Yahoo Finance Acme United Corp (ACU) Q1 2024 Earnings Call Transcript Highlights: Surging Profits and ...
Net Sales: $45 million in Q1 2024, a 2% decrease from $45.8 million in Q1 2023.
Net Income: Increased to $1.6 million in Q1 2024, up 65% from $1 million in Q1 2023.
Earnings Per Share (EPS): $0.39 in Q1 2024, up 39% from $0.28 in Q1 2023.
Gross Margin: Improved to 38.7% in Q1 2024 from 35.5% in Q1 2023.
Free Cash Flow: Generated $5.4 million in the 12 months leading up to Q1 2024.
Interest Expense: Decreased to $440,000 in Q1 2024 from $900,000 in Q1 2023.
Debt Reduction: Bank debt less cash was $32 million on March 31, 2024, down from $48 million on March 31, 2023.
Dividends: Paid $2.1 million during the 12-month period ending Q1 2024.
Release Date: April 19, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: It's good to see expanding distribution of your products and the benefits from streamlining operations on the first quarter can sometimes be the weakest quarter of the year. Could that be the case this year? A: Walter Johnsen (CEO): Yes, the first quarter was weaker, with about $2 million in sales carrying over into the second quarter. However, we are optimistic about upcoming quarters given our strong business bookings.
Q: As your strong cash flows pay down, debt interest expense fell 48%. Is the current quarter's $476,000 of interest expense a good run rate to model going forward absent acquisitions? A: Paul Driscoll (CFO): The interest rates are 3.8% for mortgages and 7% for bank debt. We expect these rates to continue unless there's a decrease in interest rates later in the year. The overall debt is likely to increase slightly as we grow but should reduce again towards the end of the year.
Q: With the diluted share count rising as stock options went into the money, could Acme purchase some of those shares to prevent share dilution? A: Walter Johnsen (CEO): Yes, we plan to purchase many of the options that employees decide to exercise, which should help reduce the share count and manage dilution effectively.
Q: Can you expand on the productivity initiatives and how they will impact the business in 2024, especially in the Canadian market? A: Walter Johnsen (CEO): We are implementing several productivity initiatives, including automation in boxing lens wipes and alcohol prep pads, which should save $400,000 to $500,000 annually. Additionally, we are automating first aid kit assembly, which could be a game-changer. In Canada, the acquisition of Hawktree Solutions has been integrated successfully, doubling our space and expecting significant growth.
Q: Congratulations on another quarter of strong earnings. A: Walter Johnsen (CEO): Thank you, Tim.
Q: Thank you and good quarter, gentlemen. A: Walter Johnsen (CEO): Thank you, Jim.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
