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): April 18, 2019
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 April 18, 2019, Acme United Corporation (the “Company”) issued a press release announcing its financial results for the quarter ended March 31, 2019. 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 April 18, 2019. |
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: April 18, 2019 | ||
| By | /s/ Paul G. Driscoll | |
| Paul G. Driscoll | ||
| Vice President and | ||
| Chief Financial Officer | ||
| Dated: April 18, 2019 | ||
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EXHIBIT INDEX
| Exhibit Number | Description | |
| 99.1 | Press release dated April 18, 2019. |
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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 April 18, 2019 |
ACME
UNITED REPORTS 14% DILUTED EPS INCREASE AND 12% OPERATING
PROFIT INCREASE FOR FIRST QUARTER OF 2019
FAIRFIELD, CT – April 18, 2019 – Acme United Corporation (NYSE American: ACU) today announced that net sales for the quarter ended March 31, 2019 were $31.4 million compared to $31.7 million in the first quarter of 2018, a decrease of 1%, or even in constant currency.
Net income was $807,000 or $0.24 per diluted share for the quarter ended March 31, 2019 compared to $764,000, or $0.21 per diluted share, for the comparable period last year, an increase of 6% in net income and 14% in diluted earnings per share.
Chairman and CEO Walter C. Johnsen, said, “Net sales in the first quarter of 2019 were slightly below last year’s, as expected, due to initial shipments to a large distributor that was launching its first aid program in the first quarter of last year.”
“Our strategy to reduce expenses by $2.0 million this year in purchasing, advertising, selling, and distribution is on plan. Our business continues to be robust, including some promising new programs in the second and third quarters of 2019. We are pleased with the performance to date.”
“Accordingly, we are reiterating financial guidance for 2019 of approximately $140 to $143 million in sales, net income of $5.0 to $5.3 million and $1.41 to $1.50 earnings per share.”
For the first quarter of 2019, net sales in the U.S. segment decreased 1% compared to the same period in 2018. The year-over-year sales decrease was mainly due to a large initial order of first aid products to a major distributor to the food service industry that took place in the first quarter of 2018.
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European net sales for the first quarter of 2019 increased 6% in U.S. dollars and 14% in local currency compared to the first quarter of 2018, mainly due to new customers in the office products channel and continued growth of DMT sharpening products.
Net sales in Canada for the first quarter of 2019 decreased 9% in U.S. dollars and 5% in local currency compared to the same period in 2018, primarily due to a large order from a new customer in the first quarter 2018 that did not repeat in the first quarter of 2019.
Gross margin was 37.6% in the first quarter of 2019 versus 38.2% in the comparable period last year.
Operating income increased 12% for the three months ended March 31, 2019.
The Company’s bank debt less cash on March 31, 2019 was $40.9 million compared to $43.7 million on March 31, 2018. During the twelve-month period ended March 31, 2019, the Company distributed $1.5 million in dividends on its common stock, repurchased $0.4 million in treasury stock and generated $5.5 million in free cash flow.
Conference Call and Webcast Information
Acme United will hold a conference call to discuss its quarterly results, which will be broadcast on Thursday, April 18, 2019, at 12:00 p.m. EDT. To listen or participate in a question and answer session, dial 855-710-4182. International callers may dial 334-454-0061. 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.
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.
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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) international trade policies and their impact on demand for our products and our competitive position, including the imposition of new tariffs or changes in existing tariff rates; 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
FIRST QUARTER REPORT 2019
(Unaudited)
| Quarter Ended | Quarter Ended | |||||||
| Amounts in 000's except per share data | March 31, 2019 | March 31, 2018 | ||||||
| Net sales | $ | 31,370 | $ | 31,709 | ||||
| Cost of goods sold | 19,568 | 19,585 | ||||||
| Gross profit | 11,802 | 12,124 | ||||||
| Selling, general and administrative expenses | 10,268 | 10,759 | ||||||
| Operating income | 1,534 | 1,365 | ||||||
| Interest expense, net | 502 | 405 | ||||||
| Other income, net | (3 | ) | (13 | ) | ||||
| Income before income tax expense | 1,035 | 973 | ||||||
| Income tax expense | 228 | 209 | ||||||
| Net income | $ | 807 | $ | 764 | ||||
| Shares outstanding - basic | 3,351 | 3,374 | ||||||
| Shares outstanding - diluted | 3,392 | 3,662 | ||||||
| Earnings per share - basic | $ | 0.24 | $ | 0.23 | ||||
| Earnings per share - diluted | 0.24 | 0.21 | ||||||
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ACME UNITED CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
FIRST QUARTER REPORT 2019
(Unaudited)
| Amounts in $000's | ||||||||
| March 31, 2019 | March 31, 2018 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 3,798 | $ | 1,065 | ||||
| Accounts receivable, less allowance | 25,228 | 24,486 | ||||||
| Inventories | 40,570 | 41,900 | ||||||
| Prepaid expenses and other current assets | 2,281 | 2,766 | ||||||
| Total current assets | 71,877 | 70,217 | ||||||
| Plant, property and equipment, net | 14,423 | 14,158 | ||||||
| Operating lease right of use asset | 2,680 | — | ||||||
| Intangible assets, less accumulated amortization | 16,736 | 17,576 | ||||||
| Goodwill | 4,696 | 4,696 | ||||||
| Other assets | 203 | 599 | ||||||
| Total assets | $ | 110,615 | $ | 107,246 | ||||
| Liabilities and stockholders' equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 5,672 | $ | 7,483 | ||||
| Operating lease liability - short term | 1,030 | — | ||||||
| Other current liabilities | 4,641 | 3,670 | ||||||
| Total current liabilities | 11,343 | 11,153 | ||||||
| Long-term debt | 41,340 | 41,100 | ||||||
| Mortgage payable, net of current portion | 3,378 | 3,644 | ||||||
| Operating lease liability - long term | 1,650 | — | ||||||
| Other non-current liabilities | 36 | 857 | ||||||
| Total liabilities | 57,747 | 56,754 | ||||||
| Total stockholders' equity | 52,868 | 50,492 | ||||||
| Total liabilities and stockholders' equity | $ | 110,615 | $ | 107,246 | ||||
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