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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 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 accounting principles generally accepted in the United States of America for financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the six months ended June 28, 2003 are not necessarily indicative of the results that may be expected for the twelve months ending January 3, 2004. The Company has historically recorded its highest sales in the fourth quarter. Certain prior year amounts have been reclassified in order to conform to the current year presentation. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's annual report on Form 10-K for the year ended December 28, 2002.

NOTE B - Acquisition of Costa Del Mar Sunglasses, Inc. ("Costa Del Mar")
On April 22, 2003, the Company completed the acquisition of all of the outstanding shares of Costa Del Mar, a designer, manufacturer and wholesaler of high quality, high-performance polarized sunglasses. The acquisition of Costa Del Mar is part of the Company's strategy of becoming a leading designer and marketer of branded personal and business accessories. Costa Del Mar was a privately held company founded in Florida in 1983. The excess of the purchase price over the fair value of the net assets acquired approximated $3.4 million, which will not be deductible for income tax purposes. The acquired intangible, the Costa Del Mar trade name, is deemed to have an indefinite life and will not be amortized. The results of operations of Costa Del Mar since April 21, 2003 are included in the consolidated statements of operations of the Company. Costa Del Mar will be reported in the optical segment of the Company.

The following is the allocation of the purchase price of Costa Del Mar:

The following unaudited pro forma summary financial information summarizes the estimated combined results of operations of the Company and Costa Del Mar assuming that the acquisition had taken place on December 30, 2001. The unaudited pro forma combined results of operations were prepared on the basis of information provided to the Company by the former management of Costa Del Mar.

NOTE C - Restructuring Charges
In 2000, the Company's Board of Directors approved a plan to restructure the Company's domestic and international writing instrument operations. As part of this restructuring plan, the Company consolidated all writing instrument manufacturing and distribution at its headquarters in Lincoln, Rhode Island, closed its Irish facility and reorganized its European operations. There was no change to the estimated expenses related to the restructuring plan in 2003.

The following is a tabular presentation of the restructuring liabilities:

With the acquisition of Costa Del Mar in the second quarter of 2003, the Company now has two reportable segments; Writing Instruments and Accessories ("WI&A") and Optical. The Company evaluates segment performance based upon profit or loss from operations before income taxes. Following is the segment information for the Company for the three and six month periods ended June 28, 2003 and June 29, 2002:

NOTE E - Comprehensive Income
Comprehensive income for the three and six month periods ended June 28, 2003 and June 29, 2002 follows:

NOTE F - Stock Option Accounting
The Company has elected to account for stock options in accordance with Accounting Principles Board ("APB") Opinion No. 25, "Accounting for Stock Issued to Employees," which uses the intrinsic value method of accounting. Accordingly, the Company has not recognized compensation expense for the fair value of its stock-based awards in its condensed consolidated statements of operations. The following table reflects pro forma net income (loss) and earnings (loss) per share had the Company elected to record expense for employee stock options under Statement of Financial Accounting Standards ("SFAS") No. 123, "Accounting for Stock Based Compensation."

NOTE G - Line of Credit
The Company maintains a $25 million unsecured line of credit with a bank. During the second quarter of 2003 the Company renegotiated the loan agreement with the bank. The renegotiated agreement requires the Company to meet certain covenants. The most restrictive covenant is that over the next three fiscal years the Company can not incur extraordinary charges, as defined by the bank, in excess of approximately $6.5 million. There is also a restriction on the Company's ability to grant a security interest in its assets. Any amounts borrowed under this agreement are payable on demand. Under this agreement, the Company has the option to borrow either at the bank's prime lending rate or at one percent per annum in excess of the London Interbank Offering Rate. This agreement is cancelable at any time by the Company or the bank. During the second quarter of 2003, the Company borrowed approximately $10 million on this line of credit, primarily to finance the acquisition of Costa Del Mar. On May 23, 2003, $9 million of this amount was converted into a five-year term note incurring interest at a rate of London Interbank Offering Rate plus 75 basis points.

On June 28, 2003, approximately $8.9 million of the $9 million converted debt was outstanding, of which $7.5 million was classified as long-term debt, less current maturities and $1.4 million was classified as current maturities of long-term debt.

The outstanding balance of notes payable to banks at June 28, 2003 was approximately $1.3 million.

