A.T. Cross Company yesterday reported its fourth quarter and full year 2001 results, which reflected continued progress in improving profitability.
Consolidated operating profit was $4.3 million in the fourth quarter compared to an operating loss of $1.3 million in the same quarter of 2000. Operating results in the quarter were driven by a significant improvement in writing instrument profitability, which rose to $6.8 million compared to a profit of $62,000 in the prior year quarter. The 2000 quarter included a pre-tax restructuring charge of $5.2 million. The Pen Computing Group reported a fourth quarter operating loss of $2.4 million compared to an operating loss of $1.4 million in the prior year quarter. The current year quarter includes a pre-tax charge of $2.1 million for asset impairment costs and an inventory write-down.
For the year ended Dec. 29, 2001, consolidated operating income was $8.3 million compared to an operating loss of $12.2 million for 2000. Operating income of the writing instrument division was $12.0 million compared to an operating loss of $10.7 million for the year 2000. The prior year operating results included a $19.9 million pre-tax restructuring charge. The Pen Computing Group recorded an operating loss of $3.7 million in 2001 compared to an operating loss of $1.4 million in 2000. The 2001 results include a pre-tax charge of $2.1 million for asset impairment costs and an inventory write-down.
For the year ended Dec. 29, 2001, consolidated revenue decreased 5.4% to $123.5 million. Writing instrument sales decreased 4.3% to $121.0 million, primarily due to a slowdown in the Company’s global corporate gift business as well as a decline in OEM revenue and unfavorable economic conditions in Asia. Domestic writing instrument sales decreased 3.5% to $58.0 million. International writing instrument sales decreased 4.9% to $63.0 million. Pen computing revenue was $2.5 million compared to $4.1 million for the prior year.
David G. Whalen, president and CEO said, “2001 was a very difficult year for the pen computing business. In response, we significantly downsized this group and have more closely aligned these efforts with our Writing Instrument Research and Development Department. We are currently working on several projects; however, before any of these projects are expanded, we will ensure that we will earn an adequate return for our efforts.”
“Overall, Cross is in a good position,” he said. “Our balance sheet is healthy. We are determined to build our core business, and we have a team in place to achieve our goals. Our outlook for 2002 is positive.”
A.T. Cross’ management is conducting a conference call this morning at 9:00 a.m. Eastern Time to discuss results for the three months and year ended Dec. 29, 2001. The webcast will be archived for 30 days on the site, while a telephone replay of the call will be available beginning at 11:00 a.m. Eastern Time on February 15 through February 19 at 800-633-8284 or 858-812-6440 (international callers) using reservation #20275743.
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