ 0.20     $ 0.04     $ 0.22     $ (0.02 )  
Diluted
  $ 0.20     $ 0.04     $ 0.21     $ (0.02 )  
                                     
Weighted Average Shares Outstanding:
                                 
Denominator for Basic Net Income (Loss) Per Share
    13,339       14,581       13,332       14,835    
 
Effect of dilutive securities
    119       12       102       -  
(A)
Denominator for Diluted Net Income (Loss) Per Share
    13,458       14,593       13,434       14,835    
                                     

 
(A) One incremental share related to options is not included due to the net loss since the effect of such shares would be anti-dilutive.

 
 
 
A. T. CROSS COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)
 
   
THREE MONTHS ENDED
   
SIX MONTHS ENDED
 
   
July 3, 2010
   
July 4, 2009
   
July 3, 2010
   
July 4, 2009
 
                         
Net Income (Loss)
  $ 2,714     $ 635     $ 2,888     $ (314 )
Other Comprehensive Income (Loss), Net of Tax:
                               
Minimum pension liability adjustment
    39       (43 )     72       (11 )
Unrealized gain on interest rate swap
    78       82       119       93  
Foreign currency translation adjustments
    55       696       (530 )     711  
Total Comprehensive Income
  $ 2,886     $ 1,370     $ 2,549     $ 479  
 
See notes to condensed consolidated financial statements.
 

 
 

 
A. T. CROSS COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
 


(THOUSANDS OF DOLLARS)
           
CASH (USED IN) PROVIDED BY:
           
Operating Activities:
 
July 3, 2010
   
July 4, 2009
 
Net Income (Loss)
  $ 2,888     $ (314 )
Adjustments to reconcile net income (loss) to net cash provided by
               
(used in) operating activities:
               
Depreciation and amortization
    3,384       3,027  
Restructuring charges
    -       797  
Restructuring charges paid
    (724 )     (1,150 )
Amortization of deferred gain
    (261 )     (260 )
Provision for bad debts
    14       304  
Deferred income taxes
    2,213       (94 )
Provision for accrued warranty costs
    454       252  
Warranty costs paid
    (392 )     (281 )
Stock-based compensation and directors' fees
    949       317  
Unrealized losses (gains) on short-term investments
    45       (84 )
Unrealized gains on foreign exchange contracts
    (304 )     (126 )
Unrealized foreign currency transaction losses (gains)
    159       (43 )
Changes in operating assets and liabilities:
               
Accounts receivable
    231       2,583  
Inventories
    (7,654 )     (5,852 )
Other assets
    (3,128 )     3,498  
Accounts payable and other liabilities
    2,314       (3,945 )
Net Cash Provided by (Used in) Operating Activities
    188       (1,371 )
                 
Investing Activities:
               
Purchases of short-term investments
    (8,439 )     (16,823 )
Sales of short-term investments
    14,548       14,617  
Additions to property, plant and equipment
    (2,970 )     (2,537 )
Additions to trademarks and patents
    (137 )     (107 )
Payments related to the acquisition of Native, net of cash acquired
    -       (296 )
Net Cash Provided by (Used in) Investing Activities
    3,002       (5,146 )
                 
Financing Activities:
               
Repayment of bank borrowings
    (4,500 )     -  
Purchase of treasury stock
    (5 )     (667 )
Proceeds from sale of Class A common stock
    9       162  
Net Cash Used in Financing Activities
    (4,496 )     (505 )
                 
Effect of exchange rate changes on cash and cash equivalents
    (116 )     391  
                 
Decrease in Cash and Cash Equivalents
    (1,422 )     (6,631 )
                 
Cash and cash equivalents at beginning of period
    10,443       18,629  
                 
Cash and Cash Equivalents at End of Period
  $ 9,021     $ 11,998  
                 
                 
Income taxes paid, net
  $ 780     $ (2,434 )
Interest paid
  $ 521     $ 550  

See notes to condensed consolidated financial statements.

