Acme United Aims To Boost Sales With $100 Million

All in all, 2023 was an excellent year for Acme United Corp. (US: ACU – $43.29). The Company decreased its net debt from $55 million at year end 2022 to $19 million one year later. Its gross margins increased as Acme successfully implemented new productivity plans. The reduction in SG&A expenses resulted in annual savings of approximately $6.5 million. And new retail distribution was gained for first aid kits, Westcott ceramic cutters, and craft planograms.

In addition, the Company sold its hunting and fishing business for $19.8 million. And acquired Hawktree Solutions at a bankruptcy auction for $1 million, providing new customers in the Canadian market.

As for 2024, the Company has lots of growth lined up in many areas. The Westcott school and office products brand, for example, will expand its distribution at a mass market retailer and a major hobby store. Westcott’s products will be replacing a competitor at those stores. Altogether, this will be a multimillion dollar expansion.

In addition, the European segment recently gained a Westcott contract for several hundred thousand dollars and the Canadian business is expected to show both organic growth and from the Hawktree acquisition.

In the case of First Aid, Acme’s products will soon be available at a new drug chain and an industrial hardware chain. In both cases, a competitor is being replaced. The Company is also developing the next generation of its SafetyHub digital requisition system for First Aid refills. Remember that the First Aid Only SafetyHub simplifies first aid supply requisitioning.

Spill Magic has gained a multimillion dollar contract at a large grocery chain. And DMT was able to win a similar size deal at a large retailer in the kitchen area.

Acme’s management is aiming to boost sales with another $100 million over the next three years by organic growth as well as accretive acquisitions.

We reiterate our buy recommendation for Acme United Corp. with a price target of $59.86 for 2024, which is 38% above today’s stock price. Smallcaps Recommendation: BUY.

Download the fourth quarter 2023 Acme United Company Report. Advice: BuyPrice Target: $59.86Latest Company Report (pdf)
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