Acme United Corporation Reports Fourth Quarter Sales Increase of 7% and
Earnings Increase of 22%
Earnings Increase of 22%
Net income for the fourth quarter ended December 31, 2009 was $731,000, or $.22per diluted share, compared to $634,000, or $.18 per diluted share, for the comparable period last year, an increase of 22%. Net income for the year ended December 31, 2009 was $2,842,000, or $.85 per diluted share, compared to $4,467,000, or $1.24 per diluted share, in the comparable period last year.
Net sales for the year ended December 31, 2009, in the U.S. segment decreased 16% compared to 2008. Net sales in Canada for the year ended December 31, 2009 decreased 13% in U.S. dollars compared to 2008, and 6% in local currency. The decline in net sales for the twelve months ended December 31, 2009 in the U.S. and Canadian segment was principally due to the economic downturn. European net sales for the year ended December 31, 2009 increased 3% in U.S. dollars and 8% in local currency compared to 2008.
Gross margins were 39% for the fourth quarter ended December 31, 2009 and 2008, respectively. Gross margins were 37% for 2009 compared to 40% in 2008. The gross margin decline for the year was primarily due to fixed costs spread over lower sales, the weaker Canadian dollar which raised the cost of products in our Canadian segment, and product mix.
Operating income in the fourth quarter ended December 31, 2009 was $293,000, compared to $795,000 in the fourth quarter of 2008. Operating income in the fourth quarter of 2009 included a $210,000 write-off of medical products donated for relief efforts. The fourth quarter of 2008 included a benefit of $400,000 from the reversal of incentive compensation liabilities. Excluding these items, operating income was $503,000 in the fourth quarter of 2009 compared to $395,000 in 2008.
Pretax income in the fourth quarter ended December 31, 2009 was $266,000 compared to $875,000 in the fourth quarter of 2008. Included in pretax income in the fourth quarter of 2008 was $265,000 in other income related to the Company's gain on the sale of its former facility in Bridgeport, CT, which had ceased manufacturing in 1996. Excluding the $210,000 charge associated with the donation of medical products and the exceptional items in the fourth quarter of 2008, pretax income was $476,000 in the fourth quarter of 2009 compared to $210,000 in same period in 2008.
In the fourth quarter of 2009, the Company recorded an income tax benefit of approximately $464,000, which was primarily due to $500,000 of tax savings related to the Company's donation of medical products to AmeriCares and the donation of land to the City of Bridgeport, CT. This donation, which occurred in December 2009, consisted of waterfront property adjacent to the property the Company sold in December 2008.
The full year effective tax rate in 2009 was 18%, compared to 33% in 2008. The decrease in the effective tax rate in 2009 was primarily the result of the $500,000 of tax savings resulting from the donations. Without these credits, the effective tax rate would have been approximately 32% for 2009.
Walter C. Johnsen, Chairman and CEO said, "We completed 2009 with momentum. Our award-winning iPoint pencil sharpeners are gaining wide distribution, the Speed Pak utility knives are building sales, and the Camillus knife sales are growing. Our new proprietary non-stick coatings are broadening our product applications for cutting in the craft, office, industrial, hardware and other markets."
Mr. Johnsen added that he was pleased with the Company's substantial reduction in debt during the year, and its new bank facility obtained in January 2010. He emphasized that Acme United enters 2010 with a stronger balance sheet than a year ago, and is well positioned for growth.
The Company's bank debt less cash on December 31, 2009 was $2.7 million compared to $6.5 million on December 31, 2008. During fiscal year 2009, the Company repurchased 206,000 shares of its common stock for approximately $1.7 million and paid $700,000 in dividends on its common stock; the expenditures were offset by cash flow from operations of $6.6 million.
ACME UNITED CORPORATION is an innovative supplier of cutting devices, measuring instruments and safety products for school, home, office, industrial and hardware use. Its leading brands include Westcott(R), Clauss(R), Camillus(R) and PhysiciansCare (R).
