Good day, and welcome, to the Acme United Corporation’s First Quarter 2015 Earnings Call. Today’s conference is being recorded. At this time, I would like to turn the conference over to Chairman and Chief Executive Officer, Mr. Walter Johnson. Please go ahead, sir.

Good morning. Welcome to the first quarter 2015 earnings conference call for Acme United Corporation. I’m Walter C. Johnsen, Chairman and CEO. With me is Paul Driscoll, our Chief Financial Officer, 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; two, the Company’s plans and results of operation will be affected by the Company’s ability to manage its growth; and three, 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 reported record first quarter sales and earnings for 2015. Our net sales were $22.8 million for the quarter, compared to $19.2 million in 2014, an increase of 19%. Our net income for the quarter was $436,000, versus $368,000 last year, an increase of 18%. Earnings per share were $0.12, compared to $0.11 in the first quarter last year. We are off to a good solid start. We are particularly happy about the performance of our Westcott Scissor line, which continues to gain market share. The new iPoint Orbit Pencil Sharpeners with our titanium bonded coatings also performed very well with major retailers in the U.S., as well as new distribution in Europe. The new Cuda line of fishing lines and tools are shipping in volume now. And we’re gaining recognition with the outstanding design and performance parameters. We’re working with major office and industrial distributors to expand distribution of our Smart Compliance First Aid kits, which help our customers meet OSHA and regulatory requirements. Our Canadian and European businesses are being impacted by weaker currencies. Their revenues were reduced by about 10% when converted into U.S. dollars during the first quarter. This was particularly frustrating that Europe grew by 14% in euros, but had a decline of 5% when reported on a U.S. dollar basis. Both subsidiaries are negotiating with suppliers to reduce costs, increasing selling prices, and from [ph] your expenses. While we cannot control exchange rates, we’re managing our business in light of these changes. We estimate the weakened currencies reduced earnings in the first quarter by about $0.02 per share. The First Aid Only integration is progressive. We’ve messed sale organizations, created a single training platform and are rationalizing duplicate components. Our systems are now on one IT platform and we’re working to consolidate various operations. We intend to optimize our production sites over the coming quarters. We have begun to see the benefits of our combined purchasing power and now are focusing on operating leverage. Last month, we have received notification from the Connecticut Department of Environmental and Energy Protection that they have accepted our Form III verification for the remediation of our former manufacturing plant in Bridgeport, Connecticut. We worked for nearly 10 years on this clean up. This week we removed all the monitoring wells. I’m very pleased that we have brought this land back to productive use and have now completed the projects. As we look to the reminder of the year, we’re adjusting our guidance to $118 million to $120 million in revenues and earnings per share of $1.45 to $1.50 based on the headwinds of the weaker currencies in Europe and in Canada. There are opportunities to improve this guidance and we hope to do so. I’ll now turn the call to Paul.

Acme’s net sales for the first quarter were $22.8 million, compared to $19.2 million in 2014, a 19% increase. Net sales for the first quarter in the U.S. segment increased 25% mainly due to higher sales of First Aid kits, introduction of Cuda fishing tools and stronger Westcott product sales. Net sales in Canada decreased 18% in U.S. dollars and 8% in local currency. There has been a general softness in the Canadian economy in 2015. Net sales in Europe decreased 5% in U.S. dollars, but increased 14% in local currency, primarily due to higher sales of office products. Gross margins were 37% in the first quarter of 2015 versus 36% in the first quarter of 2014. SG&A expenses for the first quarter of 2015 were $7.6 million, or 33% of net sales, compared with $6.3 million, or 33% of net sales, for the same period of 2014. The SG&A increase was due to higher variable selling costs as a result of higher sales in the added First Aid Only business. Operating profit was $826,000 in the first quarter of 2015, compared with $626,000 in the first quarter of 2014, 32% increase. Other expense of $76,000 related to foreign exchange transaction losses incurred in our Canadian and European subsidiaries in January of this year as a result of the sharp decline in the Canadian dollar and euro as compared to December 31, 2014. Net income for the first quarter of 2015 was $436,000, or $0.12 per diluted share, compared to net income of $368,000, or $0.11 per diluted share, in the same period of 2014. The company’s bank debt less cash on March 31, 2015 was $25.8 million compared to $13.9 million on March 31, 2014. During the 12 month period, Acme purchased First Aid Only for $13.8 million and paid $1.2 million in dividends. Additionally, the company generated $3 million in cash flow from operations and received 1.4 – $1.5 million from the exercise of employee stock options.

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

Thank you. [Operator Instructions] We’ll take our first question from Steve Percoco with Lark Research.

Hi, good morning.

Good morning, Steve.

Hi, Walter. Could you talk a little bit more about your non-financial goals for 2015, I know you covered them a little bit during your opening remarks, but if you could be a little bit more specific I would appreciate it.

