Acme United Corporation (NYSE American: ACU) today announced that
net sales for the quarter ended June 30, 2020 were $44.0 million
compared to $40.2 million in the second quarter of 2019, an
increase of 9%. Net sales for the six months ended June 30, 2020
were $79.8 million, compared to $71.6 million in the same period in
2019, an increase of 11%.
Acme United’s second quarter and six months
ended June 30, 2020 revenues included approximately $1.1 million
and $2.1 million, respectively, from the sales of First Aid Central
products. The Company acquired the assets of Canadian-based
First Aid Central, Inc. on January 7, 2020.
Net income was $3,199,000 or $0.92 per diluted
share for the quarter ended June 30, 2020 compared to $2,672,000,
or $0.77 per diluted share, for the comparable period last year, an
increase of 20% in net income and 19% in diluted earnings per
share. Net income for the six months ended June 30, 2020 was
$4,476,000, or $1.28 per diluted share, compared to $3,478,000, or
$1.01 per diluted share, in last year’s same period, increases of
29% and 27%, respectively.
Chairman and CEO Walter C. Johnsen said, “This
was a very difficult quarter that ended with good results. We
benefited from the diversification during the past 5 years of our
customer base and product lines. Sales of our traditional Westcott
cutting and measuring tools to office and school supply customers
declined dramatically, in some cases more than 80%. However, sales
to mass market retailers and ecommerce increased substantially and
offset the decline. Sales of first aid and safety products led the
quarter’s growth due to market share gains and a surge of
approximately $1.5 million of sales of COVID-related supplies.”
Mr. Johnsen added, “I am incredibly proud of our
team. They are working under difficult conditions with a sense of
purpose, and delivering results.”
Net sales for the second quarter and the first
six months of 2020 in the U.S. segment increased 10% compared to
the same periods in 2019. The Company had strong sales of first aid
and safety products, primarily due to continued market share gains
in the industrial, safety, home improvement, mass market, and
ecommerce channels. In addition, there was growth from a surge in
demand for first aid and safety products related to COVID-19.
European net sales for the second quarter of
2020 increased 4% in U.S. dollars and 6% in local currency compared
to the second quarter of 2019. Net sales for the six months
ended June 30, 2020 increased 9% in U.S. dollars and 12% in local
currency compared to the first half of 2019. The increases
for both the quarter and six months were mainly due to growth in
sales of Westcott and Camillus products in the ecommerce channel
and continued growth of DMT sharpening products.
Net sales in Canada, excluding First Aid Central
products, for the second quarter of 2020 declined 44% in U.S.
dollars and 42% in local currency compared to the same period in
2019. Net sales for the six months ended June 30, 2020 decreased
27% in U.S. dollars and 25% local currency compared to the first
half of 2019. These decreases reflected declines in sales of office
products due to office and store closings as a result of
COVID-19.
Gross margin was 36.5% in the second quarter of
2020 versus 36.7% in the comparable period last year. Gross
margin was 37.1% in the each of the six months ended June 30, 2020
and 2019.
Acme United received a loan of $3.5 million from
the Paycheck Protection Program during the second quarter of 2020,
with the proceeds applied to payroll expenses. The loan enhanced
the Company’s ability to maintain its entire payroll during
uncertain times.
The Company’s debt less cash on June 30, 2020
was $37.3 million compared to $41.0 million on June 30, 2019.
During the twelve-month period ended June 30, 2020, the Company
paid approximately $2.1 million for the acquisition of the assets
of First Aid Central, distributed $1.6 million in dividends on its
common stock, and generated $9 million in free cash flow.
Conference Call and Webcast
InformationAcme United will hold a conference call to
discuss its quarterly results, which will be broadcast on Friday,
July 17, 2020, at 12:00 p.m. EDT. To listen or participate in a
question and answer session, dial 800-437-2398. International
callers may dial 323-289-6576. 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®, First Aid
Central®, 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 the impact
that the global COVID-19 pandemic has had and will continue to have
on the Company’s business, operations and financial results.
