Acme United Corporation (NYSE American:ACU) today announced that
net sales for the second quarter ended June 30, 2017 were $38.8
million, compared to $41.0 million in the same period of 2016, a
decrease of 5%. Net sales for the six months ended June 30, 2017
were $66.6 million, compared to $66.3 million in the same period in
2016.
Net income for the quarter ended June 30, 2017
was $2.8 million, or $0.75 per diluted share, compared to $3.3
million, or $0.91 per diluted share, for the 2016 period, decreases
of 13% and 18%, respectively. Net income for the six months ended
June 30, 2017 was $3.5 million, or $0.94 per diluted share,
compared to $3.8 million, or $1.08 per diluted share, in last
year’s same period, decreases of 8% and 13%,
respectively.
Chairman and CEO Walter C. Johnsen commented,
“Although our sales in the second quarter were below last year’s,
we see a strong second half of 2017 and a robust full year.
Online sales of our back to school products have grown
substantially, and the different timing of shipments appears to
have shifted revenues from the second quarter of 2017 to the third
quarter. We also had a large promotion during the second quarter of
last year that did not repeat, but we have promotions scheduled for
later this year that we expect to more than compensate for this
differential.
“Accordingly, we are reaffirming the Company’s
guidance for 2017 of $137 million in revenues, $6.7 million net
income, and $1.76 earnings per share.”
In the U.S. segment, net sales for the quarter
ended June 30, 2017 decreased 6% compared to the same period in
2016 due to certain back-to-school promotions that did not repeat
this year. Additionally, as noted above, the changes to
on-line sales is causing some of our back-to-school business to
move to the third quarter. Net sales for the first six months
of 2017 were constant compared to the same period in 2016.
Our acquisition of Spill Magic assets in February 2017 contributed
$1.8 million in net sales in the second quarter, and $3.0 million
year to date.
Net sales in Europe for the three months ended
June 30, 2017 increased 8% in U.S. dollars and 10% in local
currency compared to the same 2016 period. Net sales for the
six months ended June 30, 2017 increased 20% in U.S. dollars and
23% in local currency compared to the first half of 2016. Net
sales for both periods increased due to new customers in the office
and sporting goods channels as well as sales of DMT sharpening
products.
Net sales in Canada for the three months ended
June 30, 2017 decreased 5% in U.S. dollars and 2% in local currency
compared to the prior-year period. Net sales for the six
months ended June 30, 2017 decreased 4% in U.S. dollars and 2% in
local currency compared to the same period in 2016.
Gross margin was 37% in the three months ended
June 30, 2017, compared to 36% in the same period in 2016.
Gross margin was 38% in the six months ended June 30, 2017,
compared to 36% in the same period in 2016 The higher gross margin
was primarily due to efficiency improvements in the Company’s first
aid operations and a better product mix.
The Company’s long-term debt less cash on June
30, 2017 was $41.3 million compared to $38.7 million on June 30,
2016. During the twelve-month period ended June 30, 2017, the
Company paid approximately $7.2 million for the acquisition of the
assets of Spill Magic and distributed $1.3 million in dividends on
its common stock. During the twelve-month period, the Company
generated $7.2 million in free cash flow.
On July 3, 2017, the Company announced a 10%
increase in its quarterly cash dividend to $0.11 per share.
This was Acme United’s tenth dividend increase since 2004.
Acme United will hold a conference call to
discuss its quarterly results, which will be broadcast over the
Internet on Tuesday, July 25, 2017, at 12:00 p.m. EDT. To listen or
participate in a question and answer session, dial 800-768-6544.
International callers may dial 785-830-7990. 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.
