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On Thursday, 10 April 2025, Acme United Corporation (NYSE: ACU) presented at the 15th Annual LD Micro Invitational, outlining a robust strategy that combines financial strength with innovative growth initiatives. The company reported strong sales driven by its cutting tools and first aid products while navigating the challenges of tariffs. Despite a slight dip in stock price, Acme United remains optimistic about future growth.
Key Takeaways
- Acme United reported $200 million in sales, with a record EBITDA of $20 million.
- The company is focusing on acquisitions in the first aid and safety sector, highlighted by the purchase of Elite First Aid.
- Innovation continues to drive growth, with new products like the Smart Compliance system.
- Acme United is actively managing tariff impacts through strategic supplier negotiations and inventory investments.
- E-commerce, particularly through Amazon, is a major growth area for the company.
Financial Results
- Sales and Earnings: Acme United achieved approximately $200 million in sales last year. The company reported a net income of $10 million, fully taxed, and earnings per share of $2.45, with the stock priced at $40.
- Profitability and Liquidity: The sale of Camillus Knife Company and CUDA Fishing Tools generated $20 million in profit, which was used to reduce debt. The EBITDA of $20 million provides significant financial flexibility.
- Dividend Policy: The company pays a dividend of 60 cents per share, with plans to increase it approximately every six to seven quarters.
Operational Updates
- Product Innovation: Acme United introduced the Smart Compliance system, an RFID-enabled first aid kit that automates supply replenishment. Other innovations include lens cleaning wipes, advanced cutting tools, and a diamond-based knife sharpener.
- Acquisitions: The acquisition of Elite First Aid aims to enhance Acme United's product offerings with medic kit solutions for severe bleeding and limb stabilization.
- Manufacturing and Automation: Investments in automation include robotic arms for production processes, improving efficiency and reducing labor costs.
Future Outlook
- Growth Strategy: Acme United is focused on expanding its revenue base and market share, particularly through e-commerce platforms like Amazon, Walmart.com, and HomeDepot.com.
- Acquisition Strategy: The company is actively seeking acquisitions to integrate into its first aid kits, aiming for continued strategic growth.
- Tariff Management: Acme United is mitigating tariff impacts through supplier negotiations, currency adjustments, and productivity improvements.
Q&A Highlights
- Tariff Impact: The company absorbed initial tariffs through various strategies, but significant increases may necessitate price adjustments.
- Competitive Landscape: Acme United identified Cintas as a major competitor, with its Smart Compliance system offering a cost-effective alternative to traditional manual servicing.
For a detailed understanding, readers are encouraged to refer to the full transcript below.
Full transcript - 15th Annual LD Micro Invitational 2025:
Unidentified speaker: Thank you very much. This is going to be one of the most interesting presentations you'll have today. So I hope you listen carefully and we will be talking about not only our business, but some of the tariff issues that will impact our business and many, many others. So ACME is on the New York Stock Exchange. We are about $200,000,000 in sales.
We make two main product lines, cutting tools and the second line is first aid and safety products. And we grow by innovation, but we do a lot more than that. One of the things that is so important is that we deliver on time to our customers every day. And you can imagine right now with tariffs going on in the global markets, and we are multinational with sourcing globally, it is very important for us to number one, understand our costs, two, understand our customers, and three, to continue to deliver value. And just remember, deliver value to our customers at the end is why we are in business.
We have a lot of liquidity. We sold a company called Camillus Knife Company and CUDA Fishing Tools a little over a year ago, generated $20,000,000 of basically profit and used that to pay down debt. We threw off $20,000,000 of EBITDA last year in addition, and so we are very liquid right now. And it is a wonderful place to be when there is uncertainty in your supply base and in your markets. So again, the leader in first aid and safety and also in cutting tools.
The Westcott scissors you probably have at home or if you have got kids, they are probably using them in school. Okay, this is another view of our business. In the middle is the green, that is our customer base. On the left are the first aid and safety acquisitions that we have done. On the right side, on the lower right, Westcott scissors, that is where it all started.
