Q2 2025 Acme United Corp Earnings Call
Operator: Corporation.
Operator: 2025 financial results.
Walter Johnsen: At this time, I would like to turn the call over to Walter Johnsen, Chairman and CEO. Good morning. Welcome to the second quarter 2025 earnings conference call for Acme United Corporation. I am Walter C. Johnson, Chairman and CEO.
Good day and welcome to the Acme United Corporation, second quarter, 2025 Financial results conference call. At this time, I would like to turn the call over to Walter Johnson, chairman and CEO. Please go ahead, sir.
Good morning.
Paul Driscoll: With me is Paul Driscoll, our Chief Financial Officer, who will first read a Safe Harbor Statement. Paul? Forward-looking statements in this conference call, including without limitation. Statements related to the company's plans, strategies, objectives, expectations, intentions and adequacy of capital and other 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, among others, those arising as a result of a challenging global macroeconomic environment characterized by continued high inflation, high interest rates, and the imposition of new tariffs or changes in existing tariff rates.
Welcome to the second quarter 2025 earnings conference. Call for Acme United Corporation. I am Walter C, Johnson, chairman and CEO with me, is Paul Driscoll. Our Chief Financial Officer. Will first, read a safe harbor statement.
Paul, we're looking statements in this conference call including without limitation.
Statements related to the company's plan strategies, objectives, expectations, intentions and adequacy of capital and other resources are made pursuant to the safe harbor, provisions of the private Securities. Litigation Reform, Act of 1995.
Paul Driscoll: In addition, we have experienced supply chain disruptions. And we may experience these disruptions in the future. We are also subject to additional risks and uncertainties. as described in our periodic filing.
Investors are cautioned that such forward-looking statements involve risk and uncertainties, including among others. Those arising as a result of the challenging, global macroeconomic environment, characterized by continued High inflation, High interest rates, and the imposition of new tariffs or changes in existing tariff rates. In addition, we have experienced supply chain disruptions and we may experience these disruptions in the future.
We also subject to additional risk and uncertainty.
As described in our periodic filings.
Paul Driscoll: Securities and Exchange Commission, and in our current earnings release.
With the Securities and Exchange Commission and in our current earnings release.
Walter Johnsen: Acme United had an excellent second quarter of 2025, setting a quarterly record for earnings. This, of course, excludes the one-time gains from the forgiveness of the PPP loan in 2021 and the sale of the CUDA and Camillus businesses in 2023. Our netted sales in the quarter were $54 million, compared to $55.4 million in 2025. Net income in the quarter was $4.8 million compared to $4.5 million and earnings per share were $1.16 versus $1.09.
Thank you, Paul.
Speaker Change: Acme. United had an excellent second quarter of 2025 setting. A quarterly record for earnings
Speaker Change: 25.
Speaker Change: net income in the quarter was 4.8 million compared to
Walter Johnsen: The market environment was particularly challenging due to terror. As you may remember, our last ten acquisitions have been manufacturers in the United States and Canada. So our reliance on imported items is much less than some of our competitors. When tariffs on goods imported from China were raised to 145% Our customers, who planned to directly import our products, cancelled their orders that were scheduled to ship. They appear to have determined that using existing stocks, substituting items, or even having empty shelves were more attractive than losing money on the product. They canceled and delayed orders, which reduced our sales.
Speaker Change: 4.5 million and earnings per share. Were a16 versus a19.
Speaker Change: The market environment was particularly challenging due to tariffs.
Speaker Change: As you may remember, our last 10 Acquisitions have been manufacturers in the United States and Canada.
Speaker Change: So, our Reliance on imported items is much less than some of our competitors.
Speaker Change: When tariffs on Goods imported from China were raised to 145%.
Our customers who plan to directly import our products canceled, their orders that were scheduled to ship.
They appear to have determined that using existing stocks substituting items or even having empty shelves, will more attractive than losing money on the products.
Speaker Change: They canceled and delayed orders.
