ACME UNITED CORP
For the period ended Dec 31, 2024. Filed Mar 6, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Mar 6, 2025
ACU$68.38-0.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-03-07.
0000950170-24-027907
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-03-06.
0000950170-25-034843
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 48 previous paragraphs and 48 current paragraphs.
23 unchanged; 15 reworded; 10 added; 8 removed; 2 previous and 0 current paragraphs rearranged.
Tables are not compared: 0 previous and 0 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (10)
Current report
In 2024, sales increased by $2,989,044, or 2%, to $194,489,991 compared to $191,500,947 in 2023. Excluding the impact of the hunting and fishing product lines sold on November 1, 2023, net sales for 2024 increased 6% compared to 2023.
Current report
The U.S. segment sales increased by 2% in 2024 compared to 2023. Excluding Camillus and Cuda, net sales for the year ended December 31, 2024 increased 7% compared to the same period in 2023. The sales increase for the year was due to market share gains across multiple product lines.
Current report
European net sales for the year ended December 31, 2024, increased 5% in both U.S. dollars and local currency, compared with the same period in 2023. Excluding Camillus and Cuda, net sales for the year ended December 31, 2024 increased 8% compared to the same period in 2023 due to market share gains in the office channel.
Current report
Operating income in the European segment decreased by $648,000 compared to 2023 primarily due to planned increases in headcount to support growth in the business.
Current report
Net interest expense for 2024 was $1,942,643 compared with $2,977,164 for 2023, a decrease of $1,034,521. The decrease in net interest expense resulted from a lower average debt outstanding under the revolving loan agreement of approximately $16 million.
Current report
Total Other Income, net
Current report
On May 23, 2024, the Company acquired the assets of Elite First Aid, Inc ("Elite First Aid") for approximately $7.1 million. Elite First Aid is a leading supplier of tactical, trauma and emergency medical products.
Current report
Standards not yet Adopted
Current report
Standards Adopted
Current report
In November 2023, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which amends ASC 280. The intent of ASU 2023-07 is to improve the disclosures around a public entity’s reportable segments and address requests from investors for additional, more detailed information about a reportable segment’s expenses by requiring entities to disclose on an annual and interim basis: (i) significant segment expenses that are regularly provided to the Chief Operating Decision Maker (“CODM”) and included within each reported measure of segment profit or loss and (ii) an amount for other segment items by reportable segment and a description of its composition, which represents the difference between segment revenue less segment expenses disclosed under the significant expense principle and each reported measure of segment profit or loss. Furthermore, entities will be required to: (i) provide all annual disclosures about a segment’s profit or loss and assets currently required under ASC 280 on an interim basis as well, (ii) clarify that an entity is not precluded from reporting additional measures of a segment’s profit or loss that are used by the CODM in assessing segment performance and deciding how to allocate resources, and (iii) disclose the title and position of the CODM and an explanation of how the CODM uses the reported measures of segment profit or loss in assessing segment performance and deciding how to allocate resources. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. As part of this Annual Report, the Company adopted ASU 2023-07, which was applied retrospectively to all prior periods presented. Refer to Note 10 to our consolidated financial statements herein for further details regarding this adoption.
Removed paragraphs (8)
Previous report
In 2023, sales decreased by $2,461,410, or 1%, to $191,500,947 compared to $193,962,357 in 2022.
Previous report
The U.S. segment sales decreased by 1% in 2023 compared to 2022. The decline in net sales is primarily due to customer reductions of inventory in the first half of 2023.
Previous report
European net sales for the year ended December 31, 2023, decreased 4% in U.S. dollars (6% in local currency), compared with the same period in 2022. The decrease was primarily due to weak economic conditions in Europe.
Previous report
Operating income in the European segment increased by $491,000 compared to 2022 primarily due to a stronger Euro against the U.S. dollar and lower inbound freight costs. .
Previous report
Net interest expense for 2023 was $2,977,164, compared with $2,364,461 for 2022, an increase of $612,703. The increase in net interest expense resulted from a higher average interest rate on the outstanding debt. The weighted average interest rate in 2023 was 6.5% compared to 3.8% in 2022.
Previous report
Other Income (Expense), net
Previous report
On November 8, 2022, the revolving loan agreement was amended to increase the ratio of funded debt to EBITDA. The increase was in effect for four quarters commencing in the third quarter of 2022 and ending with the three months ended June 30, 2023. The increase for those four quarters ranged from a low of 4.75 to 1 to a high of 5.75 to 1. The amendment also modified the interest rate from SOFR +1.75% to range from SOFR +1.60% up to a high of SOFR + 2.35% on a basis that varies quarterly with the funded debt to EBITDA ratio. As of December 31, 2023, the Company was in compliance with the covenants under the revolving loan agreement as then in effect.
