UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM l0-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1995
OR
[ ] TRANSITION REPORT PERSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND
EXCHANGE ACT OF 1934
For the transition period from _____________ to _____________
Commission File Number Q4823
ACME UNITED CORPORATION
________________________________________________________________________________
(Exact name of registrant as specified in its charter)
Connecticut 06-0236700
_______________________________ ___________________
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
75 Kings Highway Cutoff, Fairfield, Connecticut 06430
_______________________________________________ __________
(Address of principal executive offices) (Zip Code)
(203) 332-7330
__________________________________________________
Registrant's telephone number, including area code
________________________________________________________________________________
Former name, former address and former fiscal year, if changed since last report
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes [X] No [ ]
Registrant had 3,337,620 shares outstanding as of May 11, 1995 of its $ 2.50
par value Common Stock.
PART 1 - FINANCIAL INFORMATION
ITEM 1 FINANCIAL STATEMENTS
ACME UNITED CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
MARCH 31 DECEMBER 31
1995 1994
(UNAUDITED)
___________ ___________
Current Assets:
Cash and cash equivalents $ 660,675 $ 450,480
Accounts receivable 8,159,728 7,893,838
Inventories:
Finished Goods 12,969,200 11,227,978
Work in process 5,438,200 5,246,507
Raw materials & supplies 4,675,936 4,525,053
Deferred income taxes 356,897 356,874
Prepaid expenses and other current assets 829,348 747,758
___________ ___________
Total current assets 33,089,984 30,448,488
Plant, property and equipment
Land 812,879 756,625
Buildings 4,804,127 4,580,669
Machinery and equipment 16,531,531 16,063,066
Additions 248,115 -
___________ ___________
Total plant, property and equipment 22,396,652 21,400,360
Less, accumulated depreciation 13,487,110 12,852,430
___________ ___________
Net plant, property and equipment 8,909,542 8,547,930
Licensing agreements 1,599,757 1,705,416
Other assets 1,327,197 1,330,109
Goodwill 851,757 856,480
___________ ___________
Total assets $45,778,237 $42,888,423
=========== ===========
See notes to financial statements
ACME UNITED CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
LIABILITIES
MARCH 31 DECEMBER 31
1995 1994
(UNAUDITED)
___________ ___________
Current Liabilities:
Accounts payable $ 3,438,671 $ 2,473,125
Notes payable due within one year 4,917,680 4,000,069
Accrued liabilities:
Pension 536,222 470,400
Employee benefit claims 490,188 435,041
Other accrued liabilities 2,158,268 2,035,705
___________ ___________
Total current liabilities 11,541,039 9,414,340
Deferred income taxes 928,680 1,003,893
Long term debt 15,127,072 14,387,590
___________ ___________
Total liabilities 27,596,791 24,805,823
STOCKHOLDERS' EQUITY
Common stock, par value $2.50:
authorized 4,000,000 shares;
Issued 3,384,620, outstanding
3,337,620 8,461,550 8,461,550
Treasury Stock, 47,000 shares (357,631) (357,631)
Additional paid-in capital 2,145,119 2,145,119
Retained earnings 8,905,899 8,973,803
Translation adjustment (973,491) (1,140,241)
___________ ___________
Total stockholders' equity 18,181,446 18,082,600
___________ ___________
Total liabilities and stockholders' equity $45,778,237 $42,888,423
=========== ===========
See notes to financial statements
ACME UNITED CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
THREE MONTHS ENDED MARCH 31
1995 1994
Net Sales $12,896,891 $12,310,708
Other income 23,206 49,402
___________ ___________
12,920,097 12,360,110
Costs and expenses:
Cost of goods sold 9,276,192 9,031,685
Selling, general and
administrative expense 3,343,999 3,193,437
Interest expense 456,688 356,962
___________ ___________
13,076,879 12,582,084
___________ ___________
Loss before income taxes (156,782) (221,974)
Provision (benefit) for income taxes (88,878) (85,279)
___________ ___________
Net loss $ (67,904) $ (136,695)
=========== ============
Weighted average common and
dilutive common equivalent shares 3,353,899 3,337,620
========= =========
Loss per common share $(.02) $(.04)
==== ====
See notes to financial statements
ACME UNITED CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOW
(UNAUDITED)
THREE MONTHS ENDED MARCH 31
1995 1994
___________ ___________
Cash flows from operating activities:
Net loss $ (67,904) $ (136,695)
Adjustments for non-cash transactions
Depreciation 350,374 309,624
Amortization 140,316 137,896
Deferred tax charges/(credits) (175,936) 3,555
Change in assets and liabilities
Decrease in accounts receivable 189,491 496,335
(Increase) in inventory (1,589,165) (904,499)
(Increase) in prepaid expenses and other
current assets (47,126) (174,307)
(Increase) in other assets (22,271) (15,704)
Increase in accounts payable 840,688 100,897
(Decrease) in income taxes payable (35,658) -
(Decrease) in other liabilities (121,960) (137,631)
___________ ___________
Total adjustments (471,247) (183,834)
___________ ___________
Net cash used by operations (539,151) (320,529)
___________ ___________
Cash flow from investing activities:
Capital expenditures (246,338) (300,356)
___________ ___________
Net cash used for investing activities (246,338) (300,356)
___________ ___________
Cash flows from financing activities:
Net borrowings 994,194 745,023
___________ ___________
Net cash provided by
financing activities 994,194 745,023
___________ ___________
Effect of exchange rate changes on cash 1,490 (179,255)
___________ ___________
Net change in cash and cash equivalents 210,195 (55,117)
Cash and cash equivalents at beginning of year 450,480 318,660
___________ ___________
Cash and cash equivalents $ 660,675 $ 263,543
=========== ===========
See notes to financial statements
ACME UNITED CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. In the opinion of Management, the accompanying consolidated financial
statements contain all adjustments necessary to present fairly the financial
position as of March 31, 1995 and December 31, 1994 and the results of its
operations for the three month periods ended March 31, 1995 and March 31, 1994
and changes in the cash flows for the three months then ended. The financial
statements reflect all recurring adjustments but do not include all of the
disclosures normally required by generally accepted accounting principles or
those normally made in the annual Form 10-K filing. Please refer to the
Company's annual report for year ended December 31, 1994 for such disclosures.
