ACME United Reports 11% Sales Increase and 30% Net Income Increase for Third Quarter of 2021

Rhea-AI Summary

Acme United Corporation (NYSE American: ACU) reported net sales of $47.9 million for Q3 2021, up 11% from $43.3 million in Q3 2020. Year-to-date sales reached $136.3 million, also a 11% increase. Net income for Q3 2021 was $2.046 million ($0.50/share), a 30% rise from $1.579 million ($0.46/share) in Q3 2020. For nine months, net income was $11.3 million ($2.85/share) including PPP loan forgiveness. The company attributes growth to strong demand for first aid products and a 33% inventory increase to mitigate supply chain risks.

Positive

• Q3 2021 net sales increased by 11% year-over-year.
• Net income rose 30% in Q3 2021 compared to Q3 2020.
• Gross margin improved to 35.5% in Q3 2021 from 34.5% in Q3 2020.
• U.S. segment sales increased 12% in Q3 2021.
• Ecommerce revenues showed robust growth across product lines.
• Inventory increased by 33% to address potential supply chain interruptions.

Negative

• Gross margin slightly declined from 36.2% to 35.8% year-to-date.
• Bank debt increased to $38.1 million from $34.4 million year-over-year.

SHELTON, Conn., Oct. 26, 2021 (GLOBE NEWSWIRE) -- Acme United Corporation (NYSE American: ACU) today announced that net sales for the quarter ended September 30, 2021 were $47.9 million compared to $43.3 million in the third quarter of 2020, an increase of 11%. Net sales for the nine months ended September 30, 2021 were $136.3 million, compared to $123.1 million in the same period in 2020, an increase of 11%.

Net income was $2,046,000 or $0.50 per diluted share for the quarter ended September 30, 2021 compared to $1,579,000, or $0.46 per diluted share, for the comparable period last year, an increase of 30% in net income and 9% in diluted earnings per share. Net income (excluding the impact of the PPP loan forgiveness) for the nine months ended September 30, 2021 was $7,814,000, or $1.97 per diluted share, compared to $6,055,000, or $1.75 per diluted share, in last year’s same period, increases of 29% and 13%, respectively. Net income for the nine months ended September 30, 2021, including the PPP loan forgiveness, was $11.3 million, or $2.85 per diluted share.

Chairman and CEO Walter C. Johnsen said, “Acme United had strong demand for our first aid and cutting products in the third quarter. Sales to our office customers rebounded strongly, and our ecommerce revenues were robust. We proactively increased inventory by nearly 33% during the past 18 months in anticipation of potential global supply chain interruptions. Having done so, we believe we are well-positioned to respond to customer needs in the coming quarters.” Mr. Johnsen added, ”We are excited about many new opportunities as we continue to innovate and grow.”

For the third quarter of 2021, net sales in the U.S. segment increased 12% compared to the same period in 2020. For the nine months ended September 30, 2021, net sales in the U.S. segment increased 8% compared to the same period in 2020. The growth for both periods was primarily attributable to strong sales of first aid and medical products.

European net sales for the third quarter of 2021 were constant in both U.S. dollars and local currency compared to the third quarter of 2020 due to the timing of several large orders in 2020. Net sales for the nine months ended September 30, 2021 increased 22% in U.S. dollars and 15% in local currency compared to the first nine months of 2020, mainly due to sales growth in the ecommerce channel across all product lines and market share gains in Westcott school and office products.

Net sales in Canada for the third quarter of 2021 increased 6% in U.S. dollars and were constant in local currency compared to the same period in 2020. Higher sales of First Aid Central products were offset by lower sales of school and office products. In 2020, back-to-school shipments of school and office products were delayed from the second quarter to the third quarter due to the COVID-19 lockdowns in the second quarter of 2020. Net sales for the nine months ended September 30, 2021 increased 33% in U.S. dollars and 23% in local currency compared to the first nine months of 2020 primarily to due to higher sales of first aid products.

Gross margin was 35.5% in the third quarter of 2021 versus 34.5% in the comparable period last year. Gross margin was 35.8% for the nine months ended September 30, 2021, compared to 36.2% for the same period of 2020.

