Acme United Shows Strong Resilience in Second Quarter

Acme United’s (US: ACU – $40.13) second quarter results offer a clear message to investors: the Company is not only navigating challenges but leveraging them to build a more agile, efficient, and future-ready enterprise.

While net sales dipped 3% year-over-year to $54.0 million from $55.4 million, net income climbed 7%, reaching $4.8 million, or $1.16 per diluted share, compared to $1.09 per share in the same period last year.

Despite the short-term softness in revenue, Acme United’s financial health remains strong. The Company generated approximately $12 million in free cash flow during the quarter and reduced its bank debt (net of cash) to $22.8 million, down from $33.1 million a year earlier.

Acme’s factories in the United States have benefited from the increased tariffs. The Med-Nap facility in Brookfield, Florida is producing alcohol and BZK wipes, castile soap and other first aid items at record levels. Moreover, the Vancouver, Washington and Rocky Mount, North Carolina plants, that produce first aid kits, are also running at full speed.

The new Tennessee facility marks another important move toward enhancing the Company’s supply chain resilience and reducing dependency on overseas production. The start of the production in 2026 will be more than welcome, as the current Spill Magic plants in Santa Ana, California and Smyrna, Tennessee are running multiple shifts.

Looking ahead, management anticipates continued top-line growth in the second half of 2025 as delayed orders potentially resume and the benefits of its manufacture-at-home strategy materializes further. Solid confidence in its outlook was also shown back in June, as the Company increased its quarterly cash dividend to 16 cents per share. Mr. Johnsen commented, “This is Acme United’s fifteenth dividend increase since 2004. We are optimistic about our future, and we are pleased to provide this additional return to shareholders.

We reiterate our buy recommendation for Acme United Corp. with a price target of $55.17 for 2025, which is 37% above today’s stock price.

Smallcaps.us Advice: Buy	Price Target: $52.61	Latest Company Report (pdf)
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