ACU - Earnings call 3 2023 | Acme United Corporation

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Operator

Good day, and welcome to the Acme United Corporation's Third Quarter 2023 Earnings Call. At this time, I would like to turn the call over to Walter Johnsen, Chairman and CEO. Please go ahead, sir.

Walter Johnsen

Good morning. Welcome to the third Quarter 2023 Earnings Conference Call for Acme United Corporation. C. Walter am I CEO. and Chairman Johnsen, With me will Financial who our Paul read the Driscoll, first Chief safe Officer, is harbor statement. Paul?

Paul Driscoll

this company's expectations, harbor provisions including, Forward-looking related are made capital in conference the the without resources including, statements safe to challenging limitation, a Investors are and to by other the and inflation Private statements plans, macroeconomic and intentions uncertainties, forward-looking objectives, result characterized cautioned of involve as arising a pursuant such strategies, adequacy XXXX. of call, among that of statements continued those Securities Act Litigation and global rates. Reform environment high of others, risks high interest

chain described and Exchange In filings to also earnings may and Securities subject we disruptions in with risks the in They and addition, release. experienced experience uncertainties and our are we additional supply periodic as disruptions, current our in have Commission these the future.

Walter Johnsen

Acme XXXX. the United during made progress Thank you, Paul. significant of quarter third

million, Earnings X% quarter compared Our Operating Net $X.X $X.XX quarter $XX,XXX the during were in quarter compared above million year. million compared net $XXX,XXX last were XXXX. income the was last XXXX. $X.XX $X.X third the $XX.X of income to year. of sales per to in share was that which was and third approximately to

continue prior growth customers. inventory X% be tool the were sales where quarter, of Westcott year. to from in our of improvement revenues There company's below XXXX The the third reductions reflects quarter cutting X% by last

the However, demand. forward that reflect process, we of and end going nearing will believe customers comparisons true are our

to Westcott medical weakness and business the aid in The sales, continues and it strong. offset be first to

returning XXXX. shipping we initiated quarter and in compared were margins of to about the costs XX% the that This in normal XX.X% year a program impact the Our ago. levels productivity third reflects to gross

about in shipping As we year port costs and congestion. recall, expenses you to container unusual last million may $X.X incurred due

currently $X million projecting savings. totaled by million to exceed in program plan We're about $X annual the annually. productivity planned Our

are in We the results demonstrating gross margins. our improved

actively the after reducing been The during its company it purposefully increasing inventory has pandemic.

quarters pay We the the Our to earnings inventory past X the debt. year the cash inventory during reductions past declined most during down directed and $X flow of has from million.

result, in our As debt million $XX the the at our sheet $XX time substantially over to has improved compared debt. a same balance third end net of XXXX That's in XX% last and decrease the quarter a year. million was at

it bankruptcy During Hawktree million acquired XXXX, $X assets quarter the and for sells the of first is the when used the aid and medical in and government Canadian over for the training of during approximately efforts. in we supplies auction. some gallons COVID a of programs third exclusive company in Hawktree also the Canada of Solutions Red and supplied many Cross of pandemic ended. relief licensee Canadian the mass products their to gloves and extended The became

the moving and reactivating location back to Canada Laval orders our are We as speak. we inventory website, filling

has strongly. XXXX of quarter fourth Our started

sharpeners first now in opportunities. and for look call We businesses are acquisition our to well continue winning DMT as to Westcott I'll we business as and the XXXX Paul. new at new aid turn

Paul Driscoll

products strong. the the net compared to compared U.S. in sales XXXX. quarter. million of million Net $XXX Acme's same segment ended Sales million aid in million XXXX, the were in $XX.X in X third third XXXX, were first an Sales $XX.X were the period XX, for of to X% X%. sales increase September increased for $XXX the quarter in months

office for However, demand was school softer XX. Sales constant ended for were products. the months September and X

ended XXXX. first X% decreased reductions for X% the in due September low for were sales in both products Europe. X sales mainly in inventory quarter XX. for sales was of to and half This currency in the economic X-month months recession impacted periods Europe The office Net customer the school decrease for and for by the

is trend the However, improving.

$XX local first was quarter aid in X% QX due margin were transportation to of inbound in sales with the XX% of The the of quarter The compared million quarter decreased was million or months $XX.X year-to-date for in improvement of sales of of XXXX costs. well sales products. gross XXXX for compared for first expenses for lower in XX% SG&A Net third XXXX. $XX.X XXXX sales sales XX.X% million period XX% in higher that of currency the Canada XXXX XX% the for in or in gross X third were mainly same due with as the but of million margin growth X% compared productivity of XX% to or as XXXX. XXXX. expenses the increased SG&A began or the to $XX.X initiatives

of improved in an to quarter Operating the XXXX $XXX,XXX in compared profit $XXX,XXX the the margin of The entirely higher for Interest expense XXXX. XXX% third rates. third gross due quarter interest increase controlled due SG&A increased was quarter third tight was to spending. and to

million compared declined In to fact, last year. quarter average $XX in by the QX debt

third X.XX% compared Our X.X% overall of the average XXXX interest to for was XXXX. of rate quarter in third the quarter

share diluted income first the quarter $X.X compared Net XX, the of Net $XX,XXX comparable of year, diluted income X per same $X.XX September for $X.X or for last for million of million period compared XXXX. share XXXX or increases to per XXXX, the net third $X.XX XX% $X.XX diluted period $X.X was to was or diluted of million per $X.XX per share XX%. months ended in or and share the income

was September on on cash XX, to million less $XX million debt bank XX, XXXX. September compared $XX XXXX, company's The

million million paid reduction million and inventory $X approximately debt cash period, including flow, the declined an During dividends $XX free the $XX Net in from and XXXX. company million. XX, XX-month of December generated $XX

