Acme United Aims for Solid Growth in 2023

Acme United Corporation (US: ACU – $24.77), the leading consumer products company with a focus on first aid and safety products, as well as cutting solutions, had a tough third quarter, in which it faced higher costs for goods sold and higher interest expense. On the sales side, the Company still managed to set a new all-time third quarter record of $49.7 million, compared to $47.9 million in the same period of 2021, an increase of 4%.

Net income for the third quarter of 2022, however, was $64,000 or $0.02 per diluted share, compared to net income of $2 million or $0.50 per diluted share for the same period of 2021.

In response to these results, Acme has immediately implemented a series of cost reduction initiatives that are expected to generate over $5.0 million in savings in 2023. The Company has:

  • Reduced selling expenses by $600,000;
  • Implemented a wide range of productivity improvements in its manufacturing and distribution facilities, which will save $2.4 million; and
  • Lowered labor costs by $800,000 annually.

In addition to the cost reduction initiatives, solid growth opportunities in 2023, including new first aid and medical placement in the industrial and retail markets, additional Westcott craft products in the mass and ecommerce markets, and expanded sales of Spill Magic to large mass market retailers.

Moreover, the Company recently purchased the promotional business of a former competitor of Safety Made with annual sales of approximately $1.2 million.

We reiterate our buy recommendation for Acme United Corp. with a price target of $36.38 for 2023, which is 46% above today’s stock price.

Download the third quarter 2022 Acme United Company Report.
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