UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
__________________
FORM
10-Q
___________________________________
[X] QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
For
the quarterly period ended September 30, 2015
OR
[_]
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 001-07698
ACME
UNITED CORPORATION
(Exact
name of registrant as specified in its charter)
__________________
CONNECTICUT |
06-0236700 |
(State or other jurisdiction
of incorporation or organization) |
(I.R.S. Employer Identification
No.) |
55 WALLS DRIVE,
Fairfield, Connecticut |
06824 |
(Address of principal executive
offices) |
(Zip Code) |
Registrant’s
telephone number, including area code: (203) 254-6060
Indicate
by check mark whether the registrant (1) 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 [X] No [_]
Indicate
by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted 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 and post such files). Yes [X] No [_]
Indicate
by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller
reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act (Check one).
Large
accelerated filer [_] Accelerated filer [_] Non-accelerated filer [_] Smaller
reporting company [X]
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes [_] No [X]
As
of November 3, 2015 the registrant had outstanding 3,370,591 shares of its $2.50 par value Common Stock.
ACME
UNITED CORPORATION
|
|
Page |
|
|
|
Part I — FINANCIAL INFORMATION |
|
Item 1. |
Financial Statements (Unaudited) |
|
|
Condensed
Consolidated Balance Sheets as of September 30, 2015 and December 31, 2014
|
3 |
|
Condensed
Consolidated Statements of Operations for the three and nine months ended September 30, 2015 and 2014
|
5 |
|
Condensed
Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2015 and 2014 |
6 |
|
Condensed
Consolidated Statements of Cash Flows for the nine months ended September 30, 2015 and 2014 |
7 |
|
Notes
to Condensed Consolidated Financial Statements |
8 |
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of
Operations |
13 |
Item 3. |
Quantitative and Qualitative Disclosures About Market Risk |
16 |
Item 4. |
Controls and Procedures |
16 |
|
|
|
Part II — OTHER INFORMATION |
|
Item 1. |
Legal Proceedings |
17 |
Item 1A. |
Risk Factors |
17 |
Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds |
17 |
Item 3. |
Defaults Upon Senior Securities |
17 |
Item 4. |
Mine Safety Disclosures |
17 |
Item 5. |
Other Information |
17 |
Item 6. |
Exhibits |
18 |
Signatures |
19 |
Part I -
FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
ACME UNITED CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(all amounts
in thousands, except share amounts)
| |
September 30, | |
December 31, |
| |
2015 | |
2014 |
| |
(unaudited) | |
(Note 1) |
| |
| | | |
| | |
ASSETS | |
| | | |
| | |
Current assets: | |
| | | |
| | |
Cash and cash equivalents | |
$ | 4,621 | | |
$ | 2,286 | |
Accounts receivable, less allowance | |
| 23,587 | | |
| 19,477 | |
Inventories: | |
| | | |
| | |
Finished goods | |
| 29,418 | | |
| 28,713 | |
Work in process | |
| 535 | | |
| 522 | |
Raw materials and supplies | |
| 4,545 | | |
| 4,436 | |
| |
| 34,498 | | |
| 33,671 | |
Prepaid expenses and other current assets | |
| 2,171 | | |
| 2,077 | |
Total current assets | |
| 64,877 | | |
| 57,511 | |
Property, plant and equipment: | |
| | | |
| | |
Land | |
| 420 | | |
| 436 | |
Buildings | |
| 5,129 | | |
| 5,126 | |
Machinery and equipment | |
| 11,226 | | |
| 10,067 | |
| |
| 16,775 | | |
| 15,629 | |
Less accumulated depreciation | |
| 9,432 | | |
| 8,698 | |
| |
| 7,343 | | |
| 6,931 | |
Goodwill | |
| 1,375 | | |
| 1,375 | |
Intangible assets, less amortization | |
| 12,023 | | |
| 12,555 | |
Other assets | |
| 967 | | |
| 936 | |
Total assets | |
$ | 86,585 | | |
$ | 79,308 | |
See
notes to condensed consolidated financial statements.
