Acme United Corporation — Third Quarter 2026 Earnings Summary

Financial Performance:

• Net sales for the quarter ended September 30, 2026, reached $58.0 million, an 18% increase year-over-year from $49.1 million in 2025; comparable sales excluding the My Medic acquisition increased 10%.
• Net sales for the nine months ended September 30, 2026, totaled $173.0 million, a 16% increase from $149.0 million in 2025; comparable sales excluding My Medic increased 8%.
• Net income for the quarter was $3.4 million ($0.80 per diluted share), an 80% increase from $1.9 million ($0.46 per diluted share) in the prior year period.
• Net income for the nine months ended September 30, 2026, was $9.5 million ($2.29 per diluted share), a 14% increase from $8.3 million ($2.03 per diluted share) in the prior year period.
• Gross margin for the quarter was 45.3% compared to 39.1% in the prior year period; the nine-month gross margin was 42.6% compared to 39.8%.
• Gross margin improvements included a 690 basis point benefit from tariff refunds in the quarter and 230 basis points for the nine months, partially offset by DMT facility closure costs of 310 basis points (quarter) and 105 basis points (nine months).
• Free cash flow for the twelve months ended September 30, 2026, was approximately $13.8 million, including $6.0 million in tariff refunds.
• Bank debt less cash as of September 30, 2026, was $29.7 million, up from $23.1 million as of September 30, 2025.

Guidance and Future Outlook:

• The Company expects the seasonal profitability pattern of the My Medic business to continue, with the majority of profitability generated in the fourth quarter.
• Plans are in place to close the DMT plant in Massachusetts later in the year and shift production to other locations and offshore, with expected annual savings of more than $1.0 million in 2027.
• Retail and distribution commitments for My Medic product lines are expected to begin next year.

Business Segments and Product Lines:

• U.S. segment net sales increased 20% in the quarter and 17% for the nine months, driven by strong sales across all product lines and the My Medic acquisition.
• European net sales increased 5% in U.S. dollars (7% in local currency) for the quarter and 20% in U.S. dollars (15% in local currency) for the nine months, driven by higher ecommerce sales and the acquisition of a German cutting and sharpening product line.
• Canada net sales increased 9% in U.S. dollars (12% in local currency) for the quarter and 8% in both currencies for the nine months, driven by higher first-aid product sales.
• The My Medic business, acquired in January 2026, sells tactical, trauma, and emergency response products directly to consumers.
• The Company acquired the assets of My Medic for $18.6 million (net of $4.1 million holdbacks) and purchased a cutting and sharpening product line in Germany for approximately $1.6 million.

Market and Competitive Landscape:

• The Company faces increasing costs for transportation and raw materials.
• The Company is addressing cost pressures through the use of new robotics, competitive sourcing, and operational consolidation.
• The Company continues to seek acquisitions that fit its strategic criteria.

Risks and Challenges:

• Forward-looking statements highlight risks including volatility in global economic conditions, international trade policies, tariffs, inflation, and interest rates.
• Potential risks include supply chain disruptions, labor-related costs, currency fluctuations, inventory management challenges, and competition.
• Specific risks include the ability to effectively integrate acquired businesses and manage growth.

Management Commentary and Tone:

• Chairman and CEO Walter C. Johnsen described the quarter as having record sales with growth in all business units and internationally, noting strong back-to-school sales.
• Management stated the My Medic integration is progressing on plan.
• Management characterized the balance sheet as strong.

Other Key Points:

• The Company received $6.0 million in IEEPA tariff refunds; $4.0 million was recognized as a reduction of cost of goods sold in the third quarter, with the remaining $2.0 million recorded as an accrued liability.
• The Company recorded $1.0 million of variable compensation expense related to the tariff refund in selling, general, and administrative expenses.
• Cost of goods sold included $1.8 million of costs accrued for the close of the DMT sharpening facility and the move of production to Asia.
• Net income included approximately $0.4 million of tax benefits from stock option exercises.
• The Company distributed approximately $2.4 million in dividends on its common stock during the twelve-month period ended September 30, 2026.