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ACME UNITED CORP

ACME UNITED CORPACU決算レポート

NYSE · 産業 · 調理器具、手工具及び一般五金

Acme United Corporation is a supplier of cutting, measuring and safety products for the school, home, office, hardware and industrial markets. The company was organized as a partnership in 1867 and incorporated in 1873 under the laws of the State of Connecticut. It is publicly traded on the NYSE American with symbol ACU.

What changed in ACME UNITED CORP's 10-K — 2024 vs 2025

Top changes in ACME UNITED CORP's 2025 10-K

152 paragraphs added · 132 removed · 110 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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In recent years, as a result of acquisitions, the amount of first aid and medical products produced in North America has been increasing substantially. The components for the first aid kits are sourced from both U.S. and international suppliers.
In recent years, as a result of acquisitions, the amount of first aid and medical products produced in North America has been increasing substantially. The components for first aid kits are sourced from both U.S. and international suppliers.
In 2023, DMT launched a broad assortment of products that provide simple sharpening solutions to the consumer and create enthusiasm surrounding the sharpening category. The EdgeSharp product assortment features an entirely new line of sharpeners that are easy to use while providing a safe sharpening experience.
In 2023, DMT launched a broad assortment of products that provide simple sharpening solutions to the consumer and create enthusiasm surrounding the sharpening category. The EdgeSharp product assortment features an entirely new line of sharpeners that are easy to use while providing a safe sharpening 5 experience.
The Company assembles its first aid kits at its facilities in the following locations: • Vancouver, WA, • Rocky Mount, NC, • Keene, NH • Laval, Canada In addition, the Company has manufacturing facilities in the U.S. as follows: • La Vergne, TN - Spill Magic products • Santa Ana, CA - Spill Magic products • Marlborough, MA - DMT sharpening tools • Brooksville, FL - Med-Nap alcohol and benzalkonium chloride non-alcohol (BZK) wipes.
The Company assembles its first aid kits at its facilities in the following locations: • Vancouver, WA, • Rocky Mount, NC, • Keene, NH • Laval, Canada The Company has additional manufacturing facilities in the U.S. as follows: • La Vergne, TN - Spill Magic products • Santa Ana, CA - Spill Magic products • Marlborough, MA - DMT sharpening tools • Brooksville, FL - Med-Nap alcohol and benzalkonium chloride non-alcohol (BZK) wipes.
Principal Products The Company markets and sells under two main product categories: i) first aid and medical; and ii) cutting and sharpening. The first aid and medical category includes first aid and safety products (First Aid Only®, PhysiciansCare®, Pac-Kit®, Spill Magic®, First Aid Central®, Med-Nap, Safety Made and Elite brands).
Principal Products The Company markets and sells under two main product categories: i) first aid and medical; and ii) cutting and sharpening. The first aid and medical category includes first aid and safety products (First Aid Only®, PhysiciansCare®, Pac-Kit®, Spill Magic®, First Aid Central®, Med-Nap, Safety Made, Elite and My Medic brands).
The Smart Compliance® first aid system is an effective solution for maintaining compliance with ANSI standards. The Company’s SafetyHub App technology digitizes the replenishment process for a broad range of first aid components and provides data analytics to manage costs.
The Smart Compliance® first aid system is an effective solution for maintaining compliance with the American National Standards Institute (ANSI) standards. The Company’s SafetyHub App technology digitizes the replenishment process for a broad range of first aid components and provides data analytics to manage costs.
As of December 31, 2024, the Company employed 633 people, all of whom are full time and none of whom is covered by union contracts. Employee relations are considered good and the Company is not aware of any material work force issues. Culture and Diversity The Company’s workforce represents nearly all demographics, with diversity in age, race, ethnicity, and gender.
As of December 31, 2025, the Company employed 649 people, all of whom are full time and none of whom is covered by union contracts. Employee relations are considered good and the Company is not aware of any material work force issues. Culture and Diversity The Company’s workforce represents nearly all demographics, with diversity in age, race, ethnicity, and gender.
Such reports and other information are made available as soon as reasonably practicable after such material is filed with or furnished to the SEC.
Such reports and other information are made available as soon as reasonably practicable after such material is filed with or furnished to the Securities and Exchange Commission (SEC).
Total net sales in 2024 were $194 million. The Company was organized as a partnership in l867 and incorporated in l882 under the laws of the State of Connecticut. The Company sources most of its products from suppliers located outside the United States, primarily in Asia.
Total net sales in 2025 were $196.5 million. The Company was organized as a partnership in l867 and incorporated in l882 under the laws of the State of Connecticut. The Company sources most of its products from suppliers located outside the United States, primarily in Asia.
This strong liquidity will allow the Company to fund acquisitions and growth. • Dividend Increase - Increase in the quarterly dividend from $.02 per share in 2004 to $.15 per share in 2024 – an eight-fold increase.
This strong liquidity will allow the Company to fund acquisitions and growth. • Dividend Increase - Increase in the quarterly dividend from $.02 per share in 2004 to $.16 per share in 2025 – an eight-fold increase.
Patents and trademarks are amortized over their estimated useful lives. The weighted average amortization period remaining for intangible assets at December 31, 2024 was 8 years.
Patents and trademarks are amortized over their estimated useful lives. The weighted average amortization period remaining for intangible assets at December 31, 2025 was 7 years.
The Company had two customers in 2024 and 2023, respectively, that individually exceeded 10% of consolidated net sales. Net sales to these two customers were approximately 14% and 13% of consolidated net sales in 2024 and 14% and 12% in 2023.
The Company had two customers in 2025 and 2024, respectively, that individually exceeded 10% of consolidated net sales. Net sales to each of these two customers were approximately 13% of consolidated net sales in 2025 and 14% and 13% in 2024.
Westcott continues to expand their catalog of craft items with patented new technologies, handle designs and construction that has driven Westcott to be a leader in fashionable and functional solutions for students and adults.
We continue to expand our catalog of craft items with patented new technologies, handle designs and construction that has driven Westcott to be a leader in fashionable and functional solutions for students and adults.
Today, DMT continues to innovate its sharpening assortment with sharpening solutions for the home consumer while continuing to provide the very best in professional sharpening 5 solutions. In 2024, we expanded into the home and culinary markets with a wide variety of tools, including versatile countertop pull-through sharpeners.
Today, DMT continues to innovate its sharpening assortment with sharpening solutions for the home consumer while continuing to provide the very best in professional sharpening solutions. In 2024, we expanded into the home and culinary markets with a wide variety of tools, including versatile countertop pull-through sharpeners. In 2026, we will launch a comprehensive DMT line of powered sharpening solutions.
Recent Accomplishments and Initiatives Quantitative Achievements In 2024, the Company’s key financial accomplishments included the following: • Sales Growth – Continued strong average annual growth rate, 7% over ten years (2015 - 2024). • Strong Financial Position – In recent years the Company has significantly reduced bank debt to provide at December 31, 2024, approximately $47 million of availability under its $65 million credit facility.
Recent Accomplishments and Initiatives Quantitative Achievements In 2025, the Company’s key financial accomplishments included the following: • Sales Growth – Average annual growth rate over eleven years of 7%. • Strong Financial Position – In recent years the Company has significantly reduced bank debt to provide at December 31, 2025, approximately $53 million of availability under its $65 million credit facility.
The major competitors in the cutting category are 3M and Fiskars Corporation. Seasonality Traditionally, the Company’s sales of its cutting, sharpening and measuring products are stronger in the second and third quarters and weaker in the first and fourth quarters of the fiscal year, due to the seasonal nature of the Westcott back-to-school market.
Seasonality Traditionally, the Company’s sales of its cutting, sharpening and measuring products are stronger in the second and third quarters and weaker in the first and fourth quarters of the fiscal year, due to the seasonal nature of the Westcott back-to-school market.
In 2021, Clauss was the first to innovate and apply industrial Carbide materials to steel cutting blades, significantly improving cutting performance and edge-retention for hardware applications. DMT Diamond Machining Technology (DMT) was founded in 1976 by aerospace engineers and is a leader in diamond tools for sharpening knives, scissors, chisels, skis, skates and many other edges.
Clauss was the first to innovate and apply industrial Carbide materials to steel cutting blades, significantly improving cutting performance and edge-retention for hardware applications. DMT Diamond Machining Technology (DMT) was founded in 1976 by aerospace engineers and is a leader in abrasive technologies for knives, scissors, chisels, router bits, chain saws, skis, skates and many other edges.
Accounts Receivable As of December 31, 2024, the Company had three customers each of which represented 10% or more of total trade receivables. Accounts receivables from these three customers were approximately 16%, 15%, and 11% of consolidated accounts receivable.
Accounts Receivable As of December 31, 2025, the Company had three customers each of which represented 10% or more of total trade receivables. Accounts receivables from these three customers were approximately 17%, 13%, and 11% of consolidated accounts receivable.
Med-Nap Med Nap, at our Brooksville facility, manufactures medical grade products, including alcohol prep pads and benzalkonium chloride antiseptic wipes. Med-Nap provides to the Company vertical integration advantages including shorter delivery times, lower total costs, and a U.S. source of supply during unprecedented healthcare challenges. The facilities offer a platform for future product expansion.
