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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-Q
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|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2004
OR
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______ to ______
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Commission file number Q4823
ACME UNITED CORPORATION
(Exact name of registrant as specified in its charter)
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CONNECTICUT 06-0236700
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(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
1931 BLACK ROCK TURNPIKE, Fairfield, Connecticut 06825
- ------------------------------------------------ -----
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (203) 332-7330
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days. Yes |X| No |_|
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act). Yes |_| No |X|
Registrant had 3,394,721 shares outstanding as of July 28, 2004 of its $2.50 par
value Common Stock.
(1)
ACME UNITED CORPORATION
Page
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Part I -- FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets.................... 3
Condensed Consolidated Statements of Operations
and Comprehensive Income.............................. 5
Condensed Consolidated Statements of Cash Flows.......... 6
Notes to Condensed Consolidated Financial Statements..... 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations................... 10
Item 3. Quantitative and Qualitative Disclosure About Market Risk.. 13
Item 4. Controls and Procedures.................................... 13
Part II -- OTHER INFORMATION
Item 1. Legal Proceedings.......................................... 14
Item 2. Changes in Securities...................................... 14
Item 3. Defaults Upon Senior Securities............................ 14
Item 4. Submission of Matters to a Vote of Security Holders........ 14
Item 5. Other Information.......................................... 14
Item 6. Exhibits and Reports on Form 8-K........................... 14
Signatures......................................................... 16
(2)
ACME UNITED CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(all amounts in thousands, except per share data)
June 30 December 31
2004 2003
(unaudited) (audited)
------------ ------------
ASSETS
Current assets:
Cash and cash equivalents $ 804 $ 1,391
Accounts receivable, less allowance 11,869 7,075
Inventories:
Finished goods 7,536 7,252
Work in process 64 120
Raw materials and supplies 659 807
------------ ------------
8,259 8,179
Prepaid expenses and other current assets 505 260
Deferred income taxes 266 286
------------ ------------
Total current assets 21,703 17,191
------------ ------------
Property, plant and equipment:
Land 228 235
Buildings 2,630 2,644
Machinery and equipment 5,599 5,772
------------ ------------
8,457 8,651
Less accumulated depreciation 6,232 6,266
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2,225 2,385
Other assets 592 358
Goodwill 89 89
------------ ------------
Total assets $ 24,609 $ 20,023
============ ============
See notes to condensed consolidated financial statements.
(3)
ACME UNITED CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS - continued
(all amounts in thousands, except per share data)
June 30 December 31
2004 2003
(unaudited) (audited)
------------ ------------
LIABILITIES
Current liabilities:
Notes payable $ 392 $ 141
Accounts payable 2,203 1,743
Other accrued liabilities 4,358 2,494
Current portion of long-term debt 2,481 2,035
------------ ------------
Total current liabilities 9,434 6,413
Deferred income taxes 156 156
Long-term debt, less current portion 2,533 2,752
Other 653 524
------------ ------------
Total liabilities 12,776 9,845
STOCKHOLDERS' EQUITY
Common stock, par value $2.50:
authorized 8,000,000 shares;
issued 3,828,812 shares,
including treasury stock 9,572 9,132
Treasury stock, at cost - 434,091 shares
in 2004 and 387,261 shares in 2003 (1,857) (1,622)
Additional paid-in capital 2,214 2,029
Retained earnings 3,406 2,010
Accumulated other comprehensive loss:
Translation adjustment (811) (680)
Minimum pension liability (691) (691)
------------ ------------
(1,502) (1,371)
------------ ------------
Total stockholders' equity 11,833 10,178
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Total liabilities and stockholders' equity $ 24,609 $ 20,023
============ ============
See notes to condensed consolidated financial statements.
