Acme United Corporation (ACU) | Investment Case

1. Company Snapshot

1.a. Company Description

Acme United Corporation supplies first aid and safety, cutting, sharpening, and measuring products to the school, home, office, hardware, sporting goods, and industrial markets in the United States, Canada, Europe, and internationally.The company offers scissors, shears, knives, rulers, pencil sharpeners, paper trimmers, safety cutters, lettering products, glue guns, and other craft products under the Westcott brand name; and cutting tools under the Clauss brand.It also provides fixed blades, folding knives, sight cutting tools, and tactical tools under the Camillus brand; fishing tools and knives, as well as cut and puncture resistant gloves, telescopic landing nets, net containment systems, and tools and fishing gaffs under the Cuda brand; and sharpening tools under the DMT brand.

In addition, the company offers first aid kit and safety solutions under the First Aid Only brand; portable eyewash solution and over-the-counter medication, including active ingredients aspirin, acetaminophen, and ibuprofen under the PhysiciansCare brand; bodily fluid and spill clean-up solution under the Spill Magic brand; various first aid kit, refill, and safety supplies, including CPR kits, burn kits, and automotive and emergency first aid kits under the First Aid Central; and alcohol prep pads, alcohol wipes, benzalkonium chloride wipes, various antiseptic wipes, castile soaps, and lens cleaning wipes under the Med-Nap brand.It sells its products directly and through its independent manufacturer representatives to wholesale, contract, and retail stationery distributors; office supply super stores; school supply distributors; industrial distributors; wholesale florists; mass market and e-commerce retailers; and hardware chains, as well as sells a selection of products through its websites.The company was formerly known as Acme Shear Company and changed its name to Acme United Corporation in 1971.

Acme United Corporation was founded in 1867 and is based in Shelton, Connecticut.

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1.b. Last Insights on ACU

Acme United Corporation's recent performance was driven by a strong Q1 2025 earnings release, which showcased the company's ability to maintain a steady dividend payout. The announcement of a 15-cent per share cash dividend, payable on April 16, 2025, to stockholders of record on March 26, 2025, highlights the company's commitment to returning value to shareholders. Additionally, the company's participation in the LD Micro Invitational XV, where Walter C. Johnsen, Chairman and CEO, presented on April 10, demonstrates its efforts to engage with the investment community and showcase its growth initiatives.

1.c. Company Highlights

Last Price	37
Change Percentage	-0.64%
Open	36.51
Previous Close	37.24
Market Cap ( Millions)	141
Volume	3476
Year High	45.25
Year Low	34.35
M A 50	38.15
M A 200	39.8

FCF Yield	3.55%
Dividend Yield	1.68%
ROE	9.87%
Debt / Equity	22.10%
Net Debt / EBIDTA	0.13%
Price To Book	1215.18
Price Earnings Ratio	17.33
Price To FCF	28.16
Price To sales	0.96
EV / EBITDA	8.78

2. Acme United's Q2 2025 Earnings: A Resilient Performance Amidst Tariff Headwinds

Acme United reported a robust second quarter of 2025, with net sales reaching $54 million, a 3% decrease from $55.4 million in the same period last year. Despite the decline in revenues, net income rose to $4.8 million, or $1.16 per diluted share, up from $4.5 million, or $1.09 per diluted share, in Q2 2024. The earnings per share (EPS) came in significantly higher than analyst estimates of $0.5, highlighting the company's ability to navigate the challenging market environment. As Walter Johnsen noted, "Acme had built extra inventory during late 2024 and early 2025 and supplied regular Westcott customers from domestic inventory," which helped mitigate the impact of tariffs.

Publication Date: Jul -27

                                    📋 Highlights
                                    Net Sales Performance:
                                                Net sales decreased 3% to $54 million in Q2 2025 from $55.4 million in Q2 2024.
Net Income Growth:
                                                Net income rose 7% to $4.8 million, with earnings per share increasing to $1.16 from $1.09.
Debt Reduction:
                                                Bank debt less cash decreased to $23 million as of June 30, 2025, down $11 million from the previous year.
Spill Magic Expansion:
                                                Acme purchased a new facility for $6 million, expecting production to start in Q1 2026.
Future Outlook:
                                                The company anticipates growth in Q3 and Q4 as delayed orders recover and inventory levels normalize.

                                

Operational Efficiencies and Cost Management

The company's ability to manage costs and take advantage of operating efficiencies played a crucial role in its resilient performance. By working with suppliers to reduce costs and moderately increasing selling prices, Acme United was able to offset some of the negative impacts of the tariffs. This strategic approach enabled the company to maintain its profitability despite the challenging market conditions.

Debt Reduction and Cash Flow Generation

Acme United's financial health continues to improve, with bank debt less cash standing at $23 million as of June 30, 2025, down from $33 million a year ago. The company generated $12 million in free cash flow over the last 12 months, demonstrating its ability to produce cash and reduce debt. The debt reduction of $11 million over the past six months is a positive indicator of the company's financial management.

Outlook and Valuation

Looking ahead, Acme United expects growth in the third and fourth quarters as delayed programs recover and customers' canceled orders are fulfilled. The company's guidance suggests a positive trajectory, driven by its ability to gain share in the Westcott cutting tools and first aid business. With a P/E Ratio of 41.41 and an EV/EBITDA of 19.45, the market appears to be pricing in a certain level of growth. The company's ROE of 4.9% and ROIC of 3222.51% indicate a strong return on equity and invested capital, respectively.

Strategic Initiatives

Acme United's strategic initiatives, such as the purchase of a new facility for Spill Magic in Mount Pleasant, Tennessee, for approximately $6 million, are expected to drive future growth. The company anticipates starting production at the new facility in the first quarter of 2026, which will likely contribute to its revenue growth. With a revenue growth estimate of 7.5% for next year, Acme United appears well-positioned for continued success.

