EX-99 2 acme_8k102005ex991.txt EXHIBIT 99.1 EXHIBIT 99.1 ACME UNITED CORPORATION NEWS RELEASE -------------------------------------------------------------------------------- CONTACT: Paul G. Driscoll Acme United Corporation 60 Round Hill Road Fairfield, CT 06824 Phone: (203) 254-6060 FAX: (203) 254-6521 -------------------------------------------------------------------------------- FOR IMMEDIATE RELEASE October 20, 2005 ACME UNITED CORPORATION REPORTS 16% NET SALES INCREASE FOR THE THIRD QUARTER FAIRFIELD, CONN. - October 20, 2005 - Acme United Corporation (AMEX:ACU) today announced that net sales for the quarter ended September 30, 2005 were $13.4 million compared to $11.6 million in the same period in 2004, an increase of 16% . Net sales for the nine months ended September 30, 2005 were $38.9 million compared to $32.5 million in the same period in 2004, an increase of 20%. Net sales for the nine months in the U.S. increased 21% due to the sale of new products and market share gains. International sales increased by 17%, and 11% in local currency. Net income was $200,000 or $.05 per diluted share for the third quarter ended September 30, 2005 compared to $1,017,000 or $.26 per diluted share for the comparable period last year. During the third quarter of 2005 the company recognized a $1.5 million non-recurring charge for the demolition of its former manufacturing buildings in Bridgeport, Connecticut. The Company ceased manufacturing at this site in 1996 and the buildings have remained idle. Net income without this charge would have been $1,130,000 or $.29 per diluted share, a 12% increase over 2004. Net income for the nine months ended September 30, 2005 was $2,164,000, or $.57 per diluted share compared to $2,484,000, or $.66 per diluted share in the comparable period last year. Excluding the non-recurring charge net income would have been $3,094,000 or $.81 per diluted share, a 25% increase over 2004. Non-GAAP, or pro forma results, are presented to provide additional information to the reader to provide an opportunity to make meaningful comparisons to results in prior periods. Gross margins were 46.0% in the third quarter of 2005 versus 47.0% in the comparable period last year. For the first nine months of 2005 gross margins were 45.7% compared to 45.3% in the same period in 2004. Sales of new products and an improved product mix essentially offset higher raw material and shipment costs. (1) Walter C. Johnsen, President and CEO, said, "I am pleased with the new products which have been recently introduced including leading edge manual and electric pencil sharpeners, award winning kids scissors, high performance titanium scissors, new professional scissors and cutters and a number of innovative craft items. These are being shown to major customers now for shipment in 2006." The Company's bank debt on September 30, 2005 was $6.6 million compared to $3.3 million on September 30, 2004. During the first nine months of 2005, Acme repurchased 218,000 shares of its common stock at a cost of $3.2 million and paid dividends in the total amount of $267,000. In addition, the Company added approximately $3.6 million of inventory to meet forecasted growth requirements. ACME UNITED CORPORATION is a specialized supplier of cutting devices, measuring instruments, and safety products for school, home, office and industrial use. 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 without limitation the following: (i) the Company's plans, strategies, objectives, expectations and intentions are subject to change at any time at the discretion of the Company; (ii) the Company's plans and results of operations will be affected by the Company's ability to manage its growth, and (iii) other risks and uncertainties indicated from time to time in the Company's filings with the Securities and Exchange Commission. # # # (2) ACME UNITED CORPORATION CONSOLIDATED STATEMENT OF INCOME THIRD QUARTER REPORT 2005
Quarter Ended Quarter Ended September 30, 2005 September 30, 2004 Amounts in $000's except per share data (Unaudited) (Unaudited) -------------------------------------------------------------------------------------------------------- Net Sales $ 13,400 $ 11,595 Gross Profit 6,166 5,453 Selling, General, and Administrative Expenses 4,159 3,739 Other Expense 169 98 Non-Recurring Charge 1,500 - Pre-Tax Income 338 1,616 Income Tax Expense 138 599 Net Income 200 1,017 Earnings Per Share Diluted 0.05 0.26 Reconciliation to reported Net Income (GAAP) Pre-Tax Income as reported (GAAP) 338 1,616 Non-Recurring Charge 1,500 - Pre-Tax Income as adjusted 1,838 1,616 Income Tax Expense as adjusted 708 599 Net Income as adjusted 1,130 1,017 Earnings Per Share Before Non-Recurring Charge 0.29 0.26
(3) ACME UNITED CORPORATION CONSOLIDATED STATEMENT OF INCOME THIRD QUARTER REPORT 2005
Nine Months Ended Nine Months Ended September 30, 2005 September 30, 2004 Amounts in $000's except per share data (Unaudited) (Unaudited) -------------------------------------------------------------------------------------------------------- Net Sales $ 38,887 $ 32,460 Gross Profit 17,758 14,691 Selling, General, and Administrative Expenses 12,455 10,288 Other Expense 371 257 Non-Recurring Charge 1,500 - Pre-Tax Income 3,432 4,146 Income Tax Expense 1,268 1,662 Net Income 2,164 2,484 Earnings Per Share Diluted 0.57 0.66 Reconciliation to reported Net Income (GAAP) Pre-Tax Income as reported (GAAP) 3,432 4,146 Non-Recurring Charge 1,500 - Pre-Tax Income as adjusted 4,932 4,146 Income Tax Expense as adjusted 1,838 1,662 Net Income as adjusted 3,094 2,484 Earnings Per Share Before Non-Recurring Charge 0.81 0.66
(4) ACME UNITED CORPORATION CONDENSED CONSOLIDATED BALANCE SHEET THIRD QUARTER REPORT 2005 (Unaudited)
Amounts in $000's September 30, 2005 September 30, 2004 -------------------------------------------------------------------------------------------------------- Assets: Current Assets: Cash $ 518 $ 1,481 Accounts Receivable, Net 11,491 11,213 Inventories 11,699 8,053 Prepaid and Other current Assets 741 647 ---------------------------------------------- Total Current Assets 24,449 21,394 Property and Equipment, Net 2,759 2,212 Other Assets 1,442 711 ---------------------------------------------- Total Assets $ 28,650 $ 24,317 ============================================== Liabilities and Stockholders' Equity: Current Liabilities Accounts Payable 1,918 1,928 Other Current Liabilities 5,614 5,365 ---------------------------------------------- Total Current Liabilities 7,532 7,293 Long-Term debt 6,587 3,308 Other Non Current Liabilities 552 701 ---------------------------------------------- 14,670 11,302 Total Stockholders' Equity 13,980 13,015 ---------------------------------------------- Total Liabilities and Stockholders' Equity $ 28,650 $ 24,317 ==============================================
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