Walter Johnsen: Acme had built extra inventory during late 2024 and early 2025. We were prepared for the tariff. But we did not anticipate tariffs as high as 145%. We too stopped importing items to the United States, but we continued producing and storing the finished goods at our factories in China. We supplied our regular Westcott customers from domestic inventory and tried to help when they ran out of private label products. However, we did not accept large, unplanned orders, which would have reduced our ability to meet regular customer requirements. We work with our suppliers to reduce costs. took advantage of operating efficiencies and increased our selling prices moderately.
Speaker Change: Which reduced our sales.
Speaker Change: Acne had built extra inventory during late 2024, and early 2025.
Speaker Change: We were prepared with a tariffs.
Speaker Change: But we did not anticipate tariffs as high as 145%.
Speaker Change: We too stopped importing items to the United States but we continued producing and storing the finished goods at our factories in China.
Speaker Change: We supplied our regular Westcott customers from domestic inventory, and tried to help when they ran out of private label products. However, we did not accept large unplanned orders, which would have reduced to our ability to meet regular customer require requirements.
Walter Johnsen: Our products that we import are currently priced appropriately for the present 30% tariff on Chinese goods. We're also shifting production from China to other locations, including Malaysia, Thailand, Vietnam, Egypt, and our own factories. We intend to continue to supply our customers with the best total costs, including tariffs, and to maintain excellent service. Our factories in the United States have benefited from the increased tariffs. Our MedNap facility in Brooksville, Florida, is producing alcohol and BZK wipes, Castile soap, and other first aid items at record levels. Our Vancouver, Washington, and Rocky Mountain, North Carolina, plants that produce first aid kits are running at full speed.
Speaker Change: We work with our suppliers to reduce costs took advantage of operating efficiencies and increased our selling prices. Moderately, our products that we import are currently priced appropriately for the present, 30% tariff on Chinese Goods.
Speaker Change: We're also shifting production from China to other locations including Malaysia Thailand, Vietnam, Egypt and our own factories.
Speaker Change: We we we intend to continue the supply of our customers with the best total cost including tariffs and to maintain excellent service.
Speaker Change: Our factories in the United States have benefited from The increased tariffs.
Our midnight facility in Brooksville Florida, is producing alcohol. And bzk wipes, Castile, soap and other first aid items at record levels.
Walter Johnsen: Our Spill Magic spill cleanup plants in Santa Ana, California, and Smyrna, Tennessee, are running multiple shifts.
Walter Johnsen: Last week, we purchased a new facility for Spill Magic in Mount Pleasant, Tennessee for approximately $6 million. The plant is 77,000 square feet on 12 acres and has room for expansion. We start production there in the first quarter of 2026.
Speaker Change: Our Vancouver Washington and Rocky Mount North Carolina, plants that produce first aid kits are running at full speed, our spill magic, spill, cleanup plants in Santa, Ana, California and Smyrna. Tennessee are running, multiple shifts.
Speaker Change: Last week, we purchased a new facility for spill magic in Mount Pleasant Tennessee. Approximately 6 million dollars.
Walter Johnsen: While the second quarter was very challenging, I would like to thank our team for managing the tariff disruptions, working with our customers to meet their supply requirements, and executing well. They turned a challenge into an opportunity.
Speaker Change: The plant is 77,000 square feet on 12 acres and has room for expansion. We start production there in the first quarter of 2026,
Walter Johnsen: As we look at the rest of the year, we anticipate growth and continued earning strength. We believe there will be opportunity to gain share in the Westcott cutting tools and our first aid business, particularly in the retail and industrial markets due to our low total costs and supply chain diversification.
Speaker Change: While the second quarter was very challenging, I would like to thank our team for managing the Tariff disruptions working with our customers to meet their supplier requirements and ex and executing. Well they turned a challenge into an opportunity.
Speaker Change: As we look at the rest of the year, we anticipate growth, and continued to earning strength.
Paul Driscoll: I will now turn the call to Paul. Acme's net sales for the second quarter were $54 million compared to $55.4 million in 2024, a decrease of 3%. Sales for the six months ended June 30, 2025, were $100 million compared to $100.4 million in the same period in 2024.
