Acme United Well On Track for Record 2020

Acme United (ACU – $23.99), the worldwide supplier of cutting devices, measuring instruments and first-aid products for school, home, office, industrial and hardware use announced that sales for the second quarter ended June 30, 2020, reached $44.0 million, an increase of 9% compared with sales of $40.2 million in the second quarter of 2019.

First Aid Central (FAC), which was acquired by Acme in January of 2020, contributed about US$1.1 million to second quarter revenues. FAC, which is based in Laval, Canada, expanded Acme‘s ability to provide safety products which meet Health Canada regulations through the Company’s existing Canadian customer base as well as its large multinational customers.

Similar to Acme’s first quarter results, Q2 also benefitted from sales of first aid and safety products due to market share gains and a surge of approximately $1.5 million of sales of COVID-related supplies.

Net income in the second quarter of 2020 reached $3.2 million, or $0.92 per diluted share, compared to $2.6 million, or $0.77 per diluted share, for the same period in 2019, increases of no less than 20% and 19%, respectively.

Next to record breaking Q2 sales and earnings, Acme was also positive about the future. The Company mentioned that overall sales of its Westcott, Cuda, and Camillus brands increased and continued to do so.

In the first half of 2020, Acme has earned $1.28 per share, compared with $1.01 in 2019. In the second half of last year, Acme earned $0.59 per share for total earnings per share of $1.60 in 2019. When we add $0.59 (EPS second half 2019) to $1.28 (EPS first half 2020), we wind up with total EPS of $1.87 for 2020. However, because we again want to remain very conservative, we set our EPS objective for Acme United in 2020 at $1.80. Note that this is a very conservative estimate and that the objective can again be increased after the Q3 financials have been announced.

We reiterate our buy recommendation for Acme United Corp. with a price target of $38.73, which is 61% above today’s stock price. Smallcaps Recommendation: BUY.

Download the second quarter 2020 Acme United Company Report. Advice: BuyPrice Target: $59.86Latest Company Report (pdf)
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