Acme United Reports Second Quarter Results; Reaffirms Guidance for 2018
FAIRFIELD, Conn., July 20, 2018 (GLOBE NEWSWIRE) -- Acme United Corporation (NYSE American:ACU) today announced that net sales for the three months ended June 30, 2018 were $39.8 million, compared to $38.8 million in the same period of 2017, an increase of 2%. Net sales for the six months ended June 30, 2018 were $71.5 million, compared to $66.6 million in the same period in 2017, an increase of 7%.
Net income for the three months ended June 30, 2018 was $2.4 million, or $0.67 per diluted share, compared to $2.8 million, or $0.75 per diluted share, for the same period in 2017, decreases of 14% and 11%, respectively. Net income for the six months ended June 30, 2018 was $3.2 million, or $0.88 per diluted share, compared to $3.5 million, or $.94 per diluted share, in last year’s same period, decreases of 9% and 6%, respectively. The declines in net income for the three and six month periods resulted primarily from additions in sales and marketing personnel to accommodate our growth as well as higher interest rates on our variable rate credit facility.
Walter C. Johnsen, Chairman and CEO said, “We had record sales performances in many categories and areas of our company, including first aid and safety, Camillus and Cuda cutting products, DMT sharpening tools, Spill Magic absorbents, and our European business. Sales of Westcott back to school products were affected by an increasing proportion of online versus retail sales, which are expected to shift revenues from the second to the third quarter.”
“We anticipate a higher proportion of our back-to-school sales for 2018 in the third quarter and, accordingly, are reaffirming the financial guidance we previously provided for the year of approximately $140 million in revenues, $5.7 million in net income, and $1.53 earnings per share. This compares to sales of $130.6 million, non-GAAP net income of $5.3 million and earnings per diluted share of $1.42 for 2017. As previously reported, the Company’s GAAP net income of $4.1 million for 2017 reflected a $1.2 million non-cash tax charge related to the U.S. Tax Cuts and Jobs Act.
In the U.S. segment, net sales for the three months ended June 30, 2018 increased 2% compared to the same period in 2017. Sales of first aid and safety products were $15.0 million, an increase 7%. As noted above, our sales of Westcott school products were lower than the second quarter sales last year due to the timing of shipments. Net sales for the first six months of 2018 in the U.S. segment increased 7% compared to the same period in 2017. Sales of first aid and safety products increased 17% due to market share gains.
Net sales in Europe for the three months ended June 30, 2018 increased 14% in U.S. dollars and 5% in local currency compared to the same 2017 period. Net sales for the six months ended June 30, 2018 increased 19% in U.S. dollars and 7% in local currency compared to the first half of 2017. Net sales for both periods increased mainly due to new customers in the office products channel, growth in sales of DMT products, and strong e-commerce demand for these products.
Net sales in Canada for the three months ended June 30, 2018 decreased 1% in U.S. dollars and 5% in local currency compared to the same prior-year period. Net sales for the six months ended June 30, 2018 increased 3% in U.S. dollars and were constant in local currency compared to the same period in 2017.
Gross margin was 37% in the three months ended June 30, 2018, compared to 37% in the same period in 2017. Gross margin was 38% in the six months ended June 30, 2018, compared to 38% in the same period in 2017.
The Company’s bank debt less cash on June 30, 2018 was $46.0 million compared to $41.3 million on June 30, 2017. During the twelve-month period ended June 30, 2018, the Company purchased its manufacturing and distribution facility in Vancouver, WA for $4.0 million and distributed $1.5 million in dividends on its common stock.
Conference Call and Webcast Information
Acme United will hold a conference call to discuss its quarterly results, which will be broadcast on Friday, July 20, 2018, at 12:00 p.m. EDT. To listen or participate in a question and answer session, dial 888-599-8686. International callers may dial 323-794-2551. You may access the live webcast of the conference call through the Investor Relations section of the Company’s website, . A replay may be accessed under Investor Relations, Audio Archives.
About Acme United
ACME 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 ®, ®, ®, ®, ®, ®, ®, ®, and ®. For more information, visit .
