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| 8-K - FORM 8-K Q3 2011 - COSTA INC | form8k2q2011.htm |
Exhibit 99
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C R O S S®
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News Release
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Company Contact:
Kevin F. Mahoney
Senior Vice President, Finance and
Chief Financial Officer
401-335-8470
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Investor Relations:
Dave Mossberg
Three Part Advisors, LLC
817-310-0051
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FOR IMMEDIATE RELEASE
A.T. CROSS COMPANY DELIVERS STRONG THIRD QUARTER AND YEAR-TO-DATE RESULTS
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·
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Third Quarter Sales Grew 14.8% and Operating Income Increased 34.3%
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Year-To-Date Sales Grew 14.9% and Operating Income Increased 48.1%
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Third Quarter EPS of $0.16 vs. $0.13 in 2010
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Year-To-Date EPS of $0.52 vs. $0.35 in 2010
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Company buys back additional $1.6 million of its stock in 2011
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Lincoln, RI – October 26, 2011 – A.T. Cross Company (NASDAQ: ATX) today announced financial results for the third quarter ended October 1, 2011.
David G. Whalen, President and Chief Executive Officer of A.T. Cross said, “A.T. Cross built upon its outstanding first half performance and delivered a very strong third quarter. The effort was led by the Cross Optical Group which grew 19.6%. The year-to-date performance that our optical team has delivered; including, door expansion, the launch of Costa into the prescription sunglass market and the sponsorship of Kenny Chesney’s Goin’ Coastal tour has been outstanding. As the sunglass peak season passes, we are already excited about our prospects for 2012. During the quarter, the Cross Accessory Division also performed very well as the business saw growth in every region of the world. Year to date, our Cross Accessory Division, led by growth in emerging markets, has grown 10%. The Cross Accessory Division is entering its peak season with strength and we expect another productive quarter from the business. A.T. Cross has momentum. We have performed very well in the first nine months of the year and we expect to continue to deliver positive results as we move forward.”
Third Quarter 2011 Results
Consolidated sales for the third quarter of 2011 increased by 14.8% to $43.8 million compared to $38.2 million in the third quarter of 2010. The Cross Optical Group (COG) reported third quarter sales of $18.0 million, a 19.6% increase compared to last year. The Cross Accessory Division (CAD) recorded sales of $25.8 million, an increase of 11.7%, compared to last year.
Gross margin in the quarter was 53.6%, 80 basis points lower than last year’s third quarter.
Operating income in the quarter increased 34.3% to $3.0 million as compared to $2.2 million last year.
Net income for the third quarter was $1.9 million, or $0.16 per basic share, compared to $1.6 million, or $0.13 per basic share, last year.
Year-To-Date 2011 Results
Consolidated sales for the first nine months of 2011 increased by 14.9% to $131.4 million compared to $114.3 million in 2010. CAD recorded sales of $71.7 million or 10.0% higher compared to last year. COG sales grew 21.6% to $59.7 million from $49.1 million in 2010.
Gross margin for the first nine months of 2011 was 56.3% or 10 basis points higher than 2010.
Year-to-date operating income was $9.9 million, 48.1% higher than 2010 operating income of $6.7 million.
Net income for the nine-month period was $6.3 million, or $0.52 per basic share, compared to $4.5 million or $0.35 per basic share, last year.
Stock Repurchase
The Company repurchased 47,867 Class A shares in the third quarter at an average price of $10.17 per share, and 157,817 Class A shares at an average price of $10.26 per share in the first nine months of 2011. Since December 2009, the Company has repurchased approximately 20% of its outstanding common stock at an average price of $4.13 per share.
Guidance
The Company reiterated its previous 2011 earnings guidance of $0.67 to $0.70 per share. 2012 Guidance will be given in early January.
Conference Call
The Company’s management will host a conference call today, October 26, 2011 at 4:30 PM Eastern Time. Parties interested in participating in the conference call may dial-in at (877) 303-2912, while international callers may dial-in at (408) 427-3877. The conference call will be webcast and can be accessed at www.cross.com. A replay of the webcast will be archived on the Company’s website for 60 days.
About A.T. Cross Company
Building on the rich tradition of its award-winning writing instruments and reputation for innovation and craftsmanship, A.T. Cross Company is a designer and marketer of branded personal and business accessories. A.T. Cross provides a range of distinctive products that appeal to a growing market of consumers seeking to enhance their image and facilitate their lifestyle. A.T. Cross products, including award-winning quality writing instruments, timepieces, business accessories and Costa and Native Eyewear sunglasses, are distributed in retail and corporate gift channels worldwide. For more information, visit the A.T. Cross website at www.cross.com, the Costa website at www.costadelmar.com and the Native website at www.nativeyewear.com.