ACME
UNITED CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (continued)
(all amounts in thousands, except share amounts)
| |
September 30, | |
December 31, |
| |
2015 | |
2014 |
| |
(unaudited) | |
(Note 1) |
LIABILITIES | |
| | | |
| | |
Current liabilities: | |
| | | |
| | |
Accounts payable | |
$ | 7,206 | | |
$ | 7,773 | |
Other accrued liabilities | |
| 6,759 | | |
| 7,590 | |
Total current liabilities | |
| 13,965 | | |
| 15,363 | |
Long-term debt | |
| 28,551 | | |
| 24,147 | |
Other | |
| 362 | | |
| 370 | |
Total liabilities | |
| 42,878 | | |
| 39,880 | |
| |
| | | |
| | |
STOCKHOLDERS' EQUITY | |
| | | |
| | |
Common stock, par value $2.50: | |
| | | |
| | |
authorized 8,000,000 shares; | |
| | | |
| | |
issued - 4,740,618 shares in 2015 | |
| | | |
| | |
and 4,653,424 shares in 2014, | |
| | | |
| | |
including treasury stock | |
| 11,851 | | |
| 11,633 | |
Additional paid-in capital | |
| 9,304 | | |
| 7,941 | |
Retained earnings | |
| 37,236 | | |
| 33,784 | |
Treasury stock, at cost - 1,371,754 shares in 2015 | |
| | | |
| | |
and 1,362,072 shares in 2014 | |
| (12,445 | ) | |
| (12,283 | ) |
Accumulated other comprehensive income: | |
| | | |
| | |
Minimum pension liability | |
| (895 | ) | |
| (895 | ) |
Translation adjustment | |
| (1,343 | ) | |
| (752 | ) |
| |
| (2,238 | ) | |
| (1,647 | ) |
Total stockholders’ equity | |
| 43,707 | | |
| 39,428 | |
Total liabilities and stockholders’ equity | |
$ | 86,585 | | |
$ | 79,308 | |
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 | |
Nine Months Ended |
| |
September 30, | |
September 30, |
| |
2015 | |
2014 | |
2015 | |
2014 |
Net sales | |
$ | 29,903 | | |
$ | 30,008 | | |
$ | 86,694 | | |
$ | 82,555 | |
Cost of goods sold | |
| 19,578 | | |
| 19,393 | | |
| 55,398 | | |
| 53,346 | |
| |
| | | |
| | | |
| | | |
| | |
Gross profit | |
| 10,325 | | |
| 10,615 | | |
| 31,296 | | |
| 29,209 | |
| |
| | | |
| | | |
| | | |
| | |
Selling, general and administrative expenses | |
| 8,334 | | |
| 8,685 | | |
| 24,603 | | |
| 22,920 | |
Operating income | |
| 1,991 | | |
| 1,930 | | |
| 6,693 | | |
| 6,289 | |
| |
| | | |
| | | |
| | | |
| | |
Non-operating items: | |
| | | |
| | | |
| | | |
| | |
Interest: | |
| | | |
| | | |
| | | |
| | |
Interest expense | |
| 150 | | |
| 157 | | |
| 424 | | |
| 355 | |
Interest income | |
| (1 | ) | |
| (4 | ) | |
| (4 | ) | |
| (12 | ) |
Interest expense, net | |
| 149 | | |
| 153 | | |
| 420 | | |
| 343 | |
Other expense , net | |
| 92 | | |
| 67 | | |
| 149 | | |
| 78 | |
Total other expense | |
| 241 | | |
| 220 | | |
| 568 | | |
| 421 | |
Income before income taxes | |
| 1,750 | | |
| 1,710 | | |
| 6,124 | | |
| 5,868 | |
Income tax expense | |
| 542 | | |
| 521 | | |
| 1,771 | | |
| 1,769 | |
Net income | |
$ | 1,208 | | |
$ | 1,189 | | |
$ | 4,353 | | |
$ | 4,099 | |
| |
| | | |
| | | |
| | | |
| | |
Basic earnings per share | |
$ | 0.36 | | |
$ | 0.37 | | |
$ | 1.31 | | |
$ | 1.27 | |
| |
| | | |
| | | |
| | | |
| | |
Diluted earnings per share | |
$ | 0.33 | | |
$ | 0.34 | | |
$ | 1.18 | | |
$ | 1.18 | |
| |
| | | |
| | | |
| | | |
| | |
Weighted average number of common shares outstanding- | |
| | | |
| | | |
| | | |
| | |
denominator used for basic per share computations | |
| 3,354 | | |
| 3,250 | | |
| 3,328 | | |
| 3,224 | |
Weighted average number of dilutive stock options | |
| | | |
| | | |
| | | |
| | |
outstanding | |
| 345 | | |
| 296 | | |
| 370 | | |
| 261 | |
Denominator used for diluted per share computations | |
| 3,699 | | |
| 3,546 | | |
| 3,698 | | |
| 3,485 | |
| |
| | | |
| | | |
| | | |
| | |
Dividends declared per share | |
$ | 0.09 | | |
$ | 0.09 | | |
$ | 0.27 | | |
$ | 0.25 | |
See notes to condensed consolidated financial statements.
ACME UNITED CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
(all amounts in thousands)
| |
Three Months Ended | |
Nine Months Ended |
| |
September 30, | |
September 30, |
| |
2015 | |
2014 | |
2015 | |
2014 |
| |
| |
| |
| |
|
Net income | |
$ | 1,208 | | |
$ | 1,189 | | |
$ | 4,353 | | |
$ | 4,099 | |
Other comprehensive loss - | |
| | | |
| | | |
| | | |
| | |
Foreign currency translation | |
| (129 | ) | |
| (447 | ) | |
| (591 | ) | |
| (485 | ) |
Comprehensive income | |
$ | 1,079 | | |
$ | 742 | | |
$ | 3,762 | | |
$ | 3,614 | |
See notes to condensed consolidated financial statements.
