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Acme United Reports Second Quarter Results; Reaffirms Guidance for 2018

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FAIRFIELD, Conn., July 20, 2018 (GLOBE NEWSWIRE) -- Acme United Corporation (NYSE:ACU) today announced that net sales for the three months ended June 30, 2018 were $39.8 million, compared to $38.8 million in the same period of 2017, an increase of 2%. Net sales for the six months ended June 30, 2018 were $71.5 million, compared to $66.6 million in the same period in 2017, an increase of 7%.

Net income for the three months ended June 30, 2018 was $2.4 million, or $0.67 per diluted share, compared to $2.8 million, or $0.75 per diluted share, for the same period in 2017, decreases of 14% and 11%, respectively. Net income for the six months ended June 30, 2018 was $3.2 million, or $0.88 per diluted share, compared to $3.5 million, or $.94 per diluted share, in last year's same period, decreases of 9% and 6%, respectively.  The declines in net income for the three and six month periods resulted primarily from additions in sales and marketing personnel to accommodate our growth as well as higher interest rates on our variable rate credit facility.

Walter C. Johnsen, Chairman and CEO said, "We had record sales performances in many categories and areas of our company, including first aid and safety, Camillus and Cuda cutting products, DMT sharpening tools, Spill Magic absorbents, and our European business.  Sales of Westcott back to school products were affected by an increasing proportion of online versus retail sales, which are expected to shift revenues from the second to the third quarter."

"We anticipate a higher proportion of our back-to-school sales for 2018 in the third quarter and, accordingly, are reaffirming the financial guidance we previously provided for the year of approximately $140 million in revenues, $5.7 million in net income, and $1.53 earnings per share.  This compares to sales of $130.6 million, non-GAAP net income of $5.3 million and earnings per diluted share of $1.42 for 2017.  As previously reported, the Company's GAAP net income of $4.1 million for 2017 reflected a $1.2 million non-cash tax charge related to the U.S. Tax Cuts and Jobs Act.

In the U.S. segment, net sales for the three months ended June 30, 2018 increased 2% compared to the same period in 2017.  Sales of first aid and safety products were $15.0 million, an increase 7%. As noted above, our sales of Westcott school products were lower than the second quarter sales last year due to the timing of shipments.  Net sales for the first six months of 2018 in the U.S. segment increased 7% compared to the same period in 2017. Sales of first aid and safety products increased 17% due to market share gains.   

Net sales in Europe for the three months ended June 30, 2018 increased 14% in U.S. dollars and 5% in local currency compared to the same 2017 period.  Net sales for the six months ended June 30, 2018 increased 19% in U.S. dollars and 7% in local currency compared to the first half of 2017.  Net sales for both periods increased mainly due to new customers in the office products channel, growth in sales of DMT products, and strong e-commerce demand for these products.

Net sales in Canada for the three months ended June 30, 2018 decreased 1% in U.S. dollars and 5% in local currency compared to the same prior-year period.  Net sales for the six months ended June 30, 2018 increased 3% in U.S. dollars and were constant in local currency compared to the same period in 2017.

Gross margin was 37% in the three months ended June 30, 2018, compared to 37% in the same period in 2017.  Gross margin was 38% in the six months ended June 30, 2018, compared to 38% in the same period in 2017.

The Company's bank debt less cash on June 30, 2018 was $46.0 million compared to $41.3 million on June 30, 2017.  During the twelve-month period ended June 30, 2018, the Company purchased its manufacturing and distribution facility in Vancouver, WA for $4.0 million and distributed $1.5 million in dividends on its common stock. 

Conference Call and Webcast Information
Acme United will hold a conference call to discuss its quarterly results, which will be broadcast on Friday, July 20, 2018, at 12:00 p.m. EDT. To listen or participate in a question and answer session, dial 888-599-8686. International callers may dial 323-794-2551. 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®, PhysiciansCare®, Pac-Kit®, Spill Magic®, Westcott®, Clauss®, Camillus®, Cuda®, and DMT®. For more information, visit www.acmeunited.com

Forward Looking Statements

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) 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) changes in client needs and consumer spending habits; (iv) the impact of competition and technological changes on the Company; (v) the Company's ability to manage its growth effectively, including its ability to successfully integrate any business it might acquire; (vi) currency fluctuations; (vii) increases in the cost of borrowings resulting from rising interest rates; (viii) uncertainties arising from the interpretation and application of the U.S. Tax Cuts and Jobs Act enacted in December 2017; and (ix) other risks and uncertainties indicated from time to time in the Company's filings with the Securities and Exchange Commission.

