Acme United Reports Strong Fourth Quarter and Full Year 2023 Earnings
- Acme United Corporation reported a decrease in net sales for 2023 compared to 2022.
- The Company sold its Camillus and Cuda product lines, generating $19.8 million in sales and a gain of $9.6 million.
- Net income increased significantly to $8.2 million for the year and $1.6 million for the quarter, excluding the impact of the sale.
- The Company focused on core businesses, reduced debt by $13 million, and achieved cost savings of $6.5 million.
- Gross margin improved to 39.1% for the quarter and 37.7% for the year.
- Cash flow reached a record $24 million, and the Company is optimistic about growth in 2024.
- None.
Insights
The financial figures released by Acme United Corporation indicate a mixed performance with a slight decline in net sales year-over-year, but a substantial increase in net income attributable to the sale of the Camillus and Cuda product lines. The gross margin improvement, from 32.8% to 37.7% annually, suggests significant efficiency gains, which are crucial for profitability in a competitive market. Additionally, the reduction in bank debt from $55.0 million to $19.0 million, alongside a record $24 million in free cash flow, reflects a stronger balance sheet and improved financial health. Investors should note the company's ability to generate cash and pay dividends while actively managing its portfolio, which could be indicative of a management team adept at navigating market fluctuations and optimizing capital allocation.
Acme United's strategic refocus on core businesses and market share gains in the first aid and medical business are key takeaways. The divestiture of non-core product lines and the subsequent debt reduction align with a trend towards leaner operations with a focus on core competencies. The company's anticipation of growth from new customers and product placements in 2024 suggests confidence in their market strategy. However, the performance dip in the European segment, attributed to a soft economy, raises concerns about the company's sensitivity to international market conditions. The contrast in performance between the U.S., Europe and Canada highlights the importance of geographical diversification in mitigating regional economic risks.
The reported financials provide insight into broader economic trends, such as the impact of soft economic conditions in Europe on multinational corporations. Acme United's experience reflects how companies must adapt to currency fluctuations and regional economic headwinds. The company's ability to improve gross margins despite these challenges speaks to effective cost management and operational efficiency. The focus on free cash flow generation is particularly prudent in an environment where liquidity is paramount. Investors should consider the company's performance in the context of global economic conditions and the potential for continued volatility in international markets.
SHELTON, Conn., March 01, 2024 (GLOBE NEWSWIRE) -- Acme United Corporation (NYSE American: ACU) today announced that net sales for the year ended December 31, 2023 were
On November 1, 2023, the Company sold its Camillus and Cuda hunting and fishing product lines to GSM Holdings, Inc. The sales price was
Excluding the impact of the sale of Camillus and Cuda, net income for the year ended December 31, 2023, was
Net income for the three months ended December 31, 2023 excluding the impact of the sale of the Camillus and Cuda product lines was
Chairman and CEO Walter C. Johnsen said, “We had an outstanding year of strong earnings and achievements in 2023. The sale of Cuda and Camillus in the fourth quarter enabled the Company to focus on our core businesses and reduced our debt by
Mr. Johnsen added, “The Company is looking forward to a strong year in 2024. We anticipate growth from new first aid customers, additional placement of cutting tools in the craft and mass markets, and new DMT sharpener business. With our strong balance sheet, we continue to look for accretive acquisitions.”
For the three months ended December 31, 2023, net sales in the U.S. segment decreased
European net sales for the three months ended December 31, 2023 declined
Net sales in Canada for the three months ended December 31, 2023, increased
Gross margin was
The Company’s bank debt less cash as of December 31, 2023, was
Conference Call and Webcast Information
Acme United will hold a conference call to discuss its quarterly results, which will be broadcast on Friday, March 1, 2024, at 12:00 p.m. ET. To listen or participate in a question and answer session, dial 877-407-0784. International callers may dial 201-689-8560. The confirmation code is 13743912. 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®, DMT®, Med-Nap and Safety Made. For more information, visit www.acmeunited.com.