ACME UNITED CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(all amounts in thousands)
| |
Nine Months Ended |
| |
September 30, |
| |
2015 | |
2014 |
Operating Activities: | |
| | | |
| | |
Net income | |
$ | 4,353 | | |
$ | 4,099 | |
Adjustments to reconcile net income | |
| | | |
| | |
to net cash (used) provided by operating activities: | |
| | | |
| | |
Depreciation | |
| 970 | | |
| 902 | |
Amortization | |
| 584 | | |
| 345 | |
Stock compensation expense | |
| 442 | | |
| 451 | |
Gain on disposal/sale of assets | |
| — | | |
| (200 | ) |
Changes in operating assets and liabilities: | |
| | | |
| | |
Accounts receivable | |
| (4,205 | ) | |
| (6,079 | ) |
Inventories | |
| (1,392 | ) | |
| (1,895 | ) |
Prepaid expenses and other current assets | |
| (226 | ) | |
| (168 | ) |
Accounts payable | |
| (372 | ) | |
| 863 | |
Other accrued liabilities | |
| (844 | ) | |
| 3,018 | |
Total adjustments | |
| (5,042 | ) | |
| (2,763 | ) |
Net cash (used) provided by operating activities | |
| (689 | ) | |
| 1,336 | |
| |
| | | |
| | |
Investing Activities: | |
| | | |
| | |
Purchase of property, plant, and equipment | |
| (1,352 | ) | |
| (1,419 | ) |
Purchase of patents and trademarks | |
| (52 | ) | |
| (119 | ) |
Acquisition of certain assets of First Aid Only, Inc. | |
| — | | |
| (13,806 | ) |
Proceeds from the sales of property, plant, and equipment | |
| 5 | | |
| 773 | |
Net cash used by investing activities | |
| (1,399 | ) | |
| (14,571 | ) |
| |
| | | |
| | |
Financing Activities: | |
| | | |
| | |
Borrowing of long-term debt, net of repayments | |
| 4,404 | | |
| 7,433 | |
Proceeds from issuance of common stock | |
| 1,139 | | |
| 890 | |
Distributions to stockholders | |
| (895 | ) | |
| (768 | ) |
Purchase of common stock | |
| (162 | ) | |
| — | |
Net cash provided by financing activities | |
| 4,486 | | |
| 7,555 | |
| |
| | | |
| | |
Effect of exchange rate changes on cash | |
| (63 | ) | |
| (150 | ) |
Net change in cash and cash equivalents | |
| 2,335 | | |
| (5,830 | ) |
| |
| | | |
| | |
Cash and cash equivalents at beginning of period | |
| 2,286 | | |
| 11,644 | |
| |
| | | |
| | |
Cash and cash equivalents at end of period | |
$ | 4,621 | | |
$ | 5,814 | |
See notes to condensed consolidated financial statements.
Notes
to CONDENSED CONSOLIDATED Financial Statements
(UNAUDITED)
Note
1 — Basis of Presentation
In
the opinion of management, the accompanying condensed consolidated financial statements include all adjustments necessary to present
fairly the financial position, results of operations and cash flows of Acme United Corporation (the “Company”). These
adjustments are of a normal, recurring nature. However, the financial statements do not include all of the disclosures normally
required by accounting principles generally accepted in the United States of America or those normally made in the Company's Annual
Report on Form 10-K. Please refer to the Company's Annual Report on Form 10-K for the year ended December 31, 2014 for such disclosures.
The condensed consolidated balance sheet as of December 31, 2014 was derived from the audited consolidated balance sheet as of
that date. The results of operations for interim periods are not necessarily indicative of the results to be expected for the
full year. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with Management’s
Discussion and Analysis of Financial Condition and Results of Operations and the financial statements and notes thereto, included
in the Company’s 2014 Annual Report on Form 10-K.
The
Company has evaluated events and transactions subsequent to September 30, 2015 and through the date these condensed consolidated
financial statements were included in this Form 10-Q and filed with the SEC.
As
part of the process of preparing our financial statements on a quarterly basis, the Company estimates its income tax expense.
This process involves the estimation of the Company’s current tax exposure based on expected annual results of operations.
Note
2 — Contingencies
The
Company is involved from time to time in disputes and other litigation in the ordinary course of business and may encounter other
contingencies, which may include environmental and other matters. There are no pending material legal proceedings to which the
registrant is a party, or, to the actual knowledge of the Company, contemplated by any governmental authority.
In
December 2008, the Company sold property it owned in Bridgeport, Connecticut to B&E Juices, Inc. for $2.5 million, of which
$2.0 million was secured by a mortgage on the property. The property consisted of approximately four acres of land and 48,000
sq. feet of warehouse space. The property was the site of the Company’s original scissor factory which opened in 1887 and
was closed in 1996.
Under
the terms of the sale agreement, and as required by the Connecticut Transfer Act, the Company was required to remediate any environmental
contamination on the property. During 2008, the Company hired an independent environmental consulting firm to conduct environmental
studies in order to identify the extent of the environmental contamination on the property and to develop a remediation plan.
As a result of those studies and the estimates prepared by the independent environmental consulting firm, the Company recorded
an undiscounted liability of approximately $1.8 million related to the remediation of the property. This accrual included the
costs of required investigation, remedial activities, and post-remediation operating and maintenance.
Remediation
work on the project began in the third quarter of 2009 and was completed during the third quarter of 2012. In addition to the
completed remediation work, the Company, with the assistance of its independent environmental consulting firm, was required to
monitor contaminant levels on the property to ensure they comply with applicable governmental standards. During the first quarter
of 2015, the Company received notice from the Connecticut Department of Energy & Environmental Protection that it had accepted
and approved the Company’s filing of its Form III Verification Report. As a result, the Company’s remediation obligations
have been satisfied.
On
April 7, 2014, the Company sold its Fremont, NC distribution facility for $850,000 in cash. The facility originally served as
a manufacturing site for the Company’s scissors and rulers. Under the terms of the sale agreement, the Company is responsible
to remediate any environmental contamination on the property. The Company hired an independent environmental consulting firm to
conduct environmental studies in order to identify the extent of the environmental contamination on the property and to develop
a remediation plan. As a result of those studies and the estimates prepared by the independent environmental consulting firm,
and in conjunction with the sale of the property, the Company recorded a liability of $300,000 in the second quarter of 2014,
related to the remediation of the property. The accrual included the total of then estimated costs of remedial activities and
post-remediation monitoring costs.
Remediation
work on the project began in the third quarter of 2014 and is expected to be completed in 2015. In addition to the remediation
work, the Company, with the assistance of its independent environmental consulting firm, must continue to monitor contaminant
levels on the property to ensure they comply with applicable North Carolina laws and regulations. The Company expects that the
monitoring period will last a period of five years after the completion of the remediation and be completed by the end of 2020.
