ACU - Earnings call transcript Q2 2020 | Acme United Corporation

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Operator

Good day and welcome to the Acme United Corporation's Second Quarter 2020 Earnings Conference Call. At this time, I would like to turn the conference over to Mr. Walter Johnsen, Chairman and Chief Executive Officer. Please go ahead, sir.

Walter Johnsen

Good morning. quarter conference second United for the Corporation. to XXXX call earnings Acme Welcome C. am I Walter and Chairman Johnsen, CEO. statement. With Financial first harbor Officer, is who me Paul will read Driscoll, a our Chief safe Paul?

Paul Driscoll

without involve risks as, effects XXXX. Forward-looking as the other the Litigation ongoing limitation, statements current such Securities described plans, and statements result such COVID-XX Private a Exchange objectives, and pursuant the Securities are intentions and with uncertainties Investors Reform downturn that and of expectations, the conference forward-looking our harbor arising earnings to in call, uncertainties in Commission those the release. others, among strategies, filings statements to safe in our including are the this cautioned of related Company's resources, the made of of adequacy the Act including, and economic provision periodic risks pandemic, of and

Walter Johnsen

in quarter had second of good United performance XXXX. Acme the

last over $XX Our million, were time sales of an X% this year. increase

Our million, net an XX%. income increase of was $X.X

who to months not earnings compared afraid were cutting last school were because during whose the uncertainty stores in plummeted quarter. customers We've or people increase. or We $X.XX in bankruptcies be them. $X.XX and many anticipate in had the the had businesses able to share a recover XX% ahead. quarter retail had delayed shop will in tools year, orders the their canceled to office, second We customers to for due the closed were Our to markets. per We challenges

the were all during in Year were in to sanitizer, We wipes, with migrated for various had items catch-up was gowns, our Components only virus increased raw cost China our high the and were kits particularly production dramatically have to been of masks, in thermometers was materials, true many coronavirus. intense delayed. demand lines closed and gloves, and used to hand times kits. supply which delayed, first of and alcohol the at first shipments disposable components goods of closed due and U.S. our stayed New sources other across demand and this finished aid production aid that then Chinese Our closed our are the or isolation discover Europe that procedure product

tracing higher cleaning and despite to We until plants the on test over pandemic and facilities under when plants. eight as our our eases. the continue down in did of and could plants in as conditions distribution warehouses when shipped packing were temperatures bonuses We the for and and and clear workers. to Our if safety flexible factories the employees prioritize adverse cleaning operated stay installed with We not We and home We and deep planned regular had incentive States, were facilities, masks, paid gloves workers. daily shutdowns front-line sanitizer hand them in kit lines barriers paid all centers our to extra the west coast coast coronavirus plants produced between they all for east reverse coast our and We and checked and operators of United Canada of conditions. the available well. then our at our our ran We and adverse Europe down. weekends. we production conducted of The under costs. fast shut we time end no and operations see shipped our these west

bankruptcy. many in to fall of customers have Westcott marketing, the we or teams largest functioned. ideal wholesaler The traditional and the not dealers sourcing, worked expected months. end quality largest in this of and creditors. engineering filed while for our first plummeted often office planning superstores, sales remote managed the continue our we sales, We're in by dramatically the to At fear over States mode. next Europe. independent sales, in quarter the to control Our in its more United have Sales States remotely bankruptcy locations distributor office We was did. the school to and six the The United they UK and taken wholesale in

they avoided by major of were well have market account mass and online pleased far fishing sales receivable So We and product sales shifted our for our strength lines. issues. as sales as and the hunting

Cuda size in sales orders more to As of segment. of compared stores Camillus overall Westcott quarter knives June see in began in to U.S. cutting shift unforeseen the second the increased this The to the patterns. buying year demonstrating X% office and reopen the began fishing from products tools, during we last

the safety and the the e-commerce home during had XX% and aid market improvement we to due first that business growth during million COVID share $X.X the increased corona estimate quarter. demand We mass due channels. virus -- the market, of Our was in quarter of to much surge approximately gains

We are on preparing new products for to our safety. customers focus

offices, gloves, in plan During use dining planes sanitizers, demand masks, wipes many the thermometers begin the been second for we have quarter The in and shipping and quarter. and other third that good locations. protection to personal introduced facilities, schools, we initial kits has

We States the production components have during virus and shipments. in in disrupt coming worry We which chain our been the of lines supply increasing and could quarters. China for preparation our across spread the all product United disruptions Europe, about and finished inventory goods potential of key COVID

share. search our So sites, inventory has positioned hustle gained hope continue entire our to were to team coming work new now we cases uncertain In in so. we and turn I am call and we and added will content business. workforce we I to and Paul. humbled our in to be online the seeing these times. our We grateful some not We believe for forward prepare do our as the to the quarters maintained drive online for done tremendously to competitors developed not do our move efforts in we hope improved are on open you when disruptions increases products, and occur. market will for were

