Acme United(US:ACU)2025-11-06 21:00Financial Performance - Net sales for Q3 2025 reached $49,063,000, a 1.9% increase from $48,166,000 in Q3 2024[12] - Gross profit for the nine months ended September 30, 2025, was $59,262,000, compared to $58,587,000 for the same period in 2024, reflecting a year-over-year increase of 1.2%[12] - Operating income for Q3 2025 was $3,007,000, up from $2,926,000 in Q3 2024, indicating a growth of 2.8%[12] - Net income for Q3 2025 was $1,903,000, a decrease of 14.5% compared to $2,226,000 in Q3 2024[12] - Basic earnings per share for Q3 2025 were $0.50, down from $0.60 in Q3 2024, representing a decline of 16.7%[12] - For the nine months ended September 30, 2025, net income was $8,308, compared to $8,315 for the same period in 2024, reflecting a slight decrease of 0.08%[21] - Total net sales for the nine months ended September 30, 2025, reached $149,018, an increase of 0.32% from $148,547 in the same period of 2024[36] Assets and Liabilities - Total assets increased to $173,042,000 as of September 30, 2025, compared to $162,171,000 at the end of 2024, marking a growth of 6.3%[9] - Total stockholders' equity rose to $115,764,000 as of September 30, 2025, up from $106,980,000 at the end of 2024, reflecting an increase of 8.3%[10] - Current liabilities decreased to $22,087,000 as of September 30, 2025, down from $22,872,000 at the end of 2024, a reduction of 3.4%[10] - The company’s retained earnings increased to $101,025 as of September 30, 2025, from $94,498 at the end of 2024, reflecting an increase of 6.4%[18] - As of September 30, 2025, the Company had outstanding borrowings under the Loan Agreement with HSBC of $18,271,000, an increase from $17,641,000 as of December 31, 2024[39] - The Company's long-term mortgage payable decreased to $9,556,000 as of September 30, 2025, from $9,868,000 as of December 31, 2024[40] Cash Flow and Investments - Cash provided by operating activities for the nine months ended September 30, 2025, was $10,079, significantly higher than $5,604 in 2024, marking an increase of 79.5%[21] - The company reported a total of $9,753 in cash used for investing activities for the nine months ended September 30, 2025, compared to $12,343 in 2024, indicating a decrease of 21.0%[21] - The company’s cash and cash equivalents at the end of the period were $5,146, down from $5,702 at the end of September 2024, representing a decrease of 9.7%[21] - Total adjustments to reconcile net income to net cash provided by operating activities amounted to $1,771 for the nine months ended September 30, 2025, compared to a negative adjustment of $2,711 in 2024[21] Segment Performance - First Aid and Medical segment sales for the nine months ended September 30, 2025, totaled $99,122, up from $91,503 in 2024, reflecting an increase of 8.3%[36] - Cutting and Sharpening segment sales for the nine months ended September 30, 2025, were $49,896, a decrease of 12.5% from $57,044 in 2024[36] - Segment operating income for the United States segment was $2,776,000 for the three months ended September 30, 2025, compared to $2,809,000 for the same period in 2024[44] Expenses and Taxation - Selling, general and administrative expenses for the three months ended September 30, 2025 were $16,188,000, or 33.0% of net sales, an increase from $15,638,000 (32.5% of net sales) in the same period in 2024[70] - Interest expense, net for the three months ended September 30, 2025 was $422,000, a decrease of $113,000 from $535,000 in the same period of 2024[75] - The effective income tax rate for the three months ended September 30, 2025 was 22%, compared to 8% in the same period of 2024[77] Operational Metrics - The average number of days sales outstanding in accounts receivable was 51 days at September 30, 2025, down from 54 days at December 31, 2024[78] - As of September 30, 2025, the company's working capital was $76,619,000, an increase from $72,588,000 on December 31, 2024[79] - The current ratio improved to 4.47 from 4.17, indicating better short-term financial health[79] - The long-term debt to equity ratio decreased to 24.0% from 25.7%, reflecting a reduction in leverage[79] Acquisitions and Financing - The company acquired a manufacturing and distribution center in Mt. Pleasant, TN for approximately $6.0 million, with plans for expansion[81] - The company financed its manufacturing facilities with a fixed-rate mortgage at 3.8%, with approximately $10.1 million outstanding as of September 30, 2025[82] - The acquisition of Elite First Aid, Inc. for approximately $7.1 million included contingent payments based on revenue milestones[83] Risk Management and Compliance - The company is actively diversifying its supply chain to mitigate risks from tariffs and geopolitical tensions, particularly those affecting imports from China[84][85] - Cash generated from operating activities and available funds under the revolving loan agreement are expected to be sufficient to finance operations over the next twelve months[88] - The company identified a material weakness in its internal controls, which is expected to be remediated by December 31, 2025[90][92]