The
change in the accrual for environmental remediation, included in other accruaed liabilities and other liabilities on the condensed
consolidated balance sheets for the nine months ended September 30, 2015 follows (amounts in thousands):
| |
Balance
at
December 31, 2014 |
|
Payments | |
Balance
at
September 30, 2015 |
Fremont, NC | |
$ | 260 | |
|
$ | (180 | ) | |
$ | 80 | |
Bridgeport, CT | |
| 6 | |
|
| (6 | ) | |
| — | |
Total | |
$ | 266 | |
|
$ | (186 | ) | |
$ | 80 | |
Note
3 — Pension
Components
of net periodic benefit cost are as follows (in thousands):
| |
Three Months Ended September 30, | |
Nine Months Ended September 30, |
| |
2015 | |
2014 | |
2015 | |
2014 |
| |
| |
| |
| |
|
Components of net periodic benefit cost: | |
| | | |
| | | |
| | | |
| | |
Interest cost | |
$ | 15 | | |
$ | 18 | | |
$ | 44 | | |
$ | 53 | |
Service cost | |
| 6 | | |
| 6 | | |
| 19 | | |
| 19 | |
Expected return on plan assets | |
| (24 | ) | |
| (23 | ) | |
| (70 | ) | |
| (70 | ) |
Amortization of prior service costs | |
| 2 | | |
| 2 | | |
| 7 | | |
| 7 | |
Amortization of actuarial loss | |
| 36 | | |
| 29 | | |
| 92 | | |
| 87 | |
| |
$ | 35 | | |
$ | 32 | | |
$ | 92 | | |
$ | 96 | |
The
Company’s funding policy with respect to its qualified plan is to contribute at least the minimum amount required by applicable
laws and regulations. As of September 30, 2015 the Company had contributed approximately $30,000 to the plan.
Note
4 —Debt and Shareholders’ Equity
On April
25, 2013, the Company amended its revolving loan agreement with HSBC Bank N.A. dated April 5, 2012. The amendment increased the
borrowing limit to $40 million from $30 million. The interest rate remained the same at LIBOR plus 1.75%. All principal amounts
outstanding under the agreement are required to be repaid in a single amount on April 5, 2017, the date the agreement expires;
interest is payable monthly. During the fourth quarter of 2013, the Company and HSBC agreed to make certain technical amendments
to a covenant of the amended loan agreement to accommodate the purchase of the Rocky Mount facility. Funds borrowed under the
agreement may be used for working capital, general operating expenses, share repurchases, acquisitions and certain other purposes.
Under the amended loan agreement, the Company continues to be required to maintain specific amounts of tangible net worth, a debt/net
worth ratio, and a fixed charge coverage ratio. At September 30, 2015, the Company was in compliance with these covenants.
As of
September 30, 2015 and December 31, 2014, the Company had outstanding borrowings of approximately $28,551,000 and $24,147,000,
respectively, under the Company’s revolving loan agreement with HSBC.
During
the three months ended September 30, 2015, the Company issued a total of 39,599 shares of common stock and received aggregate
proceeds of $463,029 upon exercise of employee stock options.
During
the nine months ended September 30, 2015, the Company issued a total of 87,194 shares of common stock and received aggregate proceeds
of $1,137,863 upon the exercise of employee stock options.
During
the three and nine months ended September 30, 2015, the Company repurchased 9,682 shares of its Common Stock at an average price
of $16.69. As of September 30, 2015, there were 133,463 shares that may be purchased under the repurchase program announced in
2010. The Company’s purchases in September were effected pursuant to a Rule 10b5-1 plan.
Note
5— Segment Information
The
Company reports financial information based on the organizational structure used by management for making operating and investment
decisions and for assessing performance. The Company’s reportable business segments consist of: (1) United States; (2) Canada
and (3) Europe. As described below, the activities of the Company’s Asian operations are closely linked to those of the
U.S. operations; accordingly, management reviews the financial results of both on a consolidated basis, and the results of the
Asian operations have been aggregated with the results of the United States operations to form one reportable segment called the
“United States segment” or “U.S. segment”. Each reportable segment derives its revenue from the sales
of cutting devices, measuring instruments and safety products for school, office, home, hardware and industrial use.
Domestic
sales orders are filled from the Company’s distribution center in North Carolina. The Company is responsible for the costs
of shipping, insurance, customs clearance, duties, storage and distribution related to such products. Orders filled from the Company’s
inventory are generally for less than container-sized lots.
Direct
import sales are products sold by the Company’s Asian subsidiary, directly to major U.S. retailers, who take ownership of
the products in Asia. These sales are completed by delivering product to the customers’ common carriers at the shipping
points in Asia. Direct import sales are made in larger quantities than domestic sales, typically full containers. Direct import
sales represented approximately 15% and 18% of the Company’s total net sales for the three and nine months ended September
30, 2015 compared to 11% and 16% for the comparable periods in 2014.
The
chief operating decision maker evaluates the performance of each operating segment based on segment revenues and operating income.
Segment amounts are presented after converting to U.S. dollars and consolidating eliminations.