Previous report
The Company implemented a series of cost reduction initiatives that generated over $6.5 million in savings in 2023. These initiatives have included the implementation of a wide range of productivity improvements in our manufacturing and distribution facilities and a reduction of SG&A expenses and other costs.
Reworded paragraphs (15)
Previous wording
These risks and uncertainties include, without limitation, the following: (i) changes in the Company’s plans, strategies, objectives, expectations and intentions, which may be made at any time at the discretion of the Company; (ii) the impact of uncertainties in global economic conditions, including the impact on the Company’s suppliers and customers; (iii) the continuing adverse impact of inflation, including product costs, and interest rates; (iv) potential adverse effects on the Company, its customers, and suppliers resulting from the conflicts in Ukraine and the Middle East; (v) additional disruptions in the Company’s supply chains, whether caused by pandemics, natural disasters, or otherwise, including trucker shortages, port closures and delays, and delays with container ships themselves; (vi) labor related costs the Company has and may continue to incur, including costs of acquiring and training new employees and rising wages and benefits; (vii) currency fluctuations; (viii) the Company’s ability to effectively manage its inventory in a rapidly changing business environment; (ix) changes in client needs and consumer spending habits; (x) the impact of competition; (xi) the impact of technological changes including, specifically, the growth of online marketing and sales activity; (xii) the Company’s ability to manage its growth effectively, including its ability to successfully integrate any business it might acquire; (xiii) international trade policies and their impact on demand for our products and our competitive position, including the imposition of new tariffs or changes in existing tariff rates; and (xiv) other risks and uncertainties indicated from time to time in the Company’s filings with the Securities and Exchange Commission.
Current wording
These risks and uncertainties include, without limitation, the following: (i) changes in the Company’s plans, strategies, objectives, expectations and intentions, which may be made at any time at the discretion of the Company; (ii) the impact of uncertainties in global economic conditions, including the impact on the Company’s suppliers and customers; (iii) international trade policies and their impact on demand for our products and our competitive position, including the imposition of new tariffs or changes in existing tariff rates by the United States and retaliatory actions by other governments; (iv) the continuing adverse impact of inflation, including product costs, and interest rates; (v) potential adverse effects on the Company, its customers, and suppliers resulting from the conflicts in Ukraine and the Middle East; (vi) additional disruptions in the Company’s supply chains, whether caused by pandemics, natural disasters, or otherwise, including trucker shortages, port closures and delays, and delays with container ships themselves; (vii) labor related costs the Company has and may continue to incur, including costs of acquiring and training new employees and rising wages and benefits; (viii) currency fluctuations; (ix) the Company’s ability to effectively manage its inventory in a rapidly changing business environment; (x) changes in client needs and consumer spending habits; (xi) the impact of competition; (xii) the impact of technological changes including, specifically, the growth of online marketing and sales activity; (xiii) the Company’s ability to manage its growth effectively, including its ability to successfully integrate any business it might acquire; and (xiv) other risks and uncertainties indicated from time to time in the Company’s filings with the Securities and Exchange Commission.
Previous wording
Net sales in Canada for the year ended December 31, 2023, increased 1% in U.S. dollars (5% in local currency) compared to the same period in 2022. The increase in sales is primarily due to higher sales of first aid products.
Current wording
Net sales in Canada for the year ended December 31, 2024, decreased 5% in U.S. dollars (3% in local currency) compared to the same period in 2023. Excluding Camillus and Cuda, net sales for the year ended December 31, 2024 increased 1% compared to the same period in 2023. Sales of first aid products were strong, however sales of school and office products continued to be adversely impacted by a soft economy.
Previous wording
Gross profit was $72,210,235 (37.7% of net sales) in 2023 compared to $63,558,785 (32.8% of net sales) in 2022. The increase was primarily due to productivity improvements in the Company's manufacturing and distribution facilities, as well as lower in-bound freight costs.
Current wording
Gross profit was $76,350,824 (39.3% of net sales) in 2024 compared to $72,210,235 (37.7% of net sales) in 2023. The increase was primarily due to productivity improvements in the Company's manufacturing and distribution facilities.
Previous wording
Selling, general and administrative (“SG&A”) expenses were $59,021,618 in 2023 compared with $57,285,483 in 2022, an increase of $1,736,135, or 3.0%. SG&A expenses were 30.8% of net sales in 2023 compared to 29.5% in 2022. The increase in SG&A expenses was primarily due to higher personnel related costs.
Current wording
Selling, general and administrative (“SG&A”) expenses were $62,210,882 in 2024 compared with $59,021,618 in 2023, an increase of $3,189,264, or 5.4%. SG&A expenses were 32.0% of net sales in 2024 compared to 30.8% in 2023. The increase in SG&A expenses was primarily due to higher personnel related costs.
