Acme United Corporation Reports Record 2008 Sales and Earnings

Business Wire, Feb 27, 2009

FAIRFIELD, Conn. -- Acme United Corporation (NYSE Alternext US:ACU) today announced that net sales for the year ended December 31, 2008 were $68.7 million, compared to $63.2 million in the same period in 2007, an increase of 9% (8% in local currency). Net income for the year ended December 31, 2008 was $4,467,000, or $1.24 per diluted share, compared to $4,022,000, or $1.09 per diluted share, in the comparable period last year, an increase of 11% in net income and 14% in earnings per share.

Net sales for the fourth quarter ended December 31, 2008 were $12.6 million compared to $14.9 million in the same period in 2007, a decrease of 15% (12% in local currency). Net income for the fourth quarter ended December 31, 2008 was $634,000, or $.18 per diluted share, compared to $546,000, or $.15 per diluted share, for the comparable period last year, an increase of 16% in net income and 20% in earnings per share. Included in other income in the fourth quarter ended December 31, 2008 was a $265,000 ($164,000 after tax) gain on the sale of property.

Net sales for the year ended December 31, 2008, in the U.S. segment increased 10% compared to 2007 as a result of market share gains in all distribution channels. Net sales in Canada for the year ended December 31, 2008 were relatively constant in U.S. dollars compared to the same period in 2007 but declined 3% in local currency. European net sales for the year ended December 31, 2008 increased 12% in U.S. dollars and 4% in local currency compared to the same period in 2007.

Gross margins were 40.2% for 2008 compared to 41.9% in 2007. The gross margin decline in 2008 was primarily due to strong growth in the highly competitive school market.

Walter C. Johnsen, Chairman and CEO said, "The results for 2008 represent strong growth in our market shares, expansion of our distribution channels, and improvement in Europe. We experienced softer sales in the fourth quarter than we expected, but we were able to adjust expenses. I am especially pleased with the recent placement of our new products, including the iPoint family of pencil sharpeners, Microban school and office products and Speed Pak utility knives, which are expected to contribute new revenues in 2009."

The Company’s bank debt less cash on December 31, 2008 was $6.5 million compared to $5.2 million on December 31, 2007, an increase of $1.3 million. During 2008, the Company repurchased 235,000 shares of its common stock for $2.5 million and paid $600,000 in dividends on its common stock, which were offset by cash flow from operations of $3.3 million.

ACME UNITED CORPORATION is an innovative supplier of cutting devices, measuring instruments and safety products for school, home, office, industrial and hardware use. Its leading brands include Westcott®, Clauss® and PhysiciansCare ®.

Forward-looking statements in this report, including without limitation, statements related to the Company’s plans, strategies, objectives, expectations, intentions and adequacy of resources, are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that such forward-looking statements involve risks and uncertainties including, without limitation, the following: (i) the Company’s plans, strategies, objectives, expectations and intentions are subject to change at any time at the discretion of the Company; (ii) the impact of current uncertainties in global economic conditions and the ongoing financial crisis affecting the domestic and foreign banking system and financial markets, including the impact on the Company’s suppliers and customers (iii) the Company’s plans and results of operations will be affected by the Company’s ability to manage its growth, and (iv) other risks and uncertainties indicated from time to time in the Company’s filings with the Securities and Exchange Commission.

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