Paul Driscoll

compared and sharpening and due Net currency declined in six to XX.X% of to six was million of increased million $XX compared e-commerce local income of in sales XX.X% both in sales to second an or sales million XXXX, compared XXXX in aid from $XX.X office was XX% million first share. as first to $XX or office for for was six and in due were sales Net U.S. million channel with XXXX, XX, Camilla's June mainly from compared Westcott margin Net in to segment same The of the for quarter sales gross products both period gross or primarily aid both of income margin same increases expenses or increased of on periods million quarter The period the XX, The XX% of $X.X Canada per of sales, to to XX, the a XXXX. a increase million and products. gains XX% the ended and XX.X% sales increased Sales a for or the comparable XXXX well COVID-XX. cash $XX.X diluted in compared safety XXXX net June in compared XXXX, demand. per million XXXX quarter months $X.XX products XXXX $X.X to months XXXX. second period and net Net XXXX. year-to-date was or for for for XX. sales the sales the XXXX. diluted year, the quarter gains the first less XX% year-to-date. a six in XX% Acme Europe and The of million compared closings period XXXX were increase came SG&A of of to XX% XX. was June in million earnings the debt months share in quarter $XX.X primarily in company's net for was ended second central with the compared of surge result for decreased of second market in XX%. share $X.X quarter $XX.X $XX.X central XX% Canada increase XX, or first the sales $X.XX local same XX% for XX%. excluding year-to-date. per June Net $XX.X XXXX $X.XX for six of in and diluted million last and the XX% of sales for XXXX. per and $XX.X months currency aid lesser the increase X% of an Including XX% in June in higher income of ended have ended share of extent share sales was $XX Sales XX% increase per for months the X%. XXXX the an sales expenses quarter the on XX% the million the sharing COVID-XX as related as and products quarter income or for sales The for of in store SG&A DMT million increased XX% first June the million $X.XX were diluted $X.X

We million the million and first to $X.X turn call flow. cash on spent During generated million over XX-month dividends Walter. aid period $X.X $X I'll central free paid in a for acquisition. we the

Walter Johnsen

I further questions? am Are any there here.

Operator

Corporation. first to [Operator will Capital we'll this go our At of take questions. time Instructions] We Management Call Tim

Tim Call

great a on again. Congratulations quarter

Walter Johnsen

Tim. you, Thank

Tim Call

rapidly decline your Do because you to generation? expect to solid of interest continue flow expense cash

Walter Johnsen

know but increasing closed we COVID for or if were our are to the of we inventory throughout right China be had in preparation who I knows. ports what Tim, or more now, don't spreading

sheet an and with right it in the interest. our are be of extra months preparation step an unusual that's balance quarter have to next of we we do inventory products covered borrow the top but we buying So X% and for selling now to six

interest So decline. not chances the expense are will

we'll On need quarter next off the hand it the year. be first don't we of inventory selling then other that in if

Tim Call

to back the as expect service, the future hotels, sales Do opens up benefit economy retailers? in areas you in food office, like the healthcare

Walter Johnsen

Tim. increased food a and some would stock distributors aid service be then increasing that have our that's -- sales major from Well, begins sales and market rebuilding that in declined reopen, and frankly to distributors to that particularly not to actually point into as now expect Yes, our the right first I the good fell us. purchases very areas

Tim Call

there think gloves. healthcare? similar you items new are Last resistant in introduced industrial any line puncture year of or hunting, for a opportunities selling Do Cuda

Walter Johnsen

don't really hospitals. much we sell the into Well,

you're entire into throughout could workplaces supply sell in and there our wanted we chain. them shortages being are typically could and the even I needles offices where and think get in but gloves gloves because though. are homes we So them the the sure don't masks not importantly dealing with used I'm if we more

Tim Call

Thank you. environment a Well, robust I'm in level this handle that comes. see have you glad whatever inventory to to

Walter Johnsen

to We a lucky be it have that we and to sheet to sheet. are do do have balance balance able

So we're using it.

Tim Call

Thank job. good Well, you.

Walter Johnsen

Thank you.

Operator

We will RAM Matthews Jeffrey go Partners. next of to

Jeffrey Matthews

Hi are Walter! How you?

Walter Johnsen

Hi Jeff. thanks. Good,

Jeffrey Matthews

been are can through company's have longer years in months book going can to that is been a where next the going I has company if you anything it you of congratulations the how your to little just five have what you my these the you you up just few differently fire that it? kind there same that going way bit three you and caused say of is last pick last the and is little and to stick are you've from is a the all through did run going keep, to that imagine to play about did months, the about it your over all drills going think or you through this must question or made you the term head you

