Acme United Reports Solid Q1 2025 Earnings and Eyes Strategic Acquisitions Amid Tariff Challenges

Acme United Corporation (US: ACU – $41.55), a leading provider of cutting, measuring, and safety products, reported its financial results for the first quarter of 2025, demonstrating resilience and strategic foresight in a complex global trade environment. The Company also highlighted the current international trade environment as a potential catalyst for strategic acquisitions.

For the quarter ending March 31, 2025, Acme United reported net sales of $46.0 million, a 2% increase from $45.0 million in Q1 2024. Net income rose slightly to $1.65 million, or $0.41 per diluted share, marking a 1% increase in net income and a 5% rise in diluted earnings per share compared to the same period last year .

Sales of the First Aid business increased no less than 14% in the first quarter of 2025. Sales of Westcott cutting tools declined due to a large initial shipment of craft items in last year’s first quarter to a major U.S. retailer which did not repeat the past quarter. DMT sharpeners, on the other hand, continued to gain placement in major retailers in the kitchen segment and had strong growth in the quarter.

Chairman and CEO Walter C. Johnsen acknowledged the challenges posed by the current tariff environment, stating, “The current tariff environment is very uncertain and challenging. Our team is working to minimize the impact of these uncertainties to both Acme and our customers.” He emphasized the Company’s efforts to reduce costs through supplier negotiations, lower shipping costs, and more than $2 million in productivity savings this year. In addition, the Company will be increasing prices where necessary.

Mr. Johnsen also highlighted the potential for strategic acquisitions, noting, “I believe the Company is well positioned to increase market share from competitors with less diversified supply bases or less efficient cost structures. I also believe there will be opportunities for Acme United to make new strategic acquisitions.”

Strategic Positioning in the Current Tariff Environment

In anticipation of the tariffs, Acme focused on minimizing its internal overhead. Through capital projects and enhanced production operations, the Company realized over $2 million in annual productivity savings.

In addition, the Company has adapted to global sourcing shifts, noting that many Chinese factories have relocated production to Vietnam, Thailand, and Cambodia—a trend the Company has been actively involved in. For example, shipments from Thailand commenced in December 2024, replacing items previously sourced from China. Production of other items has been moved to India. While tariffs are also in place on products being imported from those countries, they aren’t as high as on goods imported from China.

Finally, the Company has extensive domestic production capabilities with no less than eight U.S.-based plants. Increased activity at these facilities has led to expansion initiatives such as the growth of Spill Magic operations in Tennessee and heightened automation in Rocky Mount, North Carolina and Vancouver, Washington. This domestic production focus serves as a key advantage.

The current economic conditions may also present attractive opportunities for acquisitions. The Company believes its robust sourcing and manufacturing capabilities, combined with strong financial resources, can deliver substantial value in potential acquisition scenarios.

Acme identifies its primary business segments—cutting tools and first aid products— as two promising areas for acquisitions. Management sees expansion opportunities both horizontally, through competitors, and vertically, through suppliers of components used in first aid kits.

If current tariff levels persist, competitors may face significant working capital challenges as they are forced to purchase higher-priced inventory and carry inflated receivables. Many of these competitors may lack the financial stability to endure such pressures, whereas Acme’s strong balance sheet positions it to withstand, and even benefit, from these conditions.

First Quarter Financials and Balance Sheet

SG&A expenses for the first quarter of 2025 were $15.5 million or 34% of net sales compared with $14.8 million or 33% of net sales for the same period of 2024.

The Company’s gross margin improved to 39.0%, up from 38.7% in Q1 2024, reflecting operational efficiencies and cost management.