NOTE H - Derivative Financial Instruments
During the second quarter of 2003, the Company entered into an interest rate swap agreement with an initial notional amount of $9 million and a term of five years. This swap effectively fixes the interest rate on the Company's five-year term note at 4.15%. The terms of the swap and the term note being hedged match, and the Company qualifies for the "shortcut" treatment. Amounts receivable or payable under this swap agreement are recorded as adjustments to interest expense. This swap has been designated as a cash flow hedge and the effect of the mark-to-market valuation that relates to the effective amount of the derivative financial instrument is recorded as an adjustment, net of tax, to accumulated other comprehensive loss. From inception to June 28, 2003, the effect of the mark-to-market valuation, net of tax, was an unrealized loss of approximately $191,000.

NOTE I - Goodwill and Other Intangible Assets
The Company accounts for intangible assets, including goodwill, under SFAS No. 142, "Goodwill and Other Intangible Assets." Under SFAS No. 142, goodwill is tested for impairment annually or when an event occurs or circumstances change that would more likely than not reduce the fair value of the reporting unit below its carrying amount, and write downs may be necessary. In the second quarter of 2003, approximately $3.4 million of goodwill was capitalized as a result of the Costa Del Mar acquisition. At June 28, 2003, the carrying value of all goodwill was approximately $7.3 million.

Other intangibles consisted of the following:

NOTE J - New Accounting Pronouncements
In July 2002, the Financial Accounting Standards Board ("FASB") issued SFAS No. 146, "Accounting for Costs Associated with Exit or Disposal Activities," and nullified Emerging Issues Task Force ("EITF") Issue No. 94-3. SFAS No. 146 requires that a liability for a cost associated with an exit or disposal activity be recognized when the liability is incurred, whereas EITF No 94-3 had recognized the liability at the commitment date to an exit plan. The Company adopted this statement effective January 1, 2003. The adoption of this statement will only have an impact on the accounting for exit or disposal activities initiated after December 31, 2002.

In December 2002, the FASB issued SFAS No. 148, "Accounting for Stock Based Compensation - Transition and Disclosure." SFAS No. 148 is an amendment of SFAS No. 123, "Accounting for Stock Based Compensation," and APB Opinion No. 28, "Interim Financial Reporting." SFAS No. 148 provides alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation and amends the disclosure requirements. The Company is reviewing SFAS No. 148 and has not yet made a decision on the adoption of the fair value method of recording stock options. The Company has adopted the disclosure requirements of SFAS No. 148.

In April 2003, the FASB issued SFAS No. 149, "Amendment of Statement 133 on Derivative Instruments and Hedging Activities." SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities" and SFAS No. 138, "Accounting for Certain Derivative Instruments and Certain Hedging Activities" established accounting and reporting standards for derivative instruments including derivatives embedded in other contracts (collectively referred to as derivatives) and for hedging activities. SFAS No. 149 amends and clarifies financial accounting and reporting for derivatives and for hedging activities under SFAS No. 133. This statement is effective for contracts entered into or modified after June 30, 2003 and for hedging relationships designated after June 30, 2003. The adoption of this statement is not expected to have a material impact on the Company's consolidated financial statements.

NOTE K - Stock Repurchase Plan
In fiscal 2001, the Company's Board of Directors authorized the repurchase of up to 10% of the Company's outstanding Class A common stock. This plan was completed in October 2002. A total of 1,499,967 shares were purchased under this plan for approximately $10.2 million at an average price per share of $6.78.

On October 23, 2002, the Company's Board of Directors authorized a new plan to repurchase up to an additional 10% of the outstanding Class A common stock. Under this new plan, the Company plans to purchase approximately 1.4 million shares of stock on the open market, subject to regulatory considerations, from time to time, depending on market conditions. At December 28, 2002, the Company had repurchased 180,000 shares under this new plan for approximately $1.1 million at an average price per share of $6.09. In the first quarter of 2003, the Company repurchased 260,000 shares for approximately $1.4 million at an average price per share of $5.25. In the second quarter of 2003, the Company repurchased 135,000 shares for approximately $693,000 at an average price per share of $5.13

Repurchased shares will be held as treasury stock and will be available for general corporate purposes including but not limited to employee benefit plans, strategic acquisitions and alliances.