Statements contained in this release that are not historical facts are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 (including but not limited to statements relating to the expected continued operating results for COG and CAD during the balance of 2011 and the expected overall results for A.T. Cross). In addition, words such as "believes," "anticipates," "expects," and similar expressions are intended to identify forward-looking statements. These forward-looking statements are subject to risks and uncertainties, including but not limited to the potential effect of both domestic and international economic issues on consumer confidence, as well as consumer preferences and consumers’ willingness to purchase discretionary items, and are not guarantees since there are inherent difficulties in predicting future results. Actual results could differ materially from those expressed or implied in the forward-looking statements. The information contained in this document is as of October 26, 2011. The Company assumes no obligation to update any forward-looking statements contained in this document as a result of new information or future events or developments. Additional discussion of factors that could cause actual results to differ materially from management's expectations is contained in the Company's filings under the Securities Exchange Act of 1934.
(Tables to follow)
A. T. CROSS COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)
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Three Months Ended
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Nine Months Ended
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October 1,
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October 2,
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October 1,
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October 2,
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2011
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2010
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2011
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2010
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Net sales
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$
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43,809
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$
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38,156
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$
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131,359
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$
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114,277
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Cost of goods sold
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20,338
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17,410
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57,347
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50,107
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Gross Profit
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23,471
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20,746
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74,012
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64,170
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Selling, general and administrative expenses
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17,396
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15,918
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56,069
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50,053
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Service and distribution costs
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2,325
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1,897
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6,020
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5,366
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Research and development expenses
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746
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694
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2,024
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2,067
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Operating Income
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3,004
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2,237
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9,899
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6,684
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Interest and other expense
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(657)
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(437)
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(1,010)
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(853)
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Income Before Income Taxes
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2,347
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1,800
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8,889
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5,831
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Income tax provision
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427
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170
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2,559
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1,313
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Net Income
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$
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1,920
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$
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1,630
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$
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6,330
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$
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4,518
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Net Income per Share:
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Basic
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$ 0.16
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$ 0.13
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$ 0.52
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$ 0.35
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Diluted
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$ 0.15
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$ 0.13
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$ 0.49
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$ 0.34
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Weighted Average Shares Outstanding:
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Basic
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12,244
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12,124
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12,183
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12,929
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Diluted
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13,040
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12,524
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12,975
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13,193
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Three Months Ended
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Nine Months Ended
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October 1,
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October 2,
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October 1,
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October 2,
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2011
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2010
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2011
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2010
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Segment Data: Cross Accessory Division
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Net Sales
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$
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25,795
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$
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23,092
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$
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71,681
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$
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65,191
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Operating Income (Loss)
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748
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248
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(122)
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(952)
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Segment Data: Cross Optical Group
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Net Sales
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$
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18,014
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$
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15,064
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$
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59,678
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$
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49,086
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Operating Income
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2,256
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1,989
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10,021
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7,636
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A. T. CROSS COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, unaudited)
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October 1, 2011
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October 2, 2010
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Assets
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Cash and cash equivalents
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$13,184
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$9,582
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Short-term investments
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367
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1,993
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Accounts receivable
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29,507
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25,858
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Inventories
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40,499
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35,373
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Deferred income taxes
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5,229
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4,151
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Other current assets
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6,843
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5,908
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Total Current Assets
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95,629
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82,865
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Property, plant and equipment, net
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14,253
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15,388
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Goodwill
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15,279
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15,279
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Intangibles and other assets
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11,742
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12,680
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Deferred income taxes
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9,820
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10,143
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Total Assets
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$146,723
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$136,355
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Liabilities and Shareholders' Equity
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Accounts payable and other current liabilities
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$23,775
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$23,762
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Retirement plan obligations
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2,452
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2,351
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Income taxes payable
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1,167
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290
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Total Current Liabilities
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27,394
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26,403
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Long-term debt
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21,221
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19,221
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Retirement plan obligations
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14,501
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13,834
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Deferred gain on sale of real estate
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2,346
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2,868
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Other long-term liabilities
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452
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654
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Accrued warranty costs
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1,578
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1,483
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Shareholders' equity
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79,231
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71,892
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Total Liabilities and Shareholders' Equity
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$146,723
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$136,355
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For information at A. T. Cross contact:
Kevin F. Mahoney
Senior Vice President, Finance and Chief Financial Officer
(401) 335-8470
kmahoney@cross.com