Long-Term Debt and Stockholders' Equity |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Long-Term Debt and Stockholders' Equity | 8. Long-Term Debt and Stockholders’ Equity Long-term debt consists of (i) borrowings under the Company’s revolving loan agreement with HSBC Bank USA, N.A.(“HSBC”) and (ii) amounts outstanding under the fixed rate mortgage on the Company’s manufacturing and distribution facilities in Rocky Mount, NC and Vancouver, WA. Effective as of June 26, 2025, Acme United Corporation (the “Company”) entered into Amendment No. 11 to the Revolving Loan Agreement dated as of April 5, 2012, as amended (the ”Loan Agreement”), between the Company and HSBC. Amendment No. 11 extended the scheduled maturity of the $65 million dollar secured revolving credit facility under the Loan Agreement to May 31, 2027. The terms of the Loan Agreement otherwise remain unchanged. The Loan Agreement provides for borrowings of up to $65 million which presently bears interest at Secured Overnight Financing Rate (“”) plus a margin of +1.70%; interest is payable monthly. The Company must pay a facility fee, payable quarterly, in an amount equal to one eighth of one percent (.125%) per annum of the average daily unused portion of the revolving credit line. The facility is intended to provide liquidity for operating activities, growth, acquisitions, dividends and share repurchases. Under the revolving loan agreement, the Company is required to maintain a specific ratio of funded debt to EBITDA, a fixed charge coverage ratio and must have annual net income greater than $0, measured as of the end of each fiscal year. As of December 31, 2025, the Company was in compliance with the covenants under the Loan Agreement as then in effect. As of December 31, 2025, $11,863,085, excluding net deferred financing cost of $10,299, was outstanding and $53,136,915 was available for borrowing under the Company’s revolving loan agreement. The Company’s manufacturing and distribution facilities in Rocky Mount, NC and Vancouver, WA were financed by a fixed rate mortgage with HSBC Bank, N.A. at a fixed interest rate of 3.8%. The Company entered into the agreement on December 1, 2021. Commencing on January 1, 2022, payments of principal and interest are due monthly, with all amounts outstanding due on maturity on December 1, 2031. Long-term debt associated with the mortgage consisted of the following at December 31, 2025 and 2024:
Minimum annual mortgage payments are due as follows: 2026 - $454,112; 2027 - $471,948; 2028 - $489,510; 2029 - $509,713; 2030 - $529,733 and thereafter - $7,520,571. As of December 31, 2025, the Company has pledged certain assets as collateral for its debt obligations under its revolving loan agreement with HSBC Bank, N.A. The collateral consists of all inventory, property, plant, equipment, and accounts receivable. The Company believes that the collateral provided is sufficient to secure the related debt. The carrying value of the Company’s bank debt is a reasonable estimate of fair value, which uses Level 3 inputs, because of the nature of its payment terms and maturity.
On November 14, 2019, the Company announced a Common Stock repurchase program of up to a total of 200,000 shares. The program does not have an expiration date. During the years ended December 31, 2025 and 2024, the Company did not repurchase any shares of its Common Stock. As of December 31, 2025, a total of 160,365 shares may be purchased in the future under the repurchase program. |
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