Financial
data by segment:
(in thousands)
| |
Three months ended
September 30, | |
Nine months ended
September 30, |
Sales to external customers: | |
2015 | |
2014 | |
2015 | |
2014 |
United States | |
$ | 26,160 | | |
$ | 25,833 | | |
$ | 75,943 | | |
$ | 69,946 | |
Canada | |
| 1,669 | | |
| 2,190 | | |
| 5,726 | | |
| 7,372 | |
Europe | |
| 2,074 | | |
| 1,985 | | |
| 5,025 | | |
| 5,237 | |
Consolidated | |
$ | 29,903 | | |
$ | 30,008 | | |
$ | 86,694 | | |
$ | 82,555 | |
| |
| | | |
| | | |
| | | |
| | |
Operating income (loss): | |
| | | |
| | | |
| | | |
| | |
United States | |
$ | 1,849 | | |
$ | 1,819 | | |
$ | 6,405 | | |
$ | 5,752 | |
Canada | |
| 30 | | |
| 94 | | |
| 202 | | |
| 652 | |
Europe | |
| 112 | | |
| 17 | | |
| 86 | | |
| (115 | ) |
Consolidated | |
$ | 1,991 | | |
$ | 1,930 | | |
$ | 6,693 | | |
$ | 6,289 | |
| |
| | | |
| | | |
| | | |
| | |
Interest expense, net | |
| 149 | | |
| 153 | | |
| 420 | | |
| 343 | |
Other expense (income), net | |
| 92 | | |
| 67 | | |
| 148 | | |
| 78 | |
Consolidated income before income taxes | |
$ | 1,750 | | |
$ | 1,710 | | |
$ | 6,125 | | |
$ | 5,868 | |
Assets by segment: | |
| |
|
( in thousands ) | |
| |
|
| |
September 30, | |
December 31, |
| |
2015 | |
2014 |
United States | |
$ | 78,458 | | |
$ | 70,526 | |
Canada | |
| 4,102 | | |
| 4,363 | |
Europe | |
| 4,025 | | |
| 4,419 | |
Consolidated | |
$ | 86,585 | | |
$ | 79,308 | |
Note
6 – Stock Based Compensation
The
Company recognizes share-based compensation at the fair value of the equity instrument on the grant date. Compensation expense
is recognized over the required service period. Share-based compensation expenses were $138,710 and $151,193 for the quarters
ended September 30, 2015 and 2014, respectively. Share-based compensation expenses were $442,225 and $451,193 for the nine months
ended September 30, 2015 and 2014, respectively. During the three months ended September 30, 2015, the Company issued 10,000 options
with a weighted average fair value of $3.24 per share. During the nine months ended September 30, 2015 the Company issued 47,000
options with a weighted average fair value of $3.44.
As of
September 30, 2015, there was a total of $804,378 of unrecognized compensation cost, adjusted for estimated forfeitures, related
to non-vested share –based payments granted to the Company’s employees. The remaining unamortized expense is expected
to be recognized over a weighted average period of approximately 3 years.
Note
7 – Fair Value Measurements
Due
to its nature and associated interest rate, the carrying value of the Company’s bank debt approximates fair value. Fair
value was determined using a discounted cash flow analysis.
Note
8 – Business Combination
On June
2, 2014, the Company purchased certain assets of First Aid Only, Inc. (“First Aid Only”), a supplier of Smart Compliance®
first aid kits, refills, and safety products that meet regulatory requirements for a broad range of industries. The Company purchased
inventory, accounts receivable, equipment, patents, trademarks and other intellectual property for approximately $13.8 million
(including assumed liabilities) using funds borrowed under its revolving credit facility with HSBC.
The
purchase price was allocated to assets acquired and liabilities assumed as follows (in thousands):
Assets: | |
| | |
Accounts
Receivable | |
$ | 2,544 | |
Inventory | |
| 1,704 | |
Equipment | |
| 463 | |
Prepaid expenses | |
| 110 | |
Customer Relationships | |
| 5,430 | |
Trade Name | |
| 3,410 | |
Covenant Not-to-Compete | |
| 70 | |
Goodwill | |
| 1,340 | |
Total assets | |
$ | 15,071 | |
Liabilities | |
| | |
Accounts Payable | |
$ | 1,019 | |
Accrued Expense | |
| 252 | |
Total liabilities | |
$ | 1,271 | |
Assuming
First Aid Only was acquired on January 1, 2014, unaudited proforma combined net sales for the nine months ended September 30,
2014 for the Company would have been approximately $89.6 million. Unaudited proforma combined net income for nine months ended
September 30, 2014 for the Company would have been approximately $4.3 million.
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF
FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Item
2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Forward-Looking
Information
This
report contains “forward-looking statements” (as defined in Section 27A of the Securities Act of 1933 and Section
21E of the Securities Exchange Act of 1934). These forward-looking statements may concern the Company’s plans, goals, intentions,
expectations, estimates, results of operations or financial condition, as well as future trends and events, or state other information
relating to the Company, based on current beliefs of management as well as assumptions made by, and information currently available
to, the Company. Forward-looking statements generally will be accompanied by words such as “anticipate,” “believe,”
“could,” “estimate,” “expect,” “forecast,” “intend,” “may,”
“might,” “plan,” “possible,” “potential,” “predict,” “project,”
“scheduled,” “should,” or other similar words, phrases or expressions. These forward-looking statements
are based upon a number of assumptions, which management believes to be reasonable, concerning future conditions, any or all of
which may ultimately prove to be inaccurate. Forward-looking statements involve a number of risks and uncertainties that could
cause actual results to differ materially from those discussed in this report.
The
following factors, in addition to others not listed, could cause the Company’s actual results to differ materially from
those expressed in any forward looking statements made by the Company: economic and political conditions in which the Company,
its suppliers or its customers operate , changes in client needs and consumer spending habits, the impact of competition and technological
change on the Company, the impact of any loss of a major customer, whether through consolidation or otherwise, the Company’s
ability to manage its growth effectively, including its ability to successfully integrate any business or assets which it might
acquire, and currency fluctuations. For a more detailed discussion of these and other factors affecting us, see the Risk Factors
described in Item 1A included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014. All
forward-looking statements in this report are based upon information available to the Company on the date of this report and are
expressly qualified in their entirety by the foregoing cautionary statements. The Company undertakes no obligation to publicly
update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise, except as
required by law.
