Welcome to the first quarter 2026 earnings conference call for Acme United Corporation. We are also subject to additional risks and uncertainties as described in our periodic filings with the Securities and Exchange Commission and in our current earnings release. While our net sales increased 14% to $52.3 million, our net income was $985,000 compared to $1.6 million last year, and earnings per share were $0.24 compared to $0.41 last year. Our sales increase of 14% in the first quarter of 2026 includes approximately 8% from MyMedic, which was at break-even in P&L.
We expect to run through these items during the second quarter with a return to normal levels in the third quarter. Operationally, we're working to increase the revenues of MyMedic by expanding its retail distribution and building a strong core of non-seasonal business. Orders for the business are strong, and we are experiencing record growth. Our growth there includes the acquisition last November of Schmiedeglut, a small direct-to-consumer company, which is exceeding expectations.
Our first aid business in Europe had record performance, and we continue to expand its product line and sales team. In Canada, First Aid Central had a strong quarter, and the cutting segment also grew. Acme's net sales for the first quarter of 2026 were $52.3 million, compared to $46 million in 2025, a 14% increase. segment increased 12% in the quarter, driven by higher sales of first aid and medical products, including MyMedic products.
| Metric | Period | Current guidance |
|---|---|---|
| Tariff margin impact | Next 3 quarters | Expected to gradually lessen as tariff rates declined in November 2025 and February 2026 and high-cost inventory is sold, with a return to normal by Q3 |
| Med-Nap QA/compliance costs | Q2 2026 | Not expected to repeat in Q2; project about three-quarters complete |
| SG&A ratio | FY2026 | Roughly 33% of sales expected for the full year |
| Capital expenditures | FY2026 | Approximately $6-7 million |
| Westcott cutting tools | Q2-Q4 2026 | Growth expected against easy comparisons as promotional activity resumes |
| Metric | YoY | Note |
|---|---|---|
| Net sales | +14% (to $52.3M) | ~8% from My Medic plus 6% organic growth across first aid and international. |
| Net sales ex-My Medic | +6% | Underlying first aid and international strength. |
| U.S. segment | +12% | Higher sales of first aid and medical products, including My Medic. |
| Europe (local currency) | +19% | New German cutting/sharpening line plus 12% base-business growth; Westcott Europe up 10%. |
| Canada | +11% LC / +16% | Higher sales of first aid products. |
| Gross margin | 39.7% vs 39.0% | Favorable My Medic mix mostly offset by ~200 bps of tariff cost on core products. |
| Net income / EPS | -40% ($1.0M / $0.24 vs $1.6M / $0.41) | High-tariff inventory sold through in the quarter plus Med-Nap compliance costs. |
| SG&A | $19M (36%) vs $15.5M (34%) | Addition of My Medic's direct-to-consumer advertising. |
| Net debt | $38.6M vs $27.2M | $14.6M My Medic purchase, German acquisition and Tennessee facility, partly offset by ~$14.2M free cash flow. |
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Tariff cost roll-through | Tariffs spiked in mid-2025 | Because inventory turns about twice a year, peak-tariff-cost product was sold in Q1 2026, cutting core margins ~200 bps; management expects the drag to ease over the next three quarters as tariff rates fell in November 2025 and February 2026. | — |
| My Medic integration | Acquired January 2026 | Break-even and highly seasonal (Q4-weighted); the Company is expanding retail distribution, building non-seasonal business, integrating product lines, leveraging Asian sourcing/freight and eliminating duplicate functions to drive profits; name recognition is already enabling a Canadian launch (Health Canada-compliant production). | — |
| Automation and capacity | Robotics across sites | Investing in robotic packaging (Spill Magic powder, Med-Nap BZK/lens wipes, first aid refills), reconfigured Rocky Mount process flow with drones for daily cycle counts and floor-scrubbing robots; Spill Magic now in its permanent Mt. Pleasant home with room to grow. | — |
| Med-Nap FDA/GMP upgrade | FDA inspection found documentation deficiencies (March 2025) | Roughly three-quarters done upgrading GMP documentation, microbiology and chemical labs (~$1.25-1.3 million spent to date) to be able to serve the broader U.S. hospital market; costs largely expensed. | — |
| Geopolitical inventory hedge | — | After the war in Iran began, purchased ~$10 million of incremental raw materials and finished goods to guard against shortages and price increases. | — |
| Direct-to-consumer capability | — | My Medic and Schmiedeglut bring DTC/social-media selling skills (500,000+ followers, videos every two days) that management hopes to extend to other first aid and Westcott craft products. | — |