NOTE L - Contingencies
On or about April 21, 2000, the Company, certain officers and directors of the Company and others were named as defendants in an action filed in the United States District Court for the District of Rhode Island. The suit, which is brought by a purchaser of the Company's Class A common stock, alleges that the defendants violated Federal securities laws by making material misstatements and omissions in the Company's public filings and statements relating to the Company's former Pen Computing Group business. The suit seeks class action status including all purchasers of the Company's Class A common stock between September 17, 1997 and April 22, 1999. The damages sought are unspecified.

On June 30, 2000, the Company filed a Motion to Dismiss the action in the United States District Court in Rhode Island. The United States District Court for the District of Rhode Island granted the Company's Motion to Dismiss in June 2001. In July 2001, the Plaintiff filed an appeal with the First Circuit Court of Appeals. The appeal was before the First Circuit Court of Appeals. Oral argument was held February 8, 2002.

On March 20, 2002, the Court of Appeals for the First Circuit issued a judgment affirming the dismissal of all claims asserted against the W. Russell Boss Jr. Trust A, W. Russell Boss Jr. Trust B and W. Russell Boss Jr. Trust C and reversing the District Court's dismissal of the Section 10(b) and 20(a) claims asserted against the Company and the named individual defendants. The Court of Appeals' ruling was limited to a finding that the plaintiff's complaint had satisfied the pleading requirements of the Private Securities Litigation Reform Act of 1995; the Court did not opine on the merits of plaintiff's claims. The Company maintains that the claims are without merit and continues to vigorously defend the litigation.

In 1998, the Company received a Letter of Responsibility ("LOR") from the Rhode Island Department of Environmental Management ("DEM"). The LOR stated that analytical results indicated elevated levels of volatile organic compounds at several sites on the Company's property and requested that the Company conduct a site investigation to identify the source. The Company retained an environmental consulting firm to perform the site investigation and develop remedial action alternatives. The DEM has accepted these remediation proposals, and remediation activities began in 2001. Remediation activities are ongoing and have resulted in a reduction in contamination in the groundwater.

In June 2002 the United States Environmental Protection Agency ("EPA") served the Company with a Notice of Potential Liability and Request for Information regarding the J.M. Mills Landfill, which is part of the Peterson/Puritan Superfund site in Cumberland, Rhode Island. The Notice also requests that the Company pay past and future costs associated with the site. To date, approximately sixty entities have received Notice Letters from the EPA relative to the site. The Company filed its response in October 2002.

The Company is also named as one of approximately sixty defendants in a contribution suit brought by CCL/Unilever relating to the J.M. Mills Landfill site. These complaints allege that the Company is liable under the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA") for contribution for past and future costs incurred at the site. Past and future costs (excluding the required remedy) are estimated at $3 million to $5 million. No discovery has been taken to date.

The Company is involved in various litigation and legal matters that have arisen in the ordinary course of business. To its knowledge, management believes that the ultimate resolution of any existing matter will not have a material adverse effect on the Company's consolidated financial position or results of operations.

On July 24, 2003, the Company announced a corporate restructuring program designed to increase the Company's competitiveness in the global marketplace by significantly reducing operating costs and freeing additional capital for product development and diversification as well as marketing and brand development.

Management intends to phase in the reorganization over several years. As part of this program, a number of the writing instrument manufacturing departments will be moved offshore. Each succeeding step of the process will be fully dependent on the newly sourced product achieving the high quality standards expected of every Cross product. Approximately 80 manufacturing positions in Lincoln, Rhode Island will be affected in 2003.

In addition, over 80 non-manufacturing positions located in Lincoln, Rhode Island and internationally will be eliminated in 2003 and early 2004 as part of the program to consolidate and reduce administrative expenses.

Net sales for the second quarter of 2003 were $29.2 million, an increase of 6.4% compared to $27.5 million in the second quarter of 2002. Revenue from writing instruments and accessories declined 5.2% to $26 million while sales of Costa Del Mar sunglasses were $3.2 million from the date of acquisition through June 28, 2003. Domestic sales of writing instruments and accessories declined 5.9% and international sales were 6.3% lower than the comparable 2002 period. Original Equipment Manufacturer ("OEM") sales of both writing instruments and digital pens were 15.7% higher than the second quarter of 2002.