3. NewsRoom

Acme United: Sometimes The Market Disagrees, And That's The Opportunity

Nov -24

Source: seekingalpha.com

Acme United Corporation (ACU) Q3 2025 Earnings Call Transcript

Oct -21

Source: seekingalpha.com

Acme United Reports 2% Increase In Net Sales For The Third Quarter Of 2025

Oct -21

Source: globenewswire.com

Acme United to Release Third Quarter 2025 Financial Results on October 21, 2025

Oct -14

Source: globenewswire.com

Acme United to Release Third Quarter 2025 Financial Results on October 21, 2025

Oct -14

Source: globenewswire.com

Acme United Corporation Board Approves Cash Dividend

Sep -19

Source: globenewswire.com

Acme United's Westcott® Brand Launches First Ever National Scissors Day™ on August 1, 2025

Jul -30

Source: globenewswire.com

Acme United Corporation (ACU) Q2 2025 Earnings Call Transcript

Jul -23

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.90%)

6. Segments

First Aid and Safety

Expected Growth: 3.5%

Acme United Corporation's First Aid and Safety segment growth of 3.5% is driven by increasing demand for workplace safety products, rising awareness of occupational health, and growing adoption of automated external defibrillators (AEDs) in public spaces. Additionally, the company's strategic acquisitions and expansion into new markets have contributed to the segment's growth.

Cutting and Sharpening

Expected Growth: 4.5%

Acme United Corporation's Cutting and Sharpening segment growth of 4.5% is driven by increasing demand for high-quality cutting tools, expansion into new markets, and strategic partnerships. Additionally, the company's focus on innovation, product diversification, and operational efficiency have contributed to the segment's growth.

7. Detailed Products

Westcott Brand Scissors

High-quality scissors designed for cutting various materials, including paper, fabric, and plastic.

Clauss Brand Shears

Heavy-duty shears designed for cutting thick materials, including leather, metal, and heavy fabric.

Camel Brand Blades

High-carbon stainless steel blades designed for cutting and scraping various materials, including drywall, carpet, and roofing.

First Aid and Medical Kits

Comprehensive first aid and medical kits designed for treating minor injuries and providing emergency care.

Spillmaster Brand Spill Response Kits

Specialized kits designed for responding to hazardous material spills, including oil, chemical, and fuel spills.

8. Acme United Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Acme United Corporation is moderate due to the availability of alternative products in the market.

Bargaining Power Of Customers

The bargaining power of customers is high due to the concentration of buyers in the market, giving them significant negotiating power.

Bargaining Power Of Suppliers

The bargaining power of suppliers is low due to the availability of multiple suppliers in the market, reducing their negotiating power.

Threat Of New Entrants

The threat of new entrants is moderate due to the moderate barriers to entry in the industry, making it possible for new companies to enter the market.

Intensity Of Rivalry

The intensity of rivalry is high due to the high competition among existing players in the market, leading to aggressive marketing and pricing strategies.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	20.28%
Debt Cost	7.62%
Equity Weight	79.72%
Equity Cost	7.62%
WACC	7.62%
Leverage	25.44%

11. Quality Control: Acme United Corporation passed 7 out of 9 key points

Strong Liquidity

Low Debt

Strong Interest Coverage

Healthy Cash Flow

Operating Inefficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

CHS

A-Score: 6.2/10

Value: 6.2

Growth: 3.7

Quality: 3.6

Yield: 10.0

Momentum: 3.5

Volatility: 10.0

1-Year Total Return ->

Nu Skin

A-Score: 5.9/10

Value: 8.5

Growth: 2.2

Quality: 6.4

Yield: 5.0

Momentum: 10.0

Volatility: 3.0

1-Year Total Return ->

Acme United

A-Score: 4.8/10

Value: 3.8

Growth: 4.8

Quality: 6.3

Yield: 4.0

Momentum: 4.0

Volatility: 5.7

1-Year Total Return ->

Mannatech

A-Score: 4.7/10

Value: 8.6

Growth: 2.1

Quality: 4.4

Yield: 4.0

Momentum: 8.0

Volatility: 1.3

1-Year Total Return ->

Edgewell

A-Score: 4.3/10

Value: 6.6

Growth: 3.9

Quality: 3.8

Yield: 5.0

Momentum: 0.5

Volatility: 6.0

1-Year Total Return ->

European Wax Center

A-Score: 4.0/10

Value: 6.8

Growth: 5.2

Quality: 5.3

Yield: 3.0

Momentum: 1.5

Volatility: 2.3

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

9.09%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

7.62%

Acme United Corporation - US0048161048

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on ACU

1.c. Company Highlights

Strong Momentum

Higher Growth

Average Quality

Earnings Beats

Revenues Miss

Medium Volatility

Stable Momentum

Earnings Miss

Revenues Beats

Fairly Valued

Weak Momentum

Average Yield

Expensive

Average Growth

2. Acme United's Q2 2025 Earnings: A Resilient Performance Amidst Tariff Headwinds

Operational Efficiencies and Cost Management

Debt Reduction and Cash Flow Generation

Outlook and Valuation

Strategic Initiatives

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.90%)

6. Segments

First Aid and Safety

Expected Growth: 3.5%

Cutting and Sharpening

Expected Growth: 4.5%

7. Detailed Products

Westcott Brand Scissors

Clauss Brand Shears

Camel Brand Blades

First Aid and Medical Kits

Spillmaster Brand Spill Response Kits

8. Acme United Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Acme United Corporation passed 7 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

37.0$

Current Price

37$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA