ACME United Corporation Reports 21% Net Sales Increase and a 22% Increase in Net Income for Its Second Quarter.

FAIRFIELD, Conn. -- Acme United Corporation (AMEX:ACU) today announced net income of $1,314,000 or $.34 per diluted share for the second quarter ended June 30, 2005 compared to $1,075,000 or $.29 per diluted share for the comparable period last year. Net income for the six months ended June 30, 2005 was $1,964,000, or $.52 per diluted share compared to $1,468,000, or $.40 per diluted share in the comparable period last year, a 34% increase.

Net sales for the quarter ended June 30, 2005 were $14.9 million compared to $12.3 million in the same period in 2004, an increase of 21% (20% at constant currency). Net sales for the six months ended June 30, 2005 were $25.5 million compared to $20.9 million in the same period in 2004, an increase of 22% (20% at constant currency). Net sales in the U.S. increased 25% due to the sale of new products, market share gains and the Clauss business acquired on June 1, 2004. International sales increased by 14%, and 7% in local currency.

Gross margins were 45.2% in the second quarter of 2005 versus 44.9% in the comparable period last year. For the first six months of 2005 gross margins were 45.5% compared to 44.3% in the same period in 2004. The improvement is primarily due to the sale of new products and product rationalization efforts in Europe. These positive impacts were partially offset by mainly higher raw material costs.

Walter C. Johnsen, President and CEO, said, "Acme United continues to plan and invest for future growth. We are finalizing new products for introduction in the fall, and upgrading our systems and customer support. We are very pleased with our continued strong performance."

The Company's bank debt less cash on June 30, 2005 was $4.4 million compared to $4.6 million on June 30, 2004. During the first six months of 2005, the Company repurchased 146,000 shares of its common stock at a cost of $2.2 million and paid dividends in the total amount of $146,000.

On June 28, 2005 the Company announced a 50% increase in the quarterly cash dividend to 3 cents per share.

ACME UNITED CORPORATION is a specialized supplier of cutting devices, measuring instruments, and safety products for school, home, office and industrial use.

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 Company's plans and results of operations will be affected by the Company's ability to manage its growth, and (iii) other risks and uncertainties indicated from time to time in the Company's filings with the Securities and Exchange Commission.

ACME UNITED CORPORATION
                   CONSOLIDATED STATEMENT OF INCOME
                      SECOND QUARTER REPORT 2005

                                                Quarter     Quarter
                                                  Ended       Ended
                                               June 30,     June 30,
                                                  2005         2004
Amounts in $000's except per share data       (Unaudited)  (Unaudited)
----------------------------------------------------------------------


Net Sales                                    $     14,904 $    12,298
Gross Profit                                        6,731       5,519
Selling, General, and Administrative Expenses       4,577       3,579
Other Expense                                         140         120
Pre-Tax Income                                      2,014       1,820
Income Tax Expense                                    700         745
Net Income                                          1,314       1,075
Earnings Per Share Basic                             0.37        0.32
Earnings Per Share Diluted                           0.34        0.29



                                              Six Months   Six Months
                                                  Ended       Ended
                                               June 30,     June 30,
                                                  2005         2004
Amounts in $000's except per share data       (Unaudited)  (Unaudited)
----------------------------------------------------------------------

Net Sales                                    $     25,487 $    20,865
Gross Profit                                       11,592       9,239
Selling, General, and Administrative Expenses       8,296       6,550
Other Expense                                         202         159
Pre-Tax Income                                      3,094       2,530
Income Tax Expense                                  1,130       1,062
Net Income                                          1,964       1,468
Earnings Per Share Basic                             0.56        0.44
Earnings Per Share Diluted                           0.52        0.40



                       ACME UNITED CORPORATION
                 CONDENSED CONSOLIDATED BALANCE SHEET
                      SECOND QUARTER REPORT 2005
                             (Unaudited)

Amounts in $000's                                June 30,   June 30,
                                                    2005       2004
----------------------------------------------------------------------

Assets:
Current Assets:
 Cash                                           $      602 $      412
 Accounts Receivable, Net                           12,625     11,869
 Inventories                                        11,141      8,259
 Prepaid and Other current Assets                      818        771
                                                ----------------------
Total Current Assets                                25,186     21,311

 Property and Equipment, Net                         2,203      2,225
 Other Assets                                          809        681
                                                ----------------------
Total Assets                                    $   28,198 $   24,217
                                                ======================

Liabilities and Stockholders' Equity:
Current Liabilities
 Accounts Payable                                    3,770      2,203
 Other Current Liabilities                           4,559      4,358
 Current Portion of Long Term Debt                   4,968      2,481
                                                ----------------------
Total Current Liabilities                           13,297      9,042
Long-Term debt                                          54      2,533
Other Non Current Liabilities                          541        809
                                                ----------------------
                                                    13,892     12,384
Total Stockholders' Equity                          14,306     11,833
                                                ----------------------
Total Liabilities and Stockholders' Equity      $   28,198 $   24,217
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