ACU - Earnings call transcript Q4 2021 | Acme United Corporation

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Operator

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

Walter Johnsen

Good morning. quarter XXXX fourth Acme call the Corporation. United to and earnings year-end for Welcome C. Walter I'm 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 year Paul. strong in Acme you, United XXXX. Thank a

reaching sales XXXX, were its Our increase Med-Nap XXth delivered and earnings year of software Central new Aid the acquisitions, compared sheet. team high. in $XXX of installed and to distribution balance for warehouse Sales consecutive record We strengthened largest million in center First management the integrated with an $XXX our million year our XX%. all-time an

$X.X income in Our XX%. $XX.X the versus net million million was prior year, up

Aid including First $X.XX We gained XXXX. Westcott, $X.XX Camillus, in Cuda. in Our our per versus XX% of key increased earnings markets, to share DMT most Only, and

underlying record prices our tight between selling balance subsidiaries of Our the Canadian managing raising and and sales. We had managed successfully European products the costs.

due shipping factories We and global testing, costs our quarantine illness. in sites due attract and U.S. increased but and had higher increases The and wages included cost inflation costs. to of inefficiencies declined our also product in we increasing the workers, currency to markets, to keep distribution our at China containers. of Some

substantially They in The office industrial U.S. business, which new Brooksville, Central, we prep and business, First wipes and XXXX, in grew English which customers alcohol attracted we December customers and Our job. pads manufactures and our XXXX. Canada Aid Canada integrated successfully from in outstanding French-speaking Med-Nap the their an in team and acquired e-commerce in business acquired did They converted Florida.

was capacity, into programs. and Rocky Acme and brought the it integrated XXXX, for the regulatory management products sales. and equipment enterprise medical markets quality additional consumer customers software aid new During developing Mount, in installed successfully United in our and kits new for We outside began and our control Carolina software of for at facility. North warehouse generation new installed the first next use We for

and know, measure, XXX,XXX The capabilities you for acres. small feet of site and of new office of win specifications. product shipping on enhanced It improved accuracy locations, parcels. As packaging square has picking and units space software may XX the manufacturing increased and warehouse, this our

our our equity. on in I its rate it The It Importantly, United XXXX. was delivering of our U.S. for to expand enhanced associates to Rocky a task Paycheck outstanding they variable its of Business fixed and Vancouver, years. delivered. tough $XX.X a other during Carolina Acme which mortgage Washington, plants $X.X obtained loan, improved to debt. business North also enhanced in Administration The a rate replaced be a million sheet and balance at company to performance Program The rate our X our and as small locations term Protection forgave and of provided XXXX. grows. mortgage want new thank It million X.X% the with Mount, backbone

uncertainty. and with product we availability XXXX, to inflation, look we challenges As continued anticipate

we However, our business and projecting are is strong, growth. substantial

turn $XXX guidance not providing million call the revenues Paul. exceed believe to we will will time, now but will our I this at be in We XXXX.

Paul Driscoll

the Acme's net compared ended increase primarily in lines sales XX% of December The XXXX, sales primarily to was $XX.X sales the and decline an million period the impact across school in the for increase XX%. an loan XX, products. PPP due XX% in Net for fourth of $XX.X the the aid cost the were compared quarter summer sales the to was was XX.X% due quarter the The per $X.XX inflation to XXXX, and or products forgiveness same of fourth increase XX% million The gains gross XX% was well per to in fourth debt first sales increase in XX% $X.XX $XX ended XX, net December XX.X% increase year. in market XXXX. compared the on the to to cash currency year, increased year Price for XXXX, XX.X% Net pressures, $X.XX XX, currency was on U.S. was XXXX, for compared sales costs increased year of XX% year earnings $X December share December diluted for sales quarter in million share and sales for per period of was the in the Canada products. income million compared quarter due for income XX% were XXXX, million million in both or Net of the increases periods compared increase XXXX XXXX. The income for XX. year compared share e-commerce million of Europe sales increased $X.XX income, sales XX.X% sales aid segment XX.X% was diluted year ended in periods and of net and or less in growth a in due craft increase company's products. the partially of million to were quarter same higher and of with $X.X ended were SG&A million XXXX. was an in costs. per or primarily expenses $XX.X fourth share margin $XX XXXX, of both XX% million $X.X for XX, the XXXX office both the in XX, XXXX for of expenses growth period comparable $XX market ended ended $XXX XX.X% of sales The and in year fourth $XX.X last quarter $XX.X SG&A periods to in XX. and catenation to for of the XXXX. quarter channel XXXX, December as of the local compared the and $XXX million XX% of Westcott December X% an gains income diluted to labor XX, diluted mainly per net or excluding or million for for or per the or product XX.X% in Net in sales share. million first cost both offset for for share compared sales The million in all Gross XXXX, earnings margin Westcott XXXX. share. to sales for share December Net the as for with of higher increases. XX.X% local medical $XX.X of

loan repurchased $X.X common the million received dividends, of During million. million XX, of $X.X company ended the XX-month the $X.X and forgiveness distributed period in stock PPP December XXXX, for

