ACME UNITED CORP [ACU] Filings

10-Q 1 acu-20230630.htm 10-Q 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: June 30, 2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from: to

Commission file number: 01-07698

ACME UNITED CORPORATION

(Exact Name of Registrant as Specified in Its Charter)


Connecticut		06-0236700
State or Other Jurisdiction of		I.R.S. Employer Identification No.
Incorporation or Organization

1 Waterview Drive, Shelton, Connecticut		06484
Address of Principal Executive Offices		Zip Code

Registrant's telephone number, including area code: (203) 254-6060

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol	Name of each exchange on which registered
$2.50 par value Common Stock	ACU	NYSE American

Indicate by check mark whether the registrant (l) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (sec. 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act (Check one).


Large accelerated filer	☐	Accelerated filer	☒

Non-accelerated filer	☐	Smaller Reporting Company	☒

Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(s) of the Exchange Act ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Registrant had 3,568,006 shares of its $2.50 par value Common Stock outstanding as of August 3, 2023.

ACME UNITED CORPORATION

INDEX


		Page Number

Part I — FINANCIAL INFORMATION:		3
Item 1:	Financial Statements (Unaudited)	3
	Condensed Consolidated Balance Sheets at June 30, 2023 and December 31, 2022	3
	Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2023 and 2022	5
	Condensed Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2023 and 2022	6
	Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three and six months ended June 30, 2023 and 2022	7
	Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2023 and 2022	9
	Notes to Condensed Consolidated Financial Statements	10
Item 2:	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
Item 3:	Quantitative and Qualitative Disclosures about Market Risk	19
Item 4:	Controls and Procedures	19

Part II — OTHER INFORMATION:		20
Item 1:	Legal Proceedings	20
Item 1A:	Risk Factors	20
Item 2:	Unregistered Sales of Equity Securities and Use of Proceeds	20
Item 3:	Defaults Upon Senior Securities	20
Item 4:	Mine Safety Disclosures	20
Item 5:	Other Information	20
Item 6:	Exhibits	20
Signatures		21

Part I - FINANCIAL INFORMATION

Item 1: Financial Statements

ACME UNITED CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(all amounts in thousands)


	June 30,		December 31,
	2023		2022
	(unaudited)		(Note 1)
ASSETS
Current assets:
Cash and cash equivalents	$	3,401	$	6,100
Accounts receivable, less allowance of $842 in 2023 and $1,061 in 2022		39,796		32,604
Inventories		55,944		63,325
Prepaid expenses and other current assets		4,329		2,821
Restricted cash		-		750
Total current assets		103,470		105,600
Property, plant and equipment:
Land		1,982		1,979
Buildings		17,315		16,614
Machinery and equipment		33,124		31,492
		52,421		50,085
Less: accumulated depreciation		25,158		23,669
Net property, plant and equipment		27,263		26,416

Operating lease right-of-use asset, net		2,374		2,632
Goodwill		8,189		8,189
Intangible assets, less accumulated amortization		19,780		20,790
Other assets - restricted cash		750		750
Total assets	$	161,826	$	164,377

See Notes to Condensed Consolidated Financial Statements.

ACME UNITED CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS (continued)

(all amounts in thousands, except par value and share amounts)


	June 30,			December 31,
	2023			2022
	(unaudited)			(Note 1)
LIABILITIES
Current liabilities:
Accounts payable	$	10,724		$	10,514
Operating lease liability - current portion		1,122			1,130
Current portion of mortgage payable		411			405
Other current liabilities		13,013			10,078
Total current liabilities		25,270			22,127
Non-current liabilities:
Long-term debt		39,979			49,916
Mortgage payable, net of current portion		10,485			10,694
Operating lease liability - non-current portion		1,407			1,683
Deferred income taxes		305			305
Other non-current liabilities		729			622
Total liabilities		78,175			85,347

Commitments and contingencies (see note 2)

STOCKHOLDERS' EQUITY
Common stock, par value $2.50:
authorized 8,000,000 shares;
5,112,878 shares issued and 3,568,006 shares outstanding in 2023 and
5,083,051 shares issued and 3,538,179 shares outstanding in 2022		12,773			12,699
Additional paid-in capital		14,333			13,448
Retained earnings		74,406			70,967
Treasury stock, at cost - 1,544,872 shares in 2023 and 2022		(15,996	)		(15,996	)
Accumulated other comprehensive loss:
Translation adjustment		(1,865	)		(2,088	)
Total stockholders’ equity		83,651			79,030
Total liabilities and stockholders’ equity	$	161,826		$	164,377

See Notes to Condensed Consolidated Financial Statements.

ACME UNITED CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

(all amounts in thousands, except per share amounts)



	Three Months Ended June 30,						Six Months Ended June 30,
	2023			2022			2023			2022
Net sales	$	53,336		$	56,773		$	99,175		$	100,106
Cost of goods sold		33,314			38,225			62,872			66,590

Gross profit		20,022			18,548			36,303			33,516

Selling, general and administrative expenses		14,772			14,572			28,865			28,169

Operating income		5,250			3,976			7,438			5,347

Non-operating items:
Interest:
Interest expense		860			428			1,779			737
Interest income		(28	)		(5	)		(45	)		(8	)
Interest expense, net		832			423			1,734			729
Other (income) expense, net		(23	)		148			(46	)		147
Income before income tax expense		4,441			3,405			5,750			4,471
Income tax expense		998			667			1,318			903
Net income	$	3,443		$	2,738		$	4,432		$	3,568

Basic earnings per share	$	0.97		$	0.78		$	1.25		$	1.01

Diluted earnings per share	$	0.96		$	0.71		$	1.25		$	0.93

Weighted average number of common shares outstanding-denominator used for basic per share computations		3,555			3,521			3,548			3,521
Weighted average number of dilutive stock options outstanding		36			320			-			323
Denominator used for diluted per share computations		3,591			3,841			3,548			3,844

Dividends declared per share	$	0.14		$	0.14		$	0.28		$	0.27

See Notes to Condensed Consolidated Financial Statements.