(4)
ACME UNITED CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME
(UNAUDITED)
(all amounts in thousands, except per share amounts)
Three Months Ended Six Months Ended
June 30 June 30
------------------------- --------------------------
2004 2003 2004 2003
------------ ----------- ------------- -----------
Net sales $ 12,298 $ 10,142 $ 20,865 $ 17,331
Costs and expenses:
Cost of goods sold 6,779 6,221 11,626 10,528
Selling, general and administrative expenses 3,579 2,906 6,550 5,206
------------ ----------- ------------- -----------
10,358 9,127 18,176 15,734
------------ ----------- ------------- -----------
Income before non-operating items 1,940 1,015 2,689 1,597
Non-operating items:
Interest expense 40 72 85 152
Other (income) expense 80 (15) 74 135
------------ ----------- ------------- -----------
120 57 159 287
------------ ----------- ------------- -----------
Income before income taxes 1,820 958 2,530 1,310
Income tax expense 745 343 1,062 617
------------ ----------- ------------- -----------
Net income 1,075 615 1,468 693
Other comprehensive (expense) income -
Foreign currency translation (73) 315 (130) 549
Change in fair value of derivative financial instrument
less deferred income taxes of $9 in 2003 - - - 17
------------ ----------- ------------- -----------
Comprehensive income $ 1,002 $ 930 $ 1,338 $ 1,259
============ =========== ============= ===========
Basic earnings per share $ 0.32 $ 0.18 $ 0.44 $ 0.21
============ =========== ============= ===========
Diluted earnings per share $ 0.29 $ 0.17 $ 0.40 $ 0.20
============ =========== ============= ===========
Weighted average number of common shares outstanding-
denominator used for basic per share computations 3,368 3,336 3,334 3,341
Weighted average number of dilutive stock options
outstanding 354 184 311 137
------------ ----------- ------------- -----------
Denominator used for diluted per share computations 3,722 3,520 3,645 3,478
============ =========== ============= ===========
Dividends declared per share 0.02 0.00 0.02 0.00
============ =========== ============= ===========
See notes to condensed consolidated financial statements
(5)
ACME UNITED CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
(all amounts in thousands)
Six Months Ended
June 30
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2004 2003
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Operating Activities:
Net income $ 1,468 $ 693
Adjustments to reconcile net income
to net cash provided (used) by operating activities:
Depreciation 229 204
Amortization 10 13
Deferred income taxes 20 614
Loss (gain) on disposal/sale of assets 42 (49)
Changes in operating assets and liabilities:
Accounts receivable (4,702) (2,720)
Inventories (204) (793)
Prepaid expenses and other current assets (109) (77)
Other assets 28 (87)
Accounts payable 423 1,165
Other accrued liabilities 1,421 109
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Total adjustments (2,842) (1,621)
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Net cash used by operating activities (1,374) (928)
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Investing Activities:
Purchase of property, plant, and equipment (190) (131)
Proceeds from sale of property, plant, and equipment 31 50
Purchase of patents and trademarks (14) (54)
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Net cash used by investing activities (173) (135)
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Financing Activities:
Net short-term borrowings 702 1,108
Payments of long-term debt (225) (149)
Proceeds from issuance of common stock 625 -
Purchase of 46,830 shares of common stock in 2004 and
10,000 shares of common stock in 2003 for treasury (235) (298)
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Net cash provided by financing activities 867 661
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Effect of exchange rate changes 93 57
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Net change in cash and cash equivalents (587) (345)
Cash and cash equivalents at beginning of period 1,391 597
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Cash and cash equivalents at end of period $ 804 $ 252
============== ==============
See notes to condensed consolidated financial statements
(6)
Notes to CONDENSED CONSOLIDATED Financial Statements
(UNAUDITED)
Note 1 -- Basis of Presentation
In the opinion of management, the accompanying condensed consolidated financial
statements include all adjustments necessary to present fairly the financial
position, results of operations and cash flows. These adjustments are of a
normal, recurring nature. However, the financial statements do not include all
of the disclosures normally required by accounting principles generally accepted
in the United States of America or those normally made in the Company's annual
report on Form 10-K. Please refer to the Company's annual report on Form 10-K
for the year ended December 31, 2003 for such disclosures. The condensed
consolidated balance sheet as of December 31, 2003 was derived from the audited
consolidated balance sheet as of that date. The results of operations for
interim periods are not necessarily indicative of the results to be expected for
the full year.
Note 2 -- Contingencies
The Company has been involved in certain environmental and other matters.
Additionally, the Company is involved in a legal action that is still in its
preliminary stage. Based on information available, the Company believes that
there will not be a material adverse impact on financial position, results of
operations, or liquidity from these matters.
