10-Q 1 acme_10q63005.txt FORM 10-Q ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ------------------ FORM 10-Q ------------------------------------ |X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2005 OR |_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______ to ______ ------------------ Commission file number 001-07698 ACME UNITED CORPORATION (Exact name of registrant as specified in its charter) ------------------ CONNECTICUT 06-0236700 (State or other jurisdiction (I.R.S. Employer of incorporation or organization) Identification No.) 1931 BLACK ROCK TURNPIKE, FAIRFIELD, CONNECTICUT 06825 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (203) 332-7330 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes |X| No |_| Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes |_| No |X| Registrant had 3,559,983 shares outstanding as of July 12, 2005 of its $2.50 par value Common Stock. ACME UNITED CORPORATION Page ---- Part I -- FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) Condensed Consolidated Balance Sheets...................... 3 Condensed Consolidated Statements of Operations and Comprehensive Income................................ 5 Condensed Consolidated Statements of Cash Flows............ 6 Notes to Condensed Consolidated Financial Statements....... 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations..................... 9 Item 3. Quantitative and Qualitative Disclosure About Market Risk.... 13 Item 4. Controls and Procedures...................................... 13 Part II -- OTHER INFORMATION Item 1. Legal Proceedings............................................ 14 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.. 14 Item 3. Defaults Upon Senior Securities.............................. 14 Item 4. Submission of Matters to a Vote of Security Holders.......... 14 Item 5. Other Information............................................ 15 Item 6. Exhibits and Reports on Form 8-K............................. 15 Signatures........................................................... 16 (2) ACME UNITED CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (all amounts in thousands)
June 30 December 31 2005 2004 (unaudited) ----------- ----------- ASSETS Current assets: Cash and cash equivalents $ 602 $ 1,888 Accounts receivable, less allowance 12,625 8,885 Inventories: Finished goods 10,205 7,739 Work in process 161 92 Raw materials and supplies 775 558 ----------- ----------- 11,141 8,389 Prepaid expenses and other current assets 539 485 Deferred income taxes 279 279 ----------- ----------- Total current assets 25,186 19,926 ----------- ----------- Property, plant and equipment: Land 155 251 Buildings 2,512 2,796 Machinery and equipment 6,178 6,102 ----------- ----------- 8,845 9,149 Less accumulated depreciation 6,642 6,853 ----------- ----------- 2,203 2,296 Other assets 720 656 Goodwill 89 89 ----------- ----------- Total assets $ 28,198 $ 22,967 =========== ===========
See notes to condensed consolidated financial statements. (3) ACME UNITED CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (continued) (all amounts in thousands)
June 30 December 31 2005 2004 (unaudited) ----------- ----------- LIABILITIES Current liabilities: Accounts payable $ 3,770 $ 2,316 Other accrued liabilities 4,559 4,682 Current portion of long-term debt 4,968 1,379 ----------- ----------- Total current liabilities 13,297 8,377 Deferred income taxes 131 131 Long-term debt, less current portion 54 55 Other 410 420 ----------- ----------- Total liabilities 13,892 8,983 STOCKHOLDERS' EQUITY Common stock, par value $2.50: authorized 8,000,000 shares; issued 4,142,074 shares in 2005 and 3,849,512 in 2004, including treasury stock 10,355 9,624 Treasury stock, at cost - 582,091 shares in 2005 and 436,091 shares in 2004 (4,078) (1,875) Additional paid-in capital 2,288 2,231 Retained earnings 6,811 5,034 Accumulated other comprehensive loss: Translation adjustment (448) (351) Derivative financial instruments (24) (81) Minimum pension liability (598) (598) ----------- ----------- (1,070) (1,030) ----------- ----------- Total stockholders' equity 14,306 13,984 ----------- ----------- Total liabilities and stockholders' equity $ 28,198 $ 22,967 =========== ===========
See notes to condensed consolidated financial statements. (4) ACME UNITED CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (UNAUDITED) (all amounts in thousands, except per share amounts)