It still is a very, very important part of our business, very profitable. You might guess, if opening packages is important and you are using them at home and you are getting packages or deliveries or at the office, you are cutting an opening with our products. And so just the base business is growing at some two ish percent a year in units. We are the biggest in the world. We have 150 patents in that area and our customers are a who is who.
We have used the cash flow to buy companies in first aid. And in the very bottom, you will see that we used to make medical instruments. And so you can picture scissors and then medical instruments. Well, that was a business that we eventually got out of. And then we moved right up the chain into value added first aid and safety products.
For the industrial world, it's very, very important to meet OSHA and ANSI requirements and have a safe workplace. And keeping refills in those kits so that they're always current and always there in the event of an accident is imperative and legally important. And that's an annuity. So there's about a $30,000,000 piece of our business that is an annuity on the refills at high margins. About a year ago, we bought Elite First Aid.
That is the first acquisition we did to save lives. So, first aid cuts and scrapes and falls. Okay, it's not pleasant, but this elite acquisition is the equivalent of giving our customer base a medic kit. Things that will stop major bleeding, things that will stabilize limbs, things that will help open airways. And we are taking this product line across our entire customer base because everybody needs tools to save lives.
And it is a very exciting long term acquisition. We did that about a year ago. It is fully integrated into our business. This is a slide of our locations. Our headquarters are outside of New York City.
We have got a big operation in China, Four sites, location being offices, factories, dormitories, very, very important part of our business. We have an operation in India, we have an operation in Europe and one in Canada. The last 10 acquisitions that we have done have been U. S. Manufacturers or one has been Canadian.
And as a result, when we are looking at our sourcing complex, it is not like we are tied to one country or another. China is very important to us and they make great product at excellent prices and for certain products like scissors. They have half the world's steel and they sell it at half the world's price. So it's pretty hard to migrate to another country and be effective. Other areas like first aid, oh, you can be in Egypt buying gauze, you can be in India buying products, you can be making, as we do, alcohol wipes and prep pads in Florida.
So it's a broad base. Here's the financial results. I guess you'd call it boring. We keep growing. You can see it sort of flattened in 2023, but that is and it really showed in 2024 because we sold a business and the business we sold was the hunting and fishing business.
As an aside, I love that business. I like the people that are involved with it, I like the vibe with it, it is just an incredibly fun business. But we were paid a hundred times what we paid for it, We paid down the debt. We focused the business. And the buyer, which is part of a roll up private equity backed, loves the product and brand, so it all works.
But that is why you see a little bit of flattening between 2023 and 2024. We grew in 2024 despite the sale of about a $12,000,000 business. The EBITDA was a record last year at $20,000,000 So let me tell you what $20,000,000 does for us. It means we don't need money. It means you can write a check and buy inventory and anticipate tariffs and be there to service your customer when others can't.
And you know, we've done that. It means you can buy businesses like the Camillus business out of bankruptcy and then turn around and sell it for a hundred times. It means you can buy back shares. It means that in an environment like today where our customer base is facing some turbulence, our supply bases and our competitors may not be as well capitalized or may not be in a position with the diversification of supply that we are, that maybe this is a time for Acme United to go shopping. And I suspect I will tell you that we are doing so.
Net income, again it was $10,000,000 last year and it was fully taxed and earnings per share $2.45 So to put that in perspective, the stock is selling at $40 and $2.45 a share last year. It has got a full multiple, but I think there is a lot of runway as we expand and you will see, at least if I can convey it, where we are taking it in the next three years. And we pay a dividend and it has been 60¢ a share now and about every six to seven great quarters we increase. I have held back a little bit on the increase in dividend until we saw what the marketplace looked like and the stability of our customers. I'd much rather take money that would go into a dividend and put it into buying inventory that I can then turn around and sell it, perhaps a very, very attractive price.
Okay, growth drivers. This is a classic first aid kit that goes into an industrial site. It's on the wall. And each of those little boxes have things like gauze, adhesive bandages, alcohol prep pads. Some of the items in there, we make in The United States in our own factories.
You can imagine one aspect of our strategy in today's world is to be looking at the companies that make products that can go into our first aid kit. They have already got a base business, they're probably profitable, and we lay on top of that the annuity of our refill business. And the volume of course to spread corporate overhead and build out something larger. We've introduced something very, very special. And this, you've got to picture and think hard.
