ACU - Earnings call transcript Q2 2024 | Acme United Corporation

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Operator

Good day, and welcome to the Acme United Corporation's Q2 2024 earnings. 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 Second Quarter 2024 Earnings Conference Call for Acme United Corporation. C. Walter am I CEO. and Chairman Johnsen, With me will Financial who our Paul read our 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 In experience we may in addition, experienced these we supply disruptions, the have disruptions future.

and filings in our We as uncertainties are earnings also with Securities and Commission described periodic subject our Exchange current and release. risks additional the in to

Walter Johnsen

good Paul. XXXX. Acme United you, Thank in had of quarter the second performance

million, XX% X% increased and Our Income to sales $XX.X increased Net million. $X.X to

share to XX%. per $X.XX of earnings compared increase the $X.XX second of an were Our quarter XXXX, in

net sales increased the quarter of impact product company's and the in fishing the hunting without lines. second X% The

million. sold As November in revenues company for was remember, in core $XX XXXX acquisitions about our million down you XXXX, proceeds businesses. and for to this may in to the position the business had We $XX.X pay and used in debt growth and

industrial and States, share expanded in gains of broadened United kits at growth segment, In the our X% drugstore a new second base chain cleaners. to products the new and large and alcohol first for offerings product successful in Med-Nap to customer quarter was product market wipes shipped organic a we Our aid lens XXXX our distributor, the of due the large introductions.

and to the Westcott channel, market large in mass a Market tools new to of cutting the share of back-to-school craft products good sales. gains retailer. Sales craft shipments due increased

major to mass kitchen United the market rollout to States. from Our a retailer a continued sharpeners DMT product knife large in of benefit line

activities, Aid customers multinational successful continued and Our from in web and retailers in cross-selling of Canada Westcott through its of and school the First has products. distributors office our U.S. business Central product placement to grow the

acquisition Hawktree from expand first has and floods line its and in the address product aid September in to helped completed XXXX, Canada that fires, our exceeding performance The we injuries earthquakes, expectations. is

This Canada, which a modern quarter, physical near in square we XX,XXX foot into our moved footprint new Montreal. facility is

obstructions, our to first late save and In contain aid Aid step items capabilities $X.X we line kits, trauma. be further introduced lives. will and across produces airway in our product responder Elite May XXXX, Elite a to customer to which acquired First The bleeding, represents base serious million. first treat entire

new to unitized filling to quarter. warehouse pads and boxes plan products. have are the for aid improve We in to management some equipment third to install and new Med-Nap We prep software and first continued of invest at our fill reduce installed automate the to to productivity equipment using We've lens now ship operations. in and kits wipes cost of to robotics pick

it XXX,XXX in When picking of the efficiencies. to our in This foot in by racking Carolina. square Rocky the orders. high-density new installing currently first is Mountains, improve ] [ efficiency is by are capacity North completed, and XX% We step wire pick facility about increase expected further

organic growth. the to XXXX, look we we remainder As of continued see

year. optimistic actively are evaluating acquisitions about and the We are

to turn now will the Paul. I call

Paul Driscoll

the in to X%. $XX.X sales second quarter an million million XXXX, for Acme's increase net of compared were $XX.X

XX, Sales $XXX.X an in $XX.X months and period fishing quarter Cuda X%. hunting XXXX Camillus sold same million ended to X for XXXX million November XXXX, XXXX, were the and of product impact X, June in line of on second sales X%. the for the Excluding the increase increased compared of the

X%. increased sales Cuda, and Camillus of impact the Excluding

sharpeners. excluding sales, gains the craft the with and and segment Aid, First second market DMT to Camillus Westcott in share products XX% U.S. quarter increased Cuda due in Net

of X% Excluding X% currency Cuda the Camillus months to office in X% The the mainly increased was and Europe, in both sales for XX. in market Net X quarter Canada excluding mainly the in products. year-to-date, and due sales, X% in sales, the currency share X% for and sales due Net a office for for Cuda, channel. increased decline the quarter Camillus June periods and in the months local for June local for Cuda school X gains sales increase and ended Camillus excluding XX. to and decreased ended

second XX.X%, for the both compared in XX.X% improvements to for months manufacturing gross The XX.X% first of X to in compared was distribution XXXX. facilities. to XXXX. periods margin in The gross margin XX.X% due the productivity mainly quarter of was higher XXXX our and was in The gross margin XXXX

the million $XX.X for of was or with of for first XXXX expenses SG&A second of the the $XX were same of or million $XX.X for expenses XXXX. of compared sales X or in XX% of XX% sales period sales million quarter SG&A sales $XX XX% million or months with XXXX of compared XX% XXXX.

