ACU - Earnings call transcript Q3 2020 | Acme United Corporation

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Operator

Good day and welcome to the Acme United Corporation's Third Quarter 2020 Earnings Conference Call. At this time, I would like to turn the call over to Mr. Walter Johnsen. Please go ahead.

Walter Johnsen

Good morning. quarter conference third 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 provisions periodic risks pandemic of and

Walter Johnsen

had third Paul. strong quarter Acme you, XXXX. United of Thank a

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

income Our increase. for a XX% $X.X million, net quarter was the

revenues. weak our to Office but such Industrial that by the of traced third sales per year, representing tools in cutting This and Our last in of increase gains also e-commerce pandemic, third was to $X.XX the $X.XX Safety and our includes approximately in to growth as record retail with year million, only of Aid kits compared market of business strong the market were even the not Revenue XXXX & XX% quarter mass due sales First protection Sales of Westcott personal increase. a $XX share of XX%. to quarter with & were an mass accounts. we earnings offset market items last

Westcott We are in particularly mass the growth new market. placement our brand products to in due strong

over increase sharpening our - of Camillus a the of same Sales products of and an off DMT offices XXXX historical new to third time. million sales we in open. revenues in in $X.X last knives, the had opening as were increased due quarter In the of of business, and quarter second year excellent. school sales Cuda Canada, quarter XX% fishing to the tools began to Our of from at shift third

First had revenues in In Central $X.X quarter Aid million. our of addition, third business the

As million, global sell gave benefit of First you many acquisition a may recall, of from to quarter an Central aid XX% increase Aid Europe products customers growth. the January the in as first well and our Canada as in $X.X the Sales existing over in their were safety and to last of our XXXX platform year. us continued third

call. Europe office The earnings service limited in challenging accounts and were of of or were XXXX revenues faced in similar in to the full Restaurants, third by and described customers second sale. offices access. impacted e-commerce quarter Our increased were closed. the in quarter we we conditions closures reopening those our hotels reflected Many food

safety The sales was usual. our to impacted. manufacturing be followed our with a were back-to-school of items COVID-XX or There and uncertainty these at openings school associates over contact to exposed time of longer is severely someone was sales and and spread masks Our by continues customers concern. tracing our if ill to types We wear We of testing. facilities sites. our our closed primary distribution than

will We and when safe restart move forward.

of many our incur at to including COVID-XX payment compensation production a to expenses extra We result and facilities. distribution employees continue of as

last the of third have quarter operating reflect maintenance in We XX.X% we current The gross additional were which and the compared downtime. and additional year. cleaning to costs margins in expenses our of for environment XX.X% have in

for operate year. to We with to higher least coming continue at cost expect the

serious products policy. during where infections be France, six and countries increasing we although If buffer in COVID-XX Germany, we that risk supply a increased restaurant by problems $X customer prudent concerned hopeful growth. to prepared during sales We address there we're for office million we supply on through a become United potential the not There not, normal a inventory next with or large source were disruptions. scale credit hand inventory months States. distribute potential XXXX and also the COVID-XX This We've and the of we if bankruptcies to On to they epidemic have including expect disruptions note, believe long our to support about period, the excess the are are China, due of were continues delivery. more could inventory We will Canada controlled. optimistic major if sell closures. with

to are new growth related the managing our pandemic and business, plan. We aggressively and executing seeking problems continuing new

As are now looking acquisitions. turn the to Paul. for call always, we will I opportunistic

