Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | May 03, 2019 | |
Document And Entity Information | ||
Entity Registrant Name | ACME UNITED CORP | |
Entity Central Index Key | 0000002098 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 3,352,130 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2019 | |
Entity Emerging Growth Company? | false | |
Entity Small Business? | true |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 3,798 | $ 4,409 |
Accounts receivable, less allowance | 25,228 | 25,102 |
Inventories, net | 40,570 | 41,332 |
Prepaid expenses and other current assets | 2,281 | 2,149 |
Total current assets | 71,877 | 72,992 |
Property, plant and equipment: | ||
Land | 1,420 | 1,423 |
Buildings | 10,267 | 10,144 |
Machinery and equipment | 18,550 | 18,244 |
Total property, plant and equipment | 30,237 | 29,811 |
Less accumulated depreciation | 15,814 | 15,268 |
Net property, plant and equipment | 14,423 | 14,543 |
Operating lease right-of-use asset | 2,674 | |
Goodwill | 4,696 | 4,696 |
Intangible assets, less accumulated amortization | 16,736 | 17,044 |
Other assets | 209 | 203 |
Total assets | 110,615 | 109,478 |
Current liabilities: | ||
Accounts payable | 5,672 | 7,983 |
Lease liability - current portion | 1,030 | |
Current portion of mortgage payable | 267 | 267 |
Other accrued liabilities | 4,374 | 5,115 |
Total current liabilities | 11,343 | 13,365 |
Long-term debt | 41,340 | 40,283 |
Mortgage payable, net of current portion | 3,378 | 3,444 |
Lease liability - non current portion | 1,650 | |
Other accrued liabilities - non current | 36 | 53 |
Total liabilities | 57,747 | 57,145 |
Commitments and Contingencies | ||
STOCKHOLDERS' EQUITY | ||
Common stock, par value $2.50: authorized 8,000,000 shares; issued and outstanding - 4,838,071 shares in 2019 and 2018, including treasury stock | 12,094 | 12,094 |
Additional paid-in capital | 9,114 | 8,982 |
Retained earnings | 48,074 | 47,550 |
Treasury stock, at cost - 1,487,238 shares in 2019 and 2018 | (14,235) | (14,235) |
Accumulated other comprehensive loss: | ||
Minimum pension liability | (661) | (539) |
Translation adjustment | (1,518) | (1,519) |
Total accumulated other comprehensive loss | (2,179) | (2,058) |
Total stockholders' equity | 52,868 | 52,333 |
Total liabilities and stockholders' equity | $ 110,615 | $ 109,478 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2019 | Dec. 31, 2018 |
STOCKHOLDERS' EQUITY | ||
Common stock, par value | $ 2.50 | $ 2.50 |
Common stock, shares authorized | 8,000,000 | 8,000,000 |
Common stock, shares issued | 4,838,071 | 4,838,071 |
Common stock, shares outstanding | 4,838,071 | 4,838,071 |
Treasury stock, shares | 1,487,238 | 1,487,238 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Condensed Consolidated Statements Of Operations | ||
Net sales | $ 31,370 | $ 31,709 |
Cost of goods sold | 19,568 | 19,585 |
Gross profit | 11,802 | 12,124 |
Selling, general and administrative expenses | 10,268 | 10,759 |
Operating income | 1,534 | 1,365 |
Non-operating items: | ||
Interest expense | 510 | 412 |
Interest income | (9) | (7) |
Interest expense, net | 501 | 405 |
Other expense, net | (2) | (13) |
Total other expense, net | 499 | 392 |
Income before income tax expense | 1,035 | 973 |
Income tax expense | 228 | 209 |
Net income | $ 807 | $ 764 |
Basic earnings per share | $ .24 | $ .23 |
Diluted earnings per share | $ .24 | $ .21 |
Weighted average number of common shares outstanding - denominator used for basic per share computations | 3,351,000 | 3,374,000 |
Weighted average number of dilutive stock options outstanding | 41,000 | 288,000 |
Denominator used for diluted per share computations | 3,392,000 | 3,662,000 |
Dividends declared per share | $ .12 | $ .11 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Condensed Consolidated Statements Of Comprehensive Income | ||
Net income | $ 807 | $ 764 |
Other comprehensive income: | ||
Foreign currency translation adjustment | 1 | 18 |
Comprehensive income | $ 808 | $ 782 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands | Common Stock | Treasury Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Loss | Retained Earnings | Total |
Balances at Dec. 31, 2017 | $ 12,094 | $ (13,870) | $ 8,881 | $ (1,634) | $ 44,467 | $ 49,938 |
Balances (shares) at Dec. 31, 2017 | 3,374,061 | |||||
Net income | 764 | 764 | ||||