Paul Driscoll: We believe there will be opportunity to opportunity to gain share in the Westcott, cutting tools and our first aid business, particularly in the retail and Industrial markets due to our low total costs and supply chain diversification. I will now turn the call to Paul
Paul Driscoll: Net sales in the U.S. segment decreased 6% in the second quarter due to the cancellation of some back-to-school customer orders as a result of exceptionally high tariffs in April and May. Additionally, there was a large initial order of new kitchen sharpeners to a major mass market retailer that took place in the second quarter of 2024. Sales decreased 2% for the six months ended June 30. Net sales in Europe decreased 6% in local currency for the quarter and 6% for the six months ending June 30. The sale decrease for both periods was mainly due to the timing of shipments.
Acne is net sales for the second quarter of 54 million compared to 55 million. 55.4 million in 2024, a decrease of 3% sales for the 6 months ended June 30th, 2025 were 100 million compared to 100.4 million in the same period in 2024. That sales in the US segment, decreased 6%, in the second quarter due to the cancellation of some back to school customer orders as a result of exceptionally High, tariffs in April, and May additionally, there was a large, initial order of new kitchen, sharpeners, to a major Mass Market retailer that took place in the second quarter of 2024.
Paul Driscoll: We expect growth in the third quarter. Net sales in local currency for Canada increased 28% in the quarter and 21% for the year-to-date mainly due to higher sales of first-stage products. The gross margin was 41% in the second quarter of 2025 and 2024. Gross margin was 40% for the first six months of 2024 and 2024. for 2025 and. SG&A expenses for the second quarter of 2025 were $15.8 million or 29% of sales compared with $16.3 million or 29% of sales for the same period of 2024. The lower SG&A in the quarter was due to cost savings and reduced discretionary spending.
Paul Driscoll: Local currency for Canada, increased 28% and a quarter and 28 21% for the year to date, mainly due to higher sales of first aid products.
Paul Driscoll: The gross margin was 41% in the second quarter of 2025 and 2024. Gross margin was 40% for the first 6 months of 2024 and 202.
Paul Driscoll: SG&A expenses for the first six months of 2025 were $31.3 million or 31% of sales compared with $31.1 million or 31% of sales in 2024. Net income for the second quarter of 2025 was $4.5 million. 8 million dollars, or $1.16 per diluted share, compared to a net income of $4.5 million dollars, or $1.09 per diluted share, for the same period of 2024, an increase of 7% in net income and 6% in earnings per share. Net income for the first six months, and in June 30, 2025, was $6.4 million dollars, or $1.57.
4 2025 and 254 sgna expenses for the second quarter of 2025 were 15.8 million or 29% of sales compared with 16.3 million or 29% of sales for the same period of 2024. The lower sgna, the quarter was due to the cost savings and reduced discretionary spending sgna expenses, for the first 6 months of 2025 or 31.3 million or 31% of sales compared with 31.1 million or 31% of sales in 2024
Paul Driscoll: Net income for the second quarter of 2025 was 4.8 million or $6.16. But for a diluted share compared to a net, income of 4.5 million, or a $1.99 per diluted share for the same period of 2024 and increase of 7% and net income and 6% and earnings per share, net income for the first 6 months, and the June 30th 2025 was 6.4 million or a $157.
Paul Driscoll: Seniors, Mark Bailey, Companies banked at less cash on June 30th, 2025 was $23 million compared to $33 million on June 30th, 2024. During the 12-month period, we paid $2.0 million in dividends and generated approximately $12 million in free cash flow.
Paul Driscoll: Cents per diluted share compared to 6.1 million or 1.47 cents per diluted share in the comparable period last year increases of 5% and 7%.
Paul Driscoll: The company's Bank debt less cash on June 30th, 2025 was 23 million compared to 33 million on June 30th. 2024, during the 121 period, we paid 2 million dollars in dividends and generated approximately 12 million dollars in free cash flow.
Operator: I will now open the call to questions. We'll now be conducting a question and answer session. If you would like to ask a question, please press star 1. Confirmation tone will indicate your line is in the question queue. You may press star 2 to remove your question from the queue.
Speaker Change: Thank you, Paul. I will now open the call to questions.
Operator: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.
