Acme United Corporation

55 Walls Drive
Fairfield, Connecticut 06824
U.S.A
.
Toll Free: (800) 835-2263
Web site: https://www.acmeunited.com

Public Company
Incorporated:
1882 as The Acme Shear Company
Employees: 421
Sales: $130.55 million (2017)
Stock Exchanges: NYSE American
Ticker Symbol: ACU
NAICS: 332215 Metal Kitchen Cookware, Utensil, Cutlery, and Flatware (except Precious) Manufacturing

The Acme United Corporation is a publicly traded manufacturing company that is devoted to production centering around three product groups: cutting instruments, measuring devices, and safety products. The company has been involved in the manufacture of scissors since the 1800s and continues to make a wide range of scissors for the home, school, and office markets. Other cutting instruments include shears, guillotine and rotary paper trimmers, hobby knives and blades, utility knives, and medical cutting instruments. Since 2009 the company has manufactured knives under the brand name Camillus. Acme United measuring devices, such as rulers, tape measures, and math tools, are marketed under the Westcott brand name. Safety products include first aid kits, biohazard response products, and over-the-counter medication refills. Based in Fairfield, Connecticut, Acme United maintains a major warehouse and distribution center in North Carolina and a smaller site with similar functions in Germany, and leases facilities in Canada, China, and Hong Kong. Its 2017 sales amounted to $130.6 million, a company record and an increase of 5 percent over the previous year.

EARLY YEARS

Acme United's seeds were planted in 1867, when the German immigrant Leo Renz bought an old grist mill that was powered by the Beacon Hill Brook in Naugatuck. There, he opened the Renz Shear Shop, which specialized in the making of cast-iron shears and scissors. Over the next 20 years he grew the business and sold it to his brother, Robert. After his death, his heirs sold the company to a younger relation named Mitchell Renz. He moved the operations to Fairfield in 1880, and two years after that incorporated it as The Acme Shear Company. He was also responsible for bringing the brothers David C. Wheeler and Dwight Wheeler into the business. They bought out Renz, who decided in 1883 to quit New England and try his luck in Florida. Under Wheeler family management, Acme Shear expanded its product lines to include nut crackers and axe blades and later began manufacturing steel shears.

COMPANY PERSPECTIVES

Acme United aims to be the leading supplier of Cutting, Measuring, First Aid and Safety products in the Craft, School, Office, Home, Industrial and Food Processing markets. The Company strives to be known for quality and innovation in all categories in which it participates; and to enter new categories, with innovation that surpasses the competition.

ENTERING THE MEDICAL FIELD

Henry Wheeler became the CEO in 1953. Then, during the 1960s, he expanded the company in a number of directions. Surmano Ltd., a scissors subsidiary, was established in the United Kingdom to sell directly to the European market. Because of increasing demand for disposable medical scissors, Acme Shear became involved in the medical field. In 1965 it introduced a line of disposable medical scissors and surgical instruments, selling them to other companies that packaged them for the hospital market.

This business did so well that in 1969 Acme Shear opened a major manufacturing plant in Fremont, North Carolina, one that met government requirements for the production and packaging of medical equipment. The 1960s were also noteworthy because a fourth generation of the Wheeler family became involved as Dwight C. Wheeler II, Henry Wheeler's son, joined the company in 1966. A graduate of the University of Bridgeport with a degree in manufacture engineering, he worked as an industrial engineer at the Producto Machine Company in Bridgeport before coming to Acme United. The company marked its 100th anniversary in 1967, the same year that Acme United ceased to be a pure family business. Acme Shear conducted an initial public offering of stock, which then began trading on an over-the-counter (OTC) basis.

During the 1970s Acme Shear continued its efforts at diversification. In 1970 it became involved in a school product kindred to scissors, rulers, by acquiring the Westcott Rule Company, which had been founded in 1872 in Seneca Falls, New York. To better reflect the company's new business mix, the 100-year-old Acme Shear name was dropped in June 1971 in favor of Acme United Corporation.

