GlobeNewswire Inc | Jul 17, 2020 09:00AM EDT

July 17, 2020

FAIRFIELD, Conn., July 17, 2020 (GLOBE NEWSWIRE) -- Acme United Corporation (NYSE American: ACU) today announced that net sales for the quarter ended June 30, 2020 were $44.0 million compared to $40.2 million in the second quarter of 2019, an increase of 9%. Net sales for the six months ended June 30, 2020 were $79.8 million, compared to $71.6 million in the same period in 2019, an increase of 11%.

Acme Uniteds second quarter and six months ended June 30, 2020 revenues included approximately $1.1 million and $2.1 million, respectively, from the sales of First Aid Central products. The Company acquired the assets of Canadian-based First Aid Central, Inc. on January 7, 2020.

Net income was $3,199,000 or $0.92 per diluted share for the quarter ended June 30, 2020 compared to $2,672,000, or $0.77 per diluted share, for the comparable period last year, an increase of 20% in net income and 19% in diluted earnings per share. Net income for the six months ended June 30, 2020 was $4,476,000, or $1.28 per diluted share, compared to $3,478,000, or $1.01 per diluted share, in last years same period, increases of 29% and 27%, respectively.

Chairman and CEO Walter C. Johnsen said, This was a very difficult quarter that ended with good results. We benefited from the diversification during the past 5 years of our customer base and product lines. Sales of our traditional Westcott cutting and measuring tools to office and school supply customers declined dramatically, in some cases more than 80%. However, sales to mass market retailers and ecommerce increased substantially and offset the decline. Sales of first aid and safety products led the quarters growth due to market share gains and a surge of approximately $1.5 million of sales of COVID-related supplies.

Mr. Johnsen added, I am incredibly proud of our team. They are working under difficult conditions with a sense of purpose, and delivering results.

Net sales for the second quarter and the first six months of 2020 in the U.S. segment increased 10% compared to the same periods in 2019. The Company had strong sales of first aid and safety products, primarily due to continued market share gains in the industrial, safety, home improvement, mass market, and ecommerce channels. In addition, there was growth from a surge in demand for first aid and safety products related to COVID-19.

European net sales for the second quarter of 2020 increased 4% in U.S. dollars and 6% in local currency compared to the second quarter of 2019. Net sales for the six months ended June 30, 2020 increased 9% in U.S. dollars and 12% in local currency compared to the first half of 2019. The increases for both the quarter and six months were mainly due to growth in sales of Westcott and Camillus products in the ecommerce channel and continued growth of DMT sharpening products.

Net sales in Canada, excluding First Aid Central products, for the second quarter of 2020 declined 44% in U.S. dollars and 42% in local currency compared to the same period in 2019. Net sales for the six months ended June 30, 2020 decreased 27% in U.S. dollars and 25% local currency compared to the first half of 2019. These decreases reflected declines in sales of office products due to office and store closings as a result of COVID-19.

Gross margin was 36.5% in the second quarter of 2020 versus 36.7% in the comparable period last year. Gross margin was 37.1% in the each of the six months ended June 30, 2020 and 2019.

Acme United received a loan of $3.5 million from the Paycheck Protection Program during the second quarter of 2020, with the proceeds applied to payroll expenses. The loan enhanced the Companys ability to maintain its entire payroll during uncertain times.

The Companys debt less cash on June 30, 2020 was $37.3 million compared to $41.0 million on June 30, 2019. During the twelve-month period ended June 30, 2020, the Company paid approximately $2.1 million for the acquisition of the assets of First Aid Central, distributed $1.6 million in dividends on its common stock, and generated $9 million in free cash flow.

Conference Call and Webcast InformationAcme United will hold a conference call to discuss its quarterly results, which will be broadcast on Friday, July 17, 2020, at 12:00 p.m. EDT. To listen or participate in a question and answer session, dial 800-437-2398. International callers may dial 323-289-6576. You may access the live webcast of the conference call through the Investor Relations section of the Companys website, www.acmeunited.com. A replay may be accessed under Investor Relations, Audio Archives.

About Acme UnitedACME 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, Camillus, Cuda, and DMT. For more information, visit www.acmeunited.com.