 
 
 

 
  
A. T. CROSS COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
July 3, 2010
(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 July 3, 2010, and the results of operations for the three-month and six-month periods ended July 3, 2010 and July 4, 2009.  The results of operations for the six-month period ended July 3, 2010 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 2, 2010, which includes consolidated financial statements and notes thereto for the years ended January 2, 2010, January 3, 2009 and December 29, 2007.  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)
 
JULY 3, 2010
   
JANUARY 2, 2010
 
Finished goods
  $ 17,241     $ 13,972  
Work in process
    2,721       3,154  
Raw materials
    12,807       8,203  
    $ 32,769     $ 25,329  

NOTE C – Income Taxes
In the first six months of 2010 the effective tax rate was 28.3%.  In the first six months of 2009 the effective tax rate was 77.7%, which included approximately $0.8 million of income tax benefit related to the net adjustment to the accrual of tax, interest and penalties as a result of the conclusion of the Internal Revenue Service (IRS) audit of our 2005 Federal income tax return.  It also included approximately $0.1 million of income tax benefit, the realization of which was previously considered uncertain.  As a result of the IRS audit, deferred taxes increased $0.1 million.

NOTE D - Restructuring Charges
In 2008, the Company restructured Cross Accessory Division ("CAD") Lincoln based manufacturing operations in order to increase its competitiveness in the global marketplace by further leveraging the investment in China manufacturing operations.  The Company also closed several underperforming retail stores and reduced headcount at its Lincoln facility.  These restructuring programs, which were substantially complete by end of the first quarter of 2009, moved Lincoln manufacturing operations to the Company's China facility and reduced the total retail store count by four.  Approximately 50 manufacturing positions and 27 sales and administrative positions in the United States, and four sales and administrative positions in the United Kingdom were affected by these programs.  In the third quarter of 2009, the Company expanded its restructuring efforts to further reduce headcount at its Lincoln and European facilities.  Approximately $1.9 million of restructuring charges were recognized in 2009.  The Company incurred pre-tax restructuring charges of approximately $4.4 million since the inception of these programs.  Of this $4.4 million, approximately $2.4 million was for severance and related expenses and approximately $2.0 million was for transition and other costs.  The Company does not expect further charges under this program.  The following is a tabular presentation of the restructuring liabilities related to this plan:

(THOUSANDS OF DOLLARS)
 
SEVERANCE &
RELATED EXPENSES
   
PROFESSIONAL
FEES & OTHER
   
TOTAL
 
Balances at January 2, 2010
  $ 676     $ 95     $ 771  
Cash payments
    (629 )     (95 )     (724 )
Balances at July 3, 2010
  $ 47     $ -     $ 47  

NOTE E - 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
   
SIX MONTHS ENDED
 
   
JULY 3, 2010
   
JULY 4, 2009
   
JULY 3, 2010
   
JULY 4, 2009
 
Revenues from External Customers:
                       
CAD
  $ 21,383     $ 20,762     $ 42,099     $ 39,527  
COG
    20,365       16,544       34,022       28,619  
Total
  $ 41,748     $ 37,306     $ 76,121     $ 68,146  
Depreciation and Amortization:
                               
CAD
  $ 1,305     $ 1,153     $ 2,599     $ 2,279  
COG
    401       379       785       748  
Total
  $ 1,706     $ 1,532     $ 3,384     $ 3,027  
Restructuring Charges:
                               
CAD
  $ -     $ 737     $ -     $ 797  
COG
    -       -       -       -  
Total
  $ -     $ 737     $ -     $ 797  
Segment Operating Income (Loss):
                               
CAD
  $ (609 )   $ (2,069 )   $ (1,200 )   $ (4,932 )
COG
    4,530       3,522       5,647       4,296  
Total
  $ 3,921     $ 1,453     $ 4,447     $ (636 )
                                 
Total Interest and Other Expenses:
  $ (139 )   $ (183 )   $ (416 )   $ (774 )
                                 
Total Income (Loss) Before Income Taxes:
  $ 3,782     $ 1,270     $ 4,031     $ (1,410 )
                                 
Expenditures on Long-Lived Assets:
                               