approximately the Interest in of to million. XXXX quarter $XXX,XXX was the compared second was The to quarter average debt XXXX. $XXX,XXX lower second expense due $XX decrease of of for

diluted or year, for June share. $X.X Net or net the compared $X.XX XX%. of of in XXXX, XX% ended increases X million for compared $X.X the was in share of $X.XX or XX% income first income in to XXXX million $X.XX XX% earnings per period and Net per increase quarter per or period income share an $X.X $X.X million diluted and $X.XX share months XXXX per for per last diluted of income share XX, a second same the comparable net to the diluted was of million

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

in free we million, cash million of $X.X First paid flow. Elite assets XX-month $X.X for and the period, dividends During in purchased generated Aid million the $X.X

product to reduce from used $XX the Additionally, of debt. the and net Cuda was Camillus the million proceeds lines of sale

Walter Johnsen

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

Operator

Instructions] from the line [Operator question first Our with Tim Call Capital Corporation. comes of Management

Timothy Call

XX%. than future slower it's years, sales? around up Do faster growing than grow or in X% sales, is a will SG&A think little SG&A you bit

Walter Johnsen

Well, the I bonuses XX. year, And of some good don't is because should to sales. performing that well. probably the the been team be see because why that we I increased for in accrued may It understanding SG&A you'll declining a have with general, have I think But think

Paul Driscoll

bit Yes, below see little it you'll probably XX%. a

and is some in Some just of relative SG&A timing not that in but it sales. much we're of investments cost grow IT, going to to living, differences

Timothy Call

outs you'll and share ahead some think you in option lower fully diluted years the facilitate Do employee the count? cash stock

Walter Johnsen

intent. Cuda think That's the cash sheet that our the Tim. Camillus, of from course, from that essentially business. Yes, sale of balance much company stronger And the the and and had I flow because has a it's

time be We will cashed out. them comes be to buying it of when for those options some

Timothy Call

goods history of acquisitions, pick for You you sales will acquisitions. And great them cross-selling be Do First you'll the of nice. new for, sell you'll think to a products? there trailing able of out of have looks $X.X accretive $X.X and be tuck-in your pretty annual up million existing initial to their lot opportunity cash least, from million clients nice a Aid at where

Walter Johnsen

Tim. [indiscernible]

deal be first The measures. Medics accident. trauma perceptive taking very And kits a they life kits. a the with serious ones high-performance are aid to They're Elite question. that's saving think would I that

in for the line. the not cuts It's and a our to that we lives. bleeding, First it's our when because scrapes. for save it's a Aid products conference those we trauma, for bruises Elite and It's is great very base, has product obstructions, was a airway that So and it for for expand reputation. And well-established hope product through call I serious and that family hole reason intend And said it in distribution happens.

acquired try channels. the we we when and have something. So very And in to and product we really it's case, distribution many a similar line to hole this the we leverage it, does do, in acquisitions it of our

about I'm So excited it.

to that can and for we're plenty Med-Nap are there our and Magic of vertically buy Regarding components pretty components away And And half the And deals, companies constantly simple. within I looking the integrate like Buy at strategy them. that opportunities are looking. just base. companies kinds Spill buy tell in or step and you we're similar the for competitors other of those. is use making customer

Timothy Call

have We long-term tremendous have organic margin expansion. from set you it sales And a profit the sounds growth, you've like and Congratulations acquisitions, and again... for growth up growth company potential.

Walter Johnsen

the There's be to quarter always have expenses the become, more and of that from [indiscernible] in -- when container honest, getting There's coming course, Well, yes. the sometimes should don't down and they up organic have larger demonstrated comparison we And some growth Cuda to economy. do, growth be and that the the get placed. go don't apparent then, go the Camillus. costs they you're it -- But in with we we takes expect. they when that and To time the you meaningful. should you But horizon. this start the quarters acquisitions things products hope, there's

Operator

of the Our next Partners. line Jeffrey Matthews question comes Ram from with

Jeffrey Matthews

few. I Number upfront. have a from one, Paul's disclaimer

Or just continued could supply pro high chain still Were do And disruptions. still happen? seeing mentioned inflation disruptions? supply these are You you inflation? chain forma high those and see you

Walter Johnsen

forecast we'll of we they're the can't have there little for up disclaimer year, In and serious costs, beginning it But that's complete. gone general, the continuing. happened, in Well, because appears our increased bit. but prices. the neither again, that With it's increases team, them you to are be starting and -- to is although container decrease they with inflation, wanted salary of they're they've a container issues, now and clearly since

Jeffrey Matthews

about? XX of Canadian did in did a one come more real the And -- they how come Sure. -- was about? were ] where trouble. the How I Chapter one know this were acquisition [ they Elite

