Acme United Corporation (NYSE American: ACU) today announced that
net sales for the three months ended September 30, 2023 were $50.4
million compared to $49.7 million in the same period of 2022, an
increase of 1%. Net sales for the nine months ended September 30,
2023 were $149.6 million compared to $149.8 million in the same
period in 2022.
Net income was $2.2 million, or $0.58 per
diluted share, for the three months ended September 30, 2023,
compared to $64,000, or $0.02 per diluted share, for the same
period in 2022. Net income for the nine months ended September 30,
2023 was $6.6 million, or $1.83 per diluted share, compared to $3.6
million, or $0.96 per diluted share, for the same period in 2022,
an increase of 82% in net income and 91% in diluted earnings per
share.
Chairman and CEO Walter C. Johnsen said, “I am pleased that
sales at the end of the third quarter rebounded after more than a
year of customer inventory reductions. In-bound shipping costs
declined to historical levels. We successfully implemented a
productivity plan which is resulting in $5 million of annual
savings. In addition, we continued to aggressively reduce
inventory. The Company paid down $26 million, or 41%, of its bank
debt during the past 12
months.”
Mr. Johnsen continued, “We gained new product placement for
2024, including additional first aid and medical products at major
drug and hardware chains, new Westcott cutting tools and DMT
sharpeners at large retailers, and new customers for our Spill
Magic clean up products. In summary, we believe we are strongly
positioned for growth.”
“In September, we acquired Hawktree Solutions, Inc., which has
the exclusive license for first aid, safety, and survival products
with the Canadian Red Cross. Hawktree will expand our product line
to address devastating fires, floods, and earthquakes. We are also
excited about the additional opportunities this acquisition will
open for us in our Canada business. The business will operate from
our facilities near Montreal. We expect the acquisition
to be accretive starting in the fourth quarter of 2023.”
For the three months ended September 30, 2023,
net sales in the U.S. segment increased 2% compared to the same
period in 2022. Sales of first aid and medical products were
strong. However, demand in the third quarter of 2023 was
lower than in the third quarter of last year for school and office
products. For the nine months ended September 30, 2023,
net sales in the U.S. segment were constant compared to the same
period in 2022. The nine month sales for school and office products
were impacted by customer reductions of inventory in the first half
of 2023.
European net sales for the three months ended
September 30, 2023 increased 7% in U.S. dollars but decreased 1% in
local currency compared to the same period in 2022. Net
sales for the nine months ended September 30, 2023 decreased 2% in
U.S. dollars and 4% in local currency compared to the same period
in 2022. The declines in net sales in local currency for the three
and nine month periods were mainly due to the economic recession in
Europe.
Net sales in Canada for the three months ended
September 30, 2023 decreased 9% in U.S. dollars and 7% in local
currency compared to the same period in 2022. Net sales for the
nine months ended September 30, 2023 decreased 2% in U.S. dollars
but increased 3% in local currency compared to the same period in
2022. The growth in local currency in the nine months was mainly
due to higher sales of first aid products.
Gross margin was 38.7% in the three months ended
September 30, 2023 compared to 32.0% in the same period in 2022.
Gross margin was 37.3% for the nine-month period ended September
30, 2023 compared to 33.0% for the same period in 2022.
The increases in the three and the nine month periods ending
September 30, 2023 were primarily due to productivity improvements
in the Company’s manufacturing and distribution facilities, as well
as lower in-bound freight costs.
The Company’s bank debt less cash as of
September 30, 2023 was $38 million compared to $64 million as of
September 30, 2022. During the twelve-month period ended September
30, 2023, the Company paid $2 million in dividends on its common
stock and generated approximately $27 million in free cash flow,
including a reduction in inventory of $12 million.
Conference Call and Webcast
InformationAcme United will hold a conference call to
discuss its quarterly results, which will be broadcast on Monday,
October 23, 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
13741449. 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®, 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.
These risks and uncertainties 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) the continuing
adverse impact of inflation, including product costs, and interest
rates; (iv) potential adverse effects on the Company, its
customers, and suppliers resulting from the wars in Ukraine and the
Middle East; (v) additional disruptions in the Company’s supply
chains, whether caused by pandemics, natural disasters, or
otherwise, including trucker shortages, port closures and delays,
and delays with container ships themselves; (vi) labor related
costs the Company has and may continue to incur, including costs of
acquiring and training new employees and rising wages and benefits;
(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; (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.
