Acme United Corporation (NYSE American: ACU) today announced that
net sales for the quarter ended March 31, 2020 were $35.8 million
compared to $31.4 million in the first quarter of 2019, an increase
of 14%.
Acme United’s first quarter 2020 revenues
included approximately $1.0 million from the sales of First Aid
Central products. The Company acquired the assets of
Canadian-based First Aid Central, Inc. on January 7, 2020.
Net income was $1,277,000 or $0.36 per diluted
share for the quarter ended March 31, 2020 compared to $807,000, or
$0.24 per diluted share, for the comparable period last year, an
increase of 58% in net income and 50% in diluted earnings per
share.
Chairman and CEO Walter C. Johnsen said, “During
the COVID-19 pandemic, all of Acme’s production and distribution
facilities have remained open and we have shipped record levels of
our first aid and safety supplies, including first aid kits,
antiseptic wipes, medications and refills. I am very proud of
our worldwide teams who quickly executed with purpose in the
current health crisis. They pulled together whether operating
remotely or running our five manufacturing and warehouse locations
in the U.S., two plants and warehouses in Canada, and our facility
in Germany. Our colleagues in Asia worked tirelessly to meet
production demands and schedules. Each of our team members
contributed to helping us successfully supply safety products to
our global customers.”
Mr. Johnsen added, “I would like to recognize
the hard work and dedication of the First Aid Central team in
Laval, Canada. They stepped up to an unforeseen crisis
shortly after the acquisition and achieved record sales during the
first quarter. We applaud them and look forward to continuing this
promising start.”
Mr. Johnsen continued, “Among our highest
priorities is the protection of the health and well-being of our
employees. In order to protect our employees and ensure
continuity of operations, we have implemented a number of safety
measures at our production and warehousing sites including health
monitoring, use of protective gear including masks and gloves,
staggering shifts, social distancing and regular deep
cleaning.”
For the first quarter of 2020, net sales in the
U.S. segment increased 11% compared to the same period in 2019. The
sales growth was attributable to strong sales of first aid and
safety products, primarily due to market share gains in the
industrial and safety channels, as well as in the home improvement
and ecommerce channels. In addition, some growth came from
surge demand for first aid and safety products related to
COVID-19.
European net sales for the first quarter of 2020
increased 16% in U.S. dollars and 19% in local currency compared to
the first quarter of 2019, mainly due to new customers in the
office products channel, growth in the ecommerce channel, and
continued growth of DMT sharpening products.
Net sales in Canada, excluding First Aid Central
products, for the first quarter of 2020 were constant in U.S.
dollars and increased 1% in local currency compared to the same
period in 2019.
Gross margin was 37.8% in the first quarter of
2020 versus 37.6% in the comparable period last year.
The Company’s bank debt less cash on March 31,
2020 was $32.9 million compared to $41.2 million on March 31,
2019. During the twelve-month period ended March 31, 2020,
the Company paid approximately $2.1 million for the acquisition of
the assets of First Aid Central, distributed $1.6 million in
dividends on its common stock, repurchased $0.2 million in treasury
stock and generated $14.0 million in free cash flow, including a
$4.3 million reduction in inventory.
Mr. Johnsen concluded, "Acme United had an
excellent first quarter. We believe that we are in a strong
position to move forward with a solid balance sheet and ample
liquidity including $16.1 million in availability at March 31, 2020
under our $50 million line of credit with HSBC Bank, N.A.
“Nevertheless, we recognize that, like many
other businesses, we may face significant challenges resulting from
the COVID-19 pandemic including uncertainties around the duration
and magnitude of the COVID-19 outbreak. These include, for
example, revenue uncertainty with retailers whose stores are closed
or whose traffic has significantly declined. The Company’s
sales of first aid and safety products and on-line revenues may not
be sufficient to offset potential declines in our office product
lines or may also decline from recent high levels.
Accordingly, as a result of these uncertainties, we are not
providing financial guidance for 2020 at this time."
