Welcome to the fourth quarter and year-end 2026 earnings conference call for Acme United Corporation. We are also subject to additional risks and uncertainties as described in our periodic filings with the Securities and Exchange Commission in our current earnings release. Our net sales were $196.5 million, net income was $10.2 million, and earnings per share were $2.49. We had purchased extra inventory at the end of 2024 in anticipation of some increased tariff levels and supplied our regular customers with their planned orders.

This product senses components that were used, lost, or became obsolete in an industrial first aid kit and automatically generates replenishment orders. These investments in the recurring portion of our first aid business are generating savings and improving product quality. We installed new software to optimize inventory placement in our large warehouse in Rocky Mount, North Carolina. Sales of Hawktree Solutions, which was acquired out of bankruptcy in late 2023, exceeded our expectations.

We acquired a direct-to-consumer supplier of cutting and sharpening tools in October 2025. In our first aid segment in Europe, we expanded the marketing and sales team, improved product sourcing costs, and began to expand aggressively. As we move into 2026, we see growth in our first aid and medical segments and a return to more normal merchandising and promotion in the retail market. Acme's net sales for the fourth quarter were $47.5 million compared to $45.9 million in 2024, an increase of 3%.

What went well
  • Acme United delivered record full-year 2025 results: net sales of $196.5 million (up 1%), net income of $10.2 million and diluted EPS of $2.49, up 2% versus 2024.
  • Fourth-quarter net sales rose 3% to $47.5 million, with fourth-quarter net income up 10% to $1.9 million and diluted EPS up 12% to $0.46, and operating profit up 27% year over year.
  • Europe grew 22% in local currency in the quarter (up 4% for the year) and Canada grew 14% in local currency in the quarter (up 16% for the year), reflecting share gains in first aid and the new German cutting-and-sharpening acquisition.
  • The Company strengthened its balance sheet, cutting net bank debt to $18.5 million from $21.5 million and lowering interest expense to $1.6 million from $1.9 million, while generating $13 million of free cash flow before the $6 million Tennessee facility purchase.
  • Acme executed two acquisitions to expand its platform: My Medic, a leading direct-to-consumer supplier of advanced first aid and bleed-control products with ~$19 million of 2025 revenue and over 500,000 social-media followers (closed January 15, 2026 for $18.7 million), and a German direct-to-consumer cutting/sharpening line (~$2 million revenue, $1.6 million, October 1, 2025).
What went wrong
  • Full-year U.S. segment sales declined 1% as strong first aid and medical sales were offset by lower school and office (Westcott) product sales, reflecting tariff-driven cancellation of customer orders.
  • Fourth-quarter gross margin slipped to 38.2% from 38.7% a year earlier (full-year 39.4% vs 39.3%), and U.S. fourth-quarter sales were flat.
  • The April 2025 announcement of 145% China tariffs forced customers to delay and cancel retail promotions and disrupted sourcing before the Company could react.
  • Full-year net income growth was modest at 2%, constrained by the tariff environment and the earlier-year promotional slowdown in cutting tools.

Guidance Changes

MetricPeriodCurrent guidance
First aid and medical segments2026Growth expected
Retail / Westcott promotions2026Return to more normal merchandising and promotional activity expected
My Medic2026+To be integrated carefully; expand direct-to-consumer and selectively into retail, leveraging Acme sourcing and distribution
Spill Magic (Mt. Pleasant, TN)Q1 2026Moving into the new facility in Q1 2026 with newly purchased automated equipment

Performance Breakdown

MetricYoYNote
Full-year net sales +1% (to $196.5M) Record sales; first aid/medical strength offset weaker cutting-tool promotions.
Full-year net income / EPS +2% ($10.2M / $2.49) Record earnings despite tariff headwinds.
Q4 net sales +3% (to $47.5M) Growth led by Europe (+22% LC) and Canada (+14% LC), including the German cutting acquisition.
Q4 net income / EPS +10% / +12% ($1.9M / $0.46) Operating profit up 27% and lower interest expense.
Europe (local currency) +22% Q4 / +4% FY Additional sales from the October 2025 German cutting-and-sharpening acquisition plus base cutting share gains.
Canada (local currency) +14% Q4 / +16% FY Strong first aid product sales and e-commerce expansion, partly offset by lower school/office sales.
Q4 gross margin 38.2% vs 38.7% Tariff-related cost pressure; full-year margin essentially flat at 39.4%.
Net bank debt $18.5M vs $21.5M $13M free cash flow before the $6M Tennessee purchase; $2.3M dividends and $1.6M German acquisition paid during the year.

Earnings Call Themes & Trends

TopicPrevious mentionCurrent periodTrend
Tariff response and global sourcing145% China tariffs in April 2025When China tariffs fell to 30% in late April, Acme put over 50 containers on the water within days, opened new factories in Vietnam, Thailand and Malaysia, increased production in India and Egypt, negotiated cost and freight reductions and raised prices modestly.—
My Medic acquisition—Acquired the leading U.S. direct-to-consumer supplier of advanced first aid and bleed-control products (~$19M revenue, 500,000+ social followers) for $18.7M; net out-of-pocket ~$14M after a ~$1M earn-out and ~$3M holdback; to be integrated carefully with selective retail expansion.—
Domestic manufacturing and automationInvesting in Med-Nap and roboticsInvested in robotics at three U.S. sites for refill assembly, purchased a 78,000-sq-ft Spill Magic plant in Mt. Pleasant, TN (~$6M), added automated processing equipment, and continued building out Med-Nap in Florida with a microbiology lab and expanded QA to serve the broader U.S. medical market.—
Product innovation—Launched a patented automatic replenishment system that senses used or missing first aid components and auto-generates refill orders (customers save 30%-50% versus van-based delivery); Westcott expanded share in the craft market using patented non-stick and ceramic technology.—
Acquisition strategyOpportunistic, self-generated dealsFocus on horizontal expansion in first aid/medical (buying competitors, broadening into pre-hospital emergency products) and potential vertical component suppliers like Med-Nap.—

Q&A Summary

Jim Marrone (Singular Research) asked how My Medic will be integrated, and about its acquisition multiple and financing.
Johnsen said My Medic (with a half-million social followers and a strong SHOT Show presence) will be part of the first aid offering, expanded in direct-to-consumer and selectively into retail; 2025 revenue was $19 million with EBITDA of roughly $1.0-1.5 million; the $18.6 million price included a ~$1 million earn-out and ~$3 million holdback, leaving net out-of-pocket of about $14 million.
Marrone asked whether the 'selective' retailers for My Medic would be the same ones that buy Acme's cutting tools.
Johnsen said Acme sells to almost every North American retailer so it has a broad choice, but distribution will be selective and the target list is still being developed.
Marrone asked where future acquisitions will focus — first aid/medical or cutting tools.
Johnsen said acquisitions are opportunistic and mostly self-generated, likely in first aid/medical (expanding horizontally into pre-hospital emergency products or vertically into component suppliers like Med-Nap) rather than cutting tools.

More on Acme United Corp

Reported 2026-02-26 · figures from the Acme United Corp Q4 2025 earnings call.

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