Med-Nap Med Nap, at our Brooksville, Florida facility, manufactures medical grade products, including alcohol prep pads and benzalkonium chloride antiseptic wipes. Due to its domestic manufacturing facility, Med-Nap provides to the Company vertical integration advantages including shorter delivery times, lower total costs, and a U.S. source of supply during potential future healthcare challenges.
The DMT products use a proprietary process of finely dispersed diamonds bonded to the surfaces of sharpeners and are famous for providing diamond sharpeners with the flattest sharpening surface, greatest concentrated amount of diamonds and the highest quality diamonds per sharpener.
DMT products use a proprietary process bonding finely dispersed micro-monocrystalline diamonds to the surfaces of sharpeners. DMT is well known for providing diamond sharpeners with the flattest sharpening surface, greatest concentrated amount of diamonds and the highest quality diamonds per sharpener.
Compensation and Benefits The Company is committed to providing market-competitive pay and benefits to attract and retain a skilled workforce. The Company provides a range of benefits to its employees and their families, including medical and prescription drug, dental, vision and long-term disability coverage, as well as 401(k) savings and flexible spending accounts.
The Company provides a range of benefits to its employees and their families, including medical and prescription drug, dental, vision and long-term disability coverage, as well as 401(k) savings and flexible spending accounts.
Safety Made Safety Made is a leading manufacturer of first aid kits for the promotional products industry. Elite First Aid Elite is a leading supplier of tactical, trauma and emergency response products.
The facilities offer a platform for future product expansion. Safety Made Safety Made is a leading manufacturer of first aid kits for the promotional products industry. Elite First Aid Elite is a leading supplier of tactical, trauma, emergency response and bleed control products.
The Spill Response System provides all the necessary tools to effectively clean up spills, saving time, money and reducing slip & fall accidents in various venues, including grocery, retail, and big box stores; food service & hotel chains; municipal facilities; and industry-specific distributors in the U.S. 4 First Aid Central First Aid Central has been a provider and manufacturer of a wide variety of first aid kits since 2007.
The Spill Response System provides all the necessary tools to effectively clean up spills, saving time, money and reducing slip & fall accidents in various venues, including grocery, retail, and big box stores; food service & hotel chains; municipal facilities; and industry-specific distributors in the U.S.
Westcott is one of the leading scissor and ruler brands in North America. Many of the Westcott branded cutting products contain patented titanium bonding and proprietary non-stick coatings, making the blades more than three times harder than stainless steel as well as reducing friction and corrosion.
Many of the Westcott branded cutting products feature patented titanium bonding and proprietary non-stick coatings, making the blades more than three to six times harder than stainless steel as well as reducing friction and corrosion.
The Company believes that the principal points of competition in these markets are product innovation, quality, price, merchandising, design and engineering capabilities, product development, timeliness and completeness of delivery, conformity to customer specifications and post-sale support. The major competitors in the first aid and safety category are Honeywell and Cintas.
Competition The Company competes with many companies in each market and geographic area. The Company believes that the principal points of competition in these markets are product innovation, quality, price, merchandising, design and engineering capabilities, product development, timeliness and completeness of delivery, conformity to customer specifications and post-sale support.
Historically, the Company’s standard recruiting and hiring initiatives have created a diverse workforce. Our employees reflect the communities in which we are located.
Historically, the Company’s standard recruiting and hiring initiatives have created a diverse workforce. Our employees reflect the communities in which we are located. We seek to provide opportunities for growth and development at all levels of our organization.
Business and Operational Milestones and Achievements 3 • Diversification of Product Lines – – During the past eight years, sales of first aid and medical products have grown to approximately 61% of total sales. As a result, we have broadened our customer and revenue base.
Business and Operational Milestones and Achievements • Diversification of Product Lines – During the past nine years, sales of first aid and medical products have grown to approximately 66% of total sales.
We seek to provide opportunities for growth and development at all levels of our organization. 6 Creating and fostering inclusive work environments and teams allow us to create an engaging and welcoming culture for our employees, which we believe positively affects the quality of our products and the experience we deliver to our customers.
Creating and fostering inclusive work environments and teams allow us to create an engaging and welcoming culture for our employees, which we believe positively affects the quality of our products and the experience we deliver to our customers. Compensation and Benefits The Company is committed to providing market-competitive pay and benefits to attract and retain a skilled workforce.
CUTTING AND SHARPENING School, Home and Office Westcott Westcott, with a history of quality dating back to 1872, provides innovative cutting and measuring products for the school, home and office as well as industrial safety cutting. Principal products under the Westcott brand include scissors, rulers, pencil sharpeners, paper trimmers, safety cutters, lettering products, glue guns and other craft products.
My Medic My Medic is a leading supplier of tactical, trauma and emergency response products, primarily in the direct-to-consumer channel. CUTTING AND SHARPENING School, Home and Office Westcott Westcott, with a history of quality dating back to 1872, provides innovative cutting and measuring products for the school, home and office as well as industrial safety cutting.
As of December 31, 2023, the Company had three customers that individually represented 10% or more of total trade receivables, which accounted for 17%, 14%, and 14%. Competition The Company competes with many companies in each market and geographic area.
As of December 31, 2024, the Company had three customers that individually represented 10% or more of total trade receivables, which accounted for 11%, 16%, and 15%, respectively, of total receivables. Loss of a major customer could result in a decrease in the Company’s future sales and earnings.
Removed
In addition, our sales of school, home, craft and office products increased 10% in 2024, partly due to the introduction of new products. • First Aid Acquisition – On May 23, 2024, the Company acquired the assets of Elite First Aid, Inc., a leading supplier of tactical, trauma and emergency response products.
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As a result, we have broadened our customer and revenue base. 3 • Cutting Acquisition – On October 1, 2025, the Company acquired a line of cutting and sharpening tools in Germany with annual revenue of approximately $2 million. • First Aid Acquisition – In 2025, the Company successfully negotiated the acquisition of the assets of My Medic.
Removed
The Company successfully completed the integration of the assets and business in the fourth quarter of 2024. • Markets/Products – In 2024 we: ▪ Introduced first aid SmartCabinet 2.0 with patented RFID technology that automates the requisition process and helps end users to maintain OSHA compliance. ▪ Expanded in the craft market by providing advanced cutting tools which are used to create precise and unique designs. ▪ Expanded into the home and culinary markets with a wide variety of DMT sharpening tools, including versatile countertop pull-through sharpeners. • Cost Reduction Initiatives – In 2024, the Company implemented a variety of productivity enhancements across our manufacturing and distribution facilities, along with a reduction in SG&A expenses and other costs, leading to approximately $2 million in ongoing annual savings. • Capacity Expansion - In 2024, the Company installed a new storage racking system in our 340,000 square foot Rocky Mount, NC distribution center, resulting in a 30% capacity increase.
Added
My Medic is a leading supplier of tactical, trauma and emergency response products with annual revenue of approximately $19 million. • Product Innovation – In 2025, we introduced new first aid bar code scanning technology that expedites replenishment, ensuring OSHA compliance. • Cost Reduction Initiatives – In 2025, the Company invested in robotics in three of its manufacturing and distribution facilities which has already improved productivity.
Added
Additionally, the Company invested in equipment to automate its Spill Magic powder manufacturing process; the project is expected to be completed in 2026. • Capacity Expansion - In 2025, the Company purchased a 77,000 square foot manufacturing and distribution center in Mt. Pleasant, Tennessee for its growing Spill Magic absorbent business .
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First Aid Central 4 First Aid Central has been a provider and manufacturer of a wide variety of first aid kits since 2007.
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Principal products under the Westcott brand include scissors, rulers, pencil sharpeners, paper trimmers, safety cutters, lettering products, glue guns and other craft products. Westcott is one of the leading scissor and ruler brands in North America.
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The major competitors in the first aid and safety category are Honeywell and Cintas. The major competitors in the cutting category are 3M and Fiskars Corporation.
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FDA Regulation Most of our first aid and medical products and related facilities are regulated by the United States Food and Drug Administration (“FDA”) under the Federal Food, Drug, and Cosmetic Act (“FDCA”), as well as by other domestic and international regulatory authorities.
Added
Our first aid kits, many components of the kits and first aid kit refills are regulated as medical devices under the FDCA; other components of the kits are classified as drugs. We source the components of our first aid kits (other than our Med-Nap products) from third-party suppliers which themselves are subject to FDA regulation.
Added
Under the FDCA, medical devices are classified into one of three classes – Class I, Class II or Class III – depending on the degree of risk associated with each medical device and the extent of control needed to provide reasonable assurance of safety and effectiveness.
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Class I devices are subject to general controls that include regulation of sourcing, labeling, packaging, storage, marketing and distribution, as well as 6 regulations requiring facility registration. We have three facilities registered with the FDA, all within the United States, in which we assemble first aid kits and package refills for first aid kits.
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Our medical devices consist primarily of Class I devices and Unclassified devices. Our unclassified devices are first aid kits containing over-the-counter (OTC) drugs, such as analgesics and anti-inflammatory drugs. Importantly, these devices do not require premarket clearance by the FDA.
