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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the fiscal year ended December 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES ACT OF
1934
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 10-K or any amendment to this
Form 10-K. [ ]
The aggregate market value of the voting stock held by non-affiliates of the
registrant as of February 27, 1999:
Class A common stock - $80,071,000
Class B common stock - $ 0
(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 27, 1999:
Class A common stock - 14,747,203 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,
1998 are incorporated by reference into Parts I, II and IV. Portions of the
definitive proxy statement for the 1999 annual meeting of shareholders are
incorporated by reference into Parts I and III.
PART I
Item 1. BUSINESS
A.T. Cross Company (the "registrant" or the "Company") was first established in
1846 and is America's oldest manufacturer of fine writing instruments. The
Company was incorporated under the laws of the State of Rhode Island in 1916 and
became a publicly held corporation in 1971.
Business:
The Company has three reportable business segments: high quality writing
instruments, pen-based computing products and a branded line of Swiss-made
timepieces. For certain financial information with respect to these three
segments, see Note G to the registrant's financial statements included in the
annual report to shareholders for the year ended December 31, 1998 (filed
herewith as Exhibit 13 and hereinafter referred to as the "1998 Annual Report"),
which note to such financial statements is hereby incorporated by reference.
The registrant manufactures fine writing instruments consisting of ball-point
and fountain pens, Selectip rolling 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. The registrant also markets certain writing instrument accessories.
The registrant continues to be a leader in the United States in fine writing
instruments priced from approximately $10 to $50. Products in this price range
include Century, Century II, Radiance, Solo and Metropolis. The Townsend and
Pinnacle lines have given the registrant a presence in the $55 to $400 price
range. 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 sold throughout the United
States by manufacturer's agents or representatives to about 6,300 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 1998 were made by the registrant and by its wholly-owned subsidiaries to
foreign distributors and to retailers in Canada, Latin America, Europe, Africa,
the Middle East, Asia and Japan.
The registrant also manufactures, markets and sells pen-based computing products
through its Pen Computing Group (PCG) primarily in the United States. The
CrossPad, and smaller sized CrossPadXP, are personal digital notepads that allow
the user to take handwritten notes using a digital pen and traditional paper on
an electronic notepad and to capture these notes as "digital ink". These notes
can then be uploaded to a PC for electronic filing, faxing, and e-mailing. In
addition, PCG pen-based products are used to facilitate electronic communication
via the use of a special, patented refill in a Cross pen (DigitalWriter) with a
personal digital assistant or as an alternative to the traditional mouse input
device for use with a personal computer (iPen). The Company's PCG products are
primarily sold in the United States to retailers, such as office supply
superstores and consumer electronic stores, to distributors, by mail order and
via the internet.
In an effort to leverage the Cross brand name, the Company has been test
marketing a line of branded, Swiss-made timepieces in the United States. At
this time, the Company is currently investigating a possible licensing
alternative for the watch business.
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.
Raw materials for the production of PCG products are obtained principally from
China.
Finished timepieces and timepiece movements are obtained from vendors in
Switzerland.
To maintain the highest level of product quality, the Company relies on a
limited number of domestic and foreign suppliers for certain raw materials and
manufacturing technologies. The Company may be adversely affected in the event
that these suppliers cease operations, or if pricing terms become less
favorable. The Company believes, but cannot be assured, that the raw materials
currently supplied by these vendors could be obtained from other sources and
that the manufacturing technologies could be developed internally or that
suitably similar technologies could be located.
Patents, Licenses and Trademarks:
The registrant, directly and through its subsidiaries, has certain writing
instrument and PCG trademark registrations, and pending trademark applications,
in the United States and many foreign countries, including but not limited to,
its principal trademark "CROSS" and the frustoconical top of its writing
instruments. The principal trademark "CROSS" is of fundamental importance to
the business. The registrant holds certain United States and foreign writing
instrument patents, and/or has filed U.S. and foreign patent applications,
covering its desk set units, Townsend series writing instruments, Solo and Solo
Classic series writing instruments, Metropolis series writing instruments,
Signature series writing instruments, Pinnacle series writing instruments,
fountain pens, mechanical pencil mechanisms, and ball-point pen mechanisms. The
registrant also holds certain United States patents, and has filed United States
and foreign patent applications, covering certain of its PCG pen-based computer
products. 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.
