Acme United Corporation Reports Record Sales and Earnings

  Acme United Corporation Reports Record Sales and Earnings  Business Wire  FAIRFIELD, Conn. -- July 24, 2014  Acme United Corporation (NYSE MKT:ACU) today announced that net sales for the second quarter ended June 30, 2014 were $33.4 million, compared to $28.4 million in the comparable period of 2013, an increase of 18%. Excluding additional sales resulting from the acquisition on June 2, 2014 of First Aid Only, Inc., comparable sales increased 10%. Net sales for the six months ended June 30, 2014 were $52.5 million, compared to $46.1 million in the same period in 2013, an increase of 14%. Excluding First Aid Only, sales increased 10%.  On June 2, 2014, the Company acquired the assets of First Aid Only, Inc, based in Vancouver, WA, for $13.8 million in cash. The acquired net assets totaled approximately $3.5 million, which included inventory, equipment and accounts receivable. The purchase price also included intangible assets of approximately $10.3 million. First Aid Only is a supplier of Smart Compliance® first aid kits, refills, and safety products that meet regulatory requirements for a broad range of industries. First Aid Only pioneered consultative selling and support of first aid items to large corporate customers, and is recognized as an innovative leader in the safety products industry.  Net income for the quarter ended June 30, 2014 was $2,543,000, or $.72 per diluted share, compared to $2,210,000, or $.68 per diluted share, for the comparable period in 2013, an increase of 15% in net income and 6% in diluted earnings per share. Net income for the six months ended June 30, 2014 was $2,911,000, or $.83 per diluted share, compared to $2,520,000, or $.78 per diluted share in the comparable period last year, a 16% increase in net income and 6% in diluted earnings per share.  Net sales for the quarter ended June 30, 2014 in the U.S. segment increased 19% compared to the same period in 2013 due to increased sales of first aid products, additional sales resulting from the acquisition of First Aid Only, Inc., and increased sales of pencil sharpeners. Net sales for the six months ended June 30, 2014 in the U.S. segment grew 17% compared to the same period in 2013 due to increased sales of first aid products, additional sales from the acquisition of First Aid Only, Inc., the introduction of new lawn and garden products, and growth in sales of iPoint pencil sharpeners.  Net sales in Canada for the three months ended June 30, 2014 increased 17% in U.S. dollars and 24% in local currency compared to the same period in 2013. Net sales for the six months ended June 30, 2014 in Canada increased 9% in U.S. dollars and 16% in local currency compared to the same period in 2013. The increases in sales for the three and six month periods were primarily due to strong back to school sales and the introduction of new lawn and garden products.  Net sales in Europe for the three months ended June 30, 2014 increased 5% in U.S. dollars but were constant in local currency compared to the same period in 2013. Net sales for the six months ended June 30, 2014 in Europe decreased 5% in U.S. dollars and 9% in local currency compared to the same period in 2013 primarily due to the timing of sales to mass market customers.  Gross margins were 34.5% in the second quarter of 2014 compared to 35.5% in the second quarter of 2013. In the first quarter of 2014, the Company successfully completed the consolidation of its U.S. warehousing operations, moving from Fremont, NC to its new 340,000 sq. ft. facility in Rocky Mount, NC. In this regard, the Company incurred approximately $250,000 of one-time moving, training and ramp up costs in the second quarter of 2014 as reported in Cost of Goods Sold. Gross margins were 35.0% for the six months ended June 30, 2014 compared to 35.8% for the comparable period last year.  On April 7, 2014 the Company sold its Fremont, NC plant for $850,000, and recorded a gain of $200,000 in the second quarter of 2014 reported as other income.  The Company’s bank debt less cash on June 30, 2014 was $28.9 million compared to $17.6 million on June 30, 2013. During the 12 month period the Company purchased and made capital improvements to its new distribution facility in Rocky Mount, NC for $4.5 million, sold its Fremont, NC plant for $0.8 million, received $1.7 million from early repayment of a mortgage receivable and paid approximately $13.8 million for First Aid Only, Inc. During the 12 month period, the Company also generated $6.1 million in cash flow from operations and paid $1.0 million in dividends on its common stock.  Walter C. Johnsen, Chairman and CEO said, “We are pleased with the strong sales performances of our first aid products, back to school Westcott items, and our new gardening tools during the quarter. We see continued strong sales momentum, and expect a strong back to school season.” Mr. Johnsen added that the integration of the First Aid Only acquisition is progressing well, and that it has already become accretive to earnings.  