Acme United Corporation (NYSE American: ACU) today announced that
net sales for the quarter ended June 30, 2023 were $53.3 million
compared to $56.8 million in the second quarter of 2022, a decrease
of 6%. Net sales for the six months ended June 30, 2023 were $99.2
million, compared to $100.1 million in the same period in 2022, a
decrease of 1%.
Net income was $3.4 million, or $0.96 per
diluted share, for the quarter ended June 30, 2023, compared to
$2.7 million, or $0.71 per diluted share, for the same period in
2022, an increase of 26% in net income and 35% in diluted earnings
per share. Net income for the six months ended June 30, 2023 was
$4.4 million, or $1.25 per diluted share, compared to $3.6 million,
or $0.93 per diluted share, for the same period in 2022, an
increase of 24% in net income and 34% in diluted earnings per
share.
Chairman and CEO Walter C. Johnsen said, “I am very
pleased with our strong increase in earnings in the second quarter.
As anticipated, due to inventory rebalancing by some customers,
back-to-school sales were less than in the second quarter of last
year. At the same time, our gross margins improved 4.8 percentage
points due to the successful implementation of our $5.0 million
productivity plan for 2023, as well as lower container costs and
other inbound shipping expenses. Additionally, we reduced inventory
during the past 12 months by $9.1 million.”
Mr. Johnsen continued, “As a result of strong
earnings and lower inventory, we were able to reduce our bank debt
less cash by $12.3 million during the past 12 months. We believe
the Company is in a strong position to pursue growth opportunities,
including new customers, wider distribution, product innovation and
the expansion of our manufacturing facilities. We continue to
actively evaluate potential acquisitions.”
For the three months ended June 30, 2023, net
sales in the U.S. segment decreased 8% compared to the same period
in 2022. Sales of first aid and medical products were strong.
However, sales of school and office products were negatively
impacted by customer reductions of inventory. Customers acquired
additional safety stock in the second quarter of 2022 to mitigate
supply chain disruption concerns. For the six months ended June 30,
2023, net sales in the U.S. segment decreased 1% compared to the
same period in 2022.
European net sales for the three months ended
June 30, 2023 decreased 6% in U.S. dollars and 7% in local currency
compared to the second quarter of 2022. Net sales for
the six months ended June 30, 2023 decreased 6% in U.S. dollars and
5% in local currency compared to the first half of 2022. The
decline in net sales for the three and six month periods were
mainly due to the economic recession in Europe.
Net sales in Canada for the three months ended
June 30, 2023 increased 13% in U.S. dollars and 21% in local
currency compared to the same period in 2022. Net sales for the six
months ended June 30, 2023 increased 2% in U.S. dollars and 8% in
local currency compared to the first half of 2022. The growth in
the three and six month periods was mainly due to higher sales of
first aid products.
Gross margin was 37.5% in the three months ended
June 30, 2023 versus 32.7% in the comparable period last year.
Gross margin was 36.6% for the six month period ended June 30,
2023, compared to 33.5% for the same period in 2022. The increases
in the three and the six month periods ending June 30, 2023 were
primarily due to productivity improvements in the Company’s
manufacturing and distribution facilities, as well as lower ocean
container costs and demurrage charges.
Operating income increased 32% in the three
months ended June 30, 2023 as compared to the same period in
2022.
Interest expense in the second quarter of 2023
increased $0.4 million from the second quarter of 2022 due to
higher interest rates.
The Company’s bank debt less cash as of June 30,
2023 was $47.5 million compared to $59.8 million as of June 30,
2022. During the twelve-month period ended June 30, 2023, the
Company distributed $2.0 million in dividends on its common stock
and generated approximately $14.0 million in free cash flow,
including a reduction in inventory of $9.0 million.
Conference Call and Webcast
InformationAcme United will hold a conference call to
discuss its quarterly results, which will be broadcast on Friday,
July 21, 2023, at 12:00 p.m. EDT. To listen or participate in a
question-and-answer session, dial 877-407-0784. International
callers may dial 201-689-8560. The confirmation code is
13739222. 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®, Spill Magic®, Westcott®, Clauss®, Camillus®,
Cuda®, DMT®, Med-Nap and Safety Made. For more information, visit
www.acmeunited.com.