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Certain of our first aid kits also include alcohol prep pads, hand sanitizing wipes and antiseptic wipes, some of which are also sold separately. These items are deemed to be drugs under FDA regulations and, along with the US facility producing them, are subject to FDA regulations which establish standards for safety and effectiveness.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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The inability to pass these costs through to the Company’s customers could have a negative effect on its results of operations. Commencing in the first half of 2022, the Company was not able to fully pass these costs along to customers. In the future, we may continue to experience future inflationary pressure on our cost structure.
The inability to pass these costs through to the Company’s customers could have a negative effect on its results of operations. Commencing in the first half of 2022, the Company was not able to fully pass these costs along to customers. In the future, we may continue to experience inflationary pressure on our cost structure.
For example, it could: • make it more difficult for us to satisfy our obligations with respect to our indebtedness, and any failure to comply with the obligations under any of our debt instruments, including restrictive covenants, could result in an event of default under the agreements governing such indebtedness; • require us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness, thereby reducing funds available for working capital, capital expenditures, acquisitions, business development and other purposes; • compromise our ability to capitalize on business opportunities and to react to competitive pressures, as compared to our competitors, due to our high level of debt and the restrictive covenants in our loan documents; • limit our flexibility in planning for, or reacting to, changes in our business and the industries in which we operate; • limit our ability to borrow additional funds, or to dispose of pledged assets to raise funds, if needed, for working capital, capital expenditures, acquisitions and other corporate purposes.
For example, it could: • make it more difficult for us to satisfy our obligations with respect to our indebtedness, and any failure to comply with the obligations under any of our debt instruments, including restrictive covenants, could result in an event of default under the agreements governing such indebtedness; • require us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness, thereby reducing funds available for working capital, capital expenditures, acquisitions, business development and other purposes; • compromise our ability to capitalize on business opportunities and to react to competitive pressures, as compared to our competitors, due to our high level of debt and the restrictive covenants in our loan documents; • limit our flexibility in planning for, or reacting to, changes in our business and the industries in which we operate; or • limit our ability to borrow additional funds, or to dispose of pledged assets to raise funds, if needed, for working capital, capital expenditures, acquisitions and other corporate purposes.
If these or other tax regulations should change, the Company’s financial results could be impacted. Certain or our products and facilities are subject to regulation by the FDA and by analogous foreign regulators. The FDA requires us to register certain of our products and manufacturing facilities.
If these or other tax regulations should change, the Company’s financial results could be impacted. Certain of our products and facilities are subject to regulation by the FDA and by analogous foreign regulators. The FDA requires us to register certain of our products and manufacturing facilities.
Industry and Operational Risks The Company is subject to a number of significant operational risks that might cause the Company’s actual results to vary materially from its forecasts, targets or projections, including: • failing to achieve planned revenue and profit growth in each of the Company's business segments; • changes in customer requirements and in the volume of sales to principal customers; • the ability of the Company to anticipate timing of orders and shipments particularly in the e-commerce area; • reliance on third party distributors; • emergence of new competitors or consolidation of existing competitors; and • industry demand fluctuations.
Industry and Operational Risks The Company is subject to a number of significant operational risks that might cause the Company’s actual results to vary materially from its forecasts, targets or projections, including: 7 • failing to achieve planned revenue and profit growth in each of the Company's business segments; • changes in customer requirements and in the volume of sales to principal customers; • the ability of the Company to anticipate timing of orders and shipments particularly in the e-commerce area; • reliance on third party distributors; • emergence of new competitors or consolidation of existing competitors; and • industry demand fluctuations.
Increases in inflation raise the Company’s costs for labor, raw materials and services. Future market and competitive pressures may prohibit the Company from raising prices to offset increased raw material, or other product costs, including but not limited to packaging, direct labor, overhead, employee benefits, shipping costs, and other inflationary items, or to offset currency fluctuations.
Increases in inflation raise the Company’s costs for labor, raw materials and services. Future market and competitive pressures may prohibit 8 the Company from raising prices to offset increased raw material, or other product costs, including but not limited to packaging, direct labor, overhead, employee benefits, shipping costs, and other inflationary items, or to offset currency fluctuations.
In the event prevailing wage rates continue to increase in the markets in which we operate, we may be required to concurrently increase the wages paid to our employees to maintain the quality of our workforce and customer service. To the extent such increases are not offset by price increases, our profit margins may decrease as a result.
In the event prevailing wage rates continue to increase in the markets in which we operate, we may be required to concurrently increase the wages paid to our employees to maintain the quality of our workforce and customer service. To the extent such increases are not offset by price increases, our profit margins 9 may decrease as a result.
The Company’s management believes that, under current conditions, the Company’s current cash and cash equivalents, cash generated by operations, together with the borrowing availability under its revolving loan agreement with HSBC Bank N.A., will be sufficient to fund planned 11 operations for the next twelve months from the issuance date of this report.
The Company’s management believes that, under current conditions, the Company’s current cash and cash equivalents, cash generated by operations, together with the borrowing availability under its revolving loan agreement with HSBC Bank N.A., will be sufficient to fund planned operations for the next twelve months from the issuance date of this report.
The extent of the impact of any such pandemic on our business, operating results, cash flows, liquidity and financial conditions will be primarily driven by the ultimate duration and severity of the pandemic and its impact on the U.S. and global economies. The military conflicts in Ukraine and the Middle East have resulted in geopolitical instability.
The extent of the impact of any such pandemic on our business, operating results, cash flows, liquidity and financial conditions will be primarily driven by the ultimate duration and severity of the pandemic and its impact on the U.S. and global economies. The military conflicts in Ukraine and the Middle East have resulted in significant geopolitical instability.
Over the last seven years, the United States has undertaken a series of actions to increase tariffs on certain goods imported into the United States. In response to prior tariffs, certain governments imposed retaliatory tariffs on various goods, and in response to new or increased United States 7 tariffs, have threatened to similarly retaliate.
Over the last seven years, the United States has undertaken a series of actions to increase tariffs on certain goods imported into the United States. In response to prior tariffs, certain governments imposed retaliatory tariffs on various goods, and in response to new or increased United States tariffs, have threatened to similarly retaliate.
In addition, the Company might have to write off inventories that are considered obsolete based upon changes in customer demand, product design changes, or new product 9 introductions, which eliminate demand for existing products. Historically, the Company has not had to materially write down or write off product inventories.
In addition, the Company might have to write off inventories that are considered obsolete based upon changes in customer demand, product design changes, or new product introductions, which eliminate demand for existing products. Historically, the Company has not had to materially write down or write off product inventories.
Because our products are primarily sold by third parties, our financial results depend in part on the financial health of these parties and any loss of a third-party distributor could adversely affect the Company’s revenues. A large majority of the Company’s products are sold through third-party distributors and large retailers.
Because our products are primarily sold by third parties, our financial results depend in part on the financial health of these parties and any loss of a third-party distributor could adversely affect the Company’s revenues. 10 A large majority of the Company’s products are sold through third-party distributors and large retailers.
If we do not have sufficient fulfillment capacity or experience a 8 problem fulfilling orders in a timely manner, our customers may experience delays in receiving their purchases, which could harm our reputation and our relationship with our customers.
If we do not have sufficient fulfillment capacity or experience a problem fulfilling orders in a timely manner, our customers may experience delays in receiving their purchases, which could harm our reputation and our relationship with our customers.
We could be subject to liability for failure to comply with privacy and information security laws, for failing to protect personal information, or for misusing personal information, such as use of such information for an unauthorized marketing purpose.
We could be subject to liability for failure to comply with privacy and information security laws, for failing to protect personal information, or for misusing personal information, such as use of such information 11 for an unauthorized marketing purpose.
In addition, new regulations may be enacted in the U.S. or 13 abroad that may require the Company to incur additional personnel-related, environmental or other costs on an ongoing basis, significantly restrict the Company’s ability to sell certain products, or incur fines or penalties for noncompliance, any of which could adversely affect the Company’s results of operations.
In addition, new regulations may be enacted in the U.S. or abroad that may require the Company to incur additional personnel-related, environmental or other costs on an ongoing basis, significantly 14 restrict the Company’s ability to sell certain products, or incur fines or penalties for noncompliance, any of which could adversely affect the Company’s results of operations.
Loss of a major customer could result in a decrease in the Company’s future sales and earnings. Sales of our products are primarily concentrated in a few major customers including commercial retailers, office product superstores, and mass market distributors. The Company had two customers in 2024 and 2023, that individually exceeded 10% of consolidated net sales.
Loss of a major customer could result in a decrease in the Company’s future sales and earnings. Sales of our products are primarily concentrated in a few major customers including commercial retailers, office product superstores, and mass market distributors. The Company had two customers in 2025 and 2024, that individually exceeded 10% of consolidated net sales.
If we do not pay dividends or decrease the amount of dividends we pay, the price of our common stock would likely decrease. At December 31, 2024, a total of 160,365 shares may be purchased in the future under the repurchase program which the Company announced in 2019.
If we do not pay dividends or decrease the amount of dividends we pay, the price of our common stock would likely decrease. At December 31, 2025, a total of 160,365 shares may be purchased in the future under the repurchase program which the Company announced in 2019.
