SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    ---------
                                    FORM 10-Q
                                    ---------

           |X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                  For the quarterly period ended March 31, 1999

                                       OR

          |_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                 For the transition period from ______ to ______


                          Commission file number Q4823

                             ACME UNITED CORPORATION
                             -----------------------
             (Exact name of registrant as specified in its charter)
                           

         CONNECTICUT                                             06-0236700
         -----------                                             ----------
(State or other jurisdiction of                               (I.R.S. Employer
incorporation or organization)                               Identification No.)

75 Kings Highway Cutoff, Fairfield, Connecticut                    06430
(Address of principal executive offices)                         (Zip Code)

       Registrant's telephone number, including area code: (203) 332-7330

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports)  and  (2)  has  been  subject  to such  filing
requirements for the past 90 days. Yes |X| No |_|

Registrant had 3,377,488 shares  outstanding as of May 14, 1999 of its $2.50 par
value Common Stock.

<PAGE 2>
                             ACME UNITED CORPORATION
                                                                           Page
                                                                           ----
Part I -- FINANCIAL INFORMATION
  Item 1. Financial Statements
            Condensed Consolidated Balance Sheets..........................  3
            Condensed Consolidated Statements of Operations
               and Comprehensive Income (Loss).............................  5
            Condensed Consolidated Statements of Cash Flows................  6
            Notes to Condensed Consolidated Financial Statements...........  7
  Item 2. Management's Discussion and Analysis of Financial Condition
               and Results of Operations...................................  9

Part II -- OTHER INFORMATION
  Item 1. Legal Proceedings................................................ 12
  Item 2. Changes in Securities............................................ 12
  Item 3. Defaults Upon Senior Securities.................................. 12
  Item 4. Submission of Matters to a Vote of Security Holders.............. 12
  Item 5. Other Information................................................ 12
  Item 6. Exhibits and Reports on Form 8-K................................. 12
  Signatures............................................................... 13

<PAGE 3>
<TABLE>
                          PART I. FINANCIAL INFORMATION

                             ACME UNITED CORPORATION

                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (UNAUDITED)
                  (all amounts in thousands except share data)


                                                                   March 31       December 31
                                                                       1999              1998
                                                               ------------       -----------

<CAPTION>
<S>                                                               <C>               <C>      
ASSETS
Current Assets:
  Cash and cash equivalents.................................      $     549         $      40
  Accounts receivable, less allowance.......................          8,190             7,722
  Inventories:
     Finished goods.........................................          4,653             7,122
     Work in process........................................            810             1,240
     Raw materials and supplies.............................          3,206             4,907
                                                                  ----------        ----------
                                                                      8,669            13,269
  Prepaid expenses and other current assets.................          1,206               424
                                                                  ----------        ----------
          Total current assets..............................         18,614            21,455
                                                                  ----------        ----------

Property, plant and equipment:
  Land .....................................................            203               219
  Buildings.................................................          2,074             2,179
  Machinery and equipment...................................         13,446            16,216
                                                                  ----------        ----------
                                                                     15,723            18,614
  Less accumulated depreciation.............................         10,117            12,573
                                                                  ----------        ----------
                                                                      5,606             6,041
Other assets................................................            906               895
Goodwill, less accumulated amortization.....................            394               505
                                                                  ----------        ----------
            Total assets....................................      $  25,520         $  28,896
                                                                  ==========        ==========

            See notes to condensed consolidated financial statements.

<PAGE 4>
                             ACME UNITED CORPORATION

                CONDENSED CONSOLIDATED BALANCE SHEETS - continued
                                   (UNAUDITED)
                  (all amounts in thousands except share data)


                                                                   March 31       December 31
                                                                       1999              1998
                                                               ------------       -----------

LIABILITIES

Current Liabilities:
  Notes payable ............................................      $     853         $     882
  Accounts payable..........................................          3,589             4,422
  Other accrued liabilities.................................          5,011             3,590
  Current portion of long term debt.........................          2,736             8,944
                                                                  ----------        ----------
      Total current liabilities.............................         12,189            17,838
  Long term debt, less current portion......................          6,969             6,382
                                                                  ----------        ----------
       Total liabilities....................................         19,158            24,220
                                                                  ----------        ----------

STOCKHOLDERS' EQUITY

  Common stock, par value $2.50 :
    Authorized-4,000,000 shares;
    issued-3,482,495 shares in 1999
    and 1998, including treasury stock .....................          8,706             8,706
  Additional paid-in capital ...............................          2,233             2,233
  Retained-earnings deficit.................................         (2,623)           (4,380)
  Accumulated other comprehensive loss -
    translation adjustment..................................         (1,306)           (1,235)
  Treasury stock, at cost -105,007 shares...................           (648)             (648)
                                                                  ----------        ----------
      Total stockholders' equity............................          6,362             4,676
                                                                  ----------        ----------
        Total liabilities and stockholders' equity..........      $  25,520         $  28,896
                                                                  ==========        ==========
</TABLE>

            See notes to condensed consolidated financial statements.