Other comprehensive gain | 18 | |||||
Stock compensation expense | 168 | 168 | ||||
Distributions to shareholders | (371) | (371) | ||||
Cash settlement of stock options | (25) | (45) | ||||
Balances at Mar. 31, 2018 | $ 12,094 | (13,870) | 9,024 | (1,616) | 44,860 | 50,492 |
Balances (shares) at Mar. 31, 2018 | 3,374,061 | |||||
Balances at Dec. 31, 2018 | $ 12,094 | (14,235) | 8,982 | (2,058) | 47,550 | $ 52,333 |
Balances (shares) at Dec. 31, 2018 | 3,350,833 | 4,838,071 | ||||
Net income | 807 | $ 807 | ||||
Other comprehensive gain | 1 | 1 | ||||
Adoption of ASU | (122) | 122 | ||||
Stock compensation expense | 212 | 212 | ||||
Distributions to shareholders | (405) | (405) | ||||
Cash settlement of stock options | (80) | (80) | ||||
Balances at Mar. 31, 2019 | $ 12,094 | $ (14,235) | $ 9,114 | $ (2,179) | $ 48,074 | $ 52,868 |
Balances (shares) at Mar. 31, 2019 | 3,350,833 | 4,838,071 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Cash flows from operating activities: | ||
Net income | $ 807 | $ 764 |
Adjustments to reconcile net income to net cash used in operating activities: | ||
Depreciation | 551 | 475 |
Amortization of intangible assets | 308 | 306 |
Amortization of right of use assets | 248 | |
Stock compensation expense | 212 | 168 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (132) | 1,501 |
Inventories | 770 | (1,774) |
Prepaid expenses and other current assets | (70) | (623) |
Accounts payable | (2,544) | (3,645) |
Other accrued liabilities | (833) | (1,747) |
Total adjustments | (1,490) | (5,339) |
Net cash used in operating activities | (683) | (4,575) |
Cash flows from investing activities: | ||
Purchase of property, plant and equipment | (438) | (897) |
Net cash used in investing activities | (438) | (897) |
Cash flows from financing activities: | ||
Net borrowings (repayments) of long-term debt | 1,057 | (2,350) |
Cash settlement of stock options | (80) | (45) |
Repayments on mortgage | (67) | (67) |
Distributions to shareholders | (405) | (371) |
Net cash provided by (used in) financing activities | 505 | (2,833) |
Effect of exchange rate changes on cash and cash equivalents | 5 | 32 |
Net decrease in cash and cash equivalents | (611) | (8,273) |
Cash and cash equivalents at beginning of period | 4,409 | 9,338 |
Cash and cash equivalents at end of period | 3,798 | 1,065 |
Supplemental cash flow information: | ||
Cash paid for income taxes | 170 | 297 |
Cash paid for interest | $ 487 | $ 404 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | 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, 2018 for such disclosures. The condensed consolidated balance sheet as of December 31, 2018 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 2018 Annual Report on Form 10-K. The Company has evaluated events and transactions subsequent to March 31, 2019 and through the date these condensed consolidated financial statements were issued. Recently Issued and Adopted Accounting Standards In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842), Leases (Topic 842) Targeted Improvements, Leases (Topic 842) Narrow Scope Improvements for Lessors, At transition, lessees and lessors may elect to apply a package of practical expedients permitting entities not to reassess: (i) whether any expired or existing contracts are or contain leases; (ii) lease classification for any expired or existing leases; and (iii) whether initial direct costs for any expired or existing leases qualify for capitalization under the amended guidance. These practical expedients must be elected as a package and consistently applied. We have elected to apply the package of practical expedients upon adoption. The most significant effects of adoption relate to the recognition of right-of-use assets and lease liabilities on our balance sheet for operating leases and providing new disclosures about leasing activities. Upon adoption, the Company booked a right-of-use asset of $2.9 million and a corresponding lease liability. See note 9 for additional information. In February 2018, the FASB issued ASU No. 2018-02, Income Statement — Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income . In June 2018, the FASB issued ASU 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting In August 2018, the FASB issued ASU No. 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20), Disclosure Framework - Changes to the Disclosures Requirements for Defined Benefit Plans Income Statement - Reporting Comprehensive Income (Topic 220) |
