Acme United Corporation (NYSE American: ACU) today announced that
net sales for the quarter ended September 30, 2020 were $43.3
million compared to $37.0 million in the third quarter of 2019, an
increase of 17%. Net sales for the nine months ended September 30,
2020 were $123.1 million, compared to $108.6 million in the same
period in 2019, an increase of 13%.
Acme United’s revenues in the third quarter and
nine months ended September 30, 2020 included approximately $1.2
million and $3.3 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 $1,579,000 or $0.46 per diluted
share for the quarter ended September 30, 2020 compared to
$1,059,000, or $0.30 per diluted share, for the comparable period
last year, an increase of 49% in net income and 53% in diluted
earnings per share. Net income for the nine months ended September
30, 2020 was $6,055,000, or $1.75 per diluted share, compared to
$4,537,000, or $1.32 per diluted share, in last year’s same period,
an increase of 33% in net income and diluted earnings per
share.
Chairman and CEO Walter C. Johnsen said, “We
achieved very strong results in our third quarter by successfully
managing and executing across all of our markets under very
difficult circumstances. As in the second quarter of 2020, Acme
United benefited from market share gains in first aid and safety
supplies, Westcott craft cutting products, Camillus hunting and
Cuda fishing products, and e-commerce sales. We have also
successfully shifted our business to support mass market and
e-commerce customers, which has compensated for weak sales to
offices, schools, restaurants, and other businesses adversely
impacted by the COVID-19 pandemic.”
Mr. Johnsen added, “We are grateful for the focus
and dedication of our associates who have produced and shipped our
products under very challenging circumstances. Our performance this
quarter reflects their hard work.”
For the third quarter of 2020, net sales in the
U.S. segment increased 12% compared to the same period in 2019
mainly attributable to strong sales of first aid and safety
products, primarily due to continued market share gains in the
industrial, safety, home improvement, mass market and e-commerce
channels. In addition, there was a surge in demand for first aid
and safety products related to COVID-19. These sales amounted to
approximately $1.5 million in the third quarter and $3.0 million
for the nine months ended September 30, 2020. Net sales
for the nine months ended September 30, 2020 increased
11%. European net sales for the third quarter of 2020
increased 35% in U.S. dollars and 32% in local currency compared to
the third quarter of 2019. Net sales for the nine months ended
September 30, 2020 increased 17% in both U.S. dollars and local
currency compared to the first nine months of 2019. The increases
for both the quarter and nine months were mainly due to growth in
sales of Westcott cutting products and Camillus knives in the
e-commerce channel and continued growth of DMT sharpening
products.
Net sales in Canada, excluding First Aid Central
products, for the third quarter of 2020 increased 25% in both U.S.
dollars and local currency compared to the same period in 2019
primarily due to an easing of COVID-19 lockdown restrictions and a
shift of back-to-school sales from the second quarter to the third
quarter. Net sales for the nine months ended September 30, 2020
decreased 10% in both U.S. dollars and local currency compared to
the first nine months of 2019.
Gross margin was 34.5% in the third quarter of
2020 versus 35.5% in the comparable period last year mainly due to
incurring COVID-19 related costs. Gross margin was 36.2% in the
nine months ended September 30, 2020, compared to 36.6% in the same
period in 2019.
The Company’s debt less cash on September 30,
2020 was $34.4 million compared to $35.9 million on September 30,
2019. During the twelve-month period ended September 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 $6.5 million in free cash flow.
Inventory increased approximately $9 million due to anticipated
growth in our business as well as the acquisition of product to
offset the impact of potential supply chain interruptions related
to COVID-19.
Conference Call and Webcast
InformationAcme United will hold a conference call to
discuss its quarterly results, which will be broadcast on
Wednesday, October 21, 2020, at 12:00 p.m. EDT. To listen or
participate in a question and answer session, dial 800-353-6461.
International callers may dial 334-323-0501. 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.
