Acme United Reports Robust Financials for 2024

Acme United Corporation (US: ACU – $37.31) reported robust financial results for the fourth quarter and full year of 2024, reflecting strategic growth and operational efficiency.

The Company reported net sales of $45.9 million for Q4 2024, marking a 10% increase from $41.9 million* in the same period of 2023. Net income for the quarter rose by 9% to $1.70 million, compared to $1.56 million* in Q4 2023.

* For reason of comparison, we exclude the impact of the sale of the Camillus and Cuda hunting & fishing lines businesses in November 2023.

The First Aid business generated approximately $120 million in revenue in 2024, bolstered by refills of components for first aid kits, which were approximately $30 million. To further boost sales in 2025, Acme introduced SmartCompliance first aid cabinets with RFID technology in 2024, which permit automatic replenishment of refills. Automatic replenishment provides substantial savings to customers and captures a high percentage of items needed to keep the kits compliant with OSHA and ANSI standards.

The Westcott cutting and DMT sharpening businesses achieved net revenues of approximately $75 million in 2024, an increase of 10% compared to 2023. The growth was mainly driven by market share gains in the craft market and a broader distribution of high leverage scissors. In 2025, these brands are again looking to expand, as they successfully introduced their products in the kitchen and culinary markets.

Chairman and CEO Walter C. Johnsen said, “Acme United delivered a strong year in 2024. Our net sales increased 6% from our core businesses and grew overall despite the sale of the Cuda and Camillus product lines for $19.8 million in November 2023. We successfully reduced costs and implemented productivity improvements that enabled us not only to offset the contribution from the business we sold, but also to generate 23% net income growth.

Operational Efficiency

In 2024, Acme United implemented several productivity initiatives resulting in over $2 million in annual savings. Some of these measures include:

• Cost Reductions: Efforts to reduce the cost of first aid boxes and other materials contributed to significant savings.
• Automation Improvements: The Company automated the placement of items into unitized packages, enhancing efficiency in production processes.
• Freight and Carrier Optimization: By bidding out freight and carrier charges, Acme United achieved cost reductions in logistics.
• Warehouse Optimization: The installation of new racking in the Rocky Mount, North Carolina distribution center increased capacity by 30%.

Tariff Preparedness

During the earnings conference call, Mr. Johnsen addressed anticipated challenges related to tariffs. He mentioned that the Company is ready as it has proactively diversified its sourcing and production to mitigate tariff impacts.

For example, over the past eight years, it acquired no less than 10 companies with manufacturing sites in the U.S. and Canada, including facilities in Vancouver, Washington; Rocky Mount, North Carolina; Santa Ana, California; Nashville, Tennessee; and Brooksville, Florida.

The Company implemented a dual sourcing strategy in countries such as Egypt, Thailand, India, and the Philippines to reduce reliance on any single country or region. For example, the Company sources gauze and tape from Egypt, leveraging the country’s robust cotton industry.

Acme also increased its inventory in advance of the tariffs so that it has time to adjust and implement the new prices.

Finally, to offset potential tariff costs, Acme United plans to collaborate with suppliers to reduce expenses, enhance productivity, and implement price adjustments while maintaining customer value.

Financials and Balance Sheet

Net sales for the year ended December 31, 2024 were $194.5 million compared to $191.5 million in 2023, an increase of 2%. Excluding the impact of the sale of the Camillus and Cuda hunting and fishing product lines on November 1, 2023, net sales for 2024 increased 6% compared to 2023.

	Three Months Ended December 31		Year Ended December 31
Amounts in $000’s	2024	2023	2024	2023
Net Sales	45,943	41,942	194,490	191,501
Cost of Goods Sold	28,178	25,538	118,139	119,291
S, G & A Expenses	15,483	14,311	62,211	59,022
Income (Loss) From Operations	2,282	2,093	14,140	13,188
Net Interest Expense	427	460	1,942	2,977
Gain on Sale of Assets	–	12,564	–	12,564
Other Income (Expenses)	8	(31)	95	(41)
Pre-Tax Income	1,863	14,166	12,293	22,734
Income Tax Expense (Benefit)	153	2,958	2,270	4,941
Net Income (Loss)	1,710	11,208	10,023	17,793
Earnings Per Share – Diluted	0.41	2.87	2.45	2.23
Shares Out. – Diluted	4,155	3,909	4,099	3,658
Most important income statement data for the quarters and full year ended December 31, 2024 and December 31, 2023. Source: Company Press Release

Net income for the year ended December 31, 2024 was $10.02 million, or $2.45 per diluted share, compared to $8.15 million, or $2.23 per diluted share (as adjusted), for 2023, an increase of 23% in net income and 10% in diluted earnings per share. Including the net gain recognized on the sale of assets of Camillus and Cuda, net income was $17.8 million, or $4.86 per diluted share, for the year ended December 31, 2023.

