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 20, 2017

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.)

 

 

55 Walls Drive, 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 October 20, 2017, Acme United Corporation (the “Company”) issued a press release announcing its financial results for the quarter ended September 30, 2017. 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 20, 2017.

 

 

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 20, 2017
     
     
     
By /s/  Paul G. Driscoll  
  Paul G. Driscoll  
  Vice President and  
  Chief Financial Officer  
     
Dated: October 20, 2017

 

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EXHIBIT INDEX

  Exhibit Number Description
     
  99.1 Press release dated October 20, 2017.

 

 

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Exhibit 99.1

 

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

 

FOR IMMEDIATE RELEASE   October 20, 2017  

 

 

ACME UNITED REPORTS THIRD QUARTER RESULTS

 

FAIRFIELD, CT. – October 20, 2017 – Acme United Corporation (NYSE American:ACU) today announced that net sales for the third quarter ended September 30, 2017 were $33.8 million, compared to $31.9 million in the comparable period of 2016, an increase of 6%. Net sales for the nine months ended September 30, 2017 were $100.4 million, compared to $98.2 million in the same period in 2016, an increase of 2%.

 

Net income for the quarter ended September 30, 2017 was $1.2 million, or $0.32 per diluted share, compared to $1.5 million, or $0.40 per diluted share, for the 2016 period, a 19% decrease in net income and 20% decrease in earnings per share. Net income for the nine months ended September 30, 2017 was $4.7 million, or $1.25 per diluted share, compared to $5.3 million, or $1.49 per diluted share, in last year’s comparable period, an 11% decrease in net income and 16% decrease in earnings per share.

 

Chairman and CEO Walter C. Johnsen said, “We have been growing our on-line sales in excess of 100% annually for the past three years, and they now have a significant impact on our revenues. However, we experienced softer than anticipated back-to-school sell through from many of our big box retailers, which were not offset by our on-line growth. Additionally, we had a delay in new product placement with a major retailer from the third quarter to the fourth quarter. Sales of our first aid products in the third quarter were even with last year due to a shift in a major promotion to the fourth quarter of 2017. Our sales of Cuda fishing tools and Camillus hunting knives were impacted in September by the three major hurricanes that hit the U.S. and the Caribbean.”

 

“We have also incurred additional warehousing and logistics expenses due to the small packages and frequent shipping of our on-line business. We are addressing these costs with new software, improved warehouse layouts, optimized packaging, and better freight rates. While we continue to expect our seventh consecutive year of record sales in 2017, due to the sales shortfall in the third quarter and the warehouse inefficiencies, we now expect annual earnings to be below last year’s. We are therefore adjusting our guidance for the 2017 year to $133 million in revenues, $5.6 million in net income, and $1.48 earnings per share.”

 

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In the U.S. segment, net sales for the quarter ended September 30, 2017 increased 5% compared to the same period in 2016. Net sales for the first nine months of 2017 grew 2% over the comparable period in 2016. The soft back-to-school sales affected growth for the nine months. Our acquisition of Spill Magic assets in February 2017 contributed $1.8 million in net sales in the third quarter, and $4.8 million year to date.

 

Net sales in Canada for the three months ended September 30, 2017 increased 5% in U.S. dollars and were constant in local currency compared to the prior-year period. Net sales for the nine months ended September 30, 2017 decreased 2% in U.S. dollars and 1% in local currency compared to the same period in 2016.

 

Net sales in Europe for the three months ended September 30, 2017 increased 15% in U.S. dollars and 8% in local currency compared to the same period in 2016. Net sales for the nine months ended September 30, 2017 increased 18% in both U.S. dollars and local currency compared to last year’s period due to market share gains in the office products channel.

 

Gross margin was 36.2% in the three months ended September 30, 2017 compared to 37.2% in the same period in 2016. The lower gross margin was primarily due to customer and product mix, and increased costs in distribution due to on-line sales. Gross margin was 37.1% for the nine months ended September 30, 2017 compared to 36.4% for last year’s comparable period.