The Company’s bank debt less cash on September 30, 2021 was $38.1 million compared to $34.4 million on September 30, 2020. During the twelve-month period ended September 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 approximately $2 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 Tuesday, October 26, 2021, at 2:30 p.m. EDT. To listen or participate in a question and answer session, dial 866-248-8441. International callers may dial 929-477-0591. The confirmation code is 5719272.   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
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 existing and any new variant strains of the underlying virus; the continuing effectiveness, global availability, and public acceptance 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 and strength of economic recovery 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 turbulence, 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) the potential disruptions in the Company’s supply chains, whether caused by COVID-19 or otherwise; (iv) changes in client needs and consumer spending habits, including COVID-19 related changes; (v) the impact of competition; (vi) the impact of technological changes including, specifically, the growth of online marketing and sales activity; (vii) the Company’s ability to manage its growth effectively, including its ability to successfully integrate any business it might acquire; (viii) 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; (ix) the impact of any increases in inflation; (x) currency fluctuations; (xi) 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 (xii) 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
THIRD QUARTER REPORT 2021
(Unaudited)
				Three Months Ended				Three Months Ended
Amounts in 000's except per share data				September 30, 2021				September 30, 2020
Net sales			$	47,923			$	43,316
Cost of goods sold				30,918				28,360
Gross profit				17,005				14,956
Selling, general, and administrative expenses				14,044				12,832
Operating income				2,961				2,124
Interest expense				(230	)			(173	)
Interest income				2				5
Interest expense, net				(228	)			(168	)
Other (expense) income , net				(68	)			35
Total other (expense) income , net				(68	)			35
Income before income tax expense				2,665				1,991
Income tax expense				619				412
Net income			$	2,046			$	1,579
Shares outstanding - Basic				3,542				3,340
Shares outstanding - Diluted				4,058				3,461
Earnings per share - Basic			$	0.58			$	0.47
Earnings per share - Diluted				0.50				0.46
ACME UNITED CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
THIRD QUARTER REPORT 2021 (cont.)
(Unaudited)
				Nine Months Ended				Nine Months Ended
Amounts in 000's except per share data				September 30, 2021				September 30, 2020
Net sales			$	136,295			$	123,133
Cost of goods sold				87,550				78,594
Gross profit				48,745				44,539
Selling, general, and administrative expenses				39,028				36,023
Operating income				9,717				8,516
Interest expense				(682	)			(742	)
Interest income				11				20
Interest expense, net				(671	)			(722	)
PPP Loan forgiveness				3,508				-
Other expense, net				(213	)			(2	)
Total other income (expense), net				3,295				(2	)
Income before income tax expense				12,341				7,792
Income tax expense				1,019				1,737
Net income			$	11,322			$	6,055
Shares outstanding - Basic				3,449				3,343
Shares outstanding - Diluted				3,969				3,454
Earnings per share - Basic			$	3.28			$	1.81
Earnings per share - Diluted				2.85				1.75
Reconciliation to reported Net Income (GAAP)
Net income as reported (GAAP)				11,322				6,055
PPP Loan Forgiveness				(3,508	)			-
Net income as adjusted				7,814				6,055
Earnings per share before PPP Loan forgiveness - Basic			$	2.27			$	1.81
Earnings per share before PPP Loan forgiveness - Diluted				1.97				1.75
ACME UNITED CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
THIRD QUARTER REPORT 2021
(Unaudited)
Amounts in 000's				September 30, 2021				September 30, 2020
Assets:
Current assets:
Cash and cash equivalents			$	5,306			$	3,031
Accounts receivable, net				36,088				32,154
Inventories				48,795				48,351
Prepaid expenses and other current assets				2,458				2,142
Total current assets				92,647				85,678
Property, plant and equipment, net				23,181				14,341
Operating lease right of use asset				3,187				2,190
Intangible assets, less accumulated amortization				17,615				16,072
Goodwill				4,800				4,696
Other assets				-				40
Total assets			$	141,430			$	123,017
Liabilities and stockholders' equity:
Current liabilities:
Accounts payable			$	6,695			$	9,251
Operating lease liability - short term				945				847
Mortgage payable - short term				267				267
Other accrued liabilities				11,184				13,376
Total current liabilities				19,091				23,741
Long term debt				40,454				30,703
Note payable - PPP loan				-				3,508
Mortgage payable - long term				2,711				2,978
Operating lease liability - long term				2,484				1,422
Other non-current liabilities				141				69
Total liabilities				64,881				62,421
Total stockholders' equity				76,549				60,596
Total liabilities and stockholders' equity			$	141,430			$	123,017

 

CONTACT:        
Paul G. Driscoll        
Acme United Corporation        
1 Waterview Drive         
Shelton, CT 06484
Phone: (203) 254-6060 

 

 

FAQ

What were Acme United's net sales for Q3 2021?

Acme United reported net sales of $47.9 million for Q3 2021, which is an 11% increase compared to Q3 2020.

How much did Acme United's net income increase in Q3 2021?

Net income for Q3 2021 rose by 30% to $2.046 million, compared to $1.579 million in Q3 2020.

What was Acme United's gross margin in Q3 2021?

Acme United's gross margin for Q3 2021 was 35.5%, up from 34.5% in the same period last year.

How has Acme United's inventory strategy changed recently?

Acme United proactively increased its inventory by nearly 33% over the past 18 months to prepare for potential global supply chain disruptions.

What contributed to Acme United's sales growth in 2021?

The sales growth was primarily driven by strong demand for first aid and medical products, particularly in the U.S. market.