SG&A expenses for the fourth quarter of 2024 were $15.5 million or 34% of sales compared with $14.3 million or 34% of sales for the same period of 2023. SG&A expenses for the 12 months of 2024 was $62 million or 32% of sales compared with $59 million or 31% of sales in 2023.

Interest expense for the year went from $3 million in 2023 to $1.9 million in 2024 due to a decline in the average debt of approximately $16 million.

Gross margin was 38.7% in the three months ended December 31, 2024 versus 39.1% in the comparable period last year. Gross margin was 39.3% for the year ended December 31, 2024 compared to 37.7% in 2023. The increase for the year was primarily due to productivity improvements in the Company’s manufacturing and distribution facilities.

	Year Ended December 31
Amounts in $000’s	2024	2023
U.S.	166,152	163,205
Canada	13,261	13,891
Europe	15,077	14,405
Sales per segment for the years ended December 31, 2024 and December 31, 2023 (Source: Company Filing)

The Company’s bank debt less cash as of December 31, 2024 was $21.5 million compared to $19.0 million as of December 31, 2023. During the year ended December 31, 2024, the Company paid approximately $6.1 million for the acquisition of the assets of Elite First Aid Inc., distributed $2.2 million in dividends on its common stock and generated approximately $5.0 million in free cash flow.

Growth in All Segments

Acme United reports financial information on three separate business segments: the United States (including Asia), Canada and Europe.

	Year Ended December 31
Amounts in $000’s	2024	2023
Cash and Cash Equivalents	6,399	4,796
Accounts Receivable	28,236	26,234
Inventories	56,254	55,470
Total Current Assets	95,460	92,024
Property and Equipment	31,653	28,025
Total Assets	162,170	149,241
Accounts Payable	9,005	12,102
Other Current Liabilities	11,866	12,392
Total Current Liabilities	22,872	26,012
Long Term Debt	17,606	13,105
Total Liabilities	55,190	51,343
Total Stockholder Equity	106,980	97,898
Most important balance sheet data for the periods ended December 31, 2024 and December 31, 2023. Source: Company Press Release

For the three months ended December 31, 2024, net sales in the U.S. segment increased 12% compared to the 2023 period. For the year ended December 31, 2024, net sales in the U.S. segment increased 2% compared to 2023. Excluding Camillus and Cuda, net sales for the year ended December 31, 2024 increased 7% compared to 2023. The sales increases for the three and twelve-month periods were due to market share gains with First Aid, Westcott, craft products and DMT sharpeners.

European net sales for the three months ended December 31, 2024 decreased 1% in both U.S. dollars and local currency compared to the fourth quarter of 2023. Net sales for the year ended December 31, 2024 increased 5% in both U.S. dollars and local currency compared to 2023. Excluding Camillus and Cuda, net sales for the year ended December 31, 2024 increased 8% compared to 2023 due to market share gains in the office channel.

Net sales in Canada for the three months ended December 31, 2024 decreased 3% in U.S. dollars and were constant in local currency compared to the same period in 2023. Net sales for the year ended December 31, 2024 decreased 5% in U.S. dollars and 3% in local currency compared to 2023. Excluding Camillus and Cuda, net sales for the year ended December 31, 2024 increased 1% compared to 2023. Sales of first aid products were strong, while sales of school and office products continued to be adversely impacted by a soft economy.

Conclusion

In 2024, Acme United implemented productivity initiatives resulting in over $2 million in annual savings. These efforts included cost reductions, automation improvements, and optimization of warehouse operations.

Acme United’s strategic acquisitions, product innovations, and operational efficiencies position the Company for continued growth. Despite potential challenges such as tariffs and market volatility, Acme’s diversified sourcing and strong financial performance provide a solid foundation for future success. The Company has strong liquidity and is positioned for further acquisitions and growth in 2025. Smallcaps Recommendation: BUY.

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