The manufacture and distribution of certain of the Company's electronic products
are dependent on licensing arrangements (some of which are non-exclusive) for
varying lengths of time with third parties for the use of their intellectual
property.
Seasonal Business:
Retail demand for the registrant's writing instrument products is highest prior
to Christmas and other gift-giving occasions. However, seasonal fluctuations
have not materially affected continuous production of writing instrument
products. The Company historically has generated approximately one third of its
annual sales in the fourth quarter.
Working Capital Requirements:
Writing instrument and PCG inventory balances tend to be highest in anticipation
of new product launches and before peak selling seasons. The registrant has
offered in the past, and may offer in the future, extended payment terms to
domestic writing instrument 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 1998 Annual Report
incorporated by reference herein.
Customers:
The registrant is not dependent for a material part of its business upon any
single customer.
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.
The consumer electronics market for hand held devices is highly competitive.
The PCG division's competitors have broader product lines and greater financial
and technological resources.
See also the "New Products" and the "Technological Change-Intellectual Property"
sections of the "Management's Discussion and Analysis of Financial Condition and
Results of Operations" section of the 1998 Annual Report incorporated by
reference herein.
Research and Development:
The registrant had expenditures for research and development of new products and
improvement of existing products of approximately $4,360,000 in 1998, $3,367,000
in 1997, and $2,877,000 in 1996.
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 1,000 employees at December 31, 1998, of which
approximately 300 were employed by foreign subsidiaries or branches.
Foreign Operations and Export Sales:
Approximately 43% of the registrant's sales in 1998 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 1998 Annual Report, which note to such financial statements is
incorporated by reference herein. See segment information in Note G to the
registrant's financial statements included in the 1998 Annual Report, which note
to such financial statements is hereby incorporated by reference. For the
effect of foreign sales on the Company's results of operations, see
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" section of the 1998 Annual Report incorporated herein by reference.
Forward-Looking Statements:
See "Risks and Uncertainties; Forward-Looking Statements" under the
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" section of the 1998 Annual Report incorporated herein by reference.
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" and similar expressions are intended to
identify forward-looking statements. 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 securities 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; 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 and incorporated herein by
reference.
Executive Officers of the Registrant:
In addition to the directors and executive officers listed in the "Election of
Directors" section of the registrant's definitive proxy statement for the 1999
annual meeting of shareholders, which section is 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 62 Vice President, Human Resources 1981
John T. Ruggieri (1) 42 Senior Vice President, Treasurer 1997
and Chief Financial Officer
Gary S. Simpson (2) 47 Corporate Controller 1997
Chief Accounting Officer
Tina C. Benik (3) 39 Vice President, Legal, General 1993
Counsel and Corporate Secretary
J. John Lawler (4) 61 Vice President, Writing Instruments, 1993
Worldwide Tax and Duty Free
Stephen A. Perreault (5) 51 Vice President, Operations, 1995
Writing Instruments
Joseph V. Bassi (6) 46 Finance Director 1997
Robert J. Byrnes, Jr. (7) 49 President and Chief Executive 1997
Officer, Pen Computing Group
Robin Boss Dorman (8) 33 Vice President, Writing Instruments, 1999
Sales and Marketing, North America
(1) Prior to becoming Senior Vice President, Treasurer, and Chief Financial
Officer in 1997, John T. Ruggieri was Vice President, Corporate Development
and Planning, from 1993 to 1997, and from 1989 to 1993 was Executive Vice
President of the registrant's wholly-owned subsidiary Mark Cross, Inc.
(2) Prior to becoming Corporate Controller in 1997, Gary S. Simpson was the
Controller, Lincoln Operations, of the registrant from 1992 to 1997.
(3) 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.