These include the severity and duration of the pandemic, including
whether there is a “second wave,” the effect of measures taken by
the Company to limit the spread of the disease at our offices and
distribution centers, further actions that may be taken by
governmental authorities or by businesses or individuals on their
own initiative in response to the pandemic, the pace of recovery
when an effective vaccine is widely available or when the pandemic
otherwise subsides and the heightened impact the pandemic has on
many of the risks described herein, including without limitation
risks relating to the on-going world-wide economic downturn and
disruptions in our supply chain, any of which could adversely
impact the Company’s ability to manufacture, source or distribute
its products, both domestically and internationally. These
risks and uncertainties further include, 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,
(v) the impact of technological changes including specifically the
growth of online marketing and sales activity; (vi) the Company’s
ability to manage its growth effectively, including its ability to
successfully integrate any business it might acquire; (vii) the
Company’s ability to effectively manage its inventory in a rapidly
changing business environment; (viii) currency fluctuations; (ix)
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 (x) 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 2020 |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
Three Months
Ended |
|
Amounts in 000's except per share data |
|
June 30, 2020 |
|
|
June 30, 2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
|
|
|
$ |
44,042 |
|
|
$ |
40,220 |
|
|
|
Cost of goods sold |
|
|
|
27,989 |
|
|
|
25,449 |
|
|
|
Gross profit |
|
|
|
|
16,053 |
|
|
|
14,771 |
|
|
|
Selling, general, and administrative expenses |
|
11,670 |
|
|
|
11,003 |
|
|
|
Operating income |
|
|
|
4,383 |
|
|
|
3,768 |
|
|
|
Interest expense |
|
|
|
|
|
245 |
|
|
|
502 |
|
|
|
Interest income |
|
|
|
(11 |
) |
|
|
(11 |
) |
|
|
Interest expense, net |
|
|
|
234 |
|
|
|
491 |
|
|
|
Other (income) expense, net |
|
|
(1 |
) |
|
|
14 |
|
|
|
Total other expense, net |
|
|
|
233 |
|
|
|
505 |
|
|
|
Income before income tax expense |
|
|
4,150 |
|
|
|
3,263 |
|
|
|
Income tax expense |
|
|
|
951 |
|
|
|
592 |
|
|
|
Net income |
|
|
|
$ |
3,199 |
|
|
$ |
2,672 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares outstanding - Basic |
|
|
3,349 |
|
|
|
3,351 |
|
|
|
Shares outstanding - Diluted |
|
|
3,482 |
|
|
|
3,485 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share - Basic |
|
$ |
0.96 |
|
|
$ |
0.80 |
|
|
|
Earnings per share - Diluted |
|
|
0.92 |
|
|
|
0.77 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ACME UNITED
CORPORATION |
|
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME |
|
SECOND
QUARTER REPORT 2020 (cont.) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months
Ended |
|
|
Six Months
Ended |
|
|
Amounts in 000's except per share data |
|
June 30, 2020 |
|
|
June 30, 2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
|
|
|
$ |
79,817 |
|
|
$ |
71,590 |
|
|
|
Cost of goods sold |
|
|
|
50,234 |
|
|
|
45,016 |
|
|
|
Gross profit |
|
|
|
|
29,583 |
|
|
|
26,574 |
|
|
|
Selling, general, and administrative expenses |
|
23,191 |
|
|
|
21,271 |
|
|
|
Operating income |
|
|
|
6,392 |
|
|
|
5,303 |
|
|
|
Interest expense |
|
|
|
|
|
568 |
|
|
|
395 |
|
|
|
Interest income |
|
|
|
(14 |
) |
|
|
- |
|
|
|
Interest expense, net |
|
|
|
554 |
|
|
|
994 |
|
|
|
Other expense, net |
|
|
|
36 |
|
|
|
12 |
|
|
|
Total other expense, net |
|
|
|
590 |
|
|
|
1,006 |
|
|
|
Income before income tax expense |
|
|
5,802 |
|
|
|
4,297 |
|
|
|
Income tax expense |
|
|
|
1,326 |
|
|
|
819 |
|
|
|
Net income |
|
|
|
$ |
4,476 |
|
|
$ |
3,478 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares outstanding - Basic |
|
|
3,344 |
|
|
|
3,351 |
|
|
|
Shares outstanding - Diluted |
|
|
3,499 |
|
|
|
3,429 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share - Basic |
|
$ |
1.34 |
|
|
$ |
1.04 |
|
|
|
Earnings per share - Diluted |
|
|
1.28 |
|
|
|
1.01 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ACME UNITED
CORPORATION |
|
CONDENSED
CONSOLIDATED BALANCE SHEETS |
|
SECOND
QUARTER REPORT 2020 |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts in 000's |
|
|
|
June 30, 2020 |
|
|
June 30, 2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets: |
|
|
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
5,239 |
|
|
$ |
1,924 |
|
|
|
Accounts receivable, net |
|
|
33,720 |
|
|
|
35,462 |
|
|
|
Inventories |
|
|
|
44,311 |
|
|
|
39,615 |
|
|
|
Prepaid expenses and other current assets |
|
2,438 |
|
|
|
2,085 |
|
|
|
Total current assets |
|
|
|
85,708 |
|
|
|
79,086 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property, Plant and equipment, net |
|
14,278 |
|
|
|
14,200 |
|
|
|
Operating lease right of use asset |
|
2,438 |
|
|
|
2,424 |
|
|
|
Intangible assets, less accumulated
amortization |
15,164 |
|
|
|
16,422 |
|
|
|
Goodwill |
|
|
|
|
5,909 |
|
|
|
4,696 |
|
|
|
Other assets |
|
|
|
39 |
|
|
|
202 |
|
|
|
Total assets |
|
|
|
$ |
123,536 |
|
|
$ |
117,030 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and stockholders' equity: |
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
|
Accounts payable |
|
|
$ |
8,733 |
|
|
$ |
9,931 |
|
|
|
Operating lease liability - short term |
|
933 |
|
|
|
987 |
|
|
|
Mortgage payable - short term |
|
|
267 |
|
|
|
267 |
|
|
|
Other accrued liabilities |
|
|
10,680 |
|
|
|
6,865 |
|
|
|
Total current liabilities |
|
|
|
20,613 |
|
|
|
18,050 |
|
|
|
Long term debt |
|
|
|
35,742 |
|
|
|
39,388 |
|
|
|
Note Payable |
|
|
3,508 |
|
|
|
- |
|
|
|
Mortgage payable - long term |
|
|
3,044 |
|
|
|
3,311 |
|
|
|
Operating lease liability - long term |
|
1,572 |
|
|
|
1,441 |
|
|
|
Other non-current liabilities |
|
|
50 |
|
|
|
38 |
|
|
|
Total liabilities |
|
|
|
64,529 |
|
|
|
62,228 |
|
|
|
Total stockholders' equity |
|
|
59,007 |
|
|
|
54,802 |
|
|
|
Total liabilities and stockholders' equity |
$ |
123,536 |
|
|
$ |
117,030 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONTACT:Paul G. DriscollAcme United Corporation55 Walls
DriveFairfield, CT 06824Phone: (203) 254-6060FAX: (203)
254-6521
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