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): July 24, 2014

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))

 

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ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

On July 24, 2014, Acme United Corporation (the “Company”) issued a press release announcing its financial results for the quarter ended June 30, 2014. 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 July 24, 2014.

 

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: July 24, 2014
     
     
     
By /s/  Paul G. Driscoll  
  Paul G. Driscoll  
  Vice President and  
  Chief Financial Officer  
     
Dated: July 24, 2014

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EXHIBIT INDEX

  Exhibit Number Description
     
  99.1 Press release dated July 24, 2014.

 

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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   July 24, 2014  

 

 

ACME UNITED CORPORATION REPORTS RECORD SALES AND EARNINGS

 

FAIRFIELD, CONN. – July 24, 2014 – Acme United Corporation (NYSE MKT:ACU) today announced that net sales for the second quarter ended June 30, 2014 were $33.4 million, compared to $28.4 million in the comparable period of 2013, an increase of 18%. Excluding additional sales resulting from the acquisition on June 2, 2014 of First Aid Only, Inc., comparable sales increased 10%. Net sales for the six months ended June 30, 2014 were $52.5 million, compared to $46.1 million in the same period in 2013, an increase of 14%. Excluding First Aid Only, sales increased 10%.

 

On June 2, 2014, the Company acquired the assets of First Aid Only, Inc, based in Vancouver, WA, for $13.8 million in cash. The acquired net assets totaled approximately $3.5 million, which included inventory, equipment and accounts receivable. The purchase price also included intangible assets of approximately $10.3 million. First Aid Only is a supplier of Smart Compliance® first aid kits, refills, and safety products that meet regulatory requirements for a broad range of industries. First Aid Only pioneered consultative selling and support of first aid items to large corporate customers, and is recognized as an innovative leader in the safety products industry.

 

Net income for the quarter ended June 30, 2014 was $2,543,000, or $.72 per diluted share, compared to $2,210,000, or $.68 per diluted share, for the comparable period in 2013, an increase of 15% in net income and 6% in diluted earnings per share. Net income for the six months ended June 30, 2014 was $2,911,000, or $.83 per diluted share, compared to $2,520,000, or $.78 per diluted share in the comparable period last year, a 16% increase in net income and 6% in diluted earnings per share.

 

Net sales for the quarter ended June 30, 2014 in the U.S. segment increased 19% compared to the same period in 2013 due to increased sales of first aid products, additional sales resulting from the acquisition of First Aid Only, Inc., and increased sales of pencil sharpeners. Net sales for the six months ended June 30, 2014 in the U.S. segment grew 17% compared to the same period in 2013 due to increased sales of first aid products, additional sales from the acquisition of First Aid Only, Inc., the introduction of new lawn and garden products, and growth in sales of iPoint pencil sharpeners.

 

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Net sales in Canada for the three months ended June 30, 2014 increased 17% in U.S. dollars and 24% in local currency compared to the same period in 2013. Net sales for the six months ended June 30, 2014 in Canada increased 9% in U.S. dollars and 16% in local currency compared to the same period in 2013. The increases in sales for the three and six month periods were primarily due to strong back to school sales and the introduction of new lawn and garden products.

 

Net sales in Europe for the three months ended June 30, 2014 increased 5% in U.S. dollars but were constant in local currency compared to the same period in 2013. Net sales for the six months ended June 30, 2014 in Europe decreased 5% in U.S. dollars and 9% in local currency compared to the same period in 2013 primarily due to the timing of sales to mass market customers.

 

Gross margins were 34.5% in the second quarter of 2014 compared to 35.5% in the second quarter of 2013. In the first quarter of 2014, the Company successfully completed the consolidation of its U.S. warehousing operations, moving from Fremont, NC to its new 340,000 sq. ft. facility in Rocky Mount, NC. In this regard, the Company incurred approximately $250,000 of one-time moving, training and ramp up costs in the second quarter of 2014 as reported in Cost of Goods Sold. Gross margins were 35.0% for the six months ended June 30, 2014 compared to 35.8% for the comparable period last year.

 

On April 7, 2014 the Company sold its Fremont, NC plant for $850,000, and recorded a gain of $200,000 in the second quarter of 2014 reported as other income.