Speaker Change: Thank you. We'll now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. The confirmation tone will indicate your line is in the question queue. You may press star 2 to remove your question from the queue. For participants using speaker equipment, may be necessary to pick up your handset before pressing the star keys.
Jim Morrone: Our first question is from Jim morrone with singular research.
Jim Marrone: Good afternoon gentlemen, job well done on the supply management and working the inventory in your supply chains. I would imagine that resulted in a small decrease in the top line of 3% and an increase in your net income as a result. But my question, then, is... You know, if the results were tempered as a result of the, you know, inventory management and your other... Cost Strategies.
Jim Morrone: Yes, good afternoon, uh, gentlemen and uh, well job, well done on the uh, Supply management and working the inventory in your, your supply chains. And I would imagine that, um, resulted in, you know, a small decrease in the top line of 3% and a, uh, an increase in your net income, um, as a result. Um, but my question then is,
Jim Morrone: you know, if if uh,
Jim Morrone: the results were tempered, as a result of the, uh, you know, Inventory management and your other, um,
Jim Marrone: What can you expect going forward for the third and fourth quarter? Now you said that you anticipate growth, but could you provide any quantitative guidance? Do you expect a revenue decrease as well as earnings decrease for the third quarter and fourth quarter?
Jim Marrone: I'll anticipate your answer and then I'll have a follow-up question.
Speaker Change: cost strategies. What can you expect going forward for the third and fourth quarter? Now you, you you said that you, uh, anticipate growth but can you can you provide any, uh, quantitative guidance, do you expect, uh, a revenue, uh, decrease as well as uh earnings decrease for the third quarter and fourth quarter. Um um I'll uh anticipate your uh
Walter Johnsen: Well Jim, that's a very good question and there were a number of programs that were delayed in the second quarter because the customers frankly did not want to import them at 145% tariff. and then Lewis Monning. So, some of them will probably come into the third and fourth quarters as... as the inventory that's currently on hand is used up. But it's a very tricky thing because during that period, many retailers and all of the buyers were focused on one thing, get me product, get it cheap, what price and where. The last thing they were thinking about was what will they sell in October, November, It was a scramble for here and now, and you may remember that many customers were shipping to bonded warehouses, shipping to Canada, going to places that you'd never dream of in order to hold stock, and we did some of that.
Your answer and then I'll have a follow-up question after that.
Jim Morrone: Well Jim that's a very good question. And um there were a number of programs that were delayed in the second quarter because the customers frankly did not want to import them at 145% tariff.
Speaker Change: And then lose money.
Um, so some of them will probably come into the um third and fourth quarters as
Speaker Change: As the the inventory that's currently on hand is used up. But it's a very tricky thing because during that period, many retailers and all of the buyers were focused on 1 Thing, get me Product, get it cheap, what price and where the last thing they were thinking about was what will they sell in October or November December? Um,
Speaker Change: it was a Scramble for here and now and um you may remember that many um, customers were shipping to Bonded, warehouses shipping to Canada, going to places that you'd never dream of
Walter Johnsen: But it was... It was, in many ways, chaotic for our customers, particularly because they have planned programs that are slotted and some of them, when they cancel, don't get repeated. We also have a concern about demand, not for our products. I mean, I don't think our prices were particularly aggressively increased because we had other ways to offset price. But in general, there's something of a price increase. across the board for many items, and it may reduce some customer spending. We don't know that. But what we do know is that we have adequate stock at good values today.
Speaker Change: Um, in order to hold stock. Um, and we did some of that but it was
Are slotted and some of them when they canceled, don't get repeated. Um, we also have a concern about um demand not for our products. I mean I don't think our prices were particularly um aggressively increased because we had other ways to offset price, but in general, there's something of a um a price increase
Walter Johnsen: We're working with our customers on recovering programs that were delayed, and we're looking for growth in the third and fourth quarters, not declines, growth and sales. Again, we can't forecast what actually happens with demand, but so far we haven't seen a big falloff.
Speaker Change: Across the board for many items and it may reduce some customers spending. We don't know that but what we do know is that we have adequate stock at good values today we're working with our customers on recovering programs that were delayed and we're looking for growth in the third and fourth quarters not declines growth in sales. Um again we can't forecast. What actually happens with demand but
Jim Marrone: I hope that helped a little bit.
