FAIRFIELD, Conn.–(Business Wire)–
Acme United Corporation (NYSE AMEX:ACU) today announced that net sales for the
second quarter ended June 30, 2010 were $20.6 million, compared to $19.2 million
in the comparable period of 2009, an increase of 7% (8% in local currency). Net
income was $1,567,000, or $.48 per diluted share, for the quarter ended June 30,
2010, compared to $1,341,000 or $.40 per diluted share for the comparable period
last year, an increase of 17% in net income and 20% in diluted earnings per
share.

Net sales for the six months ended June 30, 2010 were $33.7 million, compared to
$30.5 million in the same period in 2009, an increase of 11% (10% in local
currency). Net income for the six months ended June 30, 2010 was $1,780,000, or
$.54 per diluted share, compared to $1,383,000, or $.41 per diluted share in the
comparable period last year, a 29% increase in net income and 32% in diluted
earnings per share.

Net sales for the quarter ended June 30, 2010 in the U.S. segment increased 1%
compared to the same period in 2009. Net sales for the six months ended June 30,
2010 in the U.S. segment increased 5% compared to the same period in 2009. Sales
in the U.S. were a reflection of the slow economic recovery in the U.S. Net
sales in Canada for the three and six months ended June 30, 2010 increased 10%
and 14%, respectively, in U.S. dollars compared to the same periods in 2009 but
decreased 2% and 1% respectively, in local currency. European net sales for the
three and six months ended June 30, 2010 increased 64% and 46%, respectively, in
U.S. dollars compared to the same periods in 2009 and increased 75% and 49%
respectively, in local currency. Sales in Europe increased due to growth in the
mass and office markets.

Gross margins were 36.7% in the second quarter of 2010 versus 37.1% in the
comparable period last year. The gross margins in the second quarter of 2010
were impacted by higher airfreight expense of approximately $250,000 due to
labor shortages and production constraints in the Asian factories. For the first
six months of 2010, gross margins were 37.6%, compared to 37.4% in the same
period in 2009.

The effective tax rate for the first six months of 2010 was 17%, compared to 34%
in the same period of 2009. The effective tax rate for the six months ended June
30, 2010, reflects approximately $180,000 of tax benefits associated with the
Company`s donation of land to the City of Bridgeport, CT in the fourth quarter
of 2009.

Walter C. Johnsen, Chairman and CEO said, “We had a solid quarter in sales,
earnings, and cash flow. However, the Company incurred substantial air freights
costs due to lower production than planned, with the resultant need to expedite
shipments to meet customer demand on time. We are addressing this by increasing
supply stock and expanding capacity.” Mr. Johnsen added that he was pleased with
the growth in European sales.

The Company`s bank debt less cash on June 30, 2010 was $8.9 million compared to
$8.9 million on June 30, 2009. During the 12 month period ended June 30, 2010,
Acme purchased 241,000 shares of its common stock for treasury for a total of
approximately $2.25 million and paid a total of $650,000 in dividends, which
were offset by cash flow from operations of $3 million. As of June 30, 2010,
there were 83,376 shares remaining for purchase under the Company`s stock
repurchase program.

ACME UNITED CORPORATION is a leading worldwide supplier of innovative cutting,
measuring and safety products to the school, home, office and industrial
markets. Its leading brands include Westcott, Clauss, Camillus and
PhysiciansCare .

Forward-looking statements in this report, including without limitation,
statements related to the Company`s plans, strategies, objectives, expectations,
intentions and adequacy of resources, are made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995. Investors
are cautioned that such forward-looking statements involve risks and
uncertainties including, without limitation, the following: (i) the Company`s
plans, strategies, objectives, expectations and intentions are subject to change
at any time at the discretion of the Company; (ii) the impact of current
uncertainties in global economic conditions and the ongoing financial crisis
affecting the domestic and foreign banking system and financial markets,
including the impact on the Company`s suppliers and customers (iii) currency
fluctuations (iv) the Company`s plans and results of operations will be affected
by the Company`s ability to manage its growth, and (v) other risks and
uncertainties indicated from time to time in the Company`s filings with the
Securities and Exchange Commission.

ACME UNITED CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
SECOND QUARTER REPORT 2010
(Unaudited)

Three Months Ended Three Months Ended
Amounts in 000′s except per share data June 30, 2010 June 30, 2009

Net sales $ 20,585 $ 19,161
Cost of goods sold 13,034 12,056
Gross profit 7,551 7,105
Selling, general, and administrative expenses 5,605 5,086
Income from operations 1,946 2,019
Interest expense 79 44
Interest income (41 ) (31 )
Net interest expense 38 13
Other expense (income) 24 (30 )
Total other expense (income) 62 (17 )
Pre-tax income 1,884 2,036
Income tax expense 317 695
Net income $ 1,567 $ 1,341

Shares outstanding – Basic 3,158 3,325
Shares outstanding – Diluted 3,289 3,388

Earnings per share basic $ 0.50 $ 0.40
Earnings per share diluted 0.48 0.40

ACME UNITED CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
SECOND QUARTER REPORT 2010 (cont.)
(Unaudited)

Six Months Ended Six Months Ended
Amounts in 000′s except per share data June 30, 2010 June 30, 2009

Net sales $ 33,706 $ 30,458
Cost of goods sold 21,042 19,056
Gross profit 12,664 11,402
Selling, general, and administrative expenses 10,417 9,302
Income from operations 2,247 2,100
Interest expense 131 86
Interest income (73 ) (66 )
Net interest expense 58 20
Other expense (income) 39 (19 )
Total other (expense) 97 1
Pre-tax income 2,150 2,099
Income tax expense 370 716
Net income $ 1,780 $ 1,383

Shares outstanding – Basic 3,163 3,336
Shares outstanding – Diluted 3,270 3,396

Earnings per share basic $ 0.56 $ 0.41
Earnings per share diluted 0.54 0.41

ACME UNITED CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
SECOND QUARTER REPORT 2010
(Unaudited)

Amounts in 000′s June 30, 2010 June 30, 2009

Assets:
Current assets:
Cash $ 4,250 $ 3,228
Accounts receivable, net 20,416 18,467
Inventories 17,970 19,299
Prepaid and other current assets 1,213 961
Total current assets 43,849 41,955

Property and equipment, net 1,994 2,249
Long term receivable 1,865 1,919
Other assets 2,562 2,509
Total assets $ 50,270 $ 48,633

Liabilities and stockholders’ equity:
Current liabilities
Accounts payable $ 6,177 $ 6,131
Other current liabilities 4,298 4,276
Total current liabilities 10,475 10,407
Bank debt 13,125 12,122
Other non current liabilities 1,746 1,995
25,346 24,524
Total stockholders’ equity 24,924 24,109
Total liabilities and stockholders’ equity $ 50,270 $ 48,633

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

Copyright Business Wire 2010