The 1970s also saw continued growth in the medical field. In 1972 Acme United acquired One Time Package Products Inc., maker of single-use consumer package products, a deal that allowed Acme United to market its own line of products rather than rely on third parties. The medical products division now offered One Time disposable procedure trays, stainless steel instruments, and povidone-iodine microbicide, a germicide sold under the ACU-Dyne brand. During the late 1970s Acme United brought out wound dressings, including a sterile, nonabsorbent, self-adhering polyurethane dressing called ACU-Derm and an absorbent version sold under the Lyo Foam name. Also of note during the decade, the company's stock graduated from the OTC and began trading on the American Stock Exchange in 1979.

STRUGGLES AND SUCCESSES

Much of Acme United's growth was due to its thriving medical business, but that would begin to change during the 1980s. The company was overly dependent on a single customer, American Hospital Supply, which by 1983 accounted for $22 million in sales. Then, American Hospital elected to manufacture several of the products itself. To make the loss of this business even worse, hospitals began pooling their orders so that they could demand steeper discounts, thus cutting into Acme United's margins. Moreover, the company faced strong new competition from the U.K. medical supplier Smith & Nephew. Acme United spent much of the 1980s adjusting to these realities, but by the end of the decade it was ready to resume expansion.

The company looked overseas to fuel growth. In January 1990 Acme United closed on the $2.8 million acquisition of Emil Schlemper GmbH, a leading West German maker of scissors, shears, manicure products, and surgical instruments. With Schlemper complementing the U.K. division, Surmanco, Acme United was now one of the largest manufacturers of cutting instruments in the European Common Market. Several months later, it increased its market share while expanding Surmanco by paying some $900,000 to acquire Homeric Ltd. of Sheffield, England, a maker of scissors, rulers, household shears, and surgical equipment.

KEY DATES
1867:
The Benz Shear Shop is founded.
1882:
The business is incorporated as The Acme Shear Company.
1965:
The company offers disposable surgical instruments.
1967:
The company goes public.
1971:
The company changes its name to Acme United Corporation.
1979:
Acme is listed on the American Stock Exchange.
1995:
Walter C. Johnsen is named CEO.
2007:
The company acquires the brand name, patents, and trademarks of Camillus Cutlery.
2014:
The company acquires rival brand First Aid Only.
2017:
Acme United celebrates its 150th anniversary.

The next major acquisition was completed in October 1991, when Acme United bought Peter Altenbach and Sons GmbH for $1.9 million. Founded in 1900, Altenbach was Germany's third-largest manufacturer of quality knives and scissors, with annual sales of about $7 million. As had been the case with the Schlemper and Homeric acquisitions, Altenbach was expected to become immediately profitable, as Henry Wheeler told the press that Altenbach was “an efficient, well-managed business.” Unfortunately for Acme United, that assessment was not accurate. According to Paul Davies in the New Haven Register in a 1995 profile of Acme United, “The Altenbach purchase turned into a disaster as labor problems and poor cost controls drained earnings. Acme moved to restructure the division and cut employment by 30 percent, which proved more costly considering the high severance costs built into German labor laws.”

NEW PRODUCTS

On other fronts during the early 1990s, Acme United offered the Kleen Earth line of “green” scissors and rulers made from recycled plastic and packaged in recycled cardboard. At a cost of $5.4 million in cash and stock, it expanded its medical division in early 1992 by acquiring SePro Healthcare, Inc., the U.S. subsidiary of the U.K. firm Seton Healthcare Group plc. As a result, Acme United picked up inventory, a New Jersey facility, and exclusive distribution rights to Seton's pressure therapy bandages and specialized wound dressings, as well as an opportunity to distribute Seton's future medical products.

Later in 1992 Acme United reached an exclusive marketing and distribution agreement with OPCO Medical Products Ltd. for the OPCO line of patented intravenous (IV) therapy products, serving both the hospital and aftercare market. These products included a patented IV bubble, an inflatable item used to keep a catheter from being accidentally dislodged, and an IV board, a companion product that immobilized a limb with a molded arm board and finger support to provide a more stable IV site. Also in 1992 Acme United acquired the exclusive U.S. marketing and distribution rights for the Royal-Derm lines of skin care and wound-care products, which were designed to increase moisturization and provide pain relief for patients suffering from burns as well as the ulcers and wounds suffered by the bedridden.