Critical
Accounting Policies
There
have been no material changes to the Company’s critical accounting policies and estimates from the information provided
in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, included in the Company’s
Annual Report on Form 10-K for the fiscal year ended December 31, 2014.
Results
of Operations
On
April 7, 2014, the Company sold its Fremont, NC distribution facility for $850,000 in cash. The facility originally served as
a manufacturing site for the Company’s scissors and rulers. In connection with the sale and as part of the terms of the
sale agreement, the Company is responsible to remediate any environmental contamination on the property. As a result, the Company
recorded a $300,000 liability for environmental remediation in the second quarter of 2014. For more information related to the
sale of the Fremont, NC facility and the required remediation, see Note 2 – Contingencies in the Notes to Condensed Consolidated
Financial Statements.
On
June 2, 2014, the Company purchased certain assets of First Aid Only, Inc. (“First Aid Only”), located in Vancouver,
WA, a supplier of Smart Compliance® first aid kits, refills, and safety products that meet regulatory requirements for a broad
range of industries. The Company purchased inventory, accounts receivable, equipment, patents, trademarks and other intellectual
property for approximately $13.8 million (including assumed liabilities) using funds borrowed under its revolving credit facility
with HSBC. Additional information concerning the acquisition of First Aid Only assets is set forth in Note 2 – Contingencies,
in the Notes to Condensed Consolidated Financial Statements.
Traditionally,
the Company’s sales are stronger in the second and third quarters, and weaker in the first and fourth quarters of the fiscal
year, due to the seasonal nature of the back-to-school market.
Net
sales
Consolidated
net sales for the three months ended September 30, 2015 were $29,903,000 compared with $30,008,000 in the same period in 2014,
approximately even with the same period last year and up 3% in constant currency. Consolidated net sales for the nine months ended
September 30, 2015 were $86,694,000, compared with $82,555,000 for the same period in 2014, a 5% increase or 8% in constant currency.
Net sales for the three and nine months ended September 30, 2015 in the U.S. segment increased 1% and 9%, respectively, compared
with the same periods in 2014. Sales in the U.S. for the three month period increased primarily due to higher sales of Westcott
school and office products, particularly the iPoint pencil sharpener. Sales of first aid products were also higher in the period
compared to the same period last year. The increase in sales in the U.S. for the nine months ended September 30, 2015 was primarily
due to increased sales of first aid products.
Net
sales in Canada for the three months ended September 30, 2015 decreased 24% in U.S. dollars (9% in local currency). Net sales
in Canada for the nine months ended September 30, 2015 decreased 22% in U.S. dollars (11% in local currency) compared with the
same period in 2014. The decreases in sales in Canada for the three and nine months ended September 30, 2015 were primarily due
to a large retail chain exiting the Canadian market and weak economic conditions.
European
net sales for the three months ended September 30, 2015 increased 5% in U.S. dollars (24% in local currency) compared with the
same period in 2014. European net sales for the nine months ended September 30, 2015 decreased 4% in U.S. dollars but increased
13% in local currency. The increase in net sales for the three and nine months is primarily related to a special promotion to
a large mass market customer in the third quarter.
Gross
profit
Gross
profit for the three months ended September 30, 2015 was $10,325,000 (34.5% of net sales) compared to $10,615,000 (35.4% of net
sales) for the same period in 2014. The decline in gross profit in the third quarter is primarily related to approximately $150,000
of one-time moving and severance costs as the Company began the process of consolidating its first aid operations into the Vancouver,
Washington facility. Gross profit for the nine months ended September 30, 2015 was $31,296,000 (36.1% of net sales) compared to
$29,209,000 (35.4% of net sales) in the same period in 2014. The increase in gross profit for the nine months ended September
30, 2015 was primarily due to a more favorable product mix.
Selling,
general and administrative expenses
Selling,
general and administrative ("SG&A") expenses for the three months ended September 30, 2015 were $8,334,000 (27.9%
of net sales) compared with $8,685,000 (28.9% of net sales) for the same period of 2014, a decrease of $351,000. SG&A expenses
for the nine months ended September 30, 2015 were $24,603,000 (28.4% of net sales) compared with $22,920,000 (27.8% of net sales)
in the comparable period of 2014, an increase of $1,683,000. The increase in SG&A expenses for the nine months ended September
30, 2015, compared to the same period in 2014, was primarily the result of incremental expenses from the addition of First Aid
Only, increases in shipping expense and sales commissions which resulted from higher sales.
Operating
income
Operating
income for the three months ended September 30, 2015 was $1,991,000 compared with $1,930,000 in the same period of 2014. Operating
income for the nine months ended September 30, 2015 was $6,693,000 compared to $6,289,000 in the same period of 2014. Operating
income in the U.S. segment increased by $61,000 and $404,000 for the three and nine months ended September 30, 2015, respectively,
compared to the same periods in 2014. The increases in operating income were principally due to higher sales. Also, the lower
SG&A expenses for the three months ended September 30, 2015 had a favorable impact on the operating income.
Operating
income in the Canadian segment declined by $64,000 for the three months ended September 30, 2015 compared to the same period in
2014. Operating income in the Canadian segment declined by $450,000 for the nine months ended September 30, 2015 compared to the
same period in 2014. The decrease in operating income in Canada for the three and nine months was principally due to the lower
sales, as described above.
For
the three months ended September 30, 2015, the operating income in the European segment increased by approximately $95,000 compared
to the comparable period in 2014. For the nine months ended September 30, 2015, the European segment had operating income of approximately
$86,000 compared to an operating loss of $115,000 in the comparable period of 2014. The increases in operating income for the
three and nine month periods were primarily due to higher sales as noted above.