Note 3 -- Pension
Components of net periodic pension cost are as follows for the periods ended:
Three Months Ended Six Months Ended
----------------------------- ------------------------------
June 30 June 30 June 30 June 30
2004 2003 2004 2003
------------- ------------- ------------- --------------
Components of net periodic benefit cost:
Interest cost $ 49,727 $ 55,316 $ 99,453 $ 110,633
Service cost 8,750 8,750 17,500 17,500
Expected return on plan assets (64,281) (61,531) (128,563) (123,062)
Amortization of prior service costs 2,194 2,194 4,388 4,388
Amortization of actuarial gain 12,399 20,172 24,797 40,344
- ------------------------------------------------------------------------------------------------------------
$ 8,789 $ 24,901 $ 17,575 $ 49,803
============================================================================================================
The Company previously disclosed in its financial statements for
the year ended December 31, 2003 that it expected to contribute $29,000 to its
pension plan. As of June 30, 2004, no contributions have been made. The Company
has recalculated the expected contribution and determined that contributions to
its pension plan in 2004 are not required. Therefore, the Company does not
intend to contribute to the pension plan in 2004.
Note 4 -- Accounting for Stock-Based Compensation
At June 30, 2004, the Company has one stock-based employee compensation plan.
The Company has elected to adopt the disclosure only provisions of Statement of
Financial Accounting Standards No. 123, Accounting for Stock-Based Compensation,
and continues to measure costs for its employee stock compensation plans by
using the accounting methods prescribed by APB Opinion No. 25, Accounting for
Stock Issued to Employees, which allows that no compensation cost be recognized
unless the exercise price of the options granted is less than the fair market
value of the Company's stock at date of grant. Generally, no stock-based
employee compensation cost is reflected in net income, as all options granted
had an exercise price equal to the market value of the underlying common stock
on the date of grant. See Note 7 for shares exercised in 2004.
(7)
The following table illustrates the proforma effect on net income and earnings
per share as if the Company had applied the fair value method under SFAS No.
123, Accounting for Stock Based Compensation, to stock-based employee
compensation for the periods ended:
Three Months Ended Six Months Ended
June 30 June 30
-------------------------------- -------------------------------
2004 2003 2004 2003
--------------- --------------- --------------- ---------------
Net income, as reported $ 1,074,551 $ 614,998 $ 1,467,618 $ 692,832
Deduct: Total stock-based employee
compensation expense determined under
fair value based method for all awards,
net of related income tax effects 18,521 35,477 38,826 50 770
- --------------------------------------------------------------------------------- -------------------------------
Pro forma net income $ 1,056,030 $ 579,521 $ 1,428,792 $ 642,062
================================================================================= ===============================
Basic-as reported $ 0.32 $ 0.18 $ 0.44 $ 0.21
Basic-pro forma $ 0.31 $ 0.17 $ 0.43 $ 0.19
Diluted-as reported $ 0.29 $ 0.17 $ 0.40 $ 0.20
Diluted-pro forma $ 0.28 $ 0.16 $ 0.39 $ 0.18
Note 5 -- Litigation Settlement
As a result of significant developments in the first quarter of 2003 the
Company's German subsidiary settled litigation for $175,000. This amount
exceeded previous accruals by $153,000 and was charged to other expense.
Note 6 -- Income Taxes
In 2004 and 2003, consolidated income before income taxes includes losses of
foreign subsidiaries with no income tax benefit, resulting in an effective
consolidated income tax rate greater than the United States statutory rate.
Note 7 -- Capital Structure
During the first six months of 2004, the Company issued 176,000 shares of common
stock with proceeds of $625,060 upon the exercise of outstanding stock options.
The company also repurchased 46,830 shares of common stock for treasury. The
shares were purchased at fair market value, with a total cost to the Company of
$235,598. During the first quarter, an additional $31,225 of compensation
expense was charged to operating results as a result of the repurchase of 16,000
shares by the Company within six months of the original option exercise.
Note 8 -- Business Combination
On May 28, 2004, the Company purchased Clauss Cutlery, a division of Alco
Industries, Inc.. The scissor and cutting business at Clauss is expected to
generate approximately $2.0 million in annual revenues. The purchase price was
the aggregate value of inventory, trademarks and brand names totaling $446,754.
