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 20, 2018

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 July 20, 2018, Acme United Corporation (the “Company”) issued a press release announcing its financial results for the quarter ended June 30, 2018. 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 20, 2018.

 

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 23, 2018
     
     
     
By /s/  Paul G. Driscoll  
  Paul G. Driscoll  
  Vice President and  
  Chief Financial Officer  
     
Dated: July 23, 2018

 

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EXHIBIT INDEX

  Exhibit Number Description
     
  99.1 Press release dated July 20, 2018.

 

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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   July 20, 2018  

 

 

ACME UNITED REPORTS SECOND QUARTER RESULTS;

REAFFIRMS GUIDANCE FOR 2018

 

 

FAIRFIELD, CT. – July 20, 2018 – Acme United Corporation (NYSE American: ACU) today announced that net sales for the three months ended June 30, 2018 were $39.8 million, compared to $38.8 million in the same period of 2017, an increase of 2%. Net sales for the six months ended June 30, 2018 were $71.5 million, compared to $66.6 million in the same period in 2017, an increase of 7%.

 

Net income for the three months ended June 30, 2018 was $2.4 million, or $0.67 per diluted share, compared to $2.8 million, or $0.75 per diluted share, for the same period in 2017, decreases of 14% and 11%, respectively. Net income for the six months ended June 30, 2018 was $3.2 million, or $0.88 per diluted share, compared to $3.5 million, or $.94 per diluted share, in last year’s same period, decreases of 9% and 6%, respectively. The declines in net income for the three and six month periods resulted primarily from additions in sales and marketing personnel to accommodate our growth as well as higher interest rates on our variable rate credit facility.

 

Walter C. Johnsen, Chairman and CEO said, “We had record sales performances in many categories and areas of our company, including first aid and safety, Camillus and Cuda cutting products, DMT sharpening tools, Spill Magic absorbents, and our European business. Sales of Westcott back to school products were affected by an increasing proportion of online versus retail sales, which are expected to shift revenues from the second to the third quarter.”

 

“We  anticipate a higher proportion of our back-to-school sales for 2018 in the third quarter and, accordingly, are reaffirming the financial guidance we previously provided for the year of approximately $140 million in revenues, $5.7 million in net income, and $1.53 earnings per share. This compares to sales of $130.6 million, non-GAAP net income of $5.3 million and earnings per diluted share of $1.42 for 2017. As previously reported, the Company’s GAAP net income of $4.1 million for 2017 reflected a $1.2 million non-cash tax charge related to the U.S. Tax Cuts and Jobs Act.

 

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In the U.S. segment, net sales for the three months ended June 30, 2018 increased 2% compared to the same period in 2017. Sales of first aid and safety products were $15.0 million, an increase 7%. As noted above, our sales of Westcott school products were lower than the second quarter sales last year due to the timing of shipments. Net sales for the first six months of 2018 in the U.S. segment increased 7% compared to the same period in 2017. Sales of first aid and safety products increased 17% due to market share gains.

 

Net sales in Europe for the three months ended June 30, 2018 increased 14% in U.S. dollars and 5% in local currency compared to the same 2017 period. Net sales for the six months ended June 30, 2018 increased 19% in U.S. dollars and 7% in local currency compared to the first half of 2017. Net sales for both periods increased mainly due to new customers in the office products channel, growth in sales of DMT products, and strong e-commerce demand for these products.

 

Net sales in Canada for the three months ended June 30, 2018 decreased 1% in U.S. dollars and 5% in local currency compared to the same prior-year period. Net sales for the six months ended June 30, 2018 increased 3% in U.S. dollars and were constant in local currency compared to the same period in 2017.

 

Gross margin was 37% in the three months ended June 30, 2018, compared to 37% in the same period in 2017. Gross margin was 38% in the six months ended June 30, 2018, compared to 38% in the same period in 2017.

 

The Company’s bank debt less cash on June 30, 2018 was $46.0 million compared to $41.3 million on June 30, 2017. During the twelve-month period ended June 30, 2018, the Company purchased its manufacturing and distribution facility in Vancouver, WA for $4.0 million and distributed $1.5 million in dividends on its common stock.

 

Conference Call and Webcast Information

Acme United will hold a conference call to discuss its quarterly results, which will be broadcast on Friday, July 20, 2018, at 12:00 p.m. EDT. To listen or participate in a question and answer session, dial 888-599-8686. International callers may dial 323-794-2551. 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.

 

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About Acme United

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

 

Forward Looking Statements

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; (viii) uncertainties arising from the interpretation and application of the U.S. Tax Cuts and Jobs Act enacted in December 2017; and (ix) 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 2018

(Unaudited)

                     

 

   Three Months Ended  Three Months Ended
Amounts in 000's except per share data  June 30, 2018  June 30, 2017
       
       
Net sales  $39,751   $38,849 
Cost of goods sold   25,039    24,366 
Gross profit   14,712    14,483 
Selling, general, and administrative expenses   11,087    10,572 
Operating Income   3,625    3,911 
Interest expense, net   445    321 
Other expense  (income), net   74    (29)
Total other expense, net   519    292 
Income before income tax expense   3,106    3,619 
Income tax expense   670    773 
Net income  $2,436   $2,846 
           
Shares outstanding - Basic   3,374    3,353 
Shares outstanding - Diluted   3,625    3,780 
           
Earnings per share basic  $0.72   $0.85 
Earnings per share diluted   0.67    0.75 

 

 

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ACME UNITED CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

SECOND QUARTER REPORT 2018 (cont.)

(Unaudited)

                     

 

   Six Months Ended  Six Months Ended
Amounts in 000's except per share data  June 30, 2018  June 30, 2017
       
       
Net sales  $71,460   $66,595 
Cost of goods sold   44,624    41,548 
Gross profit   26,836    25,047 
Selling, general, and administrative expenses   21,846    19,922 
Operating Income   4,990    5,125 
Interest expense, net   850    583 
Other expense (income), net   61    (16)
Total other expense, net   911    567 
Income before income tax expense   4,079    4,558 
Income tax expense   879    1,052 
Net income  $3,200   $3,506 
           
Shares outstanding - Basic   3,374    3,342 
Shares outstanding - Diluted   3,642    3,744 
           
Earnings per share basic  $0.95   $1.05 
Earnings per share diluted   0.88    0.94 

 

 

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ACME UNITED CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

SECOND QUARTER REPORT 2018

(Unaudited)

                     

 

Amounts in 000's  June 30, 2018  June 30, 2017
       
Assets:          
Current assets:          
Cash and cash equivalents  $1,894   $5,674 
Accounts receivable, less allowance   34,511    32,616 
Inventories, net   42,510    35,638 
Prepaid expenses and other current assets   2,524    2,417 
Total current assets   81,439    76,345 
           
Property, Plant and equipment, net   14,576    9,077 
Intangible assets, less accumulated amortization   17,268    19,227 
Goodwill   4,696    3,948 
Other assets   599    765 
Total assets  $118,578   $109,362 
           
Liabilities and stockholders' equity:          
Current liabilities          
Accounts payable  $12,972   $7,498 
Other accrued liabilities   4,640    5,215 
Total current liabilities   17,612    12,713 
Long term debt   44,318    46,956 
Mortgage payable, net of current portion   3,578    —   
Other non-current liabilities   846    345 
Total liabilities   66,354    60,014 
Total stockholders' equity   52,224    49,348 
Total liabilities and stockholders' equity  $118,578   $109,362 

 

 

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