ACU - Earnings call transcript Q2 2021 | Acme United Corporation

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Operator

Good day, and welcome to the Acme United Corporation's hosted Second Quarter 2021 Earnings Conference Call. At this time, I would like to turn the call over to Walter Johnsen. Please go ahead.

Walter Johnsen

Good morning. Welcome to the Second Quarter 2021 Earnings Conference Call for Acme United Corporation. C. Walter I'm CEO. and Johnsen, Chairman With me will Financial who our Paul read the Driscoll, first Chief safe Officer, is harbor statement. Paul?

Paul Driscoll

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

Walter Johnsen

Acme XXXX. had quarter United second solid Paul. of a Thank you,

sales with a for record Our $XX.X million, high growth X%. net the were of company

are after were the days, largest Unshipped was not the we planned. distribution workers operations Program new an per could United nonrecurring operations, as days the we in early the the income the last hire in we net June the $X.X is more approximately to States. what Protection was Paycheck share XX our Our our behind. again $X.X quarter the broken during and $X.XX we added would just the a but of below did system the anything $X million. earnings layoffs year. center compared during in But were began was in have not shipped from net grateful expected. from to for for of $X.XX at instrumental In of It fell million was productivity our loan facility following warehouse and management XX% end enough support. April, We financials. we in was quarter. separately out we The United in for and the company's installation orders ship shipping and forgiven conversion, loan times, income avoiding million, of The and normal In States increase completed

are We we States, at a continue levels United the in large now but back to shipping order. have normal

new addition, are In strong. orders

distribution in hiring levels rates are quickly additional and North associates much our ship Carolina orders. service the higher to to and customer bring site to fill the unfilled We levels

with performance was excellent, sales quarter increasing during sales XXXX second back-to-the-office Canada due XX%. Aid and Europe, strong, the In Our XX% First to second of quarter the impact the during in growth of sales of strong Central. also were with

back-to-school, tools for and strong back-to-the-office continuing. Westcott demand experienced craft our that cutting have We and see

Our and First been workers they industrial fresh the hotels new and markets, return Aid offices, has and at capacity supplies. in The will DMT been safety establishments expansion gaining group retail completed be to purchase factories, in business food service benefiting as July. and has

United States you on As had expand which and market already this in Europe. tools, industrial the and positioned sharpening may to impact growth had are diamond now the sales we positive in have has year, remember, latest The strong a high-quality in expansion DMT e-commerce manufactures accounts in demand.

new We we XXXX. which equipment continue to in invest in at acquired December Med-Nap,

X wipes in As and States. antiseptic alcohol few United the of may the Med-Nap of recall, you manufacturers is pads

supply will develop. have end will we X Our to and Med-Nap positioned August, they in be agreements business new as the by new lines of operation fulfill

will reach. performance be call to anticipate guidance, not the strong line and to continue Paul. now expand for and customer we providing I we we acquisitions the turn our product will that Although seek year,

Paul Driscoll

warehouse -- e-commerce June for X X%. XXXX, mainly months and share $XX.X increased First XX%. for for to market of same for Net XXXX, ended due and of continued U.S. the was in sorry, XX% quarter decreased X Safety second Acme's net to in delays to the million in of XXXX ended Sales Products. the Sales Net XX, implementation months an XX, due by increase an increase caused XX. the the the The to new to sales X% growth June gains compared increase local periods mainly products. in increased in for in months sharpening DMT the the compared $XX X million due in period sales for ended increased for $XX.X X% were June million management both the sales $XX.X currency Europe were and segment second XX% of increased sales Aid quarter million sales quarter the system.

compared decline was or in quarter The of of Sales reopening second expenses transportation XX% a due the mainly year-to-date. XXXX in Canada the compared sales with XXXX. of restrictions for quarter XX% $XX.X Net business. second currency quarter quarter $XX.X online of of in sales was for for to year-to-date and XXXX. in increased Also XXXX. the same XX% margin in The of were XX% or to million the of the XX% XX% COVID-XX to was increased margin in SG&A $XX for to in gross of offices grew The increased SG&A million in costs. XXXX and the or by mainly Aid X XXXX to sales the first compared second products of XXXX. or stores. XX% million expenses compared offices. sales sales $XX.X First sales gross XX.X% of of and office million margin due XX% also for months period lifting XX% products were local labor The was of for helped gross

PPP income, per included Net to million EPS. XX% of expense XXXX, PPP income, of income same in Net loan for quarter tax and period net $X.X the per a $X.XX forgiveness X impact X% increase share diluted $X.X share an for tax was stock-based XX%. Company's comparable was quarter excluding million million of $X.X $XX.X compensation. June diluted credit impact to the of in XX, or less $X.XX loan debt June last the share the the second on second share income compared for period $X.XX was months compared or cash on XX, or June the diluted compared in of diluted or $XX.X $XXX,XXX for million year, million net first per per The the XX% XX, million $X.XX XXXX excluding forgiveness, of the increases XXXX. ended and $X.X to

million acquisition, $X on During the million for generated full and period, approximately $X.X million we PPP million free cash the dividends, XX-month spent on Med-Nap in loan $X.X forgiveness received the paid $X.X flow.

