Acme United Corporation (NYSEMKT:ACU) today announced that net sales for the third quarter ended September 30, 2016 were $31.9 million, compared to $29.9 million in the comparable period of 2015, an increase of 7%. Net sales for the nine months ended September 30, 2016 were $98.2 million, compared to $86.7 million in the same period in 2015, an increase of 13%.
Net income for the quarter ended September 30, 2016 was $1.5 million, or $0.40 per diluted share, compared to $1.2 million, or $0.33 per diluted share, for the 2015 period, a 22% increase in net income and 21% in earnings per share. Net income for the nine months ended September 30, 2016 was $5.3 million, or $1.49 per diluted share, compared to $4.4 million, or $1.18 per diluted share, in last year’s comparable period, a 22% increase in net income and 26% in earnings per share.
Chairman and CEO Walter C. Johnsen said, “Our Westcott school, home, and office product lines all continued to gain market share and we delivered record back-to-school sales. In addition, we gained new first aid placement at a number of large food service chains , a promising source of new business, and grew our industrial first aid kit business. The Clauss, Camillus, and Cuda product families added new products and customers, and DMT, whose sharpening tool business we acquired in February 2016 , exceeded our expectations as we expanded the business and distribution through our broad customer base.
“We expect continued sales and earnings strength for the rest of 2016, and are therefore raising our guidance for the second time for fiscal 2016. We now expect to generate revenues of $124 million and earnings per share of $1.63. Our most recent guidance called for revenues of $123 million and earnings per share of $1.55, up from our original forecast of $120 million in revenues and earnings per share of $1.47.”
In the U.S. segment, net sales for the quarter ended September 30, 2016 increased 9% compared to the same period in 2015 due to strong sales of Westcott school and office products, and first aid kits. Revenues from our acquisition of DMT contributed $1.3 million in the third quarter, and $3.6 million February 2016 to date. Net sales for the first nine months of 2016 grew 15% over the comparable period in 2015.
Net sales in Canada for the three months ended September 30, 2016 decreased 5% in U.S. dollars and 4% in local currency compared to the prior-year period. Net sales for the nine months ended September 30, 2016 decreased 2% in U.S. dollars but increased 3% in local currency compared to the same period in 2015.
Net sales in Europe for the three months ended September 30, 2016 decreased 12% in both U.S. dollars and local currency compared to the comparable period in 2015. The decline in sales was primarily due to the timing of a shipment of promotional products to a mass-market customer. In 2015, the promotion occurred in the third quarter; in 2016, the promotion occurred in the second quarter. Net sales for the nine months ended September 30, 2016 increased 4% in both U.S. dollars and local currency compared to last year’s period due to market share gains in the office products channel.
Gross margin was 37.2% in the three months ended September 30, 2016, compared to 34.5% in the same period in 2015. The higher gross margin was primarily due to a favorable product mix. Also, in the third quarter of last year, the Company incurred approximately $150,000 of one-time moving and severance costs associated with consolidating its first aid facilities. Gross margin was 36.4% for the nine months ended September 30, 2016 compared to 36.1% for last year’s period.
The Company’s long-term debt less cash on September 30, 2016 was $33.4 million compared to $23.9 million on September 30, 2015. During the twelve-month period ended September 30, 2016, the Company paid approximately $7.0 million for the acquisition of the assets of DMT, spent $1.4 million on stock repurchases and paid $1.3 million in dividends on its common stock.
Acme United will hold a conference call to discuss its quarterly results, which will be broadcast over the Internet on Thursday, October 20, 2016, at 12:00 p.m. EDT. To listen or participate in a question and answer session, dial 800-768-6570. International callers may dial 785-830-1942. 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 or by logging on to www.streetevents.com.
ACME UNITED CORPORATION is a leading worldwide supplier of innovative cutting, measuring and safety products to the school, home, office, hardware, sporting goods and industrial markets. Its leading brands include Westcott®, Clauss®, Camillus®, Cuda®, PhysiciansCare®, First Aid Only®, Pac-Kit® and DMT®. For more information, visit www.acmeunited.com.
