Acme United Corporation Reports 22% Sales and More Than Triple Earnings Increases for the Third Quarter
FAIRFIELD, Conn.--(BUSINESS WIRE)--Oct. 22, 2004--Acme United Corporation (ASE:ACU) today announced net income of $1,017,000 or $.26 per diluted share for the third quarter ending September 30, 2004 compared to $302,000 or $.08 per diluted share for the comparable period last year. Net income for the first nine months ending September 30, 2004 was $2,484,000, or $.66 per diluted share compared to $995,000, or $.28 per diluted share in the comparable period last year.
Net sales for the quarter ending September 30, 2004 were $11.6 million compared to $9.5 million in 2003, an increase of 22%. Net sales in the U.S. increased 21% due to the launch of new products and market share gains. International sales increased by 4%. Net sales for the first nine months ending September 30, 2004 were $32.5 million compared to $26.9 million in 2003, an increase of 21% (19% at constant currency).
The Clauss acquisition in June of this year is progressing ahead of plan. The business contributed approximately $750,000 in revenue during the third quarter.
Walter C. Johnsen, President and CEO, said, "Acme United had a strong back to school season with market share gains. I am particularly pleased with the reception of our new products including titanium sewing scissors and paper trimmers. The revamped Westcott ruler line was well received at the recent school, home and office product show."
Gross margins were 47% in the third quarter of 2004 versus 33% in the comparable period last. The gross margin for the third quarter 2003 was reduced by approximately $200,000 due to costs associated with the closure of manufacturing in Germany. Gross margins for the quarter without this effect would have been 35%. For the first nine months of 2004 gross margins were 45% compared to 37% in 2003. The improvement is mainly due to new product sales.
Income before income taxes was $1.6 million in the third quarter of 2004 compared with $565,000 in the third quarter of 2003, an increase of $1.0 million. Pretax income for the first nine months was $4.1 million in 2004 compared to $1.9 million in 2003.
The Company's debt less cash on September 30, 2004 was $1.8 million compared to $5.6 million on September 30, 2003. During the first nine months of 2004, the Company repurchased 46,830 shares at a cost of $236,000.
The Company extended its debt facility until 2007 and reduced its interest rate to LIBOR plus 1.5%, or approximately 3.75%. The $10 million facility had unused capacity of $6.8 million at September 30, 2004 and is no longer tied to asset availability.
The board of directors declared a cash dividend of 2 cents per share payable on October 29, 2004 to shareholders of record on the close of business on October 9, 2004.
ACME UNITED CORPORATION is a specialized supplier of cutting devices, measuring instruments, and safety products for school, home, and office use.
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) the Company's plans, strategies, objectives, expectations and intentions are subject to change at any time at the discretion of the Company; (ii) the Company's plans and results of operations will be affected by the Company's ability to manage its growth, and (iii) other risks and uncertainties indicated from time to time in the Company's filings with the Securities and Exchange Commission.
ACME UNITED CORPORATION
CONSOLIDATED STATEMENT OF INCOME
THIRD QUARTER REPORT 2004
Quarter Quarter
Ended Ended
September September
30, 2004 30, 2003
Amounts in $000's except per share data (Unaudited) (Unaudited)
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Net Sales $ 11,595 $ 9,538
Gross Profit 5,453 3,171
Selling, General, and Administrative Expenses 3,739 2,648
Other (Income) Expense 98 (42)
Pre-Tax Income 1,616 565
Income Tax Expense 599 263
Net Income 1,017 302
Earnings Per Share Basic 0.30 0.09
Earnings Per Share Diluted 0.26 0.08
Nine Months Nine Months
Ended Ended
September September
30, 2004 30, 2003
Amounts in $000's except per share data (Unaudited) (Unaudited)
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Net Sales $ 32,460 $ 26,869
Gross Profit 14,691 9,973
Selling, General, and Administrative Expenses 10,288 7,854
Other (Income) Expense 257 245
Pre-Tax Income (loss) 4,146 1,874
Income Tax Expense 1,662 879
Net Income 2,484 995
Earnings Per Share Basic 0.74 0.30
Earnings Per Share Diluted 0.66 0.28
ACME UNITED CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
THIRD QUARTER REPORT 2004
(Unaudited)
September September
Amounts in $000's except per share data 30, 2004 30, 2003
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Assets:
Current Assets:
Cash $ 1,599 $ 825
Accounts Receivable, Net 11,213 9,600
Inventories 8,053 8,214
Prepaid and Other current Assets 647 491
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Total Current Assets 21,512 19,130
Property and Equipment, Net 2,212 2,222
Other Assets 711 447
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Total Assets $ 24,435 $ 21,799
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Liabilities and Stockholders' Equity:
Current Liabilities
Notes Payable $ 118 $ 3
Accounts Payable 1,928 2,395
Other Current Liabilities 5,365 2,506
Current Portion of Long Term Debt 1,000 4,316
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Total Current Liabilities 8,411 9,220
Long-Term debt 2,308 2,062
Other Non Current Liabilities 701 953
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11,420 12,235
Total Stockholders' Equity 13,015 9,564
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Total Liabilities and Stockholders' Equity $ 24,435 $ 21,799
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CONTACT: Acme United Corporation
Paul G. Driscoll, 203-332-7330
FAX: 203-576-1547
SOURCE: Acme United Corporation