 

The Company’s bank debt less cash on June 30, 2014 was $28.9 million compared to $17.6 million on June 30, 2013. During the 12 month period the Company purchased and made capital improvements to its new distribution facility in Rocky Mount, NC for $4.5 million, sold its Fremont, NC plant for $0.8 million,received $1.7 million from early repayment of a mortgage receivable and paid approximately $13.8 million for First Aid Only, Inc. During the 12 month period, the Company also generated $6.1 million in cash flow from operations and paid $1.0 million in dividends on its common stock.

 

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Walter C. Johnsen, Chairman and CEO said, “We are pleased with the strong sales performances of our first aid products, back to school Westcott items, and our new gardening tools during the quarter. We see continued strong sales momentum, and expect a strong back to school season.” Mr. Johnsen added that the integration of the First Aid Only acquisition is progressing well, and that it has already become accretive to earnings.

 

ACME UNITED CORPORATION is a leading worldwide supplier of innovative cutting, measuring and safety products to the school, home, office, hardware and industrial markets. Its leading brands include Westcott®, Clauss®, Camillus®, PhysiciansCare ® and Pac-Kit®.

 

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; and (vii) 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
SECOND QUARTER REPORT 2014
(Unaudited)
       
    Three Months Ended    Three Months Ended 
Amounts in 000's except per share data   June 30, 2014    June 30, 2013 
           
Net sales  $33,396   $28,412 
Cost of goods sold   21,875    18,331 
Gross profit   11,521    10,081 
Selling, general, and administrative expenses   7,983    6,889 
Income from operations   3,538    3,192 
Interest expense   108    122 
Interest income   (2)   (48)
     Net interest expense   106    74 
Other (income) expense, net   (204)   25 
Total other (income) expense, net   (98)   99 
Pre-tax income   3,636    3,093 
Income tax expense   1,093    883 
Net income  $2,543   $2,210 
           
Shares outstanding - Basic   3,210    3,156 
Shares outstanding - Diluted   3,539    3,266 
           
Earnings per share basic  $0.79   $0.70 
Earnings per share diluted   0.72    0.68 

 

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ACME UNITED CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
SECOND QUARTER REPORT 2014 (cont.)
(Unaudited)
       
       
    Six Months Ended    Six Months Ended 
Amounts in 000's except per share data   June 30, 2014    June 30, 2013 
           
Net sales  $52,548   $46,063 
Cost of goods sold   34,150    29,554 
Gross profit   18,398    16,509 
Selling, general, and administrative expenses   14,235    12,803 
Income from operations   4,163    3,706 
Interest expense   197    249 
Interest income   (9)   (106)
     Net interest expense   188    143 
Other (income) expense, net   (184)   28 
Total other (income) expense, net   4    171 
Pre-tax income   4,159    3,535 
Income tax expense   1,248    1,015 
Net income  $2,911   $2,520 
           
Shares outstanding - Basic   3,206    3,144 
Shares outstanding - Diluted   3,487    3,234 
           
Earnings per share basic  $0.91   $0.80 
Earnings per share diluted   0.83    0.78 

 

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ACME UNITED CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
SECOND QUARTER REPORT 2014
(Unaudited)
       
Amounts in 000's   June 30, 2014    June 30, 2013 
           
Assets:          
Current assets:          
Cash  $2,426   $8,458 
Accounts receivable, net   30,794    25,420 
Inventories   30,885    29,450 
Prepaid and other current assets   1,969    2,115 
Total current assets   66,075    65,443 
           
Property and equipment, net   6,576    2,353 
Long term receivable   -    1,669 
Intangible assets, less amortization   14,251    4,156 
Other assets   1,084    1,115 
Total assets  $87,987   $74,736 
           
Liabilities and stockholders' equity:          
Current liabilities          
Accounts payable  $10,919   $9,092 
Other current liabilities   7,466    5,401 
Total current liabilities   18,385    14,493 
Bank debt   31,325    26,012 
Other non current liabilities   439    1,021 
    50,150    41,526 
Total stockholders' equity   37,838    33,210 
Total liabilities and stockholders' equity  $87,987   $74,736 

 

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