Three Months Ended Six Months Ended June 30 June 30 -------------------------- -------------------------- 2005 2004 2005 2004 ------------ ------------ ------------ ------------ Net sales $ 14,904 $ 12,298 $ 25,487 $ 20,865 Costs and expenses: Cost of goods sold 8,173 6,779 13,895 11,626 Selling, general and administrative expenses 4,577 3,579 8,296 6,550 ------------ ------------ ------------ ------------ 12,750 10,358 22,191 18,176 ------------ ------------ ------------ ------------ Income before non-operating items 2,154 1,940 3,296 2,689 Non-operating items: Interest expense 43 40 56 85 Other expense 97 80 146 74 ------------ ------------ ------------ ------------ 140 120 202 159 ------------ ------------ ------------ ------------ Income before income taxes 2,014 1,820 3,094 2,530 Income tax expense 700 745 1,130 1,062 ------------ ------------ ------------ ------------ Net income 1,314 1,075 1,964 1,468 Other comprehensive expense - Foreign currency translation (81) (73) (96) (130) ------------ ------------ ------------ ------------ Comprehensive income $ 1,233 $ 1,002 $ 1,868 $ 1,338 ============ ============ ============ ============ Basic earnings per share $ 0.37 $ 0.32 $ 0.56 $ 0.44 ============ ============ ============ ============ Diluted earnings per share $ 0.34 $ 0.29 $ 0.52 $ 0.40 ============ ============ ============ ============ Weighted average number of common shares outstanding- denominator used for basic per share computations 3,541 3,368 3,508 3,334 Weighted average number of dilutive stock options outstanding 307 354 302 311 ------------ ------------ ------------ ------------ Denominator used for diluted per share computations 3,848 3,722 3,810 3,645 ============ ============ ============ ============ Dividends declared per share 0.03 0.02 0.05 0.02 ============ ============ ============ ============
See notes to condensed consolidated financial statements (5) ACME UNITED CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (all amounts in thousands)
Six Months Ended June 30 ----------------------------- 2005 2004 -------------- -------------- Operating Activities: Net income $ 1,964 $ 1,468 Adjustments to reconcile net income to net cash used by operating activities: Depreciation 259 229 Amortization 21 10 Deferred income taxes - 20 Loss on disposal/sale of assets 43 42 Changes in operating assets and liabilities: Accounts receivable (3,708) (4,702) Inventories (2,888) (204) Prepaid expenses and other current assets (61) (109) Other assets - 28 Accounts payable 1,488 423 Other accrued liabilities (51) 1,421 -------------- -------------- Total adjustments (4,897) (2,842) -------------- -------------- Net cash used by operating activities (2,933) (1,374) -------------- -------------- Investing Activities: Purchase of property, plant, and equipment (453) (190) Proceeds from sale of property, plant, and equipment 166 31 Purchase of patents and trademarks (85) (14) -------------- -------------- Net cash used by investing activities (372) (173) -------------- -------------- Financing Activities: Net short-term borrowings 3,594 450 Payments of long-term debt (225) Proceeds from issuance of common stock 788 625 Distribution to stockholders (146) Purchase of 146,000 shares of common stock in 2005 and 46,830 shares of common stock in 2004 for treasury (2,203) (235) -------------- -------------- Net cash provided by financing activities 2,033 616 -------------- -------------- Effect of exchange rate changes (14) 93 -------------- -------------- Net change in cash and cash equivalents (1,286) (838) Cash and cash equivalents at beginning of period 1,888 1,250 -------------- -------------- Cash and cash equivalents at end of period $ 602 $ 412 ============== ==============
See notes to condensed consolidated financial statements (6) NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) Note 1 -- Basis of Presentation In the opinion of management, the accompanying condensed consolidated financial statements include all adjustments necessary to present fairly the financial position, results of operations and cash flows. These adjustments are of a normal, recurring nature. However, the financial statements do not include all of the disclosures normally required by accounting principles generally accepted in the United States of America or those normally made in the Company's annual report on Form 10-K. Please refer to the Company's annual report on Form 10-K for the year ended December 31, 2004 for such disclosures. The condensed consolidated balance sheet as of December 31, 2004 was derived from the audited consolidated balance sheet as of that date. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Note 2 -- Contingencies The Company is involved from time to time in disputes and other litigation in the ordinary course of business, including certain environmental and other matters. The Company presently believes that there will not be a material adverse impact on financial position, results of operations, or liquidity from these matters. Note 3 -- Pension Components of net periodic pension cost are as follows for the periods ended:
