Raises Guidance for 2016, Reflecting Strong
Performance and Prospects
Acme United Corporation (NYSE MKT:ACU) today announced that net
sales for the second quarter ended June 30, 2016 were $41.0
million, compared to $34.0 million in the comparable period of
2015, an increase of 21%. Net sales for the six months ended June
30, 2016 were $66.3 million, compared to $56.8 million in the same
period in 2015, an increase of 17%.
Net income for the quarter ended June 30, 2016 was $3.3 million,
or $0.91 per diluted share, compared to $2.7 million, or $0.74 per
diluted share, for the 2015 period, an increase in net income of
21% and an increase of 23% in earnings per share. Net income for
the six months ended June 30, 2016 was $3.8 million, or $1.08 per
diluted share, compared to $3.1 million, or $0.85 per diluted
share, in last year’s comparable period, a 22% increase in net
income and 27% in earnings per share.
Chairman and CEO Walter C. Johnsen said, “We have set a new
record in quarterly sales and earnings by a wide margin. Organic
sales growth represented 17% for the second quarter, and 13% for
the year to date. We are particularly pleased that every major
product line contributed to setting these new performance levels.
We gained market share with Westcott cutting tools and Camillus
knives and expanded distribution of industrial first aid kits.
Sales and profits of sharpening tools from the recent acquisition
of Diamond Machining Technology (“DMT”) exceeded our
expectations.”
“We continue to see strong growth trends as we enter the second
half of the year. Accordingly, we are raising our guidance for
fiscal 2016. We now expect to generate revenues of $123 million,
net income of approximately $5.8 million and earnings per share of
$1.55. Our previous guidance called for revenues of $120 million,
net income of $5.6 million and earnings per share of $1.47.”
In the U.S. segment, net sales for the quarter ended June 30,
2016 increased 22% compared to the same period in 2015 due to
strong sales of Westcott school and office products, Camillus
knives, and first aid kits. Revenues from our acquisition of DMT in
February 2016 contributed $1.3 million in the second quarter, and
$2.3 million year to date. Net sales for the first six months of
2016 grew 18% over the comparable period in 2015.
Net sales in Canada for the three months ended June 30, 2016
decreased 6% in U.S. dollars and 2% in local currency compared to
the prior-year period. Net sales for the six months ended June 30,
2016 were constant in U.S. dollars but increased 5% in local
currency compared to the same period in 2015. The Canadian market
appears to have stabilized relative to last year.
Net sales in Europe for the three months ended June 30, 2016
increased 36% in U.S. dollars and 34% in local currency compared to
the comparable 2015 period due to market share gains in the office
products channel. Net sales for the first half of 2016 increased
15% in U.S. dollars and 16% in local currency compared to the first
half of 2015.
Gross margin was 36% in the three and six months ended June 30,
2016, compared to 37% in the same periods in 2015. The slightly
lower gross margin in 2016 was primarily due to strong sales of
back to school products, which tend to have lower gross
margins.
The Company’s long-term debt less cash on June 30, 2016 was
$38.7 million compared to $28.2 million on June 30, 2015. During
the twelve month period ended June 30, 2016, the Company paid
approximately $7 million for the acquisition of the assets of DMT,
spent $1.6 million on stock re-purchases and distributed $1.3
million in dividends on its common stock.
Acme United will hold a conference call to discuss its quarterly
results, which will be broadcast over the Internet on Friday, July
22, 2016, at 12:00 p.m. EDT. To listen or participate in a question
and answer session, dial 888-487-0336. International callers may
dial 719-325-2360. You may access the live webcast of the
conference call through the Investor Relations section of the
Company’s website, www.acmeunited.com. A replay may be accessed
under Investor Relations, Audio Archives or by logging on to
www.streetevents.com.
