Overview

• Safety solutions supplier's Q2 net sales rose 16% yr/yr, driven by broad-based growth

• Q2 net income increased 6% yr/yr; diluted EPS up 5%

• Gross margin improved to 42.6%, aided by My Medic acquisition

Outlook

• Company expects My Medic business to generate most profitability in Q4

• Company anticipates high tariffs will continue to pressure margins, but at a decreasing rate

• Acme United aims for strengthening quarterly profitability through cost reductions and growth initiatives

Result Drivers

• ACQUISITION IMPACT - My Medic acquisition contributed to sales growth but had minimal effect on Q2 earnings due to seasonal profit pattern

• U.S. SALES GROWTH - U.S. first aid sales excluding My Medic rose 10% and Westcott cutting tools sales grew 8%, helped by renewed promotional activity and stronger retail demand

• TARIFF PRESSURE - Elevated tariffs continued to weigh on U.S. gross margins, though the impact was less than in Q1

Company press release: ID:nGNX9SY6sR

Key Details

Metric	Beat/Miss	Actual	Consensus Estimate
Q2 Sales	Beat	$62.72 mln	$56.24 mln (2 Analysts)
Q2 Net Income		$5.05 mln
Q2 Basic EPS		$1.32
Q2 Gross Profit		$26.69 mln
Q2 Operating Income		$6.83 mln
Q2 Pretax Profit		$6.30 mln

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 1 "strong buy" or "buy", 1 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the medical equipment, supplies & distribution peer group is "buy"

• Wall Street's median 12-month price target for Acme United Corp is $50.00, about 8.9% above its July 22 closing price of $45.90

• The stock recently traded at 25 times the next 12-month earnings vs. a P/E of 21 three months ago

Reuters Recommended Reads

• July 21 - 3M boosts annual profit forecast driven by resilient industrial unit

• July 21 - Sweden's MedCap Q2 net sales rise 16% on organic growth and acquisitions

• July 22 - Graco Q2 sales rise less than expected

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