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 $191.5 million compared to $194.0 million for the year ended December 31, 2022, a decrease of 1%. Net sales for the three months ended December 31, 2023, were $41.9 million compared to $44.1 million in the same period of 2022, a decrease of 5%. Excluding the impact of the Camillus and Cuda product lines sold on November 1, 2023, sales for the fourth quarter of 2023 declined 1% compared to the 2022 period.
On November 1, 2023, the Company sold its Camillus and Cuda hunting and fishing product lines to GSM Holdings, Inc. The sales price was $19.8 million, of which $1.5 million is subject to customary escrow requirements. The Company recognized an after-tax gain on the sale of approximately $9.6 million during the fourth quarter of 2023. The revenues from the divested product lines were approximately $12.0 million in 2022.
Excluding the impact of the sale of Camillus and Cuda, net income for the year ended December 31, 2023, was $8.2 million, or $2.23 per diluted share, compared to $3.0 million, or $0.82 per diluted share, in 2022. Net income for the year ended December 31, 2023, including the sale of Camillus and Cuda, was $17.8 million, or $4.86 per diluted share.
Net income for the three months ended December 31, 2023 excluding the impact of the sale of the Camillus and Cuda product lines was $1.6 million, or $0.40 per diluted share, compared to a net loss of $0.6 million, or ($0.17) per diluted share, for the same period in 2022. Net income for the three months ended December 31, 2023 including the sale of the Camillus and Cuda product lines was $11.2 million, or $2.87 per diluted share.
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 $13 million. The Company successfully completed its previously announced program to reduce inventory by $5 million. We also implemented a series of cost reduction and productivity initiatives that generated approximately $6.5 million in savings, a substantial increase of the initial target of $5 million. As a result, we strengthened our balance sheet, raised our gross margin significantly, and our free cash flow reached a record $24 million. In addition, we gained market share in the first aid and medical business. Our Westcott team successfully introduced new craft and industrial cutting tools."
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 6% compared to the same period in 2022. Excluding the impact of the sale of the Camillus and Cuda product lines, sales declined 2%. For the year ended December 31, 2023, net sales in the U.S. segment decreased 1% compared to the same period in 2022. Excluding the impact of the sale of the Camillus and Cuda product lines, sales for the year ended December 31, 2023 were constant compared to 2022 primarily due to customer reductions of inventory in the first half of 2023.
European net sales for the three months ended December 31, 2023 declined 8% in U.S. dollars and 13% in local currency compared to the same period in 2022. Net sales for the year ended December 31, 2023 decreased 4% in U.S. dollars and 6% in local currency compared to 2022. The declines in net sales in local currency for both periods were mainly due to a soft economy in Europe.
Net sales in Canada for the three months ended December 31, 2023, increased 11% in U.S. dollars and 12% in local currency compared to the same period in 2022. Net sales for the year ended December 31, 2023, increased 1% in U.S. dollars and 5% in local currency compared to 2022. The growth in local currency for both periods was mainly due to higher sales of first aid products.
Gross margin was 39.1% in the three months ended December 31, 2023 compared to 31.9% in the same period in 2022. Gross margin was 37.7% for the year ended December 31, 2023, compared to 32.8% for the same period in 2022. The increases for both periods were primarily due to productivity improvements in the Company's manufacturing and distribution facilities, as well as lower in-bound freight costs.
The Company's bank debt less cash as of December 31, 2023, was $19.0 million compared to $55.0 million as of December 31, 2022. During the year ended December 31, 2023, the Company paid $2.0 million in dividends on its common stock and generated approximately $24.0 million in free cash flow, including a reduction in inventory of $5.0 million. Additionally, the net proceeds from the sale of the Camillus and Cuda product lines amounted to approximately $13.0 million.
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 | ||||
