ACME UNITED CORPORATION

TO MY FELLOW SHAREHOLDERS:

The  year  1999  was  one  of  solid   accomplishment   at  Acme  United.   Most
significantly,  we had three consecutive  quarters of net income from continuing
operations  of $125,000,  $136,000  and  $125,000  for the quarters  ended June,
September  and  December  1999.  We  expect  the  first  quarter  of  2000 to be
profitable.  We also sold our Medical  Division  and placed our entire  focus on
consumer sales. The Company shifted some U.S. stainless scissor manufacturing to
Asia.

Net sales from  continuing  operations  were  $34.3  million  compared  to $36.5
million  in 1998.  Net income  for 1999 was $2.2  million  versus a loss of $1.7
million  in 1998.  The net  income  in 1999  included  a gain on the sale of the
Medical Division and income from  discontinued  operations of $2.3 million.  For
the year 1999, the net loss from continuing  operations was $156,000 compared to
a loss of $2.4 million in 1998, an improvement of $2.3 million.

There were major accomplishments during the year.

-    In March, 1999 we sold our Medical Division for approximately  $8.2 million
     and reported a gain on the  transaction  of $2.1 million.  The sale was the
     culmination of the strategic  decision to focus on consumer  products.  The
     proceeds  reduced  total debt from $16  million in 1998 to $7.7  million in
     1999.

-    In October, 1999 we entered into a multi-year agreement with Esselte AB, to
     license  the  Tagit!  brand  name in  Europe,  Russia,  Australia,  and New
     Zealand.  Acme will also supply Tagit!  scissors in those areas for sale by
     Esselte.  The agreement calls for the co-development of additional products
     and  collaborative  sales  in  North  America.  It  brings  one  of  Acme's
     proprietary franchises to new markets quickly, with the sales and marketing
     strength of one of the largest  suppliers of office  products in the world.
     We look forward to building that partnership.

-    In January,  2000,  Acme United signed a new credit  agreement with Bank of
     America  Business  Credit,  a division  of Bank of  America.  The  facility
     provides the Company with an $11.8 million revolving debt and term loan for
     its North America operations.  We are excited about our long term prospects
     and appreciate Bank of America's confidence.

-    Acme  introduced  the Tagit!  family of  scissors  and rulers in many major
     chains in the U.S.  The Tagit!  franchise  now  includes  staplers and hole
     punches  through  our  partnership  with  Esselte.  Nearly all of our major
     product lines have been redesigned or refreshed, and are selling well.

-    On the financial side in 1999, we:
        - improved our gross margin from 21% in 1998 to 24% through productivity
          gains.
        - doubled our working capital to $7.0 million.
        - improved our book value to $1.97 per share.
        - lowered our long term debt to equity ratio from 1.37 to .72.

The new  products  and reduced  cost  structure  provide  solid  reasons for our
customers  to grow with  Acme.  During  2000,  we  expect to devote  significant
attention to new products, supply chain logistics, and increased revenues.

Your  management  moves into 2000 with great  confidence  in our  strategy,  our
people and our ability to succeed. We want to thank our customers, employees and
shareholders for their continued support.

Thank you.

Sincerely,
Walter C. Johnsen
President and Chief Executive Officer

<PAGE 2>
                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549
                                    FORM 10-K

             (X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934
                   For the fiscal year ended December 31, 1999

                                       OR

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


                          Commission file number 0-4823

                             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

           Securities registered pursuant to Section 12(b) of the Act:

                                                        Name of each exchange on
Title of each class                                         which registered
-------------------                                     ------------------------
$2.50 par value Common Stock                             American Stock Exchange

        Securities registered pursuant to Section 12 (g) of the Act: None

Indicate by check mark whether the registrant (l) 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  [ ]

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]

Registrant  had 3,507,055  shares  outstanding as of March 24, 2000 of its $2.50
par value Common Stock.  The aggregate  market value of the voting stock held by
non-affiliates  of  the  registrant  as of  March  24,  2000  was  approximately
$9,206,019.

