Acme United Reports 3% Sales Increase, 39% Operating Profit Increase and 6% EPS Increase for Fourth Quarter of 2018

Date : 02/28/2019 @ 2:00PM
Source : GlobeNewswire Inc.
Stock : Acme United Corp (ACU)
Quote : 19.7914  0.0 (0.00%) @ 1:21PM

Acme United Reports 3% Sales Increase, 39% Operating Profit Increase and 6% EPS Increase for Fourth Quarter of 2018

Acme United (AMEX:ACU)
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Acme United Corporation (NYSE American: ACU) today announced that net sales for the fourth quarter ended December 31, 2018 were $31.1 million, compared to $30.2 million in the comparable period of 2017, an increase of 3%. Net sales for the year ended December 31, 2018 were $137.3 million, compared to $130.5 million in 2017, an increase of 5%.

Net income for the quarter ended December 31, 2018 was $591,000, or $0.17 per diluted share. This compares to a loss of $655,000, in the fourth quarter of 2017, which reflected tax charges in the amount of $1.2 million incurred under the December 2017 U.S. Tax Cuts and Jobs Act. Adjusted net income (non-GAAP), excluding the tax charges was $590,000, or $0.16 per diluted share, for the fourth quarter of 2017. Earnings per share increased 6% in the fourth quarter of 2018 over the adjusted earnings per share in the fourth quarter of 2017. 

Net income for the year ended December 31, 2018 was $4.6 million, or $1.30 per diluted share. This compares to net income in 2017 of $4.1 million, or $1.09 per diluted share. Adjusted net income (non-GAAP) was $5.3 million, or $1.42 per diluted share, for the year ended December 31, 2017. On an adjusted basis, net income for 2018 decreased 13% and earnings per share decreased 8% year over year. The decline in net income for the year ended December 31, 2018 resulted primarily from investments in sales and marketing to support growth, as well as higher interest rates on our variable rate credit facility.

Operating profit increased 39% and decreased 5% for the three and twelve months ended December 31, 2018, respectively.

Chairman and CEO Walter C. Johnsen said, “We have just completed our eighth consecutive year of record sales. All of our businesses and our sales teams around the globe contributed to this.”

Mr. Johnsen added, “I am pleased with our increase in operating income during the fourth quarter of 2018, which was primarily due to sales growth and gross margin improvement. We will continue to drive our many sales initiatives and the cost cutting programs we implemented in the fourth quarter throughout 2019. Among the products we expect to contribute to our 2019 sales results are various newly developed Wescott scissors and an array of safety cutters for opening boxes. In addition, we have new Camillus knife placements planned at large mass market retailers and are focusing on continuing the growth of our SmartCompliance First Aid kits and refills with industrial users. For the year, we are providing guidance 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.”

In the U.S. segment, net sales for the quarter ended December 31, 2018 increased 3% compared to the same period in 2017. Net sales for the year ended December 31, 2018 grew 5% over 2017 in the U.S. segment. The sales increase for both periods was mainly due to strong sales of first aid and safety products as well as Camillus knives.

Net sales in Canada for the quarter ended December 31, 2018 decreased 4% in U.S. dollars and were constant in local currency compared to the prior-year period. Net sales for the year ended December 31, 2018 increased 2% in U.S. dollars and 1% in local currency compared to the same period in 2017. 

Net sales in Europe for the quarter ended December 31, 2018 increased 13% in U.S. dollars and 17% in local currency compared to the same period in 2017. Net sales for the year ended December 31, 2018 increased 13% in U.S. dollars and 9% in local currency compared to last year. Net sales for both periods grew mainly due to new customers in the office products channel, growth in sales of DMT sharpening products, and strong e-commerce demand for these products.

Gross margin was 36.5% in the three months ended December 31, 2018 compared to 35.2% in the same period in 2017. The higher gross margin was primarily due to reduced promotional spending in the Company’s e-commerce business, cost cutting initiatives and product mix. Gross margin was 36.9% for the year ended December 31, 2018 compared to 36.7% for 2017.

The Company’s long-term debt less cash on December 31, 2018 was $39.3 million compared to $37.8 million on December 31, 2017. 

The Company believes that our presentation of non-GAAP financial measures, when presented together with the corresponding GAAP financial measures, provides a more complete understanding to investors of the Company’s results of operations. Specifically, our use of non-GAAP measures facilitates comparisons of our financial results and operating performance with prior periods. In addition, our adjusted financial measures provide greater transparency to investors of supplemental information used by management in its financial and operational decision making. However, these non-GAAP financial measures should be considered as a supplement to, and not as a substitute for, the corresponding measures calculated in accordance with GAAP.