<PAGE 5>
<TABLE>

                             ACME UNITED CORPORATION

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                         AND COMPREHENSIVE INCOME (LOSS)
                                   (UNAUDITED)
              (all amounts in thousands, except per share amounts)


                                                                          Three Months Ended
                                                                               March 31
                                                                         --------------------
                                                                        1999              1998
                                                                      --------          --------
<CAPTION>
<S>                                                                   <C>               <C>     
Revenues:
  Net sales...................................................        $  7,570          $  8,471
  Other income................................................             177                53
                                                                      --------          --------
      Total revenues..........................................           7,747             8,524
                                                                      --------          --------
Costs and expenses:
  Cost of goods sold..........................................           6,077             6,531
  Selling, general and administrative expenses................           1,868             2,036
  Interest expense............................................             358               338
                                                                      --------          --------
                                                                         8,303             8,905
                                                                      --------          --------
Loss from continuing operations before income tax benefit.....            (556)             (381)
Income tax benefit............................................             (14)               (5)
                                                                      --------          --------
Net loss from continuing operations...........................            (542)             (376)
Discontinued operations:
  Gain on sale of discontinued operations.....................           2,101               ---
  Income from discontinued operations.........................             198               284
                                                                      --------          --------
                                                                         2,299               284
                                                                      --------          --------
Net income (loss).............................................           1,757               (92)
Other comprehensive expense - foreign currency translation....             (71)              (12)
                                                                      --------          --------
Comprehensive income (loss)...................................        $  1,686          $   (104)
                                                                      ========          ========
Earnings (loss) per share:
  Continuing operations.......................................        $  (0.16)         $  (0.11)
  Discontinued operations.....................................            0.68              0.08
                                                                      --------          --------
  Net income (loss)...........................................        $   0.52          $  (0.03)
                                                                      ========          ========

Weighted average number of common shares
  outstanding- denominator per share computations.............           3,377             3,368
</TABLE>


            See notes to condensed consolidated financial statements.

<PAGE 6>
<TABLE>
                             ACME UNITED CORPORATION

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
                           (all amounts in thousands)

                                                                             Three Months Ended
                                                                                  March 31
                                                                            --------------------
                                                                           1999              1998
                                                                         --------          --------
<CAPTION>
<S>                                                                    <C>               <C>        
Operating activities:
  Net income (loss)...............................................     $    1,757        $      (92)
  Adjustments to reconcile net income to net cash used by
     operating activities:
    Gain on sale of  discontinued operations......................         (2,101)              ---
    Depreciation..................................................            236               263
    Amortization..................................................              3                 6
    Increase in deferred income taxes.............................            ---                28
    Gain on disposal of property, plant, and equipment............            ---                (3)

    Changes in operating assets and liabilities:
      Accounts receivable.........................................           (624)             (410)
      Inventories.................................................          1,743               255
      Prepaid expenses and other current assets...................            140              (425)
      Other assets................................................            (14)                3
      Accounts payable............................................           (800)              869
      Other accrued liabilities...................................         (1,209)             (692)
                                                                       ----------        ----------
        Net cash used by operating activities.....................           (869)             (198)
                                                                       ----------        ----------

Investing activities:
  Capital expenditures............................................           (242)             (647)
  Proceeds from sales of property, plant, and equipment...........            ---                44
  Proceeds from sale of  discontinued operations..................          7,156               ---
                                                                       ----------        ----------
      Net cash provided (used) by investing activities............          6,914              (603)
                                                                       ----------        ----------

Financing activities:
  Proceeds from long-term debt and credit arrangements............          1,786               767
  Payments on long-term debt and credit arrangements..............         (7,321)              ---
  Stock options exercised.........................................            ---                30
                                                                       ----------        ----------
      Net cash (used) provided by financing activities............         (5,535)              797
                                                                       ----------        ----------
Effect of exchange rate changes on cash...........................             (1)              ---
                                                                       ----------        ----------
Net change in cash and cash equivalents ..........................            509                (4)

Cash and cash equivalents at beginning of period..................             40                25
                                                                       ----------        ----------

Cash and cash equivalents at end of period........................     $      549        $       21
                                                                       ==========        ==========
</TABLE>

            See notes to condensed consolidated financial statements.

