Acme United Corporation Reports Record Third Quarter Net Sales

Acme United Corporation (AMEX:ACU) today announced that net sales for the quarter ended September 30, 2007 were $17.1 million compared to $15.5 million in the same period in 2006, an increase of 10% . Net sales for the nine months ended September 30, 2007 were $48.3 million compared to $44.8 million in the same period in 2006, an increase of 8% (7% at constant currency).

Net income was $1,305,000 or $.35 per diluted share for the third quarter ended September 30, 2007 compared to $1,225,000 or $.33 per diluted share for the comparable period last year, an increase of 7% in net income. Net income for the nine months ended September 30, 2007 was $3,476,000, or $.94 per diluted share compared to $3,490,000, or $.94 per diluted share in the comparable period last year.

Net sales for the quarter ended September 30, 2007 in the U.S. segment increased 10% as a result of sales of new products and market share gains. Net sales for the nine months ended September 30, 2007 in the U.S. segment increased 6% as a result of sales of new products, including the new iPoint electric pencil sharpener and market share gains. Combined sales in Europe and Canada for the nine month period increased by 13% in U.S. dollars and 8% in local currency. The increase relates primarily to higher sales of manicure items and office products in Europe.

Gross margins were 43.2% in the third quarter of 2007 versus 42.6% in the comparable period last year. The gross margin increase for the third quarter was due to improved margins in Europe and the success of new products. For the first nine months of 2007 gross margins were 42.8% compared to 43.8% in the same period in 2006. The gross margin decline for the nine month period was due to greater sales of lower margin products, as well as the introduction of new private label programs.

Walter C. Johnsen, Chairman and CEO said, "During the quarter, Acme acquired the patents, brands, and trademarks of Camillus Cutlery and TigerSharp Technologies for approximately $600,000. Camillus is the oldest knife company in the U.S., and its acquisition expands our distribution into the hardware and sporting goods markets. TigerSharp's patented removable knife blade technology provides a platform of products and designs that are applicable to many of our cutting products. During the quarter, Acme also initiated an exclusive joint marketing agreement with Old Harbor Outfitters, Inc. to distribute its patented high quality, titanium bonded knives to the commercial and recreational fishing markets. Revenues from these actions are expected to begin in the fourth quarter of 2007 but will not be material at this stage as we begin customer presentations. We anticipate that the acquisitions in aggregate will be accretive to earnings during 2008."

The Company’s bank debt less cash on September 30, 2007 was $8.7 million compared to $9.3 million on September 30, 2006. During the twelve month period the Company spent $600,000 on acquisitions, $500,000 on share buybacks and $500,000 on shareholder dividends; these actions were financed by cash flow from operations. Based on anticipated cash flow, the debt level is expected to decline by the end of the year.

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 Company’s plans and results of operations will be affected by the Company’s ability to manage its growth, and (iii) other risks and uncertainties indicated from time to time in the Company’s filings with the Securities and Exchange Commission.

Contacts:

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