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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 September 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 001-07698
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 3,405,921 shares outstanding as of October 26, 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)
Part I - FINANCIAL INFORMATION
Item 1. Financial Statements
ACME UNITED CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
(all amounts in thousands)
September 30 December 31
2004 2003
(unaudited) (audited)
------------ ------------
ASSETS
Current assets:
Cash and cash equivalents $ 1,599 $ 1,391
Accounts receivable, less allowance 11,213 7,075
Inventories:
Finished goods 7,292 7,252
Work in process 73 120
Raw materials and supplies 688 807
------------ ------------
8,053 8,179
Prepaid expenses and other current assets 381 260
Deferred income taxes 266 286
------------ ------------
Total current assets 21,512 17,191
------------ ------------
Property, plant and equipment:
Land 232 235
Buildings 2,652 2,644
Machinery and equipment 5,760 5,772
------------ ------------
8,644 8,651
Less accumulated depreciation 6,432 6,266
------------ ------------
2,212 2,385
Other assets 622 358
Goodwill 89 89
------------ ------------
Total assets $ 24,435 $ 20,023
============ ============
See notes to condensed consolidated financial statements.
(3)
ACME UNITED CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET (continued)
(all amounts in thousands)
September 30 December 31
2004 2003
(unaudited) (audited)
------------ ------------
LIABILITIES
Current liabilities:
Notes payable $ 118 $ 141
Accounts payable 1,928 1,743
Other accrued liabilities 5,365 2,494
Current portion of long-term debt 1,000 2,035
------------ ------------
Total current liabilities 8,411 6,413
Deferred income taxes 156 156
Long-term debt, less current portion 2,308 2,752
Other 545 524
------------ ------------
Total liabilities 11,420 9,845
STOCKHOLDERS' EQUITY
Common stock, par value $2.50:
authorized 8,000,000 shares;
issued - 3,840,012 shares in 2004
and 3,652,812 shares in 2003,
including treasury stock 9,600 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 2,223 2,029
Retained earnings 4,355 2,010
Accumulated other comprehensive loss:
Translation adjustment (569) (680)
Derivative financial instruments (46) -
Minimum pension liability (691) (691)
------------ ------------
(1,306) (1,371)
------------ ------------
Total stockholders' equity 13,015 10,178
------------ ------------
Total liabilities and stockholders' equity $ 24,435 $ 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 Nine Months Ended
September 30 September 30
------------------------- --------------------------
2004 2003 2004 2003
------------ ----------- ------------- -----------
Net sales $ 11,595 $ 9,538 $ 32,460 $ 26,869
Costs and expenses:
Cost of goods sold 6,142 6,367 17,769 16,897
Selling, general and administrative expenses 3,739 2,648 10,288 7,853
------------ ----------- ------------- -----------
9,881 9,015 28,057 24,750
------------ ----------- ------------- -----------
Income before non-operating items 1,714 523 4,403 2,119
Non-operating items:
Interest expense 46 49 131 190
Other (income) expense 52 (91) 126 55
------------ ----------- ------------- -----------
98 (42) 257 245
------------ ----------- ------------- -----------
Income before income taxes 1,616 565 4,146 1,874
Income tax expense 599 263 1,662 879
------------ ----------- ------------- -----------
Net income 1,017 302 2,484 995
Other comprehensive (expense) income -
Foreign currency translation 241 (8) 110 541
Change in fair value of derivative financial instrument
less deferred income taxes of $9 in 2003 (46) - (46) 17
------------ ----------- ------------- -----------
Comprehensive income $ 1,212 $ 294 $ 2,548 $ 1,553
============ =========== ============= ===========
Basic earnings per share $ 0.30 $ 0.09 $ 0.74 $ 0.30
============ =========== ============= ===========
Diluted earnings per share $ 0.26 $ 0.08 $ 0.66 $ 0.28
============ =========== ============= ===========
Weighted average number of common shares outstanding-
denominator used for basic per share computations 3,400 3,282 3,352 3,330
Weighted average number of dilutive stock options
outstanding 442 304 387 198
------------ ----------- ------------- -----------
Denominator used for diluted per share computations 3,842 3,586 3,739 3,528
============ =========== ============= ===========
Dividends declared per share $ 0.02 $ - $ 0.04 $ -
============ =========== ============= ===========
See notes to condensed consolidated financial statements
(5)
ACME UNITED CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
(all amounts in thousands)
Nine Months Ended
June 30
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2004 2003
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Operating Activities:
Net income $ 2,484 $ 995
