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 June 30, 1995
OR
[ ] TRANSITION REPORT PURSUANT 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 August 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
June 30 December 31
1995 1994
(Unaudited)
_____________ _____________
Current Assets:
Cash and cash equivalents $ 352,937 $ 450,480
Accounts and other receivables 10,944,703 7,893,838
Inventories:
Finished goods 12,662,800 11,227,978
Work in process 5,607,000 5,246,507
Raw materials & supplies 4,467,558 4,525,053
Deferred income taxes 357,075 356,874
Prepaid expenses and other current assets 618,400 747,758
_____________ _____________
Total current assets 35,010,473 30,448,488
Plant, Property and Equipment:
Land 809,308 756,625
Buildings 4,791,799 4,580,669
Machinery and equipment 16,460,477 16,063,066
Additions 537,538 -
_____________ _____________
Total plant, property and equipment 22,599,122 21,400,360
Less, accumulated depreciation 13,796,489 12,852,430
_____________ _____________
Net plant, property and equipment 8,802,633 8,547,930
Licensing agreements 1,494,099 1,705,416
Other assets 1,231,084 1,330,109
Goodwill 839,372 856,480
_____________ _____________
Total assets $ 47,377,661 $ 42,888,423
============= =============
See notes to financial statements
ACME UNITED CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
LIABILITIES
June 30 December 31
1995 1994
(Unaudited)
_____________ _____________
Current Liabilities:
Accounts payable $ 2,644,104 $ 2,473,125
Notes payable due within one year 5,664,970 4,000,069
Accrued liabilities:
Pension 527,125 470,400
Employee benefit claims 487,828 435,041
Other accrued liabilities 2,273,247 2,035,705
_____________ _____________
Total current liabilities 11,597,274 9,414,340
Deferred income taxes 789,120 1,003,893
Long term debt 16,530,925 14,387,590
_____________ _____________
Total liabilities 28,917,319 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 9,147,487 8,973,803
Translation adjustment (936,183) (1,140,241)
_____________ _____________
Total stockholders' equity 18,460,342 18,082,600
_____________ _____________
Total liabilities and stockholders' equity $ 47,377,661 $ 42,888,423
============= =============
See notes to financial statements
ACME UNITED CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations
Unaudited
Three months ended Six months ended
__________________________ __________________________
June 30 June 30 June 30 June 30
1995 1994 1995 1994
____________ ____________ ____________ ____________
Net Sales $14,470,395 $14,244,816 $27,367,286 $26,721,194
Other income 15,126 80,250 38,332 129,652
____________ ____________ ____________ ____________
14,485,521 14,325,066 27,405,618 26,850,846
Costs and expenses:
Cost of goods sold 10,290,173 10,305,125 19,566,365 19,502,480
Selling, general and
administrative expense 3,387,458 3,399,065 6,731,457 6,592,502
Interest expense 496,274 374,472 952,962 731,434
____________ ____________ ____________ ____________
13,076,879 14,078,662 27,250,784 26,826,416
____________ ____________ ____________ ____________
Income before income taxes 311,616 246,404 154,834 24,430
Provision (benefit) for income taxes 70,028 43,612 (18,850) (41,667)
____________ ____________ ____________ ____________
Net income $ 241,588 $ 202,792 $ 173,684 $ 66,097
============ ============ ============ ============
Weighted average common and
dilutive common equivalent shares 3,355,122 3,337,620 3,359,489 3,337,620
============ ============ ============ ============
Income per common share $ .07 $ .06 $ .05 $ .02
============ ============ ============ ============
See notes to financial statements
ACME UNITED CORPORATION
Consolidated Statement of Cash Flows
Unaudited
Six months ended
__________________________
June 30 June 30
1995 1994
____________ ____________
Cash flows from operating activities:
Net income $ 173,684 $ 66,097
Adjustments for non-cash transactions:
Depreciation 706,342 629,267
Amortization 280,651 278,006
Deferred tax charges/(credits) (256,065) (86,086)
(Gain) on sale of property, plant and equipment (6,436) -
Change in assets and liabilities:
(Increase) in accounts receivable (2,608,765) (1,521,489)
(Increase) in inventory (1,247,993) (566,015)
(Increase) in prepaid expenses and other
current assets 144,990 (85,408)
Decrease in other assets 46,025 24,437
Increase/(decrease) in accounts payable 59,825 (1,068,849)
Increase in income taxes payable 132,915 286,148
(Decrease) in other liabilities (162,026) (104,198)
____________ ____________
Total adjustments (2,910,537) (2,214,187)
____________ ____________
Net cash used by operations (2,736,853) (2,148,090)
____________ ____________
Cash flow from investing activities:
Capital expenditures (538,014) (617,693)
Proceeds from sales of property, plant and equipment 6,459 6,940
____________ ____________
Net cash used for investing activities (531,555) (610,753)
____________ ____________
Cash flows from financing activities:
Net borrowings 3,159,955 2,575,400
____________ ____________
Net cash provided by financing activities 3,159,955 2,575,400
____________ ____________
Effect of exchange rate changes on cash 10,910 (1,362)
____________ ____________
Net change in cash and cash equivalents (97,543) (184,805)
Cash and cash equivalents at beginning of period 450,480 318,660
____________ ____________
Cash and cash equivalents at end of period $ 352,937 $ 133,855
============ ============
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
June 30, 1995 and December 31, 1994 and the results of its
operations for the three and six month periods ended June
30, 1995 and 1994 and changes in the cash flows for the
three and six 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 and six months
ended June 30, 1995 are not necessarily indicative of the
results to be expected for the full year.