(4) Prior to becoming Vice President, Writing Instruments, Worldwide Tax and
Duty Free in 1993, J. John Lawler was the Vice President, International of the
registrant from 1979 to 1993.
(5) Prior to becoming Vice President, Operations, Writing Instruments 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.
(6) Prior to becoming Finance Director in 1997, Joseph V. Bassi was the
Manager, Financial Planning of the registrant from 1996 to 1997, and the
Manager, Budgeting and Financial Planning of the registrant from 1987 to 1996.
(7) Prior to becoming President and Chief Executive Officer, Pen Computing
Group in 1997, Robert J. Byrnes, Jr. was the Executive Vice President and
General Manager of the NEC Computer Systems Division of Packard Bell NEC Inc.
from 1996 to 1997. From 1993 to 1996 Mr. Byrnes was the Executive Vice
President of NEC Technology.
(8) Prior to becoming Vice President, Writing Instruments, Sales and Marketing,
North America, in 1999, Robin Boss Dorman was the Director, Corporate Marketing
of the registrant from 1997 to 1999. From 1992 to 1997, Ms. Dorman was Product
Manager, Worldwide Writing Instruments of the registrant. Ms. Dorman is the
niece of Bradford R. Boss, Chairman of the Board of the registrant, and is the
daughter of Russell A. Boss, President and Chief Executive Officer of the
registrant.
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. These facilities, which are
well maintained and in good repair, are currently being utilized in either a
manufacturing, distribution or administrative capacity for the writing
instrument and PCG segments. The productive capacity of these facilities is
sufficient to meet the registrant's needs for the foreseeable future.
The registrant's operations in France, the United Kingdom, Spain, Germany,
Italy, Japan, Taiwan, Hong Kong, New Jersey, and Miami, all lease their
administrative offices and/or warehouse space.
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 registrant's
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 1998 Annual Report,
which section is incorporated by reference herein.
Item 6. SELECTED FINANCIAL DATA
See the "Five-Year Summary" section of the 1998 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 1998 Annual Report, which section is incorporated
by reference herein.
Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
See the "Quantitative and Qualitative Disclosures about Market Risk" section of
the 1998 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, set forth in the 1998 Annual
Report, are incorporated by reference herein.
Quarterly Results of Operations (Unaudited) in Note L of the registrant's
financial statements included in the 1998 Annual Report are incorporated by
reference herein.
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Not applicable
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
See "Election of Directors" and "Section 16(a) Beneficial Ownership Reporting
Compliance" of the registrant's definitive proxy statement for the 1999 annual
meeting of shareholders, which sections are incorporated by reference herein.
See also "Item 1. Business - Executive Officers of the Registrant."
Item 11. EXECUTIVE COMPENSATION
See "Executive Compensation" of the registrant's definitive proxy statement for
its 1999 annual meeting of shareholders, which section is incorporated by
reference herein. Such incorporation by reference shall not be deemed to
specifically incorporate by reference the information referred to in Item
402(a)(8) of Regulation S-K.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
See "Security Ownership of Certain Beneficial Owners" and "Security Ownership of
Management" of the registrant's definitive proxy statement for the 1999 annual
meeting of shareholders, which sections are incorporated by reference herein.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
See "Election of Directors" of the registrant's definitive proxy statement for
the 1999 annual meeting of shareholders, which section is 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 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)*
(10.4) 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)*
(10.5) 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)*
(10.6) A. T. Cross Company Executive Life Insurance Program
(incorporated by reference to Exhibit (10.8) to the
registrant's report on Form 10-K for the year ended
December 31, 1997)*
(10.7) A. T. Cross Company Omnibus Incentive Plan *
(11) Statement Re: Computation of Per Share Earnings -
(incorporated by reference to the "Consolidated
Statements of Operations and Retained Earnings"
section of the registrant's 1998 Annual Report)
(13) Annual Report to Shareholders for the year ended
December 31, 1998. Filed only in respect to the
portions expressly incorporated by reference in this
Form 10-K.