Well, there are a number of things. And the biggest non-financial goal is the integration of First Aid Only into our operations of First Aid kits in Norwalk, Connecticut and Rocky Mount, North Carolina. We’ve got some duplicate operations. We’ve got some duplicate components from three different brands. We’ve been working hard to narrow down the number of components, so that they can be used within the three brands and that’s well along its way. We’ve been doing that for the last 12 months. We’ve already bid out the components that we have with the combined volumes. This year, we’re expecting about $1 million savings in cost of sales on the First Aid side from that activity. However, there is more when we narrow down the components because obviously the volumes increase in the pre-vested [ph]some inventory. There are also operations that are done in three locations that will eventually narrow down to probably two locations. Finally, the work that’s been done at Pac-Kit in Norwalk will in time be gradually shifted to other sites as well. So there is quite a bit on our play. We’re also actively looking for acquisitions. One of the things that a strong dollar does, especially when it strengthened as quickly as did in our case, is it puts real pressure on some of the smaller independent companies both in New York as well as in Canada. And we’re seeing that as an opportunity with a strong currency here and the ability to possibly take advantage of a weaker competitor in one of those locations. We don’t have something identified yet, but I can tell you that we’re actively looking. I think this is very opportunistic.

Okay. And could you also my back of the envelope numbers indicate that your capital spending was relatively high compared with what I thought was the goal for the year of $1.2 million. And so I’d ask is your capital guidance – capital spending guidance still at that level of $1.2 million?

Yes, we’re basically going to be following somewhere around that level. We’re upgrading a little bit of screen printing work in First Aid Only’s operation in North Carolina in the Sate of Washington. We’re creating some computer systems and phone systems, but these are not huge expenses. We’re putting some more racking and computerized work in North Carolina for Internet sales. But if it’s not 1.2 million, it’s 1.4 million and might be 1 million, but it’s somewhere in that range.

Our capital spending was higher in last year because we were refurbishing the facility we bought in Rocky Mount. We were still refurbishing that in the first quarter. So for the 12 months capital spending last year was higher than normal and the trailing 12 months would have been higher than normal as well, 1.2 million is more like the normal capital spending.

Okay, thank you very much.

Thank you, Steve.

[Operator Instructions] We’ll take our next question from Scott Butler with Catalyst Research.

Hi, good morning. Thanks for taking my call.

Good morning.

Well most of my questions have been addressed. Can you remind us what percentage of utilization you’re at in terms of the North Carolina, the distribution depot? And then I have a follow-up, please.

Yes the North Carolina facility has about 10,000 square feet of office space and that’s about 40% utilized. The facility has 425,000 square feet of warehouse space and that’s about half utilized. There’s room to be bringing in both acquisitions as well as to handle growth.

And when you talk about acquisitions, Walter, I mean those would look approximately I assume like some of the deals you’ve done in the past. Do you have anything in mind in terms of industry exposure or end markets? Or is this just kind of an idea that’s brewing in terms of being opportunistic?

First, we have a history of being opportunistic whether that was the Camillus scissor business or I mean Camillus light business or the Clauss scissor business or The C-Thru Ruler business or First Date Only, I know I just rattled off a few of them, but there is always something that we’re working on. And the ideal acquisition for us is one where we can leave their facility and put it in with our own. Now, if you were to buy something in Canada that might be different, and I don’t have something that’s very far long there, but now with the strong dollar there's a chance to really add some value with the concept.

Right I agree. So in terms of like recent order rates, have you seen any kind of stabilization with the dollar seeming to kind of rebound a little bit and I known it’s – you don’t have a crystal ball any better than anyone else’s, but I'm wondering if you’re continuing to see the declines or have you seen some stabilization?

Well let me just explain the first, the reduction in the revenues. About 20% of our sales come from Canada and Germany and Europe. So roughly that’s $20 million. So if the dollar depreciated 10%, that’s $2 million, so you go from 1.20 to 1.80 on your guidance. The businesses in general are doing fine. In Europe, in particular, there seems to be a rebound in the base business and we’re seeing in April we certainly, in the first quarter had a strong growth there in the local currency. And I would expect that to continue and if it does well that’s good for us. In Canada it’s different and it’s much more of a commodity based economy. And they are softer, it’s different than Europe. There the oil and gas, the natural gas, the iron, it’s impacting and making the economy sluggish. So I don’t see the same growth that I see in Europe and Canada. Well that’s what I think is a short-term trend. In the U.S., the Westcott business is doing very, very well and we are gaining market share. And the First Aid business has a good runway as well as a recurring revenue platform from refills. The one area of first aid that is softer is the portion that we sell into the oil and gas area, for example, fracing kits and some of the kits for offshore rigs and lifeboats. But that’s not meaningful enough to show up in the overall trends.

Thank you. I appreciate the color. I’ll jump back into queue.

Thank you.

[Operator Instructions] And we have no additional questions in the queue at this time.

There are no further questions then this call is complete and I’d like to thank you very much for joining us. Good bye.

Ladies and gentlemen that does conclude our conference for today. We thank you for your participation.