Speaker Change: So far, we haven't seen a big fall-off.
Jim Marrone: I look forward to hearing your answer to that.
Walter Johnsen: Well, we just raised our dividend, and we just generated $12 million of free cash flow in the last... Paul Driscoll, Walter Johnsen, Jim Marrone, Peter Mork, Acme United, Acme United, Acme Inc. One competitor... had a disastrous quarter. and I don't know what they were doing or why they were doing it, but it was a complete disaster. We'll be able to see more in the coming weeks, but I can tell you that we did a good job and we anticipated the tariffs and we managed our customers as well as we thought we could do. Others apparently did not.
Speaker Change: I hope that helped a little bit. Yeah, no, that's uh, provide some uh, visibility and uh, are you hearing anything from your competitors? Your peers, like, are they fairing better? Or are they fairing worse? And maybe if you can also talk about other strategies is potentially cutting the dividend. Is that a possibility? Um uh I look forward to hearing your answer to that.
Speaker Change: Well, we just raised our dividend and we we just generated 12 million dollars of free cash flow, um, in the last 12 months, which was a record. So, I mean, the dividend we're very comfortable with and frankly, our debt is at 22 million so it's down 11 or 23 million. It's down. Uh,
Speaker Change: 11 million in the past 6 months. So know the dividend we're fully expecting to to continue and the cash flow in the company's performance supports that um relative to other competitors.
Speaker Change: Um, 1, competitor.
Speaker Change: Had a disastrous quarter.
Speaker Change: And um, I don't know what they were doing or why they were doing it, but it was a complete disaster. Um it will be able to see more in the in the coming weeks but I can tell you that we did a good job and we anticipated the tariffs and we managed our customers.
As well as we thought we could do, um, others like apparently did not.
Jim Marrone: Yeah, thank you for your answers, Jim. Thanks, Jim.
Speaker Change: Yeah, thank you for your answers, gentlemen.
Thanks Jim.
Tim Cole: Now our next question is from Tim Cole with Capital Management.
No, our next question. From Tim call with Capital Management corporation.
Tim Cole: Congratulations on a strong quarter. Thanks, Tim. I know that the free cash flow pays down debt and lowers interest expense over time, but if the Fed, Federal Reserve, lowers interest rates later this year... Does that also help lower your interest expectancy? Oh, sure. Yeah, about 10. I'm guessing right now it's about $10.4 million of fixed mortgage for that's on our Vancouver, Washington. property and our Rocky Mountain, North Carolina property. And Paul, is that at 3.4% fixed? It's 3.8%. 3.8%. So the $10.3 million-ish is fixed. The remaining piece floats, and so that would be a benefit to us if rates were to drop.
Speaker Change: Congratulations on a strong quarter.
Speaker Change: Thanks Tim.
Speaker Change: Um,
Speaker Change: I know uh that that the free cash flow uh pays down debt and lowers interest expense over time but um If the Fed
Federal Reserve lowers interest rates later this year, uh, does that also uh, help lower your interest expense?
Speaker Change: Oh sure.
Speaker Change: Yeah. Um about 10 I'm guessing right now. It's about 10.4 million dollars of fixed mortgage. Um for that's on our Vancouver, Washington property and our Rocky Mount North Carolina property. And Paul, is that at 3.4% fixed, uh, it's it's 3.8%.
Speaker Change: 3.84 cents. So the 10.3 million is is um is fixed the remaining piece floats. And so that would be a benefit to us if um, rates were to drop.
Tim Cole: Great.
Walter Johnsen: And then with the Capacity constraints you've had in Spill Magic from growing it. It's good to hear. found a way to expand that capacity a great deal in the near future. Sometimes you have similar issues with certain healthcare lines. Are you experiencing that anywhere in healthcare and are you increasing productivity or? Expanding capacity in any of those areas. Well, in the MEDNAP facility in Florida, our revenues are up substantially and they clearly are stressed. We're running two shifts and we're working on new products and a lot of productivity improvements there. So . In the short term We're doing things like buying...