Writing instruments and accessories revenue in the Americas region declined 5.6% to $15.3 million due primarily to a 16.3% decline in the business gift division. The America's business gift decline was entirely due to a 17.9% decline in business gift division sales in the United States. The Americas retail sales declined 2% in the quarter, reflective of sluggish economic conditions.

The Europe, Middle East and Africa ("EMEA") region writing instrument and accessory sales of $6.7 million increased 3.8% compared to the second quarter of 2002. Foreign currency translation, particularly the stronger euro, favorably impacted sales by approximately 12.6 percentage points ("PP"). Poor economic conditions in Europe and the Middle East had a negative impact on sales volume in the quarter.

Sales of writing instrument and accessory products of $2.8 million in the Asian markets were 25.1% lower in the second quarter of 2003 compared to the same period of 2002. Retail sales declined 36.8% and business gift sales declined 5.2%. Foreign currency translation favorably impacted sales by approximately 3.1 PP. The SARS virus adversely impacted retailers due to lack of store traffic and duty free operations due to diminished travel in the quarter. While most Asian markets declined, in particular Taiwan 45% and Hong Kong 27%, our largest Asian market, Japan, which was not affected by the SARS virus, reported a 12% increase in second quarter sales, as retail sales increased 27% and business gift sales increased 7%.

OEM revenue increased 15.7% as compared to last year's second quarter. OEM revenue from traditional writing instruments was flat compared to 2002 as significantly lower sales to a direct marketing customer were offset by the addition of new customers, including Paul Smith. OEM revenue from digital pens for Tablet PC products was $186,000 in the second quarter of 2003 compared to $6,000 in 2002.

Costa Del Mar sunglass sales were $3.2 million from the date of acquisition through June 28, 2003. The second quarter is seasonally the strongest of the year for Costa Del Mar.

Gross margin of 51.6% was 0.4 PP less than last year's second quarter margin of 52%. Writing instrument and accessory margins declined by 1.5 PP largely due to lower sales volume and unfavorable product mix issues. This decline was partially offset by the inclusion of Costa Del Mar.

SG&A expenses of approximately $13.9 million were 1.7% higher than last year. This increase was entirely due to the $1.1 million SG&A expenses of Costa Del Mar as writing instrument and accessory SG&A expenses declined 6.4%.

R&D expenses in the second quarter of 2003 were lower than the comparable 2002 period by 8% due largely to timing. These results were not impacted by Costa Del Mar, which had no R&D expenses.

S&D expenses were 3.7% higher than the comparable period last year. This increase was due to Costa Del Mar as writing instrument and accessory product S&D expenses were 3.4% below prior year levels.

In the second quarter of 2003, the Company recorded an approximate $1 million gain on disposition of asset held for sale. This gain resulted from the June 10, 2003 sale of the Company's former manufacturing facility in Ireland.

Interest and other was an expense of $49,000 in the second quarter of 2003, versus income of $325,000 in 2002. There were unrealized losses on trading securities in the second quarter of 2003 of $22,000 as compared to unrealized gains of $166,000 in the second quarter of 2002. In addition, interest income was lower and interest expense higher in the second quarter of 2003 as compared to 2002.

The effective tax rate for the quarter was 35%, equal to the tax rate in the second quarter of 2002.

Net sales for the six month period ended June 28, 2003 were $55.3 million, an increase of 0.5% as compared to the same period in 2002. Revenue from writing instruments and accessories declined 5.3% to $52.1 million while sales of Costa Del Mar sunglasses were $3.2 million from the date of acquisition through June 28, 2003. Domestic writing instrument and accessory sales were $23.8 million for the first six months, 6.8% lower than the comparable prior year period. International writing instrument and accessory sales of $25.3 million were 4.6% lower than the comparable prior year period. OEM sales of both writing instruments and digital pens were 2.7% higher than the first six months of 2002.

Writing instrument and accessory sales in the Americas region of $28.2 million declined 6.6%, driven by decreases in both the domestic retail and business gift markets. Domestic retail sales declined 5.4% and domestic business gift sales declined 10.4%. Sales in Canada and Latin America declined 2.1% and 8.1% respectively. Canadian business gift sales declined 10.2% somewhat offset by a slight increase in retail sales. Retail sales in Latin America declined 10.1%, somewhat offset by a 37.1% increase in the relatively smaller business gift market. These results are indicative of the sluggish economy.

