Acme United Corp (NYSE MKT:ACU) Q3 2019 Earnings Conference Call - Final Transcript
Oct 18, 2019 • 12:00 pm ET
Walter C. Johnsen
year ago. As you may recall we reduced headcount by implementing our ERP software across all our US operations. Improved shipping efficiency and lowered our cost to reach market. Consistent with the targets we set, these savings totaled about $2 million annually. We continue to identify cost saving opportunities and are formulating new targets for 2020. Our net debt has declined nearly a $11 million during this past 12 months from $46.9 million to $35.1 million.
We are very pleased with this performance and it provides new capital for growth and perhaps our next acquisition. As I have mentioned in past calls, we are always on the lookout for potential candidates, particularly in the US and Canada where we have the sourcing and distribution capabilities that could quickly add value.
Based on what we see now for the four quarter, we have updated our guidance for 2019 to $142 million in sales, $5.2 million in net income, and $1.48 earnings per share.
I will now turn the call to Paul Driscoll. Paul?
Paul G. Driscoll
Acme's net sales for the third quarter were $37 million compared to $34.7 million in 2018, an increase of 7%. Sales for the nine months ended September 30, 2019 were $109 million compared to $106 million in the same period in 2018, an increase of 2%. Net sales in the US segment increased 6% in the quarter and 2% for the nine months ended September 30.
Sales of first aid and safety products were strong. However, there was some softness in sales of school and office products into some of the superstores. Net sales in local currency for Canada increased 6% in the quarter, but declined 3% year-to-date. Net sales for Europe increased 21% in local currency for the quarter and 22% for the nine months ended September 30. The sales increase for both periods was primarily due to new customers in the office channel as well as higher sales of DMT sharpening products.
The gross margin was approximately 36% in both the third quarter of 2019 and 2018. The year-to-date gross margin was 37% compared to 37% in last year's period. SG&A expenses for the third quarter of 2019 were $11.4 million or 31% of sales compared with $11.1 million or 32% of sales for the same period of 2018. SG&A expenses for the first nine months of 2019 were $32.7 million or 30% of sales compared with $32.9 million or 31% of sales in 2018.
Net income for the third quarter of 2019 was $1.1 million or $0.30 per diluted share, compared to net income of $800,000 or $0.23 per diluted share for the same period of 2018, increases of 31% and 30%. Net income for the first nine months ended September 30, 2019 was $4.5 million or $1.32 per diluted share compared to $4 million or $1.12 per diluted share in the comparable period last year, increases of 13% and 18%.
The company's bank debt less cash on September 30, 2019 was $36 million compared