Acme United Corporation Reports 23% Sales Increase and 56% Increase in Earnings Per Share for the Fourth Quarter

  Acme United Corporation Reports 23% Sales Increase and 56% Increase in
  Earnings Per Share for the Fourth Quarter

Business Wire

FAIRFIELD, Conn. -- February 28, 2013

Acme United Corporation (NYSE MKT:ACU) today announced that net sales for the
fourth quarter ended December 31, 2012 were $19.5 million, compared to $15.8
million in the comparable period of 2011, an increase of 23%.

Net income was $431,000, or $.14 per diluted share, for the quarter ended
December 31, 2012, compared to $266,000 or $.09 per diluted share, for the
comparable period last year, an increase of 62% in net income and 56% in
diluted earnings per share.

Net sales for the year ended December 31, 2012 were $84.4 million, compared to
$73.3 million in 2011, an increase of 15%.

Net income for the year ended December 31, 2012 was $3,549,000, or $1.13 per
diluted share, compared to $2,811,000, or $.91 per diluted share last year, a
26% increase in net income and 24% increase in diluted earnings per share.

Net sales in the U.S. segment for the quarter and year ended December 31, 2012
increased 27% and 20%, respectively, compared to the same periods in 2011. The
increases for both periods were primarily due to greater sales of pencil
sharpeners, paper trimmers, first aid kits and new sales resulting from the
C-Thru Ruler acquisition in June, 2012. Revenues from new distribution of
Camillus knives at major retailers also contributed to the growth. Net sales
in Canada for the three months ended December 31, 2012 increased 10% in U.S.
dollars (7% in local currency) compared to the same period in 2011. Net sales
in Canada for the year ended December 31, 2012 increased 3% in U.S. dollars
(5% in local currency) compared to 2011. The increased sales in Canada for
both periods were primarily due to the introduction of Camillus knives.
European net sales for the three months ended December 31, 2012 increased 16%
in U.S. dollars (25% in local currency), compared to the same period last
year. European net sales for the year ended December 31, 2012 decreased 1% in
U.S. dollars but increased 9% in local currency compared to last year. The
increased sales in Europe for both periods were primarily due to higher sales
in the mass market channel.

Gross margins were 33.6% in the fourth quarter of 2012 versus 35.9% in the
comparable period last year. Gross margins were 35.2% for the year ended
December 31, 2012 versus 35.9% last year. In the fourth quarter of 2012, the
Company donated $135,000 of products to the Kids In Need Foundation. Excluding
the impact of the donation, gross margins would have been 34.2% and 35.4% for
the quarter and year ended December 31, 2012, respectively.

Operating profit was $465,000 for the quarter ended December 31, 2012 compared
to $522,000 for the comparable period last year. Excluding the impact from the
donation, operating profit was $600,000, an increase of 15% over last year.
Operating profit was $5,361,000 for the year ended December 31, 2012 compared
to $4,285,000 last year, an increase of 25%.

Income tax in the fourth quarter of 2012 included a tax benefit of
approximately $90,000 from the donation.

Walter C. Johnsen, Chairman and CEO said, “Acme United had an excellent year
in 2012. We had successful introductions of new iPoint pencil sharpeners and
TrimAir paper trimmers. We acquired the C-Thru line of lettering and measuring
tools and successfully integrated the product family. We brought a number of
new Camillus knives into broad distribution, and had excellent reception of
the Les Stroud survival tools. Both our PhysiciansCare and Pac-Kit first aid
product families entered new markets and gained share.” Mr. Johnsen added that
he would like to acknowledge the hard work of the Acme United employees, and
looks forward to another successful year in 2013.

The Company’s bank debt less cash and cash equivalents on December 31, 2012
was $14.6 million compared to $9.7 million on December 31, 2011. On June 7,
2012, the Company paid approximately $1.5 million for certain assets of the
C-Thru Ruler Company. During the year ended December 31, 2012, Acme purchased
43,000  shares of its common stock for treasury for a total of about $440,000
and paid approximately $1.1 million in dividends on its common stock. The
Company accelerated the payment of its fourth quarter dividend, which
historically has been paid in January, to December 2012, to be more tax
advantageous for shareholders.

