Acme United Corporation (ACU) Q3 2025 Earnings Report

Acme United Corporation reported Q3 2025 results with revenue of $49.063 million and a gross margin of 39.1%, delivering an operating income of $3.007 million (operating margin 6.13%) and net income of $1.903 million (net margin 3.88%). Diluted earnings per share came in at $0.46 (GAAP) with basic EPS of $0.50 on 3.802 million weighted average shares. On a sequential basis, revenue declined about 9% quarter‑over‑quarter (QoQ) from Q2 2025, while year‑over‑year (YoY) revenue rose modestly (~+1.9% vs Q3 2024). The contraction in quarterly operating income and net income largely reflects softer top line and continued cost discipline, despite a modest gross margin improvement versus the year‑ago period. Liquidity remains solid, with a current ratio of 4.47 and a quick ratio of 1.75, signaling ample short‑term coverage of liabilities. Leverage is modest (debt ratio 0.15; interest coverage ~6.7x), supporting a conservative balance sheet posture. However, the company exhibits a high operating‑cycle burden: days sales outstanding ~55, days inventory outstanding ~181, and a cash conversion cycle of ~217 days, indicating significant working capital tied up in inventory and receivables. Cash per share is minimal (~$0.0014) and cash flow metrics are not disclosed in the provided data, limiting visibility into cash generation. Management strengths remain in diversified product lines across the Westcott, Clauss, DMT, Camillus, and First Aid product families, supported by a broad wholesale and retail distribution network. The near‑term outlook hinges on seasonal demand patterns in school/home office channels, inventory management, and the ability to sustain margin discipline amid competitive pressure. Absent explicit quarterly guidance, investors should monitor topline trajectory, inventory levels, and any shifts in mix that could affect gross margins.