	First Quarter Ended March 31
Amounts in $000’s	2025	2024
Net Sales	45,958	44,956
Cost of Goods Sold	28,041	27,560
S, G & A Expenses	15,491	14,838
Income From Operations	2,426	2,558
Interest Expense	426	476
Other Income (Expense)	(90)	(44)
Pre-Tax Income	2,119	2,159
Income Tax Expense (Benefit)	466	523
Net Income	1,653	1,636
Shares Outstanding – Diluted	4,065	4,213
Earnings Per Diluted Share	0.41	0.39
Selected income statement data for the quarters ending March 31, 2025 and March 31, 2024. Source: Company Press Release

Acme United’s bank debt less cash on March 31, 2025 was $27.2 million compared to $31.5 million on March 31, 2024. During the twelve-month period ended March 31, 2025, 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 $12.0 million in free cash flow.

	First Quarter Ended March 31
Amounts in $000’s	2025	2024
Cash and Cash Equivalents	3,446	2,443
Accounts Receivable	30,814	32,966
Inventories	57,274	56,887
Total Current Assets	96,845	98,406
Property and Equipment	32,153	28,863
Total Assets	163,039	159,381
Accounts Payable	7,433	7,907
Other Current Liabilities	10,662	11,931
Total Current Liabilities	20,069	21,861
Long Term Debt	20,428	23,294
Total Liabilities	54,758	60,289
Total Stockholder Equity	108,281	99,092
Selected balance sheet data for the periods ended March 31, 2025 and March 31, 2024. Source: Company Press Release

First Aid Growth Driver in All Three Segments

For the first quarter of 2025, net sales in the U.S. segment increased 3% compared to the same period in 2024. Sales of first aid and medical products were strong, while sales of school and office products declined mainly due to a large initial order of craft products to a major mass market retailer that took place in the first quarter of 2024 and did not repeat in the first quarter of 2025.

European net sales for the first quarter of 2025 decreased 7% in U.S. dollars and 4% in local currency compared to the first quarter of 2024 due primarily to a large promotion in the first quarter of 2024 that did not repeat this year. The European team has broadened its first aid and medical product lines and begun new distribution in Switzerland and the Netherlands. The first aid sales team will be expanded in Germany and the team will attend the MEDICA show in Dusseldorf in the fall for the first time.

Net sales in Canada for the first quarter of 2025 increased 5% in U.S. dollars and 6% in local currency compared to the same period in 2024. Sales of first aid products were strong, while sales of school and office products continued to be adversely impacted by a soft economy. Good news is that the Canadian team secured new first aid distribution in the mass and industrial markets and is also increasing its sales team.

Conclusion

Acme United’s Q1 2025 results reflect a stable financial performance and a proactive approach to navigating global trade challenges.

The Company’s management has identified the prevailing international trade policies and tariff structures as potential catalysts for strategic acquisitions. By leveraging its strong financial position and operational efficiencies, the current tariff environment may present opportunities to acquire competitors, particularly those facing challenges due to increased import costs.

Moreover, despite the discomfort associated with tariff unpredictability, Acme United views this environment as a strategic opportunity to increase market share. With eight manufacturing facilities across the United States, the Company is positioned to produce competitively priced products.

Last month, it installed the first robotic system in its Rocky Mount, North Carolina plant. This system has four robots that process bulk antiseptic packets for the first aid product line, orients them for packaging, folds smart compliance boxes and fills them. This custom designed machine costs about $650,000, replaces seven employees and has less than a two-year payback. A second robotic system has been ordered for the Company’s Vancouver, Washington first aid plant.

Also the Spill Magic product line has increased substantially since Acme purchased it about five years ago. Its items include bodily fluid and blood borne pathogen cleanup kits, as well as general materials for removing fluids from spills. In fact, Spill Magic has grown so much that it has outgrown its current facility outside Nashville, Tennessee. The goal is to install automated powder transfer and filling equipment once a new site has been acquired.

With a solid start to 2025, Acme United continues to focus both on strategic growth initiatives and potential acquisitions that align with its core competencies. Smallcaps Recommendation: BUY.

Smallcaps.us Advice: Buy	Price Target: $53.27	Latest Company Report (pdf)
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