 

The Company’s long-term debt less cash on September 30, 2017 was $38.9 million compared to $33.4 million on September 30, 2016. During the twelve-month period ended September 30, 2017, the Company paid approximately $7.2 million for the acquisition of the assets of Spill Magic and distributed $1.4 million in dividends on its common stock. During the twelve-month period, the Company generated $3.2 million in free cash flow.

 

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Acme United will hold a conference call to discuss its quarterly results, which will be broadcast over the Internet on Friday, October 20, 2017, at 11:00 a.m. EDT. To listen or participate in a question and answer session, dial 888-417-2254. International callers may dial 719-325-4800. 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.

 

ACME UNITED CORPORATION is a leading worldwide supplier of innovative cutting, measuring and safety products to the school, home, office, hardware, sporting goods and industrial markets. Its leading brands include Westcott®, Clauss®, Camillus®, Cuda®, PhysiciansCare®, First Aid Only®, Pac-Kit®, DMT® and Spill Magic®. For more information, visit www.acmeunited.com.

 

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; and (viii) 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 2017

(Unaudited)

                     

 

   Three Months Ended  Three Months Ended
Amounts in $000's except per share data  September 30, 2017  September 30, 2016
       
       
Net sales  $33,785   $31,913 
Cost of goods sold   21,559    20,050 
Gross profit   12,226    11,863 
Selling, general, and administrative expenses   10,277    9,723 
Income from operations   1,949    2,140 
Interest expense, net   365    247 
Other expense, net   17    65 
Total other expense, net   382    312 
Income before income tax expense   1,567    1,828 
Income tax expense   366    355 
Net income  $1,201   $1,473 
           
Shares outstanding - Basic   3,373    3,324 
Shares outstanding - Diluted   3,794    3,641 
           
Earnings per share basic  $0.36   $0.44 
Earnings per share diluted   0.32    0.40 

 

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ACME UNITED CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

THIRD QUARTER REPORT 2017 (cont.)

(Unaudited)

                     

 

   Nine Months Ended  Nine Months Ended
Amounts in $000's except per share data  September 30, 2017  September 30, 2016
       
       
Net sales  $100,380   $98,198 
Cost of goods sold   63,107    62,455 
Gross profit   37,273    35,743 
Selling, general, and administrative expenses   30,243    28,008 
Income from operations   7,030    7,735 
Interest expense, net   948    642 
Other (income) expense, net   (43)   38 
Total other expense, net   905    680 
Income before income tax expense   6,125    7,055 
Income tax expense   1,418    1,750 
Net income  $4,707   $5,305 
           
Shares outstanding - Basic   3,351    3,329 
Shares outstanding - Diluted   3,765    3,562 
           
Earnings per share basic  $1.40   $1.59 
Earnings per share diluted   1.25    1.49 

 

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ACME UNITED CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

THIRD QUARTER REPORT 2017

(Unaudited)

                     

 

Amounts in $000's  September 30, 2017  September 30, 2016
       
Assets:          
Current assets:          
Cash and cash equivalents  $7,021   $6,272 
Accounts receivable, net   31,579    25,909 
Inventories   36,799    38,117 
Prepaid and other current assets   2,449    1,995 
Total current assets   77,847    72,293 
           
Property and equipment, net   9,449    7,893 
Goodwill   3,948    1,406 
Intangible assets, net   18,929    16,768 
Other assets   765    1,012 
Total assets  $110,938   $99,372 
           
Liabilities and stockholders' equity:          
Current liabilities          
Accounts payable  $8,463   $6,748 
Other current liabilities   5,520    6,597 
Total current liabilities   13,983    13,345 
Bank debt   45,969    39,706 
Other non current liabilities   265    574 
    60,217    53,625 
Total stockholders' equity   50,720    45,747 
Total liabilities and stockholders' equity  $110,938   $99,372 

 

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