acme_8k102610.htm

 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
__________________
 
 
FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of report (date of earliest event reported): October 26, 2010
 
 
ACME UNITED CORPORATION
(Exact name of registrant as specified in its charter)
__________________
 
Connecticut
001-07698
06-0236700
(State or other jurisdiction of incorporation or organization)
(Commission file number)
 
(I.R.S. Employer
Identification No.)
 
 
60 Round Hill Road, Fairfield, Connecticut
 
 
06824
(Address of principal executive offices)
(Zip Code)

Registrant’s telephone number, including area code:  (203) 254-6060
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
 [   ]  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
   
 [   ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
   
 [   ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
   
 [   ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 
 

 

ITEM 2.02.  RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
 
On October 26, 2010, Acme United Corporation (the “Company”) issued a press release announcing its financial results for the quarter ended September 30, 2010.  A copy of the press release is attached as Exhibit 99.1 to this current report.
 
ITEM 9.01.  FINANCIAL STATEMENTS AND EXHIBITS.
 
(c)           Exhibits
 
Exhibit Number  Description
   
99.1
Press release dated October 26, 2010.
 
 
SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
ACME UNITED CORPORATION
 
 By /s/  Walter C. Johnsen  
 
Walter C. Johnsen
Chairman and
Chief Executive Officer
 
 
Dated:   October 26, 2010
 

By /s/  Paul G. Driscoll  
 
Paul G. Driscoll
Vice President and
Chief Financial Officer
 
Dated:   October 26, 2010
 
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EXHIBIT INDEX

 
  Exhibit Number Description
     
  99.1
Press release dated October 26, 2010.

 
 
 
 
 
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acme_8k102610ex991.htm
Exhibit 99.1

 
ACME UNITED CORPORATION                   NEWS RELEASE
 CONTACT:  Paul G. Driscoll  Acme United Corporation  60 Round Hill Road   Fairfield, CT  06824
     Phone: (203) 254-6060  FAX: (203) 254-6521  
  
 
FOR IMMEDIATE RELEASE   October 26, 2010   

 
ACME UNITED CORPORATION REPORTS THIRD QUARTER EARNINGS

FAIRFIELD, CONN. – October 26, 2010 – Acme United Corporation (NYSE AMEX:ACU)  today announced that net sales for the third quarter ended September 30, 2010 were $16.1 million compared to $15.3 million in the comparable period of 2009, an increase of 5% (6% local currency).  Operating income for the quarter ended September 30, 2010 was $657,000 compared to $634,000 for the comparable period last year, an increase of 4%. Net income was $612,000, or $.19 per diluted share, for the quarter ended September 30, 2010 compared to $728,000 or $.22 per diluted share for the comparable period last year, a decrease of 16% in net income and 14% in diluted earnings per share.

Third quarter 2009 earnings included pre-tax income of $458,000 due to completion below estimated costs of a major portion of the remediation of the Bridgeport property which was sold in December 2008.  Excluding tax credits in the third quarter of 2010 and the after tax impact of the third quarter 2009 adjustment to the Bridgeport remediation accrual, net income was $510,000 for the quarter ended September 30, 2010 compared to $440,000 for the comparable period last year, an increase of 16%. Diluted earnings per share, as adjusted, would have been $.16 compared to $.13 for the same period in 2009, a 23% increase.

Net sales for the nine months ended September 30, 2010 were $49.8 million, compared to $45.7 million in the same period in 2009, an increase of 9% (8% in local currency).  Operating income for the nine months ended September 30, 2010 was $2,903,000 compared to $2,734,000 in the comparable period last year, an increase of 6%.  Net income for the nine months ended September 30, 2010 was $2,391,000, or $.74 per diluted share compared to $2,111,000, or $.63 per diluted share in the comparable period last year, a 13% increase in net income and 17% in diluted earnings per share.
 
 
 

 
 
Net sales for the three and nine months ended September 30, 2010 in the U.S. segment increased 10% and 7%, respectively, compared to the same periods in 2009. Increased U.S. revenues in the three and nine months ended September 30, 2010 were mainly due to higher sales of the iPoint pencil sharpener, and growth with mass market customers.  Net sales in Canada for the three months ended September 30, 2010 were constant in U.S. dollars but declined 5% in local currency. Net sales in Canada for the nine months ended September 30, 2010 increased 9% in U.S. dollars but declined 2% in local currency. Net sales in Europe for the three months ended September 30, 2010 declined 10% in U.S. dollars and 1% in local currency. Third quarter 2010 sales were affected by timing of mass market pr omotional sales which took place in the prior quarter.  Net sales in Europe for the nine months ended September 30, 2010 increased 22% in U.S. dollars and 29% in local currency. Year to date sales in Europe increased due to growth in the mass and office markets.

Gross margins were 35% in the third quarter of 2010 versus 36% in the comparable period last year. For the first nine months of 2010, gross margins were 37% compared to 37% in the same period in 2009.