Included in the purchase price is a stand-by letter of credit the Company issued
in the amount of $230,000 for a trademark from Alco Industries, Inc. that was
renewed by the U.S. Patent and Trademark Office on July 13, 2004. The letter of
credit was set-up to expire on May 28, 2005, if the trademark was not renewed.
Since the trademark was renewed prior to the expiration date, Alco Industries,
Inc. will enforce the letter of credit and drawdown the funds. The letter of
credit liability was recorded in other current liabilities as of June 30, 2004.
Included in the accompanying Statement of Operations are the operations of the
acquired business, which resumed on June 1, 2004. In accordance with Regulation
S-X, proforma information is not provided because of the immateriality of the
transaction.
(8)
Note 9 -- Abandonment of Equipment
During the second quarter of 2004, the Company abandoned its ruler manufacturing
equipment. In accordance with FASB 144, Accounting for the Impairment or
Disposal of Long-Lived Assets, the Company recorded an impairment loss of
$84,820, or $0.02 a share, for the full amount of the assets at the time of
abandonment.
(9)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
For the Three and Six Months Ended June 30, 2004
Results of Operations
Net Sales
Traditionally, the Company's sales are stronger in the second and third
quarters, and weaker in the first and fourth quarters of the fiscal year due to
the seasonal nature of the business specific to the back-to-school season.
Consolidated net sales for the quarter ended June 30, 2004 were $12,298,000
compared with $10,142,000 for 2003, a 21% increase. Net sales for the first six
months of 2004 were $20,865,000 compared with $17,331,000 for 2004, a 20%
increase. Excluding the favorable effect of currency gains in Canada and Europe,
net sales for the first six months increased 18%. The sales increase was mainly
driven by an 18% increase in the U.S. due to market share gains and new product
launches. Europe and Canada sales were up 9% in local currency. The new business
in Hong Kong generated $437,000 in the first six months of 2004.
Gross Profit
The gross profit for the second quarter of 2004 was $5,519,000 (44.9% of net
sales) compared to $3,921,000 (38.7% of net sales) for the second quarter of
2003. Gross profit for the first six months of 2004 was 44.3% of net sales
compared to 39.3% in the same period of 2003. The introduction of new products
coupled with positive impacts from product rationalization efforts in Europe
were the main reasons for the improved gross margins.
Selling, General and Administrative Expenses
Selling, general and administrative ("SG&A") expenses for the second quarter of
2004 were $3,579,000 (29% of net sales) compared with $2,906,000 (29% of net
sales) for the same period of 2003, an increase of $673,000. SG&A expenses were
31% of net sales for the first six months of 2004 versus 30% in the comparable
period of 2003. The majority of the increase in SG&A expenses in 2004 was
selling related expenses, the new sourcing and quality control office in Hong
Kong and the addition of sales and marketing personnel in North America and
Europe.
Interest Expense
Interest expense for the first six months of 2004 was $85,000, compared with
$152,000 for 2003, a $67,000 decrease. This is mainly attributable to the
decline in debt.
Other Expense
Net other expense was $74,000 in the first six months of 2004 compared to
$135,000 in the first six months of 2003. The change from 2003 primarily relates
to the settlement of a $175,000 lawsuit in Germany in March of 2003 partially
offset by the write-off of obsolete equipment in the second quarter of 2004.
Income Before Income Taxes
Income before income taxes was $1,820,000 in the second quarter of 2004 compared
with $958,000 in the second quarter of 2003, an increase of $862,000. Income
before income taxes was $2,530,000 for the first six months of 2004 compared
with $1,310,000 in the first six months of 2003, an improvement of $1,220,000.
Pretax income for North America and Asia increased by approximately $1.2
million. Despite a 15% increase in sales, the European operations had a slightly
higher loss (exclusive of the one time expense of $175,000) in the first six
months of 2004 compared to 2003. Increased investment in sales and marketing
efforts resulted in higher costs.
(10)
Income Taxes
The effective tax rate in the first six months of 2004 was 42% compared to 47%
in 2003. The improvement is principally due to the lower losses in Europe, for
which the benefit cannot be utilized to offset earnings.
