Strong Q4 Results And 2010 Outlook For Acme United

Strong Q4 Results And 2010 Outlook For Acme United post image

Acme United Corporation (ACU) on Friday announced strong fourth quarter sales and earnings growth driven by the Company’s operational execution and innovative product mix.

Mr. Johnsen, the Company’s Chairman and CEO, didn’t provide guidance for 2010, but he did indicate that revenues were up 17% year over year for January 2010 and that he expected strong growth for the full quarter.

Fourth Quarter and Full Year 2009 Results

Net sales for the quarter ended December 31, 2009, were $13.4 million compared to $12.6 million in the same period in 2008, or an increase of 7%. Net income for the fourth quarter was $731,000, or $.22 per diluted share, compared to $634,000, or $.18 per diluted share, for the comparable period last year, an increase of 15%.

Amounts in $000’s
12/31/09
12/31/08
Net Sales
13,422
12,584
Cost of Goods Sold
8,248
7,701
S, G & A Expenses
4,881
4,088
Income From Operations *
293
795
Other Income (Expense)
(29)
169
Pre-Tax Income
266
875
Income Tax Expense (Benefit)
(464)
241
Net Income
731
634
Shares Outstanding – Diluted
3,305
3,511
Earnings Per Share
0.22
0.18
Most important income statement data for the quarters ending December 31, 2009 and December 31, 2008. Source: Company Filings

* Income From Operations in the fourth quarter of 2009 included a $210,000 write-off of medical products donated for relief efforts, while the fourth quarter of 2008 included a benefit of $400,000 from the reversal of incentive compensation liabilities. Excluding these items, operating income was $503,000 in the fourth quarter of 2009 compared to $395,000 in 2008.

Net sales for the year ended December 31, 2009 were $59.1 million, compared to $68.7 million in the same period in 2008, a decrease of 14%. And net income for 2009 was $2,842,000, or $.85 per diluted share, compared to $4,467,000, or $1.24 per diluted share, in the comparable period last year.

Balance Sheet

Thanks to a continued focus on inventory and the implementation of a new inventory management system, early 2009, the Company was able to decrease its inventory by over $4.3 million compared to December 31, 2008. Despite this reduction, ACU maintained exceptional on time delivery metrics.

Additionally, year over year, Acme United increased its cash position with $1.3 million to $6.5 million and reduced its long term debt with more than $2.5 million to $9.2 million. The Company now has a current ratio of 5.25!

Outlook for 2010

Sales in January 2010 grew by 17% compared with January 2009, and we’re convinced 2010 will continue to see a lot of growth thanks to the following items.

  • Acme United launched its excellent non-stick scissors in 2009 in an office super store chain and did really well. For 2010, a whole family of non-stick scissors will be introduced worldwide.

  • The iPoint Evolution Pencil Sharpener, which recently won a GOOD DESIGN award, was introduced at a major retail chain mid 2009. Weekly sales were up between 37% and 60% over the product it replaced. This product will also be distributed internationally in 2010.

  • The SpeedPak Utility Knife, with a removable blade cartridge, already did well in 2009 but will be distributed much broader in 2010. For example, ACU recently started shipping the SpeedPak to a new customer with over 1,700 hardware stores.

  • And finally we have the new Camillus knives that are being very good received. The Company sold $200,000 worth of knives in Q4 and intends to sell a whole lot more as distribution is increased to a number of mass market retailers.

Apparently, Acme United has turned the corner and investors clearly understood the message as they sent the stock almost 7% higher to $9.77 on Friday. We have a 12-month price target of $11.97 in our books, but as we’ll start work on our next update report we’ll make sure to take these strong fourth quarter results and FY 2010 outlook into account.


For important disclosures, please read our disclaimer.

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