CAD
  $ 1,449     $ 1,273     $ 2,468     $ 2,062  
COG
    437       181       639       582  
Total
  $ 1,886     $ 1,454     $ 3,107     $ 2,644  




   
JULY 3, 2010
   
JANUARY 2, 2010
 
Segment Assets:
           
CAD
  $ 85,196     $ 94,358  
COG
    53,292       44,061  
Total
  $ 138,488     $ 138,419  
Goodwill:
               
CAD
  $ -     $ -  
COG
    15,279       15,279  
Total
  $ 15,279     $ 15,279  

NOTE F - Warranty Costs
The Cross Accessory Division'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 Del Mar 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 accrued warranty costs 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 $0.5 million at July 3, 2010 and January 2, 2010, and were recorded in accrued expenses and other liabilities.  The following chart reflects the activity in aggregate accrued warranty costs:

(THOUSANDS OF DOLLARS)
 
THREE MONTHS ENDED
   
SIX MONTHS ENDED
 
   
JULY 3, 2010
   
JULY 4, 2009
   
JULY 3, 2010
   
JULY 4, 2009
 
Accrued Warranty Costs -  beginning of period
  $ 1,962     $ 1,792     $ 1,936     $ 1,823  
Warranty costs paid
    (191 )     (151 )     (392 )     (281 )
Warranty costs accrued
    227       153       454       252  
Accrued Warranty Costs -  end of period
  $ 1,998     $ 1,794     $ 1,998     $ 1,794  

NOTE G - Line of Credit
In 2008, 2009 and in the first quarter of 2010, the Company amended its secured revolving line of credit with Bank of America, N.A. (the “Bank”).  Under the amended line of credit agreement, the Bank agreed to make loans to the Company in an aggregate amount not to exceed $35.0 million, including up to $5.0 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 $5.0 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 credit facility would have matured and amounts outstanding would have been payable on March 31, 2011.  However, as discussed in Note M - Subsequent Events, the Company amended and restated its line of credit on July 28, 2010.  This amended credit facility matures on July 28, 2013, as such, the line of credit is classified as long-term debt as of July 3, 2010.

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 2.25% and 3.00%, and the applicable margin for federal funds or the Bank's prime rate will be an amount between 1.00% and 1.25%, 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 restricts the Company from declaring cash dividends on its common stock.  The agreement requires the Company to maintain a minimum consolidated tangible net worth, computed at each year end, a maximum level of capital expenditures, a maximum ratio of consolidated funded indebtedness to consolidated adjusted EBITDA 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.  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 3, 2010, the outstanding balance of the Company's amended line of credit was $15.2 million, bearing an interest rate of approximately 3.23%, and the unused and available portion, according to the terms of the amended agreement, was $19.8 million.  At January 2, 2010, the outstanding balance of the Company's line of credit was $19.7 million, bearing an interest rate of approximately 3.23%, and the unused and available portion, according to the terms of the agreement, was $15.3 million.

NOTE H - Employee Benefit Plans
The following table illustrates the components of net periodic benefit cost:

(THOUSANDS OF DOLLARS)
 
THREE MONTHS ENDED
   
SIX MONTHS ENDED
 
   
JULY 3, 2010
   
JULY 4, 2009
   
JULY 3, 2010
   
JULY 4, 2009
 
Service cost
  $ 11     $ 25     $ 22     $ 50  
Interest cost
    560       579       1,120       1,157  
Expected return on plan assets
    ( 567 )     ( 536 )     ( 1,134 )     ( 1,072 )
Amortization of unrecognized loss
    117       93       234       186  
Amortization of prior service cost
    3       3       6       6  
Net Periodic Benefit Cost
  $ 124     $ 164     $ 248     $ 327  

The Company contributed $1.5 million to its defined benefit pension plans and expects to contribute $0.8 million to its defined contribution retirement plans and $0.2 million to its excess benefit plan in 2010.  Additionally, the Company expects to meet or exceed its minimum funding requirements for its defined benefit plans in future years.  The Company anticipates these future funding requirements to be between $1.0 million and $2.0 million per year.