Net Income
Net income for the second quarter of 2004 was $1,075,000, or 29 cents per share
(diluted), compared to a net income of $615,000, or 17 cents per share (diluted)
for the same period of 2003. Net income for the first six months of 2004 was
$1,468,000, or 40 cents per share (diluted), compared to a net income of
$693,000, or 20 cents per share (diluted) for the same period of 2003.
(11)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS-Continued
For the Three and Six Months Ended June 30, 2004
Financial Condition
Liquidity and Capital Resources
The Company's working capital, current ratio and long-term debt to equity ratio
follow:
June 30, 2004 December 31, 2003
------------------ ------------------
Working capital....................... $12,499,000 $10,778,000
Current ratio......................... 2.36 to 1 2.68 to 1
Long-term debt to equity ratio........ 21.4% 27.0%
During the first six months of 2004, total debt increased by $478,000 compared
to total debt at December 31, 2003 principally as a result of net additional
short-term borrowings to fund inventory purchases in anticipation of next
quarter's seasonal sales volume and seasonal collection terms which are longer
during the second and third quarters.
The Company has a revolving loan agreement, which allows for borrowings up to a
maximum of $10,000,000 based on a formula, which applies specific percentages to
balances of accounts receivable and inventory. Interest is payable monthly and
is charged at the LIBOR rate plus 1.75 percent. As of June 30, 2004, $4,643,612
was outstanding and $5,356,388 was available for borrowing under this agreement.
Maturities of long-term debt follow: 2004 - $2,873,000, 2005 - $2,533,000. All
outstanding borrowings are due on July 31, 2005.
Cash expected to be generated from operating activities, together with funds
available under its existing loan agreement, are expected, under current
conditions, to be sufficient to finance the Company's planned operations over
the next twelve months. Over that same period, the Company does not expect to
make significant investments in property, plant, and equipment.
Safe Harbor for Forward-looking Statements
Forward-looking statements in this report, including without limitation,
statements related to the Company's plans, strategies, objectives, expectations,
intentions and adequacy of resources, are made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995. Investors
are cautioned that such forward-looking statements involve risks and
uncertainties, including without limitation the following: (i) the Company's
plans, strategies, objectives, expectations and intentions are subject to change
at any time at the discretion of the Company; (ii) the Company's plans and
results of operations will be affected by the Company's ability to manage its
growth and inventory; and (iii) other risks and uncertainties indicated from
time to time in the Company's filings with the Securities and Exchange
Commission.
(12)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS-Continued
For the Three and Six Months Ended June 30, 2004
Item 3. Quantitative and Qualitative Disclosure About Market Risk
There are no material changes in market risks since our most recent filing on
Form 10-K for the year ended December 31, 2003.
Item 4. Controls and Procedures
(a) Evaluation of Internal Controls and Procedures
As of June 30, 2004, our Chief Executive Officer and Chief Financial Officer
have reviewed and evaluated the effectiveness of our disclosure controls and
procedures, which included inquiries made to certain other of our employees.
Based on their evaluation, our Chief Executive Officer and Chief Financial
Officer have each concluded that our disclosure controls and procedures are
effective and sufficient to ensure that we record, process, summarize and report
information required to be disclosed by us in our periodic reports filed under
the Securities and Exchange Commission's rules and forms.
(b) Changes in Internal Controls
Subsequent to the date of their evaluation, there have not been any significant
changes in our internal controls or in other factors that could significantly
affect these controls, including any corrective action with regard to
significant deficiencies and material weaknesses.
(13)
PART II. OTHER INFORMATION
Item 1 -- Legal Proceedings
The Company has been involved in certain environmental and other matters.
Additionally, the Company is involved in a legal action that is still in
its preliminary stage. Based on information available, the Company believes
that there will not be a material adverse impact on financial position,
results of operations, or liquidity, from these matters.