Reliance on foreign suppliers could adversely affect the Company’s business. 14 The Company sources its products from suppliers located in Asia, Europe and the United States. The Company’s Asia vendors are located primarily in China, which subjects the Company to various risks within the region including regulatory, political, economic and foreign currency changes.
Reliance on foreign suppliers could adversely affect the Company’s business. 15 The Company sources its products from suppliers located in Asia, Europe, Africa and the United States. The Company’s Asia vendors are located primarily in China, which subjects the Company to various risks within the region including regulatory, political, economic and foreign currency changes.
Although the length, impact and outcome of the war is highly unpredictable, this war has contributed to significant market and other disruptions, including significant volatility in commodity prices and supply of energy resources, instability in financial markets, supply chain interruptions, political and social instability, changes in consumer or purchaser preferences as well as an increase in cyberattacks and espionage.
Although the length, impact, and outcome of the war remain highly unpredictable, this conflict has contributed to significant market and other disruptions, including volatility in commodity prices and the supply of energy resources, instability in financial markets, supply chain interruptions, political and social instability, changes in consumer or purchaser preferences, as well as increased cyberattacks and espionage.
There were approximately 3,289,572 shares of our common stock held by non-affiliates as of December 31, 2024. Thus, our common stock is less liquid than the stock of companies with broader public ownership, and, as a result, the trading price for shares of our common stock may be more volatile.
There were approximately 3,341,812 shares of our common stock held by non-affiliates as of December 31, 2025. Thus, our common stock is less liquid than the stock of companies with broader public ownership, and, as a result, the trading price for shares of our common stock may be more volatile.
Our business, financial position, results of operations and cash flows could be adversely affected by the negative impacts on the global economy resulting from these conflicts. In February 2022, Russian military forces invaded Ukraine. In response, Ukrainian military personnel and civilians are actively resisting the invasion.
Our business, financial position, results of operations and cash flows could be adversely affected by the negative impacts on the global economy resulting from these conflicts. In February 2022, Russian military forces invaded Ukraine. Ukrainian military personnel and civilians have continued to resist the invasion.
In 2023, the Company had receivables to these customers of approximately 17%, 14%, and 14%, respectively. The Company anticipates that a limited number of customers may account for a substantial portion of its total net revenues for the foreseeable future.
In 2024, the Company had receivables to these customers of approximately 11%, 16%, and 15%, respectively. The Company anticipates that a limited number of customers may account for a substantial portion of its total net revenues for the foreseeable future.
If our remedial measures are insufficient to address the material weakness or if another material weakness or significant deficiencies in our internal control are discovered or occur in the future, our ability to report our financial condition and results of operations in a timely and accurate manner may be materially adversely affected and investor confidence in the Company may be negatively impacted.
If a material weakness or significant deficiency in our internal control is discovered or occur in the future, our ability to report our financial condition and results of operations in a timely and accurate manner may be materially adversely affected and investor confidence in the Company may be negatively impacted.
Net sales to those customers were approximately 14% and 13% in 2024 and 14% and 12% in 2023, respectively. The Company had three customers in 2024 that individually exceeded 10% of consolidated accounts receivable. Accounts receivable to those customers were approximately 16%, 15%, and 11%.
Net sales to each of those customers were approximately 13%, in 2025 and 14% and 13% in 2024, respectively. The Company had three customers in 2025 that individually exceeded 10% of consolidated accounts receivable. Accounts receivable to those customers were approximately 17%, 13%, and 11%.
Changes in interest rates could adversely affect us . We have exposure to increases in interest rates under our revolving credit loan agreement with HSBC Bank, N.A. which presently bears interest at SOFR + 1.70%. The economy has been experiencing inflation since 2021. In response to significant and prolonged increases in inflation, the U.S.
Changes in interest rates could adversely affect us . We have exposure to increases in interest rates under our revolving credit loan agreement with HSBC Bank, N.A., which presently bears interest at SOFR + 1.70%. Since 2021, the U.S. economy has experienced elevated inflation and shifting monetary policy conditions. In response to persistent inflationary pressures, the U.S.
Although the Company has recently reduced its indebtedness, we continue to borrow under our bank line of credit, which could adversely affect our financial condition and ability to operate our business. As of December 31, 2024, excluding net deferred financing costs of $34,983, $17,640,550 was outstanding and $47,359,450 was available for borrowing under the Company’s revolving credit facility.
Although the Company has recently reduced its indebtedness, we continue to borrow under our bank line of credit, which could adversely affect our financial condition and ability to operate our business. As of December 31, 2025, excluding net deferred financing costs of $10,299, $11,863,085 was outstanding and $53,136,915 was available for borrowing under the Company’s revolving credit facility.
Our business has experienced significant historical growth both internally and through acquisitions through the years including through the acquisitions of Hawktree in 2023 and Elite First Aid in 2024. We expect our business to continue to grow organically and seek to grow through strategic acquisitions both domestically and internationally. This growth places significant demands on management and operational systems.
Our business has experienced significant historical growth both internally and through acquisitions through the years including through the acquisitions of Elite First Aid in 2024 and My Medic in January 2026. We expect our business to continue to grow organically and seek to grow through strategic acquisitions both domestically and internationally.
Continuing uncertainty in the global economy could negatively impact our business. Uncertainty in the global economy could adversely affect our customers and our suppliers and businesses such as ours.
Continuing uncertainty in the global economy could negatively impact our business. Uncertainty in the global economy, including uncertainty resulting from the military conflicts in the Ukraine, the Middle East and elsewhere, could adversely affect our customers and our suppliers and businesses such as ours.
It is not possible to predict the extent and duration of the military conflict, sanctions, and any associated market disruptions, which could have a material adverse effect on our business, financial position, results of operations and cash flows.
It is not possible to predict the extent and duration of military conflicts, cease fires, sanctions, or any associated market disruptions, which could have a material adverse effect on our business, financial position, results of operations and cash flows. 13 A material weakness in our internal control over financial reporting which could, if not remediated, result in material misstatements in our financial statements.
The risk of ongoing supply disruptions may further result in delayed deliveries of our products. While the length and total impact of the military conflicts are unpredictable, it has led to market disruptions, including volatility in raw material prices and credit and capital markets, and supply chain challenges.
While the length and total impact of these military conflicts are unpredictable, they have led to market disruptions, including volatility in raw material prices and credit and capital markets, and supply chain challenges.
We may be unable to adjust our spending in a timely manner to compensate for any unexpected shortfall in net sales.
Additionally, our business is affected by general economic and business conditions in our markets. We may be unable to adjust our spending in a timely manner to compensate for any unexpected shortfall in net sales.
Based on the continued, and more recently increased market volatility and geopolitical unrest pertaining to the military conflict between Russia and Ukraine and the Middle East, European energy crisis and highly inflationary environment, and corresponding macro-economic uncertainty, we cannot reasonably estimate the full impact the conflict will have on our long-term financial condition, results of operations, liquidity and cash flows.
Based on the continued and recently increased market volatility and geopolitical unrest related to the conflicts in Ukraine and the Middle East, the European energy crisis, the highly inflationary environment, corresponding macro-economic uncertainty, newly escalated conflicts and tensions in Asia and Africa, as well as recent cease fires or negotiations, we cannot reasonably estimate the full impact these conflicts and their resolutions will have on our long-term financial condition, results of operations, liquidity and cash flows.
In response to the military conflict, governments in the U.S. and abroad have imposed sanctions against Russia and proposed or threatened additional potential sanctions. These sanctions could adversely affect the global economy and financial markets in which we operate.
In response to these conflicts, governments in the U.S. and abroad have imposed sanctions against Russia, and have imposed or threatened additional sanctions and trade restrictions in connection with China, Iran, North Korea, and entities involved in African conflicts. These sanctions could adversely affect the global economy and financial markets in which we operate.
Specifically, the state of tariffs and other trade measures between the United States and China remains in flux. Starting in 2018, the United States and China engaged in an escalating imposition of tariffs and trade restrictions on each other’s products. The two countries signed a preliminary trade agreement in early 2020.
Specifically, the state of tariffs and other trade measures between the United States and China remains in flux. Beginning in 2018, the United States and China engaged in escalating tariff increases and trade restrictions on each other’s products.
These risks, in turn, could have a material adverse effect on our business results of operations and financial condition. We expect to continue to experience inflationary pressure on our cost structure, and price increases may not be sufficient to offset cost increases or may result in sales volume declines.
We expect to continue to experience inflationary pressure on our cost structure, and price increases may not be sufficient to offset cost increases or may result in sales volume declines.
For example, it is possible that the conflict could result in lower sales if supply parts and raw materials for become less available or if there are continued significant increases in energy and fuel prices.
We are monitoring the situation and its impact on global markets, which may, in turn, impact our business. For example, it is possible that these conflicts and related disruptions could result in lower sales if supply parts and raw materials become less available or if there are continued significant increases in energy and fuel prices.
The Company’s success will depend in part on its ability to anticipate and offer products that appeal to the changing needs and preferences of our customers in the various market categories in which it competes. 10 The Company may not have sufficient resources to make the investments that may be necessary to anticipate those changing needs and the Company may not anticipate, identify, develop and market products successfully or otherwise be successful in maintaining its competitive position.
