ACME UNITED CORP

Overview

Acme United Corporation, a Connecticut corporation (together, with its subsidiaries, the "Company"), is a leading worldwide supplier of innovative first aid and medical products and cutting technology to the school, home, office, hardware, sporting goods and industrial markets. Its principal products sold across all segments are first aid kits and medical products, scissors, shears, knives, and sharpening tools. The Company sells its products primarily to mass market and e-commerce retailers, industrial distributors, wholesale, contract and retail stationery distributors, office supply superstores, sporting goods stores, and hardware chains.

The Company's operations are in the United States, Canada, Europe (located in Germany) and Asia (located in Hong Kong and China). The operations in the United States, Canada and Europe are primarily involved in product development, marketing, sales, administrative, manufacturing and distribution activities. The operations in Asia consist of sourcing, product development, production planning, quality control and sales activities. Total net sales in 2024 were $194 million. The Company was organized as a partnership in l867 and incorporated in l882 under the laws of the State of Connecticut.

The Company sources most of its products from suppliers located outside the United States, primarily in Asia. In recent years, as a result of acquisitions, the amount of first aid and medical products produced in North America has been increasing substantially. The components for the first aid kits are sourced from both U.S. and international suppliers. The Company assembles its first aid kits at its facilities in the following locations:

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Vancouver, WA,

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Rocky Mount, NC,

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Keene, NH

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Laval, Canada

In addition, the Company has manufacturing facilities in the U.S. as follows:

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La Vergne, TN - Spill Magic products

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Santa Ana, CA - Spill Magic products

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Marlborough, MA - DMT sharpening tools

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Brooksville, FL - Med-Nap alcohol and benzalkonium chloride non-alcohol (BZK) wipes.

Recent Accomplishments and Initiatives

Quantitative Achievements

In 2024, the Company’s key financial accomplishments included the following:

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Sales Growth – Continued strong average annual growth rate, 7% over ten years (2015 - 2024).

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Strong Financial Position – In recent years the Company has significantly reduced bank debt to provide at December 31, 2024, approximately $47 million of availability under its $65 million credit facility. This strong liquidity will allow the Company to fund acquisitions and growth.

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Dividend Increase - Increase in the quarterly dividend from $.02 per share in 2004 to $.15 per share in 2024 – an eight-fold increase.

Business and Operational Milestones and Achievements

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Diversification of Product Lines – – During the past eight years, sales of first aid and medical products have grown to approximately 61% of total sales. As a result, we have broadened our customer and revenue base. In addition, our sales of school, home, craft and office products increased 10% in 2024, partly due to the introduction of new products.

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First Aid Acquisition – On May 23, 2024, the Company acquired the assets of Elite First Aid, Inc., a leading supplier of tactical, trauma and emergency response products. The Company successfully completed the integration of the assets and business in the fourth quarter of 2024.

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Markets/Products– In 2024 we:

▪ Introduced first aid SmartCabinet 2.0 with patented RFID technology that automates the requisition process and helps end users to maintain OSHA compliance.

▪ Expanded in the craft market by providing advanced cutting tools which are used to create precise and unique designs.

▪ Expanded into the home and culinary markets with a wide variety of DMT sharpening tools, including versatile countertop pull-through sharpeners.

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Cost Reduction Initiatives – In 2024, the Company implemented a variety of productivity enhancements across our manufacturing and distribution facilities, along with a reduction in SG&A expenses and other costs, leading to approximately $2 million in ongoing annual savings.

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Capacity Expansion - In 2024, the Company installed a new storage racking system in our 340,000 square foot Rocky Mount, NC distribution center, resulting in a 30% capacity increase.

Principal Products

The Company markets and sells under two main product categories: i) first aid and medical; and ii) cutting and sharpening. The first aid and medical category includes first aid and safety products (First Aid Only®, PhysiciansCare®, Pac-Kit®, Spill Magic®, First Aid Central®, Med-Nap, Safety Made and Elite brands). The cutting and sharpening categories include school, home and office products (Westcott® brand), and hardware, industrial and sporting goods products (Clauss® and DMT® brands).

