On July 19, 2024, Acme United Corp (ACU, Financial) released its 8-K filing for the second quarter of 2024, showcasing a robust financial performance. The company, a leading supplier of first aid and medical products, cutting technology, and other office and industrial supplies, reported significant growth in net income and earnings per share (EPS).
Company Overview
Acme United Corp is a supplier of first aid and medical products and cutting technology to various markets, including school, home, office, hardware, sporting goods, and industrial sectors. Its principal products include first aid kits, medical products, scissors, shears, knives, rulers, pencil sharpeners, and sharpening tools. The company operates in three reportable segments: the United States, Canada, and Europe, with the majority of its revenue derived from the United States.
Q2 2024 Financial Performance
For the quarter ended June 30, 2024, Acme United Corp reported net sales of $55.4 million, a 4% increase from $53.3 million in the same period in 2023. Excluding the impact of the Camillus and Cuda product lines sold in November 2023, net sales increased by 8% year-over-year. Net income for the quarter was $4.5 million, or $1.09 per diluted share, compared to $3.4 million, or $0.96 per diluted share, in Q2 2023, marking a 32% increase in net income and a 14% increase in diluted EPS.
Key Financial Metrics
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Net Sales | $55.4 million | $53.3 million |
| Net Income | $4.5 million | $3.4 million |
| Diluted EPS | $1.09 | $0.96 |
| Gross Margin | 40.8% | 37.5% |
Segment Performance
In the U.S. segment, net sales increased by 5% compared to Q2 2023. Excluding Camillus and Cuda, net sales rose by 10%, driven by market share gains across multiple product lines. European net sales grew by 4% in U.S. dollars and 5% in local currency, with a 9% increase excluding Camillus and Cuda. However, Canadian net sales decreased by 7% in both U.S. dollars and local currency, with a 4% decline excluding Camillus and Cuda, primarily due to a soft economy impacting school and office product sales.
Operational Highlights
Gross margin improved to 40.8% in Q2 2024 from 37.5% in Q2 2023, attributed to productivity improvements in manufacturing and distribution facilities. The company also reported a significant reduction in bank debt, which stood at $33.1 million as of June 30, 2024, compared to $47.5 million a year earlier.
Recent Acquisitions
On May 23, 2024, Acme United Corp acquired the assets of Elite First Aid, Inc., a supplier of tactical, trauma, and emergency response products. This acquisition, which had revenues of approximately $4.2 million in 2023, is expected to strengthen Acme United's emergency response product line and expand its customer base.
Chairman and CEO Walter C. Johnsen stated, “Sales in the second quarter of 2024 were strong. We had significant market share gains and sales growth in first aid. Revenues of Westcott cutting tools increased due to gains in the craft market and growth in back-to-school sales. Our underlying growth was approximately 8% in the quarter after taking into account the revenues of the hunting and fishing lines which were sold last year to enhance our focus on Acme United’s primary product lines.”
Conclusion
Acme United Corp's Q2 2024 earnings report highlights the company's strong financial performance, driven by strategic acquisitions and market share gains. The company's ability to improve gross margins and reduce debt further underscores its operational efficiency. Investors and stakeholders will be keen to see how Acme United leverages its recent acquisitions and continues to navigate economic challenges in the coming quarters.
Explore the complete 8-K earnings release (here) from Acme United Corp for further details.
