Acme United Corporation (NYSE American: ACU) today announced that
net sales for the fourth quarter ended December 31, 2018 were $31.1
million, compared to $30.2 million in the comparable period of
2017, an increase of 3%. Net sales for the year ended December 31,
2018 were $137.3 million, compared to $130.5 million in 2017, an
increase of 5%.
Net income for the quarter ended December 31,
2018 was $591,000, or $0.17 per diluted share. This compares to a
loss of $655,000, in the fourth quarter of 2017, which reflected
tax charges in the amount of $1.2 million incurred under the
December 2017 U.S. Tax Cuts and Jobs Act. Adjusted net income
(non-GAAP), excluding the tax charges was $590,000, or $0.16 per
diluted share, for the fourth quarter of 2017. Earnings per share
increased 6% in the fourth quarter of 2018 over the adjusted
earnings per share in the fourth quarter of 2017.
Net income for the year ended December 31, 2018
was $4.6 million, or $1.30 per diluted share. This compares to net
income in 2017 of $4.1 million, or $1.09 per diluted share.
Adjusted net income (non-GAAP) was $5.3 million, or $1.42 per
diluted share, for the year ended December 31, 2017. On an adjusted
basis, net income for 2018 decreased 13% and earnings per share
decreased 8% year over year. The decline in net income for the year
ended December 31, 2018 resulted primarily from investments in
sales and marketing to support growth, as well as higher interest
rates on our variable rate credit facility.
Operating profit increased 39% and decreased 5%
for the three and twelve months ended December 31, 2018,
respectively.
Chairman and CEO Walter C. Johnsen said, “We
have just completed our eighth consecutive year of record sales.
All of our businesses and our sales teams around the globe
contributed to this.”
Mr. Johnsen added, “I am pleased with our
increase in operating income during the fourth quarter of 2018,
which was primarily due to sales growth and gross margin
improvement. We will continue to drive our many sales initiatives
and the cost cutting programs we implemented in the fourth quarter
throughout 2019. Among the products we expect to contribute to our
2019 sales results are various newly developed Wescott scissors and
an array of safety cutters for opening boxes. In addition, we have
new Camillus knife placements planned at large mass market
retailers and are focusing on continuing the growth of our
SmartCompliance First Aid kits and refills with industrial users.
For the year, we are providing guidance of approximately $140 to
$143 million in sales, net income of $5.0 to $5.3 million and $1.41
to $1.50 earnings per share.”
In the U.S. segment, net sales for the quarter
ended December 31, 2018 increased 3% compared to the same period in
2017. Net sales for the year ended December 31, 2018 grew 5% over
2017 in the U.S. segment. The sales increase for both periods was
mainly due to strong sales of first aid and safety products as well
as Camillus knives.
Net sales in Canada for the quarter ended
December 31, 2018 decreased 4% in U.S. dollars and were constant in
local currency compared to the prior-year period. Net sales for the
year ended December 31, 2018 increased 2% in U.S. dollars and 1% in
local currency compared to the same period in 2017.
Net sales in Europe for the quarter ended
December 31, 2018 increased 13% in U.S. dollars and 17% in local
currency compared to the same period in 2017. Net sales for the
year ended December 31, 2018 increased 13% in U.S. dollars and 9%
in local currency compared to last year. Net sales for both periods
grew mainly due to new customers in the office products channel,
growth in sales of DMT sharpening products, and strong e-commerce
demand for these products.
Gross margin was 36.5% in the three months ended
December 31, 2018 compared to 35.2% in the same period in 2017. The
higher gross margin was primarily due to reduced promotional
spending in the Company’s e-commerce business, cost cutting
initiatives and product mix. Gross margin was 36.9% for the year
ended December 31, 2018 compared to 36.7% for 2017.
The Company’s long-term debt less cash on
December 31, 2018 was $39.3 million compared to $37.8 million on
December 31, 2017.
The Company believes that our presentation of
non-GAAP financial measures, when presented together with the
corresponding GAAP financial measures, provides a more complete
understanding to investors of the Company’s results of operations.
Specifically, our use of non-GAAP measures facilitates comparisons
of our financial results and operating performance with prior
periods. In addition, our adjusted financial measures provide
greater transparency to investors of supplemental information used
by management in its financial and operational decision making.
