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 19, 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 July 19, 2019, Acme United Corporation (the “Company”) issued a press release announcing its financial results for the quarter ended June 30, 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 July 19, 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: July 19, 2019
     
     
     
By /s/  Paul G. Driscoll  
  Paul G. Driscoll  
  Vice President and  
  Chief Financial Officer  
     
Dated: July 19, 2019

 

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EXHIBIT INDEX

  Exhibit Number Description
     
  99.1 Press release dated July 19, 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   July 19, 2019  

 

 

ACME UNITED REPORTS 10% NET INCOME INCREASE AND 15% DILUTED EPS
INCREASE FOR SECOND QUARTER OF 2019

 

 

FAIRFIELD, CT. – July 19, 2019 – Acme United Corporation (NYSE American: ACU) today announced that net sales for the three months ended June 30, 2019 were $40.2 million, compared to $39.8 million in the same period of 2018, an increase of 1%, or 2% in constant currency. Net sales for the six months ended June 30, 2019 were $71.6 million, compared to $71.5 million in the same period in 2018, a 1% increase in constant currency.

 

Net income for the three months ended June 30, 2019 was $2.7 million, or $0.77 per diluted share, compared to $2.4 million, or $0.67 per diluted share, for the same period in 2018, increases of 10% and 15%, respectively. Net income for the six months ended June 30, 2019 was $3.5 million, or $1.01 per diluted share, compared to $3.2 million, or $0.88 per diluted share, in last year’s same period, increases of 9% and 15%, respectively.

 

Walter C. Johnsen, Chairman and CEO said, “We had excellent sales of first aid products, Camillus hunting and camping items, and Cuda fishing tools. Sales of Westcott items related to back to school were softer than in last year’s period.

 

“Revenues for the next 6 months are forecast to have solid growth in first aid, Camillus and DMT products. Sales of Westcott school and office products are expected to be consistent with last year. Accordingly, we are reiterating our 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.”

 

Mr. Johnsen added “We have reduced net debt by over $5.0 million during the past 12 months and continue to seek tuck-in acquisitions with particular interest in products we can bring in through multiple channels of distribution.”

 

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In the U.S. segment, net sales for the three months ended June 30, 2019 increased 1% compared to the same period in 2018. Sales of first aid and safety products were strong; however, there was softness in sales of certain school and office products. Net sales for the first six months of 2019 in the U.S. segment were constant compared to the same period in 2018.

 

Net sales in Europe for the three months ended June 30, 2019 increased 22% in U.S. dollars and 28% in local currency compared to the same 2018 period. The sales increase in the quarter was mainly due to a large back-to-school promotion to a major retailer. Net sales for the six months ended June 30, 2019 increased 13% in U.S. dollars and 22% in local currency compared to the first half 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 three and six months ended June 30, 2019 decreased 10% in U.S. dollars and 6% in local currency compared to the same prior-year periods.

 

Gross margin was 36.7% in the three months ended June 30, 2019, compared to 37.0% in the same period in 2018. Gross margin was 37.1% in the six months ended June 30, 2019, compared to 37.6% in the same period in 2018.

 

The Company’s bank debt less cash on June 30, 2019 was $41.0 million compared to $46.3 million on June 30, 2018. During the twelve-month period ended June 30, 2019, the Company distributed $1.5 million in dividends on its common stock, repurchased $0.4 million in treasury stock and generated $8.4 million in free cash flow, including a $2.9 million reduction in inventory.

 

Conference Call and Webcast Information

Acme United will hold a conference call to discuss its quarterly results, which will be broadcast on Friday, July 19, 2019, at 12:00 p.m. EDT. To listen or participate in a question and answer session, dial 800-289-0558. International callers may dial 929-477-0275. 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) 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

SECOND QUARTER REPORT 2019

(Unaudited)

                     

 

   Three Months Ended  Three Months Ended
Amounts in 000's except per share data  June 30, 2019  June 30, 2018
       
       
Net sales  $40,220   $39,751 
Cost of goods sold   25,449    25,039 
Gross profit   14,771    14,712 
Selling, general, and administrative expenses   11,003    11,087 
Operating Income   3,768    3,625 
Interest expense, net   491    445 
Other expense, net   14    74 
Total other expense, net   505    519 
Income before income tax expense   3,263    3,106 
Income tax expense   592    670 
Net income  $2,671   $2,436 
           
Shares outstanding - Basic   3,351    3,374 
Shares outstanding - Diluted   3,485    3,624 
           
Earnings per share - Basic  $0.80   $0.72 
Earnings per share - Diluted   0.77    0.67 

 

 

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ACME UNITED CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

SECOND QUARTER REPORT 2019 (cont.)

(Unaudited)

                     

 

   Six Months Ended  Six Months Ended
Amounts in 000's except per share data  June 30, 2019  June 30, 2018
       
       
Net sales  $71,590   $71,460 
Cost of goods sold   45,016    44,624 
Gross profit   26,574    26,836 
Selling, general, and administrative expenses   21,271    21,846 
Operating Income   5,303    4,990 
Interest expense, net   994    850 
Other expense, net   12    61 
Total other expense, net   1,006    911 
Income before income tax expense   4,297    4,079 
Income tax expense   819    879 
Net income  $3,478   $3,200 
           
Shares outstanding - Basic   3,351    3,374 
Shares outstanding - Diluted   3,429    3,642 
           
Earnings per share - Basic  $1.04   $0.95 
Earnings per share - Diluted   1.01    0.88 

 

 

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ACME UNITED CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

SECOND QUARTER REPORT 2019

(Unaudited)

                     

 

Amounts in 000's  June 30, 2019  June 30, 2018
       
Assets:          
Current assets:          
Cash and cash equivalents  $1,924   $1,894 
Accounts receivable, less allowance   35,462    34,511 
Inventories, net   39,615    42,510 
Prepaid expenses and other current assets   2,085    2,525 
Total current assets   79,086    81,440 
           
Property, Plant and equipment, net   14,200    14,576 
Operating lease right of use asset   2,424    —   
Intangible assets, less accumulated amortization   16,422    17,268 
Goodwill   4,696    4,696 
Other assets   202    598 
Total assets  $117,030   $118,578 
           
Liabilities and stockholders' equity:          
Current liabilities:          
Accounts payable  $9,931   $12,972 
Operating lease liability - short term   987    —   
Mortgage payable   267    267 
Other accrued liabilities   6,865    4,373 
Total current liabilities   18,050    17,612 
Long term debt   39,388    44,318 
Mortgage payable, net of current portion   3,311    3,578 
Operating lease liability - long term   1,441    —   
Other non-current liabilities   38    846 
Total liabilities   62,228    66,354 
Total stockholders' equity   54,802    52,224 
Total liabilities and stockholders' equity  $117,030   $118,578 

 

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