Acme United Corporation Reports Fourth Quarter Net Sales Increase of 23% and Net Income Increase of 38% and Record Full Year Results

Acme United Corporation (AMEX:ACU) today announced that net sales for the quarter ended December 31, 2007 were $14.9 million compared to $12.1 million in the same period in 2006, an increase of 23% . Net sales for the year ended December 31, 2007 were $63.2 million compared to $56.9 million in the same period in 2006, an increase of 11% (10% in local currency).

Net income for the fourth quarter ended December 31, 2007 was $546,000, or $.15 per diluted share, compared to $396,000, or $.11 per diluted share, for the comparable period last year, an increase of 38%. Net income for the year ended December 31, 2007 was $4,022,258, or $1.09 per diluted share, compared to $3,885,662, or $1.05 per diluted share, in the comparable period last year, an increase of 4%.

Net sales for the year ended December 31, 2007, in the U.S. segment increased 10% compared to 2006 as the result of sales of new products, including the iPoint electric pencil sharpener, and market share gains. Net sales in Canada for the year ended December 31, 2007 increased by 11% in U.S. dollars and 5% in local currency compared to 2006 primarily due to higher sales of the iPoint electric pencil sharpeners. Net sales in Europe for the year ended December 31, 2007 increased by 21% in U.S. dollars and 11% in local currency compared to 2006 due to higher sales of manicure items and expanded distribution of office products.

Gross margins were 42% for 2007 compared to 43% in 2006. The gross margin decline in 2007 was due to product mix and increased cost of goods sold on purchases from China due to higher raw material and labor costs and depreciation of the U.S. dollar. Costs also increased due to the reduction of an export tax credit in China.

Walter C. Johnsen, Chairman and CEO said, "The results in the fourth quarter and the year represent strong growth in our market shares, expansion of our distribution channels, and improvement in Europe. I am especially pleased with the recent placement of our new products, including the iPoint razor pencil sharpener and Microban school and office products, which are expected to generate robust sales in 2008."

The effective income tax rate improved to 36% in 2007 compared to 39% in 2006 primarily due to the decreased losses in 2007 in Europe where there is no recorded tax benefit for losses. The European business is improving due to operational improvements and sales growth.

The Company’s bank debt less cash on December 31, 2007 was $5.2 million compared to $6.4 million on December 31, 2006, a decrease of $1.2 million. This change primarily resulted from the Company’s payments of $600,000 for acquisitions and $500,000 for shareholder dividends, which was offset by the Company’s generation of $2.7 million in cash flow from operations.

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