ACME United Reports 16% Net Income Increase and 2% EPS Increase for Second Quarter of 2021
07/22/2021 - 10:26 AM
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.
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.
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 . 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 ®, PhysiciansCare ®, Pac-Kit ®, Spill Magic ®, Westcott ®, Clauss ®, Camillus ®, Cuda ®, DMT ®, and Med-Nap . For more information, visit www.acmeunited.com .
Forward Looking Statements
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
