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News
Acme United Reports Second Quarter Results; Reaffirms Guidance for 2017
07/25/2017
FAIRFIELD, Conn., July 25, 2017 (GLOBE NEWSWIRE) -- Acme United Corporation (NYSE American:ACU) today announced that net sales for the second quarter ended June 30, 2017 were $38.8 million, compared to $41.0 million in the same period of 2016, a decrease of 5%. Net sales for the six months ended June 30, 2017 were $66.6 million, compared to $66.3 million in the same period in 2016.
Net income for the quarter ended June 30, 2017 was $2.8 million, or $0.75 per diluted share, compared to $3.3 million, or $0.91 per diluted share, for the 2016 period, decreases of 13% and 18%, respectively. Net income for the six months ended June 30, 2017 was $3.5 million, or $0.94 per diluted share, compared to $3.8 million, or $1.08 per diluted share, in last year’s same period, decreases of 8% and 13%, respectively.
Chairman and CEO Walter C. Johnsen commented, “Although our sales in the second quarter were below last year’s, we see a strong second half of 2017 and a robust full year. Online sales of our back to school products have grown substantially, and the different timing of shipments appears to have shifted revenues from the second quarter of 2017 to the third quarter. We also had a large promotion during the second quarter of last year that did not repeat, but we have promotions scheduled for later this year that we expect to more than compensate for this differential.
“Accordingly, we are reaffirming the Company’s guidance for 2017 of $137 million in revenues, $6.7 million net income, and $1.76 earnings per share.”
In the U.S. segment, net sales for the quarter ended June 30, 2017 decreased 6% compared to the same period in 2016 due to certain back-to-school promotions that did not repeat this year. Additionally, as noted above, the changes to on-line sales is causing some of our back-to-school business to move to the third quarter. Net sales for the first six months of 2017 were constant compared to the same period in 2016. Our acquisition of Spill Magic assets in February 2017 contributed $1.8 million in net sales in the second quarter, and $3.0 million year to date.
Net sales in Europe for the three months ended June 30, 2017 increased 8% in U.S. dollars and 10% in local currency compared to the same 2016 period. Net sales for the six months ended June 30, 2017 increased 20% in U.S. dollars and 23% in local currency compared to the first half of 2016. Net sales for both periods increased due to new customers in the office and sporting goods channels as well as sales of DMT sharpening products.
Net sales in Canada for the three months ended June 30, 2017 decreased 5% in U.S. dollars and 2% in local currency compared to the prior-year period. Net sales for the six months ended June 30, 2017 decreased 4% in U.S. dollars and 2% in local currency compared to the same period in 2016.
Gross margin was 37% in the three months ended June 30, 2017, compared to 36% in the same period in 2016. Gross margin was 38% in the six months ended June 30, 2017, compared to 36% in the same period in 2016 The higher gross margin was primarily due to efficiency improvements in the Company’s first aid operations and a better product mix.
The Company’s long-term debt less cash on June 30, 2017 was $41.3 million compared to $38.7 million on June 30, 2016. During the twelve-month period ended June 30, 2017, the Company paid approximately $7.2 million for the acquisition of the assets of Spill Magic and distributed $1.3 million in dividends on its common stock. During the twelve-month period, the Company generated $7.2 million in free cash flow.
On July 3, 2017, the Company announced a 10% increase in its quarterly cash dividend to $0.11 per share. This was Acme United’s tenth dividend increase since 2004.
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