ACME UNITED CORPORATION is a leading worldwide supplier of innovative cutting,
measuring and safety products to the school, home, office, hardware and
industrial markets. Its leading brands include Westcott®, Clauss®, Camillus®,
PhysiciansCare ® and Pac Kit®.

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 systems and
financial markets, including the impact on the Company’s suppliers and
customers; (iii) currency fluctuations; (iv) the Company’s plans and results
of operations will be affected by the Company’s ability to manage its growth;
(v) the Company’s ability to successfully integrate acquired business; and
(vi) 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 2012
(Unaudited)
                                                           
                                             Quarter Ended      Quarter Ended
Amounts in $000's except per share data     December 31,     December 31,
                                             2012               2011
                                                                
                                                                
Net sales                                  $ 19,534           $ 15,836
Cost of goods sold                           12,979            10,143    
Gross profit                                 6,555              5,693
Selling, general, and administrative         6,090             5,171     
expenses
Income from operations                       465                522
Interest expense                             (125      )        (100      )
Interest income                              61                37        
Net interest expense                         (64       )        (63       )
Other expense, net                           (5        )        (6        )
Total other expense, net                     (69       )        (69       )
Pre-tax income                               396               453       
Income tax (benefit) expense                 (35       )        187       
Net income                                 $ 431             $ 266       
                                                                
                Shares outstanding -         3,118              3,125
                Basic
                Shares outstanding -         3,175              3,125
                Diluted
                                                                
Earnings per share basic                   $ 0.14             $ 0.09
Earnings per share diluted                   0.14               0.09

ACME UNITED CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
YEAR END REPORT 2012 (cont.)
(Unaudited)
                                                          
                                           Year Ended          Year Ended
Amounts in $000's except per share data   December 31,      December 31,
                                           2012                2011
                                                               
Net sales                                $ 84,370            $ 73,302
Cost of goods sold                         54,623             46,977     
Gross profit                               29,747              26,325
Selling, general, and administrative       24,386             22,040     
expenses
Income from operations                     5,361               4,285
Interest expense                           (444       )        (404       )
Interest income                            179                150        
Net interest expense                       (265       )        (254       )
Other expense, net                         (99        )        (5         )
Total other expense, net                   (364       )        (259       )
Pre-tax income                             4,997              4,026      
Income tax expense                         1,448              1,215      
Net income                               $ 3,549            $ 2,811      
                                                               
              Shares outstanding -         3,116               3,100
              Basic
              Shares outstanding -         3,133               3,100
              Diluted
                                                               
Earnings per share basic                 $ 1.14              $ 0.91
Earnings per share diluted                 1.13                0.91

ACME UNITED CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
YEAR END REPORT 2012
(Unaudited)
                                                          
Amounts in $000's                      December 31,       December 31,
                                          2012                 2011
                                                               
Assets:
Current assets:
      Cash                              $ 9,750              $ 7,853
      Accounts receivable, net            16,442               12,904
      Inventories                         30,292               24,495
      Prepaid and other current           1,925                1,270
      assets
Total current assets                      58,409               46,522
                                                               
      Property and equipment, net         2,353                2,506
      Long term receivable                1,702                1,766
      Other assets                        5,364                4,428
Total assets                            $ 67,828             $ 55,222
                                                               
Liabilities and stockholders' equity:
Current liabilities
      Accounts payable                  $ 6,480              $ 4,935
      Other current liabilities           5,250                3,770
Total current liabilities                 11,730               8,705
Non-current liabilities
      Long term debt                      24,320               17,568
      Other non current liabilities       912                  1,174
Total liabilities                         36,962               27,447
Total stockholders' equity                30,866               27,775
Total liabilities and stockholders'     $ 67,828             $ 55,222
equity

Contact:

Acme United Corporation
Paul G. Driscoll
Phone: (203) 254-6060
FAX: (203) 254-6521
 
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