Item 2 -- Changes in Securities
On July 23, 2003, the Company announced a stock repurchase program of
150,000 shares. The program does not have an expiration date. The following
table discloses the shares repurchased under the program for the quarter
ended June 30, 2004:
Total Number of Maximum
shares Number of
Purchased as Shares that can
Total Number of Part of Publicly be Purchased
Shares Average Price Announced Under the
Period Purchased Paid per Share Program Program
---------------------------------------------------------------------------------------------------------------
April 1 to April 30 1,700 5.8876 1,700 150,000
May 1 to May 31 29,130 6.0039 29,130 150,000
June 1 to June 30 - - - -
Item 3. --Defaults Upon Senior Securities
None
Item 4 -- Submission of Matters to a Vote of Security Holders
None
Item 5 -- Other Information
None.
Item 6 -- Exhibits and Reports on Form 8-K
(a) Documents filed as part of this report.
Exhibit 31.1 Certification of Walter C. Johnsen pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002
Exhibit 31.2 Certification of Paul G. Driscoll pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002
(14)
PART II. OTHER INFORMATION-Continued
Exhibit 32.1 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Exhibit 32.2 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(b) Reports on Form 8-K
A Form 8-K was filed by the Company on July 23, 2004.
(15)
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ACME UNITED CORPORATION
By /s/ WALTER C. JOHNSEN
------------------------------
Walter C. Johnsen
President and
Chief Executive Officer
Dated: July 28, 2004
By /s/ PAUL G. DRISCOLL
------------------------------
Paul G. Driscoll
Vice President and
Chief Financial Officer
Dated: July 28, 2004
(16)
Exhibit 31.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, WALTER C. JOHNSEN, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Acme United
Corporation;
2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in
this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant
and have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
quarterly report is being reported;
b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of June 30, 2004; and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on
our evaluation as of June 30, 2004;
5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the
audit committee of registrant's board of directors:
a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's
ability to record, process, summarize and report financial data
and have identified for the registrant's auditors any material
weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have significant role in the registrant's
internal controls; and
6. The registrant's other certifying officers and I have indicated in
this quarterly report whether there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent
evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
By /s/ WALTER C. JOHNSEN
------------------------------
Walter C. Johnsen
President and
Chief Executive Officer
Dated: July 28, 2004
(17)
Exhibit 31.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, PAUL G. DRISCOLL, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Acme United
Corporation;
2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in
this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant
and have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
quarterly report is being reported;
b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of June 30, 2004; and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on
our evaluation as of June 30, 2004;
5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the
audit committee of registrant's board of directors:
a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's
ability to record, process, summarize and report financial data
and have identified for the registrant's auditors any material
weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have significant role in the registrant's
internal controls; and
6. The registrant's other certifying officers and I have indicated in
this quarterly report whether there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent
evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
By /s/ PAUL G. DRISCOLL
------------------------------
Paul G. Driscoll
Vice President and
Chief Financial Officer
Dated: July 28, 2004
(18)
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
The undersigned officer of Acme United Corporation (the "Company") hereby
certifies to my knowledge that the Company's quarterly report on Form 10-Q for
the quarterly period ended June 30, 2004 (the "Report"), as filed with the
Securities and Exchange Commission on the date hereof, fully complies with the
requirements of section 13(a) or 15(b), as applicable, of the Securities
Exchange Act of 1934, as amended, and that the information contained in the
Report fairly presents, in all material respects, the financial condition and
results of operations of the Company. This certification is provided solely
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, and shall not be deemed to be a part of the Report
or "filed" for any purpose whatsoever.
By /s/ WALTER C. JOHNSEN
------------------------------
Walter C. Johnsen
President and
Chief Executive Officer
Dated: July 28, 2004
(19)
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
The undersigned officer of Acme United Corporation (the "Company") hereby
certifies to my knowledge that the Company's quarterly report on Form 10-Q for
the quarterly period ended June 30, 2004 (the "Report"), as filed with the
Securities and Exchange Commission on the date hereof, fully complies with the
requirements of section 13(a) or 15(b), as applicable, of the Securities
Exchange Act of 1934, as amended, and that the information contained in the
Report fairly presents, in all material respects, the financial condition and
results of operations of the Company. This certification is provided solely
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, and shall not be deemed to be a part of the Report
or "filed" for any purpose whatsoever.
By /s/ PAUL G. DRISCOLL
------------------------------
Paul G. Driscoll
Vice President and
Chief Financial Officer
Dated: July 28, 2004
(20)