Acme United Corporation (NYSE AMEX:ACU) announced that net sales for the quarter ended December 31, 2009, were $13.4 million compared to $12.6 million in the same period in 2008, an increase of 7% (4% in local currency). Net sales for the year ended December 31, 2009 were $59.1 million, compared to $68.7 million in the same period in 2008, a decrease of 14% (17% in local currency).
Net income for the fourth quarter ended December 31, 2009 was $731,000, or $.22 per diluted share, compared to $634,000, or $.18 per diluted share, for the comparable period last year, an increase of 22%. Net income for the year ended December 31, 2009 was $2,842,000, or $.85 per diluted share, compared to $4,467,000, or $1.24 per diluted share, in the comparable period last year.
Net sales for the year ended December 31, 2009, in the U.S. segment decreased 16% compared to 2008. Net sales in Canada for the year ended December 31, 2009 decreased 13% in U.S. dollars compared to 2008, and 6% in local currency. The decline in net sales for the twelve months ended December 31, 2009 in the U.S. and Canadian segment was principally due to the economic downturn. European net sales for the year ended December 31, 2009 increased 3% in U.S. dollars and 8% in local currency compared to 2008.
Gross margins were 39% for the fourth quarter ended December 31, 2009 and 2008, respectively. Gross margins were 37% for 2009 compared to 40% in 2008. The gross margin decline for the year was primarily due to fixed costs spread over lower sales, the weaker Canadian dollar which raised the cost of products in our Canadian segment, and product mix.
Operating income in the fourth quarter ended December 31, 2009 was $293,000, compared to $795,000 in the fourth quarter of 2008. Operating income in the fourth quarter of 2009 included a $210,000 write-off of medical products donated for relief efforts. The fourth quarter of 2008 included a benefit of $400,000 from the reversal of incentive compensation liabilities. Excluding these items, operating income was $503,000 in the fourth quarter of 2009 compared to $395,000 in 2008.
Pretax income in the fourth quarter ended December 31, 2009 was $266,000 compared to $875,000 in the fourth quarter of 2008. Included in pretax income in the fourth quarter of 2008 was $265,000 in other income related to the Company’s gain on the sale of its former facility in Bridgeport, CT, which had ceased manufacturing in 1996. Excluding the $210,000 charge associated with the donation of medical products and the exceptional items in the fourth quarter of 2008, pretax income was $476,000 in the fourth quarter of 2009 compared to $210,000 in same period in 2008.
In the fourth quarter of 2009, the Company recorded an income tax benefit of approximately $464,000, which was primarily due to $500,000 of tax savings related to the Company’s donation of medical products to AmeriCares and the donation of land to the City of Bridgeport, CT. This donation, which occurred in December 2009, consisted of waterfront property adjacent to the property the Company sold in December 2008.
The full year effective tax rate in 2009 was 18%, compared to 33% in 2008. The decrease in the effective tax rate in 2009 was primarily the result of the $500,000 of tax savings resulting from the donations. Without these credits, the effective tax rate would have been approximately 32% for 2009.
The Company’s bank debt less cash on December 31, 2009 was $2.7 million compared to $6.5 million on December 31, 2008. During fiscal year 2009, the Company repurchased 206,000 shares of its common stock for approximately $1.7 million and paid $700,000 in dividends on its common stock; the expenditures were offset by cash flow from operations of $6.6 million.
Tags: Acme United, Sales
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