Walter Johnsen

international do I've on lot number Well, online there just calls to do obviously to we've see there to as operations continue. every is shorter knows are will but that been to less customers see everybody and can amazed we've and day call in been the the disadvantages I that be in I I suppliers team remotely and in suppliers be that will think we but like to hope a my amazing travel we and how and would more to case some learned that traveling and our able be think of our -- able term. traveling of sales I know this

not how and you I'm relative this need is may I going changed in And you not We something approached what is offices. what may more that products forward to in having a less. the and and and another and environment time. we're sure future I'm hygiene and the work changes office different and not your know times then there space will configuration distancing if that’s we to that office home more airports provide to we that Our I a develop just a social similar that's the sure bit workplace similar now be will in will be have and evaluating is we'll area to find the that how at but we're the security, think I right in accurate X/XX more way that very distancing. in think want need attuned it you hygienic first safe the them aid. little forgotten be

a there there. for and re-emphasized protractors be so of forth. entire And year's will products anti-microbial Also Westcott we and So products scissors category. next and we line rulers the some throughout sales product have new them the reintroducing and on in those and family baskets

be only number to fishing some of surprised it's old opportunities already enthusiasts. and in they quarter hunting of be will had and sales products me and but new I they've seen stronger I been that we more think have and give truly but we've we'll seeing fishing and also because entrants I think refreshed got where new but particularly are in not the in those the to a So area the known growth good them. new with participants we've think happened too and

Jeffrey Matthews

there? about how your Can give thoughts And it. supply Got you chain?

Walter Johnsen

Mountain, in Smyrna, chain in that purchase in been DMT Carolina, of in last North of supply have base and the our Well, the two diversification. expanding years, in -- our aid Marlborough Ana, diversifying magic Mass; first course biggest the that of other of operations very two part buying were Rocky these our Washington all one we products important diversifications components the was to plants spill Vancouver, and without Santa of we've California, the Tennessee of a one

years for now we components places getting ago. we're Egypt addition two like hadn't that In some done

to more We've moving Malaysia. in India. into are We more started do

still I that anticipate China and continue. to However, is a important very partner

Jeffrey Matthews

thanks And good luck. Walter. lot a Thanks Great. everybody and

Walter Johnsen

you Thank Jeff.

Operator

will Adler], move next a private to We [Robert investor.

Unidentified Analyst

Good afternoon Walter.

United the [indiscernible]. already Acme to begun that, to Regarding results product have them Canadian they you are line domestic or report see sales into you the show integrate the

Walter Johnsen

So only would The category to market. good primary haven't we to First business that it January. bought been is to Bob we question. very many-many and restrictions our Aid first was aid into When in reason able because do bring be that Canadian entire a that in do our of in

And bring been in There team none ability of that to Aid products. been doing Central what the in by plenty in base Canadian Canada to of January particularly done take Laval, working customers them. customer to Ives buying us in opportunities of and in us with so it Canada has First by versions has bring gave March and have production. been amazing our our now. many of those products back are throughout and in closed Well, we've online we've that our and We're

yet results them. we of too will much seen the haven't but seeing We be

expand so of that that's the segment very hoping which And the rest company. strategic important aid in so business first was our now in Canadian is into accomplished. been acquisition And the

the is and Fortunately rebound to also the be business more stores seem we're seeing open Canadian starting orders. to because

think it's way say at hard but worse over this I the for So stage. it that appears is to Canada

Unidentified Analyst

the in of combining Canadian it of X half line. sales represents So year essentially product the than a million-plus result was that you've companies the in for rather bought two the gotten first that as the business

Walter Johnsen

That's correct.

Unidentified Analyst

wanted you thank I what That's Okay. Walter. to,

Walter Johnsen

Sure.

Operator

go Marash next First Ralph to Company. at will We Manhattan

Ralph Marash

Hi Walter.

Walter Johnsen

Ralph. Hi

Ralph Marash

are supply thinking what's the them all school about that about of to purchases? your assume let's going uncertainty and not will schools Thanks. reopen With -- many whether

Walter Johnsen

is I'm the school getting that saying confident growth the good in had quarter uncertain we area in Well, the and was reason very second that more and area. am I

As the we that business holding quarter business are only looking finding but third not supply in and the with school we're we are online is now our increasing.

grades each educated that schools students the supplies. of Now in get and close the they million have X.X but we may not get have to still

while are other getting or customers. Wal-Mart they're And we that of They Amazon buying which from find at places some on purchasing or not may our maybe customers. awful them current so

the just it but shift may place customers using but believe now believe back to quarter. have occurring a we'll pretty a that different the what be is the and what So I they're supplies the studying and they're I normal and within in school we're right seeing that's in

Ralph Marash

benefit you probably was or introduced the And future? remember slow so mentioned past that and the grower. in anti-microbial, that Will I if more had something it correctly you is it currently a in

Walter Johnsen

of we're an customers competitors for got continued now number our antimicrobial okay in that items expect against a retail formulas fortunately so be it it and them are products. all line interested up. the our we was quite and Well, of we're that years We've some place want Today in ago. a product to the tooled customers producing and vector of

Ralph Marash

Good. Thank Walter. you much very

Walter Johnsen

Thank you.

Operator

time And concluding management there conference further are will remarks. queue. over I the back questions at any the this turn for to in no

Walter Johnsen

Thank this you updating there and much. further after the questions complete If we very third to then again forward you look is no are Goodbye. quarter. call

Operator

And that for does participation. Again you conclude thank today's your conference.

Acme United (ACU) 17 Jul 202020 Q2 Earnings call transcript