Forward Looking Statements
The Company may from time to time make written or oral “forward-looking statements” including statements contained in this report and in other communications by the Company, which are made in good faith pursuant to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Such statements are based on our beliefs as well as assumptions made by and information currently available to us. When used in this document, words like “may,” “might,” “will,” “except,” “anticipate,” “believe,” “potential,” and similar expressions are intended to identify forward-looking statements. Actual results could differ materially from our current expectations.
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 that may impact the Company’s business, operations and financial results.
These risks and uncertainties 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, including the impact on the Company’s suppliers and customers; (iii) the continuing adverse impact of inflation, including product costs, and interest rates; (iv) potential adverse effects on the Company, its customers, and suppliers resulting from the conflicts in Ukraine and the Middle East; (v) additional disruptions in the Company’s supply chains, whether caused by pandemics, natural disasters, or otherwise, including trucker shortages, port closures and delays, and delays with container ships themselves; (vi) labor related costs the Company has and may continue to incur, including costs of acquiring and training new employees and rising wages and benefits; (vii) currency fluctuations including, for example, the fluctuation of the dollar against the euro; (viii) the Company’s ability to effectively manage its inventory in a rapidly changing business environment; (ix) changes in client needs and consumer spending habits; (x) the impact of competition; (xi) the impact of technological changes including, specifically, the growth of online marketing and sales activity; (xii) the Company’s ability to manage its growth effectively, including its ability to successfully integrate any business it might acquire; (xiii) 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 (xiv) other risks and uncertainties indicated from time to time in the Company’s filings with the Securities and Exchange Commission.
| CONTACT: | Paul G. Driscoll | Acme United Corporation |
| Phone: (203) 254-6060 | ||
| ACME UNITED CORPORATION | ||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF INCOME | ||||||||
| FOURTH QUARTER REPORT 2023 | ||||||||
| (Unaudited) | ||||||||
| Three Months Ended | Three Months Ended | |||||||
| Amounts in 000's except per share data | December 31, 2023 | December 31, 2022 | ||||||
| Net sales | $ | 41,942 | $ | 44,104 | ||||
| Cost of goods sold | 25,538 | 30,021 | ||||||
| Gross profit | 16,404 | 14,083 | ||||||
| Selling, general, and administrative expenses | 14,311 | 14,110 | ||||||
| Operating income (loss) | 2,093 | (27 | ) | |||||
| Interest expense | 501 | 937 | ||||||
| Interest income | (41 | ) | (16 | ) | ||||
| Interest expense, net | 460 | 921 | ||||||
| Gain on sale of assets | 12,551 | - | ||||||
| Other (expense) income, net | (18 | ) | 109 | |||||
| Total other income (expense), net | 12,533 | 109 | ||||||
| Income before income tax expense (benefit) | 14,166 | (839 | ) | |||||
| Income tax expense (benefit) | 2,958 | (242 | ) | |||||
| Net income (loss) | $ | 11,208 | $ | (597 | ) | |||
| Shares outstanding - Basic | 3,610 | 3,537 | ||||||
| Shares outstanding - Diluted | 3,909 | 3,537 | ||||||
| Earnings per share - Basic | $ | 3.10 | $ | (0.17 | ) | |||
| Earnings per share - Diluted | 2.87 | (0.17 | ) | |||||
| Reconciliation to reported net income (GAAP) | ||||||||
| Net income as reported (GAAP) | 11,208 | (597 | ) | |||||