Three Months Ended Six Months Ended ------------------------- --------------------------- June 30 June 30 June 30 June 30 2005 2004 2005 2004 ----------- ----------- ------------ ------------ Components of net periodic benefit cost: Interest cost $ 53,365 $ 49,727 $ 102,115 $ 99,453 Service cost 8,750 8,750 17,500 17,500 Expected return on plan assets (69,045) (64,281) (130,045) (128,563) Amortization of prior service costs 2,138 2,194 4,388 4,388 Amortization of actuarial gain 17,102 12,399 33,102 24,797 ----------------------------------------------------------------------------------------------------- $ 12,310 $ 8,789 $ 27,060 $ 17,575 =====================================================================================================
Note 4 -- Accounting for Stock-Based Compensation The Company has elected to adopt only the disclosure provisions of Statement of Financial Accounting Standards No. 123, Accounting for Stock-Based Compensation, and continues to measure costs for its employee stock compensation plans by using the accounting methods prescribed by APB Opinion No. 25, Accounting for Stock Issued to Employees, which allows that no compensation cost be recognized unless the exercise price of the options granted is less than the fair market value of the Company's stock at date of grant. Generally, no stock-based employee compensation cost is reflected in net income, as all options granted had an exercise price equal to the market value of the underlying common stock on the date of grant. The following table illustrates the proforma effect on net income and earnings per share as if the Company had applied the fair value method under SFAS No. 123, Accounting for Stock Based Compensation, to stock-based employee compensation for the periods ended: (7)
Three Months Ended Six Months Ended June 30 June 30 ------------------------------ ----------------------------- 2005 2004 2005 2004 -------------- -------------- -------------- -------------- Net income, as reported $ 1,314,000 $ 1,074,551 $ 1,964,000 $ 1,467,618 Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of related income tax effects 119,297 18,521 148,974 38,826 ------------------------------------------------------------------------------- ----------------------------- Pro forma net income $ 1,194,703 $ 1,056,030 $ 1,815,026 $ 1,428,792 =============================================================================== ============================= Basic-as reported $ 0.37 $ 0.32 $ 0.56 $ 0.44 Basic-pro forma $ 0.34 $ 0.31 $ 0.52 $ 0.43 Diluted-as reported $ 0.34 $ 0.29 $ 0.52 $ 0.40 Diluted-pro forma $ 0.31 $ 0.28 $ 0.48 $ 0.39
Note 5 -- Capital Structure During the first six months of 2005, the Company issued 292,562 shares of common stock with proceeds of $788,164 upon the exercise of outstanding stock options. The Company also repurchased 146,000 shares of common stock for treasury. The shares were purchased at fair market value, with a total cost to the Company of $2,203,104. Note 6 -- Business Combination On May 28, 2004, the Company purchased Clauss Cutlery, a division of Alco Industries, Inc.. Sales of Clauss products for three and six months ended June 30, 2004 were $196,000. The purchase price was the aggregate value of inventory, trademarks and brand names totaling $446,754. Included in the accompanying Statement of Operations for the three and six months ended June 30, 2005 is the operations of the acquired business. Sales for Clauss products for the three and six months ended June 30, 2005 were $990,000 and $1,750,000, respectively. In accordance with Regulation S-X, proforma information for the six months ended June 30, 2004 is not provided because of the immateriality of the transaction. (8) MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Item 2. - Results of Operations Forward-Looking Information 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 by the Company pursuant to the "safe Harbor" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements of the Company's plans, objectives, expectations, estimates and intentions, which are subject to change