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Press release content from Globe Newswire. The AP news staff was not involved in its creation.
PRESS RELEASE: Paid content from Globe Newswire
Press release content from Globe Newswire. The AP news staff was not involved in its creation.

ACME United Reports 16% Net Income Increase and 2% EPS Increase for Second Quarter of 2021

July 22, 2021 GMT

SHELTON, Conn., July 22, 2021 (GLOBE NEWSWIRE) -- Acme United Corporation (NYSE American: ACU) today announced that net sales for the quarter ended June 30, 2021 were $44.8 million compared to $44.0 million in the second quarter of 2020, an increase of 2%. Net sales for the six months ended June 30, 2021 were $88.4 million, compared to $79.8 million in the same period in 2020, an increase of 11%.

Net income (excluding the impact of the forgiveness of the Company’s Paycheck Protection Program (“PPP”) loan) was $3,723,000 or $0.94 per diluted share for the quarter ended June 30, 2021 compared to $3,199,000, or $0.92 per diluted share, for the comparable period last year, an increase of 16% in net income and 2% in diluted earnings per share. Net income (excluding the impact of the PPP loan forgiveness) for the six months ended June 30, 2021 was $5,769,000, or $1.46 per diluted share, compared to $4,476,000, or $1.28 per diluted share, in last year’s same period, increases of 29% and 14%, respectively.

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On June 9, 2021 the Company’s PPP loan of $3.5 million was fully forgiven by the Small Business Administration (SBA), and that amount was remitted by the SBA to the company’s lender, HSBC Bank USA, NA. Net income for the second quarter including the loan forgiveness was $7.2 million, or $1.82 per diluted share. Net income for the six months ended June 30, 2021 including the loan forgiveness was $9.3 million, or $2.34 per diluted share.

Chairman and CEO Walter C. Johnsen said, “Our performance in the second quarter was impacted by interruptions in our operations as we installed a new warehouse management system at our main U.S. distribution facility in North Carolina. As planned, we did not ship for the first 10 days of the quarter. We finished the quarter with approximately $5 million of unfilled orders at the site. We are now shipping at more normal levels and are addressing the backorders. New orders continue to be strong and our new warehouse management system will enable us to fulfill them more quickly and efficiently.”

For the second quarter of 2021, net sales in the U.S. segment decreased 4% compared to the same period in 2020 due to the delayed shipments as the Company’s new warehouse management system was installed. For the six months ended June 30, 2021, net sales in the U.S. segment increased 6% compared to the same period in 2020. The growth was primarily attributable to strong sales of first aid and safety products.

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European net sales for the second quarter of 2021 increased 26% in U.S. dollars and 16% in local currency compared to the second quarter of 2020, mainly due to re-opening of offices and growth in the e-commerce channel across all product lines. Net sales for the six months ended June 30, 2021 increased 34% in U.S. dollars and 23% in local currency compared to the first half of 2020, mainly due to sales growth in the ecommerce channel across all product lines and continued growth of DMT sharpening products.

Net sales in Canada for the second quarter of 2021 increased 68% in U.S. dollars and 49% in local currency compared to the same period in 2020, due to higher sales of First Aid Central products, principally in the e-commerce channel as well as increased sales of school and office products compared to the COVID-19 lockdowns in the second quarter of 2020. Net sales for the six months ended June 30, 2021 increased 53% in U.S. dollars and 40% in local currency compared to the first half of 2020.

Gross margin was 36% in the second quarter of 2021 versus 36.5% in the comparable period last year. Gross margin was 36% for the six months ended June 30, 2021, compared to 37% for the same period of 2020.

The second quarter tax expense included a $0.9 million tax credit for stock-based compensation.

The Company’s bank debt less cash on June 30, 2021 was $39.4 million compared to $37.3 million on June 30, 2020. During the twelve-month period ended June 30, 2021, the Company paid approximately $9.3 million for the acquisition of the assets of Med-Nap LLC., distributed $1.7 million in dividends on its common stock, generated $3.6 million in free cash flow, and received forgiveness for the PPP loan of $3.5 million.

Conference Call and Webcast Information
Acme United will hold a conference call to discuss its quarterly results, which will be broadcast on Thursday, July 22, 2021, at 12:00 p.m. EDT. To listen or participate in a question and answer session, dial 800-353-6461 . International callers may dial 334-323-0501. The confirmation code is 8518704.  You may access the live webcast of the conference call through the Investor Relations section of the Company’s website, www.acmeunited.com. A replay may be accessed under Investor Relations, Audio Archives.

About Acme United
ACME UNITED CORPORATION is a leading worldwide supplier of innovative safety solutions and cutting technology to the school, home, office, hardware, sporting goods and industrial markets. Its leading brands include First Aid Only ®, First Aid Central ®, Physicians Care ®, Pac-Kit ®, Spill Magic ®, Westcott ®, Clauss ®, Camillus ®, Cuda ®, DMT ®, and Med-Nap. For more information, visit www.acmeunited.com.  

Forward Looking Statements
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 the impact that the global COVID-19 pandemic has had and will continue to have on the Company’s business, operations and financial results. These include, the extent of the COVID-19 pandemic, including the duration, spread, severity, and any recurrence of the COVID-19 pandemic including through any new variant strains of the underlying virus; the effectiveness and availability of vaccines; the duration and scope of pandemic-related government orders and restrictions on commercial and other activities, including retail store, office, school and restaurant closures; the duration and scope of the Company’s actions to maintain employee health at our offices, production facilities and distribution centers; the extent of the impact of the COVID-19 pandemic on overall demand for the Company’s products; the pace of recovery when an effective vaccine is widely available or when the pandemic otherwise subsides and the heightened impact the pandemic has on many of the risks described herein, including, without limitation, risks relating to the on-going world-wide economic downturn, and potential disruptions in our supply chain, any of which could adversely impact the Company’s ability to manufacture, source or distribute it products, both domestically and internationally.