Walter Johnsen

to now will you, call Thank questions. Paul. I the open

Operator

first Marrone Singular with Jim comes [Operator question Research. from Instructions] Our

Jim Marrone

two questions. have I

of and business? a that involves Aid is Or forgiveness in regards First the first one. loan question it of the experienced. quarter. for cutting business? and is the The is Is the warehouse short the on the And second to first It the the the the warehouse part tools segment the impact backlog that

in is So continue effect and that that something that's you quarter Or impacted anymore? later to won't first quarters? the alone impact going just have to has that residual

Walter Johnsen

I'll a feet. our business, a XXX,XXX some The facility Jim, It's of large warehouse both it's square very of the production handles with XX-acre Walter facility. because First Aid Johnsen. start. It's

it that's a produced, of of after First So for portion warehouse production. does it shipment, into And the goes was some our and Aid delayed. that

pretty able that First be to going through are tools Mount facility Rocky Washington, Aid facility. Vancouver, was a and The that have makes kits, cutting operating independently. all much the also We

be continue that Westcott right to particular, tools. tools now, in the the fishing orders addressing and So and we're would and That be, very order, cutting Camillus Cuda back strong.

into So as add and to continues back gradually we digging productivity the improve, continue the we're people orders. to

Protection Paul. the I'll Regarding loan, that one turn Paycheck to

Paul Driscoll

the The affect the -- the numbers. financial impacted the third it impact will or quarter, year-to-date income to reflected statement. not be it PPP on forgiveness Yes. statements will will the not of quarter It quarter fourth second and continue but year-to-date the impact in

Jim Marrone

you. Great. Okay. Thank

Walter. to back warehouse, going Just the

you fact So is comment how shortfall to government go shortage as your that being Or And results? subsidies? are wages putting addressing Can pressure far the back you increasing financial it's reluctant a you the are as on So how as result just cost? addressed? to is of what it labor work impact of shortage on to labor? is people that that are and that and

Walter Johnsen

up in hour consistently an machinery during wages about ago. labor because competitive. excellent very is it XX an has Surely. increased an And starting. past We've typically year Mount, The $XX it's been, And And for the Rocky people business. the $XX North $X as running Carolina hour, now that's to a place from environment example, months. to do an make

people. job things in fair XX The good Wednesday place, and have helping. include We hired new and areas stay this And had are also which you past like address incentives a those we for other attendance. bonuses can

broader we're you certainly Carolina, a just is our products increasing. costs it. But it's And us the more. company North it across addressing So Mount, are is possible, are look, also and It the from increasing. we bringing labor in are the doing not labor if Asia costing that certainly, in Rocky take

through our pass will to price passed and have customers. continue commensurate we So to through increases

Operator

Tim Capital next [Operator Our Instructions] Corp. Call question comes with from Management

Tim Call

the I was have to wondering with those last care result refill health started increasing of year, in greatly units sales? base over the installed

Walter Johnsen

aid of the consuming is the installed that segments. an you Tim, of then the ones And when and components they currently can Aid our thing. imagine, site as absolutely. replacing are doing those refill within First base so one business expiring, And orders. The have new you business, fastest-growing are increasing they're same on are first kits, are industrial

within it's So First -- of it engines real is the the growth Aid. one

capture Our customers make for automatic times. ability replenish makes to it to automatically enhances SafetyHub, occurring and to easy kits the at all replenishment those refills them program, the very our

that So I'm to of the that it's the business, of it's happy part business. one and of say portions fastest-growing important an

Tim Call

options those count? the the time Earnings In Acme share share expect a higher decline past, has by been with basic share share should the eventually diluted options than we into XX% cash, going which growth back the the up per more basic diluted over the forward that stock stock count, has settled stable that towards count? count Should is moving due held share to going money.

Walter Johnsen

I'll and Paul? to Driscoll it let add if address it's important. that Paul one I'll

Paul Driscoll

to to and But I doing cash start to going settlements think optionees the things because cash beneficial exercise out. instead company market, in for in in it's more to the future, things the allow -- it cash we're comparative will of the normalize. not brings purposes, moment, the at will

big our doing stock can now, you there's in And So enough this. net as see. there's liquidity in a benefit

So there's we in cash to settlements. no plan will -- back going

Walter Johnsen

too. there's the diluted fully Tim, stock to shares, time the were bit a also were below months. more cash time, in the from options issued, all to And counted that, on past before, exercise whereas because appreciated some little counted, in depending settlements. in but XX of The of shares that, We now we because -- prices. a lot the not flow the were buy those cash the may, and are

wouldn't I for Paul won't equity. that. it's But out, as pointed the in we in say beneficial the bring company to very do past been that So year,

Tim Call

there through grow warehouse on are can when growing that so many and companies closed, look congratulations to... that their through Well, not is forward

Walter Johnsen

X Well, stay we've us move online an past as It handle to had We so the that that have abreast important was to a in fully the part depth company. not robotics ways in positions to thank step an This environment. the didn't to truly current in continue you, many that the smaller and to have X other sales major years, It business. to provider of was older Amazon was Tim. happened warehouse, that made a upgrades into system able the with documented. be for the

a remarkable. eventually, for out customer the and productivity will while So that, painful quarter, was comes of be service the think, that it I

the -- So we're over implementation.

working Now some speak. up of we we're back just the have order, to catch we as which on on

Operator

Thank gentlemen, queue. no there at additional this questions you. are time, in And

Walter Johnsen

Thank call. the of If quarters there to in end coming soon. speaking are very like We with development the further you forward you forward would continued I look to and no look sharing you then to questions, much. business the the to

Operator

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

now may disconnect. You

Acme United (ACU) 22 Jul 212021 Q2 Earnings call transcript