Acme United Reported Record Second Quarter Sales as Growth Accelerated Across Core Businesses

Acme United Corporation (US: ACU – $56.86) reported second-quarter 2026 net sales of $62.7 million, representing a 16% increase compared to $54.0 million in the same period of 2025. Excluding revenue generated by the acquisition of My Medic, which closed on January 15, 2026, comparable quarterly sales increased 8%, reflecting solid organic growth across the Company’s core operations.

Growth was broad-based throughout the business. Sales of first aid and medical products increased 10%, driven primarily by strong demand from mass-market retailers. Additional contributors included Safety Made’s first aid business, Med-Nap antiseptic wipes, and Spill Magic cleanup products. Westcott cutting tools also delivered a strong performance, with sales rising 8% during the quarter.

Management noted that the retail environment had improved considerably compared to the prior year. During 2025, promotional programs had been widely cancelled due to tariff uncertainty and higher product costs. As those concerns eased, promotional activity resumed, resulting in stronger retail demand and contributing significantly to Westcott’s improved performance.

Internationally, Europe continued to be a standout performer. Revenue increased 19% in local currency, supported primarily by robust sales of Westcott cutting tools.

Management Commentary

Chairman and Chief Executive Officer Walter C. Johnsen stated that the Company achieved record quarterly revenue and operating income through balanced growth across virtually all geographies and product categories.

According to management, the U.S. first aid business generated 10% organic growth, excluding the contribution from My Medic, while Westcott cutting tools benefited from the return of seasonal promotional programs and stronger retail demand following a challenging prior year.

Mr. Johnsen also acknowledged that elevated tariffs continued to pressure gross margins in the United States because inventory purchased under higher tariff rates was still being sold. However, the impact was noticeably smaller than during the first quarter. Management expected this headwind to continue easing over the coming quarters as lower-cost inventory gradually replaced higher-cost inventory.

Regarding the recently acquired My Medic business, management indicated that integration was progressing well. The Company had begun introducing My Medic’s products to large retail and industrial customers while simultaneously leveraging Acme’s purchasing scale to reduce sourcing costs. Additional overhead reductions and operational efficiencies had also been implemented, with the objective of steadily improving profitability over time.

Financial Performance

Second-quarter net income increased to $5.1 million, or $1.22 per diluted share, compared to $4.8 million, or $1.16 per diluted share, in the same quarter of 2025. This represented a 6% increase in net income and a 5% improvement in diluted earnings per share.

	Three Months Ended June 30		Six Months Ended June 30
Amounts in $000’s	2026	2025	2026	2025
Net Sales	62,716	53,996	115,017	99,954
Cost of Goods Sold	36,028	31,847	67,544	59,888
S, G & A Expenses	19,858	15,759	38,899	31,250
Income From Operations	6,830	6,390	8,574	8,816
Interest Expense	532	401	1,018	798
Other Expense (Income)	(5)	(99)	11	(188)
Pre-Tax Income	6,303	6,088	7,545	8,206
Income Tax Expense (Benefit)	1,252	1,336	1,511	1,802
Net Income	5,051	4,752	6,034	6,404
Earnings Per Share	1,22	1.16	1,46	1.57
Shares Out. – Diluted	4,141	4,101	4,138	4,070
Selected income statement data for the quarters and six months ended June 30, 2026 and June 30, 2025. Source: Company Press Release

For the first six months of 2026, net sales reached $115 million, up 15% from $100 million during the comparable period in 2025. Excluding My Medic, comparable first-half sales increased 7%.

Despite stronger revenue growth, first-half net income declined to $6.0 million, or $1.46 per diluted share, from $6.4 million, or $1.57 per diluted share, a year earlier. These declines of 6% and 7%, respectively, were largely attributable to the lingering effects of elevated tariffs.

Management explained that higher tariffs introduced during 2025 had increased inventory costs. Because these costs were capitalized into inventory, their full earnings impact was not realized until those products were sold during the first quarter of 2026. The effect moderated during the second quarter and was expected to continue diminishing over the following two quarters after tariff rates were reduced in November 2025 and again in February 2026.

Margin Performance

Gross margin improved to 42.6% during the second quarter, compared with 41.0% in the prior-year period. For the first six months of 2026, gross margin increased to 41.3%, versus 40.1% a year earlier. The improvement was primarily driven by the addition of My Medic’s higher-margin direct-to-consumer business.

Excluding My Medic, however, gross margins in the United States declined by approximately 100 basis points due to the sale of inventory purchased under elevated tariff rates. Even so, management noted that this represented a significant improvement from the first quarter and anticipated further gross margin expansion as remaining high-cost inventory was worked through.

Selling, general and administrative expenses increased to $19.9 million, or 32% of sales, during the second quarter, compared with $15.8 million, or 29% of sales, in the prior-year quarter. For the first six months of 2026, SG&A expenses totaled $38.9 million, or 34% of sales, versus $31.3 million, or 31% of sales, in 2025.

The increase was primarily attributed to the additional marketing and advertising expenses required to support My Medic’s direct-to-consumer business.

Balance Sheet and Capital Allocation

Net bank debt, defined as bank borrowings less cash, increased from $22.8 million at June 30, 2025, to $27.3 million one year later.