FIRST AID AND MEDICAL

First Aid Only

The First Aid Only brand offers first aid and medical products that meet regulatory requirements for a broad range of industries. The Smart Compliance® first aid system is an effective solution for maintaining compliance with ANSI standards. The Company’s SafetyHub App technology digitizes the replenishment process for a broad range of first aid components and provides data analytics to manage costs. Our next generation SmartCompliance Complete ™ offers a modular system that addresses first aid, bloodborne pathogen, bleed control, eyewash and OTC medication requirements for the most challenging workplace environments.

PhysiciansCare

The PhysiciansCare brand offers a variety of portable eyewash solutions and over-the counter medications, including the active ingredients aspirin, acetaminophen and ibuprofen.

Spill Magic

Spill Magic is a leader in bodily fluid and spill clean-up solutions with a lightweight, absorbent powder that quickly encapsulates a spill. The Spill Response System provides all the necessary tools to effectively clean up spills, saving time, money and reducing slip & fall accidents in various venues, including grocery, retail, and big box stores; food service & hotel chains; municipal facilities; and industry-specific distributors in the U.S.

First Aid Central

First Aid Central has been a provider and manufacturer of a wide variety of first aid kits since 2007. The first aid kits facilitate compliance by Canadian businesses with federal & provincial first aid and medical regulations through their wide variety of first aid kits, refills, and safety supplies, including CPR kits, burn kits, and automotive and emergency first aid kits.

Med-Nap

Med Nap, at our Brooksville facility, manufactures medical grade products, including alcohol prep pads and benzalkonium chloride antiseptic wipes. Med-Nap provides to the Company vertical integration advantages including shorter delivery times, lower total costs, and a U.S. source of supply during unprecedented healthcare challenges. The facilities offer a platform for future product expansion.

Safety Made

Safety Made is a leading manufacturer of first aid kits for the promotional products industry.

Elite First Aid

Elite is a leading supplier of tactical, trauma and emergency response products.

CUTTING AND SHARPENING

School, Home and Office

Westcott

Westcott, with a history of quality dating back to 1872, provides innovative cutting and measuring products for the school, home and office as well as industrial safety cutting. Principal products under the Westcott brand include scissors, rulers, pencil sharpeners, paper trimmers, safety cutters, lettering products, glue guns and other craft products. Westcott is one of the leading scissor and ruler brands in North America.

Many of the Westcott branded cutting products contain patented titanium bonding and proprietary non-stick coatings, making the blades more than three times harder than stainless steel as well as reducing friction and corrosion.

Westcott continues to expand their catalog of craft items with patented new technologies, handle designs and construction that has driven Westcott to be a leader in fashionable and functional solutions for students and adults. In addition, Westcott continues to build on its cutting line with an expanded assortment of ceramic safety knives which include new features, allowing its customers to remain safer on the job.

Hardware, Industrial and Sporting Goods

Clauss

Clauss, with its roots dating back to 1877, offers a line of quality cutting tools for professionals in the hardware & industrial, floral, sewing and housewares channels. Many of the Clauss products are enhanced with the Company’s patented titanium and proprietary non-stick coatings. In 2021, Clauss was the first to innovate and apply industrial Carbide materials to steel cutting blades, significantly improving cutting performance and edge-retention for hardware applications.

DMT

Diamond Machining Technology (DMT) was founded in 1976 by aerospace engineers and is a leader in diamond tools for sharpening knives, scissors, chisels, skis, skates and many other edges. The DMT products use a proprietary process of finely dispersed diamonds bonded to the surfaces of sharpeners and are famous for providing diamond sharpeners with the flattest sharpening surface, greatest concentrated amount of diamonds and the highest quality diamonds per sharpener. In 2023, DMT launched a broad assortment of products that provide simple sharpening solutions to the consumer and create enthusiasm surrounding the sharpening category. The EdgeSharp product assortment features an entirely new line of sharpeners that are easy to use while providing a safe sharpening experience. Today, DMT continues to innovate its sharpening assortment with sharpening solutions for the home consumer while continuing to provide the very best in professional sharpening solutions. In 2024, we expanded into the home and culinary markets with a wide variety of tools, including versatile countertop pull-through sharpeners.