The Company may not have sufficient resources to make the investments that may be necessary to anticipate those changing needs and the Company may not anticipate, identify, develop and market products successfully or otherwise be successful in maintaining its competitive position.
Net sales and operating results are difficult to forecast, because they generally depend on the volume, timing and type of the orders we receive, all of which are uncertain. Additionally, our business is affected by general economic and business conditions in our markets.
We base our expense levels on our operating forecasts and estimates of future net sales and gross margins. Net sales and operating results are difficult to forecast, because they generally depend on the volume, timing and type of the orders we receive, all of which are uncertain.
Furthermore, following Hamas’ attack on Israel, the Houthi movement, which controls parts of Yemen, launched a number of attacks on marine vessels in the Red Sea. The Red Sea is an important maritime route for international trade. As a result of such disruptions, we may experience in the future extended lead times, delays in supplier deliveries, and increased freight costs.
However, the situation remains fragile, and the risk of renewed conflict or escalation persists. Furthermore, following Hamas’ attack on Israel, the Houthi movement, which controls parts of Yemen, launched a number of attacks on marine vessels in the Red Sea—an important maritime route for international trade.
Any additional increase in the interest which we pay would reduce our cash available for working capital, acquisitions, and other uses.
Any additional increases in interest rates, or an extended 12 period of elevated rates, would increase interest costs, which could reduce our cash available for working capital, acquisitions, capital expenditures, and other purposes.
If we cannot effectively manage our growth, we would likely experience operational inefficiencies and incur unanticipated costs, thus negatively impacting our operating results. To the extent we grow through strategic acquisitions, our success will depend on selecting the appropriate targets, integrating such acquisitions quickly and effectively and realizing any expected synergies and cost savings related to such acquisitions.
To the extent we continue grow through strategic acquisitions, our success will depend on selecting the appropriate targets, integrating such acquisitions quickly and effectively and realizing any expected synergies and cost savings related to such acquisitions. We may be unable to accurately forecast net sales and appropriately plan our expenses in the future.
The Company’s manufacturing and distribution facilities in Rocky Mount, NC and Vancouver, WA were financed by a fixed rate mortgage with HSBC Bank, N.A. of which $10,409,797 was outstanding as of December 31, 2024. Our indebtedness if it were to increase substantially, combined with our other financial obligations and contractual commitments, could have significant consequences for our business.
The Company’s manufacturing and distribution facilities in Rocky Mount, NC and Vancouver, WA were financed by a fixed rate mortgage with HSBC Bank, N.A. of which $9,975,587, excluding deferred financing fees of $89,627, was outstanding as of December 31, 2025.
Separately, on October 7, 2023, Hamas, a U.S.-designated terrorist organization, launched a series of coordinated attacks from the Gaza Strip onto Israel. On October 8, 2023, Israel formally declared war on Hamas, and the armed conflict is ongoing as of the date of this filing. Hostilities between Israel and Hamas could escalate and involve surrounding countries in the Middle East.
On October 7, 2023, Hamas, a U.S.-designated terrorist organization, launched a series of coordinated attacks from the Gaza Strip onto Israel. On October 8, 2023, Israel formally declared war on Hamas. Hostilities in the region persisted until a cease fire was announced on October 9, 2025, which has reduced immediate hostilities and temporarily eased regional tensions.
We do not have manufacturing operations in Ukraine or Russia nor any significant business relationships with Ukraine or Russian-based customers or suppliers. To date, we have not experienced any material impacts of the ongoing military conflict. We are monitoring the situation and its impact on the global markets, which may, in turn, impact our business.
We do not have manufacturing operations in, nor any significant business relationships with customers or suppliers based in Ukraine, Russia, Iran, North Korea or sub-Saharan Africa. While we do have significant business relationships with suppliers based in China, they are not currently affected.
The impact that these and any other trade measures will have on our business and financial results is difficult to predict, particularly because trade is a current focus of the new United States administration and it is not possible to know the amount, scope, and nature of any additional tariffs or other trade measures the United States will adopt and how trading partners will respond to the administration’s future and present actions.
The impact of these and any additional trade measures on our business and financial results is difficult to predict, particularly because trade policy remains a key focus of U.S. economic strategy and litigation affecting existing measures continues.
However, in February 2025, the United States imposed additional tariffs on imports of Chinese-origin goods, and China announced retaliatory tariffs and additional trade restrictions on United States goods. In addition, in February 2025, the United States imposed new tariffs on Canada and Mexico and has threatened member countries of the European Union with tariffs.
The United States also imposed additional tariffs on imports from Canada, Mexico, and the European Union in 2025, and Canada, Mexico and other partners have implemented reciprocal duties on certain U.S. goods.
Removed
Canada and Mexico subsequently have announced retaliatory tariffs on certain U.S. goods.
Added
In 2025, the two countries reached a series of negotiated actions to reduce some barriers, including agreements to lower certain tariffs and suspend heightened reciprocal duties through at least November 10, 2026, as part of broader economic and trade discussions.
Removed
Any new or continued trade disputes or increased tensions between the United States and other countries, and any governmental actions, including further increases of existing tariffs or the imposition of new tariffs, may continue to adversely impact demand for our products, increase our costs, and disrupt our supply chain.
Added
In early 2026, the United States Supreme Court ruled that a broad set of tariffs imposed under emergency powers was unconstitutional, raising uncertainty about the legal basis for those trade measures and the potential refund of approximately $133 billion in duties collected.
Removed
We may be unable to accurately forecast net sales and appropriately plan our expenses in the future. We base our expense levels on our operating forecasts and estimates of future net sales and gross margins.
Added
In response, the U.S. administration announced it would pursue alternative legal authorities and implemented revised global tariff levels — including increased rates on imports from multiple trading partners — which continues to generate international concern and diplomatic pushback.
Removed
Federal Reserve has raised interest rates multiple times since the beginning of 2022, which has significantly increased our interest expense. Interest rates may remain at the current high levels or continue to increase. Increases in interest rates have increased our interest costs on our variable-rate debt as well as any future fixed rate debt.
Added
The amount, scope, and duration of any additional tariffs or other trade measures that may be adopted, as well as the nature of any retaliatory actions by trading partners, remain uncertain.
Removed
A material weakness in our internal control over financial reporting which could, if not remediated, result in material misstatements in our financial statements. 12 In connection with the preparation of our annual report for the year ended December 31, 2024, we identified a material weakness related to the Company’s information technology general controls (ITGCs).
Added
The use of artificial intelligence by us and third parties dealing with us presents operational and regulatory risks for our business. The Company currently uses artificial intelligence for certain limited purposes and will continue to evaluate its use for a variety of additional business tasks.
Removed
As reported in this annual report, the material weakness identified as a result of ITGCs that were not designed and operating effectively related to logical security and privileged access management for a financially relevant system.
Added
Significant issues and challenges exist with respect to using artificial intelligence, including regulatory, ethical, privacy, and cybersecurity risks. The Company continues to evaluate whether existing and potential future uses of artificial intelligence provide or may provide sufficient value and efficiencies while balancing the operational and regulatory risks involved.
Removed
In response to the material weakness, the Company removed the privileged access and will further limit users with privileged access as discussed in Item 9A, Controls and Procedures, in this Annual Report. The actions deemed taken are subject to continued review, supported by monitoring and testing by management as well as audit committee oversight.
Added
Our suppliers’ and other third parties’ integration of artificial intelligence into their businesses may adversely affect our customers and us as a result of a failure to implement artificial intelligence responsibly. Moreover, we may not be aware of suppliers’ and others’ use of artificial intelligence in dealing with us, which could expose the Company to presently unknown risks and liabilities.
Added
This growth places significant demands on management and operational systems. If we cannot effectively manage our growth, we would likely experience operational inefficiencies and incur unanticipated costs, thus negatively impacting our operating results.
Added
The Company’s success will depend in part on its ability to anticipate and offer products that appeal to the changing needs and preferences of our customers in the various market categories in which it competes.
Added
Our indebtedness if it were to increase substantially, combined with our other financial obligations and contractual commitments, could have significant consequences for our business.
Added
Federal Reserve raised its policy interest rate multiple times from 2022 through 2023 and maintained historically high benchmark rates into 2024 and early 2025.
Added
More recently, in 2025 and early 2026 the Federal Reserve signaled a period of rate stability, with the federal funds target range remaining elevated compared to pre-pandemic levels, although future policy actions remain uncertain and may include additional increases or decreases depending on inflation and broader economic conditions.
Added
The sustained higher interest rate environment has increased our interest expense on variable-rate debt, including our revolving credit facility, and could increase the cost of any future borrowings even if they are fixed-rate.
Added
Additionally, the escalation of tensions in the South China Sea and the Taiwan Strait, ongoing hostilities involving Iran and its proxies, increased missile testing by North Korea, and renewed violence in sub-Saharan Africa (including Sudan and the Sahel region) have contributed to further instability.
Added
As a result of such disruptions, we may experience extended lead times, delays in supplier deliveries, and increased freight costs. The risk of ongoing supply disruptions may further result in delayed deliveries of our products.
Added
Since spring 2024, tensions have further escalated in the South China Sea and the Taiwan Strait, with increased military activity and diplomatic standoffs involving China, Taiwan, and the United States. These developments have raised concerns over potential disruptions to global technology supply chains and maritime trade.