CONTACT: |
Paul G. Driscoll |
Acme United Corporation |
|
|
Phone: (203) 254-6060 |
|
|
|
ACME UNITED CORPORATION |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME |
THIRD QUARTER REPORT 2023 |
(Unaudited) |
|
|
|
|
|
|
|
Three Months Ended |
|
Three Months Ended |
Amounts in 000's except per share data |
|
September 30, 2023 |
|
September 30, 2022 |
|
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
50,384 |
|
|
$ |
49,744 |
|
Cost of goods sold |
|
|
30,881 |
|
|
|
33,819 |
|
Gross profit |
|
|
19,503 |
|
|
|
15,925 |
|
Selling, general, and administrative expenses |
|
|
15,846 |
|
|
|
14,972 |
|
Operating income |
|
|
3,657 |
|
|
|
953 |
|
Interest expense |
|
|
816 |
|
|
|
722 |
|
Interest income |
|
|
(32 |
) |
|
|
(8 |
) |
Interest expense, net |
|
|
784 |
|
|
|
714 |
|
Other expense, net |
|
|
55 |
|
|
|
209 |
|
Total other expense , net |
|
|
55 |
|
|
|
209 |
|
Income before income tax expense |
|
|
2,818 |
|
|
|
30 |
|
Income tax expense (benefit) |
|
|
666 |
|
|
|
(34 |
) |
Net income |
|
$ |
2,152 |
|
|
$ |
64 |
|
|
|
|
|
|
Shares outstanding - Basic |
|
|
3,578 |
|
|
|
3,530 |
|
Shares outstanding - Diluted |
|
|
3,721 |
|
|
|
3,692 |
|
|
|
|
|
|
Earnings per share - Basic |
|
$ |
0.60 |
|
|
$ |
0.02 |
|
Earnings per share - Diluted |
|
|
0.58 |
|
|
|
0.02 |
|
|
|
|
|
|
ACME UNITED CORPORATION |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME |
SECOND QUARTER REPORT 2023 (cont.) |
(Unaudited) |
|
|
|
|
|
|
|
|
Nine Months Ended |
|
Nine Months Ended |
Amounts in 000's except per share data |
|
September 30, 2023 |
|
September 30, 2022 |
|
|
|
|
|
Net sales |
|
$ |
149,559 |
|
|
$ |
149,849 |
|
Cost of goods sold |
|
|
93,752 |
|
|
|
100,374 |
|
Gross profit |
|
|
55,807 |
|
|
|
49,475 |
|
Selling, general, and administrative expenses |
|
|
44,711 |
|
|
|
43,176 |
|
Operating income |
|
|
11,096 |
|
|
|
6,299 |
|
Interest expense |
|
|
2,595 |
|
|
|
1,459 |
|
Interest income |
|
|
(78 |
) |
|
|
(16 |
) |
Interest expense, net |
|
|
2,517 |
|
|
|
1,443 |
|
Other expense, net |
|
|
9 |
|
|
|
354 |
|
Total other expense, net |
|
|
9 |
|
|
|
354 |
|
Income before income tax expense |
|
|
8,569 |
|
|
|
4,502 |
|
Income tax expense |
|
|
1,984 |
|
|
|
870 |
|
Net income |
|
$ |
6,585 |
|
|
$ |
3,632 |
|
|
|
|
|
|
Shares outstanding - Basic |
|
|
3,558 |
|
|
|
3,525 |
|
Shares outstanding - Diluted |
|
|
3,597 |
|
|
|
3,781 |
|
|
|
|
|
|
Earnings per share - Basic |
|
$ |
1.85 |
|
|
$ |
1.03 |
|
Earnings per share - Diluted |
|
|
1.83 |
|
|
|
0.96 |
|
|
|
|
|
|
ACME UNITED CORPORATION |
CONDENSED CONSOLIDATED BALANCE SHEETS |
SECOND QUARTER REPORT 2023 |
(Unaudited) |
|
Amounts in 000's |
|
September 30, 2023 |
|
September 30, 2022 |
|
|
|
|
|
Assets: |
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
|
$ |
5,567 |
|
|
$ |
4,218 |
|
Accounts receivable, net |
|
|
33,855 |
|
|
|
40,149 |
|
Inventories |
|
|
54,575 |
|
|
|
66,210 |
|
Prepaid expenses and other current assets |
|
|
3,779 |
|
|
|
3,989 |
|
Restricted cash |
|
|
750 |
|
|
|
750 |
|
Total current assets |
|
|
98,526 |
|
|
|
115,316 |
|
|
|
|
|
|
Property, plant and equipment, net |
|
|
27,708 |
|
|
|
26,042 |
|
Operating lease right of use asset |
|
|
2,300 |
|
|
|
2,891 |
|
Intangible assets, less accumulated
amortization |
|
|
19,546 |
|
|
|
21,296 |
|
Goodwill |
|
|
8,189 |
|
|
|
8,189 |
|
Other assets |
|
|
- |
|
|
|
750 |
|
Total assets |
|
$ |
156,269 |
|
|
$ |
174,484 |
|
|
|
|
|
|
Liabilities and stockholders' equity: |
|
|
|
|
Current liabilities: |
|
|
|
|
Accounts payable |
|
$ |
9,976 |
|
|
$ |
11,771 |
|
Operating lease liability - short term |
|
|
1,165 |
|
|
|
1,142 |
|
Mortgage payable - short term |
|
|
415 |
|
|
|
389 |
|
Other accrued liabilities |
|
|
13,873 |
|
|
|
11,138 |
|
Total current liabilities |
|
|
25,429 |
|
|
|
24,440 |
|
Long term debt |
|
|
32,934 |
|
|
|
57,131 |
|
Mortgage payable, net of current portion Mortgage payable -
long term |
|
|
10,393 |
|
|
|
10,803 |
|
Operating lease liability - long term |
|
|
1,279 |
|
|
|
1,949 |
|
Other non-current liabilities |
|
|
327 |
|
|
|
1,180 |
|
Total liabilities |
|
|
70,363 |
|
|
|
95,503 |
|
Total stockholders' equity |
|
|
85,906 |
|
|
|
78,981 |
|
Total liabilities and stockholders' equity |
|
$ |
156,269 |
|
|
$ |
174,484 |
|
|
|
|
|
|
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