Good day, and welcome to the Acme United Corporation's Q2 2024 earnings. At this time, I would like to turn the call over to Walter Johnson, Chairman and CEO. Please go ahead, sir. Good morning. Welcome to the second quarter 2024 earnings conference call for Acme United Corporation. I am Walter C. Johnsen, Chairman and CEO. 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 and high interest rates. 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 filings with the Securities and Exchange Commission and in our current earnings release. Thank you, Paul. Acme United had good performance in the second quarter of 2024. Our sales increased 4% to $55.4 million, and net income increased 29% to $4.5 million. Our earnings per share were $1.09, compared to $0.96 in the second quarter of 2023, an increase of 14%. The company's net sales increased 8% in the second quarter without the impact of the hunting and fishing product lines. As you may remember, this business had about $12 million in revenues in 2022 and was sold in November 2023 for nineteen point eight million dollars. We used the proceeds to pay down debt and to position the company for growth and acquisitions in our core businesses. Our organic growth of 8% in the second quarter of 2024 was due to market share gains and successful new product introductions. In the first aid product segment, we shipped new kits to a large drugstore chain in the United States, broadened our product offerings at a large industrial distributor, and expanded the customer base for our Med-Nap alcohol wipes and lens cleaners. Sales of the Westcott products increased due to shipments of new craft cutting tools to a large mass market retailer, market share gains in the craft channel, and good back-to-school sales. Our DMT product line continued to benefit from a large rollout of kitchen knife sharpeners to a major mass market retailer in the United States. Our First Aid Central business in Canada has continued to grow through its web activities, cross-selling of multinational distributors and retailers from the U.S., and successful product placement of our Westcott products in the school and office products. The Hawktree acquisition that we completed in September 2023, has helped expand the first aid product line in Canada to address injuries from fires, floods, and earthquakes, and its performance is exceeding our expectations. This quarter, we moved into our new physical footprint in Canada, which is a modern 64,000 sq ft facility near Montreal. In late May 2024, we acquired Elite First Aid for $6.1 million. Elite produces first responder kits, which contain items to treat serious bleeding, airway obstructions, and trauma. The product line will be introduced across our entire first aid customer base and represents a further step in our capabilities to save lives. We have continued to invest in new equipment to improve productivity at our operations. We've installed new equipment to automate filling of some unitized kits for first aid and are now using warehouse management software to reduce the costs to pick and ship products. We plan to install robotics to fill boxes of lens wipes and prep pads at Med-Nap in the third quarter. We are currently installing new high-density racking in our 345,000 sq ft facility in Rocky Mount, North Carolina. When completed, it is expected to increase capacity by about 25% and improve the efficiency of picking orders. This is the first step in further pick-by-wave efficiencies. As we look to the remainder of 2024, we see continued organic growth. We are actively evaluating acquisitions and are optimistic about the year. I will now turn the call to Paul. Acme's net sales for the second quarter were $55.4 million compared to $53.3 million in 2023, an increase of 4%. Excluding the impact of the Camillus and Cuda hunting and fishing product line sold on November 1, 2023, sales for the second quarter of 2024 increased 8%. Sales for the six months ended June 30, 2024, were $100.4 million compared to $99.2 million in the same period in 2023, an increase of 1%.... excluding the impact of Camillus and Cuda, sales increased 5%. Net sales, excluding Camillus and Cuda in the U.S. segment, increased 10% in the second quarter due to market share gains with first aid, Westcott craft products, and DMT sharpeners. Excluding Camillus and Cuda, sales increased 6% for the six months ended June 30. Net sales, excluding Camillus and Cuda in Europe, increased 9% in local currency for the quarter and 8% for the six months ended June 30. The sales increase for both periods was mainly due to market share gains in the office channel. Net sales, excluding Camillus and Cuda in local currency for Canada, decreased 4% in the quarter and 2% for the year-to-date, mainly due to a decline in sales of school and office products. The gross margin was 40.8% in the second quarter of 2024, compared to 37.5% in 2023. The gross margin was 39.9% for the first six months of 2024, compared to 36.6% in 2023. The higher gross margin for both periods was mainly due to productivity improvements in our manufacturing and distribution facilities. SG&A expenses for the second quarter of 2024 were $16.3 million, or 29% of sales, compared with $14.8 million, or 28% of sales, for the same period of 2023. SG&A expenses for the first six months of 2024 were $31 million, or 31% of sales, compared with $29 million, or 29% of sales, in 2023. Interest expense for the second quarter of 2024 was $540,000, compared to $830,000 in the second quarter of 2023. The decrease was due to lower average debt of approximately $18 million. Net income for the second quarter of 2024 was $4.5 million, or $1.09 per diluted share, compared to a net income of $3.4 million, or $0.96 per diluted share for the same period of 