NOTE I - 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 2, 2010.

At July 3, 2010 and January 2, 2010, 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)
 
   
JULY 3, 2010
   
JANUARY 2, 2010
 
   
GROSS
CARRYING
AMOUNT
   
ACCUMULATED
AMORTIZATION
   
OTHER
INTANGIBLES
NET
   
GROSS
CARRYING
AMOUNT
   
ACCUMULATED
AMORTIZATION
   
OTHER
INTANGIBLES
NET
 
Amortized:
                                   
Trademarks
  $ 9,200     $ 8,703     $ 497     $ 9,108     $ 8,581     $ 527  
Patents
    3,212       3,082       130       3,168       3,040       128  
Customer relationships
    3,170       1,019       2,151       3,170       792       2,378  
Non-compete agreements
    800       450       350       800       350       450  
    $ 16,382     $ 13,254       3,128     $ 16,246     $ 12,763       3,483  
Not Amortized:
                                               
Trade names
                    6,900                       6,900  
Intangibles, Net
            $ 10,028                     $ 10,383  

Amortization expense for the three and six month periods ended July 3, 2010 was approximately $0.3 million and $0.5 million, respectively.  The estimated future amortization expense for other intangibles remaining as of July 3, 2010 is as follows:

(THOUSANDS OF DOLLARS)
 
Remainder
2010
 
2011
 
2012
 
2013
 
2014
 
Thereafter
    $ 461     $ 859     $ 652     $ 548     $ 495     $ 113  

NOTE J - 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 operations 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 operations.

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 operations as incurred.  Foreign currency derivatives had a total notional value of $22.0 million as of July 3, 2010 and $15.6 million as of January 2, 2010.  Gains and losses on the derivatives were generally offset by changes in U.S. dollar value of the underlying hedged items.

Interest Rates
In March 2008, the Company entered into three interest rate swap agreements with a total initial notional amount of $15.0 million and a term of three years.  These swaps effectively fix the interest rate on a portion of the Company's three-year line of credit at approximately 3.64%.  Amounts paid or received under these swap agreements are recorded as adjustments to interest expense.  The Company measures hedge ineffectiveness using the “hypothetical” derivative method.  These swaps have been designated cash flow hedges and the effect of the mark-to-market valuations are recorded as an adjustment, net of tax, to accumulated other comprehensive loss.  From inception to July 3, 2010, the effect of the mark-to-market valuations, net of tax, was an unrealized loss of approximately $0.2 million and is included as a component of accumulated other comprehensive loss.  At July 3, 2010, the combined notional value of these three interest rate swaps was $15.0 million.

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)
 
JULY 3, 2010
 
JANUARY 2, 2010
   
LEVEL 1
   
LEVEL 2
   
LEVEL 3
   
TOTAL
 
LEVEL 1
   
LEVEL 2
   
LEVEL 3
   
TOTAL
Assets:
                                               
Money market funds (A)
  $ 27     $ -     $ -     $ 27     $ 1,427     $ -     $ -     $ 1,427  
Short-term investments (B)
    1,063       -       -       1,063       7,217       -       -       7,217  
Derivatives not designated as
                                                               
Hedging instruments:
                                                               
Foreign exchange contracts (C)
    -       424       -       424       -       614       -       614  
Total Assets at Fair Value
  $ 1,090     $ 424     $ -     $ 1,514     $ 8,644     $ 614     $ -     $ 9,258  

(THOUSANDS OF DOLLARS)
 
JULY 3, 2010
 
JANUARY 2, 2010
   
LEVEL 1
 
LEVEL 2
 
LEVEL 3
 
TOTAL
 
LEVEL 1
 
LEVEL 2
 
LEVEL 3
 
TOTAL
Liabilities
                                               
Derivatives designated as
                                               
Hedging instruments:
                                               
Interest rate swaps (D)
  $ -     $ 358     $ -     $ 358     $ -     $ 541     $ -     $ 541  
Derivatives not designated as
                                                               
Hedging instruments:
                                                               
