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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-K
ANNUAL AND TRANSITIONAL REPORTS PURSUANT TO SECTIONS 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the fiscal year ended December 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES ACT
OF 1934 [NO FEE REQUIRED]
For the transition period from __________to __________
Commission File Number 1-6720
A. T. CROSS COMPANY
(Exact name of registrant as specified in its charter)
Rhode Island 05-0126220
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
One Albion Road, Lincoln, Rhode Island 02865
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (401) 333-1200
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered:
Class A Common Stock ($1. Par Value) American Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months, and (2) has been subject to such
filing requirements for the past 90 days. Yes X No______
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10K or any
amendment to this Form 10-K. [ X ]
The aggregate market value of the voting stock held by non-affiliates of
the registrant as of February 28, 1997:
Class A common stock - $154,431,900
(For this purpose all directors have been treated as affiliates).
The number of shares outstanding of each of the issuer's classes of common
stock as of February 28, 1997:
Class A common stock - 14,691,679 shares
Class B common stock - 1,804,800 shares
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the annual report to shareholders for the year ended December
31, 1996 are incorporated by reference into Parts I, II and IV. Portions
of the definitive proxy statement for the 1997 annual meeting of
shareholders are incorporated by reference into Part III.
PART I
Item 1. BUSINESS
A. T. Cross Company (the "registrant") currently operates predominantly in
one business segment, the manufacture and sale of high quality writing
instruments.
The registrant manufactures fine writing instruments consisting of ball-
point and fountain pens, Selectip roller-ball pens (which also accommodate
a porous point refill), mechanical pencils, desk sets and ball-point
refills. The registrant's writing instruments are offered in a variety of
styles and materials, including the traditional, narrow girth Century line
and the wider girth Townsend line, both fabricated primarily in metal, the
Solo and Solo Classic lines, fabricated in resin, and the new Metropolis
line, also fabricated in metal, introduced in the United States and certain
foreign markets in 1996. The registrant also markets certain writing
instrument accessories. The registrant continues to be the leading company
in the United States in fine writing instruments priced from $10 to $50.
Products in this price range include Century, Solo and Solo Classic and
Metropolis. The Townsend collection has given the registrant a notable
presence in the $55 to $250 price range of products. The registrant
emphasizes styling, craftsmanship and quality control in the design and
production of its products. All of the registrant's writing instruments
carry a full warranty of unlimited duration against mechanical failure.
The registrant's writing instruments are packaged and sold as individual
units or in matching sets. The registrant also sells single and double
unit desk sets with bases made of various materials such as onyx, marble
and wood.
The registrant's writing instrument products are distributed throughout the
United States by approximately 40 manufacturer's agents or representatives
to about 7,300 active retail and wholesale accounts. Retail accounts
include gift stores, department stores, jewelers, stationery and office
supply stores, mass merchandisers and catalogue showrooms. The wholesale
accounts distribute the registrant's products to retail outlets which
purchase in smaller quantities.
Advertising specialty representatives market the registrant's writing
instruments in the United States to business and industry. Typically, such
products are engraved or carry the purchaser's name or emblem and are used
for gifts, sales promotions, incentive purposes or advertising. The
registrant also sells its products to United States military post
exchanges, service centers and central buying operations.
Sales of the registrant's writing instrument products outside the United
States during 1996 were made by the registrant and by its wholly-owned
subsidiaries to foreign distributors and to retailers principally in
Canada, Latin America, Europe, Africa, the Middle East, Asia, and the Far
East.
The registrant also markets fine quality leather goods (primarily ladies
handbags) and accessories through its wholly-owned subsidiary, Manetti-
Farrow, Incorporated. Manetti-Farrow is the exclusive wholesale
distributor for Fendi and Echo brands of leather products and fashion
accessories in the United States.
Raw Materials:
Most raw materials for production of writing instruments in the United
States are obtained domestically. Some desk set base materials, some
fountain pen nibs and front sections, certain finished caps and barrels,
and some lacquer coating of metal shells are imported from Germany and
France. Complete pencil mechanisms, some porous point refill components
and leads, resin caps and barrels and some fountain pen nibs and front
sections are imported from Japan. Raw materials for production of writing
instruments in Ireland are obtained largely from Ireland, Germany, Japan
and the United States.