<PAGE 7>
              Notes to CONDENSED CONSOLIDATED Financial Statements

                                   (Unaudited)

Note 1 -- Basis of Presentation

     In the  opinion of  management,  the  accompanying  condensed  consolidated
financial  statements  contain all  adjustments  necessary to present fairly the
financial position, results of operations and cash flows. However, the financial
statements do not include all of the disclosures  normally required by generally
accepted  accounting  principles or those normally made in the Company's  annual
report on Form 10-K.  Please refer to the  Company's  annual report on Form 10-K
for the year ended December 31, 1998 for such disclosures. The condensed balance
sheet as of December 31, 1998 was derived from the audited financial  statements
as of that date.  The results of operations for the three months ended March 31,
1999 are not  necessarily  indicative of the results to be expected for the full
year.

     Because  the  Company has a loss from  continuing  operations  in the three
months  ended  March 31, 1999 and 1998,  the  weighted  average  number of stock
options  outstanding  were  anti-dilutive  and are  excluded  from the per share
calculations.


Note 2 -- Discontinued Operations

     On March 22, 1999 the Company sold its medical business  including customer
lists, inventory, and certain equipment for approximately $8,156,000 realizing a
gain of $2,101,000. The consolidated statements of operations for 1998 have been
reclassified to reflect the discontinuance of the medical business segment.

     The consolidated  statements of operations relating to the medical business
follow:

                                                  Three Months Ended
                                                       March 31
                                              ---------------------------
                                                1999              1998
                                              ---------         ---------


     Net sales..........................   $   2,101,000     $   2,574,000
     Costs and expenses.................       1,903,000         2,290,000
                                              ----------        ----------
     Income from operations.............   $     198,000     $     284,000
                                              ==========        ==========
     Earnings per share.................   $         .06     $         .08
                                              ==========        ==========


     Income taxes related to the medical business are not material.  As of March
31,  1999,  $1,000,000  due  relating  to the sale of the  Medical  business  is
classified with prepaid expenses and other assets.


Note 3 -- Contingencies

     The  Company  has  been   involved   in  certain   environmental   matters.
Additionally,  the Company has been involved in numerous legal actions  relating
to the use of certain latex products,  which the Company  distributes,  but does
not  manufacture.  The Company is one of many  defendants.  The Company has been
released from the majority of the lawsuits.  While a limited  number of lawsuits
remain,  they are still in  preliminary  stages and there is no  indication  the
Company's products were involved.  Based on information  available,  the Company
believes that there will not be a material adverse impact on financial position,
results of operations, or liquidity, from environmental and product liabilities,
either individually or in aggregate.

<PAGE 8>
         Notes to CONDENSED CONSOLIDATED Financial Statements- continued

                                   (Unaudited)

Note 4 -- Debt

     The company  has  short-term  lines of credit for its foreign  subsidiaries
which are  renewable at various  times  throughout  the  remainder of 1999.  The
aggregate  amount available under these lines is $1,029,000 of which $853,000 is
outstanding at March 31, 1999.

     Long term debt consisted of the following:

          (all amounts in thousands)

                                              March 31          December 31
                                                1999                1998
                                            ------------       ------------
          Notes payable:
            Refinanced..................    $     8,284        $     6,614
            Other.......................          1,421              8,712
                                              ----------         ----------
                                                  9,705             15,326
          Less current portion                    2,736              8,944
                                              ----------         ----------
                                            $     6,969        $     6,382
                                              ==========         ==========

     On March 22,  1999,  the  Company  used the  proceeds  from the sale of the
medical business to pay down $6,800,000 of outstanding debt.

