Acme United Corporation (ACU) has reported a 25.23 percent rise in profit for the quarter ended Dec. 31, 2016. The company has earned $0.55 million, or $0.15 a share in the quarter, compared with $0.44 million, or $0.12 a share for the same period last year.
Revenue during the quarter grew 14.09 percent to $26.38 million from $23.12 million in the previous year period. Gross margin for the quarter expanded 144 basis points over the previous year period to 37.20 percent. Total expenses were 97.32 percent of quarterly revenues, up from 97.17 percent for the same period last year. That has resulted in a contraction of 15 basis points in operating margin to 2.68 percent.
Operating income for the quarter was $0.71 million, compared with $0.66 million in the previous year period.
Chairman and chief executive officer Walter C. Johnsen said, "Our team delivered strong results in 2016, and I am very proud of all of their efforts. In particular, we achieved strong growth in Wescott cutting tools. The Company generated strength in revenues in the First Aid business with improved margins. We increased market shares for both our Cuda fishing tools and Camillus hunting knives. The DMT sharpening business which we acquired in February 2016 exceeded our expectations, while our Canadian and European businesses delivered strong performances." Mr. Johnsen added, "We are entering 2017 with confidence. Our core businesses are doing well and growing. We acquired Spill Magic this month, which provides world-class fluid absorbent solutions for safety, and look forward to building its sales and earnings. For 2017, we are providing guidance of approximately $137 million in sales and net income of $6.7 million."
Working capital increases
Acme United Corporation has recorded an increase in the working capital over the last year. It stood at $52.64 million as at Dec. 31, 2016, up 10.37 percent or $4.95 million from $47.70 million on Dec. 31, 2015. Current ratio was at 5.11 as on Dec. 31, 2016, up from 5 on Dec. 31, 2015.
Debt increases substantially
Acme United Corporation has witnessed an increase in total debt over the last one year. It stood at $32.94 million as on Dec. 31, 2016, up 27.10 percent or $7.02 million from $25.91 million on Dec. 31, 2015. Acme United Corporation has witnessed an increase in long-term debt over the last one year. It stood at $32.94 million as on Dec. 31, 2016, up 27.10 percent or $7.02 million from $25.91 million on Dec. 31, 2015. Total debt was 35.77 percent of total assets as on Dec. 31, 2016, compared with 31.83 percent on Dec. 31, 2015. Debt to equity ratio was at 0.71 as on Dec. 31, 2016, up from 0.60 as on Dec. 31, 2015. Interest coverage ratio deteriorated to 3.11 for the quarter from 4.46 for the same period last year.
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