Forward Looking StatementsThe
Company may from time to time make written or oral “forward-looking
statements” including statements contained in this report and in
other communications by the Company, which are made in good faith
pursuant to the “safe harbor” provisions of the Private Securities
Litigation Reform Act of 1995. Such statements are based on our
beliefs as well as assumptions made by and information currently
available to us. When used in this document, words like “may,”
“might,” “will,” “except,” “anticipate,” “believe,” “potential,”
and similar expressions are intended to identify forward-looking
statements. Actual results could differ materially from our current
expectations.
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 that may impact the Company’s business, operations
and financial results, including those risks and uncertainties
resulting from the global COVID-19 pandemic and the heightened
impact the pandemic has on many of the risks described herein,
including, without limitation, risks relating to disruptions in our
domestic and global supply chains, and labor shortages, any of
which could materially 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, whether caused by
COVID-19 or otherwise, including the impact on the Company’s
suppliers and customers; (iii) additional disruptions in the
Company’s supply chains, whether caused by COVID-19, natural
disasters, or otherwise, including trucker shortages, port closures
and delays, and delays with container ships themselves; (iv) labor
related costs the Company has and may continue to incur, including
costs of acquiring and training new employees and rising wages and
benefits; (v) the continuing adverse impact of inflation, including
product costs, and interest rates; (vi) potential adverse effects
on the Company, its customers, and suppliers resulting from the war
in Ukraine; (vii) currency fluctuations including, for example, the
fluctuation of the dollar against the euro; (viii) the Company’s
ability to effectively manage its inventory in a rapidly changing
business environment, including the additional inventory the
Company acquired in anticipation of supply chain disruptions and
uncertainties; (ix) changes in client needs and consumer spending
habits; (x) the impact of competition; (xi) the impact of
technological changes including, specifically, the growth of online
marketing and sales activity; (xii) the Company’s ability to manage
its growth effectively, including its ability to successfully
integrate any business it might acquire; (xiii) 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 (xiv) 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 2023 |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Three Months Ended |
|
Amounts in 000's except per share data |
|
|
June 30, 2023 |
|
|
June 30, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
|
|
|
$ |
53,336 |
|
|
$ |
56,773 |
|
|
Cost of goods sold |
|
|
|
33,314 |
|
|
|
38,225 |
|
|
Gross profit |
|
|
|
|
20,022 |
|
|
|
18,548 |
|
|
Selling, general, and administrative expenses |
|
14,772 |
|
|
|
14,572 |
|
|
Operating income |
|
|
|
5,250 |
|
|
|
3,976 |
|
|
Interest expense |
|
|
|
|
|
860 |
|
|
|
428 |
|
|
Interest income |
|
|
|
(28 |
) |
|
|
(5 |
) |
|
Interest expense, net |
|
|
|
832 |
|
|
|
423 |
|
|
Other (income) expense, net |
|
|
(23 |
) |
|
|
148 |
|
|
Total other (income) expense , net |
|
|
(23 |
) |
|
|
148 |
|
|
Income before income tax expense |
|
|
4,441 |
|
|
|
3,405 |
|
|
Income tax expense |
|
|
|
998 |
|
|
|
667 |
|
|
Net income |
|
|
|
$ |
3,443 |
|
|
$ |
2,738 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares outstanding - Basic |
