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    ACU
    Earnings call· Jun 2026(Q2 FY26)

    ACME UNITED CORP ACU

    Jul 23, 2026 Source

    Executive summary

    Acme United Q2 FY26 — Strong Sales Growth Driven by MyMedic Acquisition and Core Business Recovery

    Acme United delivered strong Q2 FY26 results, with net sales up 16% driven by the MyMedic acquisition and a recovery in core businesses like Westcott cutting tools. While MyMedic's high gross margins boosted overall profitability, tariff-related costs impacted US gross margins, and increased advertising for MyMedic led to higher SG&A. The company is focused on integrating MyMedic, expanding retail distribution, and leveraging automation for future growth as it expects continued gross margin expansion.

    Highlights

    5

    • Net sales increased 16% to $62.7 million, reaching $150 million for the first six months.

    • MyMedic acquisition contributed approximately $4.3 million in Q2 sales.

    • US First Aid and Medical products sales increased 10%.

    • US Westcott cutting tools sales increased 8%, with record back-to-school sales through June.

    • Overall gross margin expanded to 42.6% in Q2, up from 41% year-over-year.

    Concerns

    4

    • US gross margins declined approximately 100 basis points due to high-tech product tariffs capitalized in inventory.

    • SG&A expenses increased to 32% of sales in Q2 (from 29%) primarily due to MyMedic's advertising costs.

    • Year-to-date net income decreased 6% to $6 million, mainly due to higher tariffs in Q1.

    • Net debt increased from $22.8 million to $27.3 million year-over-year.

    Guidance & targets

    3
    CategoryTargetConfidence
    Gross Margin Recovery
    1% recovery
    medium materiality
    High
    MyMedic Profitability
    Strong profits
    medium materiality
    Medium
    Gross Margin Expansion
    Continued expansion
    medium materiality
    High

    Segment performance

    4
    SegmentRevenueYoYQoQMargin
    United States
    Sales increased 15% for the six months ended June 30th (total), 6% (ex-MyMedic). Increases for both periods driven by higher sales across all product lines. Gross margins declined approximately 100 basis points due to high-tech product tariffs.
    First aid and medical products sales increased 10%Westcott cutting tools business increased 8%
    		$58.4M (ex-MyMedic)17% (total), 8% (ex-MyMedic)——
    Europe
    Net sales increased 19% in local currency for both the second quarter and six months of 2026 compared to 2025.
    Base business sales increase of 12%New line of cutting and sharpening tools contributed to growth
    		—19% in local currency——
    Canada
    Net sales increased 6% for the year to date. First aid central business is strong and growing, while the Westcott side is impacted by the sluggish economy.
    Higher sales of first aid productsWestcott side is weaker
    		—3%——
    MyMedic
    Acquired in January 2026. Sells high-quality first aid kits, mostly direct-to-consumer. Seasonal, with particular strength expected in Q4.
    Net sales in 2025 were $19 millionHigh gross marginsHigh advertising and marketing costsGrown about a third this year (overall business)
    		$4.3 million——Break-even operations

    Operational metrics

    20
    Net Debt
    $27.3 millionUp from $22.8 million at June 30, 2025
    June 30, 2026

    Increased due to MyMedic acquisition and other investments.

    Dividends Distributed
    $2.4 million
    12 months ended June 30, 2026

    Part of capital allocation during the period.

    Gross Margin
    42.6%Up from 41% in Q2 FY25
    Q2 FY26

    Overall gross margin improvement, despite tariff headwinds in the US.

    Gross Margin
    41.3%Up from 40.1% in first six months FY25
    First six months FY26

    Overall gross margin improvement for the year-to-date period.

    SG&A Expenses as % of Sales
    32%Up from 29% in Q2 FY25
    Q2 FY26

    Primarily due to the addition of the MyMedic business and its higher advertising needs.

    SG&A Expenses as % of Sales
    34%Up from 31% in first six months FY25
    First six months FY26

    Primarily due to the addition of the MyMedic business and its higher advertising needs.

    MyMedic Sales
    $19 million
    FY25

    Net sales for MyMedic in the year prior to acquisition.

    Total Sales Growth (excluding MyMedic)
    8%
    Q2 FY26

    Organic sales growth for the company's base business.

    Total Sales Growth (excluding MyMedic)
    7%
    First six months FY26

    Organic sales growth for the company's base business year-to-date.

    US Sales Growth (excluding MyMedic)
    8%
    Q2 FY26

    Organic sales growth for the US segment.

    US Sales Growth (excluding MyMedic)
    6%
    First six months FY26

    Organic sales growth for the US segment year-to-date.

    Spill Magic Sales Growth
    30-40%
    Year-to-date

    Strong growth for the Spill Magic product line.

    MyMedic Business Growth
    about a third
    This year

    Overall growth for the MyMedic business since acquisition.

    Tennessee Plant Acquisition Cost
    $6 million
    Last year

    Investment in a permanent facility for Spill Magic, enabling automation.

    MedNap Regulatory Compliance
    —
    Year-end

    Investing to upgrade regulatory compliance to address the US hospital market, with certification expected by year-end.

    Smart Compliance Software Rollout
    —
    Early next year

    Next generation software in final stages, going out to early distributors next year.

    Extra Inventory
    $10 million
    Ongoing

    Ordered at the start of the Iran war to buffer potential product shortages and cost increases.

    MyMedic Social Media Followers
    Half a million
    Current

    Strong social media presence supporting the direct-to-consumer model.

    MyMedic Q4 Sales Seasonality
    35%
    Q4

    Q4 is typically the strongest quarter for MyMedic due to holiday spending.