Walter Johnsen

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

Operator

[Operator of Richard Dearnley from line question our first with is Instructions] Partners. And the Longport

Richard Dearnley

about you pricing resistance. talk Would and price

on, are -- people getting and seen more sensitive? economy so hadn't been any, the You but folks given

Walter Johnsen

-- and it in it's business, reductions for now is year, quarter. tough the it's is sensitive. is next always like industry our in inventory lapping fourth I we're honestly, seems seeing and business price I What change. see Well, and new any always a price-sensitive, the don't a this not am pickup

don't while price I resistance, some good do I pretty see see demand. So

Richard Dearnley

guess inventories Good. a it should where outlook? are about would be be that safe they And given that

Walter Johnsen

Yes. [indiscernible].

Richard Dearnley

The inventory should 'XX reflecting is demand whatever in from be flat or here?

Walter Johnsen

That's Yes. exactly right.

Richard Dearnley

sales Yes. And mix, aid the was Paul, what Westcott? and first

Paul Driscoll

for X third It was for first in XX% aid. the and the quarter months

Richard Dearnley

last year's? And Right. you have do

Paul Driscoll

Last in quarter year approximately the year-to-date. XX% the and third was

Operator

The next from Sakai Chris comes of line question the Singular Research. with

Joichi Sakai

in the in products school Walter, office I U.S. the sales? what on a the drove and had decline question there

Walter Johnsen

and of the many year, that our the products because congestion difficulty it and China, customers getting overpurchased they During of did was Westcott of out past understandable. and port the of

had remember, we in of a the XXXX. war start may March So in Ukraine as you also

XXXX, But So unusual scrambling in that shipping. paid it, them. customers for they all disrupted We products expenses. our with course, were got for just and of

case had into In the going excess this knew they the of we back-to-school, year. product, and that

it that of there the So unexpected. years. But pretty some actual it -- prior a was But workout for it's not was inventory all underlying of the it year, they and demand booked us, a consistent new was wasn't was. with prior

Joichi Sakai

the there Israel as at then is Acme conflict all? And as Okay. concerned, far is exposed

Walter Johnsen

think and of benefit, the it even the volume, whole And of exposed additional this more aid got good In like I in the which for than we've a half making half business, then situation. areas pads and products. alcohol world not it very our -- business, news. very, of there. we and it's example, some is And wipes Med-Nap may sad is to hate XX% Those is think probably prep will first I But forth. so general, that. in get some is areas,

Joichi Sakai

that we the quarter How next Should margin or quarter -- the of same going it Okay. or of be your And in then think for X even gross improve about forward? XX.X%. should or more?

Walter Johnsen

but and improvements laying productivity had million. plan not been generating $X may is a we annually up, be -- to $X continue is productivity have is million now out now picked We

to in And year. at the be honestly only got keep So coming think productivity the I additional an improvements. we're we'll expanded we've but margin able not

quite So optimistic about I'm that.

Operator

question line is Capital Timothy Call Corporation. of next Our with from the Management

Timothy Call

hard Congratulations work on paying great off. quarter. All the a

mentioned, customers inventory you being accretive With like made, retailer corrections we the our forward? just expanding the the and easier acquisition should new sounds you sourcing it now looking relationships and completed, and with along growth expect all revenue strong

Walter Johnsen

as in well. expectation And now aid as and business know, a revenues, of than been you the is number the XX% That's fast, growing that's my years. total for first of our faster company

got its think to is I And in gaining which only continue. now lapping not fairly inventory reflected it's influence, but the going Westcott that saying performance, accurate we've so piece I'm corrections. And

productivity the reduction, line, a So direction. move improvements seeing you're the growth more be with in a Also margins bit on right. top there's I to to favorable And we mean, the go. continuing. perhaps little continuing debt should

positive. so that's And all

Timothy Call

So interest on expense should basis? year-over-year decline a

Walter Johnsen

it raising that's and million $XX on fixed And was know. reasons for less certainly but structure and that had have of as I our but think recall, debt debt don't we appropriate, I should, Yes, mortgages you keep it That, properties. impacted. may rates our they are and debt, those X.X% are

it. debt, our we're piece variable the we as So of dropping drop

So as of declined. we'll rate actually see percent a interest our

Timothy Call

the smart those X do ask paying next for a all will work think hard of and the Board moves to with over Well, increase you months? management your off, dividend X

Walter Johnsen

that flow and just the should based And and we've seeing flow earnings, what cash at look consider. on generated that's generally I the cash projections. I'm on something we think We

Timothy Call

good and on expansion, again all the lower it's great growth, moves debt strong revenue see quarter, you made. and congratulations margin Well, a to

it's paying So off.

Walter Johnsen

Tim. Thank Thank you. is. you It

Operator

end I'll his reached for to call session. Johnsen the the [Operator turn We've over remarks. Instructions] Mr. the of question-and-answer closing now

Walter Johnsen

you If is like there forward and to completed. you you. soon. Goodbye. then questions, us, for I'd call are updating joining further to no look this we thank Thank

Operator

conclude today's will This conference.

participation. disconnect at thank your may We time. for your You lines you this

Acme United (ACU) 23 Oct 232023 Q3 Earnings call transcript