Acme United Releases President's Letter.

Business Editors

FAIRFIELD, Conn.--(BUSINESS WIRE)--April 5, 2001

ACME UNITED CORPORATION (ASE: ACU) released the President's letter to shareholders today. The complete text follows:

"Acme United made substantial business progress during the year 2000. The Company reported net income of $1.1 million compared to loss from continuing business of $156,000 in 1999. Earnings every quarter during the year were better than those of 1999.

"Net sales during 2000 were $34.4 million compared to $35.9 million last year, a decline of 4%. Most low margin, non-value added products have now been dropped from our lines or refreshed. We have driven cost out of nearly every functional area, and introduced economies of production to improve our gross margins.

"Our new product efforts have been effective. During the year, Acme introduced new Tagit! student scissors, rulers, staplers and staple removers, which incorporate our proprietary identification features. We expanded our safety product line with new first aid kits; hearing, eye and head protection; and ergonomic supports and braces. We are excited about our new product pipeline, and anticipate releasing a number of unique items during 2001.

"Customer service and logistics have received considerable attention during the year. We are pleased that we exceeded 98% on-time, single shipment delivery consistently throughout the year. Our performance during back-to-school when demands are at their peak was nearly flawless. During 2001, Acme will continue to invest in systems and training to build our value as a preferred supplier.

"The Company entered into key agreements with the largest school supply wholesaler in the U.S., the largest North American office supply dealer, the largest European office products distributor, and the largest superstore chain in North America. All these agreements go into full effect in 2001.

"During 2000, Acme signed a multi-year senior debt facility with Bank of America and refinanced its mortgage on the plant in Fremont, North Carolina. The Company has excess borrowing capacity and the liquidity to fund meaningful growth. We are delighted to report that Acme exceeded every loan covenant every quarter of the year.

"There were many cost saving initiatives that were completed during the year. The Company moved its headquarters to a more efficient facility. We closed the Goldsboro, North Carolina warehouse, sold machinery no longer needed, shifted production equipment to Asia and our German plant, and refurbished our Fremont facility. Anticipated cost savings from these moves exceed $400,000 annually. Our efficiency continues to improve, with headcount at year-end of 134 compared to 487 only 4 years ago.

"On the financial side in 2000, we:

- improved gross margin from 28%in 1999 to 35%.

- increased operating profit from $605,000 to $2.4 million.

- increased working capital to $8.5 million.

- improved book value to $2.25 per share.

- increased EBITDA from $1.9 million in 1999 to $2.8 million in 2000.

"I would like to recognize the ACME management and staff who accomplished their goals in 2001. We look forward with enthusiasm and confidence to 2001. Thank you for your continued support."

Acme United is one of the largest suppliers of cutting instruments, measuring devices, and safety and related products for consumers.

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 could be affected by the Company's ability to manage its growth and assets; and (III) other risks and uncertainties indicated from time to time in the Company's filings with the Securities and Exchange Commission.