Why 2015 Will Be Even Better Than 2014
Acme United (ACU – $18.25) achieved record sales in all four quarters of fiscal year 2014. Looking at the number of products that are set to be launched, the synergies in the first aid business and the internal growth, we believe the Company will repeat that feat in 2015.
In the first and second quarter of 2015, for example, sales will see the contribution of First Aid Only for the first time, as it was acquired mid-2014. Acme’s three first aid brands are broadening their line of first aid kits and expanding the refill business, which positions them ideally with office products & mass market customers, and sporting goods dealers. The first aid business now accounts for 35% of Acme’s total revenues.
At the SHOT Show in January 2015, a great deal of new products were launched. Camillus presented the completely re-designed Carnivore X machete, the ‘Seven’ series folding knife line and an updated version of the highly successful Heat, Sizzle and Wildfire knives. Also, the once popular Western knife brand was re-launched with all new designs, packaging and branding. These tools will all hit the stores in 2015.
About 30 Cuda fishing knives and tools are now available. Both in North America and Europe, the tools received lots of attention from distributors and retail chains when they were introduced at the SHOT Show and IWA Show, respectively. It’s safe to assume that the brand will become another significant contributor to Acme’s results.
Finally, there’s the solid internal growth from products such as the iPoint Orbit electric pencil sharpener, which has truly become an iconic product in its category and continues to be a phenomenal success.
Acme’s management team foresees the Company’s sales to reach between $120 and $125 million in 2015, an increase of 12 to 16.6 percent respectively compared with 2014. In addition, it expects earnings to come in at $5.5 million to $5.8 million, up 14.8 and 21.1 percent respectively compared with 2014. At a fully diluted share count of 3.63 million shares, Earnings Per Share would reach between $1.51 and $1.60 in 2015. In our opinion, these are somewhat conservative estimates.
Thanks to the continued strong performance of all its brands we reiterate our buy recommendation for Acme United Corp. with a price target of $30.32, which is 66% above today’s stock price.
|Download the fourth quarter 2014 Acme United Company Report.|
|Smallcaps.us Advice: Buy||Price Target: $36.38||Latest Company Report (pdf)|
|For important disclosures, please read our disclaimer.|