Interest
expense, net
Interest
expense, net for the three months ended September 30, 2015 was $149,000, compared with $153,000 for the same period of 2014, a
$4,000 decline. Interest expense, net for the nine months ended September 30, 2015, was $420,000 compared to $343,000 for the
same period in 2014, an increase of $77,000. The increase in interest expense resulted from higher average borrowings under the
Company’s bank revolving credit facility for the nine months ended September 30, 2015. The higher borrowings are primarily
the result of the acquisition of assets of First Aid Only.
Other
expense
Net
other expense was $92,000 in the three months ended September 30, 2015 compared to other expense of $67,000 in the same period
of 2014. Net other expense was $149,000 in the first nine months of 2015 compared to $78,000 in the same period of 2014. The increase
in other expense for the three and nine months ended September 30, 2014 was primarily due to losses from foreign currency transactions.
Income
taxes
The
Company’s effective tax rates for both the three and nine month periods ended September 30, 2015 were 31% and 29%, respectively
compared to 30% in the same periods of 2014. The decrease in the effective tax rate for the nine months ended September 30, 2015
was due to the Company generating a higher proportion of earnings in jurisdictions with lower tax rates.
Financial
Condition
Liquidity
and Capital Resources
During
the first nine months of 2015, working capital increased approximately $8,756,000 compared to December 31, 2014. Inventory increased
by approximately $826,000 at September 30, 2015 compared to December 31, 2014. Inventory turnover, calculated using a twelve month
average inventory balance, was 2.0 for the period ended September 30, 2015, compared to 2.2 for the twelve months ended December
31, 2014. Receivables increased by approximately $4.1 million at September 30, 2015 compared to December 31, 2014. The increase
in accounts receivables occurred primarily due to the higher sales in the third quarter of 2015 compared to the fourth quarter
of 2014. The average number of days sales outstanding in accounts receivable was 64 days at September 30, 2015 compared to 63
days at December 31, 2014.
The
Company's working capital, current ratio and long-term debt to equity ratio follow:
| |
September 30, 2015 | |
December 31, 2014 |
| |
| | | |
| | |
Working capital | |
$ | 50,913 | | |
$ | 42,148 | |
Current ratio | |
| 4.65 | | |
| 3.74 | |
Long term debt to equity ratio | |
| 65.3 | % | |
| 61.2 | % |
During
the first nine months of 2015, total debt outstanding under the Company’s revolving credit facility increased by approximately
$4.4 million, compared to total debt thereunder at December 31, 2014. As of September 30, 2015, $28,550,507 was outstanding and
$11,449,493 was available for borrowing under the Company’s credit facility. The increase in the debt outstanding was primarily
related to the increase in accounts receivable and inventory . Increases in accounts receivable, inventory and debt outstanding
under the Company’s revolving credit facility are typical at this point in the year due to the seasonal nature of the business.
On April
25, 2013, the Company amended its loan agreement with HSBC Bank, N.A. dated April 5, 2012. The amendment increased the borrowing
limit to $40 million from $30 million. The interest rate remained the same at LIBOR plus 1.75%. All principal amounts outstanding
under the agreement are required to be repaid in a single amount on April 5, 2017, the date the agreement expires; interest is
payable monthly. During the fourth quarter of 2013, the Company and HSBC agreed to make certain technical amendments to a covenant
of the amended loan agreement to accommodate the purchase of the Rocky Mount facility. Funds borrowed under the agreement may
be used for working capital, general operating expenses, share repurchases, acquisitions and certain other purposes. Under the
amended loan agreement, the Company continues to be required to maintain specific amounts of tangible net worth, a debt/net worth
ratio, and a fixed charge coverage ratio. At September 30, 2015 the Company was in compliance with the covenants then in effect
under the amended agreement with HSBC.
As
discussed in Note 2 to the Condensed Consolidated Financial Statements set forth in Item 1 above, at September 30, 2015, the Company
had a total of approximately $80,000 remaining in its accrual for environmental remediation and monitoring, related to property
it owned in Fremont, NC.
The
Company believes that cash expected to be generated from operating activities, together with funds available under its revolving
credit facility are expected, under current conditions, to be sufficient to finance the Company’s planned operations over
the next twelve months.
Item
3. Quantitative and Qualitative Disclosure About Market Risk
Not
applicable.
Item
4. Controls and Procedures
| (a) | Evaluation
of Internal Controls and Procedures |
Under
the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer,
we have evaluated the effectiveness of our disclosure controls and procedures as required by Exchange Act Rule 13a-15(b) as of
the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer
have concluded that these disclosure controls and procedures are effective.
| (b) | Changes
in Internal Control over Financial Reporting |
During
the quarter ended September 30, 2015, there were no changes in our internal control over financial reporting that materially affected,
or are reasonably likely to materially affect, our internal control over financial reporting.
PART
II. OTHER INFORMATION
Item
1 — Legal Proceedings
There
are no pending material legal proceedings to which the registrant is a party, or, to the actual knowledge of the Company, contemplated
by any governmental authority.
Item
1A – Risk Factors
See
Risk Factors set forth in Part I, Item 1A of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2014.
Item
2 — Unregistered Sales of Equity Securities and Use of Proceeds
Issuer purchases of equity securities | |
| |
| |
|
Period | |
Total Number of Shares Purchased | |
Average Price Paid per Share | |
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | |
Maximum Number of Shares that may yet be Purchased Under the Programs |
| |
| |
| |
| |
|
July 1 - 31 | |
| — | | |
$ | — | | |
| — | | |
| 143,145 | |
| |
| | | |
| | | |
| | | |
| | |
August 1 - 31 | |
| — | | |
| — | | |
| — | | |
| 143,145 | |
| |
| | | |
| | | |
| | | |
| | |
September 1 - 30 | |
| 9,682 | | |
$ | 16.69 | | |
| 9,682 | | |
| 133,463 | |
| |
| | | |
| | | |
| | | |
| | |
Total | |
| 9,682 | | |
$ | 16.69 | | |
| 9,682 | | |
| 133,463 | |
Item
3. —Defaults Upon Senior Securities
None.