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) changes in the Company’s plans, strategies, objectives, expectations and intentions, which may be made at any time at the discretion of the Company; (ii) the impact of uncertainties in global economic conditions, including the impact on the Company’s suppliers and customers (iii) changes in client needs and consumer spending habits; (iv) the impact of competition and technological changes on the company (v) the Company’s ability to manage its growth effectively, including its ability to successfully integrate any business it might acquire; (vi) currency fluctuations; and (vii) 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 SECOND QUARTER REPORT 2014 (Unaudited)                                      Three Months Ended  Three Months Ended Amounts in 000's except per         June 30, 2014       June 30, 2013 share data                                                                                                                                     Net sales                              $    33,396          $    28,412 Cost of goods sold                          21,875              18,331     Gross profit                                11,521               10,081 Selling, general, and                       7,983               6,889      administrative expenses Income from operations                      3,538                3,192 Interest expense                            108                  122 Interest income                             (2        )          (48       ) Net interest expense                        106                  74 Other (income) expense, net                 (204      )          25         Total other (income) expense,               (98       )          99 net Pre-tax income                              3,636                3,093 Income tax expense                          1,093               883        Net income                             $    2,543          $    2,210       Shares outstanding - Basic                  3,210                3,156 Shares outstanding - Diluted                3,539                3,266  Earnings per share basic               $    0.79            $    0.70 Earnings per share diluted                  0.72                 0.68                                                                               ACME UNITED CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF INCOME SECOND QUARTER REPORT 2014 (cont.) (Unaudited)                                       Six Months Ended    Six Months Ended Amounts in 000's except per         June 30, 2014       June 30, 2013 share data                                                                    Net sales                              $   52,548             $   46,063 Cost of goods sold                         34,150                29,554    Gross profit                               18,398                 16,509 Selling, general, and                      14,235                12,803    administrative expenses Income from operations                     4,163                  3,706 Interest expense                           197                    249 Interest income                            (9       )             (106     ) Net interest expense                       188                    143 Other (income) expense, net                (184     )             28        Total other (income) expense,              4                     171       net Pre-tax income                             4,159                  3,535 Income tax expense                         1,248                 1,015     Net income                             $   2,911             $   2,520                                                                        Shares outstanding - Basic                 3,206                  3,144 Shares outstanding - Diluted               3,487                  3,234  Earnings per share basic               $   0.91               $   0.80 Earnings per share diluted                 0.83                   0.78                                                                               ACME UNITED CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS SECOND QUARTER REPORT 2014 (Unaudited)  Amounts in 000's                          June 30, 2014    June 30, 2013  Assets: Current assets:                                            Cash                                         $    2,426          $    8,458 Accounts receivable, net                          30,794              25,420 Inventories                                       30,885              29,450 Prepaid and other current assets                 1,969              2,115 Total current assets                              66,075              65,443  Property and equipment, net                       6,576               2,353 Long term receivable                              0                   1,669 Intangible assets, less amortization              14,251              4,156 Other assets                                     1,084              1,115 Total assets                                 $    87,987         $    74,736  Liabilities and stockholders' equity: Current liabilities Accounts payable                             $    10,919         $    9,092 Other current liabilities                         7,466               5,401 Total current liabilities                         18,385              14,493 Bank debt                                         31,325              26,012 Other non current liabilities                    439                1,021                                                   50,150              41,526 Total stockholders' equity                       37,838             33,210 Total liabilities and stockholders'          $    87,987         $    74,736 equity                                                                         Contact:  Acme United Corporation Paul G. Driscoll, 203-254-6060 Fax: 203-254-6521  
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