Documents Incorporated By Reference

(1) Proxy  Statement  for the  annual  meeting  scheduled  for  April  24,  2000
incorporated into 1999 10-K, Part III

<PAGE 3>
PART I

Item 1.  Business

General

Acme United  Corporation  (together  with its  subsidiaries  the  "Company") was
organized as a partnership  in l867 and  incorporated  in l882 under the laws of
the  State of  Connecticut.  On March  22,  1999 the  Company  sold its  medical
segment.  Prior thereto,  the Company operated two business  segments - consumer
and medical.  The  Company's  continuing  operations  are in the United  States,
Canada,  England and Germany.  Financial  information  concerning net sales, and
long-lived  assets  by  geographic  area  appears  in  note 11 of the  notes  to
consolidated financial statements.

Consumer

The Company manufactures and distributes scissors,  shears, rulers and first aid
kits for school,  office and home use.  Acquisitions  of Emil Schlemper GmbH and
Co. KG of Solingen, Germany in January l990, Homeric, Ltd. of Sheffield, England
in July l990 and Peter  Altenbach  and Sohne GmbH of  Solingen,  Germany in l99l
extended the Company's  presence in Europe as a scissor and shear  manufacturer.
On May 1, 1996, the Company sold the assets (excluding  accounts  receivable) of
Peter Altenbach and Sohne GmbH. The Company continues to be a major manufacturer
of  scissors  and shears in the United  States  and  Germany,  and rulers in the
United  States;  a  distributor  of  scissors,  shears,  rulers and other office
products in Canada;  and a  distributor  of  scissors,  shears and other  office
products in  England.  In addition to local  competitors  in each  country,  the
Company  competes  with  imported  products  from China,  Taiwan and Korea.  The
Company also imports scissors,  shears,  rulers and other products to supplement
its manufactured products.

Independent manufacturer  representatives are primarily used to sell its line of
consumer products with wholesale,  contract and retail stationery  distributors,
office  supply  super  stores,  school  supply  distributors,  and  mass  market
retailers  in  the  United  States.  Foreign  operations  use a  combination  of
independent commission agents and an internal sales force.

A seasonal surge in revenues  arises from March through July which is attributed
to sales in the educational field,  primarily through school supply distributors
and  mass  market  retailers.  Unfilled  order  backlog  at year  end  1999  was
$1,629,612 compared to $1,400,498 in 1998.

Medical

The Company  entered the medical  products field in l965,  producing  disposable
medical scissors and instruments in bulk for hospital distributors. In l972, the
Company's  Medical  Products  Division began marketing its own line of products.
New  products  were  added to the  procedure  tray line  every  year to meet the
specialized needs of hospitals,  clinics and convalescent  homes. In l978, wound
dressings were introduced by the Company. Bandage products were added in January
l992,  when the Company  acquired the major portion of the United States medical
products  business of SePro  Healthcare,  Inc., the United States  subsidiary of
Seton  Healthcare  Group,  plc of Oldham,  England.  The  Company  entered  into
distribution   agreements  with  Seton  Healthcare   International  Limited  for
exclusive United States rights to an extensive line of state-of-the-art pressure
therapy bandages and specialized wound dressings.  Subsequently,  in March 1997,
the Company sold its distribution rights of certain wound care products to Seton
Healthcare  International  Limited.  Under  the  agreement,  Acme  continued  to
distribute the products for a portion of 1997.

On March 22,  1999,  the  Company  sold the medical  business to Medical  Action
Industries, Inc.

The  Company had  historically  sold its  products  through a network of medical
dealers who  distributed its line of medical  products with  hospitals,  nursing
facilities, other alternate care providers, and certain major buying groups. The
Company's  field sales  force  historically  provided  technical  assistance  in
addition to overseeing a network of manufacturer representatives.

<PAGE 4>
Other

Environmental  Rules and  Regulations  -  Environmental  rules  and  regulations
regarding hazardous waste control and electroplating effluent have been complied
with and the Company  believes no major  financial  impact is expected to result
from current and future compliance with these rules and regulations.