ACME UNITED CORPORATION is a leading worldwide supplier
of innovative cutting, measuring and safety products to the school,
home, office, hardware, sporting goods and industrial markets. Its
leading brands include Westcott®, Clauss®, Camillus®, Cuda®,
PhysiciansCare®, First Aid Only®, Pac-Kit® and DMT®. For more
information, visit www.acmeunited.com.
Forward-looking statements in this report, including without
limitation, statements related to the Company’s plans, strategies,
objectives, expectations, intentions and adequacy of resources, are
made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. Investors are cautioned
that such forward-looking statements involve risks and
uncertainties including, without limitation, the following: (i)
changes in the Company’s plans, strategies, objectives,
expectations and intentions, which may be made at any time at the
discretion of the Company; (ii) the impact of uncertainties in
global economic conditions, including the impact on the Company’s
suppliers and customers; (iii) changes in client needs and consumer
spending habits; (iv) the impact of competition and technological
changes on the Company; (v) the Company’s ability to manage its
growth effectively, including its ability to successfully integrate
any business it might acquire; (vi) currency fluctuations; and
(vii) other risks and uncertainties indicated from time to time in
the Company’s filings with the Securities and Exchange
Commission.
ACME UNITED CORPORATION CONDENSED
CONSOLIDATED STATEMENTS OF INCOME SECOND QUARTER REPORT
2016 (Unaudited) Three Months Ended
Three Months Ended Amounts in 000's except per share
data June 30, 2016
June 30, 2015 Net sales $
40,997 $ 33,954 Cost of goods sold
26,303 21,419 Gross profit 14,694
12,535 Selling, general, and administrative expenses
10,054 8,660 Income from operations
4,640 3,875 Interest expense, net 211
141 Other expense (income), net 11 (20)
Total other expense, net 222 121 Pre-tax
income 4,418 3,754 Income tax expense
1,151 1,044 Net income $ 3,267
$ 2,710 Shares outstanding - Basic
3,323 3,300 Shares outstanding - Diluted
3,583 3,681 Earnings per share basic
$ 0.98 $ 0.82 Earnings per share
diluted 0.91 0.74 ACME
UNITED CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF
INCOME SECOND QUARTER REPORT 2016 (cont.)
(Unaudited) Six Months Ended Six
Months Ended Amounts in 000's except per share data
June 30, 2016 June 30,
2015 Net sales $ 66,285 $
56,791 Cost of goods sold 42,406 35,821
Gross profit 23,879 20,970 Selling,
general, and administrative expenses 18,284
16,269 Income from operations 5,595
4,701 Interest expense, net 395 271
Other (income) expense, net (27) 56 Total
other expense, net 368 327 Pre-tax income
5,227 4,374 Income tax expense 1,395
1,228 Net income $ 3,832 $
3,146 Shares outstanding - Basic 3,331
3,315 Shares outstanding - Diluted 3,560
3,706 Earnings per share basic $
1.15 $ 0.95 Earnings per share diluted
1.08 0.85 ACME
UNITED CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS
SECOND QUARTER REPORT 2016 (Unaudited)
Amounts in 000's June
30, 2016 June 30, 2015
Assets:
Current assets: Cash $ 2,087 $
1,941 Accounts receivable, net 34,646
27,123 Inventories 38,417 36,216
Prepaid and other current assets 2,424
2,425 Total current assets 77,574
67,705 Property and equipment, net
7,702 7,197 Intangible assets, less
amortization 13,596 12,173 Goodwill
4,816 1,375 Other assets 1,039
971 Total assets $ 104,727
$ 89,421
Liabilities and
stockholders' equity:
Current liabilities Accounts payable $
11,573 $ 9,332 Other current
liabilities 6,453 7,039 Total current
liabilities 18,027 16,371 Bank debt
40,821 30,179 Other non current liabilities
355 336 59,203 46,886
Total stockholders' equity 45,526
42,535 Total liabilities and stockholders' equity
$ 104,727 $ 89,421
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Acme United CorporationPaul G. Driscoll, 203-254-6060
Acme United (AMEX:ACU)
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