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 impact of current uncertainties in global economic conditions and the ongoing financial crisis affecting the domestic and foreign banking system and financial markets, including the impact on the Company's suppliers and customers (iii) the Company's plans and results of operations will be affected by the Company's ability to manage its growth, and (iv) other risks and uncertainties indicated from time to time in the Company's filings with the Securities and Exchange Commission.
| ACME UNITED CORPORATION | ||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||
| YEAR END REPORT 2009 | ||||||||||||
| (Unaudited) | ||||||||||||
| Quarter Ended | Quarter Ended | |||||||||||
| Amounts in $000's except per share data | December 31, 2009 | December 31, 2008 | ||||||||||
| Net sales | $ | 13,422 | $ | 12,584 | ||||||||
| Cost of goods sold | 8,248 | 7,701 | ||||||||||
| Gross profit | 5,174 | 4,883 | ||||||||||
| Selling, general, and administrative expenses | 4,881 | 4,088 | ||||||||||
| Income from operations | 293 | 795 | ||||||||||
| Interest expense | (32 | ) | (89 | ) | ||||||||
| Interest income | 33 | - | ||||||||||
| Net interest expense | 2 | (89 | ) | |||||||||
| Other (expense) income | (29 | ) | 169 | |||||||||
| Total other (expense) income net | (27 | ) | 80 | |||||||||
| Pre-tax income | 266 | 875 | ||||||||||
| Income tax (benefit) expense | (464 | ) | 241 | |||||||||
| Net income | $ | 731 | $ | 634 | ||||||||
| Shares outstanding - Basic | 3,208 | 3,415 | ||||||||||
| Shares outstanding - Diluted | 3,305 | 3,511 | ||||||||||
| Earnings per share basic | $ | 0.23 | $ | 0.19 | ||||||||
| Earnings per share diluted | 0.22 | 0.18 | ||||||||||
| ACME UNITED CORPORATION | ||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||
| YEAR END REPORT 2009 (cont.) | ||||||||||||
| (Unaudited) | ||||||||||||
| Year Ended | Year Ended | |||||||||||
| Amounts in $000's except per share data | December 31, 2009 | December 31, 2008 | ||||||||||
| Net sales | $ | 59,149 | $ | 68,719 | ||||||||
| Cost of goods sold | 37,075 | 41,062 | ||||||||||
| Gross profit | 22,073 | 27,657 | ||||||||||
| Selling, general, and administrative expenses | 19,047 | 20,778 | ||||||||||
| Income from operations | 3,027 | 6,879 | ||||||||||
| Interest expense | (155 | ) | (396 | ) | ||||||||
| Interest income | 129 | - | ||||||||||
| Net interest expense | (26 | ) | (396 | ) | ||||||||
| Other (expense) income | 452 | 193 | ||||||||||
| Total other income (expense) net | 426 | (203 | ) | |||||||||
| Pre-tax income | 3,453 | 6,676 | ||||||||||
| Income tax expense | 611 | 2,209 | ||||||||||
| Net income | $ | 2,842 | $ | 4,467 | ||||||||
| Shares outstanding - Basic | 3,289 | 3,486 | ||||||||||
| Shares outstanding - Diluted | 3,353 | 3,612 | ||||||||||
| Earnings per share basic | $ | 0.86 | $ | 1.28 | ||||||||
| Earnings per share diluted | 0.85 | 1.24 | ||||||||||
| ACME UNITED CORPORATION | ||||||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||||||
| YEAR END REPORT 2009 | ||||||||||||
| (Unaudited) | ||||||||||||
| Amounts in $000's | December 31, 2009 | December 31, 2008 | ||||||||||
|
Assets: |
||||||||||||
| Current assets: | ||||||||||||
| Cash | $ | 6,519 | $ | 5,225 | ||||||||
| Accounts receivable, net | 10,703 | 10,564 | ||||||||||
| Inventories | 17,400 | 21,769 | ||||||||||
| Prepaid and other current assets | 1,133 | 1,088 | ||||||||||
| Total current assets | 35,755 | 38,646 | ||||||||||
| Property and equipment, net | 2,088 | 2,269 | ||||||||||
| Long term receivable | 1,892 | 2,000 | ||||||||||
| Other assets | 2,574 | 2,509 | ||||||||||
| Total assets | $ | 42,309 | $ | 45,424 | ||||||||
|
Liabilities and stockholders' equity: |
||||||||||||
| Current liabilities | ||||||||||||
| Accounts payable | $ | 3,546 | $ | 3,669 | ||||||||
| Other current liabilities | 3,257 | 5,157 | ||||||||||
| Total current liabilities | 6,803 | 8,826 | ||||||||||
| Non-current liabilities | ||||||||||||
| Long term debt | 9,154 | 11,750 | ||||||||||
| Other non current liabilities | 1,811 | 1,960 | ||||||||||
| Total liabilities | 17,768 | 22,536 | ||||||||||
| Total stockholders' equity | 24,541 | 22,888 | ||||||||||
| Total liabilities and stockholders' equity | $ | 42,309 | $ | 45,424 | ||||||||
SOURCE: Acme United Corporation
Acme United Corporation
Paul G. Driscoll, 203-254-6060
Fax: 203-254-6521