Acme United Corporation Reports Third Quarter Earnings

http://www.businesswire.com/news/home/20091029005603/en

FAIRFIELD, Conn.--(Business Wire)--
Acme United Corporation (NYSE AMEX:ACU) today announced that net sales for the
third quarter ended September 30, 2009 were $15.3 million compared to $19.2
million in the comparable period of 2008, a decrease of 20% (19% local
currency). Net income was $728,000, or $.22 per diluted share, for the quarter
ended September 30, 2009 compared to $1,351,000 or $.37 per diluted share for
the comparable period last year, a decrease of 46% in net income and 41% in
diluted earnings per share.

Third quarter 2009 earnings included pre-tax income of $458,000 due to
completion below estimated costs of a major portion of the remediation of the
Bridgeport property which was sold in December 2008. The Company`s contingency
reserve for the remaining environmental and monitoring costs is approximately
$950,000. Without the achieved cost reduction, net income would have been
$433,000 for the third quarter.

Net sales for the nine months ended September 30, 2009 were $45.7 million,
compared to $56.1 million in the same period in 2008, a decrease of 19% (16% in
local currency). Net income for the nine months ended September 30, 2009 was
$2,111,000, or $.63 per diluted share compared to $3,833,000, or $1.05 per
diluted share in the comparable period last year, a 45% decrease in net income
and 40% in diluted earnings per share. The lower net income is primarily the
result of reduced sales, partially offset by savings from our cost savings plan.

Net sales for the quarter ended September 30, 2009 in the U.S. segment decreased
26% compared to the same period in 2008. Contributing to the decline was an
unexpected order in the third quarter 2008 of approximately $1.2 million to a
major retailer for product for the back to school market which did not reoccur
this year. Net sales for the nine months ended September 30, 2009 in the U.S.
segment decreased 22% compared to the same period in 2008. Net sales in Canada
for the three and nine months ended September 30, 2009 decreased by 7% and 14%,
respectively, in U.S. dollars but declined 2% for both periods respectively, in
local currency compared to the same periods in 2008. European net sales for the
three and nine months ended September 30, 2009 increased 10% and 1%,
respectively, in U.S. dollars compared to the same periods in 2008 and increased
16% and 12% respectively, in local currency. Revenues in Europe grew primarily
due to higher sales of office and manicure products.

Gross margins were 36% in the third quarter of 2009 versus 41% in the comparable
period last year. For the first nine months of 2009, gross margins were 37%
compared to 41% in the same period in 2008. The gross margin decline for the
three and nine month periods 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.

Walter C. Johnsen, Chairman and CEO said, "We have been aggressively seeking new
sales opportunities, continuing to reduce expenses, and improving our balance
sheet. We are seeing commitments from our customers for new products and
programs for the coming year, and are encouraged."

Mr. Johnsen added that during the past 12 months, the Company repurchased about
7% of its outstanding stock, increased its dividend and reduced net debt by
approximately 60%. He noted that the Company is very well positioned for future
growth opportunities.

The Company`s bank debt less cash on September 30, 2009 was $2.8 million
compared to $7.5 million on September 30, 2008. During the 12 month period ended
September 30, 2009, Acme purchased 266,791 shares of its common stock for
approximately $2.3 million and paid $700,000 in dividends. On October 7, 2009
the company`sBoard of Directors approved a new stock repurchase program of up to
200,000 common shares. The Company may also repurchase 49,335 shares under its
repurchase program previously announced on December 19, 2008.

ACME UNITED CORPORATION is a leading worldwide supplier of innovative cutting,
measuring and safety products to the school, home, office, hardware and
industrial markets.

Forward-looking statements in this report, including without limitation,
statements related to the Company`s plans, strategies, objectives, expectations,
intentions and adequacy of resources, are made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995. Investors
are cautioned that such forward-looking statements involve risks and
uncertainties including, without limitation, the following: (i) the Company`s
plans, strategies, objectives, expectations and intentions are subject to change
at any time at the discretion of the Company; (ii) the impact of current
uncertainties in global economic conditions and the ongoing financial crisis
affecting the domestic and foreign banking system and financial markets,
including the impact on the Company`s suppliers and customers (iii) currency
fluctuations (iv) the Company`s plans and results of operations will be affected
by the Company`s ability to manage its growth, and (v) other risks and
uncertainties indicated from time to time in the Company`s filings with the
Securities and Exchange Commission.

ACME UNITED CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
THIRD QUARTER REPORT 2009
(Unaudited)

Quarter Ended Quarter Ended
Amounts in $000's except per share data September 30, 2009 September 30, 2008

Net sales $ 15,269 $ 19,158
Cost of goods sold 9,771 11,288
Gross profit 5,498 7,870
Selling, general, and administrative expenses 4,864 5,651
Income from operations 634 2,219
Interest expense 38 135
Interest income 31 15
Net interest expense 7 120
Other income (expense) 461 (138 )
Total other income (expense) 454 (258 )
Pre-tax income 1,088 1,961
Income tax expense 360 610
Net income $ 728 $ 1,351

Shares outstanding - Basic 3,290 3,515
Shares outstanding - Diluted 3,353 3,650

Earnings per share basic $ 0.22 $ 0.38
Earnings per share diluted 0.22 0.37

ACME UNITED CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
THIRD QUARTER REPORT 2009 (cont.)
(Unaudited)

Nine Months Ended Nine Months Ended
Amounts in $000's except per share data September 30, 2009 September 30, 2008

Net sales $ 45,727 $ 56,135
Cost of goods sold 28,827 33,361
Gross profit 16,900 22,774
Selling, general, and administrative expenses 14,166 16,690
Income from operations 2,734 6,084
Interest expense 124 389
Interest income 97 83
Net interest expense 27 306
Other income 480 23
Total other income (expense) 453 (283 )
Pre-tax income 3,187 5,801
Income tax expense 1,076 1,968
Net income $ 2,111 $ 3,833

Shares outstanding - Basic 3,318 3,517
Shares outstanding - Diluted 3,362 3,654

Earnings per share basic $ 0.64 $ 1.09
Earnings per share diluted 0.63 1.05

ACME UNITED CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
THIRD QUARTER REPORT 2009
(Unaudited)

Amounts in $000's September 30, 2009 September 30, 2008

Assets:
Current assets:
Cash $ 6,599 $ 5,485
Accounts receivable, net 11,846 16,045
Inventories 17,850 20,240
Prepaid and other current assets 1,207 951
Total current assets 37,502 42,721

Property and equipment, net 2,159 2,402
Long term receivable 1,905 -
Other assets 2,505 1,976
Total assets $ 44,071 $ 47,099

Liabilities and stockholders' equity:
Current liabilities
Accounts payable $ 3,305 $ 3,734
Other current liabilities 4,680 4,427
Bank debt due June 30, 2010 9,324 -
Total current liabilities 17,308 8,161
Bank debt due June 30, 2010 - 12,994
Other non current liabilities 1,990 542
19,299 21,697
Total stockholders' equity 24,772 25,402
Total liabilities and stockholders' equity $ 44,071 $ 47,099

Acme United Corporation
Paul G. Driscoll, 203-254-6060
FAX: 203-254-6521

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