3. Net Income 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 $226,000 or 2% and $646,000
or 2% for the three and six month periods ended June 30,
1995 as compared to the similar periods in 1994. Net sales
for consumer operations increased $340,000 or 3% and
$843,000 or 5% for the three and six month periods in 1995
over 1994 which can be attributed to a 6% and 11% sales
increase in U.S. Consumer operations for the three and six
months, respectively. Net sales for medical operations
decreased $115,000 or 3% and $197,000 or 2% for the three
and six month periods in 1995 over 1994 mainly due to a
volume decrease in some wound care products.
Net sales from U.S. operations were $9,546,000 and
$18,068,000 for the three and six month periods ended June
30, 1995, an increase of $256,000 or 3% and $929,000 or 5%,
respectively. Foreign operations net sales were $4,924,000
and $9,300,000 for the three and six month periods which
resulted in a decrease of $30,000 or 1% and $283,000 or 3%,
respectively, compared to 1994. Foreign sales were
positively impacted on translation by approximately
$900,000, primarily on the strength of the German mark and
British pound.
Gross Profit Margin
The consolidated gross profit margin for the three and six
month periods ended June 30, 1995 was 29%, as compared to
28% and 27%, respectively, in 1994. The medical operation
margins were 37% for the three and six month periods in 1995
as compared to 38% and 37% for the same periods in 1994
which can be attributed to product sales mix and the
decision not to pass on higher costs on selected products
because of competitive market conditions. The consumer
operation margins were 26% and 25% for the three and six
month periods in 1995, compared to 23% and 22%,
respectively, which can be attributed to product sales mix,
lower manufacturing costs and price increases.
Selling, General and Administrative Expenses
Selling, general and administrative expenses decreased
$12,000 and increased $139,000 or 2% for the three and six
month periods ended June 30, 1995 over 1994. The Company
has selectively reduced costs in 1995 which has been offset
by inflationary increases and the effect of a stronger
German mark and British pound on the translation of results.
Interest Expense
Interest expense increased $122,000 and $222,000 for the
three and six month periods ended June 30, 1995 as compared
to 1994 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 and six month periods
ended June 30, 1995 was 22% and negative 12% as compared to
18% and negative 171% for 1994. 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:
June 30, 1995 December 31, 1994
_________________ _________________
Working capital $23,413,000 $21,035,000
Current ratio 3.02 to 1 3.23 to 1
Long term debt to equity ratio .90 .80
Capital expenditures were $538,000 and $618,000 for the six
month periods ended June 30, 1995 and 1994. The 1995
capital expenditures are expected to be approximately
$1,200,000.
The Company has a $13,000,000 U.S. revolving line of credit
due to expire in March l997 and foreign overdraft
arrangements due to expire at various times in 1995. 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 1995.
PART II - OTHER INFORMATION
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) No Form 8-K was filed by the Company during the three months
ended June 30, 1995.
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: August 11, 1995 Stephen T. Bajda
______________________________
Stephen T. Bajda
Senior Vice President-Finance
Date: August 11, 1995 Richard L. Windt
______________________________
Richard L. Windt
Controller
5
6-MOS
DEC-31-1995
JUN-30-1995
352937
0
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0
0
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47377661
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19566365
0
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154834
(18850)
173684
0
0
0
173684
.05
.05