Patents and Trademarks:
The registrant, directly and through its subsidiaries, has certain
trademark registrations in the United States and many foreign countries,
including but not limited to, its principal trademark "CROSS", and related
trademarks, and the frustoconical top of its writing instruments. The
principal trademark "CROSS" and related goodwill is of fundamental
importance to the business. The registrant also holds certain United
States and foreign patents covering its desk set units, Townsend series
writing instruments, Solo and Solo Classic series writing instruments,
Metropolis series writing instruments, Signature series writing
instruments, fountain pens, mechanical pencil mechanisms, ball-point pen
mechanisms, and fountain pen cartridges, and has filed United States and
foreign patent applications on certain of the foregoing writing instruments
and related items. While the registrant pursues a practice of seeking
patent protection for novel inventions or designs, the Company's business
is not significantly dependent upon obtaining and maintaining patents.
In 1993, the registrant sold its Mark Cross trademark and selected assets
of its wholly-owned subsidiary, Mark Cross, Inc. and discontinued its Mark
Cross retail business. However, under the terms of that sale, the
registrant retained the right to use the CROSS trademark in certain non-
writing instruments categories, without challenge by the purchaser of the
Mark Cross trademark.
Seasonal Business:
Retail demand for the registrant's products is traditionally highest
immediately prior to Christmas and other gift-giving occasions. However,
seasonal fluctuations have not materially affected continuous production of
writing instrument products. The Company generates approximately one third
of its annual sales in the fourth quarter.
Working Capital Requirements:
Inventory balances tend to be highest in anticipation of new product
launches and just before peak selling seasons. Production for some
products which have longer lead times or for which production capacity is
limited is proportionately greater earlier in the year, and inventory
balances are relatively higher, to assure adequate supply is available for
the peak selling season. The registrant has offered in the past, and may
offer in the future, extended payment terms to domestic customers at
certain points during the year, usually September through November. See
the "Management's Discussion and Analysis of Financial Condition and
Results of Operations" section of the registrant's annual report to
shareholders for the year ended December 31, 1996 (filed herewith as
Exhibit 13 and hereinafter referred to as the "1996 Annual Report"), which
section is incorporated by reference herein.
Customers:
The registrant is not dependent for a material part of its business upon
any single customer or a small number of customers.
Backlog of Orders:
The backlog of orders is not a significant factor in the registrant's
business.
Government Contracts:
Sales of the registrant's writing instrument products are made to military
post exchanges and service centers, but no contracts are entered into which
are subject to renegotiation or termination by the United States
Government.
Competition:
The writing instrument field is highly competitive. In particular,
competition is strong with respect to product quality and brand
recognition. There are numerous manufacturers of ball-point, roller-ball
and fountain pens and mechanical pencils in the United States and abroad.
Many of such manufacturers produce lower priced writing instruments than
those produced by the registrant. Although the registrant is a major
producer of ball-point, roller-ball and fountain pens and mechanical
pencils in the $10 to $50 price range, other writing instrument companies
have significantly higher sales volumes from a broader product line across
a wider range of prices or have greater resources as divisions of larger
corporations.
Research and Development:
The registrant had expenditures for research and development of new
products and improvement of existing products of approximately $2,877,000
in 1996, $2,991,000 in 1995, and $2,036,000 in 1994.
Environment:
The registrant believes it is in substantial compliance with all Federal,
State and local environmental laws and regulations. It is believed that
future capital expenditures for environmental control facilities will not
be material.
Employees:
The registrant had approximately 1,200 employees at December 31, 1996, of
which 255 were employed by foreign subsidiaries or branches.
Foreign Operations and Export Sales:
Approximately 45% of the registrant's sales in 1996 were in foreign
markets. The registrant's primary foreign markets are in Europe and the
Far East. Sales of writing instrument products to foreign distributors are
subject to import duties in many countries although sales by the
registrant's wholly-owned manufacturing and distribution facilities in
Ireland into European Common Market countries are duty free. The
operations of the registrant's foreign subsidiaries and branches are
subject to the effects of currency fluctuations, to the availability of
dollar exchange, to exchange control and to other restrictive regulations.