Paul Driscoll

COVID-XX $XXX.X the Acme's COVID-XX Aid in Net back-to-school quarter due came to the in Westcott Europe the XX%. September Canada net for of XX, were increase to in the local aid September in due as and in nine and lesser million was segment XXXX, currency months primarily $XXX.X the well products to primarily safety gains to and for for Net to excluding XX. sales increased easing quarter sales from of a e-commerce the shift ended both quarter. periods for channel Net ended The for higher XXXX, sales an market the Camillus lockdown XX% for first from $XX.X in the product an XX%. the as product. XX% of nine the million million a XX% demand. DMT sales share XX% increase sales in XX% The sales and for and months in local restrictions of in quarter quarter U.S. to second sharpening First the third XX. and were surge increased in related same Central nine increased for sales increase gains currency sales ended September and third months extent increased million increase from quarter mainly compared compared $XX the of period XXXX, Sales

or to year, million XX% income income to XX% were XXXX. Aid for XX, XX% increased The However, by the for of earlier for percentage gross margin compared XXXX, or XX, year-to-date share year-to-date year-to-date. million $XX expenses. months XX% of nine of currency. of margin XX.X% of was and share closings. gross major compared with third $X.XX $X.X XXXX margin Net million and contributor in XXXX, was compared million sales a for expenses XXXX SG&A XXXX of the sales XXXX. for $XX.X the per period quarter was period an as months The of XX% debt or September of increase store income quarter for million compared share. diluted in compared XXXX. per $XX.X income compared The million the was XX.X% last COVID-related XXXX. September $XX.X third a per was XX% share XX.X% earnings the the sales in net of gross Year-to-date million in SG&A sales office less declined $X.X increase of XXXX same first XX% $X.X million the earnings same sales in million of net $XX.X with per to or diluted ended net and $X.XX $X.XX million sales income the share. an of sales share XXXX, both on $X.XX diluted first The of for $XX.X period XX% Central, quarter or the or impacted Including for nine were were was on and per diluted XXXX September XXXX. Company's to or XX.X% in of per local $X.X expenses sales the for comparable XX, in cash First XX% declining Net to or

cash million $X.X During million flow. dividends First $X.X period, Aid and Central the for in acquisition XX-month we million generated paid in and the $X.X free

Walter Johnsen

Thank you, Paul.

questions. will open We the for call now

Operator

[Operator our Marrone Please question first go with ahead. Instructions] We take Singular Research. from will Jim

Jim Marrone

to aid to one safety and I have One the questions, tools. regards both revenue. and related So the two first other in cutting the related to

revenue you had a nice in firstly, increase. the and relation first safety So, to aid,

was parse to of that it just the growth expansion organic than how attributed to the a attributable Canada, of so, and market if as share. that out expansion in Canada? in is really rather can much of kind said You Is result you

Walter Johnsen

that… address me let Okay,

Jim Marrone

And question ask after second my I that will answer.

Walter Johnsen

from Okay, home well both major those gained let is we've multi-millions talked North me first very separate in dollars. address a of club in as in were what America about of we large and Canada as aid. the North growth of that a large one. expansion The very improvement chain was America in occurred share wholesale What at

the from acquisition, In that yes, Canada, So million Aid separately. out new was we business. First that broken so Central, dollars added was several

Jim Marrone

office attributed how of get and tools the said cutting in trying closures, there regards but mentioned to to I'm or home the growth if - much any a to was regards… was so growth as And to you've on it sense was that, offices that demand any the regards there sense do people sharpeners, you mostly growth of of pent-up have and opening in result in any you up a

Walter Johnsen

The think have was a a I spread school We longer very over very good business period. good and that question. sense was

September properly to was they May born into in X.X school then home you and picked kids at year reopened lock partly As a May, and and August June their were sales to and people and were million a equipped. substantial it may as lot year, into children. slow and they and bit a schools in we move be and schools the by people it Remember, saw then as each up October need closed there's all remember, children up educated then educating little online, tend

it while also to very was slight do because at some closed. overall were deliveries direct office So, the were are perhaps Those like that business-to-business portion closures, years. Relative were to the was well, office dealers in were the the a very, offices their retail, consistent stores, and decline much in the impacted closed. sold much companies school aggregate, there pretty because of super on those offices businesses with severely impacted prior that sales,

other hand, chain, online market On that. sales truly for the the mass compensated large truly, the chains the account and to

And and the because of so as the flat very third flat it was strong. we was Westcott market the closures. quarter, was out very, mass about business the e-commerce, the office net But

They it Westcott. places. of different for in product. was And net shopped the all sales our wanted about people flat So

Jim Marrone

All right.

the you. a better thank me That sense Okay, gives of trend.

