MRO Magazine

Acme United Reports Second Quarter Sales and Earnings


July 22, 2015
By Business Wire News

FAIRFIELD, Conn.

Acme United Corporation (NYSE MKT:ACU) today announced that net sales for the second quarter ended June 30, 2015 were $34.0 million, compared to $33.4 million in the comparable period of 2014, an increase of 2%, or 4% in constant currency. Net sales for the six months ended June 30, 2015 were $56.8 million, compared to $52.5 million in the same period in 2014, an increase of 8%, or 10% in constant currency.

Net income for the quarter ended June 30, 2015 was $2.7 million, or $0.74 per diluted share, compared to $2.5 million, or $0.72 per diluted share, for the 2014 period, an increase in net income of 6%. Net income for the six months ended June 30, 2015 was $3.1 million, or $0.85 per diluted share, compared to $2.9 million, or $0.83 per diluted share, in last year’s period, an 8% increase in net income.

Chairman and CEO Walter C. Johnsen said, “We set new sales and earnings records for the quarter despite being impacted by store closures at large office supply retail chains. Our diversification into the hardware, industrial, safety, and sporting goods channels has broadened our customer base, thereby offsetting the softness of the office market. We have a number of new first aid, hunting, and office product initiatives underway for the coming quarters, which are intended to increase sales and earnings. These programs reflect our emphasis on penetrating additional markets, offering innovative products, and bringing greater value to our customers.”

In the U.S. segment, net sales for the quarter ended June 30, 2015 increased 6% compared to the same period in 2014 due to increased sales of first aid products, Camillus knives, and Cuda fishing tools. Year over year, net sales for the first six months of 2015 grew 13% due to increased sales of first aid products and Westcott scissors.

Net sales in Canada for the three months ended June 30, 2015 decreased 23% in U.S. dollars and 13% in local currency compared to the prior-year period. Year over year, net sales for the six months ended June 30, 2015 decreased 22% in U.S. dollars and 11% in local currency. These decreases were primarily due to a large retail chain exiting the Canadian market and weak economic conditions.

Net sales in Europe for the three months ended June 30, 2015 decreased 19% in U.S. dollars but were constant in local currency compared to the 2014 period. Net sales for the first half of 2015 decreased 13% in U.S. dollars but rose 6% in local currency.

Gross margins were 36.9% in the second quarter of 2015 compared to 35.1% in the 2014 period. Gross margins were 36.9% for the six months ended June 30, 2015 compared to 35.4% for last year’s period. The gross margin improvement for both periods was primarily due to a favorable product mix.

The Company’s bank debt less cash on June 30, 2015 was $28.2 million compared to $28.9 million on June 30, 2014.

ACME UNITED CORPORATION is a leading worldwide supplier of innovative cutting, measuring and safety products to the school, home, office, hardware, sporting goods and industrial markets. Its leading brands include Westcott®, Clauss®, Camillus®, Cuda®, PhysiciansCare®, First Aid Only® and Pac-Kit®. For more information, visit www.acmeunited.com.

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 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; and (vii) 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 2015
(Unaudited)
 
     Three Months Ended      Three Months Ended
Amounts in 000’s except per share data      June 30, 2015        June 30, 2014
 
Net sales$33,954$33,396
Cost of goods sold21,41921,875
Gross profit12,53511,521
Selling, general, and administrative expenses8,6607,983
Income from operations3,8753,538
Interest expense142108
Interest income(2)(2)
Net interest expense141106
Other (income) expense, net(18)(204)
Total other (income) expense, net123(98)
Pre-tax income3,7523,636
Income tax expense1,0441,093
Net income$2,708$2,543
 
Shares outstanding – Basic3,3003,210
Shares outstanding – Diluted3,6823,539
 
Earnings per share basic$0.82$0.79
Earnings per share diluted0.740.72
 
 
ACME UNITED CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
SECOND QUARTER REPORT 2015 (cont.)
(Unaudited)
 
     Six Months Ended      Six Months Ended
Amounts in 000’s except per share data        June 30, 2015        June 30, 2014
 
Net sales$56,791$52,548
Cost of goods sold35,82134,150
Gross profit20,97018,398
Selling, general, and administrative expenses16,26914,235
Income from operations4,7024,163
Interest expense274197
Interest income(3)(9)
Net interest expense270188
Other (income) expense, net60(184)
Total other (income) expense, net3294
Pre-tax income4,3734,159
Income tax expense1,2291,248
Net income$3,144$2,911
 
Shares outstanding – Basic3,3153,206
Shares outstanding – Diluted3,7053,487
 
Earnings per share basic$0.95$0.91
Earnings per share diluted0.850.83
 
 
ACME UNITED CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
SECOND QUARTER REPORT 2015
(Unaudited)
 
Amounts in 000’s          June 30, 2015        June 30, 2014
           

Assets:

Current assets:
Cash$1,941$2,426
Accounts receivable, net27,12330,795
Inventories36,21730,885
Prepaid and other current assets  2,425  1,969
Total current assets67,70666,075
 
Property and equipment, net7,1956,577
Intangible assets, less amortization12,17412,876
Goodwill1,3751,375
Other assets  971  1,084
Total assets$89,421$87,987
 

Liabilities and stockholders’ equity:

Current liabilities
Accounts payable$9,332$10,919
Other current liabilities7,0397,466
Total current liabilities16,37118,385
Bank debt30,17931,325
Other non current liabilities  336  439
46,88650,150
Total stockholders’ equity  42,535  37,838
Total liabilities and stockholders’ equity$89,421$87,987
 

Acme United Corporation
Paul G. Driscoll, 203-254-6060
Fax: 203-254-6521