Undistributed earnings of the foreign manufacturing and marketing
subsidiaries prior to the Revenue Reconciliation Act of 1993 (i.e., the
"1993 Act") generally are not subject to current United States federal
income and state income taxes. However, repatriation to the registrant of
the accumulated earnings of foreign subsidiaries would subject such
earnings to United States federal and state income taxes. It is not the
intention of the registrant to repatriate these earnings. The 1993 Act
added Internal Revenue Code Section 956A which had the effect of subjecting
a portion of current foreign earnings (i.e., earnings generated subsequent
to the 1993 Act) to United States federal taxation. See Note F to the
registrant's financial statements included in the 1996 Annual Report, which
note to such financial statements is incorporated by reference herein. See
geographic information and export sales data in Note G to the registrant's
financial statements included in the 1996 Annual Report, which note to such
financial statements is hereby incorporated by reference.
___________________________________________________________________________
See the first paragraph under the "Management's Discussion and Analysis of
Financial Condition and Results of Operations" section of the 1996 Annual
Report incorporated herein by reference. In addition to statements in this
document that may be construed as forward-looking statements, there may be
statements in other documents of the registrant and oral statements by
representatives of the registrant to security analysts or investors that
may be construed as forward-looking statements about the business and new
products, sales and expenses, and operating and capital requirements. Any
such statements are subject to risks that could cause the actual results or
needs to differ materially, including but not limited to the ability of the
Company to generate consumer acceptance of various new products recently
introduced and or planned for introduction in the coming months; increases
in the cost of, or limitations in the supply of, raw materials (including
prices of precious metals used in the Company's products); changes in
political and economic conditions in the United States and other countries
in which the Company operates; interest and currency rate fluctuations;
competitive product and pricing pressures; and inflation. These risks are
discussed in the section referred to above.
Item 2. PROPERTIES
The registrant currently occupies approximately 269,000 square feet of
manufacturing, warehouse and office space in its facility in Lincoln, Rhode
Island. The registrant's wholly-owned subsidiary, A. T. Cross Limited,
owns and operates an approximately 64,000 square foot manufacturing and
distribution facility in Ballinasloe, County Galway, Ireland.
Substantially all of these facilities, which are well maintained and in
good repair, are currently being utilized in either a manufacturing,
distribution or administrative capacity. The productive capacity of these
facilities is sufficient to meet the registrant's needs for the foreseeable
future. The registrant also owns an approximately 130,000 square foot
facility in Lincoln, formerly the site of the registrant's distribution
center and certain administrative offices, which it is offering for sale,
and which currently is partially rented.
The registrant's operations in Germany, Japan, France, Italy, the United
Kingdom, Spain and Hong Kong, all lease their administrative offices and
warehouse space.
Manetti-Farrow leases administrative office space in New York, New York and
warehouse and office space in Oakland, California.
Item 3. LEGAL PROCEEDINGS
No material legal proceedings are pending by or against the registrant or
any of its subsidiaries which would have a material effect upon the
consolidated business and financial condition.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
PART II
Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
See the "Market and Dividend Information" section of the 1996 Annual
Report, which section is incorporated by reference herein.
Item 6. SELECTED FINANCIAL DATA
See the "Five-Year Summary" section of the 1996 Annual Report, which
section is incorporated by reference herein.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
See the "Management's Discussion and Analysis of Financial Condition and
Results of Operations" section of the 1996 Annual Report, which section is
incorporated by reference herein.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The consolidated financial statements of the registrant and its
subsidiaries and the report of its independent auditors thereon for the
audit of the consolidated financial statements for the year ended December
31, 1996, set forth in the 1996 Annual Report, are incorporated herein by
reference.
The report of the Company's independent auditors for the year ended
December 31, 1995 and 1994 are included in Item 14 (a)(1).
Quarterly Results of Operations in Note I of the registrant's financial
statements included in the 1996 Annual Report are incorporated herein by
reference.
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
At a meeting held on July 11, 1996 the Audit Committee of the Company's
Board of Directors recommended, and the Board of Directors approved, the
engagement of Deloitte & Touche LLP as its independent auditors for the
year ending December 31, 1996 to replace the firm of Ernst & Young LLP, who
were dismissed as auditors of the Company effective July 11, 1996. The
appointment of Deloitte & Touche LLP as the Company's independent
accountants for 1996 was effective upon the dismissal of Ernst & Young LLP,
subject to the approval of the Company's Class B shareholders which was
obtained on July 16, 1996.
The reports of Ernst & Young LLP on the Company's financial statements
for the past two years did not contain an adverse opinion or a disclaimer
of opinion and were not qualified or modified as to uncertainty, audit
scope, or accounting principles.