Walter Johnsen

So this to that And years. regularly us. been we've companies XX interesting for are we contact doing

are of companies So pretty large as a investment know, we've the market. may of database most in you And our we bankers contacted. that are transactions because self-generated without constantly there's

talked of XXXX. the that CEO me in first we reminded Elite, the was the in And case time

lot happened. they So them a sense end And regular had big to weren't made mind again talked and and at of enough pay communications, for price, contacts last I so the grew. know in our just And and -- the everybody, it did we they year. We of a in then for price we to it. exactly us what they

Jeffrey Matthews

on? is you yourself? they have to And do this something reengineer stay Or

Walter Johnsen

and supply role in know is are very people good Yes. on, terrific his staying both And the to who really son a lines have and the going role product them The base. is and of very, important company. an very founder our

them. with working fun it's So

Jeffrey Matthews

the been which Great. that's had acquisition, have the bought getting pretty then to messy main sounds That's it to to you've it there? Canadian was when things like great. get And do flip you speed. on up side, the it, What

Walter Johnsen

for $X.X that it know, of those we solutions XXXX. we Hawktree million. administration -- It $X So don't million of inventory bought for bought was purchased an and September in

So we the at and inventory bought with discount. it of all and, came the intellectual the license Canadian the a for customer Red the property. base Cross course, and that And

situation got out to get when have downside, there's So upside. your that, is and warehouse to work but upside, it of get limited the you a own. product you wherever have you've And lot of the in like a into a first,

got aligned. numbers product's You've your to get properly

customers not service. the we service for the was and and reason a You've reassure customer got bankruptcy, because good excellent in have good to

of the bankruptcy, to issues is out the work families the through or even. then flowing again, inventory delivery you've got out in -- And lack a and go with product not the see that customers

have another and the they kit took that put kit not might whole were parts one into of one a the it's but you X/X to it. ship So because it kit, in

a so to get lot there And was of right. it rework

Okay.

good building a are business. the bought we Aid lot that, and excellent product off we're with the them family. the got We've from now we've right that's very got the Central Acme the at cases, And price. cases, First them were Canadian United and with a is but you we've relationship and And an in supporting work, them new So company base, Canadian new bought products Red overlapped got customers, potential of Where and with other you and shipping a product they line. some our in customer Cross.

we're -- in So side after as it's X terrific. of back lot on we're and was it now, months a right of And acquisition. the looking work the momentum, the on it,

Jeffrey Matthews

your of management had that Cuda as mirror, that, Great. And I to as things distracting have has rearview sale X The -- far now more. that's time? the are less on Camillus, any those impact operating that selling product and other business the in lines

Walter Johnsen

with product The use the hunting I I people have I'm and was in now them. And that products, put probably focused, that that. and hands And to Cuda million, it. force have to distracting fishing on you the were to real really fishing of when use they really I $XX out family, able and because there Cuda leverage GSM base And we that fun distribution working a a and had would didn't taken core amount we in Camillus but hunting it disproportionate do Camillus We to time business like was proud we're it's we're time, into be platform because the business. and able it, say much flat pretty for we weren't like and the about we the area. and does. way we of and a becoming And management the talk on spent more sure, And fun. businesses, the

So yes, although think for product acquisition them. did an focus was it family. miss I I excellent the it And us,

Jeffrey Matthews

testing dock, $XX remember the wasn't that I that year Paul, sure Is XX% I a of And million more. something product or used think number SG&A. of something? what the on regarding I Walter. XX Two said meant. the

Walter Johnsen

number that. didn't I that said? hear was Paul, the what you

Paul Driscoll

million Yes, $XX said definitely have -- million I say or didn't and or I $XX XX% wouldn't XX, XX%. I

Jeffrey Matthews

okay. XX,

Paul Driscoll

Definitely not XX.

Jeffrey Matthews

annualized And Okay. an of that or is [indiscernible]? kind idea

Paul Driscoll

year-to-date. a No, That's number. that's a X-month

Jeffrey Matthews

it. Got

Okay.

Is shifting remember, China to when what production think margin? here is the I margin was going is you and we were manufacturing So XX%. gross the quarter. back to a -- margins in Walter, target? in cost the that Or for I of day, recall up to of I'm plateau going figure getting kind are what out down. you of XX% trying always gross do out, gross XX%

Walter Johnsen

gross continue margins aid, conservative model Well margins. I we to that. margin. fastest-growing But of higher gross tend to be the on tend more the refills business. have the increasing higher sell the substantially have us -- products let's And as first they wouldn't the that's And and part

So margin XX%. anywhere natural wouldn't model there time. tendency will be increase a gross near but the I over to

Operator

questions to for floor are back this Johnsen the would time. to you. at Thank There no comments. I turn over closing like further Mr.

Walter Johnsen

very updating call third you joining forward good Thank you again for this there in the complete. If are no Have further look quarter. much to is us. day. a questions, I

Operator

teleconference. today's concludes This

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

Acme United (ACU) 19 Jul 242024 Q2 Earnings call transcript