Walter Johnsen

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

Operator

Instructions]. [Operator

Our Research. first comes at question Singular Sakai Chris from

Chris Sakai

for today. on Walter, Marrone I'm Jim

Just you inventory supply had disruptions supply chain? inventory any comfortable a seeing in And chain your regarding are -- question levels? issues. you Are are your your levels with

Walter Johnsen

a to question. very supply a good be continues that's The very chain Chris, problem. difficult

inventory by You may performance the generating. know ago. know many and actively And XX% increased about us XX months our that inventory investors allowed additional to do meet that of that has of sales we're our kinds we

comfortable items expand pretty in X chain that be they and months also the year, hard that will meet to is customer our continues problem. But risk well. is is of is growth in doing out we're the an not midst be sold that supply that that very But easy out our your shipping. And and miscalculating products with fortunately, we supply buy this are expectations, demand, and a within we're the organization. to we're levels can that. to are as inventory able that task. for our this a chain dealing conflict I'm support we and the We're we're and And generic working easily However, projecting very high. make of the disrupting

Chris Sakai

ask, Okay. that I -- conflict. Great. And about I that all? wanted war? is to affecting And ask how know I wanted if your at the just to the mentioned you Russia-Ukraine business, Is

Walter Johnsen

on are business, Acme to We disturbing being sales -- Well, about And of now. is to in -- very very, of referring very, year the to impact Relative do our a the the EUR harmed find European people Russia. the plight watch we conflict right into is was through the that very it Ukraine. yes, I war insignificant. United I XX,XXX

So can just being it's lines right very of now are diverting in world. to in terrible And imagine But that that's That Russia away insignificant. just in actually But facing. that service major some that ships I vessels you various chain read a the the is happening supply conflict places shipping conflict. avoid now. from diverted and some the them thing putting elsewhere helps issues are we're

Operator

Dearnley We'll Longport [Operator Richard next Instructions]. Partners. of to go

Richard Dearnley

price you increases? sort to price any the you of cost frame resistance Could are increases yet? relative And then seeing

Walter Johnsen

Dick. to China, And many the the COVID cost the Well, in cost part whether are so it's hurting are the increases the impact congestion the that's we ports, U.S. shipping question, in complication increases, of -- price delivery a complicated there or containers ports. I or mean, is -- of which is of

the some Beach that from tried don't and but You traveling at U.S. see of the ships offshore had anymore, ports. eliminate L.A. the about administration that speed congestion X/X -- China. slower the the we of may in know you they're And Long to is result

past in moving got the the actual change on are the several the The overwhelmed. the East Coast they're, ports they better so West because And ports. problems has delivery in water, Coast schedules, continuing slower. been just had months But

Beach, up. went so Charleston. vessels And Panama are to and Savannah now And went the the and plugged through too they Canal Long

you've so cost in many got pressures And places.

and world January. over that's as the a coming annually vessels, cost well all value working we ultimately, As we U.S. the you delivery value of what seeing, increases, reported we're And from oil of X.X%, both we what the gets into price price of see of living. the fuel, direct plastics, customers. mind for increases, for that versus The is vessels was think result We're continuing. freight. XX% that the the And outbound into which on pressures about your how it that in do gets potentially, in as inflation of on delivery for work appropriate we of are bearing want a how in are

a we're pricing what it's through best the costs our can, customers. we complicated very model. passing is So estimating to And and the those doing appropriately

Richard Dearnley

same of far, so, not mean, the everyone’s – And so stuck sort boat. you’re I in

So resistance too high. thinking is we’ll our is I is raising prices. there oops, little starting about to that’s to prices just the was talk that raise general if anyone wondering But because

that. Now term you’re the of XXX short probably today, or isn’t in stop exempt XXX at very short oil with to term, wherever, from the I anyway. mean going price this the in

Walter Johnsen

Well, is that’s increasing. lot and it’s a it’s right. across continuing price the of it’s board. And There pressure, and exactly

So sell most in products $XX retail. under our of for

likely that, might. consumer or used same resistance not example, kind car a they’re to a of So face refrigerator the for

Operator

additional back to other conference I holding. turn closing you have comments. or And questions no currently Instructions] Gentlemen, [Operator any the for I'll

Walter Johnsen

and I Well, in you It and this done, focus awful in thank again year to lot we work you we us. is of for this and first -- Again, things are so It did like with for quarter further and the XXXX. the look unrelenting get they much. forward did outstanding. team was our difficult an was speaking thank Thank If pressure no really in very to joining much get to complete, Goodbye. questions, to it. there call you April. would

Operator

today's thank participation. for call. We you Ladies and your that gentlemen, concludes

time. call. thank Ladies for this your that gentlemen, participation. at disconnect may you today's concludes and You We

time. this at You may disconnect

Acme United (ACU) 1 Mar 222021 Q4 Earnings call transcript