 
Foreign exchange contracts (C)
    -       119       -       119       -       111       -       111  
Total Liabilities at Fair Value
  $ -     $ 477     $ -     $ 477     $ -     $ 652     $ -     $ 652  
(A)
Value based on quoted market prices of identical instruments, fair value included in cash and cash equivalents
(B)
Value based on quoted market prices of identical instruments
(C)
Value based on the present value of the forward rates less the contract rate multiplied by the notional amount, fair value included in other current assets or accounts payable, accrued expenses and other liabilities
(D)
Value derived from a discounted cash flow analysis based on the terms of the contract and the interest rate curve, fair value 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 and short-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 on our derivative instruments for the six month periods ended July 3, 2010 and July 4, 2009 are categorized in the following table:

(THOUSANDS OF DOLLARS)
 
GAINS (LOSSES) RECOGNIZED
IN STATEMENT
OF OPERATIONS
 
GAINS RECOGNIZED
IN ACCUMULATED OTHER
COMPREHENSIVE LOSS
   
JULY 3, 2010
 
JULY 4, 2009
 
JULY 3, 2010
 
JULY 4, 2009
Fair Value / Non-designated Hedges:
               
 
Foreign exchange contracts (A)
  $ 304     $ 126     $ -     $ -  
Cash Flow Hedges:
                               
 
Interest rate swaps (B)
  $ (255 )   $ (242 )   $ 119     $ 93  
(A)
Included in selling, general and administrative expenses
(B)
Included in interest expense

NOTE K - Short-Term Investments
At July 3, 2010, the Company had short-term investments of $1.1 million, classified as trading securities.  Realized and unrealized gains or losses on these short-term investments are included in other income (expense).  The net unrealized loss on short-term investments held at July 3, 2010 was not material.

NOTE L - Commitments and Contingencies
The Company is 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 allege that the Company is liable under the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA") for contribution for Site investigation costs.  Site investigation costs (excluding the required remedy) are currently estimated at $7 million.  The Company has reached settlement of the case and has paid a settlement amount of $205,000.

The Company expects that the Federal Environmental Protection Agency ("EPA") will select a remedy for the Site in the fall of 2010.  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 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 M – Subsequent Events

Stock Redemption Agreement; Related Party Transaction:
Effective July 7, 2010 The Company entered into a Stock Redemption Agreement with Galal Doss, a director and major stockholder of the Company, to purchase 1.25 million of the Company’s Class A common stock for total consideration of $5,040,000.  The Board of Directors approved the transaction following the review and recommendation by a committee comprised of independent directors of the Board.  The Company completed the stock purchase on July 8, 2010.  A copy of the Stock Redemption Agreement was filed as Exhibit 99.1 on the Company’s Form 8-K filed on July 9, 2010.

Line of Credit:
On July 28, 2010, the Company amended and restated its secured revolving line of credit with Bank of America, N.A.  (the “Bank”).  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 on July 28, 2013.

The interest rate for the Committed Loans will be, at the Company's option, either 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.

This amended and restated credit agreement is included in this Form 10-Q as Exhibit 10.

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

Overview
A.T. Cross Company is a leading designer and marketer of branded personal accessories including writing instruments, watches, 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.  Also under the Cross brand, CAD offers a variety of personal and business accessories including leather goods, reading glasses, watches, desk sets, business totes, cufflinks, and stationery.  Historically, this segment records its highest sales and operating income in the fourth quarter of the fiscal year.

Cross Optical Group ("COG")
The Company established an optical segment with the 2003 acquisition of Costa Del Mar Sunglasses, Inc., a designer, manufacturer and marketer of high-quality polarized sunglasses.  On March 24, 2008, the Company acquired Native Eyewear, Inc.  Historically, this segment records its highest sales and operating income in the second quarter of the fiscal year.

Results of Operations Second Quarter 2010 Compared to Second Quarter 2009

In the second quarter of 2010, the Company reported net income of $2.7 million, or $0.20 per basic and diluted share, compared to net income of $0.6 million, or $0.04 per basic and diluted share in the second quarter of 2009.

