Acme United Corporation (NYSE American: ACU) today announced that
net sales for the quarter ended June 30, 2021 were $44.8 million
compared to $44.0 million in the second quarter of 2020, an
increase of 2%. Net sales for the six months ended June 30, 2021
were $88.4 million, compared to $79.8 million in the same period in
2020, an increase of 11%.
Net income (excluding the impact of the
forgiveness of the Company’s Paycheck Protection Program (“PPP”)
loan) was $3,723,000 or $0.94 per diluted share for the quarter
ended June 30, 2021 compared to $3,199,000, or $0.92 per diluted
share, for the comparable period last year, an increase of 16% in
net income and 2% in diluted earnings per share. Net income
(excluding the impact of the PPP loan forgiveness) for the six
months ended June 30, 2021 was $5,769,000, or $1.46 per diluted
share, compared to $4,476,000, or $1.28 per diluted share, in last
year’s same period, increases of 29% and 14%, respectively.
On June 9, 2021 the Company’s PPP loan of $3.5
million was fully forgiven by the Small Business Administration
(SBA), and that amount was remitted by the SBA to the company’s
lender, HSBC Bank USA, NA. Net income for the second quarter
including the loan forgiveness was $7.2 million, or $1.82 per
diluted share. Net income for the six months ended June 30, 2021
including the loan forgiveness was $9.3 million, or $2.34 per
diluted share.
Chairman and CEO Walter C. Johnsen said, “Our
performance in the second quarter was impacted by interruptions in
our operations as we installed a new warehouse management system at
our main U.S. distribution facility in North Carolina. As planned,
we did not ship for the first 10 days of the quarter. We finished
the quarter with approximately $5 million of unfilled orders at the
site. We are now shipping at more normal levels and are addressing
the backorders. New orders continue to be strong and our new
warehouse management system will enable us to fulfill them more
quickly and efficiently.”
For the second quarter of 2021, net sales in the
U.S. segment decreased 4% compared to the same period in 2020 due
to the delayed shipments as the Company’s new warehouse management
system was installed. For the six months ended June 30, 2021, net
sales in the U.S. segment increased 6% compared to the same period
in 2020. The growth was primarily attributable to strong sales of
first aid and safety products.
European net sales for the second quarter of
2021 increased 26% in U.S. dollars and 16% in local currency
compared to the second quarter of 2020, mainly due to re-opening of
offices and growth in the e-commerce channel across all product
lines. Net sales for the six months ended June 30, 2021 increased
34% in U.S. dollars and 23% in local currency compared to the first
half of 2020, mainly due to sales growth in the ecommerce channel
across all product lines and continued growth of DMT sharpening
products.
Net sales in Canada for the second quarter of
2021 increased 68% in U.S. dollars and 49% in local currency
compared to the same period in 2020, due to higher sales of First
Aid Central products, principally in the e-commerce channel as well
as increased sales of school and office products compared to the
COVID-19 lockdowns in the second quarter of 2020. Net sales for the
six months ended June 30, 2021 increased 53% in U.S. dollars and
40% in local currency compared to the first half of 2020.
Gross margin was 36% in the second quarter of
2021 versus 36.5% in the comparable period last year. Gross margin
was 36% for the six months ended June 30, 2021, compared to 37% for
the same period of 2020.
The second quarter tax expense included a $0.9
million tax credit for stock-based compensation.
The Company’s bank debt less cash on June 30,
2021 was $39.4 million compared to $37.3 million on June 30, 2020.
During the twelve-month period ended June 30, 2021, the Company
paid approximately $9.3 million for the acquisition of the assets
of Med-Nap LLC., distributed $1.7 million in dividends on its
common stock, generated $3.6 million in free cash flow, and
received forgiveness for the PPP loan of $3.5 million.