Conference Call and Webcast
InformationAcme United will hold a conference call to
discuss its quarterly results, which will be broadcast on Friday,
April 17, 2020, at 1:00 p.m. EDT. To listen or participate in a
question and answer session, dial 866-288-0540. International
callers may dial 323-994-2131. 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®, 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 those arising
as a result of the effects of the global COVID-19 outbreak and
measures taken to limit its spread, including the on-going
world-wide economic downturn and further actions that may be taken
by governmental authorities or by businesses or individuals on
their own initiative in response to the pandemic, any of which
could adversely impact the Company’s ability to manufacture, source
or distribute its products, both domestically and internationally,
or reduce demand for its products.. 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, 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 |
FIRST
QUARTER REPORT 2020 |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
Ended |
|
|
Quarter
Ended |
Amounts in 000's except per share data |
|
March 31, 2020 |
|
|
March 31, 2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
|
|
|
$ |
35,775 |
|
|
$ |
31,370 |
|
Cost of goods sold |
|
|
|
22,244 |
|
|
|
19,568 |
|
Gross profit |
|
|
|
|
13,531 |
|
|
|
11,802 |
|
Selling, general and administrative expenses |
|
11,521 |
|
|
|
10,268 |
|
Operating income |
|
|
|
2,010 |
|
|
|
1,534 |
|
Interest expense |
|
|
|
322 |
|
|
|
510 |
|
Interest income |
|
|
|
(8 |
) |
|
|
(9 |
) |
|
Net interest expense |
|
|
|
314 |
|
|
|
501 |
|
Other expense (income), net |
|
|
44 |
|
|
|
(2 |
) |
Income before income tax expense |
|
|
1,652 |
|
|
|
1,035 |
|
Income tax expense |
|
|
|
375 |
|
|
|
228 |
|
Net income |
|
|
|
$ |
1,277 |
|
|
$ |
807 |
|
|
|
|
|
|
|
|
|
|
|
|
Shares outstanding - basic |
|
|
3,349 |
|
|
|
3,351 |
|
|
Shares outstanding - diluted |
|
|
3,519 |
|
|
|
3,392 |
|
|
|
|
|
|
|
|
|
|
|
Earnings per share - basic |
|
$ |
0.38 |
|
|
$ |
0.24 |
|
Earnings per share - diluted |
|
|
0.36 |
|
|
|
0.24 |
|
|
|
|
|
|
|
|
|
|
|
ACME UNITED
CORPORATION |
CONDENSED
CONSOLIDATED BALANCE SHEETS |
FIRST
QUARTER REPORT 2020 |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
Amounts in $000's |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2020 |
|
|
March 31, 2019 |
Assets |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
4,272 |
|
|
$ |
3,798 |
|
|
Accounts receivable, net |
|
|
27,413 |
|
|
|
25,228 |
|
|
Inventories |
|
|
|
36,250 |
|
|
|
40,570 |
|
|
Prepaid expenses and other current assets |
|
1,926 |
|
|
|
2,281 |
|
Total current assets |
|
|
|
69,861 |
|
|
|
71,877 |
|
|
|
|
|
|
|
|
|
|
|
|
Plant, property and equipment, net |
|
14,097 |
|
|
|
14,423 |
|
|
Operating lease right of use asset |
|
2,711 |
|
|
|
2,674 |
|
|
Intangible assets, less accumulated
amortization |
15,478 |
|
|
|
16,736 |
|
|
Goodwill |
|
|
|
|
5,886 |
|
|
|
4,696 |
|
|
Other assets |
|
|
|
89 |
|
|
|
209 |
|
Total assets |
|
|
|
$ |
108,122 |
|
|
$ |
110,615 |
|
|
|
|
|
|
|
|
|
|
|
Liabilities and stockholders' equity |
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Accounts payable |
|
|
$ |
5,186 |
|
|
$ |
5,672 |
|
|
Operating lease liability - short term |
|
1,003 |
|
|
|
1,030 |
|
|
Mortgage payable - short term |
|
|
267 |
|
|
|
267 |
|
|
Other current liabilities |
|
|
6,955 |
|
|
|
4,374 |
|
Total current liabilities |
|
|
|
13,411 |
|
|
|
11,343 |
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt |
|
|
|
33,853 |
|
|
|
41,340 |
|
|
Mortgage payable - long term |
|
|
3,111 |
|
|
|
3,378 |
|
|
Operating lease liability - long term |
|
1,765 |
|
|
|
1,650 |
|
|
Other non-current liabilities |
|
|
157 |
|
|
|
36 |
|
Total liabilities |
|
|
|
52,297 |
|
|
|
57,747 |
|
Total stockholders' equity |
|
|
55,825 |
|
|
|
52,868 |
|
Total liabilities and stockholders' equity |
$ |
108,122 |
|
|
$ |
110,615 |
|
|
|
|
|
|
|
|
|
|
|
CONTACT:Paul G. DriscollAcme United
Corporation55 Walls DriveFairfield, CT 06824Phone: (203)
254-6060FAX: (203) 254-6521
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