Added
Additionally, Iran and its affiliated groups have continued to engage in regional hostilities, impacting stability and shipping routes in the Middle East. North Korea has intensified its missile testing and military exercises, prompting international sanctions and heightened security risks. Renewed violence in sub-Saharan Africa, particularly in Sudan and the Sahel, has contributed to further supply chain and commodity market volatility.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Identification, Assessment of, and Response to Cybersecurity Threats We employ a multi-layered approach to identify, assess, and report potential cybersecurity threats: • Threat intelligence tracking: We actively monitor relevant-threat intelligence feeds and other sources to stay informed about emerging threats and vulnerabilities. • Managed Detection and Response (“MDR”) partnership: We have partnered with a recognized third-party MDR provider to enhance our threat detection and response capabilities.
Identification, Assessment of, and Response to Cybersecurity Threats We employ a multi-layered approach to identify, assess, and report potential cybersecurity threats: • Threat intelligence tracking: We actively monitor relevant threat intelligence feeds and other sources to stay informed about emerging threats and vulnerabilities. • Managed Detection and Response (“ MDR ”) partnership: We have partnered with a recognized third-party MDR provider to enhance our threat detection and response capabilities.
Item 1C. Cybersecurity We understand the critical importance of cybersecurity and proactively manage vulnerabilities to ensure the confidentiality, integrity, and availability of our information assets. While we have not experienced any material risks from cybersecurity incidents to date, we recognize the 15 evolving threat landscape and maintain a vigorous security posture.
Item 1C. Cybersecurity We understand the critical importance of cybersecurity and proactively manage vulnerabilities to ensure the confidentiality, integrity, and availability of our information assets. While we have not experienced any material risks from cybersecurity incidents to date, we recognize the 16 evolving threat landscape and maintain a vigorous security posture.
Management and Board of Director Oversight of Cybersecurity Threats The Company's Chief Executive Officer, Chief Operating Officer, Chief Financial Officer, and Chief Information Officer that comprise our cybersecurity audit group, as well as the Board of Directors has responsibility for the oversight of cybersecurity threats and incidents and reviews the Company’s programs and policies no less than three times annually.
Management and Board of Director Oversight of Cybersecurity Threats The Company's Chief Executive Officer, Chief Operating Officer, Chief Financial Officer, and Chief Information Officer that comprise our cybersecurity audit group, as well as the Board of Directors have responsibility for the oversight of cybersecurity threats and incidents and reviews the Company’s programs and policies no less than three times annually.
We partner with third party specialists in the role of Virtual Information Security Officer (VISO), with biweekly meetings to review current state, develop security strategies, access risk management, and develop policies and procedures over our information security program.
We partner with third party specialists in the role of Virtual Information Security Officer (VISO), with biweekly meetings to review current state, develop security strategies, assess risk management, and develop policies and procedures over our information security program.
The Company’s Chief Information Officer has specific tactical & strategic responsibilities in overseeing technology infrastructure and cybersecurity. 17
The Company’s Chief Information Officer has specific tactical & strategic responsibilities in overseeing technology infrastructure and cybersecurity. 18
In the 1st quarter of 2025, we expect to complete the implementation of a robust Privileged Access Management (PAM) solution, an identity security solution that helps protect against cyberthreats through monitoring, detecting, and preventing unauthorized privileged access to critical resources. The Risk Management, Strategy and Incident Response described above applies to our North American and Asian operations.
In the second quarter of 2025, we went live on a robust Privileged Access Management (PAM) solution, an identity security solution that helps protect against cyberthreats through monitoring, detecting, and preventing unauthorized privileged access to critical resources. The Risk Management, Strategy and Incident Response described above apply to our North American and Asian operations.
Our Tabletop exercises include cybersecurity-based scenarios that incorporate various cyber threat categories including ransomware, insider threats, phishing, and physical disasters. Additionally, as in prior years, in 2025 we will perform vulnerability assessments and penetration testing through third party providers for an objective assessment.
Our Tabletop exercises include cybersecurity-based scenarios that incorporate various cyber threat categories including ransomware, insider threats, phishing, and physical disasters. In the fourth quarter of 2025 we completed our annual vulnerability assessments, penetration testing, and risk assessment through third party providers for objective evaluations.
The cybersecurity audit group is notified, and the Chief Information Officer, in consultation with our Security Operation Center submits a detailed report to senior management. For moderate risk incidents, there is prompt notification, and a detailed report would be prepared and submitted. If a cybersecurity incident is deemed material, it will be reported promptly under SEC rules.
For moderate risk incidents, there is prompt notification, and a detailed report would be prepared and submitted. If a cybersecurity incident is deemed material, it will be reported promptly under SEC rules.
In 2024, we initiated a data governance program aimed at securing enterprise data through internal processes, defined roles, metrics, & compliance standards.
Our data governance program started in 2024 aimed at securing enterprise data through internal processes, defined roles, metrics, & compliance standards has been expanded and will remain an active initiative and long-term commitment.
In line with internal processes, access to internal resources by third-party consultants is subject to Privileged Access Management (PAM). We apply the principles of zero trust, wherein privileges are granted to only that which is required, restricting unauthorized access.
In line with internal processes, access to internal resources by third-party consultants is subject to Privileged Access Management (PAM).
Reporting 16 We have a communication process for incidents based on their severity as outlined in our incident response plan and pursuant to various regulatory and contractual obligations. When a high risk incident or potential high risk incident is detected by our Security Operation Center or otherwise, executive leadership is immediately informed.
We apply the principles of zero trust, wherein privileges are granted to only that which is required, restricting unauthorized access. 17 Reporting We have a communication process for incidents based on their severity as outlined in our incident response plan and pursuant to various regulatory and contractual obligations.
Added
When a high risk incident or potential high risk incident is detected by our Security Operations Center or otherwise, executive leadership is immediately informed. The cybersecurity audit group is notified, and the Chief Information Officer, in consultation with our Security Operation Center submits a detailed report to senior management.

Item 2. Properties

Properties — owned and leased real estate

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Pr operties Location Square Footage Purpose Owned Rocky Mount, NC Vancouver, WA Brooksville, FL 340,000 53,000 42,460 Warehousing, manufacturing and distribution Warehousing, manufacturing and distribution Warehousing, manufacturing and distribution Keene, NH 11,000 Warehousing, manufacturing and distribution Solingen, Germany 35,000 Warehousing, distribution and administrative 481,460 Leased Shelton, CT 34,200 Administrative Bentonville, AK 1,500 Administrative Marlborough, MA 28,000 Manufacturing, warehousing and distribution Santa Ana, CA 10,000 Manufacturing, warehousing, and distribution La Vergne, TN 56,000 Manufacturing, warehousing and distribution Mount Forest, Ontario, Canada 20,000 Warehousing and distribution Orangeville, Ontario, Canada 2,850 Administrative Laval, Quebec, Canada 42,860 Manufacturing, warehousing, distribution and administrative Hong Kong, China 2,750 Administrative Guangzhou, China 3,500 Administrative Ningbo, China 1,800 Administrative 203,460 Total: 684,920 The Company’s facilities located in the United States and China are utilized by all of its segments.
Pr operties Location Square Footage Purpose Owned Rocky Mount, NC 340,000 Warehousing, manufacturing and distribution Mount Pleasant, TN 77,000 Warehousing, manufacturing and distribution Vancouver, WA 53,000 Warehousing, manufacturing and distribution Brooksville, FL 42,600 Warehousing, manufacturing and distribution Keene, NH 11,000 Warehousing, manufacturing and distribution Solingen, Germany 35,000 Warehousing, distribution and administrative 558,600 Leased Shelton, CT 34,200 Administrative Bentonville, AR 1,500 Administrative Marlborough, MA 28,000 Manufacturing, warehousing and distribution Santa Ana, CA 10,000 Manufacturing, warehousing, and distribution La Vergne, TN 56,000 Manufacturing, warehousing and distribution Mount Forest, Ontario, Canada 20,000 Warehousing and distribution Orangeville, Ontario, Canada 2,850 Administrative Laval, Quebec, Canada 42,860 Manufacturing, warehousing, distribution and administrative Hong Kong, China 2,750 Administrative Guangzhou, China 3,500 Administrative Ningbo, China 1,800 Administrative 203,460 Total: 762,060 The Company’s facilities located in the United States and China are utilized by all of its segments.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Item 3. Legal Proceedings There are no pending material legal proceedings to which the Company is a party or, to the actual knowledge of the Company, contemplated by any governmental agency. Item 4. Mine Saf ety Disclosures Not applicable. 18 PART II
Item 3. Legal Proceedings There are no pending material legal proceedings to which the Company is a party or, to the actual knowledge of the Company, contemplated by any governmental agency. Item 4. Mine Saf ety Disclosures Not applicable. 19 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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During the twelve months ended December 31, 2024, the Company did not repurchase any of its shares of Common Stock. As of December 31, 2024, a total of 160,365 shares may be purchased under the repurchase program announced in 2019. The 2019 program does not have an expiration date. Item 6. R eserved 19
During the twelve months ended December 31, 2025, the Company did not repurchase any of its shares of Common Stock. As of December 31, 2025, a total of 160,365 shares may be purchased under the repurchase program announced in 2019. The 2019 program does not have an expiration date. Item 6. R eserved 20

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

22 edited+12 added−13 removed10 unchanged
Such statements are based on our beliefs as well as assumptions made by and information currently available to us. When used in this document, words like “may,” “might,” “will,” “except,” “anticipate,” “believe,” “potential,” and similar expressions are intended to identify forward-looking statements. Actual results could differ materially from our current expectations.