Conference Call and Webcast InformationAcme United will hold a conference call to discuss its quarterly results, which will be broadcast on Thursday, February 28, 2019, at 12:00 p.m. ET. To listen or participate in a question and answer session, dial 877-260-1479. International callers may dial 334-323-0522. 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 UnitedACME 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 StatementsForward-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.

 
ACME UNITED CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
YEAR END REPORT 2018
(Unaudited)
       
   Quarter Ended  Quarter Ended
Amounts in $000's except per share data December 31, 2018  December 31, 2017
       
       
Net sales $31,130   $30,170  
Cost of goods sold  19,768    19,544  
Gross profit  11,362    10,626  
Selling, general, and administrative expenses 10,269    9,838  
Income from operations  1,093    788  
Interest expense  (523)  (386)
Interest income  10    7  
Net interest expense  (513)  (379)
Other income (expense), net   18    (41)
Total other expense, net  (495)  (420)
Pre-tax income  598    368  
Income tax expense  7    1,023  
Net income (loss) $591   $(655)
       
Shares outstanding - Basic  3,363    3,374  
Shares outstanding - Diluted  3,421    3,676  
       
Earnings per share basic $0.18   $(0.19)
Earnings per share diluted  0.17    (0.18)
       
Reconciliation of Non-GAAP Financial Measures     
GAAP net income (loss)   591    (655)
Adjustment for tax expense related to U.S. tax reform-    1,245  
Non-GAAP net income  591    590  
       
Earnings per share basic - Non GAAP $0.18   $0.17  
Earnings per share diluted - Non GAAP 0.17    0.16  
       
 
ACME UNITED CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
YEAR END REPORT 2018 (cont.)
(Unaudited)
       
   Year Ended  Year Ended
Amounts in $000's except per share data December 31, 2018  December 31, 2017
       
Net sales $137,321   $130,550  
Cost of goods sold  86,672    82,651  
Gross profit  50,649    47,899  
Selling, general, and administrative expenses  43,192    40,016  
Income from operations  7,457    7,883  
Interest expense  (1,891)  (1,357)
Interest income  33    29  
Net interest expense  (1,858)  (1,328)
Other (expense) income, net  (68)  (62)
Total other expense, net  (1,926)  (1,390)
Pre-tax income  5,531    6,493  
Income tax expense  933    2,441  
Net income $4,598   $4,052  
       
Shares outstanding - Basic  3,371    3,356  
Shares outstanding - Diluted  3,542    3,725  
       
Earnings per share basic  $1.36    1.21  
Earnings per share diluted   1.30    1.09  
       
Reconciliation of Non-GAAP Financial Measures      
GAAP net income  4,598    4,052  
Adjustment for tax expense related to U.S. tax reform     1,245  
Non-GAAP net income  4,598    5,297  
       
Earnings per share basic - Non GAAP $1.36   $1.58  
Earnings per share diluted - Non GAAP  1.30    1.42  
       
       
ACME UNITED CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
YEAR END REPORT 2018
(Unaudited)
       
Amounts in $000's  December 31, 2018  December 31, 2017
       
Assets:      
Current assets:      
Cash $4,409   $9,338  
Accounts receivable, net  25,102    26,012  
Inventories  41,332    40,087  
Prepaid and other current assets  2,529    2,664  
Total current assets  73,372    78,101  
       
Property and equipment, net  14,543    13,728  
Intangible assets, less amortization  16,664    17,882  
Goodwill  4,696    4,696  
Other assets  203    323  
Total assets $109,478   $114,730  
       
Liabilities and stockholders' equity:      
Current liabilities      
Accounts payable $7,983   $11,151  
Other current liabilities  5,382    5,632  
Total current liabilities  13,365    16,783  
Non-current liabilities      
Long term debt  40,283    43,450  
Mortgage payable L/T  3,444    3,711  
Other non current liabilities  53    848  
Total liabilities   57,145    64,792  
Total stockholders' equity  52,333    49,938  
Total liabilities and stockholders' equity $109,478   $114,730  
       

CONTACT:Acme United CorporationPaul G. DriscollPhone: (203) 254-6060Fax: (203) 254-652155 Walls DriveFairfield, CT  06824

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