The white box that says first aid, it's a big white box on a wall. And you see down at the bottom what looks like an RFID, and in fact it is, the concentric circles. Every component that goes into that white box, every component has an RFID tag. The patents that we've developed measuring what's inside that box tell us when it's empty. So it'll say something's expired.
It's very important because no other system can do that. If it expires, we know on the RFID the lot number and the date of expiration. It turns off, it's not recognized, it says to the customer, time to buy. If it's missing because it was stolen, it's missing. The RFID is missing, the sensors notes it, buy.
Of course, when it is being consumed because there has been an accident and you are a third of the way through the package, it says time for a refill. So this box is now being introduced to The U. S. Market and soon Canada, to major corporate entities. When you put it on a wall and it's on, the rest is automatic as it is being used, as people need it, as it is being expired, it is issuing purchase orders, refill me, refill me, it goes to the safety manager, it goes to the seller of the product which might be say Fasenal or Grainger, and also to us.
And that annuity is a closed loop. Nobody is driving around in vans, nobody is doing anything, you've got a monitor on the wall. The customer saves between 3550% of someone driving in a van and filling these manually. And our biggest competitor is Cintas, which we estimate has about $600,000,000 of business that they service quite well, but it's very very expensive. The customer might want to have a good value, they should look at us.
In a time like this where prices are going up substantially, this is the time for us to strike. And this product is literally at a major trade show as we speak. And we have had great interest. We are to take it to the next step, we will see. So although it looks like a plain white box, what is inside of it is a lot of sophistication with a patented monitoring system and we think we can change the industry.
Here is an example of some other items that would go on that wall. And these are for bleed control. You might know that a serious artery cut will bleed a patient to death in ninety seconds. So you need access if that happens and you save lives. So here's a number of them.
One is a tourniquet for limbs, another one is for your torso and another one is for around your lungs. It's a a chest seal. And for lots of reasons, these things are selling. But on an industrial floor, accidents happen and if it's a bleeding accident like this, it saves lives. There is another one that we don't have here but we've announced it.
We are going to be taking on ZOLL defibrillators and that will be on a wall as well. And the beauty of that for these industrial sites is then you have a safety center with a core of it and we will have the ability to train and monitor eventually with our smart compliance all the maintenance that's required for AEDs. So it's a very, very important value added that's in the process right now of going out to the marketplace. So when we bought MedNap in Florida making alcohol wipes and pads, one thing that made sense to us is lens cleaning wipes. And you can do that for goggles, can do it for sunglasses, of course you do it for your regular glasses.
And this is in Brooksville, Florida. We are working right now on an expansion of a plant and getting distribution, as you can imagine, in both our safety accounts and all of our office accounts. And because we are domestic and price competitive, the tariff world is probably going to be giving this a boost in sales. Okay, in the cutting area. Here is an example at the top of a snip and then a high leverage shear and at the bottom is ceramic box opener.
And each of these are leveraging technologies. We have got titanium nitride, chromium nitride coatings that enhance the hardness. We have got carbonitrides which are really, really hard, almost diamond like for industrial uses. The ceramic box opener is excellent because although it will cut you, it's not like a razor and the ceramic is a tough cutting surface. So companies like Amazon use these by the millions.
And it is for opening boxes. We have a home unit which I use all the time and they are available at retail in places like Wal Mart. In the craft area, last year that was a major, major growth for us. And it's not because you've got, in this case, a nice paper trimmer or a healable safety mat where you can cut it, use a knife on it and it reforms itself, or that we've got the non stick scissors that can be used with glues and tapes. But rather what it is, is an extension of one item to another, to another of size and material.
Last year, the craft business pulled the entire Westcott business forward and it had a record year. And this this is fun. So every year there's 3,800,000 kids born in The US. And by the time they were in fourth or fifth grade, somebody, maybe it would have been me, is taking a son or daughter shopping and inevitably, they look for something that's fun. They look for color, they look for texture, they look for something that catches their eye.