    Westcott Back-to-School Sales
    Record
    Through June

    Strong performance for back-to-school season, indicating recovery in promotional activity.

    Industry KPIs

    6
    MetricValueDetails
    Tariff impact100bps
    New product launch ramp—
    FCF conversion leverage guidance$15 millionUSD
    Segment franchise organic growth10%%
    Consumables recurring revenue mix—
    Sales force commercial capacity build—

    Product announcements

    2
    ProductTypeDetails
    New line of cutting and sharpening toolslaunch
    Next generation Smart Compliance softwaremilestone

    Deals & partnerships

    2
    MyMedicAcquisition of a company selling high-quality first aid kits, primarily direct-to-consumer.$14 million

    Acquired in January 2026. Extends product line from simple retail kits to advanced ones. Focus on increasing DTC business and expanding to retail, while optimizing costs and consolidating functions.

    UnnamedAcquisition of a cutting and sharpening line of products.$1.6 million

    Purchased a cutting and sharpening line of products in Germany.

    Risks & headwinds

    6
    Challenging global macroeconomic environment

    Continued high inflation, high interest rates

    Tariff impact on gross marginsQ2 FY26, expected to lessen over next two quarters

    Approximately 100 basis points decline in US gross margins in Q2

    Mitigation: Tariff rates declined in November 2025 and February 2026; high-cost inventory being sold off.

    Increased SG&A expensesQ2 FY26

    SG&A increased to 32% of sales in Q2 (from 29%)

    Mitigation: Efforts to eliminate duplicate corporate functions and consolidate freight for MyMedic.

    Supply chain disruptionsOngoing

    Experienced in the past, may experience in the future

    Mitigation: Maintained $10 million of extra inventory to buffer potential shortages.

    Weakening dollar against Chinese currencyPast year

    Headwind for items imported from China

    Mitigation: Addressed through product pricing and locked-in excellent pricing for existing inventory.

    Sluggish Canadian economyQ2 FY26

    Impacted Westcott sales in Canada

    Mitigation: First aid business in Canada remains strong and growing.

    What to watch in Q3 FY26

    5

    MyMedic Profitability

    Q4 FY26
    CurrentBreak-even operations in Q2
    TargetStrong profits, particular strength in Q4

    Why it matters

    MyMedic is a key acquisition and growth driver; its profitability is crucial for overall company performance.

    The intention is to have strong profits from MyMedic during all quarters with particular strength in the fourth quarter.

    Q&A highlights

    6

    Inquired about the progress of long-term initiatives such as Spill Magic capacity expansion, MedNap throughput, plant certification for government/hospital sales, and MyMedic expansion.

    Management confirmed these are long-term initiatives, detailing the new Tennessee facility for Spill Magic (40% YTD sales growth), MedNap's regulatory compliance progress for the US hospital market (certification by year-end), and the upcoming next-gen Smart Compliance software for first aid kits (early next year rollout). They also emphasized MyMedic's retail distribution expansion.

    “The certification work is progressing well and we should be done with it by year end. My medic business in general has grown about a third this year.”

    asked by Timothy Cole · answered by Unknown Speaker

    2 min read6 chapters

    Detailed Narrative

    01

    MyMedic Integration and Strategy

    The MyMedic acquisition in January 2026 contributed approximately $4.3 million in Q2 sales, operating at break-even as expected. The company is focused on increasing the core direct-to-consumer business, expanding product offerings to retail, and optimizing product costs through Asian sourcing and freight consolidation. The goal is to achieve strong profits from MyMedic in all quarters, particularly Q4, by eliminating duplicate corporate functions and leveraging Acme United's retail distribution strength.

    02

    Gross Margin Dynamics and Tariff Impact

    Overall gross margins improved to 42.6% from 41% year-over-year, primarily due to the favorable mix from MyMedic's higher-margin direct-to-consumer products. However, US gross margins declined by approximately 100 basis points due to the costs of high-tech product tariffs that were capitalized into inventory and are now being sold. Management anticipates continued gross margin expansion as these higher-cost products are sold off over the next two quarters, recovering the 1% tariff impact🌐.

    03

    Core Business Performance and Recovery

    The core businesses showed strong performance, with US net sales of first aid and medical products increasing 10% and Westcott cutting tools business increasing 8%. This marks a recovery from the previous year when retail promotions were canceled due to tariff and cost uncertainty. The company noted a 'full book of promotional activity' for Westcott for the rest of the year, including back-to-school and Q4, with back-to-school sales through June being a record.

    04

    Strategic Investments and Automation

    Acme United has invested in expanding its operational capacity, including acquiring a 78,000 sq ft facility on a 12-acre site in Tennessee for $6 million for Spill Magic growth, where automation is being installed. The MedNap business in Florida is undergoing significant investment to upgrade regulatory compliance to address the US hospital market, with certification expected by year-end. These investments aim to support long-term growth and efficiency.

    05

    Innovation and Competitive Advantage

    The company highlighted its competitive advantages, including pioneering titanium and non-stick coatings for Westcott cutting tools, which deliver superior performance and cost-effectiveness due to scale. In first aid, a strong marketing team is developing differentiated products, supported by a multi-office, multi-country sourcing team in Asia, which contributes to competitive pricing and market leadership at major retailers like Walmart, Grainger, and Fastenal.

    06

    Smart Compliance Software Development

    The next generation of the Smart Compliance software, which automates replenishment for industrial first aid kits by scanning contents and generating orders via the internet, is in its final stages and expected to roll out to early distributors next year. This initiative represents a potential significant growth segment, enhancing service offerings and driving future sales.

    AI-generated summary of the company’s earnings call. Not investment advice.