2. The results of operations for the three months ended March 31, 1995 are not
necessarily indicative of the results to be expected for the full year.
3. Net Income (loss) per share is based on the weighted average number of
common shares and dilutive common equivalent shares (common stock options)
outstanding using the treasury stock method.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE CONSOLIDATED
STATEMENTS OF OPERATION
RESULTS OF OPERATIONS
Net Sales
Consolidated net sales increased $586,000 or 5% for the three month period
ended March 31, l995 as compared to the similar period in l994 which can be
mainly attributed to increased sales volume. Net sales for consumer operations
increased $668,000 or 9% for the three month period in 1995 over l994 primarily
because of volume increases in the U.S. Net sales for medical operations
decreased $82,000 or 2% for the three month period in l995 over l994 because of
lower volume.
Net sales from U.S. operations were $8,521,000 for the three month period ended
March 31, l995, an increase of $673,000 or 9%. Foreign operations net sales
were $4,376,000 for the three month period which resulted in a decrease of
$87,000 or 2% compared to 1994. Foreign operation sales were favorably impacted
as a result of the strength in the German mark and the British pound.
Gross Profit Margin
The consolidated gross profit margin for the three month period ended March 31,
1995 was 28% as compared to 27% in 1994. The medical division margins decreased
to 37% for the three month period in l995 as compared to 38% for l994 which can
be attributed to higher costs. The consumer division gross profit was 23% and
20% for the three month period in l995 and l994, respectively. Margins improved
on US consumer and declined on foreign operations.
Selling, General and Administrative Expenses
Selling, general and administrative expenses increased $151,000 or 5% for the
three month period ended March 31, l995 over l994 which is primarily
attributable to inflationary increases and the effect of a stronger German mark
and British pound.
Interest Expense
Interest expense increased $100,000 for the three month period ended March 31,
l995 as compared to l994 which is attributable to increased average borrowings
and higher interest rates on the U.S. revolving line of credit.
Provision for Income Taxes
The effective tax rate for the three month period ended March 31, l995 was 57%
as compared to 38% for l994. The consolidated effective tax rates vary from
year to year because income (loss) before taxes vary from year to year by
country of operation and the statutory rates and laws vary by country of
operation.
Liquidity and Capital Commitments
The Company's working capital, current ratio and long term debt to equity ratio
are as follows:
March 31, 1995 December 31, 1994
Working capital $21,549,000 $21,035,000
Current ratio 2.87 to 1 3.23 to 1
Long term debt to equity ratio .83 .80
Capital expenditures were $246,000 for the three month period ended March 1995.
The 1995 capital expenditures are expected to be approximately $1,200,000.
The Company has a $l3,000,000 U.S. revolving line of credit due to expire in
March l997 and foreign overdraft arrangements due to expire at various times in
l995. Based on maintaining the U.S. revolving line of credit and foreign
overdraft arrangements, current cash balances and cash flow from operations,
the Company believes it can meet capital expenditure and other planned
financial commitments in l995.
PART II - OTHER INFORMATION
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) The Annual Meeting was held on April 24, 1995.
(b) The following individuals were elected Directors at the
meeting and comprise the entire Board.
Votes Votes
for withheld
_________ _________
David W. Clark, Jr. 3,055,832 99,340
George R. Dunbar 3,055,750 99,422
James F. Farrington 3,057,625 97,547
Walter C. Johnsen 3,057,675 97,497
Newman M. Marsilius 3,055,700 99,472
Wayne R. Moore 3,055,832 99,340
Gary D. Penisten 3,055,832 99,340
Dwight C. Wheeler II 3,055,545 99,627
Henry C. Wheeler 3,055,737 99,435
(c) Coopers & Lybrand L.L.P. were appointed as Auditors for the
Company for the year 1995 with 3,129,566 shares voting for the
appointment, 20,623 shares voting against the appointment,
4,983 abstentions and 38,798 broker non-votes.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) No Form 8-K was filed by the Company during the three months
ended March 31, l995.
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 thereunto duly authorized.
ACME UNITED CORPORATION
________________________________
(Registrant)
Date: May 11, 1995 Stephen T. Bajda
________________________________
Stephen T. Bajda
Senior Vice President-Finance
Date: May 11, 1995 Richard L. Windt
_________________________________
Richard L. Windt
Controller
5
3-MOS
DEC-31-1995
JAN-01-1995
MAR-31-1995
660675
0
7301726
216822
23083336
33098984
22396652
13487110
45778237
11541039
15127072
8461550
0
0
9719896
45778237
12896891
12920097
9276192
9276192
0
37647
456688
(156782)
(88878)
(67904)
0
0
0
(67904)
(.02)
(.02)
