Good day, and welcome to Acme United Corporation’s Fourth Quarter and Year End 2012 Earnings Conference Call. Today’s conference is being recorded. At this time I would like to turn the conference over to Mr. Walter Johnsen, Chairman and Chief Executive Officer. Please go ahead sir.

Good morning. Welcome to the 2012 fourth quarter and yearend earnings conference call for Acme United Corporation. I’m Walter Johnsen, Chairman and CEO. With me is Paul Driscoll, who will first read a Safe Harbor statement. Paul?

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 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. One, the company’s plans, strategies, objectives, expectations and intentions are subject to change at any time at the discretion of the company; 2, the company’s plans and results of operation will be affected by the company’s ability to manage its growth; and 3, other risks and uncertainties indicated from time to time in the company’s filings with the Securities and Exchange Commission.

Thank you, Paul. Acme United had a very good year in 2012. Net sales increased 15% over 2011. Operating income grew 25%. Net income increased 26%. Our earnings per share were $1.13 versus $0.91 in 2012, an increase of 24%. All of our major brand groups and operating subsidiaries made forward progress in 2012. In the U.S., our net sales increased 20%. The Westcott product lines showed growth due to market share gains in scissors and shears, in the school and mass markets. Our award winning iPoint pencil sharpeners continued to gain placement involve the mass market and office super stores, the new paper trimmers at GE national distribution. The See-Through family of letter inks, pencils, protractors, rulers and math kits, was successfully integrated into the Westcott line, adding about $1.7 million in sales since its acquisition in June 2012. We’re very happy with its performance. The cross line of industrial cutting tools exceeded budget. We introduced new non-stick shears for professional users and began distribution of our high performance cutting tools to major U.S. hardware chains. The PhysiciansCare and Pack-it lines of first-aid products and medications also had excellent growth. This area has benefited from the office channel with the Jansen [ph] segment has been performing very well for the super-stores and independent dealers. We won new contract in the industrial distribution channel as well and expanded the customer base to mass market retailers for their internal use as well as their retail sales. In Europe, we suffered from the bankruptcy and liquidation of Schlecker, a very large drug store chain with 17,000 stores. This represented approximately $1.5 million in annual revenues. However, we recovered by selling new [indiscernible] and Westcott products to the mass market primarily, Lidl, Aldi and Norma. Although total sales in Europe declined 1% in local - in U.S. currency, they increased 9% on the local books before currency trend mentioned. Our Canadian business also grew, sales of Camillus and Les Stroud knives were the primary drivers, but we also gained new mass market distribution. At year end, we donated about $135,000 of school supplies to the Kids In Need Foundation. This provided excellent scissors and other products, for those who need the most and provided favorable tax treatment. Gross margins for the year adjusting for the donation were 35.4% compared to 35.9% last year. We had operating leverage from the growth in 2012, overall operating income for the year increased 25%. As we look to 2013, we see sales in the $90 million to $95 million range, with gross margins comparable to 2012. If we achieve the revenue growth, we would expect earnings per share to be in the $1 to $1.25 range, perhaps more. I will now turn the call to Paul.

Acme’s net sales for the fourth quarter were $19.5 million compared to $15.8 million in 2011, an increase of 23%, sales for the year-end December 31, 2012 were $84.4 million compared to $73.3 million in 2011, an increase of 15%. Net sales in the U.S. segment increased 27% in the quarter and 20% for the year ended December 31. The biggest contributors to the sales increase came from the iPoint pencil sharpeners, Camillus knives, first-aid kits and See-Through ruler products. Net sales and local currency for Canada increased 7% in the quarter and 5% for the year. Camillus knives contributed to the sales increase. Net sales in local currency for Europe increased 25% in the quarter and 9% for the year. The increase in both periods was primarily due to increases in the mass market channel. Earlier in 2012, we lost Schlecker, our large customer due to their liquidation. Loss of Schlecker sales amounts to approximately $125 million annually. However, the increased mass market business is more than offsetting the lost Schlecker business. The fourth quarter gross margin after adjusting for the donation to the kids in need foundation was 34.2% compared to $35.9% in the fourth quarter of 2011. Gross margins for the year was 35.4% compared to 35.9% last year. SG&A expenses for the fourth quarter of 2012 were $6.1 million or 31% of sales compared with $5.2 million or 32% of sales for the same period of 2011. SG&A expenses for the year ended December 31, 2012 were $24.4 million or 29% of the sales compared with $22 million or 30% of sales in 2011. The increase for the quarter and the year was primarily due to higher sales, commissions and delivery cost associated with the higher sales, additional sales and marketing personnel of higher spending on new product development. Operating cost in the fourth quarter after adjusting for the $135,000 donation to the Kids Need Foundation increased from $522,000 last year to $600,000 this year. Operating profit for the year ended December 31, 2012 increased by 25%. Net income for the fourth quarter and year end increased by 52% and 26% respectively. The company’s bank debt less cash on December 31, 2012 was $14.6 million compared to $9.7 million on December 31, 2011. During 2012, we spent $1.5 million on See-Through, paid $1.1 million of dividends, purchased $400,000 of treasury shares and added $5.7 million of inventory. The increase in inventory was primarily related to new Camillus products as well as other new business for 2013. The $1.1 million in dividends represents 5 payments for the year compared to the company’s typical 4 quarterly payments. We accelerated the January 2013 payment into December 2012 to provide a one-time tax advantage to shareholders.

Thank you, Paul. I will now open the call to questions.

[Operator Instructions] And we’ll go to Richard Dearnley [ph] with Longport Partners [ph].

Let’s start with gross margins. Usually gross margins are up in the fourth quarter, there a number of things that come to mind that might have happened. But could you talk about the non-usual trend there, what happened, was it - introductory pricing to Wal-Mart or distribution costs or what happened?

No, it was just, it was just a matter of a mix difference, product mix difference, customer and product mix difference.

Yes, Dick, I wouldn’t read any significance into that.

Is, well, what if you had a - was Camillus a large component of the initial settling to inventory stacking?

No, that actually started in the second and third - it started in second quarter, continued into the third quarter and the fourth quarter. But I mean, Camillus did affect the margin in the fourth quarter.

I would think that Camillus would be helping gross margins, except for - maybe air-freight or something, if there were productions screw-ups, because demand was good?

Yes, it’s a good margin business.

Well, that then doesn't explain gross margins going down 300 basis points quarter-to-quarter when they’re usually up.

I can’t give you an adequate answer for that. If you’d like to call off-line we’ll go through a couple of other points.

The Camillus had a positive impact but there are other factors in terms of customer and product mix which offset that.

Okay. And what was the - how did the EC do for the year in terms of operating profit?

You asking how did Europe do for the year?

Yes.

Europe was profitable.

Good. It looks like they had a great fourth quarter?

Yes, and had a good year as well.

Honestly, if Schlecker hadn’t, not only gone bankrupt but then liquidated it would have been a gangbuster year. But it’s the first profitable year Europe has had in a number of years. And they did a really good job recovering from, what was a setback in June.

And, what was the - what was the tax-rate for the year pre the charitable contribution?

30%.

Okay.

The charitable contribution didn’t really make that much of an impact, I mean, it was - in terms of rounding it was - the tax rate was 30%.

[Operator Instructions] It appears there are no other questions in the queue at this time.

Okay. Well, if there are no further questions, then this call is complete. I’d like to thank you for joining us. Good bye.

That does conclude today’s conference. Thank you for your participation.

Thank you. Bye-bye.