Acme United Corporation Reports Record Sales and 16% Earnings Increase for First Quarter

Acme United Corporation (AMEX:ACU) today announced that net sales for the quarter ended March 31, 2008 were $14.3 million, compared to $12.2 million in the comparable period of 2007, an increase of 17% (13% in local currency).

Net income was $753,000 or $.21 per diluted share for the first quarter ended March 31, 2008 compared to $650,000 or $.17 per diluted share for the comparable period last year, a 16% increase in net income and 24% increase in diluted earnings per share.

Net sales for the first quarter 2008 in the U.S. segment increased 17% compared to the same period in 2007 due to market share gains in the cutting and first aid product categories. Net sales in Canada in the first quarter of 2008 increased by 8% in U.S. dollars but declined 7% in local currency due to soft demand in the overall office products market. European sales in the first quarter of 2008 increased 18% in U.S. dollars and 4% in local currency compared to the first quarter in 2007.

Gross margins were 42.0% in the first quarter of 2008 versus 43.6% in the first quarter of 2007. The margin in 2008 declined mainly due to a successful promotion of medication sales which carried a profitable, but lower margin than our other product lines. Gross margins without the promotion would have been 43.0% during the first quarter of 2008.

Walter C. Johnsen, President and CEO said, “While the retail environment is difficult, we are seeing success with our innovative and new products. We are excited about the prospects of our new school tools, pencil sharpeners, and antimicrobial scissors which begin shipping in the second quarter. Our patented cartridge-based utility knife has had good reception by its initial customers, and we are working to expand placement during the year.”

The Company’s bank debt less cash on March 31, 2008 was $7.9 million compared to $7.1 million on March 31, 2007. During the 12 month period ended March 31, 2008, Acme purchased 67,600 shares of its common stock for approximately $900,000 under its previously announced repurchase program. As of March 31, 2008, there were 182,400 shares that my be purchased under the outstanding stock repurchase programs.

ACME UNITED CORPORATION is a leading worldwide supplier of innovative cutting, measuring and safety products to the school, home, office and industrial markets.

Forward-looking statements in this earnings release, included without limitation, statements related to the Company’s plans, strategies, objectives, expectations, intentions and adequacy of resources. 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