Contingencies
Contingencies | 3 Months Ended |
Mar. 31, 2019 | |
Contingencies | |
Contingencies | 2. Contingencies There are no pending material legal proceedings to which the Company is a party, or, to the actual knowledge of the Company, contemplated by any governmental authority. |
Pension
Pension | 3 Months Ended |
Mar. 31, 2019 | |
Retirement Benefits [Abstract] | |
Pension | 3. Pension In December 1995, the Company’s Board of Directors approved an amendment to the Company’s United States pension plan that terminated all future benefit accruals as of February 1, 1996, without terminating the pension plan. Components of net periodic benefit cost are as follows (in thousands): Three Months Ended March 31, 2019 2018 Service cost $ 9 $ 9 Interest cost $ 9 $ 10 Expected return on plan assets (14 ) (17 ) Amortization of actuarial loss 22 22 Total non-service cost $ 17 $ 15 Net periodic pension cost $ 26 $ 24 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. In 2019, the Company is not required to contribute to the plan. As of March 31, 2019, the Company had not made any contributions to the plan. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 3 Months Ended |
Mar. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contracts with Customers | 4 Revenue from Contracts with Customers On January 1, 2018, the Company adopted ASC 606, Revenue from Contracts with Customers Nature of Goods and Services The Company recognizes revenue from the sales of a broad line of products that are grouped into two main categories: (i) cutting, sharpening and other; and (ii) first aid and safety. The cutting, sharpening and other category includes scissors, knives, paper trimmers, pencil sharpeners and other sharpening tools. The first aid and safety category includes first aid kits and refills, over-the-counter medications and a variety of safety products. Revenue recognition is evaluated through the following five steps: (i) identification of the contract or contracts with a customer; (ii) identification of the performance obligations in the contract; (iii) determination of the transaction price; (iv) allocation of the transaction price in the contract; and (v) recognition of revenue when or as a performance obligation is satisfied. When Performance Obligations Are Satisfied A performance obligation is a promise in a contract to transfer a distinct good or service to the customer. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. Revenue is generated by the sale of the Company’s products to its customers. Sales contracts (purchase orders) generally have a single performance obligation that is satisfied at a point in time, with shipment or delivery, depending on the terms of the underlying contract. Revenue is measured based on the consideration specified in the contract. The amount of consideration we receive and revenue we recognize is impacted by incentives ("customer rebates"), including sales rebates, which are generally tied to sales volume levels, in-store promotional allowances, shared media and customer catalog allowances and other cooperative advertising arrangements; freight allowance programs offered to our customers; and allowance for returns and discounts. We generally recognize customer rebate costs as a deduction to gross sales at the time that the associated revenue is recognized. Significant Payment Terms Payment terms for each customer are dependent on the agreed upon contractual repayment terms. Payment terms typically are between 30 and 90 days, they vary dependent on the size of the customer and its risk profile to the Company. Some customers receive discounts for early payment. Product Returns The Company accepts product returns in the normal course of business. The Company estimates reserves for returns and the related refunds to customers based on historical experience. Reserves for returned merchandise are included as a component of “Accounts receivable” in the condensed consolidated balance sheets. Practical Expedient Usage and Accounting Policy Elections The Company has determined to utilize the modified retrospective approach which requires cumulative effect adjustment to the opening balance of