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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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): September 20, 2005
ACME UNITED CORPORATION
(Exact name of registrant as specified in its charter)
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Connecticut 001-07698 06-0236700
(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) file number) Identification No.)
60 Round Hill Road, Fairfield, Connecticut 06824
(Address of principal executive offices) (Zip Code)
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:
[_] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[_] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[_] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[_] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
ITEM 8.01. OTHER EVENTS.
On September 20, 2005, Acme United Corporation issued a press release announcing
that it had incurred non-recurring charges in the third quarter ending September
30, 2005. A copy of the press release is attached as Exhibit 99.1 to this
current report.
(c) Exhibits
Exhibit Number Description
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99.1 Press release dated September 20, 2005.
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.
ACME UNITED CORPORATION
By /s/ WALTER C. JOHNSEN
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Walter C. Johnsen
President and
Chief Executive Officer
Dated: September 20, 2005
By /s/ PAUL G. DRISCOLL
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Paul G. Driscoll
Vice President and
Chief Financial Officer
Dated: September 20, 2005
EXHIBIT INDEX
Exhibit Number Description
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99.1 Press release dated September 20, 2005.
ACME UNITED CORPORATION NEWS RELEASE
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CONTACT: Paul G. Driscoll
Acme United Corporation
60 Round Hill Road, Fairfield, CT 06824
Phone: (203) 254-6060 FAX: (203) 254-6521
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FOR IMMEDIATE RELEASE September 20, 2005
ACME UNITED CORPORATION INCURS NON-RECURRING CHARGES IN THE THIRD QUARTER ENDING
SEPTEMBER 30, 2005
FAIRFIELD, CONN. - September 20, 2005 - Acme United Corporation (the
"Company") is the owner of certain commercial property located in Bridgeport,
Connecticut. Buildings, totaling approximately 150,000 square feet, are located
on this property. The Company ceased using the property as a manufacturing
facility in 1996. In October 1998, the Company leased the property to a
commercial tenant for a term of 24 years. Since then the tenant has leased
several of the buildings to subtenants primarily for use as commercial
warehouses.
The lease had provided for the payment of one dollar ($1.00) per year
as base rent and required that the tenant pay all taxes, insurance and other
expenses in connection with the property. Because the lease had granted the
tenant an option to purchase the property for one dollar the Company wrote off
the value of the property in 1998.
In July 2005, one of the buildings at the property sustained roof
damage. As a result of an inspection of the damaged building and the property
generally by local authorities, the Company received notice that it must either
repair certain portions of the damaged building and two others or demolish them
because of unsafe conditions. As a result of discussions between the Company and
the tenant regarding the required actions, the Company and the tenant agreed to
terminate the lease; the Company also decided to demolish all unoccupied
structures on the property.
Pursuant to a Termination of Lease entered into by the Company and the
tenant on September 16, 2005, the parties terminated this lease, effective
September 1, 2005. As part of the lease termination, the Company paid $400,000
to the tenant.
Several subtenants will continue to occupy portions of the property and
will pay rent presently totaling approximately $150,000 per year to the Company,
which will assume the subleases. In addition, the principal subtenant will pay a
portion of the taxes and insurance expenses related to the property it leases.
The leased property will provide positive net cash flow to the Company.
The Company estimates that it will cost approximately $1.7 million for
demolition of the structures. The Company intends to pay the costs of the lease
termination and demolition with funds borrowed under its existing revolving
credit facility. The Company intends to record these costs in the third fiscal
quarter, ending on September 30, 2005. Management is evaluating the accounting
for the above transactions and a final conclusion has not been reached. Based on
current estimates of fair value, management presently anticipates that the cost
of the lease cancellation will be accounted for as a capital item and the cost
of demolition will be expensed.
After completion of the demolition, Acme intends to explore the sale or
the development of the property and other ways to maximize its value.
Management does not believe that the Company's operations will be
significantly affected by either the lease termination or the costs of the
property demolition. The Company anticipates that, after recording these
non-recurring costs in the third fiscal quarter, the Company will have positive
earnings per share for the quarter.
ACME UNITED CORPORATION is a specialized supplier of cutting devices,
measuring instruments, and safety products for school, home, industrial and
office 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.
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