   
ACME UNITED CORPORATION  
CONDENSED CONSOLIDATED STATEMENTS OF INCOME  
SECOND QUARTER REPORT 2018  
  (Unaudited)    
                       
            Three Months Ended     Three Months Ended    
Amounts in 000's except per share data   June 30, 2018     June 30, 2017    
                       
                       
Net sales       $ 39,751   $ 38,849      
Cost of goods sold       25,039     24,366      
Gross profit           14,712       14,483      
Selling, general, and administrative expenses     11,087       10,572      
Operating Income         3,625       3,911      
Interest expense, net         445       321      
Other expense  (income), net        74       (29 )    
Total other expense, net          519       292      
Income before income tax expense       3,106       3,619      
Income tax expense         670       773      
Net income       $ 2,436   $ 2,846      
                       
  Shares outstanding - Basic     3,374     3,353      
  Shares outstanding - Diluted     3,625     3,780      
                       
Earnings per share basic     $ 0.72   $ 0.85      
Earnings per share diluted     0.67     0.75      
                       
ACME UNITED CORPORATION  
CONDENSED CONSOLIDATED STATEMENTS OF INCOME  
SECOND QUARTER REPORT 2018 (cont.)  
(Unaudited)  
                       
                       
            Six Months Ended     Six Months Ended    
Amounts in 000's except per share data   June 30, 2018     June 30, 2017    
                       
Net sales       $ 71,460   $ 66,595      
Cost of goods sold       44,624     41,548      
Gross profit           26,836       25,047      
Selling, general, and administrative expenses     21,846       19,922      
Operating Income         4,990       5,125      
Interest expense, net         850       583      
Other expense (income) , net        61       (16 )    
Total other expense, net          911       567      
Income before income tax expense       4,079       4,558      
Income tax expense         879       1,052      
Net income       $ 3,200   $ 3,506      
                       
  Shares outstanding - Basic     3,374     3,342      
  Shares outstanding - Diluted     3,642     3,744      
                       
Earnings per share basic     $ 0.95   $ 1.05      
Earnings per share diluted     0.88     0.94      
                       
                       
ACME UNITED CORPORATION  
CONDENSED CONSOLIDATED BALANCE SHEETS  
SECOND QUARTER REPORT 2018  
(Unaudited)  
                       
Amounts in 000's       June 30, 2018     June 30, 2017    
                       
Assets:                    
Current assets:                  
  Cash and cash equivalents   $ 1,894   $ 5,674      
  Accounts receivable, less allowance   34,511     32,616      
  Inventories, net       42,510     35,638      
  Prepaid expenses and other current assets   2,524     2,417      
Total current assets       81,439     76,345      
                       
  Property, Plant and equipment, net     14,576     9,077      
  Intangible assets, less accumulated amortization   17,268     19,227      
  Goodwill         4,696     3,948      
  Other assets       599     765      
Total assets       $ 118,578   $ 109,362      
                       
Liabilities and stockholders' equity:                
Current liabilities                  
  Accounts payable     $ 12,972   $ 7,498      
  Other accrued liabilities     4,640     5,215      
Total current liabilities       17,612     12,713      
  Long term debt         44,318       46,956      
  Mortgage payable, net of current portion     3,578       -      
  Other non-current liabilities     846     345      
Total liabilities        66,354     60,014      
Total stockholders' equity       52,224     49,348      
Total liabilities and stockholders' equity $ 118,578   $ 109,362      
                       

CONTACT:

Paul G. Driscoll
Acme United Corporation
55 Walls Drive
Fairfield, CT  06824
Phone: (203) 254-6060
FAX: (203) 254-6521

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