However, these non-GAAP financial measures should be considered as
a supplement to, and not as a substitute for, the corresponding
measures calculated in accordance with GAAP.
Conference Call and Webcast
InformationAcme United will hold a conference call to
discuss its quarterly results, which will be broadcast on Thursday,
February 28, 2019, at 12:00 p.m. ET. To listen or participate in a
question and answer session, dial 877-260-1479. International
callers may dial 334-323-0522. 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®, 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, 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
and technological changes on the Company; (v) the Company’s ability
to manage its growth effectively, including its ability to
successfully integrate any business it might acquire; (vi) currency
fluctuations; (vii) increases in the cost of borrowings resulting
from rising interest rates; (viii) 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 (ix) 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 |
| YEAR END REPORT 2018 |
| (Unaudited) |
| |
|
|
|
|
|
|
| |
|
|
Quarter Ended |
|
|
Quarter Ended |
| Amounts in $000's except per share
data |
|
December 31, 2018 |
|
|
December 31, 2017 |
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| Net
sales |
|
$ |
31,130 |
|
|
$ |
30,170 |
|
| Cost of goods
sold |
|
|
19,768 |
|
|
|
19,544 |
|
| Gross
profit |
|
|
11,362 |
|
|
|
10,626 |
|
|
Selling, general, and administrative expenses |
|
10,269 |
|
|
|
9,838 |
|
| Income from
operations |
|
|
1,093 |
|
|
|
788 |
|
| Interest
expense |
|
|
(523 |
) |
|
|
(386 |
) |
| Interest
income |
|
|
10 |
|
|
|
7 |
|
|
Net interest expense |
|
|
(513 |
) |
|
|
(379 |
) |
| Other income
(expense), net |
|
|
18 |
|
|
|
(41 |
) |
| Total
other expense,
net |
|
|
(495 |
) |
|
|
(420 |
) |
| Pre-tax
income |
|
|
598 |
|
|
|
368 |
|
| Income tax
expense |
|
|
7 |
|
|
|
1,023 |
|
| Net income
(loss) |
|
$ |
591 |
|
|
$ |
(655 |
) |
|
|
|
|
|
|
|
|
|
Shares outstanding - Basic |
|
|
3,363 |
|
|
|
3,374 |
|
|
Shares outstanding - Diluted |
|
|
3,421 |
|
|
|
3,676 |
|
|
|
|
|
|
|
|
|
| Earnings per
share basic |
|
$ |
0.18 |
|
|
$ |
(0.19 |
) |
| Earnings per
share diluted |
|
|
0.17 |
|
|
|
(0.18 |
) |
|
|
|
|
|
|
|
|
|
Reconciliation of Non-GAAP Financial Measures |
|
|
|
|
|
|
GAAP net income (loss) |
|
|
591 |
|
|
|
(655 |
) |
| Adjustment for tax expense related to U.S. tax
reform |
- |
|
|
|
1,245 |
|
|
Non-GAAP net income |
|
|
591 |
|
|
|
590 |
|
|
|
|
|
|
|
|
|
| Earnings per
share basic - Non GAAP |
|
$ |
0.18 |
|
|
$ |
0.17 |
|
|
Earnings per share diluted - Non GAAP |
|
0.17 |
|
|
|
0.16 |
|
| |
|
|
|
|
|
|
| |
| ACME UNITED CORPORATION |
| CONDENSED CONSOLIDATED STATEMENTS OF
INCOME |
| YEAR END REPORT 2018 (cont.) |
| (Unaudited) |
| |
|
|
|
|
|
|
| |
|
|
Year Ended |
|
|
Year Ended |
| Amounts in $000's except per share
data |
|
December 31, 2018 |
|
|
December 31, 2017 |
| |
|
|
|
|
|
|
| Net
sales |
|
$ |
137,321 |
|
|
$ |
130,550 |
|
| Cost of goods