retained earnings in the current year. This opening adjustment is determined based on the impact of the new revenue standard’s application on contracts that were not completed as of January 1, 2018, the date of initial application of the standard. This election did not have an impact on the Company’s condensed consolidated financial statements. For the Company’s contracts that have an original duration of one year or less, the Company uses the practical expedient in ASC 606-10-32-18 applicable to such contracts and does not consider the time value of money in relation to significant financing components. The effect of applying this practical expedient election did not have an impact on the Company’s condensed consolidated financial statements. Per ASC 606-10-25-18B, the Company has elected to account for shipping and handling activities that occur after the customer has obtained control as a fulfillment activity instead of a performance obligation. Furthermore, shipping and handling activities performed before transfer of control of the product also do not constitute a separate and distinct performance obligation. The Company has elected to exclude from the transaction price those amounts which relate to sales and other taxes that are assessed by governmental authorities and that are imposed on and concurrent with a specific revenue-producing transaction and collected by the Company from a customer. Applying the practical expedient in ASC 340-40-25-4, Other Assets and Deferred Costs, Disaggregation of Revenues The following table represents external net sales disaggregated by product category: For the three months ended March 31, 2019 (amounts in 000's) U.S. Canada Europe Total Cutting, Sharpening and Other $ 13 ,172 $ 1,413 $ 2,518 $ 17,103 First Aid and Safety 14,267 — — 14,267 Total Net Sales $ 27,439 $ 1,413 $ 2,518 $ 31,370 For the three months ended March 31, 2018 (amounts in 000's) U.S. Canada Europe Total Cutting, Sharpening and Other $ 12,496 $ 1,552 $ 2,380 $ 16,428 First Aid and Safety 15,281 — — 15,281 Total Net Sales $ 27,777 $ 1,552 $ 2,380 $ 31,709 |
Debt and Shareholders' Equity
Debt and Shareholders' Equity | 3 Months Ended |
Mar. 31, 2019 | |
Debt And Shareholders Equity | |
Debt and Shareholders Equity | 5. Debt and Shareholders’ Equity On May 24, 2018, the Company amended its revolving loan agreement with HSBC Bank, N.A. The amendment lowered the interest rate to LIBOR plus 1.75%; interest is payable monthly. In addition, the expiration date of the credit facility was extended to May 24, 2023. The prior interest rate was LIBOR plus 2%. The amount available for borrowing remains unchanged at $50 million. The Company must pay a facility fee, payable quarterly, in an amount equal to two tenths of one percent (.20%) per annum of the average daily unused portion of the revolving credit line. The facility is intended to provide liquidity for growth, share repurchases, dividends, acquisitions, and other business activities. Under the revolving loan agreement, the Company is required to maintain specific amounts of tangible net worth, a specified debt to net worth ratio and a fixed charge coverage ratio and must have annual net income greater than zero, measured as of the end of each fiscal year. At March 31, 2019, the Company was in compliance with the covenants of the loan agreement. As of March 31, 2019 and December 31, 2018, the Company had outstanding borrowings of $41,340,000 and $40,283,000, respectively, under the Company’s revolving loan agreement with HSBC. On October 26, 2017, the Company exercised its option to purchase its First Aid Only manufacturing and distribution center in Vancouver, WA for $4.0 million. The property consists of 53,000 square feet of office, manufacturing, and warehouse space on 2.86 acres. The purchase was financed by a variable rate mortgage with HSBC Bank, N.A. at an interest rate of LIBOR plus 2.5%. Commencing on December 1, 2017, principal payments of $22,222 are due monthly, with all amounts outstanding due on maturity on October 31, 2024. During the three months ended March 31, 2019, the Company paid approximately $79,800 to optionees who had elected a net cash settlement of their respective options. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2019 | |
Segment Information | |
