A.T. CROSS COMPANY REPORTS THIRD QUARTER RESULTS

Net Sales increase 11%
Operating Income increases 10%

Lincoln, RI – October 22, 2008 – A.T. Cross Company (NASDAQ: ATX) today announced financial results for the third quarter ended September 27, 2008.

Consolidated sales for the third quarter of 2008 increased 11% to $39.0 million compared to $35.1 million in the third quarter of 2007. The Cross Accessory Division (CAD) recorded revenue of $26.6 million, up 1.3% compared to the same period last year. The Company’s optical segment, which now includes the Native Eyewear business, had a third quarter sales increase of 39.8% to $12.3 million, compared to the same period last year. This increase was driven both by continued strong growth for the Costa Del Mar brand as well as the contribution from Native Eyewear.

Gross margin in the third quarter of 57.0% increased 30 basis points as compared to 56.7% in last year’s third quarter. Operating expenses, including $0.2 million of restructuring charges in the current quarter, were $19.8 million, or 50.7% of sales in the quarter, versus $17.7 million, or 50.3% of sales for the same period a year ago. Operating income in the third quarter was $2.5 million versus $2.2 million in the third quarter of last year.

Net income for the third quarter was $1.8 million, or $0.11 per diluted share, compared to $2.4 million, or $0.15 per diluted share, last year. The income tax provisions for both quarters were favorably impacted by the recognition of tax benefits, the realization of which was previously considered uncertain. These tax benefits favorably impacted the current quarter results by $0.02 per share and the prior year’s third quarter results by $0.06 per share. Therefore, excluding these one-time favorable income tax adjustments in both years, the Company earned $0.09 per diluted share in both third quarters.

David G. Whalen, President and Chief Executive Officer of A.T. Cross said, “We were pleased with our performance in the third quarter as both divisions reported improved revenue results in what has developed into a very difficult retail market. We believe that this performance is a result of the power of our brands and the ongoing improvements we are making to our operating model. During 2008, we have grown our accessories and writing instrument business, lowered our cost structure, grown our optical businesses, and successfully leveraged our recent acquisition.”

Mr. Whalen then continued, “Our third quarter came in generally as we expected, however we began to see lower than anticipated revenue in the Cross Accessory Division in late September as the marketplace began to brace for a difficult holiday season. While we believe we are well positioned, that new trend appears to be continuing and, coupled with a strengthening U.S. dollar, we have adopted a more cautious view of the CAD business during its peak holiday season. Therefore, we are revising our full year EPS guidance from $0.49 to $0.51 to $0.40 to $0.45, before any restructuring charges.”

Balance Sheet

At the end of the third quarter the Company had cash and cash equivalents of $14.0 million versus $7.3 million at this time last year. Inventory at the end of the quarter was $32.3 million versus the year-ago level of $39 million. The Company has achieved a net reduction of inventory even with the addition of $1.3MM of inventory for the Native business. The reduction was due to an $8.2 million improvement in the inventory position of the Cross Accessory Division. The Company’s long term debt increased to $21.7 million versus $3.3 million at this time last year, due primarily to the Native acquisition.

Guidance

The Company stated that it is now targeting full year net sales growth of 6% to 8% and full year 2008 earnings per share in the range of $0.40 to $0.45, before charges for restructuring.

Conference Call

The Company’s management will host a conference call today, October 22, 2008 at 4:30 PM Eastern Time. Parties interested in participating in the conference call may dial-in at (888) 215-6955, while international callers may dial-in at (913) 312-1278. A live webcast of the call will be accessible here. The webcast will be archived for 30 days on this site, while a telephone replay of the call will be available beginning at 7:30 PM Eastern Time on October 22, 2008 through October 29, 2008 at (888) 203-1112 or (719) 457-0820 for international callers, and entering the pass code of 4702971.

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 and Native Eyewear sunglasses, are distributed in retail and corporate gift channels worldwide. For more information, visit the Costa Del Mar website at Costa Del Mar and the Native Eyewear 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 continued improvement in the Company’s operating model, the expected attainment of the Company’s financial goals, and expectations regarding sales during the holiday season. In addition, words such as "believes," "anticipates," "expects," and similar expressions are intended to identify forward-looking statements. These forward-looking statements, including our amended 2008 revenue and earnings per share guidance, are subject to risks and uncertainties, including but not limited to domestic and international economic market uncertainty, consumers’ willingness to purchase non-essential items; consumers' and retailers' reaction to the Company's existing and new writing instrument and accessory products, and the success of the direct to consumer initiatives, 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 22, 2008. 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

ICR
James Palczynski
203-682-8229

Download a spreadsheet with 2008 Third Quarter Results