Previous wording
Operating income was $13,188,617 in 2023 compared with $6,273,302 in 2022, an increase of $6,915,315.
Current wording
Operating income was $14,139,942 in 2024 compared with $13,188,617 in 2023, an increase of $951,325.
Previous wording
Operating income in the U.S. segment increased in 2023 by approximately $6,694,000 compared to 2022, primarily due to productivity improvements in the Company's manufacturing and distribution facilities, a reduction of SG&A expenses, as well as lower in-bound freight costs.
Current wording
Operating income in the U.S. segment increased in 2024 by approximately $1,768,000 compared to 2023, primarily due to productivity improvements in the Company's manufacturing and distribution facilities.
Previous wording
Operating income in Canada decreased in 2023 by approximately $270,000 compared to 2022.
Current wording
Operating income in Canada decreased in 2024 by approximately $168,000 compared to 2023. The decrease in operating income was primarily due to lower net sales of school and office products.
Previous wording
Other income was $41,002 in 2023 compared to other expense of $246,396 in 2022. The decrease in total other income (expense), net was due to the gain on the sale of the Camillus and Cuda business. The pre-tax gain was approximately $12,551,000.
Current wording
Total other income, net was $95,110 in 2024 compared to $12,523,151 in 2023. The decrease in total other income, net was due to the gain on the sale of the Camillus and Cuda business in 2023. The pre-tax gain was approximately $12,564,153.
Previous wording
Income tax expense was $4,941,444 in 2023, resulting in an effective tax rate of 22% compared to $627,679, in 2022, an effective tax rate of 17%. The higher effective tax rate in 2023 was due to a higher proportion of earnings in jurisdictions with a higher tax rate.
Current wording
Income tax expense was $2,270,058 in 2024, resulting in an effective tax rate of 18% compared to $4,941,444 in 2023, an effective tax rate of 22%. The lower effective tax rate in 2024 was due to a higher proportion of earnings in jurisdictions with a lower tax rate. Also in 2024, the Company recorded a tax credit of approximately $600,000 related to employee exercise of stock options, compared to $385,000 in 2023.
Previous wording
During 2023, working capital decreased by approximately $17.4 million compared to December 31, 2022. Inventory decreased by approximately $7.9 million, or 12%. The decline in inventory was due to planned reductions as the risk of supply chain disruptions has diminished. The Company expects that changes in inventory levels will continue to be consistent with changes in sales, including the seasonal impact on the Company's revenue stream. Inventory turnover calculated using a twelve-month average inventory balance, was 2.1 at December 31, 2023 as compared to 2.0 at December 31, 2022. The reserve for slow moving and obsolete inventory was $1,338,211 at December 31, 2023 compared to $1,720,350 at December 31, 2022. We do not anticipate material increases in the allowance for slow moving and obsolete inventory in the ordinary course of business during 2024.
Current wording
During 2024, working capital increased by approximately $6.6 million compared to December 31, 2023. Inventory increased by approximately $0.8 million, or 1%. Inventory turnover, calculated using a twelve-month average inventory balance, was 2.1 at December 31, 2024 as compared to 2.1 at December 31, 2023. The reserve for slow moving and obsolete inventory was $1,254,121 at December 31, 2024 compared to $1,338,211 at December 31, 2023. We do not anticipate material increases in the allowance for slow moving and obsolete inventory in the ordinary course of business during 2025. Receivables increased by approximately $2.0 million at December 31, 2024 compared to December 31, 2023. The average number of days sales outstanding in accounts receivable was 54 days in 2024 compared to 55 days in 2023.
Previous wording
Long-term debt consists of (i) borrowings under the Company’s revolving loan agreement with HSBC Bank, N.A. and (ii) amounts outstanding under the fixed rate mortgage related to the Company’s manufacturing and distribution facilities in Rocky Mount, NC and Vancouver, WA. The revolving loan agreement provides for borrowings of up to $65 million at an interest rate of SOFR plus 1.75%; interest is payable monthly. The credit facility has an expiration date of May 31, 2026. The Company must pay a facility fee, payable quarterly, in an amount equal to one eighth of one percent (.125%) per annum of the average daily unused portion of the revolving credit line. The facility is intended to provide liquidity for growth, acquisitions, dividends, share repurchases, and other business activities. Under the revolving loan agreement, the Company is required to maintain specific amounts of funded debt to EBITDA, a fixed charge coverage ratio and must have annual net income greater than $0, measured as of the end of each fiscal year.