Intellectual Property

The Company owns many patents and trademarks that are important to its business. The Company’s success depends in part on its ability to maintain patent protection for its products, to preserve its proprietary technology and to operate without infringing upon the patents or proprietary rights of others. The Company generally files patent applications in the United States and foreign countries where patent protection for its technology is appropriate and available.

The Company also considers its trademarks important to the success of its business. The more significant trademarks include Westcott, Clauss, PhysiciansCare, First Aid Only, DMT, Pac-Kit, Spill Magic and First Aid Central.

Patents and trademarks are amortized over their estimated useful lives. The weighted average amortization period remaining for intangible assets at December 31, 2024 was 8 years.

Product Distribution; Major Customers

Independent manufacturer representatives and direct sales are primarily used to sell the Company’s line of consumer products to mass market, e-commerce retailers, industrial distributors, wholesale, contract and retail stationery distributors, office supply super stores, school supply distributors, and hardware chains. The Company also sells its products directly to consumers through its own websites. The Company had two customers in 2024 and 2023, respectively, that individually exceeded 10% of consolidated net sales. Net sales to these two customers were approximately 14% and 13% of consolidated net sales in 2024 and 14% and 12% in 2023.

Accounts Receivable

As of December 31, 2024, the Company had three customers each of which represented 10% or more of total trade receivables. Accounts receivables from these three customers were approximately 16%, 15%, and 11% of consolidated accounts receivable. As of December 31, 2023, the Company had three customers that individually represented 10% or more of total trade receivables, which accounted for 17%, 14%, and 14%.

Competition

The Company competes with many companies in each market and geographic area. The Company believes that the principal points of competition in these markets are product innovation, quality, price, merchandising, design and engineering capabilities, product development, timeliness and completeness of delivery, conformity to customer specifications and post-sale support. The major competitors in the first aid and safety category are Honeywell and Cintas. The major competitors in the cutting category are 3M and Fiskars Corporation.

Seasonality

Traditionally, the Company’s sales of its cutting, sharpening and measuring products are stronger in the second and third quarters and weaker in the first and fourth quarters of the fiscal year, due to the seasonal nature of the Westcott back-to-school market.

Compliance with Environmental Laws

The Company believes that it is in compliance with applicable environmental laws. The Company anticipates that no material adverse financial impact will result from compliance with current environmental rules and regulations.

Employees and Human Capital Considerations

The Company views its human capital as its most important asset. As of December 31, 2024, the Company employed 633 people, all of whom are full time and none of whom is covered by union contracts. Employee relations are considered good and the Company is not aware of any material work force issues.

Culture and Diversity

The Company’s workforce represents nearly all demographics, with diversity in age, race, ethnicity, and gender. Historically, the Company’s standard recruiting and hiring initiatives have created a diverse workforce. Our employees reflect the communities in which we are located. We seek to provide opportunities for growth and development at all levels of our organization.

Creating and fostering inclusive work environments and teams allow us to create an engaging and welcoming culture for our employees, which we believe positively affects the quality of our products and the experience we deliver to our customers.

Compensation and Benefits

The Company is committed to providing market-competitive pay and benefits to attract and retain a skilled workforce.

The Company provides a range of benefits to its employees and their families, including medical and prescription drug, dental, vision and long-term disability coverage, as well as 401(k) savings and flexible spending accounts.

Available Information

You may obtain at no charge, a copy of the Company’s annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K and amendments to those reports on the Company’s website at http://www.acmeunited.com or by contacting the Investor Relations Department at the Company’s corporate offices by calling (203) 254-6060. Such reports and other information are made available as soon as reasonably practicable after such material is filed with or furnished to the SEC.