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 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 October 18, 2019, Acme United Corporation (the “Company”) issued a press release announcing its financial results for the quarter ended September 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 October 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: October 18, 2019 | ||
| By | /s/ Paul G. Driscoll | |
| Paul G. Driscoll | ||
| Vice President and | ||
| Chief Financial Officer | ||
| Dated: October 18, 2019 | ||
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EXHIBIT INDEX
| Exhibit Number | Description | |
| 99.1 | Press release dated October 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 October 18, 2019 |
ACME
UNITED REPORTS 7% NET SALES INCREASE AND 30% DILUTED EPS
INCREASE FOR THIRD QUARTER OF 2019
FAIRFIELD, CT. – October 18, 2019 – Acme United Corporation (NYSE American: ACU) today announced that net sales for the three months ended September 30, 2019 were $37.0 million, compared to $34.7 million for the same period of 2018, an increase of 7%. Net sales for the nine months ended September 30, 2019 were $108.6 million, compared to $106.2 million for the same period in 2018, a 2% increase.
Net income for the three months ended September 30, 2019 was $1.1 million, or $0.30 per diluted share, compared to $.8 million, or $0.23 per diluted share, for the same period in 2018, increases of 31% and 30%, respectively. Net income for the nine months ended September 30, 2019 was $4.5 million, or $1.32 per diluted share, compared to $4.0 million, or $1.12 per diluted share, in last year’s same period, increases of 13% and 18%, respectively.
Chairman and CEO Walter C. Johnsen, said, “We are very pleased with our third quarter sales and earnings. We had excellent performance with our First Aid Only safety products line, driven by success of SmartCompliance kits and refills. International sales both in Europe and Canada were strong. Our on-line business was excellent, reflecting strength in first aid products and back-to-school items.
Mr. Johnsen added, “We expect continued good performance in the fourth quarter of 2019, particularly as our focus on productivity and sales growth continues. Based on the trends we are currently seeing, we are updating our financial guidance for the year. We now expect net sales of approximately $142 million compared to our previously provided range of $140 million - $143 million; net income of approximately $5.2 million compared to our previously provided range of $5.0 million - $5.3 million; and earnings per share of approximately $1.48 compared to our previously provided range of $1.41 - $1.50.
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In the U.S. segment, net sales for the three months ended September 30, 2019 increased 6% compared to the same period in 2018. Sales of first aid and safety products were strong, more than offsetting softness in the sales of certain school and office products. Net sales for the first nine months of 2019 in the U.S. segment increased 2% compared to the same period in 2018.
Net sales in Europe for the three months ended September 30, 2019 increased 15% in U.S. dollars and 21% in local currency compared to the same 2018 period. Net sales for the nine months ended September 30, 2019 increased 14% in U.S. dollars and 22% in local currency compared to the first nine months of 2018. The sales increases in the quarter and nine months were mainly due to new customers in the office products channel and continued growth of DMT sharpening products.
Net sales in Canada for the three months ended September 30, 2019 increased 5% in U.S. dollars and 6% in local currency compared to the same 2018 period. Net sales for the nine months ended September 30, 2019 decreased 6% in U.S. dollars and 3% in local currency compared to the first nine months of 2018.
Gross margin was 35.5% in the three months ended September 30, 2019, compared to 35.8% in the same period in 2018. Gross margin was 36.6% in the nine months ended September 30, 2019, compared to 37.0% in the same period in 2018.
