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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