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®, Pac-Kit®, DMT® and Spill
Magic®. 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; (vii) increases in the
cost of borrowings resulting from rising interest rates; and (viii)
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 2017 |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Three Months Ended |
Amounts in 000's except per share
data |
|
June 30, 2017 |
|
|
June 30, 2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
sales |
|
|
|
$ |
38,849 |
|
|
$ |
40,997 |
|
Cost of goods sold |
|
|
|
24,366 |
|
|
|
26,303 |
|
Gross profit |
|
|
|
|
14,483 |
|
|
|
14,694 |
|
Selling, general, and administrative expenses |
|
10,594 |
|
|
|
10,054 |
|
Income from operations |
|
|
|
3,889 |
|
|
|
4,640 |
|
Interest expense, net |
|
|
|
321 |
|
|
|
211 |
|
Other (income) expense,
net |
|
|
(51 |
) |
|
|
11 |
|
Total other expense,
net |
|
|
|
270 |
|
|
|
222 |
|
Pre-tax income |
|
|
|
3,619 |
|
|
|
4,418 |
|
Income tax expense |
|
|
|
773 |
|
|
|
1,151 |
|
Net
income |
|
|
|
$ |
2,846 |
|
|
$ |
3,267 |
|
|
|
|
|
|
|
|
|
|
|
|
Shares outstanding - Basic |
|
|
3,353 |
|
|
|
3,323 |
|
|
Shares outstanding - Diluted |
|
|
3,780 |
|
|
|
3,583 |
|
|
|
|
|
|
|
|
|
|
|
Earnings per share basic |
|
|
$ |
0.85 |
|
|
$ |
0.98 |
|
Earnings per share diluted |
|
|
0.75 |
|
|
|
0.91 |
|
|
|
|
|
|
|
|
|
|
|
ACME UNITED CORPORATION |
CONDENSED CONSOLIDATED STATEMENTS OF
INCOME |
SECOND QUARTER REPORT 2017 (cont.) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended |
|
|
Six Months Ended |
Amounts in 000's except per share
data |
|
June 30, 2017 |
|
|
June 30, 2016 |
|
|
|
|
|
|
|
|
|
|
Net
sales |
|
|
|
$ |
66,595 |
|
|
$ |
66,285 |
|
Cost of goods sold |
|
|
|
41,548 |
|
|
|
42,406 |
|
Gross profit |
|
|
|
|
25,047 |
|
|
|
23,879 |
|
Selling, general, and administrative expenses |
|
19,967 |
|
|
|
18,284 |
|
Income from operations |
|
|
|
5,080 |
|
|
|
5,595 |
|
Interest expense, net |
|
|
|
583 |
|
|
|
395 |
|
Other income, net |
|
|
|
(60 |
) |
|
|
(27 |
) |
Total other expense,
net |
|
|
|
523 |
|
|
|
368 |
|
Pre-tax income |
|
|
|
4,557 |
|
|
|
5,227 |
|
Income tax expense |
|
|
|
1,052 |
|
|
|
1,395 |
|
Net
income |
|
|
|
$ |
3,505 |
|
|
$ |
3,832 |
|
|
|
|
|
|
|
|
|
|
|
|
Shares outstanding - Basic |
|
|
3,342 |
|
|
|
3,331 |
|
|
Shares outstanding - Diluted |
|
|
3,744 |
|
|
|
3,560 |
|
|
|
|
|
|
|
|
|
|
|
Earnings per share basic |
|
|
$ |
1.05 |
|
|
$ |
1.15 |
|
Earnings per share diluted |
|
|
0.94 |
|
|
|
1.08 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ACME UNITED CORPORATION |
CONDENSED CONSOLIDATED BALANCE SHEETS |
SECOND QUARTER REPORT 2017 |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
Amounts in 000's |
|
|
|
June 30, 2017 |
|
|
June 30, 2016 |
|
|
|
|
|
|
|
|
|
|
Assets: |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash |
|
|
|
$ |
5,674 |
|
|
$ |
2,087 |
|
|
Accounts receivable, net |
|
|
32,616 |
|
|
|
34,646 |
|
|
Inventories |
|
|
|
35,638 |
|
|
|
38,416 |
|
|
Prepaid and other current assets |
|
|
2,417 |
|
|
|
2,424 |
|
Total current assets |
|
|
|
76,345 |
|
|
|
77,573 |
|
|
|
|
|
|
|
|
|
|
|
|
Property and equipment, net |
|
|
9,077 |
|
|
|
7,704 |
|
|
Intangible assets, less amortization |
|
19,227 |
|
|
|
13,596 |
|
|
Goodwill |
|
|
|
|
3,948 |
|
|
|
4,816 |
|
|
Other assets |
|
|
|
765 |
|
|
|
1,039 |
|
Total assets |
|
|
|
$ |
109,362 |
|
|
$ |
104,728 |
|
|
|
|
|
|
|
|
|
|
|
Liabilities and stockholders' equity: |
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
|
Accounts payable |
|
|
$ |
7,498 |
|
|
$ |
11,573 |
|
|
Other current liabilities |
|
|
5,215 |
|
|
|
6,453 |
|
Total current liabilities |
|
|
|
12,713 |
|
|
|
18,026 |
|
Bank debt |
|
|
|
|
46,956 |
|
|
|
40,821 |
|
Other non current liabilities |
|
|
345 |
|
|
|
355 |
|
|
|
|
|
|
|
60,014 |
|
|
|
59,202 |
|
Total stockholders' equity |
|
|
|
49,348 |
|
|
|
45,526 |
|
Total liabilities and stockholders' equity |
$ |
109,362 |
|
|
$ |
104,728 |
|
|
|
|
|
|
|
|
|
|
|
CONTACT:
Paul G. Driscoll
Acme United Corporation
55 Walls Drive
Fairfield, CT 06824
Phone: (203) 254-6060
FAX: (203) 254-6521