In this case, these are Vibe scissors that are going nationwide for this back to school. And just like last year, and the year before, and the year before, the three point eight million kids that had the scissors lost them by the end of the year, and they're back shopping all over again. And that's part of our business. It's a good business and it's fun. This we have a business called Diamond Machine Technology in Massachusetts, which sharpens knives and the diamond cutting surfaces are the best in the industry.
What does best mean? The diamonds are very, very carefully distributed and the sharpening surfaces are absolutely flat. You can imagine if a sharpening surface is curved, by the time you are done sharpening a knife, you will have a curved knife and that is not where you want to be, so flat is important. This particular product which is patented is simple and we'd never done it until last year, but we said why not take a simple sharpener design where you can put the blade through and the blades automatically adjust to the angle, so you don't have to do anything, and give it the diamond based sharpeners from Massachusetts that we make. That's what that does.
And Walmart picked it up, and then Menards, and then it took legs, and and now it's in different shapes and sizes. It is a multi million dollar product launch that happened last year and with innovations that are coming through this year will be a growth driver for the company. I am very excited with that. And priorities? Well, of course, grow on our solid revenue base.
E commerce is our largest single segment. Amazon is our biggest customer. We are obviously driving big time there. And it's also not Amazon, it's also walmart.com, it's homedepot.com and so forth. The market share gaining products are things like the smart compliance, which we're actively introducing to the market now with the patented technology.
We've invested heavily in our equipment. I saw this last week in North Carolina. We've got six robotic arms that are stuffing the oh, it might be like an alcohol prep pad that we make in MedNap. It comes in bulk, they stuff them in little boxes, those things then go into our smart compliance kits. But it's not one or two, these are thousands and thousands of these things and they are automating what seven people used to do.
I was so pleased with it, well, we bought another one. And that is going to Vancouver, Washington to another plant probably in about three months when it gets built. But that is the kind of investment in productivity that comes back to you fast and it helps you to compete effectively. And finally, if we do these things right, we will have another record year in earnings and we will continue to be increasing the dividend over time. I just want some stability to know what this world is.
And finally, we are actively shopping for acquisitions as we speak. So why don't we open it up and I'd be happy to talk about things like tariffs which we're actively involved in. Yeah, John. Well, don't want to identify specific customers because they all listen. But I will tell you that everybody if you go back just three months, you've had two tariffs for China, Ten Percent And Ten Percent.
And so everybody who could went back to their suppliers and got some savings. And I'm speaking specifically about China, but it would be across the board. So the savings from your suppliers. Typically, you're getting some pickup in currency because the Chinese currency dropped about 2% during the time Trump was elected until March. So you had a pickup there.
You had productivity, so that helped. And then you had a small price increase and that is what we did. And so in the end, the first twenty percent is sort of has sort of been absorbed in the normal level of inflation. Now, the next level if it goes up to, well pick a number, 150% for China, There we're not getting it from productivity, we're not getting it from our suppliers. There's been some talk that China will devalue its currency.
If it does, we have buying power. We would generate savings in our cost and pass that on to the consumer. But there would have to be some piece that would be an increase as well. So it's dynamic. It's very hard right now because you've got normal supply going out to all the retailers and companies like us in the world.
And a tariff that goes from from 20% to a 50% in in like a week, anybody that's thinking maybe the tariff is going to go down will not wanna pick up at the port in, say, in China because they're gonna have to pay the 50%. We did something that not everybody did, but we spent millions of dollars after president Trump was elected in November buying inventory, both for first aid and also for Westcott. So we have a buffer to be able to work with our customers as we put through price increases. Also for things like tariffs now 150%, maybe we tell the factory don't put it on a boat, hold it until we see where we have some visibility. Maybe the tariff is going to be 25% in three weeks.
We'd rather pay 25 than 50. There are many companies right now who can't do that. And there's many retailers that can't do that. They're they're in a just in time situation, particularly their private brands where they have a slot on their shelf, they need the product, it's slotted in and they're taking delivery at a 50%. Then I make not only aren't they making any money but if they do it enough, it'll swell their inventory as they replace it by a 50.
And many of them are so levered they'll never make that happen. There's some scary things out there. Walmart will go great. Thank you.
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