In connection with the audits of the Company's financial statements
for each of the two years ended December 31, 1995, and in the subsequent
interim period, there were no disagreements with Ernst & Young LLP on any
matters of accounting principles or practices, financial statement
disclosure, or auditing scope and procedures which, if not resolved to the
satisfaction of Ernst & Young LLP, would have caused Ernst & Young LLP to
make reference to the matter in its report.
During the Company's two most recently completed years and the
subsequent interim period preceding the engagement of Deloitte & Touche LLP
through the present date, there were no reportable events (as defined in
item 304 of Regulation S-K) with Ernst & Young LLP and during such periods
the Company did not consult with Deloitte & Touche LLP regarding the
application of accounting principles to a specified transaction, either
completed or proposed, or the type of audit opinion that might be rendered
on the Company's financial statements.
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
In addition to the directors and executive officers listed on pages 5 and 6
of the registrant's definitive proxy statement for the 1997 annual meeting
of shareholders, which pages are incorporated by reference herein, the
following are executive officers of the registrant (each of whom serves
until his or her successor is elected and has qualified):
Year in Which
Name Age Title First Held Office
Joseph F. Eastman 60 Vice President-Human Resources 1981
David A. Rogers (1) 48 Vice President-U.S. Marketing
and Sales 1995
Michael El-Hillow 45 Vice President-Finance; Treasurer; 1990
Chief Financial Officer
Donald W. Reilly 38 Corporate Controller 1992
Chief Accounting Officer
Tina C. Benik (2) 37 Vice President-Legal, General 1993
Counsel and Corporate Secretary
Steven T. Henick (3) 54 Vice President- 1996
Worldwide Marketing and Sales
J. John Lawler (4) 59 Vice President- 1993
Worldwide Tax and Duty Free
John T. Ruggieri (5) 40 Vice President- 1993
Corporate Development and Planning
Stephen A. Perreault (6) 49 Vice President-Manufacturing 1995
David J. Arthur (7) 38 Vice President, Engineering 1996
(1) Prior to becoming the Vice President-U.S. Marketing and Sales in 1995,
David A. Rogers was the Vice President of U.S. Sales.
(2) Prior to becoming Vice President-Legal, General Counsel and Corporate
Secretary, Tina C. Benik was the general counsel of the registrant from
1989 to 1991 and corporate secretary from 1991 to 1993.
(3) Prior to becoming Vice President-International Marketing and Sales in
1996, Steven T. Henick was the Vice President-Worldwide Marketing and Sales
from 1993 to 1996. Prior to 1993, Mr. Henick held various senior executive
positions in large multi-national consumer goods companies, including
Procter & Gamble, Inc., Tambrands, Inc., and Del International
Incorporated.
(4) Prior to becoming Vice President-Worldwide Tax and Duty Free in 1993,
J. John Lawler was the Vice President International of the registrant.
(5) Prior to becoming Vice President-Corporate Development and Planning in
1993, John T. Ruggieri was the Executive Vice President of the registrant's
wholly-owned subsidiary Mark Cross, Inc.
(6) Prior to becoming Vice President-Manufacturing in 1995, Stephen A.
Perreault held various senior executive positions in the jewelry,
cosmetics, and gift manufacturing and distribution companies, including
Weingeroff Enterprises, Inc., Lantis Corporation, Swarovski Jewelry U.S.
Ltd., and Avon Products, Inc.
(7) Prior to becoming Vice President, Engineering in 1996, David J. Arthur
was the Director of Engineering of the registrant from 1995 to 1996, and
the Manager, New Business Development of the registrant from 1994 to 1995.
From 1991-1994 Mr. Arthur was Group Manager, Corporate R&D and Product Line
Manager, Composite Materials Division, at Rogers Corporation.
Item 11. EXECUTIVE COMPENSATION
See pages 7 through 13 of the registrant's definitive proxy statement for
its 1997 annual meeting of shareholders, which pages are incorporated by
reference herein.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
See pages 3 and 4 of the registrant's definitive proxy statement for the
1997 annual meeting of shareholders, which pages are incorporated by
reference herein.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
See pages 5 and 6 of the registrant's definitive proxy statement for the
1997 annual meeting of shareholders, which pages are incorporated by
reference herein.
PART IV
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) (1) and (2) - The response to this portion of Item 14 is submitted
as a separate section of this report.
