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Acme United Corporation Reports Record Sales and 20% Increase in Net Income for the Third Quarter

  Acme United Corporation Reports Record Sales and 20% Increase in Net Income
  for the Third Quarter

Business Wire

FAIRFIELD, Conn. -- October 18, 2013

Acme United Corporation (NYSEMKT:ACU) today announced that net sales for the
third quarter ended September 30, 2013 were $22.1 million, compared to $20.4
million in the comparable period of 2012, an increase of 9%.

Net income was $959,000, or $.29 per diluted share, for the quarter ended
September 30, 2013, compared to $798,000 or $.26 per diluted share, for the
comparable period last year, an increase of 20% in net income and 12% in
diluted earnings per share.

Net sales for the nine months ended September 30, 2013 were $68.2 million,
compared to $64.8 million in the same period in 2012, an increase of 5%.

Net income for the nine months ended September 30, 2013 was $3,479,000, or
$1.07 per diluted share, compared to $3,118,000, or $1.00 per diluted share in
the comparable period last year, a 12% increase in net income and 7% in
diluted earnings per share.

Net sales for the quarter ended September 30, 2013 in the U.S. segment
increased 11% compared to the same period in 2012 primarily due to higher
sales of Camillus knives and back to school products as well as increased
distribution of first aid kits. Net sales for the nine months ended September
30, 2013 in the U.S. segment increased 8% compared to the same period in 2012
due to additional sales resulting from the acquisition of the C-Thru Ruler
Company in June 2012, increased back to school sales and higher sales of
Camillus knives. Net sales in Canada for the three months ended September 30,
2013 decreased 18% in U.S. dollars (15% in local currency) compared to the
same period in 2012. Net sales in Canada for the nine months ended September
30, 2013 decreased 8% in U.S. dollars (6% in local currency) compared to the
same period in 2012. The sales decline in Canada for both periods was
primarily due to general softness in the office products industry which
resulted from continuing weakness in the Canadian economy. European net sales
for the three months ended September 30, 2013 increased 26% in U.S. dollars
(19% in local currency), compared to the same period last year mainly due to
higher sales to mass market retailers. European net sales for the nine months
ended September 30, 2013 decreased 6% in U.S. dollars (7% in local currency)
compared to the same period last year primarily due to the bankruptcy and
liquidation of a large customer in Germany in the second quarter of 2012.

Gross margins were 36% for the three and nine months ended September 30, 2013
and 2012, respectively.

Walter C. Johnsen, Chairman and CEO said, “Acme United performed well in the
third quarter. We had record back to school sales and strong performance with
the Clauss, Camillus, and PacKit first aid product lines. On August 30, 2013
we purchased a 340,000 sq. ft. distribution facility in Rocky Mount, North
Carolina to facilitate current and future growth. Our business continues to be
strong.”

Mr. Johnsen added that the new facility is currently being upgraded and will
be available to begin consolidating distribution facilities at year end. We
will have duplicate running costs until then, and expect to realize savings in
2014.

The Company’s bank debt less cash and cash equivalents on September 30, 2013
was $13.2 million compared to $14.2 million on September 30, 2012. During the
12 month period ended September 30, 2013, Acme purchased the new distribution
facility in North Carolina for $2.8 million and paid $900,000 in dividends on
its common stock. On August 21, 2013 the Company received $1.7 million from
early repayment of a mortgage receivable. During the 12 month period the
Company also generated $3 million in cash flow from operations.

ACME UNITED CORPORATION is a leading worldwide supplier of innovative cutting,
measuring and safety products to the school, home, office, hardware and
industrial markets. Its leading brands include Westcott®, Clauss®, Camillus®,
PhysiciansCare® and Pac-Kit®.

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)
changes in the Company’s plans, strategies, objectives, expectations and
intentions, which may be made at any time at the discretion of the Company;
(ii) the impact of uncertainties in global economic conditions, including the
impact on the Company’s suppliers and customers; (iii) changes in client needs
and consumer spending habits; (iv) the impact of competition and technological
changes on the company; (v) the Company’s ability to manage its growth
effectively, including its ability to successfully integrate any business it
might acquire; (vi) currency fluctuations; and (vii) other risks and
uncertainties indicated from time to time in the Company’s filings with the
Securities and Exchange Commission.

ACME UNITED CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
THIRD QUARTER REPORT 2013
(Unaudited)

                                    Three Months Ended    Three Months Ended
Amounts in $000's except per       September 30, 2013   September 30, 2012
share data
                                                            
                                                            
Net sales                          $ 22,135               $ 20,363
Cost of goods sold                   14,195                 12,937
Gross profit                         7,940                  7,426
Selling, general, and                6,531                  6,067
administrative expenses
Income from operations               1,409                  1,359
Interest expense                     133                    147
Interest income                      (34)                   (64)
Net interest expense                 99                     83
Other (income) expense               (13)                   7
Total other expense                  86                     91
Income before income tax expense     1,323                  1,269
Income tax expense                   364                    471
Net income                         $ 959                  $ 798
                                                            
Shares outstanding - Basic           3,189                  3,103
Shares outstanding - Diluted         3,325                  3,133
                                                            
Earnings per share basic           $ 0.30                 $ 0.26
Earnings per share diluted           0.29                   0.26


ACME UNITED CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
THIRD QUARTER REPORT 2013 (cont.)
(Unaudited)

                                    Nine Months Ended     Nine Months Ended
Amounts in $000's except per       September 30, 2013   September 30, 2012
share data
                                                            
Net sales                          $ 68,198               $ 64,835
Cost of goods sold                   43,749                 41,644
Gross profit                         24,449                 23,191
Selling, general, and                19,334                 18,296
administrative expenses
Income from operations               5,115                  4,895
Interest expense                     382                    340
Interest income                      (140)                  (140)
Net interest expense                 242                    200
Other expense                        15                     93
Total other expense                  257                    293
Income before income tax expense     4,858                  4,602
Income tax expense                   1,379                  1,484
Net income                         $ 3,479                $ 3,118
                                                            
Shares outstanding - Basic           3,158                  3,114
Shares outstanding - Diluted         3,244                  3,132
                                                            
Earnings per share basic           $ 1.10                 $ 1.00
Earnings per share diluted           1.07                   1.00


ACME UNITED CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
THIRD QUARTER REPORT 2013
(Unaudited)

Amounts in $000's                  September 30, 2013   September 30, 2012
                                                       
Assets:
Current assets:
Cash and cash equivalents          $ 11,809               $ 10,105
Accounts receivable, net             17,488                 16,058
Inventories                          29,280                 29,992
Prepaid and other current assets    1,884                 1,911
Total current assets                 60,461                 58,066
                                                            
Property and equipment, net          5,060                  2,388
Long term receivable                 -                      1,718
Intangible assets, net               4,105                  4,275
Other assets                        1,111                 1,214
Total assets                       $ 70,737               $ 67,661
                                                            
Liabilities and stockholders'
equity:
Current liabilities
Accounts payable                   $ 5,016                $ 6,513
Other current liabilities            5,244                  5,296
Total current liabilities            10,260                 11,809
Bank debt                            25,031                 24,321
Other non current liabilities       994                   1,153
                                     36,285                 37,283
Total stockholders' equity          34,452                30,378
Total liabilities and              $ 70,737               $ 67,661
stockholders' equity

Contact:

Acme United Corporation
Paul G. Driscoll, 203-254-6060
FAX: 203-254-6521