Walter Johnsen

Great.

Operator

go comes Our Please next question from Timothy The Capital Management with [Operator Call Corporation. ahead. Instructions]

Timothy Call

Congratulations on another strong quarter.

Walter Johnsen

Thank Tim. you,

Timothy Call

you of margin With followed recurring, hinder what lower a indications overall those replenishment And hub how products? of sales? installations be margins? that the higher margin as do with do that proportion healthcare systems, sales you installations see aid have Does first that will of

Walter Johnsen

solid, aid and impacted increase hand pads factories and were drive first for lot Nevertheless, the component as well above price we business tended stock referring is actual was where in were over our margins market about we centers account. you're money buying these was to of gross to can distribution buying What components physically these very wipes, replenishment the continuing we're well hub the do there margin through, saw items, incentive first And it business into but that margins locations on In those and van-based whereas the was a delivery are they're open sanitizer. and brought market, aggressively which price good. quite hub, down the the price sale. that be very pay what were they're as masks, We customer, allows alcohol good. open by replenishment safety aid competition. imagine, we safety you things on systems and of one lag to wipes, to are we've also because that would people gloves, to actually go is components the average the kit, where many saving increases BZK margins passed gross See, our the as large and our although online, keep corporate like the and and automatic the prep operating And our normal that good. alcohol refills drive,

Timothy Call

outbound gas well? at down, you fees or shipping recoup cost see be are costs, are increases goods transporting eventually that and you prices the those you inbound as to for on can up. able look Do When but your

Walter Johnsen

at containers bit capacity cost. increased the But right but XX% last chains the of - demand prices it the off a not for as well same laid gone demand Well, right And was behind now by so month. mostly from demand, online have and being up, picking faster picking has again, it's price board, trucks have the is and shift Relative the it's example, on the impacted supply little reliability that about increase both across prices as has that drivers And level, to also because it's drivers, and about the gas had down. up. have the delivery the China meant you're into are because containerships followed huge for are for of than China, again the up sales obviously demand supply. shipments trucks has and over increased so out

again some is there So, increases price there.

are be same through able be at about passing we Unfortunately, done customers. passing been consistently and increases do our to market We that position have price through and our to to the permits are. to us we've levels it

historically we excessive price but we taking to consistent are that with be trying increases, we're margins have. So, of not advantage

Timothy Call

COVID-related to your how would next decline much think year? finally there distributed you when employees, And a do gets that expenses vaccine is

Walter Johnsen

that think very kind pricing. and a If week masks, production country which gloves, their all sanitizers, that's stabilized we've they be but the a for vaccine, each that's hope for I not guess with would and it's do some gathering only why inventory incentive control to will we now where together be supply some built, to stabilize. world weeks, we're about, New to have us humankind there from more India. work migration not Week that me would see six now, the levels is there's hard certainly they we're $X that in year diverge sucking chain the also is need, it's quick had then recover months that just $X more I paying, pay, costs If also supply that chain let of built. But cases the there I and it big I more and things three take the that largest I that like probably right placing guess going employees fireworks would happen, of Golden now. of disruptions. and would the were and hour we've have And that orders and a that that and and of sick, had for and that per every the expenses for in tends X.X away fear we're reliable, antibiotics to My million and is be stabilize people that week gets will very billion into at margins India, stay thinking some problems. of but Chinese I person that be out doesn't million we'll probably still where Day place. great facing mixing the that ready. will maybe in cause you National costs normalized, is with serious an we'll They XX just China right to to do countries the the parties reduce are is the in and serious of very inventory that Year with think become China could are spreading second. in for

Timothy Call

well you're through Thank for hard work. that. Well, you managing the quite

Walter Johnsen

Tim. you, Thank

Operator

next is with Longport Please go from coming Our Dearnley question Richard Partners. ahead.

