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Acme United Reports 7% Net Sales Increase and 30% Diluted EPS Increase for Third Quarter of 2019

FAIRFIELD, Conn., Oct. 18, 2019 (GLOBE NEWSWIRE) -- Acme United Corporation (NYSE American: ACU) today announced that net sales for the three months ended September 30, 2019 were $37.0 million, compared to $34.7 million for the same period of 2018, an increase of 7%. Net sales for the nine months ended September 30, 2019 were $108.6 million, compared to $106.2 million for the same period in 2018, a 2% increase.

Net income for the three months ended September 30, 2019 was $1.1 million, or $0.30 per diluted share, compared to $.8 million, or $0.23 per diluted share, for the same period in 2018, increases of 31% and 30%, respectively. Net income for the nine months ended September 30, 2019 was $4.5 million, or $1.32 per diluted share, compared to $4.0 million, or $1.12 per diluted share, in last year’s same period, increases of 13% and 18%, respectively. 

Chairman and CEO Walter C. Johnsen, said, “We are very pleased with our third quarter sales and earnings. We had excellent performance with our First Aid Only safety products line, driven by success of SmartCompliance kits and refills. International sales both in Europe and Canada were strong. Our on-line business was excellent, reflecting strength in first aid products and back-to-school items. 

Mr. Johnsen added, “We expect continued good performance in the fourth quarter of 2019, particularly as our focus on productivity and sales growth continues. Based on the trends we are currently seeing, we are updating our financial guidance for the year. We now expect net sales of approximately $142 million compared to our previously provided range of $140 million - $143 million; net income of approximately $5.2 million compared to our previously provided range of $5.0 million - $5.3 million; and earnings per share of approximately $1.48 compared to our previously provided range of $1.41 - $1.50.

In the U.S. segment, net sales for the three months ended September 30, 2019 increased 6% compared to the same period in 2018. Sales of first aid and safety products were strong, more than offsetting softness in the sales of certain school and office products. Net sales for the first nine months of 2019 in the U.S. segment increased 2% compared to the same period in 2018.

Net sales in Europe for the three months ended September 30, 2019 increased 15% in U.S. dollars and 21% in local currency compared to the same 2018 period. Net sales for the nine months ended September 30, 2019 increased 14% in U.S. dollars and 22% in local currency compared to the first nine months of 2018. The sales increases in the quarter and nine months were mainly due to new customers in the office products channel and continued growth of DMT sharpening products.

Net sales in Canada for the three months ended September 30, 2019 increased 5% in U.S. dollars and 6% in local currency compared to the same 2018 period. Net sales for the nine months ended September 30, 2019 decreased 6% in U.S. dollars and 3% in local currency compared to the first nine months of 2018.

Gross margin was 35.5% in the three months ended September 30, 2019, compared to 35.8% in the same period in 2018. Gross margin was 36.6% in the nine months ended September 30, 2019, compared to 37.0% in the same period in 2018.

The Company’s bank debt less cash on September 30, 2019 was $35.9 million compared to $46.8 million on September 30, 2018. During the twelve-month period ended September 30, 2019, the Company distributed $1.6 million in dividends on its common stock, repurchased $0.4 million in treasury stock and generated $14 million in free cash flow, including a $2.3 million reduction in inventory.

Conference Call and Webcast Information
Acme United will hold a conference call to discuss its quarterly results, which will be broadcast on Friday, October 18, 2019, at 12:00 p.m. EDT. To listen or participate in a question and answer session, dial 800-767-8973. International callers may dial 334-777-6979. 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 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 First Aid Only®, PhysiciansCare®, Pac-Kit®,Spill Magic®, Westcott®, Clauss®, Camillus®, Cuda®, and DMT®. For more information, visit www.acmeunited.com

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) 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
THIRD QUARTER REPORT 2019
  (Unaudited)
             
      Three Months Ended     Three Months Ended
Amounts in 000's except per share data   September 30, 2019     September 30, 2018
             
             
Net sales $ 36,995   $ 34,731
Cost of goods sold   23,861     22,281
Gross profit   13,134     12,450
Selling, general, and administrative expenses   11,408     11,077
Operating Income   1,726     1,373
Interest expense, net   469     496
Other expense, net   40     23
Total other expense, net   509     519
Income before income tax expense   1,217     854
Income tax expense   158     47
Net income $ 1,059   $ 807
             
  Shares outstanding - Basic   3,352     3,374
  Shares outstanding - Diluted   3,486     3,551
             
Earnings per share - Basic $ 0.32   $ 0.24
Earnings per share - Diluted   0.30     0.23
             
             
ACME UNITED CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
THIRD QUARTER REPORT 2019 (cont.)
(Unaudited)
             
             
      Nine Months Ended     Nine Months Ended
Amounts in 000's except per share data   September 30, 2019     September 30, 2018
             
Net sales $ 108,585   $ 106,191
Cost of goods sold   68,877     66,905
Gross profit   39,708     39,286
Selling, general, and administrative expenses   32,679     32,923
Operating Income   7,029     6,363
Interest expense, net   1,463     1,346
Other expense, net   52     84
Total other expense, net   1,515     1,430
Income before income tax expense   5,514     4,933
Income tax expense   977     926
Net income $ 4,537   $ 4,007
             
  Shares outstanding - Basic   3,352     3,374
  Shares outstanding - Diluted   3,445     3,574
             
Earnings per share - Basic $ 1.35   $ 1.19
Earnings per share - Diluted   1.32     1.12
             
             
ACME UNITED CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
THIRD QUARTER REPORT 2019
(Unaudited)
             
Amounts in 000's   September 30, 2019     September 30, 2018
             
Assets:          
Current assets:          
  Cash and cash equivalents $ 5,698   $ 4,021
  Accounts receivable, less allowance   30,635     30,869
  Inventories, net   38,970     41,274
  Prepaid expenses and other current assets   1,787     2,270
Total current assets   77,090     78,434
             
  Property, Plant and equipment, net   14,006     14,488
  Operating lease right of use asset   2,123     -
  Intangible assets, less accumulated amortization 16,107     16,959
  Goodwill   4,696     4,696
  Other assets   202     606
Total assets $ 114,224   $ 115,183
             
Liabilities and stockholders' equity:          
Current liabilities:          
  Accounts payable $ 7,217   $ 6,654
  Operating lease liability - short term   920     -
  Mortgage payable   267     267
  Other accrued liabilities   8,202     4,417
Total current liabilities   16,606     11,338
Long term debt   38,125     47,028
Mortgage payable, net of current portion   3,244     3,511
Operating lease liability - long term   1,210     -
Other non-current liabilities   15     815
Total liabilities   59,200     62,692
Total stockholders' equity   55,024     52,491
Total liabilities and stockholders' equity $ 114,224   $ 115,183


CONTACT: Paul G. Driscoll Acme United Corporation 55 Walls Drive Fairfield, CT  06824
    Phone: (203) 254-6060 FAX: (203) 254-6521