Adjustments to reconcile net income
to net cash provided (used) by operating activities:
Depreciation 352 309
Amortization 21 19
Deferred income taxes 20 685
Loss (gain) on disposal/sale of assets 34 (117)
Changes in operating assets and liabilities:
Accounts receivable (4,042) (3,265)
Inventories 93 (1,289)
Prepaid expenses and other current assets 6 155
Other assets 39 70
Accounts payable 152 1,062
Other accrued liabilities 2,754 917
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Total adjustments (571) (1,454)
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Net cash provided (used) by operating activities 1,913 (459)
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Investing Activities:
Purchase of property, plant, and equipment (330) (209)
Purchase of patents and trademarks (286) (74)
Proceeds from sale of property, plant, and equipment 52 122
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Net cash used by investing activities (564) (161)
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Financing Activities:
Net short-term (payments) borrowings (977) 1,572
Payments of long-term debt (497) (296)
Proceeds from issuance of common stock 663 -
Distributions to shareholders (71) -
Purchase of 46,830 shares of common stock in 2004 and
118,200 shares of common stock in 2003 for treasury (235) (469)
-------------- --------------
Net cash (used) provided by financing activities (1,117) 807
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Effect of exchange rate changes (24) 40
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Net change in cash and cash equivalents 208 227
Cash and cash equivalents at beginning of period 1,391 598
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Cash and cash equivalents at end of period $ 1,599 $ 825
============== ==============
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
In the June 30, 2004 10Q the Company reported that it was involved in a legal
action that was in its preliminary stages. During the third quarter 2004 this
proceeding was settled on terms satisfactory to management with no material
effect on the Company.
The Company is involved from time to time in disputes and other litigations in
the ordinary course of business including certain environmental and other
matters. The Company presently 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 Nine Months Ended
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September 30 September 30 September 30 September 30
2004 2003 2004 2003
------------ ------------ ------------ ------------
Components of net periodic benefit cost:
Interest cost $ 49,727 $ 55,316 $ 149,180 $ 165,949
Service cost 8,750 8,750 $ 26,250 $ 26,250
Expected return on plan assets (64,281) (61,531) $(192,844) $(184,593)
Amortization of prior service costs 2,194 2,194 $ 6,582 $ 6,582
Amortization of actuarial gain 12,399 20,172 $ 37,196 $ 60,515
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$ 8,789 $ 24,901 $ 26,364 $ 74,703
=======================================================================================================
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 September 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 September 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 Nine Months Ended
September 30 September 30
-------------------------------- -------------------------------
2004 2003 2004 2003
--------------- --------------- --------------- ---------------
Net income, as reported $ 1,017,289 $ 302,132 $ 2,484,404 $ 994,964
Deduct: Total stock-based employee
compensation expense determined under
fair value based method for all awards,
net of related income tax effects 17,655 16,839 56,149 67,609
- --------------------------------------------------------------------------------- --------------------------------
Pro forma net income $ 999,634 $ 285,293 $ 2,428,255 $ 927,355
================================================================================= ================================
Basic-as reported $ 0.30 $ 0.09 $ 0.74 $ 0.30
Basic-pro forma $ 0.29 $ 0.09 $ 0.72 $ 0.28
Diluted-as reported $ 0.26 $ 0.08 $ 0.66 $ 0.28
Diluted-pro forma $ 0.26 $ 0.08 $ 0.65 $ 0.26
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 nine months of 2004, the Company issued 187,200 shares of
common stock with proceeds of $662,892 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
Company's repurchase of 16,000 shares within six months of exercise of certain
options by a terminated employee.
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 net 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. enforced the letter of credit and drew down the funds. Included
in the accompanying Statement of Operations are the operations of the acquired
business since the date of acquisition. In accordance with Regulation S-X,
proforma information is not provided because of the immateriality of the
transaction.