| Gain on sale of business, net of tax | (9,644 | ) | ||||||
| Net income as adjusted | 1,564 | (597 | ) | |||||
| Adjusted earnings per share - Basic | $ | 0.43 | $ | (0.17 | ) | |||
| Adjusted earnings per share - Diluted | 0.40 | (0.17 | ) | |||||
| ACME UNITED CORPORATION | ||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF INCOME | ||||||||
| FOURTH QUARTER REPORT 2023 (cont.) | ||||||||
| (Unaudited) | ||||||||
| Year Ended | Year Ended | |||||||
| Amounts in 000's except per share data | December 31, 2023 | December 31, 2022 | ||||||
| Net sales | $ | 191,501 | $ | 193,962 | ||||
| Cost of goods sold | 119,291 | 130,403 | ||||||
| Gross profit | 72,210 | 63,559 | ||||||
| Selling, general, and administrative expenses | 59,022 | 57,285 | ||||||
| Operating income | 13,188 | 6,274 | ||||||
| Interest expense | 3,096 | 2,396 | ||||||
| Interest income | (119 | ) | (31 | ) | ||||
| Interest expense, net | 2,977 | 2,365 | ||||||
| Gain on sale assets | 12,551 | - | ||||||
| Other expense, net | (28 | ) | (246 | ) | ||||
| Total other income (expense), net | 12,523 | (246 | ) | |||||
| Income before income tax expense | 22,734 | 3,663 | ||||||
| Income tax expense | 4,941 | 628 | ||||||
| Net income | $ | 17,793 | $ | 3,035 | ||||
| Shares outstanding - Basic | 3,572 | 3,528 | ||||||
| Shares outstanding - Diluted | 3,658 | 3,719 | ||||||
| Earnings per share - Basic | $ | 4.98 | $ | 0.86 | ||||
| Earnings per share - Diluted | 4.86 | 0.82 | ||||||
| Reconciliation to reported net income (GAAP) | ||||||||
| Net income as reported (GAAP) | 17,793 | 3,035 | ||||||
| Gain on Sale of business | (9,644 | ) | - | |||||
| Net income as adjusted | 8,149 | 3,035 | ||||||
| Adjusted Earnings per share - Basic | $ | 2.28 | $ | 0.86 | ||||
| Adjusted earnings per share - Diluted | 2.23 | 0.82 | ||||||
| ACME UNITED CORPORATION | ||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
| FOURTH QUARTER REPORT 2023 | ||||||||
| (Unaudited) | ||||||||
| Amounts in 000's | December 31, 2023 | December 31, 2022 | ||||||
| Assets: | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 4,796 | $ | 6,100 | ||||
| Accounts receivable, net | 26,234 | 32,603 | ||||||
| Inventories | 55,470 | 63,325 | ||||||
| Prepaid expenses and other current assets | 4,774 | 2,822 | ||||||
| Restricted cash | 750 | 750 | ||||||
| Total current assets | 92,024 | 105,600 | ||||||
| Property, plant and equipment, net | 28,025 | 26,416 | ||||||
| Operating lease right of use asset | 2,002 | 2,632 | ||||||
| Intangible assets, less accumulated amortization | 19,001 | 20,790 | ||||||
| Goodwill | 8,189 | 8,189 | ||||||
| Other assets | - | 750 | ||||||
| Total assets | $ | 149,241 | $ | 164,377 | ||||
| Liabilities and stockholders' equity: | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 12,102 | $ | 10,514 | ||||
| Operating lease liability - short term | 1,099 | 1,130 | ||||||
| Mortgage payable - short term | 419 | 405 | ||||||
| Other accrued liabilities | 12,392 | 10,078 | ||||||
| Total current liabilities | 26,012 | 22,127 | ||||||
| Long term debt | 13,105 | 49,916 | ||||||
| Mortgage payable, net of current portion Mortgage payable - long term | 10,284 | 10,694 | ||||||
| Operating lease liability - long term | 1,026 | 1,683 | ||||||
| Other non-current liabilities | 916 | 927 | ||||||
| Total liabilities | 51,343 | 85,347 | ||||||
| Total stockholders' equity | 97,898 | 79,030 | ||||||
| Total liabilities and stockholders' equity | $ | 149,241 | $ | 164,377 | ||||
FAQ
What was the net sales figure for Acme United Corporation in 2023?
How much did the Company sell the Camillus and Cuda product lines for?
What was the net income for Acme United Corporation in 2023?
What was the gross margin for Acme United Corporation in 2023?
How much did the Company reduce its debt by in 2023?