Speaker Change: Great. And then with the, uh,
Capacity, constraints. Uh, you've had a spill Magic from from growing it.
Speaker Change: Um, it's good to hear.
Speaker Change: You found a way to expand that capacity a great deal uh in the near future are
sometimes you have, uh, similar issues with with certain Healthcare lines, are you uh, are you experiencing that anywhere in healthcare and, and are you, uh, increasing productivity or uh,
Speaker Change: Expanding capacity in any of those areas.
Speaker Change: Well, in the, um, medapp facility in Florida. Um, our revenues are up substantially and, um, they clearly are are stressed. Um, we're running 2 shifts and, um, we're working on new products and a lot of productivity improvements there. Um, uh, so
Speaker Change: In the short term.
Walter Johnsen: portable trailers to move the office out of an area that we turned into production. We expanded our microbial lab by buying another portable trailer. Eventually, we'd like to get a permanent home that's larger in Florida for... the MEDNAP business. Medknap also, because it's a supplier of alcohol wipes and BCK wipes and alcohol prep pads, is pretty critical in the US medical industry, including the hospital area, where we think we have some real growth potential. And so we've been buying. major new pieces of equipment, including automation, to not only drive our costs down, but get more consistency in the product.
um, we're doing things like buying, um,
An area that we turned into production. We um, expanded our micro microbial lab by buying another. Um, portable trailer eventually would like to get a permanent home, that's larger in, um, in in Florida for
Speaker Change: The medmap business medmap also because it's a supplier of alcohol, wipes and bck wipes and alcohol prep pads. Um, is pretty critical in the US. Um, medical industry, including the hospital area where we think we have some real growth potential.
Speaker Change: um, and so we've been buying
Walter Johnsen: We're also making major investments in documentation at MedNap and training in preparation for what we hope is some business in the future with the hospital market at MedNap. Relative to Spill Magic, this facility that we bought gives it a permanent home, and there's a very big difference between a leased manufacturing facility, where you never know when you'll have a big price increase and you've got to move equipment, and over time, as you build out a factory, that equipment becomes Hopefully, bigger and better, and unfortunately, less mobile. So by buying the facility in Mount Pleasant, and I will be in Mount Pleasant tomorrow working on that project, we're really laying the groundwork for substantial material flow automation, packaging automation, and we're excited because we know we can drive productivity when we have our own facility and are able to make permanent installation.
Speaker Change: Major New pieces of equipment, including automation to not only drive our costs down, but get more consistency. In the product. We're ALS making major investments in, um, documentation, um, in mednet and training, um, in preparation for what we hope is, um, some business in the future. Um, with the hospital Market at medapp relative uh to still magic. Um this facility that we bought, gives it a permanent home and there's a very big difference between at least manufacturing facility where you never know, when you'll have a big price increase and you've got to move um, equipment and over time as you
Speaker Change: Build out a factory that equipment becomes.
Walter Johnsen: In other sites, for example, our Vancouver, Washington facility, we would love to expand, but the real estate values in Vancouver, Washington, which is just across the border from Portland, are very high. And although we've looked for a number of years to expand the facility, to date we haven't found an attractive enough value to allocate assets there, as opposed to elsewhere in the company. Our Rocky Mountain, North Carolina facility gained capacity in storage when we did the installation of new racking during the first six months of this year, and that's increased by about a third. We've recently installed automation there for packing bulk items into boxes for the medical business, and I would expect similar kinds of automation in Vancouver, Washington, and perhaps in our facility in Canada at First Aid Central.
Speaker Change: Hopefully bigger and better and unfortunately Less Mobile. So by buying the facility in Mount Pleasant and I will be in Mount Pleasant tomorrow um, working on that project. Um, we're really laying the groundwork for substantial material, flow automation, packaging automation. Um, and we're excited because we know we can drive productivity when we have our own facility and are able to make permanent installations.
Speaker Change: In other sites. Uh, for example, our Vancouver Washington facility, we would love to expand but the real estate values in Vancouver, Washington, which is just across the border from Portland are very high. And although we have looked for a number of years, to expand the facility to date, we haven't found um an attractive enough value to allocate assets there as opposed to elsewhere in the company.