The problems with Altenbach led to a $468,000 restructuring charge in 1992. In addition, Acme United also encountered problems with the launch of the Royal-Derm and OPCO product lines. Attempts to market the latter failed completely, leading to a $264,000 charge for leftover inventory and licensing rights, while Royal-Derm met with stiff new competition, resulting in price cutting and a $415,000 charge for dated inventory.

To address Acme United's mounting difficulties, management began a reorganization plan in January 1994. The company was divided into three business units: North American consumer products, European consumer products, and U.S. Medical products. Management teams were assigned to each unit and given the authority to make sweeping changes, including headcount reduction and other cost-cutting measures. In addition, 78-year-old Henry Wheeler stepped down as CEO and was replaced by his 51-year-old son, Dwight C. Wheeler II. The elder Wheeler retained the chairship, however.

NEW LEADERSHIP AND CHALLENGES

After losing more than $8.7 million on sales of $52.2 million in 1995, Acme United initiated a cost-reduction program in 1996. The Westcott plant in Seneca Falls was closed in 1995 and sold the following year. The company's plant in Bridgeport, Connecticut, was also shut down in 1996, with all production moved to Acme United's more modern, lower-cost facilities in North Carolina. Also, Altenbach was sold in May 1996. As planned, Acme United began reducing its inventory company-wide to free up money. Moreover, Johnsen shook up his management team. All four of his directors, along with five other senior managers, were terminated in 1996. The company lost another $3.2 million in 1996, much of which was the result of restructuring charges, but it also saw revenues dip to $47.5 million, with the medical products unit experiencing a 12 percent drop in business and European sales that, excluding Altenbach, were off by 4 percent.

Acme United expanded its North American office products business in 1997 by acquiring the Rotex Division of Esselte, Canada. That same year Acme United sold the marketing rights for Seton Healthcare products for $2 million, a harbinger of what was to come, as Johnsen decided to focus the company's attention on consumer products. Less than two years later, in March 1999, Acme United sold its medical unit for $8.2 million to Medical Action Industries, a Long Island–based supplier of medical and disposable surgical products.

INCREASE IN SALES AND PROFITS

Although the loss of the medical division significantly lowered the company's total revenues, Acme United slowly returned to profitability, posting a net income of $1.1 million in 2000 after losing $156,000 from continuing operations in 1999 and $1.7 million in 1998. The company shied away from low-margin products, concentrating instead on value-added products, such as the Tagit! line of student scissors, rulers, staplers, and staple removers introduced in 2000. In addition, it made inroads in the office market by achieving greater penetration with retailers such as Staples and Office Max. Its sales improved to $36.2 million in 2001, a 5 percent improvement over the previous year, and its net income grew to $1.3 million.

Poor economic conditions caused another setback in 2002, which resulted in the restructuring of the European unit, with the operations of the U.K. plant transferred to Germany. Acme United also increased its focus on core products and regained some momentum in 2003, during which its sales increased 13 percent over the previous year to $35 million and its net income increased 85 percent to $1.2 million. A new titanium scissor line performed well enough to warrant the application of the technology to new products, such as paper trimmers. In addition, in 2003 Acme United opened a Hong Kong subsidiary.

With business once again on an upswing, Acme United was in a position to grow externally. In June 2004 it acquired Clauss Cutlery from Alco Industries. Almost as old as Acme United, Clauss, founded in Fremont, Ohio, in 1877, was once the world's largest scissor manufacturer. Its scissors and cutting tools now primarily served the floral market as well as industrial customers such as auto, textile, food processing, and electronics, providing Acme United with a solid platform on which to expand into other areas of the cutting trade.

The company's turnaround under Johnsen's leadership appeared complete when the results for 2004 were released in March 2005. Acme United experienced a 24 percent increase in sales to $43.4 million, while its net income grew to $3.2 million. With sales improving in all markets, the company posted six consecutive quarters of double-digit growth in profits, despite rising commodity prices. The financial world was taking notice: Acme United made Fortune magazine's list of the nation's fastest-growing small companies in 2005 and 2006. Continuous innovation was a principal factor behind its success. A high proportion of the company's products were new, particularly as it added its titanium-bonded coating to its scissor designs. The proprietary technology increased the strength and durability of metal blades and helped them hold sharp edges considerably longer than conventional products. Westcott enjoyed stable arrangements with the retailers OfficeMax and Staples and the wholesaler United Stationers. The company's foreign sales received a boost when it began supplying first aid kits to the British National Health Service.