(3) Listing of Exhibits
(3) Restated Articles of Incorporation and By-laws
(incorporated by reference to Exhibit (3) to the
registrant's report on Form 10-K for the year ended
December 31, 1980); Amendment to Restated Articles
of Incorporation (incorporated by reference to Exhibit
(3) to the registrant's report on Form 10-K for the
year ended December 31, 1994), Amendment to By-laws
adopted December 2, 1988 (incorporated by reference to
Exhibit (3) to the registrant's report on Form 10-K
for the year ended December 31, 1989); Amendment to
By-laws adopted February 6, 1992 (incorporated by
reference to Exhibit (3) to the registrant's report on
Form 10-K for the year ended December 31, 1991)
(10.1) A. T. Cross Company Executive Compensation Program
Performance Cash Plan, January 1, 1995 (incorporated by
reference to Exhibit (10.1) to the registrant's report
on Form 10-K for the year ended December 31, 1994)*
(10.2) A. T. Cross Company Executive Compensation Program
Annual Incentive Plan, January 1, 1995 (incorporated by
reference to Exhibit (10.2) to the registrant's report
on Form 10-K for the year ended December 31, 1994)*
(10.3) A. T. Cross Company Non-Qualified Stock Option Plan,
1975 (as amended and restated February 4, 1988, as
amended December 10, 1991, as amended October 21, 1993,
and as further amended and restated December 6, 1994)
(incorporated by reference to Exhibit (10.3) to the
registrant's report on Form 10-K for the year ended
December 31, 1995)*
(10.4) A. T. Cross Company Incentive Stock Option Plan, 1981
(as amended February 6, 1992 and as further amended
April 28, 1994) (incorporated by reference to Exhibit
(10.4) to the registrant's report on Form 10-K for the
year ended December 31, 1994)*
(10.5) A. T. Cross Company Deferred Compensation Plan
(incorporated by reference to Exhibit (10.5) to the
registrant's report on Form 10-K for the year ended
December 31, 1994)*
(10.6) A. T. Cross Company Unfunded Excess Benefit Plan (as
amended) (incorporated by reference to Exhibit (10.6)
to the registrant's report on Form 10-K for the year
ended December 31, 1994)*
(10.7) A. T. Cross Company Restricted Stock Plan (incorporated
by reference to Exhibit (10.7) to the registrant's
report on Form 10-K for the year ended December 31,
1995)*
(11) Statement Re: Computation of Per Share Earnings
(13) Annual Report to Shareholders for the year ended
December 31, 1996. Filed only in respect to the
portions expressly incorporated by reference in this
Form 10-K.
(21) Subsidiaries - incorporated by reference to the
"Subsidiaries and Branches" section of the registrant's
1996 Annual Report
(23.1) Consent of Deloitte & Touche LLP
(23.2) Consent of Ernst & Young LLP
(27) Financial Data Schedules - filed electronically
* Management contract, compensatory plan or arrangement
(b) No reports on Form 8-K were filed in the fourth quarter of 1996.
(c) Exhibits--See Item (a)(3) above
(d) Financial Statement Schedules--The response to this portion of
Item 14 is submitted as a separate section of this report.
SIGNATURES
Pursuant to the requirements of Section 13 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.
A. T. CROSS COMPANY
By: BRADFORD R. BOSS
Bradford R. Boss
Chairman
Dated: March 25, 1997
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant in the capacities and on the dates indicated:
Signature Title Date
BRADFORD R. BOSS Chairman & Director March 25, 1997
(Bradford R. Boss)
RUSSELL A. BOSS President & Director March 25, 1997
(Russell A. Boss) (Chief Executive Officer)
JOHN E. BUCKLEY Executive Vice President March 25, 1997
(John E. Buckley) & Director
(Chief Operating Officer)
MICHAEL EL-HILLOW Vice President, Finance March 18, 1997
(Michael El-Hillow) Treasurer
(Chief Financial Officer)
DONALD W. REILLY Corporate Controller March 25, 1997
(Donald W. Reilly) (Chief Accounting Officer)
BERNARD V. BUONANNO, JR. Director March 25, 1997
(Bernard V. Buonanno, Jr.)