Such statements are based on our beliefs as well as assumptions made by and information currently available to us. When used in this document, words like “may,” “might,” “will,” “expect,” “anticipate,” “believe,” “potential,” and similar expressions are intended to identify forward-looking statements. Actual results could differ materially from our current expectations.
For a more detailed discussion of these and other factors affecting the Company, see the Risk Factors described in Item 1A included in this Annual Report on Form 10-K for the fiscal year December 31, 2024 and below under “Financial Condition”.
For a more detailed discussion of these and other factors affecting the Company, see the Risk Factors described in Item 1A included in this Annual Report on Form 10-K for the fiscal year December 31, 2025 and below under “Financial Condition”.
As of December 31, 2024, the Company was in compliance with the covenants under the revolving loan agreement as then in effect. At December 31, 2024, total debt outstanding under the Company’s revolving credit facility increased by approximately $4.5 million compared to total debt outstanding at December 31, 2023.
As of December 31, 2025, the Company was in compliance with the covenants under the revolving loan agreement as then in effect. At December 31, 2025, total debt outstanding under the Company’s revolving credit facility decreased by approximately $5.8 million compared to total debt outstanding at December 31, 2024.
Inventory turnover, calculated using a twelve-month average inventory balance, was 2.1 at December 31, 2024 as compared to 2.1 at December 31, 2023. The reserve for slow moving and obsolete inventory was $1,254,121 at December 31, 2024 compared to $1,338,211 at December 31, 2023.
Inventory turnover, calculated using a twelve-month average inventory balance, was 2.1 at December 31, 2025 as compared to 2.1 at December 31, 2024. The reserve for slow moving and obsolete inventory was $1,477,849 at December 31, 2025 compared to $1,254,121 at December 31, 2024.
Off-Balance Sheet Transactions The Company did not engage in any off-balance sheet transactions during 2024. 21 Liquidity and Capital Resources During 2024, working capital increased by approximately $6.6 million compared to December 31, 2023. Inventory increased by approximately $0.8 million, or 1%.
Off-Balance Sheet Transactions The Company did not engage in any off-balance sheet transactions during 2025. Liquidity and Capital Resources During 2025, working capital increased by approximately $0.7 million compared to December 31, 2024. Inventory increased by approximately $3.6 million, or 6%.
Recently Issued Accounting Standards Standards not yet Adopted In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”). ASU 2023-09 requires additional categories of information about federal, state and foreign income taxes to be included in effective tax rate reconciliation disclosure.
Standards Adopted 23 In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”). ASU 2023-09 requires additional categories of information about federal, state and foreign income taxes to be included in effective tax rate reconciliation disclosure. Additionally, the newly added categories also apply to the income taxes paid disclosure.
The facility is intended to provide liquidity for growth, acquisitions, dividends, share repurchases, and other business activities. Under the revolving loan agreement, the Company is required to maintain specific amounts of funded debt to EBITDA, a fixed charge coverage ratio and must have annual net income greater than $0, measured as of the end of each fiscal year.
Under the revolving loan agreement, the Company is required to maintain specific amounts of funded debt to EBITDA, a fixed charge coverage ratio and must have annual net income greater than $0, measured as of the end of each fiscal year.
Results of Operations 2024 Compared with 2023 Traditionally, the Company’s sales and profits are stronger in the second and third quarters and weaker in the first and fourth quarters of the fiscal year, due to the seasonal nature of the Westcott back-to-school market. 20 Net Sales In 2024, sales increased by $2,989,044, or 2%, to $194,489,991 compared to $191,500,947 in 2023.
Results of Operations 2025 Compared with 2024 Traditionally, the Company’s sales and profits are stronger in the second and third quarters and weaker in the first and fourth quarters of the fiscal year, due to the seasonal nature of the Westcott back-to-school market. 21 Net Sales In 2025, sales increased by $2,051,825, or 1%, to $196,541,816 compared to $194,489,991 in 2024.
We do not anticipate material increases in the allowance for slow moving and obsolete inventory in the ordinary course of business during 2025. Receivables increased by approximately $2.0 million at December 31, 2024 compared to December 31, 2023. The average number of days sales outstanding in accounts receivable was 54 days in 2024 compared to 55 days in 2023.
We do not anticipate material increases in the allowance for slow moving and obsolete inventory in the ordinary course of business during 2026. Receivables increased by approximately $0.9 million at December 31, 2025 compared to December 31, 2024.
Long-term debt consists of (i) borrowings under the Company’s revolving loan agreement with HSBC Bank, N.A. and (ii) amounts outstanding under the fixed rate mortgage related to the Company’s manufacturing and distribution facilities in Rocky Mount, NC and Vancouver, WA.
The average number of days sales outstanding in accounts receivable was 55 days in 2025 compared to 54 days in 2024. 22 Long-term debt consists of (i) borrowings under the Company’s revolving loan agreement with HSBC Bank, N.A. and (ii) amounts outstanding under the fixed rate mortgage on the Company’s manufacturing and distribution facilities in Rocky Mount, NC and Vancouver, WA.
The credit facility has an expiration date of May 31, 2026. The Company must pay a facility fee, payable quarterly, in an amount equal to one eighth of one percent (.125%) per annum of the average daily unused portion of the revolving credit line.
The Company must pay a facility fee, payable quarterly, in an amount equal to one eighth of one percent (.125%) per annum of the average daily unused portion of the revolving credit line. The facility is intended to provide liquidity for growth, share repurchases, dividends, acquisitions, and other business activities.
The sales increase for the year was due to market share gains across multiple product lines. European net sales for the year ended December 31, 2024, increased 5% in both U.S. dollars and local currency, compared with the same period in 2023.
Net sales in Canada for the year ended December 31, 2025, increased 14% in U.S. dollars (16% in local currency) compared to the same period in 2024. The increase in sales for the year ended December 31, 2025 was due to strong sales of first aid products.
Capital expenditures during 2024 and 2023 were $7,148,648 and $4,673,717, respectively, which were, in part, financed with borrowings under the Company’s revolving credit facility.
Capital expenditures during 2025 and 2024 were $10,651,913 and $7,148,648, respectively, which were, in part, financed with borrowings under the Company’s revolving credit facility. The increase in capital expenditures is primarily related to the purchase of the manufacturing facility in Mt. Pleasant, TN as discussed above.
Selling, General and Administrative Selling, general and administrative (“SG&A”) expenses were $62,210,882 in 2024 compared with $59,021,618 in 2023, an increase of $3,189,264, or 5.4%. SG&A expenses were 32.0% of net sales in 2024 compared to 30.8% in 2023. The increase in SG&A expenses was primarily due to higher personnel related costs.
Gross Profit Gross profit was $77,409,848 (39.4% of net sales) in 2025 compared to $76,350,824 (39.3% of net sales) in 2024. Selling, General and Administrative Selling, general and administrative (“SG&A”) expenses were $62,685,334 in 2025 compared with $62,210,882 in 2024, an increase of $474,452, or 0.8%. SG&A expenses were 31.9% of net sales in 2025 compared to 32.0% in 2024.
The lower effective tax rate in 2024 was due to a higher proportion of earnings in jurisdictions with a lower tax rate. Also in 2024, the Company recorded a tax credit of approximately $600,000 related to employee exercise of stock options, compared to $385,000 in 2023.
Income Tax Expense Income tax expense was $2,933,201 in 2025, resulting in an effective tax rate of 22% compared to $2,270,058 in 2024, an effective tax rate of 18%. In 2025, the Company recorded a tax credit of approximately $300,000 related to employee exercise of stock options, compared to $600,000 in 2024.
As of December 31, 2024, $17,640,550 was outstanding, and $47,359,450 was available for borrowing under the Company’s revolving credit facility. The Company’s manufacturing and distribution facilities in Rocky Mount, NC and Vancouver, WA were financed by a fixed rate mortgage with HSBC Bank, N.A. at a fixed interest rate of 3.8%.
The Company’s manufacturing and distribution facilities in Rocky Mount, NC and Vancouver, WA were financed by a fixed rate mortgage with HSBC Bank, N.A. at a fixed interest rate of 3.8%. The Company entered into the agreement on December 1, 2021. Payments of principal and interest are due monthly, with all amounts outstanding due on maturity on December 1, 2031.
Operating Income Operating income was $14,139,942 in 2024 compared with $13,188,617 in 2023, an increase of $951,325. Operating income in the U.S. segment increased in 2024 by approximately $1,768,000 compared to 2023, primarily due to productivity improvements in the Company's manufacturing and distribution facilities.
Operating Income Operating income was $14,724,514 in 2025 compared with $14,139,942 in 2024, an increase of $584,572. Operating income in the U.S. segment increased in 2025 by approximately $117,000 compared to 2024. Operating income in the European segment increased in 2025 by $143,000 compared to 2024.
