What Management Said
Read the full Q1 2026 transcript ↗Welcome to the first quarter 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 and in our current earnings release. While our net sales increased 14% to $52.3 million, our net income was $985,000 compared to $1.6 million last year, and earnings per share were $0.24 compared to $0.41 last year. Our sales increase of 14% in the first quarter of 2026 includes approximately 8% from MyMedic, which was at break-even in P&L.
We expect to run through these items during the second quarter with a return to normal levels in the third quarter. Operationally, we're working to increase the revenues of MyMedic by expanding its retail distribution and building a strong core of non-seasonal business. Orders for the business are strong, and we are experiencing record growth. Our growth there includes the acquisition last November of Schmiedeglut, a small direct-to-consumer company, which is exceeding expectations.
Our first aid business in Europe had record performance, and we continue to expand its product line and sales team. In Canada, First Aid Central had a strong quarter, and the cutting segment also grew. Acme's net sales for the first quarter of 2026 were $52.3 million, compared to $46 million in 2025, a 14% increase. segment increased 12% in the quarter, driven by higher sales of first aid and medical products, including MyMedic products.
What went well
- First-quarter 2026 net sales grew 14% to $52.3 million, including roughly 8% from the newly acquired My Medic; revenue excluding My Medic still rose 6%.
- Gross margin improved to 39.7% from 39.0% a year earlier, helped by My Medic's high direct-to-consumer margins.
- Europe grew 19% in local currency (with the base business up 12% and Westcott up 10%) and Canada grew 11-16%, driven by first aid strength and the Schmiedeglut acquisition.
- Spill Magic posted record growth (up more than 30%) as the Company completed its move into the new Mt. Pleasant, Tennessee facility and began installing automation, with a further ~30% capacity addition underway in Canada.
- The Company proactively purchased about $10 million of extra inventory to buffer against potential shortages and cost increases from the war in Iran, locking in favorable pricing.
What went wrong
- It was a difficult quarter for earnings: net income fell to $985,000 (about $1.0 million) from $1.6 million and diluted EPS dropped to $0.24 from $0.41, a roughly 40% decline in net income.
- Core (ex-My Medic) gross margins declined about 200 basis points because high-cost, high-tariff inventory made at peak tariff rates was sold during the quarter (inventory turns only about twice a year).
- SG&A rose to $19 million (36% of sales) from $15.5 million (34%), driven by My Medic's heavy direct-to-consumer advertising spend.
- My Medic operated only at break-even in the quarter, as expected given its Q4-weighted seasonality.
- Net debt increased to $38.6 million from $27.2 million a year earlier, reflecting $14.6 million paid for My Medic, the German acquisition and the Tennessee facility.
- The Company incurred about $300,000 of incremental Med-Nap quality-assurance/FDA-compliance costs in the quarter (on top of ~$1 million in 2024).
Guidance Changes
| Metric | Period | Current guidance |
|---|---|---|
| Tariff margin impact | Next 3 quarters | Expected to gradually lessen as tariff rates declined in November 2025 and February 2026 and high-cost inventory is sold, with a return to normal by Q3 |
| Med-Nap QA/compliance costs | Q2 2026 | Not expected to repeat in Q2; project about three-quarters complete |
| SG&A ratio | FY2026 | Roughly 33% of sales expected for the full year |
| Capital expenditures | FY2026 | Approximately $6-7 million |
| Westcott cutting tools | Q2-Q4 2026 | Growth expected against easy comparisons as promotional activity resumes |
Performance Breakdown
| Metric | YoY | Note |
|---|---|---|
| Net sales | +14% (to $52.3M) | ~8% from My Medic plus 6% organic growth across first aid and international. |
| Net sales ex-My Medic | +6% | Underlying first aid and international strength. |
| U.S. segment | +12% | Higher sales of first aid and medical products, including My Medic. |
| Europe (local currency) | +19% | New German cutting/sharpening line plus 12% base-business growth; Westcott Europe up 10%. |
| Canada | +11% LC / +16% | Higher sales of first aid products. |
| Gross margin | 39.7% vs 39.0% | Favorable My Medic mix mostly offset by ~200 bps of tariff cost on core products. |
| Net income / EPS | -40% ($1.0M / $0.24 vs $1.6M / $0.41) | High-tariff inventory sold through in the quarter plus Med-Nap compliance costs. |