The following chart details net sales performance:


(THOUSANDS OF DOLLARS)
 
THREE MONTHS ENDED
 
PERCENTAGE
   
JULY 3, 2010
 
JULY 4, 2009
 
CHANGE
Cross Accessory Division (CAD)
  $ 21,383     $ 20,762       3.0 %
Cross Optical Group (COG)
    20,365       16,544       23.1 %
Consolidated Net Sales
  $ 41,748     $ 37,306       11.9 %

Consolidated net sales were $41.7 million in the second quarter of 2010 compared to $37.3 million in the second quarter of 2009.  The effect of foreign exchange was immaterial to consolidated second quarter 2010 sales results.

The Cross Accessory Division’s sales increased by 3% in the second quarter of 2010 compared to the second quarter of 2009, and after excluding a one-time pipeline fill order to Office Depot in last year’s second quarter, the CAD segment’s revenue would have increased by 11%.  This growth was across every region and among Distributors and Retailers as they are seeing 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 last year’s recession.  The Cross Optical Group brand grew by 23.1% as both Costa and Native grew at double digit rates in the segment’s second quarter, historically its largest quarter.

Gross margins were 57.3% in the second quarter, 260 basis points higher than the same period last year.  CAD gross margins improved in the second quarter of 2010 to 53.7%, 190 basis points higher than 2009.  This improvement was primarily the result of cost reduction programs the Company has implemented over the last two years and favorable channel and product mix.  COG margins in the second quarter of 2010 were 61.0% up from last year by 260 basis points.

Operating expenses for the second quarter of 2010 were $20.0 million, or 47.9% of sales, as compared to $18.9 million, or 50.8% of sales a year ago; a decrease of 290 basis points.  The CAD segment second quarter operating expenses, after excluding one-time items, was equal to the prior year’s second quarter.  The COG segment’s second quarter operating expenses were 28.5% higher than last year, primarily due to sales volume related expenditures and increased marketing expenses.

In the second quarter of 2010 the effective tax rate was 28.2% compared to 50.0% in the second quarter of 2009.  The decrease is the result of a shift in the percentage of forecasted profitability to tax jurisdictions with lower tax rates during the second quarter of 2010 compared to the second quarter of 2009.

Results of Operations Six Months Ended July 3, 2010 Compared to Six Months Ended July 4, 2009

In the six months ended July 3, 2010, the Company reported net income $2.9 million, or $0.22 per basic share and $0.21 per diluted share, compared to a net loss of $0.3 million, or $0.02 per basic and diluted share, in the six months ended July 4, 2009.

The following chart details net sales performance:

(THOUSANDS OF DOLLARS)
 
SIX MONTHS ENDED
 
PERCENTAGE
   
JULY 3, 2010
 
JULY 4, 2009
 
CHANGE
CAD
  $ 42,099     $ 39,527       6.5 %
COG
    34,022       28,619       18.9 %
Consolidated Net Sales
  $ 76,121     $ 68,146       11.7 %

Consolidated net sales were $76.1 million in the first six months of 2010 compared to $68.1 million in the first six months of 2009.  The effect of foreign exchange was favorable to consolidated 2010 sales results by approximately $0.4 million, or 0.6 percentage points.

CAD sales of $42.1 million for the first six months 2010 grew by 6.5% compared to the same period last year.  In the second quarter of 2009, there was a one-time pipeline fill order to Office Depot when Cross became their primary quality writing instrument supplier.  After excluding the effect of this one time order from 2009, CAD’s revenue would have increased 11% with all major CAD divisions reporting revenue increases in the first six months of 2010 compared to 2009.  The effect of foreign exchange was favorable to CAD six months 2010 sales results by approximately $0.4 million, or 1.1 percentage points.
The Optical segment sales grew by 18.9% in the first six months of 2010 compared to 2009 as both Costa and Native reported double digit sales increases.

Consolidated gross profit margins for the six month period were 57.0%, 250 basis points higher than last year’s comparable period margin of 54.5%.  CAD gross profit margins were 55.7% for the first six months of 2010, up by 340 basis points from the prior year period.  This improvement was primarily the result of cost reduction programs the Company has implemented over the last two years as well as favorable channel and product mix.  COG gross profit margins in the first six months of 2010 were 58.7%, or an increase of 110 basis points from the prior year period.