Conference Call and Webcast
InformationAcme United will hold a conference call to
discuss its quarterly results, which will be broadcast on Thursday,
July 22, 2021, 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. The confirmation code is
8518704. 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®, DMT®, and Med-Nap. 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 extent of the COVID-19
pandemic, including the duration, spread, severity, and any
recurrence of the COVID-19 pandemic including through any new
variant strains of the underlying virus; the effectiveness and
availability of vaccines; the duration and scope of
pandemic-related government orders and restrictions on commercial
and other activities, including retail store, office, school and
restaurant closures; the duration and scope of the Company’s
actions to maintain employee health at our offices, production
facilities and distribution centers; the extent of the impact of
the COVID-19 pandemic on overall demand for the Company’s products;
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 potential disruptions in our supply chain,
any of which could adversely impact the Company’s ability to
manufacture, source or distribute it 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, whether caused by
COVID-19 or otherwise, including the impact on the Company’s
suppliers and customers; (iii) changes in client needs and consumer
spending habits, including COVID-19 related changes; (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, including additional inventory acquired to respond to
COVID-19 related uncertainties; (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 2021 |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Three Months Ended |
|
Amounts in 000's except per share data |
|
|
June 30, 2021 |
|
|
June 30, 2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
sales |
|
|
|
$ |
44,847 |
|
|
$ |
44,042 |
|
|
Cost of
goods sold |
|
|
|
28,694 |
|
|
|
27,989 |
|
|
Gross
profit |
|
|
|
|
16,153 |
|
|
|
16,053 |
|
|
Selling,
general, and administrative expenses |
|
|
12,364 |
|
|
|
11,670 |
|
|
Operating
income |
|
|
|
3,789 |
|
|
|
4,383 |
|
|
Interest
expense |
|
|
|
(226 |
) |
|
|
(245 |
) |
|
Interest
income |
|
|
|
4 |
|
|
|
11 |
|
|
|
Interest
expense, net |
|
|
|
(222 |
) |
|
|
(234 |
) |
|
PPP Loan
forgiveness |
|
|
|
3,508 |
|
|
|
- |
|
|
Other
(expense) income , net |
|
|
(68 |
) |
|
|
1 |
|
|
Total
other income (expense), net |
|
|
3,440 |
|
|
|
(233 |
) |
|
Income
before income tax expense |
|
|
7,007 |
|
|
|
4,150 |
|
|
Income tax
(benefit) expense |
|
|
(224 |
) |
|
|
951 |
|
|
Net
income |
|
|
|
$ |
7,231 |
|
|
$ |
3,199 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
outstanding - Basic |
|
|
3,347 |
|
|
|
3,349 |
|
|
|
Shares
outstanding - Diluted |
|
|
3,964 |
|
|
|
3,482 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings
per share - Basic |
|
|
$ |
2.16 |
|
|
$ |
0.96 |
|
|
Earnings
per share - Diluted |
|
|
1.82 |
|
|
|
0.92 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation to reported Net Income (GAAP) |
|
|
|
|
|
|
|
Net income
as reported (GAAP) |
|
|
7,231 |
|
|
|
3,199 |
|
|
|
PPP Loan
Forgiveness |
|
|
|
(3,508 |
) |
|
|
- |
|
|
|
Net income
as adjusted |
|
|
|
3,723 |
|
|
|
3,199 |
|
|
|
Earnings per share before PPP Loan forgiveness -
Basic |
|
|
|
$ |
1.11 |
|
|
$ |
0.96 |
|
|
|
Earnings per share
before PPP Loan forgiveness - Diluted |
|
|
|
|
0.94 |
|
|
|
0.92 |
|
|
ACME UNITED CORPORATION |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME |
SECOND QUARTER REPORT 2021 (cont.) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended |
|
|
Six Months Ended |
|
Amounts in 000's except per share data |