Richard Dearnley

by aggressively intrigued comment business. seeking I'm your we're new about

have Is You gathering changed? pretty same split. and the or new been business good what this marketing all about

Walter Johnsen

Richard. address me Let

person since single a off a other cause We laid pandemic have started. the not for than

quickly going we're we've our business and firing them, that want really just it's advertising, be open new what all going be concept. are and after and need of new and when competitors we're migrated down, new to with people. why don't so we're shop. sold into going we back why need at added In people and focused to of to simple, not. are other fact, be where you getting that's so aren't. accounts products, they're content on people hard we shopping search. food, money people that's are put I who And they're hustling back are online development, be to when they And go others wondering market sell online to why sales we've And to we they're told fast a And those mass to associates, and we're And more of thieved. where all cutting product there places cutting we and understand going we're

So when I I aggressive, say mean it.

Operator

We your will Kevin caller Please move go to next with our Dede HCW. with question. ahead

Kevin Dede

on and upcoming wanted like remain you How My is - just with ambush. administration how continue discussion last I curious an for do apologize I'm happens seem LD and yourself hedge what relations had the what to we the at the you think in to positioned? months election? see with how I maybe advance view U.S.-China conference. might incumbent ago XX the place, should in Acme you But

Walter Johnsen

we the we pay accumulate capital. international me substantial if higher bring whatever in and again and happen. acquisition questions you. would are tend hand, the ever Kevin, did, in don't plenty previously coming it taxes. and U.S. we of there be back really think The would Germany increase way were Those Canada substantially will corporate with are I our that - is and into would begin But operations I if cash to had, tax to places thank and to if clearly other opportunities election rates that's the in to we on in not is factored happening. mean But that what the more already where like deploy

be of we've the got corporate really a taxes to we and also and don't into hinder paying and tax more But individuals is office maybe in the isn't or time of you Company. very be in for to bring and a wouldn't came speed be Belt but to relations, into to neighboring some in rates, it Africa that that of the may of other also the growth and a U.S. it would Relative kind to doing that the over I So, to more the which who bring sense have. U.S., But know, deficit going that and money the down and will that guess countries' in Relative into all a President wanting think expansionary ports neighboring I has there Pakistan. than, see XXXX, been because interest China that continue the we China in in hinder complicated big that's clashes. on have be be reasonable. as more it expansion will have part more I would and Road been is be only not think leadership will might trains port an doing, approach It administration it Initiatives, and high close. what as taking countries we so that And aggressive with whichever is smart Abuja through it's trade. both Xi,

of Magic, was Connecticut Carolina. one bought Those Vancouver, diamond two First our Marlborough, Pac-Kit, the Aid expanded plants, one Acme, DMT, machining I five in Washington; company; sourcing Only later. company our Santa Mount, the or included that California. Regarding which in at first Mass, in the companies purchased We aid merge past Spill North and then Smyrna, United in we Rocky years Georgia in in sharpener We Tennessee during manufacturing Smyrna, Ana, and States. a mean, number - in production

States continue, will expansionary there aggressively will will going production think, United clashes be other and bringing and a the I have trend is very been need and I with China ultimate leadership each the China from be time-to-time. that administration, we an think to important continue, we partner there in but into and forward is either So, probably

Kevin Dede

for really you sharing I Walter. perspectives thank it. appreciate your Well,

helps you sort experience the my perspective in think line. own get bring of I me

for apologies you the really So, on heavy-handed again I appreciate thank for it. sharing. Congrats the And question. quarter.

Walter Johnsen

Kevin. you, Thank

Operator

time. you Thank Mr. the remarks. I are you. questions this to Johnsen, closing conference turn And there no for back at further any will

Walter Johnsen

call And further quarter. the is look fourth your We complete. forward you no then support. this Goodbye. you for to questions, are updating thank There after

Operator

you Thank Thank your today's you. This for concludes participation. call.

disconnect. now may You

Acme United (ACU) 21 Oct 202020 Q3 Earnings call transcript