Why Acme United Stands Solid, Even In Uncertain Times

2019 was a remarkable year for Acme United (US: ACU – $21.66). The worldwide supplier of cutting devices, measuring instruments and first-aid products for school, home, office, industrial and hardware use, achieved record sales for the 9th consecutive year. Net sales for the year ended December 31, 2019 were $142.5 million, compared to $137.3 million in 2018, an increase of 4%.

Moreover, the decisive steps which Acme took in Q4 of 2018 to reduce annual recurring costs by up to $1.3 million had an astonishing result. Net income for the year ended December 31, 2019 was $5.5 million, or $1.60 per diluted share, compared to $4.6 million, or $1.30 per diluted share in 2018, increases of 20% and 23%, respectively!

Especially Acme’s SmartCompliance first aid cabinets, which provide comprehensive safety products to employers, showed strong sales growth. This is encouraging and demonstrates how much employers value the fast and easy to requisition first aid system.

Acme began 2020 on a strong note, acquiring First Aid Central, a Canadian first aid and safety supplier, in early January. The acquisition expands the Company’s product offerings, global distribution capabilities and online presence. First Aid Central is doing well and is already contributing to Acme’s top and bottom line. Moreover, it could become a platform of growth and more acquisitions in a fragmented Canadian first aid market.

Next to first aid, also the Camillus, Cuda, and DMT brands are doing well. They continue to gain market share, and are expected to grow again in 2020.

Contrary to most other companies, Corona may pose an opportunity for upside for Acme United. First, because the Company has a diversified worldwide supply base, and second because it has a large enough inventory to supply its existing and new clients.

We reiterate our buy recommendation for Acme United Corp. with a price target of $32.86, which is 51% above today’s stock price.

Download the fourth quarter 2019 Acme United Company Report.


Smallcaps.us Advice: BuyPrice Target: $59.86Latest Company Report (pdf)
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