Acme United Reports 10% Net Income Increase and 15% Diluted EPS Increase for Second Quarter of 2019

Date : 07/19/2019 @ 1:00PM
Source : GlobeNewswire Inc.
Stock : Acme United Corp (ACU)
Quote : 21.25  0.04 (0.19%) @ 4:49PM

Acme United Reports 10% Net Income Increase and 15% Diluted EPS Increase for Second Quarter of 2019

Acme United (AMEX:ACU)
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6 Months : From Jun 2019 to Dec 2019

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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. DriscollAcme United Corporation55 Walls DriveFairfield, CT  06824
  Phone: (203) 254-6060FAX: (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   
            

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