     On April 28, 1999  the  Company  refinanced  its debt  arrangements  in the
U.S.  and  Canada.  Under the new  arrangement,  the  Company  may  borrow up to
$10,500,000 through November 15, 1999 and from January 1, 2000 to April 30, 2000
(the maturity date); between November 16, 1999 and December 31, 1999 the Company
may borrow up to $7,250,000.  (The amounts the Company may borrow are based on a
formula which applies  specific  percentages to balances of accounts  receivable
and   inventories.)  The  Company  expects  to  have  a  minimum  of  $4,800,000
outstanding under this arrangement through March 2000. In addition,  the Company
converted $2,500,000 of debt into a term loan payable in monthly installments of
$50,000,  plus interest commencing May 1, 1999 through April 1, 2000 and a final
installment  of  $1,900,000,  plus  interest,  due April 30,  2000.  All amounts
borrowed  under these  arrangements  bear  interest  at the prime base rate,  as
defined, plus 1.5%. The refinancing has been applied retroactively. On April 29,
1999,  outstanding debt under the Company's  arrangements in the U.S. and Canada
was $8,618,694 and $466,480 was available for additional borrowing.

     Under these  arrangements,  the  Company, among other things, is restricted
with  respect  to  dividends,  additional  borrowings,   investments,   mergers,
distributions, and property and equipment acquisitions.  Further, the Company is
required  to  maintain  specific  amounts of  tangible  net worth,  as  defined,
commencing  June 30,  1999 and a  specified  debt  service  coverage  ratio,  as
defined,  commencing  September 30, 1999. The Company  believes these  financial
covenants  will be met.  Maturities of long-term debt as of March 31, 1999 which
reflect the  refinancing  are  $2,735,602  through March 31, 2000 and $6,969,234
through March  31,2001.  Substantially  all assets are pledged as collateral for
debt, including that portion refinanced.

<PAGE 9>
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

                    For the Three Months Ended March 31, 1999


Results of Operations

   Net Sales

     Traditionally,  the  Company's  sales are  stronger in the second and third
quarters,  and weaker in the first and fourth quarters of the fiscal year due to
the  seasonal  nature of the  business  specific to the  back-to-school  season.
Consolidated  net sales for the quarter  ended  March 31,  1999 were  $7,570,000
compared with $8,471,000 for 1998, or 11% lower. In March 1999, the Company sold
its medical business to Medical Action Industries,  Inc. In the quarter, efforts
were  focused on building  inventory  to meet  contractual  obligations  to sell
additional  medical  products to Medical Action  Industries,  Inc., which slowed
production  and  shipments of consumer  products  thereby  negatively  impacting
continuing  operations.  Domestic consumer sales backorder for the first quarter
of 1999 was $569,000  compared  with  $107,000 for the first quarter of 1998, or
four times higher.  Had backorder  levels been equal to prior year,  sales would
have been only 5% lower.

     Domestic  sales  growth  occurred in first aid,  manicure  implements,  and
geometry tools offsetting declines in all other categories.

     International  sales  decreased by 14% for the first quarter.  Net sales in
Canada were down 14%, of which 3% was due to  currency  fluctuations.  The first
quarter of 1998 benefited  from initial sales related to the  acquisition of the
Rotex  Division of Esselte  Canada in December of 1997.  Since the  acquisition,
product rationalization of lower margin products,  coupled with the loss of some
products  sold to a  customer  negatively  impacted  the sales.  European  sales
decreased  14%  mainly due to weak  sales in the  United  Kingdom,  as a slowing
economy negatively impacted results in the first quarter.



   Gross Profit

     The gross profit from  continuing  operations for the first quarter of 1999
was  $1,492,000  (19.7% of net sales)  compared  with  $1,940,000  (22.9% of net
sales) for the first quarter of 1998.  Manufacturing  inefficiencies  negatively
impacted  manufacturing  costs in the U.S.  consumer  business  which  lead to a
decline  in gross  margin  from  27.1% in 1998 to 20.3% in the first  quarter of
1999. The international  gross margin rose to 18.0% in the first quarter of 1999
from  15.1% in the  comparable  quarter  in 1998.  The gain in gross  profit was
primarily due to savings  associated  with  re-sourcing  products  acquired from
Esselte Canada in 1997.

     Management  expects to consolidate  sourcing  product from Asia to leverage
its buying power to improve margins.

<PAGE 10>

   Selling, General and Administrative Expenses

     Selling, general and administrative ("SG&A") expenses for the first quarter
of 1999 were  $1,868,000 (25% of net sales) compared with $2,009,000 (24% of net
sales) for the same period of 1998, a decrease of  $141,000,  or 7%. The primary
reason  for the  decrease  is staff  reductions.  Management  is  continuing  to
investigate other potential SG&A cost saving programs.


