Strong Growth Opportunities for Acme United in 2024

Acme United Corporation (US: ACU – $40.72) reached net sales of $45.0 million for the quarter ended March 31, 2024, compared with $45.8 million in the same quarter last year. This represents a 2% decrease, reflecting the sale of the Camillus and Cuda hunting and fishing product lines in November 2023 for $19.6 million.

Despite sales being more or less even, earnings soared to $1.6 million, or $0.39 per diluted share, for the quarter ended March 31, 2024, compared to $1.0 million, or $0.28 per diluted share, for the comparable period last year. This is an increase of 65% in net income and 39% in diluted earnings per share.

Acme’s Chairman and CEO Walter C. Johnsen said, “Acme United had very strong earnings in the first quarter due to productivity improvements in manufacturing and distribution. We also achieved additional distribution of first aid kits and components in the hardware and drug store markets, new craft and cutting tool planograms in the mass market, additional sales of spill clean-up products to large mass market retailers, and new sharpening tools for the kitchen. We intend to continue and expand these initiatives and I am excited about the meaningful sales growth that we anticipate in the coming quarters.”

Looking forward, Acme expects to see growth in First Aid, as it won new distribution of first aid kits in one of the largest drug chains in the United States. It has gained additional placement of cutting tools in the craft and mass markets, and has expanded its Spill Magic cleanup line to a major mass market retailer. Also, DMT Sharpeners will see significant incremental distribution in the kitchen category.

Acme’s growth plans also require additional space. As such, the Company is upgrading its production and distribution facilities in Rocky Mount, North Carolina and at Spill Magic in Santa Ana, California. Furthermore, it is expanding its First Aid Only production capacity in Vancouver, WA, the First Aid Central facility in Laval, Canada, and its Med-Nap plant in Brooksville, FL.

We reiterate our buy recommendation for Acme United Corp. with a price target of $57.28 for 2024, which is 41% above today’s stock price. Smallcaps Recommendation: BUY.

Download the first quarter 2024 Acme United Company Report. Advice: BuyPrice Target: $59.86Latest Company Report (pdf)
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