Acme United Corporation Reports 16% Net Sales Increase for the Third Quarter
FAIRFIELD, Conn.--(BUSINESS WIRE)--Oct. 20, 2005--Acme United Corporation (AMEX:ACU) today announced that net sales for the quarter ended September 30, 2005 were $13.4 million compared to $11.6 million in the same period in 2004, an increase of 16% . Net sales for the nine months ended September 30, 2005 were $38.9 million compared to $32.5 million in the same period in 2004, an increase of 20%. Net sales for the nine months in the U.S. increased 21% due to the sale of new products and market share gains. International sales increased by 17%, and 11% in local currency.
Net income was $200,000 or $.05 per diluted share for the third quarter ended September 30, 2005 compared to $1,017,000 or $.26 per diluted share for the comparable period last year. During the third quarter of 2005 the company recognized a $1.5 million non-recurring charge for the demolition of its former manufacturing buildings in Bridgeport, Connecticut. The Company ceased manufacturing at this site in 1996 and the buildings have remained idle. Net income without this charge would have been $1,130,000 or $.29 per diluted share, a 12% increase over 2004. Net income for the nine months ended September 30, 2005 was $2,164,000, or $.57 per diluted share compared to $2,484,000, or $.66 per diluted share in the comparable period last year. Excluding the non-recurring charge net income would have been $3,094,000 or $.81 per diluted share, a 25% increase over 2004. Non-GAAP, or pro forma results, are presented to provide additional information to the reader to provide an opportunity to make meaningful comparisons to results in prior periods.
Gross margins were 46.0% in the third quarter of 2005 versus 47.0% in the comparable period last year. For the first nine months of 2005 gross margins were 45.7% compared to 45.3% in the same period in 2004. Sales of new products and an improved product mix essentially offset higher raw material and shipment costs.
Walter C. Johnsen, President and CEO, said, "I am pleased with the new products which have been recently introduced including leading edge manual and electric pencil sharpeners, award winning kids scissors, high performance titanium scissors, new professional scissors and cutters and a number of innovative craft items. These are being shown to major customers now for shipment in 2006."
The Company's bank debt on September 30, 2005 was $6.6 million compared to $3.3 million on September 30, 2004. During the first nine months of 2005, Acme repurchased 218,000 shares of its common stock at a cost of $3.2 million and paid dividends in the total amount of $267,000. In addition, the Company added approximately $3.6 million of inventory to meet forecasted growth requirements.
ACME UNITED CORPORATION is a specialized supplier of cutting devices, measuring instruments, and safety products for school, home, office and industrial use.
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) the Company's plans, strategies, objectives, expectations and intentions are subject to change at any time at the discretion of the Company; (ii) the Company's plans and results of operations will be affected by the Company's ability to manage its growth, and (iii) other risks and uncertainties indicated from time to time in the Company's filings with the Securities and Exchange Commission.
ACME UNITED CORPORATION
CONSOLIDATED STATEMENT OF INCOME
THIRD QUARTER REPORT 2005
Quarter Ended Quarter Ended
September 30, September 30,
2005 2004
Amounts in $000's except per share data (Unaudited) (Unaudited)
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Net Sales $ 13,400 $ 11,595
Gross Profit 6,166 5,453
Selling, General, and Administrative
Expenses 4,159 3,739
Other Expense 169 98
Non-Recurring Charge 1,500 -
Pre-Tax Income 338 1,616
Income Tax Expense 138 599
Net Income 200 1,017
Earnings Per Share Diluted 0.05 0.26
Reconciliation to reported Net Income (GAAP)
Pre-Tax Income as reported (GAAP) 338 1,616
Non-Recurring Charge 1,500 -
Pre-Tax Income as adjusted 1,838 1,616
Income Tax Expense as adjusted 708 599
Net Income as adjusted 1,130 1,017
Earnings Per Share Before Non-Recurring
Charge 0.29 0.26
ACME UNITED CORPORATION
CONSOLIDATED STATEMENT OF INCOME
THIRD QUARTER REPORT 2005
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Nine Months Nine Months
Ended Ended
September 30, September 30,
2005 2004
Amounts in $000's except per share data (Unaudited) (Unaudited)
Net Sales $ 38,887 $ 32,460
Gross Profit 17,758 14,691
Selling, General, and Administrative
Expenses 12,455 10,288
Other Expense 371 257
Non-Recurring Charge 1,500 -
Pre-Tax Income 3,432 4,146
Income Tax Expense 1,268 1,662
Net Income 2,164 2,484
Earnings Per Share Diluted 0.57 0.66
Reconciliation to reported Net Income (GAAP)
Pre-Tax Income as reported (GAAP) 3,432 4,146
Non-Recurring Charge 1,500 -
Pre-Tax Income as adjusted 4,932 4,146
Income Tax Expense as adjusted 1,838 1,662
Net Income as adjusted 3,094 2,484
Earnings Per Share Before Non-Recurring
Charge 0.81 0.66
ACME UNITED CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
THIRD QUARTER REPORT 2005
(Unaudited)
Amounts in $000's September 30, September 30,
2005 2004
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Assets:
Current Assets:
Cash $ 518 $ 1,481
Accounts Receivable, Net 11,491 11,213
Inventories 11,699 8,053
Prepaid and Other current Assets 741 647
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Total Current Assets 24,449 21,394
Property and Equipment, Net 2,759 2,212
Other Assets 1,113 711
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Total Assets $ 28,321 $ 24,317
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Liabilities and Stockholders' Equity:
Current Liabilities
Accounts Payable 1,918 1,928
Other Current Liabilities 5,285 5,365
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Total Current Liabilities 7,203 7,293
Long-Term debt 6,587 3,308
Other Non Current Liabilities 552 701
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14,341 11,302
Total Stockholders' Equity 13,980 13,015
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Total Liabilities and Stockholders'
Equity $ 28,321 $ 24,317
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CONTACT: Acme United Corporation
Paul G. Driscoll, 203-254-6060
Fax: 203-254-6521
SOURCE: Acme United Corporation