(21) Subsidiaries - incorporated by reference to the
"Subsidiaries, Branches and Divisions" section of
the registrant's 1998 Annual Report
(23) Consent of Deloitte & Touche LLP
(27) Financial Data Schedules
* Management contract, compensatory plan or arrangement
(b) No reports on Form 8-K were filed in the fourth quarter of 1998.
(c) Exhibits--See Item (a)(3) above
(d) Financial Statement Schedule--Schedule II Valuation and Qualifying
Accounts
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 /s/BRADFORD R. BOSS
Bradford R. Boss
Chairman
Dated: March 23,1999
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
/s/BRADFORD R. BOSS Chairman & Director March 23, 1999
(Bradford R. Boss)
/s/RUSSELL A. BOSS President & Director March 23, 1999
(Russell A. Boss) (Chief Executive Officer)
/s/JOHN E. BUCKLEY Executive Vice President March 23, 1999
(John E. Buckley) & Director
(Chief Operating Officer)
/s/JOHN T. RUGGIERI Senior Vice President March 23, 1999
(John T. Ruggieri) (Chief Financial Officer)
/s/GARY S. SIMPSON Corporate Controller March 23, 1999
(Gary S. Simpson ) (Chief Accounting Officer)
/s/BERNARD V. BUONANNO, JR. Director March 23, 1999
(Bernard V. Buonanno, Jr.)
/s/H. FREDERICK KRIMENDAHL II Director March 23, 1999
(H. Frederick Krimendahl II)
/s/ANDRIES VAN DAM Director March 23, 1999
(Andries van Dam)
/s/TERRENCE MURRAY Director March 23, 1999
(Terrence Murray)
Director March , 1999
(James C. Tappan)
/s/EDWIN G. TORRANCE Director March 23, 1999
(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 SCHEDULE
CERTAIN EXHIBITS
FINANCIAL STATEMENT SCHEDULE
YEAR ENDED DECEMBER 31, 1998
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 SCHEDULE
The following consolidated financial statements of A. T. Cross Company and
subsidiaries, included in the 1998 Annual Report, are incorporated by reference
in Item 8:
Consolidated Balance Sheets - December 31, 1998 and 1997
Consolidated Statements of Operations and Retained Earnings- Years
Ended December 31, 1998, 1997 and 1996
Consolidated Statements of Comprehensive Income (Loss)- Years
Ended December 31, 1998, 1997 and 1996
Consolidated Statements of Cash Flows - Years Ended December 31, 1998,
1997 and 1996
Notes to Consolidated Financial Statements
Independent Auditors' Report
The following consolidated financial statement schedule of A. T. Cross Company
and subsidiaries is included in Item 14(d):
Schedule II - Valuation and Qualifying Accounts
The independent auditors' report on Financial Statement Schedule II is 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
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, 1998
Deducted from asset account:
Allowance for doubtful
accounts $1,624,000 $ 41,580 $114,580(A) $1,551,000
Year Ended December 31, 1997
Deducted from asset account:
Allowance for doubtful
accounts $1,388,000 $648,140 $412,140(A) $1,624,000
Year Ended December 31, 1996
Deducted from asset account:
Allowance for doubtful
accounts $1,244,000 $325,064 $181,064(A) $1,388,000
(A) Uncollectible accounts written off.
Independent Auditors' Report Item 14(d)
To the Board of Directors and Shareholders of
A.T. Cross Company
Lincoln, Rhode Island
We have audited the consolidated financial statements of A.T. Cross Company and
subsidiaries (the "Company") as of December 31, 1998 and 1997 and for each of
the three years in the period ended December 31,1998, and have issued our report
thereon dated February 11, 1999; such consolidated financial statements and
report are included in the Company's 1998 Annual Report to Shareholders and are
incorporated herein by reference. Our audits also included the consolidated
financial statement schedule of the Company, listed in Item 14(d). This
consolidated financial statement schedule is the responsibility of the Company's
management. Our responsibility is to express an opinion based on our audits.
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 11, 1999