BUILDING OUT A BRAND PORTFOLIO

Acme United gained further visibility through a licensing agreement in 2013 with Scotts Miracle-Gro, a leader in the home and garden market. For the first time Scotts put its trademark on cutting tools for gardening, including shears, pruners, saws, machetes, and loppers. The products were jointly marketed by Scotts and Clauss and came in two lines: one set of professional-level tools called AirShoc and another known as Enviro-Line, which was priced more affordably for homeowners. All tools included nonstick titanium-bonded coatings as well as antimicrobial technology to prevent fungal and bacterial buildup.

Acme United advanced its market position in the first aid industry through a pair of strategic acquisitions. First, in 2011 it picked up the Pac-Kit Safety Equipment Company. Founded in 1890 as part of the pharmaceutical firm Burroughs Wellcome and Company, Pac-Kit eventually won renown for outfitting the expeditions of Theodore Roosevelt and the polar explorers Admiral Richard Byrd and Captain Robert Scott. It retained a large facility in Norwalk, Connecticut, less than 10 miles from Acme United's headquarters in Fairfield. In 2014 the company bought another of its rivals, First Aid Only, a Vancouver-based manufacturer that provided first aid kits to the American Red Cross and other large customers. First Aid Only specialized in kits for the corporate market that complied with Occupational Safety and Health Act standards. Acme United chose to retain both brand names along with its PhysiciansCare line, under which it sold over-the-counter medicines such as pain relievers.

Still ably led by Johnsen after two decades, Acme United continued to shore up its markets and expand its suite of brands through acquisitions. In February 2016 it bought Diamond Machining Technology, a maker of specialized precision sharpening tools, in a cash deal worth $7 million. The following year it absorbed Spill Magic, Inc., maker of chemical absorbents that turned spilled liquids into powdered form to facilitate disposal. Celebrating 150 years in business in 2017, the company posted its seventh consecutive year of record sales, along with an annual net income of $5.3 million.

Ed Dinger
Updated, Roger K. Smith

PRINCIPAL SUBSIDIARIES

Acme United Limited; Acme United Europe GmbH; Acme United (Asia Pacific) Limited; Acme United China Limited; Acme United Netherlands Cooperatie U.A.

PRINCIPAL DIVISIONS

First Aid and Safety; Hardware, Industrial, and Sporting Goods; School, Home, and Office.

PRINCIPAL COMPETITORS

The 3M Company; Fiskars Corporation; Maped; Johnson & Johnson; Stanley-Bostitch Inc.

FURTHER READING

“Acme United Acquires Germany Cutlery Maker.” Fairfield Count Business Journal, November 4, 1991.

“Acme United to Acquire Major Portion of SepRo's Medical Products.” Fairfield Count Business Journal, January 20, 1992.

“Acme United to Distribute New Line of Wound and Skin-Care Products.” Fairfield Count Business Journal, September 21, 1992.

“After Acquisition, Marlborough Diamond Sharpener Looks Forward.” Worcester Business Journal, August 9, 2016.

Angell, Mike. “Acme United Corp. Fairfield, Connecticut; Scissors Manufacturer Looks for a Bigger Cut of the Global Market.” Investor's Business Daily, June 23, 2005, A7.

“Camillus Brand to Live on Elsewhere.” Syracuse Post-Standard, September 19, 2007.

Davies, Paul. “Scissor-Maker Cutes New Hope.” New Haven Register, May 28, 1995.

Oliver, Gordon. “Rival Buys First Aid Only for $13.8M.” Columbian (Vancouver, WA), June 5, 2014.

Strempel, Dan, “Acme United Corp. Acquires Clauss Cutlery Assets.” Fairfield Count Business Journal, June 28, 2004.