| SG&A | $19M (36%) vs $15.5M (34%) | Addition of My Medic's direct-to-consumer advertising. |
| Net debt | $38.6M vs $27.2M | $14.6M My Medic purchase, German acquisition and Tennessee facility, partly offset by ~$14.2M free cash flow. |
Earnings Call Themes & Trends
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Tariff cost roll-through | Tariffs spiked in mid-2025 | Because inventory turns about twice a year, peak-tariff-cost product was sold in Q1 2026, cutting core margins ~200 bps; management expects the drag to ease over the next three quarters as tariff rates fell in November 2025 and February 2026. | — |
| My Medic integration | Acquired January 2026 | Break-even and highly seasonal (Q4-weighted); the Company is expanding retail distribution, building non-seasonal business, integrating product lines, leveraging Asian sourcing/freight and eliminating duplicate functions to drive profits; name recognition is already enabling a Canadian launch (Health Canada-compliant production). | — |
| Automation and capacity | Robotics across sites | Investing in robotic packaging (Spill Magic powder, Med-Nap BZK/lens wipes, first aid refills), reconfigured Rocky Mount process flow with drones for daily cycle counts and floor-scrubbing robots; Spill Magic now in its permanent Mt. Pleasant home with room to grow. | — |
| Med-Nap FDA/GMP upgrade | FDA inspection found documentation deficiencies (March 2025) | Roughly three-quarters done upgrading GMP documentation, microbiology and chemical labs (~$1.25-1.3 million spent to date) to be able to serve the broader U.S. hospital market; costs largely expensed. | — |
| Geopolitical inventory hedge | — | After the war in Iran began, purchased ~$10 million of incremental raw materials and finished goods to guard against shortages and price increases. | — |
| Direct-to-consumer capability | — | My Medic and Schmiedeglut bring DTC/social-media selling skills (500,000+ followers, videos every two days) that management hopes to extend to other first aid and Westcott craft products. | — |
Q&A Summary
Richard Dearnley (Longbow Partners) asked to quantify the Med-Nap quality-assurance costs.
Johnsen and Driscoll said Acme spent about $1 million in consulting in 2024 (plus equipment) and about $300,000 in Q1 2026, roughly $1.25-1.3 million in total, to upgrade GMP documentation and labs at the Brooksville, Florida facility to serve the U.S. hospital market; the project is about three-quarters complete and largely expensed.
Dearnley asked Acme to size its other automation investments and their productivity payoffs.
Johnsen described robotic packaging for Med-Nap bulk wipes into first aid refills, ~$500,000 of Spill Magic powder-packaging automation, reconfigured Rocky Mount process flow with inventory drones and floor-scrubbing robots, and a lens-wipe robot in Brooksville due online by June.
Dearnley asked whether My Medic's direct-to-consumer expertise transfers to the First Aid or Westcott businesses.
Johnsen said both recent DTC acquisitions (My Medic and Schmiedeglut) use social-media selling, and with 500,000+ followers and frequent videos, Acme hopes to broaden its other product lines — particularly Westcott craft items — through the platform.
Tim Call (Capital Management) asked whether the many recent investments and acquisitions will add to long-term sales, margin and earnings growth.
Johnsen strongly agreed, citing the $6 million Spill Magic facility with room to grow (up over 30% in the quarter), one-time-done automation, and a faster-than-expected Canadian launch of My Medic products.
Call asked how long the two new acquisitions might take to benefit from cross-selling and Acme's wider geographic footprint.
Johnsen said a Canadian launch of My Medic (Health Canada-compliant) is already underway this year due to brand recognition, with a further ~30% capacity addition planned at the Laval, Quebec operation.
Georgie Vishenko (Freedom Broker) asked about cutting-and-sharpening (Westcott) revenue trends in Q1.
Johnsen and Driscoll said Westcott was down about 10% company-wide in 2025 on cancelled promotions but only about 2% in Q1 2026, with recovery expected in Q2-Q4 against easy comparisons as promotional activity resumes.
Jake Patterson (Talanta Investment Group) asked about the SG&A run rate, legacy gross-margin decline and 2026 capital expenditures.
Johnsen and Driscoll guided SG&A to roughly 33% of sales for the year, quantified the tariff-driven legacy gross-margin decline at about 200 basis points, and set 2026 capex at approximately $6-7 million.
More on Acme United Corp
Reported 2026-04-23 · figures from the Acme United Corp Q1 2026 earnings call.
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