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Acme United Corporation Reports Record 2008 Sales and Earnings

February 27, 2009 at 9:02 AM EST

FAIRFIELD, Conn.--(BUSINESS WIRE)--Feb. 27, 2009-- Acme United Corporation (NYSE Alternext US:ACU) today announced that net sales for the year ended December 31, 2008 were $68.7 million, compared to $63.2 million in the same period in 2007, an increase of 9% (8% in local currency). Net income for the year ended December 31, 2008 was $4,467,000, or $1.24 per diluted share, compared to $4,022,000, or $1.09 per diluted share, in the comparable period last year, an increase of 11% in net income and 14% in earnings per share.

Net sales for the fourth quarter ended December 31, 2008 were $12.6 million compared to $14.9 million in the same period in 2007, a decrease of 15% (12% in local currency). Net income for the fourth quarter ended December 31, 2008 was $634,000, or $.18 per diluted share, compared to $546,000, or $.15 per diluted share, for the comparable period last year, an increase of 16% in net income and 20% in earnings per share. Included in other income in the fourth quarter ended December 31, 2008 was a $265,000 ($164,000 after tax) gain on the sale of property.

Net sales for the year ended December 31, 2008, in the U.S. segment increased 10% compared to 2007 as a result of market share gains in all distribution channels. Net sales in Canada for the year ended December 31, 2008 were relatively constant in U.S. dollars compared to the same period in 2007 but declined 3% in local currency. European net sales for the year ended December 31, 2008 increased 12% in U.S. dollars and 4% in local currency compared to the same period in 2007.

Gross margins were 40.2% for 2008 compared to 41.9% in 2007. The gross margin decline in 2008 was primarily due to strong growth in the highly competitive school market.

Walter C. Johnsen, Chairman and CEO said, "The results for 2008 represent strong growth in our market shares, expansion of our distribution channels, and improvement in Europe. We experienced softer sales in the fourth quarter than we expected, but we were able to adjust expenses. I am especially pleased with the recent placement of our new products, including the iPoint family of pencil sharpeners, Microban school and office products and Speed Pak utility knives, which are expected to contribute new revenues in 2009."

The Company’s bank debt less cash on December 31, 2008 was $6.5 million compared to $5.2 million on December 31, 2007, an increase of $1.3 million. During 2008, the Company repurchased 235,000 shares of its common stock for $2.5 million and paid $600,000 in dividends on its common stock, which were offset by cash flow from operations of $3.3 million.

ACME UNITED CORPORATION is an innovative supplier of cutting devices, measuring instruments and safety products for school, home, office, industrial and hardware use. Its leading brands include Westcott®, Clauss® and PhysiciansCare ®.

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 impact of current uncertainties in global economic conditions and the ongoing financial crisis affecting the domestic and foreign banking system and financial markets, including the impact on the Company’s suppliers and customers (iii) the Company’s plans and results of operations will be affected by the Company’s ability to manage its growth, and (iv) 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
YEAR END REPORT 2008
(Unaudited)
         
Quarter Ended Quarter Ended
Amounts in $000's except per share data       December 31, 2008         December 31, 2007
 
 
Net sales $ 12,584 $ 14,852
Cost of goods sold 7,701 9,053
Gross profit 4,883 5,799
Selling, general, and administrative expenses 4,088 4,919
Income from operations 795 880
Interest expense, net 89 136
Other income, net 169 129
Pre-tax income 875 873
Income tax expense 241 327
Net income $ 634 $ 546
 
Shares outstanding - Basic 3,415 3,548
Shares outstanding - Diluted 3,511 3,697
 
Earnings per share basic $ 0.19 $ 0.15
Earnings per share diluted 0.18 0.15
         
ACME UNITED CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
YEAR END REPORT 2008 (cont.)
(Unaudited)
 
 
Year Ended Year Ended
Amounts in $000's except per share data       December 31, 2008         December 31, 2007
 
Net sales $ 68,719 $ 63,173
Cost of goods sold 41,062 36,680
Gross profit 27,657 26,493
Selling, general, and administrative expenses 20,778 19,741
Income from operations 6,879 6,752
Interest expense, net 396 655
Other income, net 193 206
Pre-tax income 6,676 6,303
Income tax expense 2,209 2,281
Net income $ 4,467 $ 4,022
 
Shares outstanding - Basic 3,486 3,536
Shares outstanding - Diluted 3,612 3,697
 
Earnings per share basic $ 1.28 $ 1.14
Earnings per share diluted 1.24 1.09
           
ACME UNITED CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
YEAR END REPORT 2008
(Unaudited)
 
Amounts in $000's       December 31, 2008           December 31, 2007
 

Assets:

Current assets:
Cash $ 5,225 $ 4,988
Accounts receivable, net 10,564 12,727
Inventories 21,769 18,935
Prepaid and other current assets   1,088 1,210
Total current assets 38,646 37,860
 
Property and equipment, net 2,269 2,479
Long term receivable 2,000
Other assets   2,509 1,883
Total assets $ 45,424 $ 42,222
 

Liabilities and stockholders' equity:

Current liabilities
Accounts payable $ 3,669 $ 4,575
Other current liabilities 5,157 3,907
Total current liabilities 8,826 8,482
Long-term debt 11,750 10,187
Other non current liabilities   1,960 507
22,536 19,176
Total stockholders' equity   22,888 23,046
Total liabilities and stockholders' equity $ 45,424 $ 42,222

Source: Acme United Corporation

Acme United Corporation
Paul G. Driscoll, 203-254-6060
Fax: 203-254-6521