CONTACT:Paul G. DriscollAcme United Corporation55 Walls
DriveFairfield, CT 06824Phone: (203) 254-6060FAX: (203)
254-6521
ACME UNITED
CORPORATION |
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME |
THIRD
QUARTER REPORT 2020 |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
Three Months
Ended |
Amounts in 000's except per share data |
|
September 30, 2020 |
|
September 30, 2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
$ |
43,316 |
|
|
$ |
36,995 |
|
Cost of goods sold |
|
28,360 |
|
|
|
23,861 |
|
Gross profit |
|
14,956 |
|
|
|
13,134 |
|
Selling, general, and administrative expenses |
|
12,832 |
|
|
|
11,408 |
|
Operating income |
|
2,124 |
|
|
|
1,726 |
|
Interest expense |
|
173 |
|
|
|
478 |
|
Interest income |
|
(5 |
) |
|
|
(9 |
) |
|
Interest expense, net |
|
168 |
|
|
|
469 |
|
Other (income) expense, net |
|
(35 |
) |
|
|
40 |
|
Total other expense, net |
|
133 |
|
|
|
509 |
|
Income before income tax expense |
|
1,991 |
|
|
|
1,217 |
|
Income tax expense |
|
412 |
|
|
|
158 |
|
Net income |
$ |
1,579 |
|
|
$ |
1,059 |
|
|
|
|
|
|
|
|
|
Shares outstanding - Basic |
|
3,340 |
|
|
|
3,352 |
|
|
Shares outstanding - Diluted |
|
3,461 |
|
|
|
3,486 |
|
|
|
|
|
|
|
|
Earnings per share - Basic |
$ |
0.47 |
|
|
$ |
0.32 |
|
Earnings per share - Diluted |
|
0.46 |
|
|
|
0.30 |
|
|
|
|
|
|
|
|
ACME UNITED
CORPORATION |
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME |
THIRD
QUARTER REPORT 2020 (cont.) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months
Ended |
|
Nine Months
Ended |
Amounts in 000's except per share data |
|
September 30, 2020 |
|
September 30, 2019 |
|
|
|
|
|
|
|
Net sales |
$ |
123,133 |
|
|
$ |
108,585 |
|
Cost of goods sold |
|
78,594 |
|
|
|
68,877 |
|
Gross profit |
|
44,539 |
|
|
|
39,708 |
|
Selling, general, and administrative expenses |
|
36,023 |
|
|
|
32,679 |
|
Operating income |
|
8,516 |
|
|
|
7,029 |
|
Interest expense |
|
742 |
|
|
|
1,491 |
|
Interest income |
|
(20 |
) |
|
|
(28 |
) |
|
Interest expense, net |
|
722 |
|
|
|
1,463 |
|
Other expense, net |
|
2 |
|
|
|
52 |
|
Total other expense, net |
|
724 |
|
|
|
1,515 |
|
Income before income tax expense |
|
7,792 |
|
|
|
5,514 |
|
Income tax expense |
|
1,737 |
|
|
|
977 |
|
Net income |
$ |
6,055 |
|
|
$ |
4,537 |
|
|
|
|
|
|
|
|
|
Shares outstanding - Basic |
|
3,343 |
|
|
|
3,352 |
|
|
Shares outstanding - Diluted |
|
3,454 |
|
|
|
3,446 |
|
|
|
|
|
|
|
|
Earnings per share - Basic |
$ |
1.81 |
|
|
$ |
1.35 |
|
Earnings per share - Diluted |
|
1.75 |
|
|
|
1.32 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ACME UNITED
CORPORATION |
CONDENSED
CONSOLIDATED BALANCE SHEETS |
THIRD
QUARTER REPORT 2020 |
(Unaudited) |
|
|
|
|
|
|
|
Amounts in 000's |
|
September 30, 2020 |
|
September 30, 2019 |
|
|
|
|
|
|
|
Assets: |
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash
and cash equivalents |
$ |
3,031 |
|
|
$ |
5,698 |
|
|
Accounts receivable, net |
|
32,154 |
|
|
|
30,635 |
|
|
Inventories |
|
48,351 |
|
|
|
38,970 |
|
|
Prepaid expenses and other current assets |
|
2,142 |
|
|
|
1,787 |
|
Total current assets |
|
85,678 |
|
|
|
77,090 |
|
|
|
|
|
|
|
|
|
Property, plant and equipment, net |
|
14,341 |
|
|
|
14,006 |
|
|
Operating lease right of use asset |
|
2,190 |
|
|
|
2,123 |
|
|
Intangible assets, less accumulated
amortization |
16,072 |
|
|
|
16,107 |
|
|
Goodwill |
|
4,696 |
|
|
|
4,696 |
|
|
Other assets |
|
40 |
|
|
|
202 |
|
Total assets |
$ |
123,017 |
|
|
$ |
114,224 |
|
|
|
|
|
|
|
Liabilities and stockholders' equity: |
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
Accounts payable |
$ |
9,251 |
|
|
$ |
7,217 |
|
|
Operating lease liability - short term |
|
847 |
|
|
|
920 |
|
|
Mortgage payable - short term |
|
267 |
|
|
|
267 |
|
|
Other accrued liabilities |
|
13,376 |
|
|
|
8,202 |
|
Total current liabilities |
|
23,741 |
|
|
|
16,606 |
|
|
Long
term debt |
|
30,703 |
|
|
|
38,125 |
|
|
Note
Payable (PPP) |
|
3,508 |
|
|
|
- |
|
|
Mortgage payable - long term |
|
2,978 |
|
|
|
3,244 |
|
|
Operating lease liability - long term |
|
1,422 |
|
|
|
1,210 |
|
|
Other non-current liabilities |
|
69 |
|
|
|
15 |
|
Total liabilities |
|
62,421 |
|
|
|
59,200 |
|
Total stockholders' equity |
|
60,596 |
|
|
|
55,024 |
|
Total liabilities and stockholders' equity |
$ |
123,017 |
|
|
$ |
114,224 |
|
|
|
|
|
|
|
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