Acme United Corp (NYSE MKT:ACU) Q2 2020 Earnings Conference Call - Final Transcript
Jul 17, 2020 • 12:00 pm ET
Good day and welcome to the Acme United Corporation's Second Quarter 2020 Earnings Conference Call.
At this time, I would like to turn the conference over to Mr. Walter Johnsen, Chairman and Chief Executive Officer. Please go ahead, sir.
Walter C. Johnsen
Good morning. Welcome to the second quarter 2020 earnings conference call for Acme United Corporation. I am Walter C. Johnsen, Chairman and CEO. With me is Paul Driscoll, our Chief Financial Officer, who will first read a safe harbor statement. Paul?
Paul G. Driscoll
Forward-looking statements in this conference call, 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 provision of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that such forward-looking statements involve risks and uncertainties such as, among others, those arising as a result of the effects of the COVID-19 pandemic, including the ongoing economic downturn and the other risks and uncertainties described in our periodic filings with the Securities and Exchange Commission and in our current earnings release.
Walter C. Johnsen
Acme United had good performance in the second quarter of 2020. Our sales were $44 million, an increase of 9% over this time last year. Our net income was $3.2 million, an increase of 20%. Our earnings per share were $0.92 compared to $0.77 in the second quarter last year, a 19% increase.
We've had many challenges during the quarter. We had customers whose businesses plummeted because their stores were closed or people were afraid to shop in them. We had orders canceled or delayed for cutting tools due to uncertainty in the office, school and retail markets.
We anticipate bankruptcies to the customers who will not be able to recover in the months ahead. Our sources of supply of raw materials, components and finished goods across all our product lines were at various times closed or shipments were delayed, this was particularly true with our production in China which closed during Chinese New Year and then stayed closed due to the coronavirus. We had intense catch-up production only to discover that the virus have been migrated to the US and Europe and the demand was delayed.
Components of our first aid kits were in high demand and cost increased dramatically for gloves, isolation gowns, procedure masks, alcohol wipes, hand sanitizer, disposable thermometers and many other items that are used in our first aid kits.
Our factories and distribution centers in the United States, Canada and Europe operated under adverse conditions. We prioritize safety with masks, hand sanitizer and gloves available for all of our production workers. We conducted regular deep cleaning of our facilities, installed clear flexible barriers between operators and our kit packing lines and paid extra incentive bonuses to our front-line workers.
We checked temperatures of our employees daily and paid them to stay home if they were not well. We had planned shutdowns to test for coronavirus and cleaning and tracing in our plants. We produced and shipped at all of our