based on various important factors (some of which are beyond the Company's control). The following factors, in addition to others not listed, could cause the Company's actual results to differ materially from those expressed in forward looking statements: the strength of the domestic and local economies in which the Company conducts operations, changes in client needs and consumer spending habits, the impact of competition and technological change on the Company, the Company's ability to manage its growth effectively, including its ability to successfully integrate any business which it might acquire, and currency fluctuations. All forward-looking statements in this report are based upon information available to the Company on the date of this report. The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise, except as required by law. Net Sales Traditionally, the Company's sales are stronger in the second and third quarters, and weaker in the first and fourth quarters of the fiscal year due to the seasonal nature of the back-to-school business. Consolidated net sales for the quarter ended June 30, 2005 were $14,904,000 compared with $12,298,000 for the same period in 2004, a 21% increase. Net sales for the first six months of 2005 were $25,487,000 compared with $20,865,000 for the same period in 2004, a 22% increase. Excluding the favorable effect of currency gains in Canada and Europe, the net sales increase represented 20%. The sales increase was mainly driven by a 25% increase in U.S. sales and Hong Kong direct import sales due to market share gains, new product launches and the Clauss business acquired on May 28, 2004. Combined Europe and Canada sales were up 7% in local currency. Gross Profit Gross profit for the second quarter of 2005 was $6,731,000 (45.2% of net sales) compared to $5,519,000 (44.9% of net sales) for the second quarter of 2004. Gross profit for the first six months of 2005 was $11,592,000 (45.5% of net sales compared to $9,239,000 (44.3% of net sales) in the same period of 2004. The increased percentage of new products with higher gross margins coupled with positive impacts from product rationalization efforts and sales of a more profitable product mix in Europe were the main reasons for the improved gross margins. Offsetting factors to the improved margins were increased raw material costs and a higher volume of airfreight costs due to orders of some items in excess of those anticipated. Selling, General and Administrative Expenses Selling, general and administrative ("SG&A") expenses for the second quarter of 2005 were $4,577,000 (31% of net sales) compared with $3,579,000 (29% of net sales) for the same period of 2004, an increase of $998,000. SG&A expenses were 33% of net sales for the first six months of 2004 versus 31% in the comparable period of 2004. The majority of the increase relates to higher sales commission and freight costs associated with increased sales, investment in new products and the addition of sales, marketing, logistics and quality control personnel. (9) Interest Expense Interest expense for the second quarter of 2005 was $43,000, compared with $40,000 for the same quarter of 2004. Interest expense for the first six months of 2005 was $56,000, compared with $85,000 for the same period of 2004, a $29,000 decrease. This decrease is mainly attributable to the decline in bank debt (the amount outstanding under the Company's revolving credit facility). Other Expense, Net Net other expense was $97,000 in the second quarter of 2005 compared to net other expense of $80,000 in the second quarter of 2004. Net other expense was $146,000 for the first six months of 2005 as compared to $74,000 for the same period of 2004. The change from 2004 is primarily due to higher foreign exchange transaction losses in 2005. Income Before Income Taxes Income before income taxes was $2,014,000 in the second quarter of 2005 compared with $1,820,000 in the second quarter of 2004, an increase of $194,000. Income before income taxes was $3,094,000 for the first six months of 2005 compared with $2,530,000 in the first six months of 2004, an improvement of $564,000. Pretax income for North America and Asia increased by $234,000. The European operations had a net loss of $60,000 in the first six months of 2005 compared to a net loss of $390,000 in the same period of 2004. The results of the European operations are improving due to higher sales, product rationalization efforts and a more profitable product mix. The higher sales are primarily due to increases in the