EMEA writing instrument and accessory sales for the first six months of 2003 of $13.5 million increased 0.6% as compared to the first six months of 2002. Business gift sales in the region increased 2.1% offset by a slight decline in retail sales. Excluding the favorable impact of foreign exchange, EMEA revenue declined approximately 12% during the first six months of 2003, as economic conditions in Europe and the Middle East continue to adversely affect EMEA revenue performance.

Asia writing instrument and accessory revenue of $7.5 million declined 12.5% for the six months of 2003. A 23.5% decline in retail sales was somewhat offset by a 4.6% increase in business gift sales. The SARS virus adversely impacted retailers and duty free operations in the first six months of 2003. The Company's Taiwan subsidiary reported a 34.2% decline in retail sales and a 33.9% decline in business gift sales and Hong Kong reported a 27.4% decline in retail sales, somewhat offset by a 38.7% increase in business gift sales. Our largest Asian subsidiary, Cross Company of Japan, which was not affected by SARS, reported a 12.6% increase in retail sales and a 14.9% increase in business gift sales. Foreign currency translation favorably impacted sales by approximately 4.6 PP.

OEM revenue from traditional writing instruments of $1.9 million declined 29.8% compared to 2002 as significantly lower sales to a direct marketing customer were partially offset by the addition of new customers, including Paul Smith. OEM revenue from digital pens for Tablet PC products was $942,000 in 2003 as compared to $40,000 in 2002.

Costa Del Mar sunglass sales were $3.2 million from the date of acquisition through June 28, 2003. The second quarter is seasonally the strongest of the year for Costa Del Mar.

The consolidated gross profit margin for the first six months of 2003 was 51.5%, 0.6 PP lower than the 52.1% gross margin reported for the comparable prior year period. Writing instrument and accessory product margins, which declined 1.2 PP, were somewhat offset by the more favorable Costa Del Mar gross profit margin. Writing instrument and accessory product margins were unfavorable due to the writing instrument and accessory revenue decline and the effect of product mix.

SG&A expenses for the first six months of 2003 were even with the prior year. SG&A expenses in 2003 included $1.1 million of incremental SG&A expenses associated with Costa Del Mar. Offsetting this was a $1.1 million, or 4.3% decline in writing instrument and accessory SG&A expenses.

R&D expenses in the first six months of 2003 were lower than the same 2002 period by 5.4% due largely to timing. These results were not impacted by Costa Del Mar, which had no R&D expenses in the period.

In the second quarter of 2003, the Company recorded an approximate $1 million gain on disposition of asset held for sale. This gain resulted from the June 10, 2003 sale of the Company's former manufacturing facility in Ireland.

Interest and other for the first six months of 2003 was income of $34,000 as compared to income of $418,000 in 2002. Interest income was 31.7% lower than 2002, due to lower average invested funds and lower interest rates. There were unrealized losses on trading securities in the first six months of 2003 of $32,000 as compared to unrealized gains of $116,000 in the first six months of 2002. In addition, interest expense was higher in the first six months of 2003 as compared to 2002.

The Company recorded income tax expense of 35% on the income from continuing operations in the first six months of 2003, which is the Company's best estimate of the effective tax rate for the full year, and is the same as the tax rate used for the first six months of 2002.

Cash, cash equivalents and short-term investments ("cash") increased approximately $1.4 million from December 28, 2002 to $19.4 million at June 28, 2003. Cash available for domestic operations approximated $3.6 million, while cash held offshore approximated $15.8 million at June 28, 2003. In 1999, the Company determined that approximately $15 million in undistributed foreign earnings were no longer considered invested indefinitely and recorded a provision for deferred taxes of approximately $5.3 million. This represented the estimated tax associated with these undistributed earnings. As of June 28, 2003, approximately $13 million of these earnings had been repatriated to the United States. At present, management continues to believe that the unremitted foreign earnings for which deferred taxes have not been provided will continue to be permanently invested in the growth of business outside of the United States; hence, no additional deferred taxes were recorded during the first six months of 2003.