(8)
Note 9 -- Impairment 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 Nine Months Ended September 30, 2004
Item 2. - 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 September 30, 2004 were $11,595,000
compared with $9,538,000 for 2003, a 22% increase. Net sales for the first nine
months of 2004 were $32,460,000 compared with $26,869,000 for 2003, a 21%
increase. Excluding the favorable effect of currency gains in Canada and Europe,
net sales for the first nine months increased 19%. The sales increase was mainly
driven by a 21% increase in the U.S. due to market share gains and new product
launches. The new business in Hong Kong generated $883,000 in the first nine
months of 2004.
Gross Profit
The gross profit for the third quarter of 2004 was $5,453,000 (47.0% of net
sales) compared to $3,171,000 (33.2% of net sales) for the third quarter of
2003. The gross profit in 2003 included approximately $200,000 of costs
associated with the closure of manufacturing in Germany. Gross margins for the
third quarter of 2003 without this effect were 35.3%. Gross profit for the first
nine months of 2004 was 45.3% of net sales compared to 37.1% 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 third quarter of
2004 were $3,739,000 (32% of net sales) compared with $2,648,000 (28% of net
sales) for the same period of 2003, an increase of $1,091,000. SG&A expenses
were 32% of net sales for the first nine months of 2004 versus 29% 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 nine months of 2004 was $131,000, compared with
$190,000 for 2003, a $59,000 decrease. This is mainly attributable to the
decline in debt.
Other Expense
Net other expense was $126,000 in the first nine months of 2004 compared to
$55,000 in the first nine months of 2003.
Income Before Income Taxes
Income before income taxes was $1,616,000 in the third quarter of 2004 compared
with $565,000 in the third quarter of 2003, an increase of $1,051,000. Income
before income taxes was $4,146,000 for the first nine months of 2004 compared
with $1,874,000 in the first nine months of 2003, an improvement of $2,272,000.
Pretax income for North America and Asia increased by approximately $2.1
million. The European operations had a slightly higher loss (exclusive of one
time expenses of approximately $300,000) in the first nine 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 nine months of 2004 was 40% compared to 46%
in 2003, which was effected by the one time charge for the closing of
manufacturing facilities in Germany. 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 third quarter of 2004 was $1,017,000, or 26 cents per share
(diluted), compared to a net income of $302,000, or 8 cents per share (diluted)
for the same period of 2003. Net income for the first nine months of 2004 was
$2,484,000, or 66 cents per share (diluted), compared to a net income of
$995,000, or 28 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 Nine Months Ended September 30, 2004
Financial Condition
Liquidity and Capital Resources
The Company's working capital, current ratio and long-term debt to equity ratio
follow:
September 30, 2004 December 31, 2003
------------------ ------------------
Working capital..................... $13,101,000 $10,778,000
Current ratio....................... 2.56 to 1 2.68 to 1
Long-term debt to equity ratio...... 17.7% 27.0%
During the first nine months of 2004, total debt decreased by $1,479,000
compared to total debt at December 31, 2003 principally as a result of seasonal
collection terms which mature during the later half of the third quarter.
During September 2004, the Company renewed its revolving loan agreement, which
originally allowed for borrowings up to a maximum of $10,000,000 based on a
borrowing base formula, which applies specific percentages to balances of
accounts receivable and inventory. The renewal modified several characteristics
of the original agreement, the most significant of which are reducing the
interest rate to LIBOR plus 1.50 percent, eliminating the borrowing base
formula, allowing the company to borrow up to $10,000,000, regardless of its
inventory and receivable levels, and extending the maturity of the loan to June
30, 2007. As of September 30, 2004, $3,161,613 was outstanding and $6,838,387
was available for borrowing under this agreement. The estimated maturities of
all long-term debt follow: 2005 - $1,000,000, 2006 - $1,600,000, 2007 -
$708,174.
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 Nine Months Ended September 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
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, as of September 30, 2004 our disclosure controls and procedures
were 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 Control over Financial Reporting
During the quarter ended September 30, 2004, there were no changes in our
internal control over financial reporting that materially affected, or was
reasonably likely to materially affect, this control.