Forward Looking Statements
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; (viii) uncertainties arising from the interpretation and application of the U.S. Tax Cuts and Jobs Act enacted in December 2017; 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 | ||||||||||||
| SECOND QUARTER REPORT 2018 | ||||||||||||
| (Unaudited) | ||||||||||||
| Three Months Ended | Three Months Ended | |||||||||||
| Amounts in 000's except per share data | June 30, 2018 | June 30, 2017 | ||||||||||
| Net sales | $ | 39,751 | $ | 38,849 | ||||||||
| Cost of goods sold | 25,039 | 24,366 | ||||||||||
| Gross profit | 14,712 | 14,483 | ||||||||||
| Selling, general, and administrative expenses | 11,087 | 10,572 | ||||||||||
| Operating Income | 3,625 | 3,911 | ||||||||||
| Interest expense, net | 445 | 321 | ||||||||||
| Other expense (income), net | 74 | (29 | ) | |||||||||
| Total other expense, net | 519 | 292 | ||||||||||
| Income before income tax expense | 3,106 | 3,619 | ||||||||||
| Income tax expense | 670 | 773 | ||||||||||
| Net income | $ | 2,436 | $ | 2,846 | ||||||||
| Shares outstanding - Basic | 3,374 | 3,353 | ||||||||||
| Shares outstanding - Diluted | 3,625 | 3,780 | ||||||||||
| Earnings per share basic | $ | 0.72 | $ | 0.85 | ||||||||
| Earnings per share diluted | 0.67 | 0.75 | ||||||||||
| ACME UNITED CORPORATION | ||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||
| SECOND QUARTER REPORT 2018 (cont.) | ||||||||||||
| (Unaudited) | ||||||||||||
| Six Months Ended | Six Months Ended | |||||||||||
| Amounts in 000's except per share data | June 30, 2018 | June 30, 2017 | ||||||||||
| Net sales | $ | 71,460 | $ | 66,595 | ||||||||
| Cost of goods sold | 44,624 | 41,548 | ||||||||||
| Gross profit | 26,836 | 25,047 | ||||||||||
| Selling, general, and administrative expenses | 21,846 | 19,922 | ||||||||||
| Operating Income | 4,990 | 5,125 | ||||||||||
| Interest expense, net | 850 | 583 | ||||||||||
| Other expense (income) , net | 61 | (16 | ) | |||||||||
| Total other expense, net | 911 | 567 | ||||||||||
| Income before income tax expense | 4,079 | 4,558 | ||||||||||
| Income tax expense | 879 | 1,052 | ||||||||||
| Net income | $ | 3,200 | $ | 3,506 | ||||||||
| Shares outstanding - Basic | 3,374 | 3,342 | ||||||||||
| Shares outstanding - Diluted | 3,642 | 3,744 | ||||||||||
| Earnings per share basic | $ | 0.95 | $ | 1.05 | ||||||||
| Earnings per share diluted | 0.88 | 0.94 | ||||||||||
| ACME UNITED CORPORATION | ||||||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||||||
| SECOND QUARTER REPORT 2018 | ||||||||||||
| (Unaudited) | ||||||||||||
| Amounts in 000's | June 30, 2018 | June 30, 2017 | ||||||||||
| Assets: | ||||||||||||
| Current assets: | ||||||||||||
| Cash and cash equivalents | $ | 1,894 | $ | 5,674 | ||||||||
| Accounts receivable, less allowance | 34,511 | 32,616 | ||||||||||
| Inventories, net | 42,510 | 35,638 | ||||||||||
| Prepaid expenses and other current assets | 2,524 | 2,417 | ||||||||||
| Total current assets | 81,439 | 76,345 | ||||||||||
| Property, Plant and equipment, net | 14,576 | 9,077 | ||||||||||
| Intangible assets, less accumulated amortization | 17,268 | 19,227 | ||||||||||
| Goodwill | 4,696 | 3,948 | ||||||||||
| Other assets | 599 | 765 | ||||||||||
| Total assets | $ | 118,578 | $ | 109,362 | ||||||||
| Liabilities and stockholders' equity: | ||||||||||||
| Current liabilities | ||||||||||||
| Accounts payable | $ | 12,972 | $ | 7,498 | ||||||||
| Other accrued liabilities | 4,640 | 5,215 | ||||||||||
| Total current liabilities | 17,612 | 12,713 | ||||||||||
| Long term debt | 44,318 | 46,956 | ||||||||||
| Mortgage payable, net of current portion | 3,578 | - | ||||||||||
| Other non-current liabilities | 846 | 345 | ||||||||||
| Total liabilities | 66,354 | 60,014 | ||||||||||
| Total stockholders' equity | 52,224 | 49,348 | ||||||||||
| Total liabilities and stockholders' equity | $ | 118,578 | $ | 109,362 | ||||||||
CONTACT:
Paul G. Driscoll
Acme United Corporation
55 Walls Drive
Fairfield, CT 06824
Phone: (203) 254-6060
FAX: (203) 254-6521