ACME UNITED CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

(all amounts in thousands)


	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2023		2022			2023		2022
Net income	$	3,443	$	2,738		$	4,432	$	3,568
Other comprehensive income:
Foreign currency translation adjustment		114		(574	)		223		(547	)
Comprehensive income	$	3,557	$	2,164		$	4,656	$	3,021

See Notes to Condensed Consolidated Financial Statements.

ACME UNITED CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

(UNAUDITED)

(all amounts in thousands, except share amounts)

For the three months ended June 30, 2022


	Outstanding Shares of Common Stock		Common Stock		Treasury Stock			Additional Paid-In Capital		Accumulated Other Comprehensive Loss			Retained Earnings			Total
Balances, March 31, 2022		3,520,646	$	12,655	$	(15,996	)	$	12,222	$	(1,353	)	$	70,245		$	77,773
Net income														2,738			2,738
Other comprehensive income											(574	)					(574	)
Stock compensation expense									368								368
Distributions to shareholders														(492	)		(492	)
Issuance of common stock		727		2					8								10
Balances June 30, 2022		3,521,373	$	12,657	$	(15,996	)	$	12,598	$	(1,927	)	$	72,491		$	79,823

For the three months ended June 30, 2023


	Outstanding Shares of Common Stock		Common Stock		Treasury Stock			Additional Paid-In Capital			Accumulated Other Comprehensive Loss			Retained Earnings			Total
Balances, March 31, 2023		3,545,725	$	12,717	$	(15,996	)	$	13,914		$	(1,979	)	$	71,460		$	80,116
Net income															3,443			3,443
Other comprehensive income												114						114
Stock compensation expense									389									389
Distributions to shareholders															(497	)		(497	)
Issuance of common stock		15,702		40					189									229
Net share settlement of stock options		6,579		16					(159	)								(143	)
Balances June 30, 2023		3,568,006	$	12,773	$	(15,996	)	$	14,333		$	(1,865	)	$	74,406		$	83,651

For the six months ended June 30, 2022


	Outstanding Shares of Common Stock		Common Stock		Treasury Stock			Additional Paid-In Capital			Accumulated Other Comprehensive Loss			Retained Earnings			Total
Balances, December 31, 2021		3,520,646	$	12,655	$	(15,996	)	$	11,930		$	(1,380	)	$	69,873		$	77,082
Net income															3,568			3,568
Other comprehensive loss												(547	)					(547	)
Stock compensation expense									768									768
Distributions to shareholders															(950	)		(950	)
Issuance of common stock		727		2					8									10
Cash settlement of stock options									(108	)								(108	)
Balances June 30, 2022		3,521,373	$	12,657	$	(15,996	)	$	12,598		$	(1,927	)	$	72,491		$	79,823

For the six months ended June 30, 2023


	Outstanding Shares of Common Stock		Common Stock		Treasury Stock			Additional Paid-In Capital		Accumulated Other Comprehensive Loss			Retained Earnings		Total
Balances, December 31, 2022		3,538,179	$	12,699	$	(15,996	)	$	13,448	$	(2,088	)	$	70,967	$	79,030
Net income														4,432

ACME UNITED CORP [ACU] Filings
10-Q	[2023-08-08]
10-Q	[2023-05-09]
10-K	[2023-03-10]
10-Q	[2022-11-09]
10-Q	[2022-08-08]
10-Q	[2022-05-09]
10-K	[2022-03-30]
10-Q	[2021-11-09]
10-Q	[2021-08-06]
10-Q	[2021-05-07]
10-K	[2021-03-31]
10-Q	[2020-11-06]
10-Q	[2020-08-07]
10-Q	[2020-05-08]
10-K	[2020-03-13]
10-Q	[2019-11-07]
10-Q	[2019-08-07]
10-Q	[2019-05-09]
10-K	[2019-03-15]
10-Q	[2018-11-09]
10-Q	[2018-08-09]
10-Q	[2018-05-10]
10-K	[2018-03-15]
10-Q	[2017-11-09]
10-Q	[2017-08-04]
10-Q	[2017-05-12]
10-K	[2017-03-10]
10-Q	[2016-11-04]
10-Q	[2016-08-15]
10-Q	[2016-05-13]
10-K	[2016-03-11]
10-Q	[2015-11-12]
10-Q	[2015-08-14]
10-Q	[2015-05-13]
10-K	[2015-03-06]
10-Q	[2014-11-14]
10-Q	[2014-08-14]
10-Q	[2014-05-02]
10-K	[2014-03-06]
10-Q	[2013-11-08]
10-Q	[2013-08-13]
10-Q	[2013-05-10]
10-K	[2013-03-08]
10-Q	[2012-11-09]
10-Q	[2012-08-14]
10-Q	[2012-05-14]
10-K	[2012-03-07]