Operating expenses for the first six months of 2010 were $39.0 million, or 51.2% of sales, as compared to $37.8 million, or 55.5% of sales, a year ago, a decrease of 430 basis points.  The CAD segment reduced operating expenses by 3.8% in the first six months of 2010 compared to 2009.  The COG segment operating expenses were 17.7% higher than last year, primarily due to sales volume related expenditures and increased marketing expenses.

In the first six months of 2010 the effective tax rate was 28.3%.  In the first six months of 2009 the effective tax rate was 77.7%, which included approximately $0.8 million of income tax benefit related to the net adjustment to the accrual of tax, interest and penalties as a result of the conclusion of the Internal Revenue Service (IRS) audit of our 2005 Federal income tax return.  It also included approximately $0.1 million of income tax benefit, the realization of which was previously considered uncertain.  As a result of the IRS audit, deferred taxes increased $0.1 million.

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, restructuring programs, contributions to the retirement plans, stock repurchase programs and debt service.  The Company expects its future cash needs in 2010 will be met by these historical sources of liquidity and capital.

The Company's cash and short-term investments balance of $10.1 million at July 3, 2010 decreased $7.6 million from January 2, 2010.  The most significant factors affecting the Company's cash balance are discussed in this section.

Inventory was $32.8 million at July 3, 2010, an increase of $7.4 million since January 2, 2010.  CAD inventory increased $6.9 million and COG inventory levels increased by $0.5 million from year end 2009.  The increase in CAD segment inventory was due to planned increases to support higher sales volumes in the last six months of the year.

In the first six months of 2010, the Company repaid $4.5 million on its line of credit.

The Company contributed $1.5 million to its defined benefit pension plans and expects to contribute $0.8 million to its defined contribution retirement plans and $0.2 million to its excess benefit plan in 2010.  Additionally, the Company expects to meet or exceed its minimum funding requirements for its defined benefit plans in future years.  The Company anticipates these future funding requirements to be between $1.0 million and $2.0 million per year.

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 will be $0.2 million annually each January through 2012.

The Company has a $35 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.  The unused and available portion of this line of credit was $19.8 million at July 3, 2010 and $15.3 million at January 2, 2010.  The Company was in compliance with its various debt covenants as of July 3, 2010.  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 July 3, 2010
Consolidated
Tangible Net Worth
Cannot be less than $40 million plus 50% of Net Income For Fiscal Years after 2008
$50 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 million
Consolidated
Leverage Ratio
Cannot exceed 2.5 to 1
0.9:1

On July 28, 2010, subsequent to the balance sheet date, the Company amended and restated its secured revolving line of credit with Bank of America, N.A.  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.

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 2010 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 delaying completion of the stock repurchase plan.

At July 3, 2010, cash and short-term investments available for domestic operations was approximately $6.7 million, while cash and short-term investments held offshore was approximately $3.4 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 2, 2010.

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," "will" and similar expressions are intended to identify forward-looking statements, including but not limited to statements related to the availability of sources of cash; anticipated compliance with laws and regulations (including but not limited to environmental laws); 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 2010 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 2009 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 2, 2010 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 2009 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 July 3, 2010 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 second quarter of 2010 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 2, 2010 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.

Refer to Item 1A in the Company's Form 10-K Annual Report for the fiscal year ended January 2, 2010 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.

None

Item 3.  Defaults Upon Senior Securities.

None

Item 4.  (Removed and Reserved)

Item 5.  Other Information.

None

Item 6.  Exhibits.

Exhibit 10
Amended and Restated Credit Agreement with Bank of America, N.A.
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:  August 16, 2010
By:  DAVID G. WHALEN
David G. Whalen
Chief Executive Officer
   
Date:  August 16, 2010
By:  KEVIN F. MAHONEY
Kevin F. Mahoney
Senior Vice President, Finance and
Chief Financial Officer