sold |
|
|
86,672 |
|
|
|
82,651 |
|
| Gross
profit |
|
|
50,649 |
|
|
|
47,899 |
|
| Selling,
general, and administrative expenses |
|
|
43,192 |
|
|
|
40,016 |
|
| Income from
operations |
|
|
7,457 |
|
|
|
7,883 |
|
| Interest
expense |
|
|
(1,891 |
) |
|
|
(1,357 |
) |
| Interest
income |
|
|
33 |
|
|
|
29 |
|
|
Net interest expense |
|
|
(1,858 |
) |
|
|
(1,328 |
) |
| Other (expense)
income, net |
|
|
(68 |
) |
|
|
(62 |
) |
| Total other
expense, net |
|
|
(1,926 |
) |
|
|
(1,390 |
) |
| Pre-tax
income |
|
|
5,531 |
|
|
|
6,493 |
|
| Income tax
expense |
|
|
933 |
|
|
|
2,441 |
|
| Net
income |
|
$ |
4,598 |
|
|
$ |
4,052 |
|
|
|
|
|
|
|
|
|
|
Shares outstanding - Basic |
|
|
3,371 |
|
|
|
3,356 |
|
|
Shares outstanding - Diluted |
|
|
3,542 |
|
|
|
3,725 |
|
|
|
|
|
|
|
|
|
| Earnings per
share basic |
|
$ |
1.36 |
|
|
|
1.21 |
|
| Earnings per
share diluted |
|
|
1.30 |
|
|
|
1.09 |
|
|
|
|
|
|
|
|
|
| Reconciliation
of Non-GAAP Financial Measures |
|
|
|
|
|
|
|
GAAP net income |
|
|
4,598 |
|
|
|
4,052 |
|
|
Adjustment for tax expense related to U.S. tax
reform |
|
|
|
|
|
1,245 |
|
|
Non-GAAP net income |
|
|
4,598 |
|
|
|
5,297 |
|
|
|
|
|
|
|
|
|
| Earnings per
share basic - Non GAAP |
|
$ |
1.36 |
|
|
$ |
1.58 |
|
| Earnings per
share diluted - Non GAAP |
|
|
1.30 |
|
|
|
1.42 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ACME UNITED CORPORATION |
| CONDENSED CONSOLIDATED BALANCE
SHEETS |
| YEAR END REPORT 2018 |
| (Unaudited) |
| |
|
|
|
|
|
|
|
Amounts in $000's |
|
|
December 31, 2018 |
|
|
December 31, 2017 |
|
|
|
|
|
|
|
|
|
Assets: |
|
|
|
|
|
|
| Current
assets: |
|
|
|
|
|
|
|
Cash |
|
$ |
4,409 |
|
|
$ |
9,338 |
|
|
Accounts receivable, net |
|
|
25,102 |
|
|
|
26,012 |
|
|
Inventories |
|
|
41,332 |
|
|
|
40,087 |
|
|
Prepaid and other current assets |
|
|
2,529 |
|
|
|
2,664 |
|
| Total current
assets |
|
|
73,372 |
|
|
|
78,101 |
|
|
|
|
|
|
|
|
|
|
Property and equipment, net |
|
|
14,543 |
|
|
|
13,728 |
|
|
Intangible assets, less amortization |
|
|
16,664 |
|
|
|
17,882 |
|
|
Goodwill |
|
|
4,696 |
|
|
|
4,696 |
|
|
Other assets |
|
|
203 |
|
|
|
323 |
|
| Total
assets |
|
$ |
109,478 |
|
|
$ |
114,730 |
|
|
|
|
|
|
|
|
|
| Liabilities and
stockholders' equity: |
|
|
|
|
|
|
| Current
liabilities |
|
|
|
|
|
|
|
Accounts payable |
|
$ |
7,983 |
|
|
$ |
11,151 |
|
|
Other current liabilities |
|
|
5,382 |
|
|
|
5,632 |
|
| Total current
liabilities |
|
|
13,365 |
|
|
|
16,783 |
|
| Non-current
liabilities |
|
|
|
|
|
|
|
Long term debt |
|
|
40,283 |
|
|
|
43,450 |
|
|
Mortgage payable L/T |
|
|
3,444 |
|
|
|
3,711 |
|
|
Other non current liabilities |
|
|
53 |
|
|
|
848 |
|
| Total
liabilities |
|
|
57,145 |
|
|
|
64,792 |
|
| Total
stockholders' equity |
|
|
52,333 |
|
|
|
49,938 |
|
| Total
liabilities and stockholders' equity |
|
$ |
109,478 |
|
|
$ |
114,730 |
|
|
|
|
|
|
|
|
|
CONTACT:Acme United CorporationPaul G.
DriscollPhone: (203) 254-6060Fax: (203) 254-652155 Walls
DriveFairfield, CT 06824
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