Current wording
Long-term debt consists of (i) borrowings under the Company’s revolving loan agreement with HSBC Bank, N.A. and (ii) amounts outstanding under the fixed rate mortgage related to the Company’s manufacturing and distribution facilities in Rocky Mount, NC and Vancouver, WA. The revolving loan agreement provides for borrowings of up to $65 million at an interest rate that ranges from SOFR +1.70% up to a high of SOFR + 2.45% on a basis that varies quarterly with the funded debt to EBITDA ratio. The current interest rate is SOFR plus 1.70%; interest is payable monthly. The credit facility has an expiration date of May 31, 2026. The Company must pay a facility fee, payable quarterly, in an amount equal to one eighth of one percent (.125%) per annum of the average daily unused portion of the revolving credit line. The facility is intended to provide liquidity for growth, acquisitions, dividends, share repurchases, and other business activities. Under the revolving loan agreement, the Company is required to maintain specific amounts of funded debt to EBITDA, a fixed charge coverage ratio and must have annual net income greater than $0, measured as of the end of each fiscal year. As of December 31, 2024, the Company was in compliance with the covenants under the revolving loan agreement as then in effect.
Previous wording
At December 31, 2023, total debt outstanding under the Company’s revolving credit facility decreased by approximately $36.8 million compared to total debt outstanding at December 31, 2022. As of December 31, 2023, $13,164,358 was outstanding and $51,835,642 was available for borrowing under the Company’s revolving credit facility. The Company used the proceeds from the sale of its Camillus and Cuda business to pay down the outstanding debt.
Current wording
At December 31, 2024, total debt outstanding under the Company’s revolving credit facility increased by approximately $4.5 million compared to total debt outstanding at December 31, 2023. As of December 31, 2024, $17,640,550 was outstanding, and $47,359,450 was available for borrowing under the Company’s revolving credit facility.
Previous wording
The Company’s manufacturing and distribution facilities in Rocky Mount, NC and Vancouver, WA were financed by a fixed rate mortgage with HSBC Bank, N.A. at a fixed interest rate of 3.8%. The Company entered into the agreement on December 1, 2021. Payments of principal and interest are due monthly, with all amounts outstanding due on maturity on December 1, 2031. The outstanding principal on December 31, 2023, was $10,823,033.
Current wording
The Company’s manufacturing and distribution facilities in Rocky Mount, NC and Vancouver, WA were financed by a fixed rate mortgage with HSBC Bank, N.A. at a fixed interest rate of 3.8%. The Company entered into the agreement on December 1, 2021. Payments of principal and interest are due monthly, with all amounts outstanding due on maturity on December 1, 2031. The outstanding principal on December 31, 2024, was $10,409,797.
Previous wording
The purchase price for the Business was $19.8 million. At closing, GSM Holdings paid $18.3 million to the Company; the balance of the purchase price, $1.5 million, is subject to a 12-month holdback as a non-exclusive source of recovery primarily to satisfy indemnification claims under the Asset Purchase Agreement. The divestiture resulted in a gain of $12.6 million, which was recorded within Other Income, Net in the consolidated statements of operations. The gain, net of tax, was approximately $9.6 million. Sales of Camillus and Cuda products represented approximately 6% of the total net sales in 2023.
Current wording
On November 1, 2023, the Company sold the assets of its Camillus Cutlery and Cuda business lines (the “Business”) to GSM Holdings, Inc., a Delaware corporation (“GSM Holdings”), pursuant to an Asset Purchase Agreement entered into on the same date. The purchase price for the assets was $19.8 million. At closing, GSM Holdings paid $18.3 million to the Company; the balance of the purchase price, $1.5 million, was subject to a 12-month holdback as a non-exclusive source of recovery primarily to satisfy indemnification claims under the Asset Purchase Agreement. The Company received payment of the $1.5 million in November 2024. The divestiture resulted in a gain of $12.6 million, which was recorded within Other Income, Net in the consolidated statements of operations. The gain, net of tax, was approximately $9.6 million. Sales of Camillus and Cuda products represented approximately 6% of the total net sales in 2023.
Previous wording
Capital expenditures during 2023 and 2022 were $4,673,717 and $4,304,264, respectively, which were, in part, financed with borrowings under the Company’s revolving credit facility.
Current wording
Capital expenditures during 2024 and 2023 were $7,148,648 and $4,673,717, respectively, which were, in part, financed with borrowings under the Company’s revolving credit facility.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
Receivables decreased by approximately $6.4 million at December 31, 2023 compared to December 31, 2022. The average number of days sales outstanding in accounts receivable was 55 days in 2023 compared to 62 days in 2022.
Previous report — wording carried elsewhere
On November 1, 2023, the Company sold the assets of its Camillus Cutlery and Cuda business lines (the “Business”) to GSM Holdings, Inc., a Delaware corporation (“GSM Holdings”), pursuant to an Asset Purchase Agreement entered into on the same date.