EX-99 2 acme_8k072106ex991.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 July 21, 2006 ------------------------------------ ACME UNITED CORPORATION REPORTS 14% SALES GROWTH FAIRFIELD, CONN. - July 21, 2006 - Acme United Corporation (AMEX:ACU) today announced that net sales for the quarter ended June 30, 2006 were $17.0 million, compared to $14.9 million in the comparable period of 2005, an increase of 14%. Net sales for the six months ended June 30, 2006 were $29.2 million, compared to $25.5 million in the same period in 2005, an increase of 15% (14% at constant currency). Net income was $1,506,000 or $.40 per diluted share for the second quarter ended June 30, 2006 compared, to $1,314,000 or $.34 per diluted share for the comparable period last year, an increase of 15% in net income and 18% in diluted earnings per share. Net income for the six months ended June 30, 2006 was $2,265,000, or $.61 per diluted share compared to $1,964,000, or $.52 per diluted share in the comparable period last year, a 15% increase in net income and 18% in diluted earnings per share. Net sales for the six months ended June 30, 2006 in the U.S. segment increased 15% as the result of sales initiatives with several major retailers and superstores. Sales in Europe and Canada increased by 12% in U.S. dollars and 8% in local currency. This sales growth was principally driven by new sales to a large pan-European superstore and an expanded product line with a major European retailer. Gross margins were 43.7% in the second quarter of 2006 versus 45.2% in the comparable period last year. For the first six months of 2006 gross margins were 44.4% compared to 45.5% in the same period in 2005. The lower margins in 2006 were primarily the result of one time expenses associated with filling large orders on an expedited basis for the new business in Europe. These expenses lay the foundation for future revenues to large multinational customers in Europe. (1) Walter C. Johnsen, President and CEO said, "Acme United had an excellent quarter. We reported the highest quarterly sales and earnings in the Company's history. We expanded our distribution channels, developed new products and continued to gain market share. Acme has been selected for a second consecutive year by Fortune Small Business as one of the top 100 fastest growing public companies in the U.S." The Company's bank debt on June 30, 2006 was $10.2 million compared to $5.0 million on June 30, 2005. The increase in bank debt during the twelve month period was used to buy additional inventory of $3.8 million, repurchase $1.4 million of Acme stock, demolish a former manufacturing site for $1.5 million and make dividend payments to shareholders of $.4 million. Based on anticipated cash flow, the debt level is expected to decline during the second half of the year. ACME UNITED CORPORATION is a leading worldwide supplier of innovative cutting, measuring and safety products to the school, home, office and industrial markets. Forward-looking statements in this earnings release, include without limitation, statements related to the Company's plans, strategies, objectives, expectations, intentions and adequacy of resources. 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 SECOND QUARTER REPORT 2006
Quarter Ended Quarter Ended June 30, 2006 June 30, 2005 Amounts in $000's except per share data (Unaudited) (Unaudited) ----------------------------------------------------------------------------------------------- Net sales $ 16,984 $ 14,904 Gross profit 7,428 6,731 Selling, general, and administrative expenses 4,995 4,577 Interest expense 130 43 Other (income) expense (38) 97 Pre-tax income 2,341 2,014 Income tax expense 835 700 Net income 1,506 1,314 Earnings per share basic 0.43 0.37 Earnings per share diluted 0.40 0.34 Six Months Ended Six Months Ended June 30, 2006 June 30, 2005 Amounts in $000's except per share data (Unaudited) (Unaudited) ----------------------------------------------------------------------------------------------- Net sales $ 29,241 $ 25,487 Gross profit 12,980 11,592 Selling, general, and administrative expenses 9,254 8,296 Interest expense 255 56 Other (income) expense (114) 146 Pre-tax income 3,585 3,094 Income tax expense 1,320 1,130 Net income 2,265 1,964 Earnings per share basic 0.65 0.56 Earnings per share diluted 0.61 0.52
(3) ACME UNITED CORPORATION CONDENSED CONSOLIDATED BALANCE SHEET SECOND QUARTER REPORT 2006 (Unaudited)
Amounts in $000's June 30, 2006 June 30, 2005 ----------------------------------------------------------------------------------------------- Assets: Current assets: Cash $ 1,053 $ 602 Accounts receivable, net 14,960 12,625 Inventories 14,990 11,141 Prepaid and other current assets 1,222 818 ------------------------------------------------- Total current assets 32,225 25,186 Property and equipment, net 2,566 2,203 Other assets 1,591 809 ------------------------------------------------- Total assets $ 36,382 $ 28,198 ================================================= Liabilities and stockholders' equity: Current liabilities Accounts payable 3,715 3,770 Other current liabilities 4,768 4,559 ------------------------------------------------- Total current liabilities 8,483 8,329 Long-term debt 10,256 5,022 Other non current liabilities 1,084 541 ------------------------------------------------- 19,823 13,892 Total stockholders' equity 16,559 14,306 ------------------------------------------------- Total liabilities and stockholders' equity $ 36,382 $ 28,198 =================================================
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