Accounts receivable decreased since the end of 2002 by approximately $7.7 million to $19.4 million, primarily due to cash collected in January 2003 from customers who took advantage of the Company's 2002 extended dating program. This program allowed domestic customers to defer payments on certain 2002 purchases to 2003. This program was similar to holiday season extended dating programs that have been offered in prior years. Offsetting the decrease in writing instruments accounts receivable was the addition of $1.8 million in Costa Del Mar accounts receivable.

Inventory was $18.5 million at June 28, 2003, an increase of $5 million since December 28, 2002. A significant portion of this increase was in the writing instruments segment, reflecting the lower writing instrument sales volume in the second quarter as well as planned increases to support programs in the second half of 2003. In addition, $1.8 million of the increase was due to the acquisition of Costa Del Mar Sunglass inventories.

The Company currently has available a $25 million unsecured line of credit with a bank that provides an additional source of working capital. During the second quarter of 2003, the Company borrowed approximately $10 million on this line of credit primarily to initially finance the acquisition of Costa Del Mar at closing. Of this amount, $9 million was converted into long-term debt. The Company believes that it will generate sufficient cash flow to service and payoff the long-term debt.

In the first six months of 2003, $1.5 million of restructuring charges were paid related to the restructuring plan the Company initiated in fiscal 2000. Total cash payments to date through June 28, 2003, related to the 2000 restructuring plan, approximated $15.5 million. The remaining approximate $75,000 cash obligation is expected to be paid in 2003. The total cash portion of the 2000 restructuring will approximate $15.5 million.

As a result of the Company's latest reorganization program announced in 2003, the Company expects to realize general and administrative savings of approximately $4 to $5 million annually beginning in 2004. Assuming the manufacturing plan is fully implemented, a process which is expected to take approximately three years, the Company expects to realize manufacturing cost savings of approximately $5 to $7 million annually. In connection with this effort, the Company will incur pre-tax restructuring charges of approximately $6.5 million that will be realized over the life of the program, assuming full implementation. Approximately $2 to $2.5 million is expected to be recognized in 2003.

On October 23, 2002, the Company's Board of Directors authorized a plan to repurchase up to 10% of the outstanding Class A common stock. Under this plan, the Company plans to purchase approximately 1.4 million shares of stock on the open market, subject to regulatory considerations, from time to time, depending on market conditions. At December 28, 2002, the Company had repurchased 180,000 shares under this plan for approximately $1.1 million at an average price per share of $6.09. In the first six fiscal months of 2003, the Company repurchased 395,000 shares for approximately $2.1 million at an average price per share of $5.21. Subsequent to June 28, 2003, up to the date of this filing, the Company repurchased an additional 94,500 shares of stock for approximately $521,000 at an average price per share of $5.52.

The Company believes that existing cash and funds from operations, supplemented, as appropriate, by the Company's short-term borrowing arrangements, will be adequate to finance its foreseeable operating and capital requirements, the requirements of the Company's restructuring programs and the stock repurchase plan. Should operating cash flows in 2003 not materialize as projected, the Company has a number of 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, delaying non-critical research and development and capital projects and delaying the completion of the stock repurchase plan.

For a description of new accounting pronouncements that affect the Company and the status of the Company's implementation thereof, see Note J "New Accounting Pronouncements" to the Company's condensed consolidated financial statements in Item 1 of this Form 10-Q Quarterly Report. None are expected to have a material impact on the Company's consolidated financial position or results of operations.

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 Company's newly acquired line of business; anticipated availability of the unsecured line of credit; anticipated sufficiency of available working capital; the anticipated level of research and development costs; and the expectation that unremitted foreign earnings for which taxes have not been provided will continue to be permanently invested. The Company cautions that a number of important factors could cause the Company's actual results for fiscal 2003 and beyond to differ materially from those expressed in any forward-looking statements made by, or on behalf of, the Company. Forward-looking statem ents contain a number of risks and uncertainties, including, but not limited to, risks associated with the uncertainty of the domestic and foreign economies in which the Company operates, the political uncertainty of certain foreign markets in which the Company operates, the uncertainty related to litigation, customer and consumer acceptance of the Company's new and existing product lines, the Company's ability to successfully operate Costa Del Mar, the effect of seasonal fluctuations in our sales on our operating results and the Company's ability to control costs. See the Company's Form 10-K for a more detailed discussion of certain of these factors. The Company cannot assure that it will be able to anticipate or respond timely to changes which could adversely affect its operating results in one or more fiscal quarters. Results of operations in any past period should not be considered indicative of results to be expected in future periods. Fluctuations in operating results may result in fluctuations in the price of the Company's common stock. The Company undertakes no obligation to correct or update any forward-looking statements for any reason.