The Company’s bank debt less cash on September 30, 2019 was $35.9 million compared to $46.8 million on September 30, 2018. During the twelve-month period ended September 30, 2019, the Company distributed $1.6 million in dividends on its common stock, repurchased $0.4 million in treasury stock and generated $14 million in free cash flow, including a $2.3 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, October 18, 2019, at 12:00 p.m. EDT. To listen or participate in a question and answer session, dial 800-767-8973. International callers may dial 334-777-6979. 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
THIRD QUARTER REPORT 2019
(Unaudited)
| Three Months Ended | Three Months Ended | |||||||
| Amounts in 000's except per share data | September 30, 2019 | September 30, 2018 | ||||||
| Net sales | $ | 36,995 | $ | 34,731 | ||||
| Cost of goods sold | 23,861 | 22,281 | ||||||
| Gross profit | 13,134 | 12,450 | ||||||
| Selling, general, and administrative expenses | 11,408 | 11,077 | ||||||
| Operating Income | 1,726 | 1,373 | ||||||
| Interest expense, net | 469 | 496 | ||||||
| Other expense, net | 40 | 23 | ||||||
| Total other expense, net | 509 | 519 | ||||||
| Income before income tax expense | 1,217 | 854 | ||||||
| Income tax expense | 158 | 47 | ||||||
| Net income | $ | 1,059 | $ | 807 | ||||
| Shares outstanding - Basic | 3,352 | 3,374 | ||||||
| Shares outstanding - Diluted | 3,486 | 3,551 | ||||||
| Earnings per share - Basic | $ | 0.32 | $ | 0.24 | ||||
| Earnings per share - Diluted | 0.30 | 0.23 | ||||||
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ACME UNITED CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
THIRD QUARTER REPORT 2019 (cont.)
(Unaudited)
| Nine Months Ended | Nine Months Ended | |||||||
| Amounts in 000's except per share data | September 30, 2019 | September 30, 2018 | ||||||
| Net sales | $ | 108,585 | $ | 106,191 | ||||
| Cost of goods sold | 68,877 | 66,905 | ||||||
| Gross profit | 39,708 | 39,286 | ||||||
| Selling, general, and administrative expenses | 32,679 | 32,923 | ||||||
| Operating Income | 7,029 | 6,363 | ||||||
| Interest expense, net | 1,463 | 1,346 | ||||||
| Other expense, net | 52 | 84 | ||||||
| Total other expense, net | 1,515 | 1,430 | ||||||
| Income before income tax expense | 5,514 | 4,933 | ||||||
| Income tax expense | 977 | 926 | ||||||
| Net income | $ | 4,537 | $ | 4,007 | ||||
| Shares outstanding - Basic | 3,352 | 3,374 | ||||||
| Shares outstanding - Diluted | 3,445 | 3,574 | ||||||
| Earnings per share - Basic | $ | 1.35 | $ | 1.19 | ||||
| Earnings per share - Diluted | 1.32 | 1.12 | ||||||
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ACME UNITED CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
THIRD QUARTER REPORT 2019
(Unaudited)
| Amounts in 000's | September 30, 2019 | September 30, 2018 | ||||||
| Assets: | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 5,698 | $ | 4,021 | ||||
| Accounts receivable, less allowance | 30,635 | 30,869 | ||||||
| Inventories, net | 38,970 | 41,274 | ||||||
| Prepaid expenses and other current assets | 1,787 | 2,270 | ||||||
| Total current assets | 77,090 | 78,434 | ||||||
| Property, Plant and equipment, net | 14,006 | 14,488 | ||||||
| Operating lease right of use asset | 2,123 | — | ||||||
| Intangible assets, less accumulated amortization | 16,107 | 16,959 | ||||||
| Goodwill | 4,696 | 4,696 | ||||||
| Other assets | 202 | 606 | ||||||
| Total assets | $ | 114,224 | $ | 115,183 | ||||
| Liabilities and stockholders' equity: | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 7,217 | $ | 6,654 | ||||
| Operating lease liability - short term | 920 | — | ||||||
| Mortgage payable | 267 | 267 | ||||||
| Other accrued liabilities | 8,202 | 4,417 | ||||||
| Total current liabilities | 16,606 | 11,338 | ||||||
| Long term debt | 38,125 | 47,028 | ||||||
| Mortgage payable, net of current portion | 3,244 | 3,511 | ||||||
| Operating lease liability - long term | 1,210 | — | ||||||
| Other non-current liabilities | 15 | 815 | ||||||
| Total liabilities | 59,200 | 62,692 | ||||||
| Total stockholders' equity | 55,024 | 52,491 | ||||||
| Total liabilities and stockholders' equity | $ | 114,224 | $ | 115,183 | ||||
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