Acme United Corporation Reports 19% Sales Increase And 50% Increase In Earnings Per Share For The Fourth Quarter

Acme United Corporation (NYSE AMEX:ACU) today announced that net sales for the fourth quarter ended December 31, 2011 were $15.8 million, compared to $13.4 million in the comparable period of 2010, an increase of 19%. Excluding sales resulting from the acquisition on February 28, 2011 of Pac-Kit, one of the oldest manufacturers of first aid products, comparable sales for the quarter ended December 31, 2011 increased by 9%. Net sales for the year ended December 31, 2011 were $73.3 million, compared to $63.1 million in 2010, an increase of 16% (8% excluding Pac-Kit).

Net income was $266,000, or $.09 per diluted share, for the quarter ended December 31, 2011, compared to $181,000 or $.06 per diluted share, for the comparable period last year, an increase of 49% in net income and 50% in diluted earnings per share.

Net income for the year ended December 31, 2011 was $2,811,000, or $.91 per diluted share, compared to $2,573,000, or $.81 per diluted share, last year, a 9% increase in net income and a 12% increase in diluted earnings per share.

Net sales for the quarter ended December 31, 2011 in the U.S. segment increased 22% compared to the same period in 2010. Net sales for the year ended December 31, 2011 in the U.S. segment increased 20% compared to 2010. Sales in the U.S. for both periods increased due to market share gains in the mass market channel, the addition of sales resulting from the acquisition of the Pac-Kit Company and increased distribution of first aid products. Net sales in Canada for the three months ended December 30, 2011 were constant in both U.S dollars and local currency compared to the same period in 2010. Net sales in Canada for the year ended December 31, 2011 increased 10% in U.S. dollars (5% in local currency) compared to 2010. Sales in Canada for the year increased primarily due to the introduction of new products. European net sales for the three months ended December 31, 2011 increased 10% in both U.S. dollars and local currency, compared to the same period last year. European net sales for the year ended December 31, 2011 decreased 2% in U.S. dollars (8% in local currency) compared to last year. These changes in European net sales in 2011 related primarily to the timing of mass market sales.

Gross margins were 36% in the fourth quarter of 2011 versus 38% in the comparable period last year. Gross margins were 36% for the year ended December 31, 2011 compared to 37% for the comparable period last year. The decline in gross margins for the quarter and year, as anticipated, were primarily due to the addition of the Pac-Kit line of products, which have lower gross margins than the Company’s historical average gross margins.

Operating profit was $522,000 for the quarter ended December 31, 2011 compared to $77,000 for the comparable period last year. Operating profit was $4,285,000 for the year ended December 31, 2011 compared to $2,980,000 for the comparable period last year, an increase of 43%.

The effective tax rate for the year ended December 31, 2011 was 30%, compared to 12% in the same period of 2010. The effective tax rate for 2010 reflected approximately $360,000 of tax benefits associated with the Company’s donation of land to the City of Bridgeport, CT.

Walter C. Johnsen, Chairman and CEO said, “Acme United had record revenue and strong operating performance in 2011. We are particularly pleased with sales of our new products and the successful integration of the Pac-Kit company. We enter 2012 with strong business prospects and enthusiasm.”

The Company’s bank debt less cash and cash equivalents on December 31, 2011 was $9.7 million compared to $6.9 million on December 31, 2010. On February 28, 2011, the Company paid approximately $3.4 million in cash for Pac-Kit.

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®, Physicians Care ® 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 system 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 2011
(Unaudited)
           
Quarter Ended Quarter Ended
Amounts in $000's except per share data     December 31, 2011     December 31, 2010
 
 
Net sales $ 15,836 $ 13,360
Cost of goods sold 10,143 8,316
Gross profit 5,693 5,044
Selling, general, and administrative expenses 5,171 4,968
Income from operations 522 76
Interest expense (100) (84)
Interest income 37 48
Net interest expense (63) (36)
Other (expense) income, net (6) 108
Total other (expense) income, net (69) 72
Pre-tax income 453 148
Income tax expense (benefit) 187 (33)
Net income $ 266 $ 181
 
Shares outstanding - Basic 3,125 3,065
Shares outstanding - Diluted 3,125 3,121
 
Earnings per share basic $ 0.09 $ 0.06
Earnings per share diluted 0.09 0.06
 
ACME UNITED CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
YEAR END REPORT 2011 (cont.)
(Unaudited)
   
 
Year Ended Year Ended
Amounts in $000's except per share data     December 31, 2011     December 31, 2010
 
Net sales $ 73,302 $ 63,149
Cost of goods sold 46,977 39,784
Gross profit 26,325 23,365
Selling, general, and administrative expenses 22,040 20,385
Income from operations 4,285 2,980
Interest expense (404) (301)
Interest income 150 160
Net interest expense (254) (142)
Other (expense) income, net (4) 72
Total other (expense), net (259) (69)
Pre-tax income 4,026 2,911
Income tax expense 1,215 338
Net income $ 2,811 $ 2,573
 
Shares outstanding - Basic 3,100 3,129
Shares outstanding - Diluted 3,100 3,194
 
Earnings per share basic $ 0.91 $ 0.82
Earnings per share diluted 0.91 0.81
 
ACME UNITED CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
YEAR END REPORT 2011
(Unaudited)
   
Amounts in $000's     December 31, 2011     December 31, 2010
 

Assets:
Current assets:
Cash $ 7,853 $ 6,601
Accounts receivable, net 12,904 12,331
Inventories 24,495 22,293
Prepaid and other current assets 1,270 1,402
Total current assets 46,522 42,627
 
Property and equipment, net 2,506 2,216
Long term receivable 1,766 1,839
Other assets 4,428 2,899
Total assets $ 55,222 $ 49,581
 

Liabilities and stockholders' equity:
Current liabilities
Accounts payable $ 4,935 $ 5,679
Other current liabilities 3,769 3,539
Total current liabilities 8,705 9,218
Non-current liabilities
Long term debt 17,568 13,522
Other non current liabilities 1,174 1,489
Total liabilities 27,447 24,229
Total stockholders' equity 27,775 25,352
Total liabilities and stockholders' equity $ 55,222 $ 49,581
 

Copyright Business Wire 2010

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