sales force and increased advertising. Income Taxes The effective tax rate in the first six months of 2005 was 37% compared to 42% in 2004. The lower effective tax rate is principally due to lower losses in Europe for which there is no recorded tax benefit because the losses in Europe cannot be utilized to offset earnings in other countries. Net Income Net income for the second quarter of 2005 was $1,314,000, or 34 cents per share (diluted), compared to a net income of $1,075,000, or 29 cents per share (diluted), for the same period of 2004. Net income for the first six months of 2005 was $1,964,000, or 52 cents per share (diluted), compared to a net income of $1,468,000, or 40 cents per share (diluted), for the same period of 2004. (10) MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS-Continued Financial Condition Liquidity and Capital Resources The Company's working capital, current ratio and long-term debt to equity ratio follow: June 30, 2005 December 31, 2004 ---------------------------------- Working capital $ 11,888,952 $ 11,548,693 Current ratio 1.89 2.38 Long term debt to equity ratio 0.4% 0.4% During the first six months of 2005, total debt increased by $3,588,000 compared to total debt at December 31, 2004 principally as a result of the buildup of inventory in anticipation of the Company's stronger sales in the second and third quarters and the repurchase of company stock. During September 2004, the Company renewed its revolving loan agreement, which originally allowed for borrowings up to a maximum of $10,000,000 based on a borrowing base formula, which applied specific percentages to balances of accounts receivable and inventory. The renewal modified several terms of the original agreement, the most significant of which are reducing the interest rate to LIBOR plus 1.50% from LIBOR plus 1.75%, eliminating the borrowing base formula, allowing the Company to borrow up to $10,000,000, regardless of its inventory and receivable levels, and extending the maturity of the loan to June 30, 2007. As of June 30, 2005, $4,967,500 was outstanding and $5,032,500 was available for borrowing under this agreement. The Company anticipates that all debt currently outstanding under this loan agreement will be paid off in 2005. However, the Company may draw down additional funds under this loan agreement in the future. Cash expected to be generated from operating activities, which together with funds available under its existing loan agreement, are expected, under current conditions, to be sufficient to finance the Company's planned operations over the next twelve months. Over that same period, the Company does not expect to make significant investments in property, plant, and equipment. Recently Issued Accounting Standards In December 2004, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards No. 123 (revised 2004) ("SFAS 123 (R)"), "Share-Based Payment", which revised SFAS No. 123, "Accounting for Stock-Based Compensation". This statement supercedes APB Opinion No. 25, "Accounting for Stock Issued to Employees". The revised statement addresses the accounting for share-based payment transactions with employees and other third parties, eliminates the ability to account for share-based compensation transactions using APB 25 and requires that the compensation costs relating to such transactions be recognized in the consolidated statement of operations. The revised statement is effective as of the first annual period beginning after June 15, 2005. Acme will adopt the statement on January 1, 2006 as required. The impact of adoption of SFAS 123 (R) cannot be predicted at this time because it will depend on levels of share-based payments granted in the future. However, had Acme adopted SFAS 123 in prior periods, the impact of that standard would have approximated the impact of Statement 123 as described in the disclosure of pro forma net income and net income per share in the stock-based compensation accounting policy note included in Note 4 to the consolidated financial statements. (11) In November 2004, the FASB issued SFAS No. 151, "Inventory Costs, an amendment of ARB No. 43, Chapter 4," to clarify that abnormal amounts of idle facility expense, freight, handling costs and wasted material (spoilage) should be recognized as current period charges, and that fixed production overheads should be allocated to inventory based on normal capacity of production facilities. This statement is effective for Acme's fiscal year 2006. We do not expect the adoption of this standard to have a material