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 17, 2020

 

ACME UNITED CORPORATION

(Exact name of registrant as specified in its charter)

 

 

 

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:

 

Securities registered pursuant to Section 12(b) of the Act:

 

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

 

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ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

On July 17, 2020, Acme United Corporation (the “Company”) issued a press release announcing its financial results for the quarter ended June 30, 2020. 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

 

 

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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.

 

 

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Exhibit 99.1

 

 

 

FOR IMMEDIATE RELEASE   July 17, 2020

 

 

ACME UNITED REPORTS 9% SALES INCREASE AND 20% NET INCOME INCREASE FOR SECOND QUARTER OF 2020

 

FAIRFIELD, CT – July 17, 2020 – Acme United Corporation (NYSE American: ACU) today announced that net sales for the quarter ended June 30, 2020 were $44.0 million compared to $40.2 million in the second quarter of 2019, an increase of 9%. Net sales for the six months ended June 30, 2020 were $79.8 million, compared to $71.6 million in the same period in 2019, an increase of 11%.

 

Acme United’s second quarter and six months ended June 30, 2020 revenues included approximately $1.1 million and $2.1 million, respectively, from the sales of First Aid Central products.  The Company acquired the assets of Canadian-based First Aid Central, Inc. on January 7, 2020.

 

Net income was $3,199,000 or $0.92 per diluted share for the quarter ended June 30, 2020 compared to $2,672,000, or $0.77 per diluted share, for the comparable period last year, an increase of 20% in net income and 19% in diluted earnings per share.  Net income for the six months ended June 30, 2020 was $4,476,000, or $1.28 per diluted share, compared to $3,478,000, or $1.01 per diluted share, in last year’s same period, increases of 29% and 27%, respectively.  

 

 

Chairman and CEO Walter C. Johnsen said, “This was a very difficult quarter that ended with good results. We benefited from the diversification during the past 5 years of our customer base and product lines. Sales of our traditional Westcott cutting and measuring tools to office and school supply customers declined dramatically, in some cases more than 80%. However, sales to mass market retailers and ecommerce increased substantially and offset the decline. Sales of first aid and safety products led the quarter’s growth due to market share gains and a surge of approximately $1.5 million of sales of COVID-related supplies.”

 

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Mr. Johnsen added, “I am incredibly proud of our team. They are working under difficult conditions with a sense of purpose, and delivering results.”

 

Net sales for the second quarter and the first six months of 2020 in the U.S. segment increased 10% compared to the same periods in 2019. The Company had strong sales of first aid and safety products, primarily due to continued market share gains in the industrial, safety, home improvement, mass market, and ecommerce channels. In addition, there was growth from a surge in demand for first aid and safety products related to COVID-19.

 

European net sales for the second quarter of 2020 increased 4% in U.S. dollars and 6% in local currency compared to the second quarter of 2019.  Net sales for the six months ended June 30, 2020 increased 9% in U.S. dollars and 12% in local currency compared to the first half of 2019.  The increases for both the quarter and six months were mainly due to growth in sales of Westcott and Camillus products in the ecommerce channel and continued growth of DMT sharpening products.

 

Net sales in Canada, excluding First Aid Central products, for the second quarter of 2020 declined 44% in U.S. dollars and 42% in local currency compared to the same period in 2019. Net sales for the six months ended June 30, 2020 decreased 27% in U.S. dollars and 25% local currency compared to the first half of 2019. These decreases reflected declines in sales of office products due to office and store closings as a result of COVID-19.  

 

Gross margin was 36.5% in the second quarter of 2020 versus 36.7% in the comparable period last year.  Gross margin was 37.1% in the each of the six months ended June 30, 2020 and 2019.

 

Acme United received a loan of $3.5 million from the Paycheck Protection Program during the second quarter of 2020, with the proceeds applied to payroll expenses. The loan enhanced the Company’s ability to maintain its entire payroll during uncertain times.

 

The Company’s debt less cash on June 30, 2020 was $37.3 million compared to $41.0 million on June 30, 2019.  During the twelve-month period ended June 30, 2020, the Company paid approximately $2.1 million for the acquisition of the assets of First Aid Central, distributed $1.6 million in dividends on its common stock, and generated $9 million in free cash flow.

 

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Conference Call and Webcast Information

Acme United will hold a conference call to discuss its quarterly results, which will be broadcast on Friday, July 17, 2020, at 12:00 p.m. EDT. To listen or participate in a question and answer session, dial 800-437-2398. International callers may dial 323-289-6576. 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®,  First Aid Central®,  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 the impact that the global COVID-19 pandemic has had and will continue to have on the Company’s business, operations and financial results.  These include the severity and duration of the pandemic, including whether there is a “second wave,” the effect of measures taken by the Company to limit the spread of the disease at our offices and distribution centers, further actions that may be taken by governmental authorities or by businesses or individuals on their own initiative in response to the pandemic, the pace of recovery when an effective vaccine is widely available or when the pandemic otherwise subsides and the heightened impact the pandemic has on many of the risks described herein, including without limitation risks relating to the on-going world-wide economic downturn and disruptions in our supply chain,, any of which could adversely impact the Company’s ability to manufacture, source or distribute its products, both domestically and internationally.  

 

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These risks and uncertainties further include, 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, (v) the impact of technological changes including specifically the growth of online marketing and sales activity; (vi) the Company’s ability to manage its growth effectively, including its ability to successfully integrate any business it might acquire; (vii) the Company’s ability to effectively manage its inventory in a rapidly changing business environment; (viii) currency fluctuations; (ix) 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 (x) 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 2020

(Unaudited)

 

 

 

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ACME UNITED CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

SECOND QUARTER REPORT 2020 (cont.)

(Unaudited)

 

 

 

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ACME UNITED CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

SECOND QUARTER REPORT 2020

(Unaudited)