Forward Looking StatementsForward-looking statements in this report, including without limitation, statements related to the Companys 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 the impact that the global COVID-19 pandemic has had and will continue to have on the Companys business, operations and financial results. These include the severity and duration of the pandemic, including whether there is a second wave, the effect of measures taken by the Company to limit the spread of the disease at our offices and distribution centers, further actions that may be taken by governmental authorities or by businesses or individuals on their own initiative in response to the pandemic, the pace of recovery when an effective vaccine is widely available or when the pandemic otherwise subsides and the heightened impact the pandemic has on many of the risks described herein, including without limitation risks relating to the on-going world-wide economic downturn and disruptions in our supply chain, any of which could adversely impact the Companys ability to manufacture, source or distribute its products, both domestically and internationally.

These risks and uncertainties further include, without limitation, the following: (i) changes in the Companys 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 Companys suppliers and customers; (iii) changes in client needs and consumer spending habits; (iv) the impact of competition, (v) the impact of technological changes including specifically the growth of online marketing and sales activity; (vi) the Companys ability to manage its growth effectively, including its ability to successfully integrate any business it might acquire; (vii) the Companys ability to effectively manage its inventory in a rapidly changing business environment; (viii) currency fluctuations; (ix) 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 (x) other risks and uncertainties indicated from time to time in the Companys filings with the Securities and Exchange Commission.

ACME UNITED CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF INCOME SECOND QUARTER REPORT 2020 (Unaudited) Three Months Three Months Ended EndedAmounts in 000's except per share June 30, 2020 June 30, 2019 data Net sales $ 44,042 $ 40,220 Cost of goods sold 27,989 25,449 Gross profit 16,053 14,771 Selling, general, and 11,670 11,003 administrative expensesOperating income 4,383 3,768 Interest expense 245 502 Interest income (11 ) (11 ) Interest expense, net 234 491 Other (income) expense, net (1 ) 14 Total other expense, net 233 505 Income before income tax 4,150 3,263 expenseIncome tax expense 951 592 Net income $ 3,199 $ 2,672 Shares outstanding - Basic 3,349 3,351 Shares outstanding - Diluted 3,482 3,485

Earnings per share - Basic $ 0.96 $ 0.80 Earnings per share - Diluted 0.92 0.77 ACME UNITED CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF INCOME SECOND QUARTER REPORT 2020 (cont.) (Unaudited) Six Months Six Months Ended EndedAmounts in 000's except per share June 30, 2020 June 30, 2019 data Net sales $ 79,817 $ 71,590 Cost of goods sold 50,234 45,016 Gross profit 29,583 26,574 Selling, general, and 23,191 21,271 administrative expensesOperating income 6,392 5,303 Interest expense 568 395 Interest income (14 ) - Interest expense, net 554 994 Other expense, net 36 12 Total other expense, net 590 1,006 Income before income tax 5,802 4,297 expenseIncome tax expense 1,326 819 Net income $ 4,476 $ 3,478 Shares outstanding - Basic 3,344 3,351 Shares outstanding - Diluted 3,499 3,429 Earnings per share - Basic $ 1.34 $ 1.04 Earnings per share - Diluted 1.28 1.01 ACME UNITED CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS SECOND QUARTER REPORT 2020 (Unaudited) Amounts in 000's June 30, 2020 June 30, 2019 Assets: Current assets: Cash and cash equivalents $ 5,239 $ 1,924 Accounts receivable, net 33,720 35,462 Inventories 44,311 39,615 Prepaid expenses and other current 2,438 2,085 assetsTotal current assets 85,708 79,086 Property, Plant and equipment, net 14,278 14,200 Operating lease right of use asset 2,438 2,424 Intangible assets, less accumulated 15,164 16,422 amortizationGoodwill 5,909 4,696 Other assets 39 202 Total assets $ 123,536 $ 117,030 Liabilities and stockholders' equity:Current liabilities: Accounts payable $ 8,733 $ 9,931 Operating lease liability - short 933 987 termMortgage payable - short term 267 267 Other accrued liabilities 10,680 6,865 Total current liabilities 20,613 18,050 Long term debt 35,742 39,388 Note Payable 3,508 - Mortgage payable - long term 3,044 3,311 Operating lease liability - long 1,572 1,441 termOther non-current liabilities 50 38 Total liabilities 64,529 62,228 Total stockholders' equity 59,007 54,802 Total liabilities and stockholders' $ 123,536 $ 117,030 equity

CONTACT:Paul G. DriscollAcme United Corporation55 Walls DriveFairfield, CT 06824Phone: (203) 254-6060FAX: (203) 254-6521