   Operating Results

     Net income for the first  quarter  of 1999 is  $1,757,000,  or 52 cents per
share.  Net income for the first quarter of 1999 includes a realized gain on the
sale of the  medical  business  of  $2,101,000.  The net  loss  from  continuing
operations  for the first  quarter of 1999 is  $542,000,  or 16 cents per share,
compared with net loss of $376,000, or 11 cents per share, for the first quarter
of 1998.


Financial Condition

   Liquidity and Capital Resources

     During  the  first  three  months  of 1999,  the total  debt  decreased  by
$4,760,000 compared to total debt at December 31, 1998.

     Cash generated  from  operating  activities is expected to be sufficient to
meet debt  maturities  and fund capital  expenditures  through  March 2000.  The
Company's current credit arrangements  coupled with cash expected from operating
activities are considered adequate to meet liquidity needs through then.

     The Company's  working capital,  current ratio and long term debt to equity
ratio follow:



                                         March 31, 1999        December 31, 1998
                                       ------------------     ------------------

 Working capital......................       $6,425,709            $3,616,421
 Current ratio........................        1.53 to 1             1.20 to 1
 Long-term debt to equity ratio.......             1.10                  1.37


Year 2000

       The  Company  has  completed  the  assessment  phase  of  its  Year  2000
compliance program and is currently completing  modifications and testing of its
information technology and other internal systems with the exception of Germany.
In Germany,  the Company has selected a new financial  system to mitigate a Year
2000  problem.  The  Company's  goal is to complete  implementation  of this new
system by the end of the second quarter 1999. Financial systems at the Company's
other locations are substantially Year 2000 compliant.

       The Company is in the  process of  gathering  information  about the Year
2000  compliance  status  of  its  significant  suppliers  and is  developing  a
contingency plan for alternative sourcing. The Company's goal is to complete its
Year 2000 compliance program by the end of the third quarter 1999.

       Estimated  future costs for the Year 2000  compliance  program range from
$225,000 to  $275,000 of which  approximately  $150,000  relates to Germany.  Of
these costs,  the Company  expects that $75,000 will be charged to operations as
expenses.  The  costs of this  project  and its  completion  date  are  based on
management's best estimates,  which were derived from numerous assumptions about
future events,  including the  availability  of certain  resources,  third party
remediation plans, and other factors.

       The Company  continuously  monitors its action plans  addressing the Year
2000 issue, and is developing  contingency plans to address unforeseen  problems
and "worst case" scenarios. This is potentially a significant issue for most, if
not all, companies,  with implications which can not be anticipated or predicted
with any degree of certainty.

<PAGE 11>

   Safe Harbor for Forward-looking Statements

     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 inventory; (iii) other risks and uncertainties indicated from time to
time in the Company's filings with the Securities and Exchange Commission.

<PAGE 12>
                           PART II. OTHER INFORMATION


Item 1 -- Legal Proceedings

     None.


Item 2 -- Changes in Securities

     None.


Item 3 -- Defaults Upon Senior Securities

     None.


Item 4 -- Submission of Matters to a Vote of Security Holders

A.  The Annual Meeting was held on April 26, 1999.

B.  The following individuals were elected Directors at the Meeting and comprise
    the entire Board.



                             Votes for         Votes against     Votes withheld
                             ---------         -------------     --------------
 David W. Clark, Jr.         2,333,309         265,548           778,631

 George R. Dunbar            2,333,153         265,704           778,631

 Richard Y. Holden, Jr.      2,383,293         215,564           778,631

 Walter C. Johnsen           2,383,309         215,548           778,631

 Peter H. Kamin              2,383,309         215,548           778,631

 Wayne R. Moore              2,333,219         265,638           778,631

 Gary D. Pennisten           2,383,309         215,548           778,631



Item 5 -- Other Information

     None.


Item 6 -- Exhibits and Reports on Form 8-K
     Form 8-K was filed by the Company on April 6, 1999.

<PAGE 13>
                                   SIGNATURES

     Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.



ACME UNITED CORPORATION

By          /s/ WALTER C. JOHNSEN
         ------------------------------
                Walter C. Johnsen
                 President and
             Chief Executive Officer

Dated:  May 10, 1999

By          /s/ RONALD P. DAVANZO
         ------------------------------
                Ronald P. Davanzo
               Vice President and
             Chief Financial Officer

Dated:  May 10, 1999