Item
4 — Mine Safety Disclosures
Not
Applicable
Item
5 — Other Information
None.
Item
6 — Exhibits
Documents
filed as part of this report.
Exhibit 31.1 Certification of Walter C. Johnsen pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Exhibit 31.2 Certification of Paul G. Driscoll pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Exhibit 32.1 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Exhibit 32.2 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
ACME UNITED CORPORATION |
|
|
|
|
|
By |
/s/ Walter C. Johnsen |
|
|
Walter C. Johnsen Chairman
of the Board and
Chief Executive Officer
|
|
|
|
|
Dated: November 12, 2015 |
|
|
|
By |
/s/ Paul G. Driscoll |
|
|
Paul G. Driscoll Vice President and
Chief Financial Officer |
|
|
|
|
Dated: November 12, 2015 |
|
Exhibit
31.1
CERTIFICATION
PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, WALTER C. JOHNSEN, certify that:
1. | | I
have reviewed this Quarterly Report on Form 10-Q of Acme United Corporation; |
2. | | Based
on my knowledge, this report does not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect to the
period covered by this report; |
3. | | Based
on my knowledge, the financial statements, and other financial information included in
this report, fairly present in all material respects the financial condition, results
of operations and cash flows of the registrant as of, and for, the periods presented
in this report; |
4. | | The
registrant's other certifying officer(s) and I are responsible for establishing and maintaining
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e))
and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f)
and 15d-15(f)) for the registrant and have: |
(a) | | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,
to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which this report is being prepared; |
(b) | | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed
under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | | Evaluated
the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;
and |
(d) | | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's
most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal
control over financial reporting; and |
5. | | The
registrant's other certifying officer(s) and I have disclosed, based on our most recent
evaluation of internal control over financial reporting, to the registrant's auditors
and the audit committee of the registrant's board of directors (or persons performing
the equivalent functions): |
(a) | | All
significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which
are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information;
and |
(b) | | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's
internal control over financial reporting. |
By |
/s/ Walter C. Johnsen |
|
|
Walter C. Johnsen Chairman of the Board and
Chief Executive Officer
Dated:
November 12, 2015
| |
Exhibit
31.2
CERTIFICATION
PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I,
PAUL G. DRISCOLL, certify that:
1. | | I
have reviewed this Quarterly Report on Form 10-Q of Acme United Corporation; |
2. | | Based
on my knowledge, this report does not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect to the
period covered by this report; |
3. | | Based
on my knowledge, the financial statements, and other financial information included in
this report, fairly present in all material respects the financial condition, results
of operations and cash flows of the registrant as of, and for, the periods presented
in this report; |
4. | | The
registrant's other certifying officer(s) and I are responsible for establishing and maintaining
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e))
and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f)
and 15d-15(f)) for the registrant and have: |
(a) | | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,
to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which this report is being prepared; |
(b) | | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed
under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | | Evaluated
the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;
and |
(d) | | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's
most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal
control over financial reporting; and |
5. | | The
registrant's other certifying officer(s) and I have disclosed, based on our most recent
evaluation of internal control over financial reporting, to the registrant's auditors
and the audit committee of the registrant's board of directors (or persons performing
the equivalent functions): |
(a) | | All
significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which
are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information;
and |
(b) | | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's
internal control over financial reporting. |
By |
/s/ Paul
G. Driscoll |
|
|
Paul
G. Driscoll Vice
President and
Chief Financial Officer
Dated: November 12, 2015
| |
Exhibit
32.1
CERTIFICATION
PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
The
undersigned officer of Acme United Corporation (the “Company”) hereby certifies to my knowledge that the Company’s
quarterly report on Form 10-Q for the quarterly period ended September 30, 2015 (the “Report”), as filed with the
Securities and Exchange Commission on the date hereof, fully complies with the requirements of section 13(a) or 15(d), as applicable,
of the Securities Exchange Act of 1934, as amended, and that the information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Company. This certification is provided solely pursuant to
18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, and shall not be deemed to be a
part of the Report or “filed” for any purpose whatsoever.
By |
/s/ Walter C. Johnsen |
|
|
Walter C. Johnsen Chairman of the Board and
Chief Executive Officer
|
Dated:
November 12, 2015
A signed
original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise
adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906,
has been provided to Acme United Corporation and will be retained by Acme United Corporation and furnished to the Securities and
Exchange Commission or its staff upon request.
Exhibit
32.2
CERTIFICATION
PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
The
undersigned officer of Acme United Corporation (the “Company”) hereby certifies to my knowledge that the Company’s
quarterly report on Form 10-Q for the quarterly period ended September 30, 2015 (the “Report”), as filed with the
Securities and Exchange Commission on the date hereof, fully complies with the requirements of section 13(a) or 15(d), as applicable,
of the Securities Exchange Act of 1934, as amended, and that the information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Company. This certification is provided solely pursuant to
18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, and shall not be deemed to be a
part of the Report or “filed” for any purpose whatsoever.
By |
/s/ Paul
G. Driscoll |
|
|
Paul
G. Driscoll
Vice
President and
Chief
Financial Officer
|
Dated:
November 12, 2015
A signed
original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise
adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906,
has been provided to Acme United Corporation and will be retained by Acme United Corporation and furnished to the Securities and
Exchange Commission or its staff upon request.
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