Following the outbreak of the conflict involving Iran, Acme United proactively ordered approximately $10 million of additional inventory to reduce the risk of supply disruptions and future cost increases. Management indicated that these elevated inventory levels would continue to provide flexibility should additional geopolitical disruptions occur.

Amounts in $000’s	June 30, 2026	June 30, 2025
Cash and Cash Equivalents	5,041	3,641
Accounts Receivable	38,726	36,174
Inventories	64,099	57,309
Total Current Assets	112331	101,341
Property and Equipment	39,217	32,901
Total Assets	200,645	170,868
Accounts Payable	14,151	10,181
Other Accrued Liabilities	18,870	11,323
Total Current Liabilities	34,814	23,474
Bank Debt	22,637	16,352
Mortgage Payable – Long Term	9,229	9,662
Total Liabilities	79,343	57,425
Total Stockholder Equity	121,302	113,722
Selected balance sheet data for the quarters ended June 30, 2026 and June 30, 2025. Source: Company Press Release

Over the twelve months ended June 30, 2026, the Company invested approximately $14.5 million in the acquisition of My Medic’s assets, paid $2.4 million in dividends, and completed the acquisition of German direct-to-consumer cutting and sharpening supplier Schmiedeglut for $1.6 million. Despite these investments, Acme generated approximately $15.5 million in free cash flow.

On July 15, 2026, the Company also entered into a new $65 million syndicated credit facility with HSBC Bank USA and City National Bank, a U.S. subsidiary of Royal Bank of Canada. The new facility replaced the previous credit agreement and extends through July 2029.

Geographic Performance

The United States remained Acme United’s largest growth market during the quarter. Second-quarter U.S. sales increased 17%, while first-half sales rose 15%, reflecting both strong organic demand across product categories and the contribution from the My Medic acquisition.

Europe continued to deliver exceptional growth. Second-quarter revenue increased 24% in U.S. dollars and 19% in local currency, while first-half sales grew 28% in U.S. dollars and 19% in local currency. Growth was driven by expanding e-commerce sales and the contribution from the German cutting and sharpening business acquired in late 2025.

	Three Months Ended June 30
Amounts in $000’s	2026	2025
U.S.	52,739	44,991
Canada	5,258	5,198
Europe	4,719	3,807
Estimated sales per segment for the second quarter ended June 30, 2026 (Source: Smallcaps Investment Research) and actual sales per segment for the second quarter ended June 30, 2025 (Source: Company Filing)

Canadian operations also recorded positive momentum. Second-quarter sales increased 1% in U.S. dollars and 3% in local currency, while first-half sales grew 7% and 6%, respectively, supported primarily by higher first aid product sales.

Key Growth Drivers

Management highlighted three businesses that appear particularly well positioned for continued expansion.

Spill Magic manufactures absorbent products designed to handle everything from ordinary liquid spills to hazardous chemicals and biohazard cleanup.

Earlier in 2026, the business relocated to a substantially larger manufacturing facility in Mt. Pleasant, Tennessee. Earlier in 2026, Spill Magic moved into a new, larger facility in Mt. Pleasant, Tennessee. The brand experiences strong momentum, with sales increasing by more than 30% in the first quarter of 2026. The larger facility is expected to support future growth and enable expanded product development.

Med-Nap, based in Brooksville, Florida, manufactures alcohol prep pads, antiseptic wipes, benzalkonium chloride (BZK) wipes, and other first aid products.

Following an FDA inspection in 2025, the Company invested approximately $1.3 million to strengthen quality assurance procedures. Improvements included the hiring of external consultants and upgrades to both microbiological and chemical testing laboratories. Management characterized these expenditures as one-time investments intended to enhance long-term quality standards and regulatory compliance.

The certification process required to expand into the U.S. hospital market is progressing well and is expected to be completed before year-end.

The acquisition of My Medic represented one of the Company’s most significant strategic initiatives in recent years. The business generates approximately $19 million in annual revenue and specializes in premium tactical, trauma, and emergency preparedness products sold primarily through direct-to-consumer channels.

Overall, the acquisition of My Medic marked a milestone for Acme United. By combining My Medic’s strong brand, digital marketing prowess, and loyal consumer base with Acme United’s sourcing strength and retail distribution capabilities, the Company aims to accelerate growth, expand margins, and broaden access to critical emergency and trauma response products.

Although the acquisition has only recently closed, the Company is already presenting My Medic products to major retailers and industrial distributors while simultaneously reducing sourcing costs, eliminating duplicate overhead, and integrating operations. These initiatives are expected to support both revenue growth and margin expansion over the coming years.

Outlook

Looking ahead, management remains optimistic about continued growth across the business. The first aid and medical segment continues to experience healthy demand, while Westcott cutting tools is benefitting from the return of retail promotional activity after an unusually weak 2025. With uncertainty surrounding tariffs having largely subsided, retailers have resumed seasonal marketing programs, resulting in a full schedule of back-to-school promotions.

Combined with continued integration of My Medic, easing tariff headwinds, and sustained strength across international markets, Acme United appears well positioned to deliver continued revenue growth while gradually improving profitability over the coming quarters. Interesting to note is that investors have acknowledged Acme’s potential as its stock price, since the second quarter financials were announced, has shot up by almost 30%. Smallcaps Recommendation: BUY.

Smallcaps.us Advice: Buy	Price Target: $52.60	Latest Company Report (pdf)
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