H. FREDERICK KRIMENDAHL, II Director March 25, 1997
(H. Frederick Krimendahl, II)
THOMAS C. MCDERMOTT Director March 25, 1997
(Thomas C. McDermott)
TERRENCE MURRAY Director March 25, 1997
(Terrence Murray)
JAMES C. TAPPAN Director March 25, 1997
(James C. Tappan)
EDWIN G. TORRANCE Director March 25, 1997
(Edwin G. Torrance)
ANNUAL REPORT ON FORM 10-K
ITEM 14 (a)(1) and (2), (c) and (d)
LIST OF FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES
CERTAIN EXHIBITS
FINANCIAL STATEMENT SCHEDULES
YEAR ENDED DECEMBER 31, 1996
A. T. CROSS COMPANY
LINCOLN, RHODE ISLAND
FORM 10-K - ITEM 14(a)(1) and (2)
A. T. CROSS COMPANY AND SUBSIDIARIES
LIST OF FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES
The following consolidated financial statements of A. T. Cross Company and
its subsidiaries, included in the annual report of the registrant to its
shareholders for the year ended December 31, 1996, are incorporated by
reference in Item 8:
Consolidated Balance Sheets - December 31, 1996 and December 31, 1995
Consolidated Statements of Income and Retained Earnings - Years Ended
December 31, 1996, 1995 and 1994
Consolidated Statements of Cash Flows - Years Ended December 31, 1996,
1995 and 1994
Notes to Consolidated Financial Statements - December 31, 1996
Independent Auditors Report for the year ended December 31, 1996
The independent public accountants report for the years ended December 31,
1995 and 1994 are included herein.
The following consolidated financial statement schedule of A. T. Cross
Company and its subsidiaries is included in Item 14(d):
Schedule II - Valuation and Qualifying Accounts
The report of independent public accountant on Financial Statement Schedule
II for the year ended December 31, 1996 is included herein. The report of
independent public accountant on the consolidated financial statements, and
on Financial Statement Schedule II, for the years ended December 31, 1995
and 1994, are included herein. All other schedules for which provision is
made in the applicable accounting regulation of the Securities and Exchange
Commission are not required under the related instructions, or the
information required therein has otherwise been disclosed in the
consolidated financial statements referred to above, or are inapplicable,
and therefore have been omitted.
SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS
A. T. CROSS COMPANY AND SUBSIDIARIES
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
Additions
(A)
Balance at Charged to Charged to Balance
Beginning Costs and Other Accounts Deductions at End of
DESCRIPTION of Period Expenses Describe Describe Period
Year Ended December 31, 1996
Deducted from asset account:
Allowance for doubtful
accounts $1,745,000 $342,977 $535,977(A) $1,552,000
Year Ended December 31, 1995
Deducted from asset account:
Allowance for doubtful
accounts $1,828,000 $360,755 $443,755(A) $1,745,000
Year Ended December 31, 1994
Deducted from asset account:
Allowance for doubtful
accounts $1,632,000 $405,592 $209,592(A) $1,828,000
(A) Uncollectible accounts written off.
Item 14 (d)
Report of Deloitte & Touche LLP
Independent Auditors
To the Shareholders of
A.T. Cross Company:
We have audited the consolidated financial statements of A.T. Cross Company and
subsidiaries as of December 31, 1996 and for the year then ended, and have
issued our report thereon dated February 10, 1997; such consolidated financial
statements and report are included in your 1996 Annual Report to Shareholders
and are incorporated herein by reference. Our audit also included the
consolidated financial statement schedule of A.T. Cross Company, listed in Item
14. This consolidated financial statement schedule is the responsibility of the
Company's management. Our responsibility is to express an opinion based on our
audit. In our opinion, such consolidated financial statement schedule, when
considered in relation to the basic consolidated financial statements taken as a
whole, presents fairly in all material respects the information set forth
therein.
Deloitte & Touche LLP
Boston, Massachusetts
February 10, 1997
Report of Ernst & Young LLP
Independent Auditors
To the Shareholders of
A.T. Cross Company:
We have audited the accompanying consolidated balance sheets of A.T. Cross
Company and subsidiaries as of December 31, 1995, and the related consolidated
statements of income and retained earnings, and cash flows for each of the two
years in the period ended December 31, 1995. Our audits also included the
financial statement schedule listed in the Index at item 14(a). These financial
statements and schedule are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements and
schedule based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of A.T. Cross
Company and subsidiaries at December 31, 1995, and the consolidated results of
their operations and their cash flows for each of the two years in the period
ended December 31, 1995, in conformity with generally accepted accounting
principles. Also, in our opinion, the related financial statement schedule,
when considered in relation to the basic financial statements taken as a whole,
present fairly, in all material respects, the information set forth therein.
ERNST & YOUNG LLP
Providence, Rhode Island
January 30, 1996