ACU Acme United Corp

Acme United Corporation (NYSE American: ACU) today announced that net sales for the three months ended June 30, 2019 were $40.2 million, compared to $39.8 million in the same period of 2018, an increase of 1%, or 2% in constant currency. Net sales for the six months ended June 30, 2019 were $71.6 million, compared to $71.5 million in the same period in 2018, a 1% increase in constant currency.

Net income for the three months ended June 30, 2019 was $2.7 million, or $0.77 per diluted share, compared to $2.4 million, or $0.67 per diluted share, for the same period in 2018, increases of 10% and 15%, respectively. Net income for the six months ended June 30, 2019 was $3.5 million, or $1.01 per diluted share, compared to $3.2 million, or $0.88 per diluted share, in last year’s same period, increases of 9% and 15%, respectively. 

Walter C. Johnsen, Chairman and CEO said, “We had excellent sales of first aid products, Camillus hunting and camping items, and Cuda fishing tools.  Sales of Westcott items related to back to school were softer than in last year’s period. 

“Revenues for the next 6 months are forecast to have solid growth in first aid, Camillus and DMT products.  Sales of Westcott school and office products are expected to be consistent with last year. Accordingly, we are reiterating our financial guidance for 2019 of approximately $140 to $143 million in sales, net income of $5.0 to $5.3 million and $1.41 to $1.50 earnings per share.”

Mr. Johnsen added, “We have reduced net debt by over $5.0 million during the past 12 months and continue to seek tuck-in acquisitions with particular interest in products we can bring in through multiple channels of distribution.”

In the U.S. segment, net sales for the three months ended June 30, 2019 increased 1% compared to the same period in 2018.  Sales of first aid and safety products were strong; however, there was softness in sales of certain school and office products.  Net sales for the first six months of 2019 in the U.S. segment were constant compared to the same period in 2018.

Net sales in Europe for the three months ended June 30, 2019 increased 22% in U.S. dollars and 28% in local currency compared to the same 2018 period.  The sales increase in the quarter was mainly due to a large back-to-school promotion to a major retailer.  Net sales for the six months ended June 30, 2019 increased 13% in U.S. dollars and 22% in local currency compared to the first half of 2018 mainly due to new customers in the office products channel and continued growth of DMT sharpening products.

Net sales in Canada for the three and six months ended June 30, 2019 decreased 10% in U.S. dollars and 6% in local currency compared to the same prior-year periods.

Gross margin was 36.7% in the three months ended June 30, 2019, compared to 37.0% in the same period in 2018.  Gross margin was 37.1% in the six months ended June 30, 2019, compared to 37.6% in the same period in 2018.

The Company’s bank debt less cash on June 30, 2019 was $41.0 million compared to $46.3 million on June 30, 2018.  During the twelve-month period ended June 30, 2019, the Company distributed $1.5 million in dividends on its common stock, repurchased $0.4 million in treasury stock and generated $8.4 million in free cash flow, including a $2.9 million reduction in inventory.

Conference Call and Webcast InformationAcme United will hold a conference call to discuss its quarterly results, which will be broadcast on Friday, July 19, 2019, at 12:00 p.m. EDT. To listen or participate in a question and answer session, dial 800-289-0558. International callers may dial 929-477-0275. 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.

About Acme United

ACME UNITED CORPORATION is a leading worldwide supplier of innovative safety solutions and cutting technology to the school, home, office, hardware, sporting goods and industrial markets. Its leading brands include First Aid Only®, PhysiciansCare®, Pac-Kit®, Spill Magic®, Westcott®, Clauss®, Camillus®, Cuda®, and DMT®. For more information, visit www.acmeunited.com. 

Forward-Looking Statements

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; (vii) increases in the cost of borrowings resulting from rising interest rates; (viii) international trade policies and their impact on demand for our products and our competitive position, including the imposition of new tariffs or changes in existing tariff rates; and (ix) other risks and uncertainties indicated from time to time in the Company’s filings with the Securities and Exchange Commission.

CONTACT:	Paul G. Driscoll	Acme United Corporation	55 Walls Drive	Fairfield, CT  06824
		Phone: (203) 254-6060	FAX: (203) 254-6521

ACME UNITED CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
SECOND QUARTER REPORT 2019
	(Unaudited)
						Three Months Ended			Three Months Ended
Amounts in 000's except per share data						June 30, 2019			June 30, 2018
Net sales					$	40,220		$	39,751
Cost of goods sold						25,449			25,039
Gross profit						14,771			14,712
Selling, general, and administrative expenses						11,003			11,087
Operating Income						3,768			3,625
Interest expense, net						491			445
Other expense, net						14			74
Total other expense, net						505			519
Income before income tax expense						3,263			3,106
Income tax expense						592			670
Net income					$	2,671		$	2,436
	Shares outstanding - Basic					3,351			3,374
	Shares outstanding - Diluted					3,485			3,624
Earnings per share - Basic					$	0.80		$	0.72
Earnings per share - Diluted						0.77			0.67
ACME UNITED CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
SECOND QUARTER REPORT 2019 (cont.)
(Unaudited)
						Six Months Ended			Six Months Ended
Amounts in 000's except per share data						June 30, 2019			June 30, 2018
Net sales					$	71,590		$	71,460
Cost of goods sold						45,016			44,624
Gross profit						26,574			26,836
Selling, general, and administrative expenses						21,271			21,846
Operating Income						5,303			4,990
Interest expense, net						994			850
Other expense, net						12			61
Total other expense, net						1,006			911
Income before income tax expense						4,297			4,079
Income tax expense						819			879
Net income					$	3,478		$	3,200
	Shares outstanding - Basic					3,351			3,374
	Shares outstanding - Diluted					3,429			3,642
Earnings per share - Basic					$	1.04		$	0.95
Earnings per share - Diluted						1.01			0.88
ACME UNITED CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
SECOND QUARTER REPORT 2019
(Unaudited)
Amounts in 000's						June 30, 2019			June 30, 2018
Assets:
Current assets:
	Cash and cash equivalents				$	1,924		$	1,894
	Accounts receivable, less allowance					35,462			34,511
	Inventories, net					39,615			42,510
	Prepaid expenses and other current assets					2,085			2,525
Total current assets						79,086			81,440
	Property, Plant and equipment, net					14,200			14,576
	Operating lease right of use asset					2,424			-
	Intangible assets, less accumulated amortization					16,422			17,268
	Goodwill					4,696			4,696
	Other assets					202			598
Total assets					$	117,030		$	118,578
Liabilities and stockholders' equity:
Current liabilities:
	Accounts payable				$	9,931		$	12,972
	Operating lease liability - short term					987			-
	Mortgage payable					267			267
	Other accrued liabilities					6,865			4,373
Total current liabilities						18,050			17,612
Long term debt						39,388			44,318
Mortgage payable, net of current portion						3,311			3,578
	Operating lease liability - long term					1,441			-
Other non-current liabilities						38			846
Total liabilities						62,228			66,354
Total stockholders' equity						54,802			52,224
Total liabilities and stockholders' equity					$	117,030		$	118,578