Segment Information | 6. Segment Information The Company reports financial information based on the organizational structure used by the Company’s chief operating decision makers 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, the Company’s chief operating decision makers review 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, sporting and industrial use. Domestic sales orders are filled primarily from the Company’s distribution centers in North Carolina, Washington, Massachusetts, Tennessee and California. 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 8% of the Company’s total net sales for the three months ended March 31, 2019 and 7% for the comparable period in 2018. The Chief Operating Decision Maker evaluates the performance of each operating segment based on segment revenues and operating income. Segment revenues are defined as total revenues, including both external customer revenue and inter-segment revenue. Segment operating earnings are defined as segment revenues, less cost of goods sold and operating expenses. Identifiable assets by segment are those assets used in the respective reportable segment’s operations. Inter-segment amounts are eliminated to arrive at consolidated financial results. The following table sets forth certain financial data by segment for the three months ended March 31, 2019 and 2018: Financial data by segment: (in thousands) Three months ended Sales to external customers: 2019 2018 United States $ 27,439 $ 27,777 Canada 1,413 1,552 Europe 2,518 2,380 Consolidated $ 31,370 $ 31,709 Operating income: United States $ 1,257 $ 1,116 Canada 135 139 Europe 142 110 Consolidated $ 1,534 $ 1,365 Interest expense, net 501 405 Other income, net (2 ) (13 ) Consolidated income before income taxes $ 1,035 $ 973 Assets by segment: March 31, December 31, 2019 2018 United States $ 100,450 $ 99,721 Canada 4,294 3,839 Europe 5,871 5,918 Consolidated $ 110,615 $ 109,478 |
Stock Based Compensation
Stock Based Compensation | 3 Months Ended |
Mar. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Stock Based Compensation | 7. 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 $211,759 and $168,351 for the three months ended March 31, 2019 and 2018, respectively. As of March 31, 2019, there was a total of $1,948,937 of unrecognized compensation cost, adjusted for estimated forfeitures, related to non-vested share-based payments granted to the Company’s employees. As of that date, the remaining unamortized expense is expected to be recognized over a weighted average period of approximately three years. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2019 | |
Fair Value Measurements | |
Fair Value Measurements | 8. Fair Value Measurements The carrying value of the Company’s bank debt is a reasonable estimate of fair value because of the nature of its payment terms and maturity. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Leases | 9. Leases The Company has operating leases for office and warehouse space and equipment under various arrangements which provide the right to use the underlying asset and require lease payments for the lease term. The Company’s lease portfolio consists of operating leases which expire at various dates through 2024. Certain of the Company’s lease arrangements contain renewal provisions, exercisable at the Company's option. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. The Company determines if an arrangement is an operating lease at inception. Leases with an initial term of 12 months or less are not recorded on the balance sheet. All other leases are recorded on the balance sheet with right-of-use (“ROU”) assets representing the right to use the underlying asset for the lease term and lease liabilities representing the obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term and include options to extend or terminate the lease when they are reasonably certain to be exercised. The present value of lease payments is determined primarily using our incremental borrowing rate based on the information available at the lease commencement date. Lease agreements with lease and non-lease components are generally accounted for as a single lease component. The Company’s operating lease expense is recognized on a straight-line basis over the lease term. Operating lease expense was $0.3 million for the period ending March 31, 2019 of which $0.1 million