Speaker Change: Our Rocky Mountain, North Carolina facility. Um, gained capacity um in storage when we did the
Walter Johnsen: As you may know, we doubled the space at First Aid Central during the past 12 months, and the business is growing and filling it very nicely. So the constraints on space we're managing, I think, adequately, perhaps well. The capital spending program continues to get more exciting because as we're generating savings, we're generating more cash to reinvest in more and stronger automation. So I'm excited about that.
Speaker Change: Installation of new racking, um, during the first, um, 6 months of this year and that's increased by about a third. Um, we've recently installed automation, there for packing bulk items into boxes, uh, for the medical business, uh, and I would expect, um, a similar kinds of Automation in Vancouver Washington and perhaps, in our facility in um, in Canada at first aid Central, as you may know, we doubled the space at first aid Central, um, during the past. Um,
Speaker Change: 12 months and the business is growing and filling it in very nicely. So the the, the the, the the the constraints on Space, um, were managing, I think adequately perhaps, well. Um, the capital, uh, spending program, um, continues to get more exciting because as we're generating, uh, savings. Would you generate more cash to reinvest in, um, more and stronger automation? So I'm excited about that.
Tim Cole: That sounds good. Congratulations again. Thanks, Jim.
Speaker Change: That sounds good. Congratulations again.
Speaker Change: Thanks Jim.
Georgi Vashenko: Our next question is from Georgi Vashenko with Freedom. Good afternoon.
Speaker Change: Our next question is from Georgie vashchenko with freedom broker.
Walter Johnsen: Could you please highlight which segment was mostly hurt by the tariff increase, frustrate or cutting? Well, the first aid business tends to be more regularly ordered by industrial accounts and retail accounts. And the Westcott cutting tool area has some seasons, for example, back to school. So when orders were canceled and programs were canceled in April and May, that directly impacted West Cop because Those products that we would have shipped for sale for back-to-school are no longer going to be available. It just can't. It was the Westcott side that was hit more significantly. Also on price increases, the first aid area, because we've got more of a production base in the United States than in Canada, we're able to be a lot more moderate in our price increases.
Georgie Vashchenko: Uh, good afternoon. Uh, could you please highlight uh, which segment was uh, mostly hurt by the Tariff increase first state or cutting in sharpening? Thank you.
Speaker Change: Well, the
Speaker Change: First Aid, business tends to be more regularly ordered by industrial uh, accounts and Retail accounts and the Westcott cutting tool area.
Speaker Change: Um, has some seasons for example, back to school.
Speaker Change: So when orders were canceled and programs were canceled in April and May that directly impacted Westcott because
Walter Johnsen: And although we've got productivity improvements and we did a lot of good things on Westcott, the volumes there were impacted more. The recovery will probably be stronger in Westcott, because as the stocks run down with the retailers. Assuming demand continues, they'll be buying.
Speaker Change: Is going to be available, just cancels. Um, it was the Westcott side that was hit. Um, more significantly. Uh, also on um, price increases the first date area because we've got more of a production base in the United States and in Canada. Um, we're able to be a lot more moderate in our price increases. Um, and although we've got productivity improvements and we did a lot of good things and Westcott. Um, the the volumes there were impacted more and of course,
Speaker Change: The recovery um will probably be stronger in Westcott because as the stocks run down with the retailers assuming demand continues.
They'll be buying.
Georgi Vashenko: Thank you, that's helpful. Thank you.
Oh, thank you. That's helpful.
Walter Johnsen: There are no further questions. Well, there were... Thank you very much.
Speaker Change: Thank you. There are no further questions, okay.
Speaker Change: I do the Walker Johnson.
Operator: If there are no further questions, this call is complete.
Walter Johnsen: I would like to thank you for joining us, and we look forward to delivering the best results we can in the coming quarters.
Operator: Goodbye.
Speaker Change: Uh, thank you very much. Um, if there are no further questions, this call is complete. I would like to thank you for joining us and we look forward to delivering the best results we can in the coming. Quarters. Goodbye.
Operator: This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.
Speaker Change: This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.