Refer to the Company's annual report on Form 10-K for the twelve month period ended December 28, 2002 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 2002 annual report on Form 10-K.

(a) Evaluation of Disclosure Controls and Procedures. The Company's principal executive officer and principal financial officer, after evaluating the effectiveness of the Company's disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this quarterly report on Form 10-Q, have concluded that, based on such evaluation, the Company's disclosure controls and procedures were adequate and effective to ensure that material information relating to the Company, including its consolidated subsidiaries, was made known to them by others within those entities, particularly during the period in which this quarterly report on Form 10-Q was being prepared.

(b) Changes in Internal Controls. There were no changes in the Company's internal control over financial reporting, identified in connection with the evaluation of such internal control that occurred during our last fiscal quarter, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

On or about April 21, 2000, the Company, certain officers and directors of the Company and others were named as defendants in an action filed in the United States District Court for the District of Rhode Island. The suit, which is brought by a purchaser of the Company's Class A common stock, alleges that the defendants violated Federal securities laws by making material misstatements and omissions in the Company's public filings and statements relating to the Company's former PCG business. The suit seeks class action status including all purchasers of the Company's Class A common stock between September 17, 1997 and April 22, 1999. The damages sought are unspecified.

On June 30, 2000, the Company filed a Motion to Dismiss the action in the United States District Court in Rhode Island. The United States District Court for the District of Rhode Island granted the Company's Motion to Dismiss in June 2001. In July 2001, the Plaintiff filed an appeal with the First Circuit Court of Appeals. The appeal was before the First Circuit Court of Appeals. Oral argument was held February 8, 2002.

On March 20, 2002, the Court of Appeals for the First Circuit issued a judgment affirming the dismissal of all claims asserted against the W. Russell Boss Jr. Trust A, W. Russell Boss Jr. Trust B and W. Russell Boss Jr. Trust C and reversing the District Court's dismissal of the Section 10(b) and 20(a) claims asserted against the Company and the named individual defendants. The Court of Appeals' ruling was limited to a finding that the plaintiff's complaint had satisfied the pleading requirements of the Private Securities Litigation Reform Act of 1995; the Court did not opine on the merits of plaintiff's claims. The Company maintains that the claims are without merit and will continue to vigorously contest the litigation.

In June 2002 the EPA served the Company with a Notice of Potential Liability and Request for Information regarding the J.M. Mills Landfill, which is part of the Peterson/Puritan Superfund site in Cumberland, Rhode Island. The Notice also requests that the Company pay past and future costs associated with the site. To date, approximately sixty entities have received Notice Letters from the EPA relative to the site. The Company filed its response in October 2002.

The Company is also named as one of approximately sixty defendants in a contribution suit brought by CCL/Unilever relating to the J.M. Mills Landfill site. These complaints allege that the Company is liable under CERCLA for contribution for past and future costs incurred at the site. Past and future costs, excluding the required remedy, are estimated at $3 million to $5 million. No discovery has been taken to date.

No other legal proceedings are pending by or against the Company or any of its subsidiaries, which, in management's opinion, would have a material impact on the Company's consolidated financial position or results of operations.

The Company held its annual meeting on April 24, 2003 at its corporate headquarters in Lincoln, Rhode Island. The following are the matters submitted to a vote of the shareholders:

None

a) Exhibits

Exhibit 31 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
(Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code)

b) Reports on Form 8-K

On April 22, 2003, the Company filed Form 8-K current report disclosing under Item 9. Regulation FD Disclosure a press release that was issued on the same date announcing the Company's acquisition of Costa Del Mar Sunglasses, Inc.

On April 24, 2003, the Company filed Form 8-K current report disclosing under Item 9. Regulation FD Disclosure, in order to satisfy the requirements of the new Item 12, a press release that was issued on the same date announcing the Company's financial results for the first quarter of 2003.

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.