is included in cost of goods sold and $0.2 million is included in selling, general and administrative expenses in the accompanying condensed consolidated statements of operations. Information related to leases: Operating lease cost $ 290 Operating lease - cash flow $ 284 Weighted-average remaining lease term 3.3 years Weighted-average discount rate 5 % Future minimum lease payments under non-cancellable leases as of March 31, 2019 (in 000’s): 2019 (remaining) $ 819 2020 928 2021 573 2022 279 2023 255 Thereafter 64 Total future minimum lease payments $ 2,918 Less: imputed interest (238 ) Present value of lease liabilities $ 2,680 As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on information available at the lease commencement date to determine the present value of lease payments. |
Pension (Tables)
Pension (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Pension And Profit Sharing Tables Abstract | |
Components of Net Benefit Cost | Components of net periodic benefit cost are as follows (in thousands): Three Months Ended March 31, 2019 2018 Service cost $ 9 $ 9 Interest cost $ 9 $ 10 Expected return on plan assets (14 ) (17 ) Amortization of actuarial loss 22 22 Total non-service cost $ 17 $ 15 Net periodic pension cost $ 26 $ 24 |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenues | For the three months ended March 31, 2019 (amounts in 000's) U.S. Canada Europe Total Cutting, Sharpening and Other $ 13 ,172 $ 1,413 $ 2,518 $ 17,103 First Aid and Safety 14,267 — — 14,267 Total Net Sales $ 27,439 $ 1,413 $ 2,518 $ 31,370 For the three months ended March 31, 2018 (amounts in 000's) U.S. Canada Europe Total Cutting, Sharpening and Other $ 12,496 $ 1,552 $ 2,380 $ 16,428 First Aid and Safety 15,281 — — 15,281 Total Net Sales $ 27,777 $ 1,552 $ 2,380 $ 31,709 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Segment Information Tables Abstract | |
Financial Data By Segment Table | Financial data by segment: (in thousands) Three months ended Sales to external customers: 2019 2018 United States $ 27,439 $ 27,777 Canada 1,413 1,552 Europe 2,518 2,380 Consolidated $ 31,370 $ 31,709 Operating income: United States $ 1,257 $ 1,116 Canada 135 139 Europe 142 110 Consolidated $ 1,534 $ 1,365 Interest expense, net 501 405 Other income, net (2 ) (13 ) Consolidated income before income taxes $ 1,035 $ 973 |
Assets By Segment | Assets by segment: March 31, December 31, 2019 2018 United States $ 100,450 $ 99,721 Canada 4,294 3,839 Europe 5,871 5,918 Consolidated $ 110,615 $ 109,478 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Leases Tables Abstract | |
Information related to leases | Information related to leases: Operating lease cost $ 290 Operating lease - cash flow $ 284 Weighted-average remaining lease term 3.3 years Weighted-average discount rate 5 % |
Future minimum lease payments | Future minimum lease payments under non-cancellable leases as of March 31, 2019 (in 000’s): 2019 (remaining) $ 819 2020 928 2021 573 2022 279 2023 255 Thereafter 64 Total future minimum lease payments $ 2,918 Less: imputed interest (238 ) Present value of lease liabilities $ 2,680 |
Basis of Presentation (Details
Basis of Presentation (Details Narrative) - USD ($) $ in Thousands | Mar. 31, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
Retained earnings | $ 48,074 | $ 47,550 | |
Accumulated other comprehensive loss | (2,179) | $ (2,058) | |
Operating lease right-of-use asset | 2,674 | ||
Operating lease liability | $ 1,030 | ||
ASU 2018-02 | |||
Retained earnings | $ 100 | ||
Accumulated other comprehensive loss | (100) | ||
ASU 2016-02 | |||
Operating lease right-of-use asset | 2,900 | ||
Operating lease liability | $ 2,900 |
Pension (Details Narrative)
Pension (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2019 | |
Retirement Benefits [Abstract] | ||
Required plan contributions during 2019 | $ 0 | |
Plan contributions during period | $ 0 |
Pension - Periodic Benefit Cost
Pension - Periodic Benefit Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Components of net periodic benefit cost: | ||
Service cost | $ 9 | $ 9 |
Interest cost | 9 | 10 |
Expected return on plan assets | (14) | (17) |
Amortization of actuarial loss | 22 | 22 |
Total non-service cost | 17 | 15 |
Net periodic pension cost | $ 26 | $ 24 |
Revenue from Contracts with C_3