effect on our financial position, results of operations or cash flows. (12) MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS-Continued Item 3. Quantitative and Qualitative Disclosure About Market Risk There are no material changes in market risks as disclosed in our annual Report on Form 10-K for the year ended December 31, 2004. Item 4. Controls and Procedures (a) Evaluation of Internal Controls and Procedures Our Chief Executive Officer and Chief Financial Officer have reviewed and evaluated the effectiveness of our disclosure controls and procedures, which included inquiries made to certain other of our employees. Based on their evaluation, our Chief Executive Officer and Chief Financial Officer have each concluded that, as of June 30, 2005, our disclosure controls and procedures were effective and sufficient to ensure that we record, process, summarize and report information required to be disclosed by us in our periodic reports filed under the Securities and Exchange Commission's rules and forms. (b) Changes in Internal Control over Financial Reporting During the quarter ended June 30, 2005, there were no changes in our internal control over financial reporting that materially affected, or was reasonably likely to materially affect, this control. (13) PART II. OTHER INFORMATION Item 1 -- Legal Proceedings The Company is involved from time to time in disputes and other litigation in the ordinary course of business, including certain environmental and other matters. The Company presently believes that none of these matters, individually or in the aggregate, would be likely to have a material adverse impact on financial position, results of operations, or liquidity from these matters. Item 2 -- Unregistered Sales of Equity Securities and Use of Proceeds (c) On July 23, 2003, the Company announced a stock repurchase program of up to 150,000 shares. In April, 2005, all shares available under this program had been repurchased. On March 30, 2005, the Company announced a further stock repurchase program of up to 150,000 shares. The new program does not have an expiration date. The following table discloses the total shares repurchased under these programs for the quarter ended June 30, 2005:
Total Number of shares Purchased Maximum Number as Part of Publicly of Shares that can Total Number of Average Price Announced be Purchased Period Shares Purchased Paid per Share Program Under the Program -------------------------------------------------------------------------------------------------- April 64,700 14.00 64,700 May 8,500 15.65 8,500 June 12,800 16.40 12,800 -------------------------------------------------------------------------------------------------- 86,000 14.52 86,000 71,670
Item 3 -- Defaults Upon Senior Securities None Item 4 -- Submission of Matters to a Vote of Security Holders The Company's Annual Meeting of shareholders was held on April 25, 2005. A. The following individuals were elected Directors at the Meeting and comprise the entire Board. Votes for Votes against --------- ------------- George R. Dunbar 3,436,337 89,739 Richmond Y. Holden, Jr. 3,439,139 86,673 Walter C. Johnsen 3,308,337 217,485 Wayne R. Moore 3,436,583 89,239 Susan H. Murphy 3,438,749 87,073 Brian Olschan 3,309,337 216,485 Gary D. Penisten 3,438,683 87,139 Stevenson E. Ward 3,438,149 87,673 (14) B. The 2005 Non-Employee Director Stock Option Plan was approved with 2,003,297 votes for the proposal, 172,578 votes against and 2,797 votes abstaining. C. The Amendment to the Employee Stock Option Plan was approved with 1,996,196 votes for the proposal, 179,864 votes against and 2,612 votes abstaining. Item 5 -- Other Information None Item 6 -- Exhibits Documents filed as part of this report. Exhibit 10.6 Modification to Revolving Promissory Note and Revolving Credit and Security Agreement, and Reaffirmation of Guaranty Exhibit 31.1 Certification of Walter C. Johnsen pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 Exhibit 31.2 Certification of Paul G. Driscoll pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 Exhibit 32.1 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 Exhibit 32.2 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (15) SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. ACME UNITED CORPORATION By /s/ WALTER C. JOHNSEN ------------------------------ Walter C. Johnsen President and Chief Executive Officer Dated: July 28, 2005 By /s/ PAUL G. DRISCOLL ------------------------------ Paul G. Driscoll Vice President and Chief Financial Officer Dated: July 28, 2005 (16)