2023, an increase of 29% in net income and 14% in earnings per share. Net income for the first six months ended June 30, 2024, was $6.1 million, or $1.47 per diluted share, compared to $4.4 million, or $1.25 per diluted share in the comparable period last year, increases of 37% and 18%. The company's bank debt, less cash on June 30, 2024, was $33 million, compared to $48 million on June 30, 2023. During the twelve-month period, we purchased the assets of Elite First Aid for $6.1 million, paid $2.1 million in dividends, and generated $8.5 million in free cash flow. Additionally, the $13 million of net proceeds from the sale of the Camillus and Cuda product lines was used to reduce debt. Thank you, Paul. I will now open the call to questions. Thank you. We will now be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we pull for questions. Thank you. Our first question comes from the line of Tim Call with Capital Management Corporation. Please proceed with your question. Well, congratulations on another good quarter. All the hard work's paying off. Thank you, Tim. SG&A is growing a little bit faster than the sales. It's up around 9 or 10%. Do you think in future years, SG&A will grow slower than sales? Well, I don't have a good understanding of why that increased, Tim. It may have been because we accrued some bonuses because the team's performing well. But I think in general, the SG&A should be declining with sales, and I think for the year, you'll probably see that. Yeah, you'll probably see it a little bit below 31%. Some of it's just timing differences and cost of living, some investments in IT. But we're not, we're not gonna grow that much in SG&A relative to sales. Do you think you'll facilitate some employee stock option cash outs in the years ahead and lower the fully diluted share count? Yes, Tim. That's our intent. And, I think that, because the company has, a much stronger balance sheet than it's had, essentially from the, sale of Cuda and Camillus, and, of course, the cash flow from the business, we will be, buying some of those options when it comes time for them to be, cashed out. You have a great history of accretive acquisitions, nice tuck-in acquisitions, and the initial cash out for Elite First Aid of $6.1 million for $4.2 million of annual sales, trailing, looks pretty nice. Do you think there will be a lot of cross-selling opportunity where you'll pick up new clients from them, and, and you'll be able to sell their goods to your existing products and clients? Thanks, Tim. I think that's a very perceptive question. The Elite First Aid trauma kits are high-performance kits. They're the ones that medics would be taking to a serious accident, and they deal with life-saving measures. So it was a hole in our product line. And when I said in the conference call that we intend to expand it to our distribution base, we hope that happens. And the reason for that is because those products save lives. It's not for cuts and bruises and scrapes. It's for trauma, it's for serious bleeding, it's for airway obstructions. And Elite First Aid has a very well-established product family and a great reputation. So when we acquired it, and it's very similar to many of the acquisitions we do, we try to leverage our distribution channels, and in this case, we have a hole in the product line, and it really does something. So I'm excited about it. Regarding other similar kinds of deals, I can just tell you that we're constantly looking, and the strategy is pretty simple: buy competitors or buy companies that are half a step away and buy companies to vertically integrate, making the components like Med-Nap and Spill Magic, for use in the components and within our customer base. And there are plenty of opportunities for those, and we're looking at them. We have organic sales growth and growth from acquisitions, and you have profit margin expansion, and it sounds like you've set the company up for a tremendous long-term growth potential. Well, yeah, to be honest, you know, there's always things on the horizon. There's the economy, there's container costs go up, and they go down. And, you know, sometimes you have some expenses that you don't expect. But the organic growth that we demonstrated this quarter should start to become, we hope, larger and more apparent in the coming quarters when we don't have the comparison with Cuda and Camillus. And then, of course, you're getting the growth from the acquisitions that it takes time to get the products placed, but when they do, they should be meaningful. It looks like you're in a strong position. I'm looking forward to your future quarters. Congratulations. Thank you, Tim. Thank you. Our next question comes from the line of Jeffrey Matthews with RAM Partners. Please proceed with your question. Thanks. I have a few. Number one, from Paul's disclaimer up front, he mentioned continued high inflation and supply chain disruptions. Were those just pro forma, these could happen, or are you still seeing high inflation, and do you still see supply chain disruptions? Well, with inflation, there clearly is salary increases for our team, and that's continuing. With container costs, they have increased since the beginning of the year, and it now appears that they're starting to decrease again, although you can't forecast container prices, but they've gone up a little bit. In general, neither of them are serious issues, but they're in the disclaimer because it's happened and we wanted to be complete. Sure. How did the Elite acquisition come about? I know the Canadian one was more of a, they were Chapter 11, or they were in real trouble. How did this one come about? So we regularly contact companies that are interesting to us, and we've been doing this for 15 years. So there's a pretty