The effective tax rate for the first nine months of 2010 was 13% compared to 34% in the same period of 2009.  The tax rate for the nine months ended September 30, 2010 reflects approximately $300,000 of tax benefits due to the Company’s donation of land to the City of Bridgeport, CT in the fourth quarter of 2009.  Approximately $100,000 of tax benefits were recorded in the third quarter 2010 from the donation.

The Company’s bank debt less cash and equivalents on September 30, 2010 was $8.2 million compared to $2.8 million on September 30, 2009.  During the 12 month period ended September 30, 2010, Acme purchased 250,000 shares of its common stock for approximately $2.4 million and paid $630,000 in dividends. Accounts receivables increased by $3.0 million compared to September 30, 2009, due to higher sales. The company increased inventory in preparation for sales in 201l.

Walter C. Johnsen, Chairman and CEO said, “We are making progress in the U.S. office and mass markets.  Our iPoint pencil sharpeners continue to gain share.  Acme United’s proprietary micro ceramic non-stick coatings are broadening the reach of our scissors and other cutting devices.”
 
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Mr. Johnsen added that net debt is expected to drop as back to school accounts receivable are collected in the fourth quarter.
 
 
ACME UNITED CORPORATION is a leading worldwide supplier of innovative cutting, measuring and safety products to the school, home, office, hardware and industrial markets.

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) currency fluctuations (iv) the Company’s plans and results of operations will be affected by the Company’s ability to manage its growth, and (v) other risks and uncertainties indicated from time to time in the Company’s filings with the Securities and Exchange Commission.
 
 
.
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ACME UNITED CORPORATION
 
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
 
THIRD QUARTER REPORT 2010
 
(Unaudited)  
   
             
   
Three Months Ended
   
Three Months Ended
 
Amounts in $000's except per share data
 
September 30, 2010
   
September 30, 2009
 
             
             
Net sales
  $ 16,083     $ 15,269  
Cost of goods sold
    10,426       9,771  
Gross profit
    5,657       5,498  
Selling, general, and administrative expenses
    5,000       4,864  
Income from operations
    657       634  
Interest expense
    86       38  
Interest income
    (39 )     (31 )
     Net interest expense
    47       7  
Other income
    3       461  
Total other expense (income)
    44       (454 )
Pre-tax income
    613       1,088  
Income tax expense
    1       360  
Net income
  $ 612     $ 728  
                 
Shares outstanding - Basic
    3,111       3,290  
Shares outstanding - Diluted
    3,192       3,353  
                 
Earnings per share basic
  $ 0.20     $ 0.22  
Earnings per share diluted
    0.19       0.22  
 
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ACME UNITED CORPORATION
 
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
 
THIRD QUARTER REPORT 2010 (cont.)
 
(Unaudited)
 
             
             
   
Nine Months Ended
   
Nine Months Ended
 
Amounts in $000's except per share data
 
September 30, 2010
   
September 30, 2009
 
             
             
Net sales
  $ 49,789     $ 45,727  
Cost of goods sold
    31,468       28,827  
Gross profit
    18,321       16,900  
Selling, general, and administrative expenses
    15,418       14,166  
Income from operations
    2,903       2,734  
Interest expense
    217       124  
Interest income
    (112 )     (97 )
     Net interest expense
    105       27  
Other expense (income)
    36       (480 )
Total other expense (income)
    141       (453 )
Pre-tax income
    2,762       3,187  
Income tax expense
    371       1,076  
Net income
  $ 2,391     $ 2,111  
                 
Shares outstanding - Basic
    3,147       3,318  
Shares outstanding - Diluted
    3,218       3,362  
                 
Earnings per share basic
  $ 0.76     $ 0.64  
Earnings per share diluted
    0.74       0.63  
 
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ACME UNITED CORPORATION
 
CONDENSED CONSOLIDATED BALANCE SHEETS
 
THIRD QUARTER REPORT 2010
 
(Unaudited)
 
   
             
Amounts in $000's
 
September 30, 2010
   
September 30, 2009
 
             
Assets:
           
Current assets:
           
Cash and cash equivalents
  $ 7,232     $ 6,599  
Accounts receivable, net
    14,943       11,846  
Inventories
    19,972       17,850  
Prepaid and other current assets
    1,174       1,207  
Total current assets
    43,321       37,502  
                 
Property and equipment, net
    2,126       2,159  
Long term receivable
    1,852       1,905  
Other assets
    2,471       2,505  
Total assets
  $ 49,769     $ 44,071  
                 
Liabilities and stockholders' equity:
               
Current liabilities
               
Accounts payable
  $ 4,490     $ 3,305  
Other current liabilities
    2,925       4,680  
Bank debt
    -       9,324  
Total current liabilities
    7,414       17,308  
Bank debt
    15,420       -  
Other non current liabilities
    1,721       1,990  
      24,555       19,299  
Total stockholders' equity
    25,213       24,772  
Total liabilities and stockholders' equity
  $ 49,769     $ 44,071  
 
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