These risks and uncertainties further include, 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, whether caused by COVID-19 or otherwise, including the impact on the Company’s suppliers and customers; (iii) changes in client needs and consumer spending habits, including COVID-19 related changes; (iv) the impact of competition; (v) the impact of technological changes including, specifically, the growth of online marketing and sales activity; (vi) the Company’s ability to manage its growth effectively, including its ability to successfully integrate any business it might acquire; (vii) the Company’s ability to effectively manage its inventory in a rapidly changing business environment, including additional inventory acquired to respond to COVID-19 related uncertainties; (viii) currency fluctuations; (ix) international trade policies and their impact on demand for our products and our competitive position, including the imposition of new tariffs or changes in existing tariff rates; and (x) 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 2021
  (Unaudited)  
                     
            Three Months Ended     Three Months Ended  
Amounts in 000's except per share data     June 30, 2021     June 30, 2020  
                     
                     
Net sales       $ 44,847     $ 44,042    
Cost of goods sold       28,694       27,989    
Gross profit         16,153       16,053    
Selling, general, and administrative expenses     12,364       11,670    
Operating income       3,789       4,383    
Interest expense       (226 )     (245 )  
Interest income       4       11    
  Interest expense, net       (222 )     (234 )  
PPP Loan forgiveness       3,508       -    
Other (expense) income , net     (68 )     1    
Total other income (expense), net     3,440       (233 )  
Income before income tax expense     7,007       4,150    
Income tax (benefit) expense     (224 )     951    
Net income       $ 7,231     $ 3,199    
                     
  Shares outstanding - Basic     3,347       3,349    
  Shares outstanding - Diluted     3,964       3,482    
                     
Earnings per share - Basic     $ 2.16     $ 0.96    
Earnings per share - Diluted     1.82       0.92    
                     
                     
Reconciliation to reported Net Income (GAAP)            
  Net income as reported (GAAP)     7,231       3,199    
  PPP Loan Forgiveness       (3,508 )     -    
  Net income as adjusted       3,723       3,199    
  Earnings per share before PPP Loan forgiveness - Basic       $ 1.11     $ 0.96    
  Earnings per share before PPP Loan forgiveness - Diluted         0.94       0.92    
ACME UNITED CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
SECOND QUARTER REPORT 2021 (cont.)
(Unaudited)
                     
                     
            Six Months Ended     Six Months Ended  
Amounts in 000's except per share data     June 30, 2021     June 30, 2020  
                     
Net sales       $ 88,372     $ 79,817    
Cost of goods sold       56,632       50,234    
Gross profit         31,740       29,583    
Selling, general, and administrative expenses     24,983       23,191    
Operating income       6,757       6,392    
Interest expense       (452 )     (568 )  
Interest income       9       14    
  Interest expense, net       (443 )     (554 )  
PPP Loan forgiveness       3,508       -    
Other expense, net       (145 )     (36 )  
Total other income (expense), net     3,363       (591 )  
Income before income tax expense     9,677       5,802    
Income tax expense       400       1,326    
Net income       $ 9,277     $ 4,476    
                     
  Shares outstanding - Basic     3,409       3,344    
  Shares outstanding - Diluted     3,960       3,499    
                     
Earnings per share - Basic     $ 2.72     $ 1.34    
Earnings per share - Diluted     2.34       1.28    
                     
Reconciliation to reported Net Income (GAAP)            
  Net income as reported (GAAP)     9,277       4,476    
  PPP Loan Forgiveness       (3,508 )     -    
  Net income as adjusted       5,769       4,476    
  Earnings per share before PPP Loan forgiveness - Basic       $ 1.69     $ 1.34    
  Earnings per share before PPP Loan forgiveness - Diluted         1.46       1.28    
ACME UNITED CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
SECOND QUARTER REPORT 2021
(Unaudited)
                     
Amounts in 000's       June 30, 2021     June 30, 2020  
                     
Assets:                  
Current assets:                
  Cash and cash equivalents   $ 3,240   $ 5,239  
  Accounts receivable, net     36,270     33,720  
  Inventories       48,691     44,311  
  Prepaid expenses and other current assets     2,233     2,438  
Total current assets       90,434     85,708  
                     
  Property, plant and equipment, net     22,408     14,277  
  Operating lease right of use asset     3,476     2,438  
  Intangible assets, less accumulated amortization   18,019     16,376  
  Goodwill         4,800     4,696  
  Other assets       1     41  
Total assets       $ 139,138   $ 123,536  
                     
Liabilities and stockholders' equity:              
Current liabilities:                
  Accounts payable     $ 8,021   $ 8,733  
  Operating lease liability - short term     919     933  
  Mortgage payable - short term     267     267  
  Other accrued liabilities     10,374     10,680  
Total current liabilities       19,581     20,613  
Long term debt       39,550     35,742  
  Note payable       -     3,508  
  Mortgage payable - long term     2,952     3,044  
  Operating lease liability - long term     2,589     1,573  
Other non-current liabilities     14     49  
Total liabilities       64,686     64,529  
Total stockholders' equity       74,452     59,007  
Total liabilities and stockholders' equity   $ 139,138   $ 123,536  
                     
CONTACT: Paul G. Driscoll Acme United Corporation  1 Waterview Drive Shelton, CT 06484
    Phone: (203) 254-6060