large database of companies that we've contacted. And as you may know, most of our transactions are self-generated without investment bankers because we- Right ... are constantly in the market. In the case of Elite, the CEO reminded me that the first time we talked was in 2019. So I know exactly what happened. They had a price in mind, and they weren't big enough for us to pay the price, and then they grew. In our regular contacts and communications, we talked to them again at the end of last year, and it just made a lot of sense for everybody, so we did it. Do they stay on, or, or is this something you have to reengineer yourself? Yes. The founder is staying on, and his son is going to have a very good role and an important role in our company. And both of them are very, very terrific people who really know the product lines and the supply base, so it's fun working with them. That's great. Great. And then on the flip side, the Canadian acquisition, which was pretty messy when you bought it, it sounds like that's getting up to speed. What have been the main things you've had to do to get it there? ... So for those that don't know, we purchased Hawktree Solutions in September 2023. It was in administration, and we bought it for $1.3 million of inventory for $1 million. So we bought it at a discount. And with that came the license for the Canadian Red Cross and the customer base and of course, the inventory and all the intellectual property. So when you have a situation like that, you have limited downside, but there's a lot of work to get upside. And the upside, first, you've got to get the product out of wherever it is in a warehouse and into your own. You've got to get your product numbers properly aligned. You've got to reassure customers, and for good reason, because the service was not good in the bankruptcy, and we have excellent customer service. And then you've got to go out and see the customers, work through the issues with lack of delivery or filling out product families that again, in a bankruptcy, the inventory is not even. So you might have three-quarters of a kit, but it's not the whole kit, because they took the parts that were in one kit and put it into another one to ship it. And so there was a lot of rework to get it right. Okay, so that's a lot of work, but you bought the company, and you bought the potential at a very good price. Where we are right now is we've got the product family, we've got an excellent relationship with the Canadian Red Cross, and we've got a customer base that in some cases overlapped with our Canadian business, and in other cases, they were new customers. We're shipping them and building off them and supporting them with new products from the First Aid Central and Acme United product line. As we're looking back on it, it was a lot of work in the six months after the acquisition, and right now we're on the side of momentum, and it's terrific. Great. And I have three more. The sale of Cuda and Camillus, now that that's in the rearview mirror, has selling those product lines had any other impact on operating the business as far as things that are less distracting to your management time? The Cuda and Camillus business was a really fun business, and when you talk about distracting management time, I like to use the products, and I like to be out there with the people that use them. And we spent probably a disproportionate amount of time working on the product family, but it was fun. And I would say that we're now more focused for sure on the core businesses, and we put Cuda and Camillus into hands that were able to leverage it, and we weren't able to do that. We had a platform of $12 million, and we were pretty much flat because we didn't have the distribution base in hunting and fishing the way GSM does. I'm really proud because they have taken it, and it's becoming a real force in the hunting and fishing area. Right. I think it was an excellent acquisition for them. Yes, it did focus us, although I miss the product family. I remember testing the product on the dock, Walter. Yes. Two more. Paul, Paul, I think, said something, used the number of 39 regarding SG&A, and I wasn't sure what that meant. Is that $39 million a year or 39% of something? I didn't hear that. Paul, what was the number that you said? Maybe I got it wrong. Yeah, I wouldn't have—I definitely didn't say 39. I did. I said $31 million. Oh, oh, okay. 31% or $29 million and 29%. 29. Okay. Okay. Yeah, definitely not 39. Okay. And is that an annualized kind of idea, or? No, that's a year to date. That's a six-month number. Got it. Okay. So what I'm trying to figure out here is gross margin of 40% in the quarter. Walter, I always remember back in the day when you were shifting production to China and cost of manufacturing was going down. I recall gross margins getting up to 45%. Is that a target or are we... Is 40% kind of the plateau going out, you think, for gross margins? Well, I wouldn't model us increasing the gross margin, and let's be conservative on that. But as we continue to sell more first aid, they tend... The products tend to have higher gross margins, and the refills have substantially higher margins, and that's the fastest growing part of the business. So there will be a natural tendency to increase the gross margin over time, but I wouldn't model anywhere near 45. Got it. Thanks very much. I really appreciate it, and congratulations and best of luck going forward. Thank you, Jeff. Thank you. There are no further questions at this time. I would like to turn the floor back over to Mr. Johnson for closing comments. Thank you much, very much for joining us. If there are no further questions, this call is complete. I look forward to updating you again in the third quarter. Have a good day.