|
|
June 30, 2021 |
|
|
June 30, 2020 |
|
|
|
|
|
|
|
|
|
|
|
|
Net
sales |
|
|
|
$ |
88,372 |
|
|
$ |
79,817 |
|
|
Cost of
goods sold |
|
|
|
56,632 |
|
|
|
50,234 |
|
|
Gross
profit |
|
|
|
|
31,740 |
|
|
|
29,583 |
|
|
Selling,
general, and administrative expenses |
|
|
24,983 |
|
|
|
23,191 |
|
|
Operating
income |
|
|
|
6,757 |
|
|
|
6,392 |
|
|
Interest
expense |
|
|
|
(452 |
) |
|
|
(568 |
) |
|
Interest
income |
|
|
|
9 |
|
|
|
14 |
|
|
|
Interest
expense, net |
|
|
|
(443 |
) |
|
|
(554 |
) |
|
PPP Loan
forgiveness |
|
|
|
3,508 |
|
|
|
- |
|
|
Other
expense, net |
|
|
|
(145 |
) |
|
|
(36 |
) |
|
Total
other income (expense), net |
|
|
3,363 |
|
|
|
(591 |
) |
|
Income
before income tax expense |
|
|
9,677 |
|
|
|
5,802 |
|
|
Income tax
expense |
|
|
|
400 |
|
|
|
1,326 |
|
|
Net
income |
|
|
|
$ |
9,277 |
|
|
$ |
4,476 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
outstanding - Basic |
|
|
3,409 |
|
|
|
3,344 |
|
|
|
Shares
outstanding - Diluted |
|
|
3,960 |
|
|
|
3,499 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings
per share - Basic |
|
|
$ |
2.72 |
|
|
$ |
1.34 |
|
|
Earnings
per share - Diluted |
|
|
2.34 |
|
|
|
1.28 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation to reported Net Income (GAAP) |
|
|
|
|
|
|
|
Net income
as reported (GAAP) |
|
|
9,277 |
|
|
|
4,476 |
|
|
|
PPP Loan
Forgiveness |
|
|
|
(3,508 |
) |
|
|
- |
|
|
|
Net income
as adjusted |
|
|
|
5,769 |
|
|
|
4,476 |
|
|
|
Earnings per share before PPP Loan forgiveness -
Basic |
|
|
|
$ |
1.69 |
|
|
$ |
1.34 |
|
|
|
Earnings per share
before PPP Loan forgiveness - Diluted |
|
|
|
|
1.46 |
|
|
|
1.28 |
|
|
ACME UNITED CORPORATION |
CONDENSED CONSOLIDATED BALANCE SHEETS |
SECOND QUARTER REPORT 2021 |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
Amounts in 000's |
|
|
|
June 30, 2021 |
|
|
June 30, 2020 |
|
|
|
|
|
|
|
|
|
|
|
|
Assets: |
|
|
|
|
|
|
|
|
|
Current
assets: |
|
|
|
|
|
|
|
|
|
Cash and
cash equivalents |
|
$ |
3,240 |
|
$ |
5,239 |
|
|
Accounts
receivable, net |
|
|
36,270 |
|
|
33,720 |
|
|
Inventories |
|
|
|
48,691 |
|
|
44,311 |
|
|
Prepaid
expenses and other current assets |
|
|
2,233 |
|
|
2,438 |
|
Total
current assets |
|
|
|
90,434 |
|
|
85,708 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Property,
plant and equipment, net |
|
|
22,408 |
|
|
14,277 |
|
|
Operating
lease right of use asset |
|
|
3,476 |
|
|
2,438 |
|
|
Intangible
assets, less accumulated amortization |
|
18,019 |
|
|
16,376 |
|
|
Goodwill |
|
|
|
|
4,800 |
|
|
4,696 |
|
|
Other
assets |
|
|
|
1 |
|
|
41 |
|
Total
assets |
|
|
|
$ |
139,138 |
|
$ |
123,536 |
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and stockholders' equity: |
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
|
|
|
Accounts
payable |
|
|
$ |
8,021 |
|
$ |
8,733 |
|
|
Operating
lease liability - short term |
|
|
919 |
|
|
933 |
|
|
Mortgage
payable - short term |
|
|
267 |
|
|
267 |
|
|
Other
accrued liabilities |
|
|
10,374 |
|
|
10,680 |
|
Total
current liabilities |
|
|
|
19,581 |
|
|
20,613 |
|
Long term
debt |
|
|
|
39,550 |
|
|
35,742 |
|
|
Note
payable |
|
|
|
- |
|
|
3,508 |
|
|
Mortgage
payable - long term |
|
|
2,952 |
|
|
3,044 |
|
|
Operating
lease liability - long term |
|
|
2,589 |
|
|
1,573 |
|
Other
non-current liabilities |
|
|
14 |
|
|
49 |
|
Total
liabilities |
|
|
|
64,686 |
|
|
64,529 |
|
Total
stockholders' equity |
|
|
|
74,452 |
|
|
59,007 |
|
Total
liabilities and stockholders' equity |
|
$ |
139,138 |
|
$ |
123,536 |
|
|
|
|
|
|
|
|
|
|
|
|
CONTACT: |
Paul G.
Driscoll |
Acme United
Corporation |
1 Waterview
Drive |
Shelton, CT
06484 |
|
|
Phone: (203) 254-6060 |
|
|
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