|
|
3,555 |
|
|
|
3,521 |
|
|
Shares outstanding - Diluted |
|
|
3,591 |
|
|
|
3,841 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share - Basic |
|
$ |
0.97 |
|
|
$ |
0.78 |
|
|
Earnings per share - Diluted |
|
|
0.96 |
|
|
|
0.71 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ACME UNITED CORPORATION |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME |
SECOND QUARTER REPORT 2023 (cont.) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended |
|
|
Six Months Ended |
|
Amounts in 000's except per share data |
|
|
June 30, 2023 |
|
|
June 30, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
|
|
|
$ |
99,175 |
|
|
$ |
100,106 |
|
|
Cost of goods sold |
|
|
|
62,872 |
|
|
|
66,590 |
|
|
Gross profit |
|
|
|
|
36,303 |
|
|
|
33,516 |
|
|
Selling, general, and administrative expenses |
|
28,865 |
|
|
|
28,169 |
|
|
Operating income |
|
|
|
7,438 |
|
|
|
5,347 |
|
|
Interest expense |
|
|
|
|
|
1,779 |
|
|
|
737 |
|
|
Interest income |
|
|
|
(45 |
) |
|
|
(8 |
) |
|
Interest expense, net |
|
|
|
1,734 |
|
|
|
729 |
|
|
Other (income) expense, net |
|
|
(46 |
) |
|
|
147 |
|
|
Total other (income) expense , net |
|
|
(46 |
) |
|
|
147 |
|
|
Income before income tax expense |
|
|
5,750 |
|
|
|
4,471 |
|
|
Income tax expense |
|
|
|
1,318 |
|
|
|
903 |
|
|
Net income |
|
|
|
$ |
4,432 |
|
|
$ |
3,568 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares outstanding - Basic |
|
|
3,548 |
|
|
|
3,521 |
|
|
Shares outstanding - Diluted |
|
|
3,548 |
|
|
|
3,844 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share - Basic |
|
$ |
1.25 |
|
|
$ |
1.01 |
|
|
Earnings per share - Diluted |
|
|
1.25 |
|
|
|
0.93 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ACME UNITED CORPORATION |
CONDENSED CONSOLIDATED BALANCE SHEETS |
SECOND QUARTER REPORT 2023 |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
Amounts in 000's |
|
|
|
June 30, 2023 |
|
|
June 30, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
Assets: |
|
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
3,401 |
|
|
$ |
1,760 |
|
|
Accounts receivable, net |
|
|
39,796 |
|
|
|
46,991 |
|
|
Inventories |
|
|
|
55,944 |
|
|
|
65,039 |
|
|
Prepaid expenses and other current assets |
|
4,330 |
|
|
|
3,647 |
|
|
Total current assets |
|
|
|
103,471 |
|
|
|
117,437 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment, net |
|
|
27,263 |
|
|
|
26,277 |
|
|
Operating lease right of use asset |
|
|
2,393 |
|
|
|
2,787 |
|
|
Intangible assets, less accumulated
amortization |
|
27,969 |
|
|
|
29,814 |
|
|
Total assets |
|
|
|
$ |
161,846 |
|
|
$ |
177,815 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and stockholders' equity: |
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Accounts payable |
|
|
$ |
10,724 |
|
|
$ |
21,421 |
|
|
Operating lease liability - short term |
|
|
1,193 |
|
|
|
1,080 |
|
|
Mortgage payable - short term |
|
|
411 |
|
|
|
389 |
|
|
Other accrued liabilities |
|
|
13,013 |
|
|
|
10,129 |
|
|
Total current liabilities |
|
|
|
25,341 |
|
|
|
33,019 |
|
|
Long term debt |
|
|
|
39,979 |
|
|
|
50,263 |
|
|
Mortgage payable - long term |
|
|
10,485 |
|
|
|
10,897 |
|
|
Operating lease liability - long term |
|
|
1,356 |
|
|
|
1,944 |
|
|
Other non-current liabilities |
|
|
1,032 |
|
|
|
1,869 |
|
|
Total liabilities |
|
|
|
78,195 |
|
|
|
97,992 |
|
|
Total stockholders' equity |
|
|
83,651 |
|
|
|
79,823 |
|
|
Total liabilities and stockholders' equity |
|
$ |
161,846 |
|
|
$ |
177,815 |
|
|
|
|
|
|
|
|
|
|
|
|
|
CONTACT:Paul G. DriscollAcme United Corporation1 Waterview
DriveShelton, CT 06484Phone: (203) 254-6060
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