A.T. Cross Company Reports First Quarter Results

Lincoln, RI – April 28, 2005 – A.T. Cross Company (AMEX: ATX) today announced financial results for the first quarter ended April 2, 2005.

Net sales increased to $29.6 million during the first quarter of 2005 from $29.3 million for the same period last year. Revenue increases in both the optical segment and the international writing instrument and accessory business were offset by revenue declines in the Americas writing instrument and accessory business.

Gross margin was 50.2% of net sales compared to 53.7% of net sales for the same period last year. Of the 350 basis point decline in gross margin, 230 basis points resulted from a $0.7 million favorable property tax settlement in the first quarter of 2004 which was recorded as a reduction in cost of goods sold. Excluding the benefit from the property tax settlement, gross margin decreased 120 basis points due largely to anticipated costs related to the transition to offshore manufacturing.

Selling, general, and administrative expenses were $14.2 million, or 47.9% of net sales, compared to $14.8 million, or 50.6% of net sales. This 270 basis point improvement is related to cost savings generated from the Company’s ongoing restructuring program as well as a continued focus on operational efficiencies.

Net loss was $0.5 million, or $0.03 per share. This compares to a net loss of $0.7 million, or $0.05 per share, last year. Net loss for the first quarter of 2005 includes a $0.2 million pre-tax restructuring charge related to the corporate reorganization program. Net loss for the first quarter of 2004 includes a $1.1 million pre-tax restructuring charge, which is also related to the corporate reorganization program. In addition, the first quarter of 2004 was favorably impacted by a property tax settlement which totaled $1.1 million on a pre-tax basis.

David G. Whalen, President and Chief Executive Officer, stated, “We are making progress on our key initiatives. First, due in part to our restructuring efforts, our expenses are down.”

“Costa Del Mar continues to move from strength to strength and maintain its track record of double digit growth. Costa Del Mar’s new products have been well received and the brand continues to gain traction.”

“With regard to the Cross branded business, our international markets, which represent approximately 50% of our total Cross sales, have shown steady improvement for the past year. We also saw certain areas of strength in our domestic quality writing instrument business, with particularly positive results from our direct sales force. However, weakness in the corporate gift and U.S. national account businesses more than offset these areas of strength. We are working to improve our performance by launching new products and rolling out unique merchandising approaches for these channels.”

Mr. Whalen concluded, “Going forward, we will drive the performance of the Cross brand by launching innovative new products in time for the peak season. Also, we anticipate Costa Del Mar’s strong performance will continue. Finally, we will continue to streamline our cost structure to allow us to deliver a strong return to our shareholders.”

The Company’s management will host a conference call tomorrow, April 29, 2005, at 9:00 a.m. Eastern Time. A live webcast of the call will be accessible here. 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 April 29th through May 6th at 1-973-341-3080 or 1-877-519-4471.

Non-GAAP Measures

The table attached to this release contains comparable basis (non-GAAP) measures of net loss and net loss per share that are provided as a complement to results provided in accordance with generally accepted accounting principles. These non-GAAP results are among the indicators management uses as a basis for evaluating financial performance as well as for forecasting future periods. For these reasons, management believes these non-GAAP measures can be useful to investors, potential investors and others. The presentation of this additional information is not meant to be considered in isolation or as a substitute for net loss or net loss per share prepared in accordance with GAAP.

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. 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 Del Mar sunglasses, are distributed in retail and corporate gift channels worldwide. For more information, visit the A.T. Cross web site at www.cross.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 statements relating to the continued growth of the Company’s writing instrument sales internationally, the continued positive effect of the US direct sales force, the ability of the Company to continue to control costs and streamline the cost structure, the expected positive effect of new products and merchandising for the US National Account channel and the expected continued strength of the Costa Del Mar businesses). 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 economic and political stability of the numerous international markets in which the Company operates, the ability of the Company to continue to successfully transfer manufacturing offshore, and the continued consumer acceptance of Costa Del Mar products, 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 April 28, 2005. 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.

CONTACTS:
Kevin F. Mahoney
Vice President, Finance and
Chief Financial Officer
401-335-8470

Investor Relations:
Financial Dynamics
Melissa Myron/Rachel Albert
212-850-5600

Download a spreadsheet with 2005 First Quarter Results