Revenue from Contracts with Customers (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Net sales | $ 31,370 | $ 31,709 |
Cutting, Sharpening and Other | ||
Net sales | 17,103 | 16,428 |
First Aid and Safety | ||
Net sales | 14,267 | 15,281 |
United States | Cutting, Sharpening and Other | ||
Net sales | 13,172 | 12,496 |
United States | First Aid and Safety | ||
Net sales | 14,267 | 15,281 |
Canada | Cutting, Sharpening and Other | ||
Net sales | 1,413 | 1,552 |
Canada | First Aid and Safety | ||
Net sales | 0 | 0 |
Europe | ||
Net sales | 2,518 | 2,380 |
Europe | Cutting, Sharpening and Other | ||
Net sales | 2,518 | 2,380 |
Europe | First Aid and Safety | ||
Net sales | 0 | 0 |
United States | ||
Net sales | 27,439 | 27,777 |
Canada | ||
Net sales | $ 1,413 | $ 1,552 |
Debt and Shareholders' Equity (
Debt and Shareholders' Equity (Details Narrative) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 4 Months Ended | 11 Months Ended | ||
Oct. 31, 2017 | Mar. 31, 2019 | Mar. 31, 2018 | Apr. 30, 2018 | Mar. 31, 2019 | Dec. 31, 2018 | |
Cash paid to settle employee stock options | $ 80 | $ 45 | ||||
First Aid Only Distribution Center | ||||||
Interest rate of LIBOR plus percentage | 2.50% | |||||
Purchase price | $ 4,000 | |||||
Variable rate mortgage interest rate | Interest rate of LIBOR plus 2.5% | |||||
Monthly payment | $ 22 | |||||
Mortgage maturity date | Oct. 31, 2024 | |||||
HSBC Bank | ||||||
Outstanding borrowings under revolving loan agreement | 41,340 | $ 41,340 | $ 40,283 | |||
Credit facility borrowing capacity | $ 50,000 | $ 50,000 | ||||
Interest rate of LIBOR plus percentage | 2.00% | 1.75% | ||||
Credit facility interest rate | Interest rate of LIBOR plus 2.0% | Interest rate of LIBOR plus 1.75% | ||||
Facility fee per annum | 0.20% | |||||
Credit facility expiration date | May 24, 2023 | |||||
Covenant terms and compliance | Under the revolving loan agreement, the Company is required to maintain specific amounts of tangible net worth, a specified debt to net worth ratio and a fixed charge coverage ratio and must have annual net income greater than zero, measured as of the end of each fiscal year. At March 31, 2019, the Company was in compliance with the covenants of the loan agreement. |
Segment Information - Financial
Segment Information - Financial Data by Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Sales to external customers | $ 31,370 | $ 31,709 | |
Operating income | 1,534 | 1,365 | |
Interest expense, net | 501 | 405 | |
Other income, net | (2) | (13) | |
Consolidated income before income taxes | 1,035 | 973 | |
Assets | 110,615 | $ 109,478 | |
United States | |||
Sales to external customers | 27,439 | 27,777 | |
Operating income | 1,257 | 1,116 | |
Assets | 100,450 | 99,721 | |
Canada | |||
Sales to external customers | 1,413 | 1,552 | |
Operating income | 135 | 139 | |
Assets | 4,294 | 3,839 | |
Europe | |||
Sales to external customers | 2,518 | 2,380 | |
Operating income | 142 | $ 110 | |
Assets | $ 5,871 | $ 5,918 |
Segment Information (Details Na
Segment Information (Details Narrative) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Segment Information Details Narrative Abstract | ||
Direct import sales to total net sales ratio | 8.00% | 7.00% |
Stock Based Compensation (Detai
Stock Based Compensation (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Stock Based Compensation Details Narrative Abstract | ||
Share-based compensation expense | $ 212 | $ 168 |
Unrecognized compensation cost | $ 1,949 | |
Unrecognized compensation cost recognition period | 3 years |
Leases (Details Narrative)
Leases (Details Narrative) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Operating lease expense | $ 290 |
Cost of Goods Sold | |
Operating lease expense | 100 |
Selling, General and Administrative Expenses | |
Operating lease expense | $ 200 |
Leases (Details)
Leases (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Leases Details Abstract | |
Weighted-average remaining lease term | 3 years 4 months |
Weighted-average discount rate | 5.00% |
Operating lease expense | $ 290 |
Operating lease cash flow | 284 |
Future Minimum Lease Payments: | |
2019 (remaining) | 819 |
2020 | 928 |
2021 | 573 |
2022 | 279 |
2023 | 255 |
Thereafter | 64 |
Total future minimum lease payments | 2,918 |
Less: imputed interest | (238) |
Present value of lease liabilities | $ 2,680 |