Refer to Note 10 to our consolidated financial statements herein for further details regarding this adoption. Item 7A. Quantitative and Qualitat ive Disclosures about Market Risk As a smaller reporting company, the Company is not required to provide this information.
Implementation of said additions are subject to quantitative thresholds. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024. The adoption of ASU 2023-09 did not have a material impact on the financial statements. Item 7A. Quantitative and Qualitat ive Disclosures about Market Risk As a smaller reporting company, the Company is not required to provide this information.
The purchase price for the assets was $19.8 million. At closing, GSM Holdings paid $18.3 million to the Company; the balance of the purchase price, $1.5 million, was subject to a 12-month holdback as a non-exclusive source of recovery primarily to satisfy indemnification claims under the Asset Purchase Agreement. The Company received payment of the $1.5 million in November 2024.
An additional holdback of (b) $500,000, was subject to a 13 month holdback as a non-exclusive source of recovery primarily to satisfy certain types of indemnification claims under the Asset Purchase Agreement; the Company paid this amount in July 2025.
Interest Expense, net Net interest expense for 2024 was $1,942,643 compared with $2,977,164 for 2023, a decrease of $1,034,521. The decrease in net interest expense resulted from a lower average debt outstanding under the revolving loan agreement of approximately $16 million. Total Other Income, net Total other income, net was $95,110 in 2024 compared to $12,523,151 in 2023.
Interest Expense, net Net interest expense for 2025 was $1,559,920 compared with $1,942,643 for 2024, a decrease of $382,723. The decrease in net interest expense resulted from lower average outstanding borrowings as well as lower average interest rates on the debt outstanding.
Excluding Camillus and Cuda, net sales for the year ended December 31, 2024 increased 8% compared to the same period in 2023 due to market share gains in the office channel. Net sales in Canada for the year ended December 31, 2024, decreased 5% in U.S. dollars (3% in local currency) compared to the same period in 2023.
European net sales for the year ended December 31, 2025, increased 8% in U.S. dollars (4% in local currency), compared with the same period in 2024. On October 1, 2025, the Company's German subsidiary acquired a line of cutting and sharpening tools that contributed $0.5 million in sales during the year ended December 31, 2025.
The revolving loan agreement provides for borrowings of up to $65 million at an interest rate that ranges from SOFR +1.70% up to a high of SOFR + 2.45% on a basis that varies quarterly with the funded debt to EBITDA ratio. The current interest rate is SOFR plus 1.70%; interest is payable monthly.
Amendment No. 11 extends the scheduled maturity of the $65 million dollar secured revolving credit facility under the Loan Agreement to May 31, 2027. The revolving loan agreement provides for borrowings of up to $65 million, which presently bears interest at SOFR plus 1.70%; interest is payable monthly. The loan agreement has an expiration date of May 31, 2027.
Removed
Excluding the impact of the hunting and fishing product lines sold on November 1, 2023, net sales for 2024 increased 6% compared to 2023. The U.S. segment sales increased by 2% in 2024 compared to 2023. Excluding Camillus and Cuda, net sales for the year ended December 31, 2024 increased 7% compared to the same period in 2023.
Added
The U.S. segment sales decline by 1% in 2025 compared to 2024. Sales of first aid and medical products were strong. However, sales of school and office products were lower mainly due to the cancellation of customer orders in the third and fourth quarters as a result of tariff uncertainty.
Removed
Excluding Camillus and Cuda, net sales for the year ended December 31, 2024 increased 1% compared to the same period in 2023. Sales of first aid products were strong, however sales of school and office products continued to be adversely impacted by a soft economy.
Added
The increase in operating income was primarily due to higher sales as well as improved gross margins. Operating income in Canada increased in 2025 by approximately $326,000 compared to 2024. The increase in operating income was primarily due to higher sales as well as improved gross margins.
Removed
Gross Profit Gross profit was $76,350,824 (39.3% of net sales) in 2024 compared to $72,210,235 (37.7% of net sales) in 2023. The increase was primarily due to productivity improvements in the Company's manufacturing and distribution facilities.
Added
Total Other (Expense) Income, net Total other (expense), net was $46,972 in 2025 compared to other income, net of $95,110 in 2024. The change in total other expense, net was primarily related to higher losses from foreign currency transactions.
Removed
Operating income in the European segment decreased by $648,000 compared to 2023 primarily due to planned increases in headcount to support growth in the business. Operating income in Canada decreased in 2024 by approximately $168,000 compared to 2023. The decrease in operating income was primarily due to lower net sales of school and office products.
Added
Effective as of June 26, 2025, Acme United Corporation (the “Company”) entered into Amendment No. 11 to the Revolving Loan Agreement dated as of April 5, 2012, as amended (the ”Loan Agreement”), between the Company and HSBC Bank, N.A.
Removed
The decrease in total other income, net was due to the gain on the sale of the Camillus and Cuda business in 2023. The pre-tax gain was approximately $12,564,153. Income Tax Expense Income tax expense was $2,270,058 in 2024, resulting in an effective tax rate of 18% compared to $4,941,444 in 2023, an effective tax rate of 22%.
Added
As of December 31, 2025, $11,863,085 was outstanding, and $53,136,915 was available for borrowing under the Company’s revolving credit facility. On July 15, 2025, the Company purchased a manufacturing and distribution center in Mt. Pleasant, TN for approximately $6.0 million using funds available under its revolving credit facility.
Removed
The Company entered into the agreement on December 1, 2021. Payments of principal and interest are due monthly, with all amounts outstanding due on maturity on December 1, 2031. The outstanding principal on December 31, 2024, was $10,409,797. On May 23, 2024, the Company acquired the assets of Elite First Aid, Inc ("Elite First Aid") for approximately $7.1 million.
Added
The property consists of 77,000 square feet of manufacturing and warehouse space on 12 acres and is designed to be expanded by up to an additional 60,000 square feet. The facility will primarily be used to manufacture our Spill Magic line of bodily fluid and spill clean up solutions.
Removed
Elite First Aid is a leading supplier of tactical, trauma and emergency medical products. On November 1, 2023, the Company sold the assets of its Camillus Cutlery and Cuda business lines (the “Business”) to GSM Holdings, Inc., a Delaware corporation (“GSM Holdings”), pursuant to an Asset Purchase Agreement entered into on the same date.
Added
The outstanding principal on December 31, 2025, was $9,975,587.
Removed
The divestiture resulted in a gain of $12.6 million, which was recorded within Other Income, Net in the consolidated statements of operations. The gain, net of tax, was approximately $9.6 million. Sales of Camillus and Cuda products represented approximately 6% of the total net sales in 2023.
Added
On May 23, 2024, the Company acquired the assets of Elite First Aid, Inc ("Elite First Aid") for approximately $7.1 million of which $1.0 million is subject to holdbacks as follows: (a) $500,000, the payment of which is contingent upon certain revenue milestones during an consecutive 12-month period from May 31, 2024 to December 31, 2025.
Removed
Additionally, the newly added categories also apply to the income taxes paid disclosure. Implementation of said additions are subject to quantitative thresholds. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024. The Company is currently evaluating the impact of adopting ASU 2023-09.
Added
The acquired business did not meet the required milestones within the allowable period; therefore, the contingent amount was not payable. Accordingly, the Company reversed the related $500,000 liability.
Removed
Standards Adopted In November 2023, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which amends ASC 280.
Added
Recently Issued Accounting Standards Standards not yet Adopted In November 2024, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses.
Removed
The intent 22 of ASU 2023-07 is to improve the disclosures around a public entity’s reportable segments and address requests from investors for additional, more detailed information about a reportable segment’s expenses by requiring entities to disclose on an annual and interim basis: (i) significant segment expenses that are regularly provided to the Chief Operating Decision Maker (“CODM”) and included within each reported measure of segment profit or loss and (ii) an amount for other segment items by reportable segment and a description of its composition, which represents the difference between segment revenue less segment expenses disclosed under the significant expense principle and each reported measure of segment profit or loss.
Added
This ASU requires more detailed information about specified categories of expenses (purchases of inventory, employee compensation, depreciation, intangible asset amortization and depletion) included in certain expense captions presented on the face of the income statement. The ASU is effective for fiscal years beginning after December 15, 2026 and for interim periods beginning after December 15, 2027.
Removed
Furthermore, entities will be required to: (i) provide all annual disclosures about a segment’s profit or loss and assets currently required under ASC 280 on an interim basis as well, (ii) clarify that an entity is not precluded from reporting additional measures of a segment’s profit or loss that are used by the CODM in assessing segment performance and deciding how to allocate resources, and (iii) disclose the title and position of the CODM and an explanation of how the CODM uses the reported measures of segment profit or loss in assessing segment performance and deciding how to allocate resources.
Added
The ASU may be applied either prospectively to financial statements issued for reporting periods after the effective date of this ASU or retrospectively to all prior periods presented in the financial statements and early adoption is permitted. The Company is currently evaluating the impact of adopting this ASU on our consolidated financial statements and related disclosures.
Removed
ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. As part of this Annual Report, the Company adopted ASU 2023-07, which was applied retrospectively to all prior periods presented.

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