(13)
PART II. OTHER INFORMATION
Item 1 -- Legal Proceedings
In the June 30, 2004 10Q the Company reported that it was involved in a legal
action that was in its preliminary stages. During the third quarter 2004 this
proceeding was settled on terms satisfactory to management with no material
effect on the Company.
The Company is involved from time to time in disputes and other litigations in
the ordinary course of business including certain environmental and other
matters. The Company presently believes that there will not be a material
adverse impact on financial position, results of operations, or liquidity from
these matters.
Item 2 -- Issuer Purchases of Equity 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 September 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
---------------------------------------------------------------------------------------------------------------
July 1 to July 31 - - - -
August 1 to August 31 - - - -
September 1 to September 30 - - - -
---------------------------------------------------------------------------------
Total - - - 69,670
Item 3. --Defaults Upon Senior Securities
None
Item 4 -- Submission of Matters to a Vote of Security Holders
None
Item 5 -- Other Information
None.
(14)
PART II. OTHER INFORMATION-Continued
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
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
On July 23, 2004 and October 21, 2004 Forms 8-K were filed by the
Company reporting press releases issued by the Company on July 23,
2004 and October 22, 2004, respectively.
(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: October 26, 2004
By /s/ PAUL G. DRISCOLL
------------------------------
Paul G. Driscoll
Vice President and
Chief Financial Officer
Dated: October 26, 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:
I have reviewed this Quarterly Report on Form 10-Q of Acme United
Corporation;
Based on my knowledge, this 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
report;
Based on my knowledge, the financial statements, and other financial
information included in this 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 report;
The registrant's other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, 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 report is being prepared;
(b) Evaluated the effectiveness of the registrant's disclosure controls
and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end
of the period covered by this report based on such evaluation; and
(c) Disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the registrant's
most recent fiscal quarter (the registrant's fourth fiscal quarter in
the case of an annual report) that has materially affected, or is
reasonably likely to materially affect, the registrant's internal
control over financial reporting; and
The registrant's other certifying officer(s) and I have disclosed, based on
our most recent evaluation of internal control over financial reporting, to
the registrant's auditors and the audit committee of the registrant's board
of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design
or operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to
record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal control over financial reporting.
By /s/ WALTER C. JOHNSEN
------------------------------
Walter C. Johnsen
President and
Chief Executive Officer
Dated: October 26, 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:
I have reviewed this Quarterly Report on Form 10-Q of Acme United
Corporation;
Based on my knowledge, this 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
report;
Based on my knowledge, the financial statements, and other financial
information included in this 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 report;
The registrant's other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, 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 report is being prepared;
(b) Evaluated the effectiveness of the registrant's disclosure controls
and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end
of the period covered by this report based on such evaluation; and
(c) Disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the registrant's
most recent fiscal quarter (the registrant's fourth fiscal quarter in
the case of an annual report) that has materially affected, or is
reasonably likely to materially affect, the registrant's internal
control over financial reporting; and
The registrant's other certifying officer(s) and I have disclosed, based on
our most recent evaluation of internal control over financial reporting, to
the registrant's auditors and the audit committee of the registrant's board
of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design
or operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to
record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal control over financial reporting.
By /s/ PAUL G. DRISCOLL
------------------------------
Paul G. Driscoll
Vice President and
Chief Financial Officer
Dated: October 26, 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 September 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(d), 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: October 26, 2004
A signed original of this written statement required by Section 906, or other
document authenticating, acknowledging, or otherwise adopting the signature that
appears in typed form within the electronic version of this written statement
required by Section 906, has been provided to Acme United Corporation and will
be retained by Acme United Corporation and furnished to the Securities and
Exchange Commission or its staff upon request.
(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 September 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(d), 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 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: October 26, 2004
A signed original of this written statement required by Section 906, or other
document authenticating, acknowledging, or otherwise adopting the signature that
appears in typed form within the electronic version of this written statement
required by Section 906, has been provided to Acme United Corporation and will
be retained by Acme United Corporation and furnished to the Securities and
Exchange Commission or its staff upon request.
(20)