The following is excerpted from the question-and-answer section of the transcript.
(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)
Question: Tim Call - Capital Management Corporation - Analyst
: Well, congratulations on another good quarter. All the hard works paying off.
Question: Tim Call - Capital Management Corporation - Analyst
: SG&A is growing a little bit faster than sales, it's up around 9% or 10%. Do you think in future years, SG&A will grow slower than sales?
Question: Tim Call - Capital Management Corporation - Analyst
: Do you think you'll facilitate some employee stock option cash outs in the years ahead and lower the fully diluted share count?
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JULY 19, 2024 / 4:00PM, ACU.A - Q2 2024 Acme United Corp Earnings Call
Question: Tim Call - Capital Management Corporation - Analyst
: You have a great history of accretive acquisitions, nice tuck-in acquisitions. And the initial cash out for at least First Aid of $6.1 million for $4.2 million
of annual sales trailing looks pretty nice. Do you think there will be a lot of cross-selling opportunity where you'll pick up new clients from them
and you'll be able to sell their goods to your existing products?
Question: Tim Call - Capital Management Corporation - Analyst
: You have organic sales growth, and growth from acquisitions, and you have profit margin expansion. And it sounds like you've set the company
up for a tremendous long-term growth potential. Congratulations again.
Question: Tim Call - Capital Management Corporation - Analyst
: It's look like you are in a strong position. I looking forward to your future quarters. Congratulations.
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JULY 19, 2024 / 4:00PM, ACU.A - Q2 2024 Acme United Corp Earnings Call
Question: Jeffrey Matthews - Ram Partners - Analyst
: Thanks. I have a few. Number one from Paul's disclaimer upfront. He mentioned continued high inflation and supply chain disruptions. Were those
just pro forma these could happen? Or are you still seeing high inflation? And do you still see supply chain disruptions?
Question: Jeffrey Matthews - Ram Partners - Analyst
: Sure. How did the Elite acquisition come about? I know the Canadian one was more of a -- they were Chapter 11, or they were in real trouble. And
how did this one come about?
Question: Jeffrey Matthews - Ram Partners - Analyst
: And do they stay on? Or is this something you have to reengineer yourself?
Question: Jeffrey Matthews - Ram Partners - Analyst
: That's great. And then on the flip side, the Canadian acquisition, which was pretty messy when you bought it, it sounds like that's getting up to
speed. What have been the main things you've had to do to get it there?
Question: Jeffrey Matthews - Ram Partners - Analyst
: Great. And I have three more. The sale of Cuda and Camillus, now that, that's in the rearview mirror, has that -- selling those product lines had any
other impact on operating the business as far as things that are less distracting to your management time?
Question: Jeffrey Matthews - Ram Partners - Analyst
: (laughter) I remember testing the product on the dock, Walter. Two more. Paul, I think said something used the number of [39] regarding SG&A.
And I wasn't sure what that meant. Is that $39 million a year or 39% of something?
Question: Jeffrey Matthews - Ram Partners - Analyst
: Okay. And is that an annualized kind of idea or not?
Question: Jeffrey Matthews - Ram Partners - Analyst
: Got it. Okay. So, what I'm trying to figure out here is gross margin of 40% in the quarter. Walter, I always remember, back in the day, when you were
shifting production to China and cost of manufacturing was going down, I recall gross margins getting up to 45%. Is that a target? Or are we -- is
40% kind of the plateau going out, what do you think for gross margin?
Question: Jeffrey Matthews - Ram Partners - Analyst
: Got it. Thanks very much. I really appreciate it. And congratulations and best of luck going forward.
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JULY 19, 2024 / 4:00PM, ACU.A - Q2 2024 Acme United Corp Earnings Call
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