Employment - As of year end, the Company employed 172 persons,  most of whom are
full  time and none are  covered  by union  contracts.  Employee  relations  are
considered good and no foreseeable problems with the work force are evident.

Item 2.  Properties

Acme United Corporation is headquartered at 75 Kings Highway Cutoff,  Fairfield,
Connecticut  in 7,500 square feet of leased  space.  The Company owns and leases
manufacturing and warehousing  facilities in the United States,  owns a facility
in Germany,  and leases  52,000 square feet of  warehousing  space in Canada and
6,000  square  feet  of  warehousing   space  in  England.   All  United  States
manufacturing is conducted at a 58,000 square foot owned Fremont, North Carolina
plant.

Manufacturing  for Europe is presently  being  conducted at a 48,000 square foot
owned plant in Solingen, Germany.

Management believes that the Company's facilities,  whether leased or owned, are
adequate to meet its current  needs and should  continue to be adequate  for the
foreseeable future.

Properties owned by the Company in Fremont, North Carolina and Solingen, Germany
are  collateralized  by notes and mortgages.  The leased facilities are occupied
under leases for terms ranging from less than one year to six years.

Item 3.  Legal Proceedings

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  five  lawsuits  remain,  they  are  still in
preliminary stages and it has not been determined whether the Company's products
were involved.  Based on information available,  the Company believes 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.

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

There were no matters submitted to a vote of the security holders of the Company
through the  solicitation  of proxies or otherwise  during the fourth quarter of
the fiscal year ended December 31,1999.

<PAGE 5>
PART II

Item 5.  Market for the Registrant's Common Stock and Related Security Holder
         Matters

The Company's  Common Stock is traded on the American  Stock  Exchange under the
symbol "ACU". The following table sets forth the high and low sale prices on the
American Stock Exchange for the Common Stock for the periods indicated:

                                               High               Low
Year Ended December 31, 1999
First Quarter                                  2 1/2             1 3/8
Second Quarter                                 2 3/8             2
Third Quarter                                  2 1/8             1 1/4
Fourth Quarter                                 1 9/16              13/16

Year Ended December 31, 1998
First Quarter                                  6                 4 7/8
Second Quarter                                 6 1/2             4
Third Quarter                                  4 1/8             2 1/4
Fourth Quarter                                 3                 1 7/8

As of March 24,  2000 there were  approximately  1,300  holders of record of the
Company's Common Stock.

The Company did not pay cash dividends on its Common Stock in 1999 and 1998. The
Company presently intends to retain earnings to finance business improvements.

<PAGE 6>
Item 6.  Selected Financial Data

<TABLE>
FIVE YEAR SUMMARY OF SELECTED FINANCIAL DATA
(All figures in thousands except per share data)

                                                           1999         1998 (A)     1997 (A)     1996 (A)(B)    1995 (A)
----------------------------------------------------- ------------ ------------ ------------ --------------- -----------
<CAPTION>
<S>                                                     <C>          <C>          <C>          <C>             <C>
Net Sales                                               $34,309      $36,457      $32,843      $33,125         $35,882
----------------------------------------------------- ------------ ------------ ------------ --------------- -----------
Loss from Continuing Operations                            (156)      (2,364)      (2,847)      (4,744)         (9,110)
----------------------------------------------------- ------------ ------------ ------------ --------------- -----------
Total Assets                                             20,767       28,896       29,327       27,251          37,021
----------------------------------------------------- ------------ ------------ ------------ --------------- -----------
Long Term Debt, Less Current Portion                      5,013        6,382       11,852        8,444          14,880
----------------------------------------------------- ------------ ------------ ------------ --------------- -----------
Loss Per Share from Continuing Operations (C)              (.05)        (.70)        (.85)       (1.42)          (2.73)
</TABLE>

(A) As restated  to reflect  the sale of the medical  business on March 22, 1999
which is reported as discontinued operations.
(B) Reflects the divestiture of Altenbach as of May 1, 1996.
(C) The effects of the weighted average number of stock options  outstanding are
antidilutive  for all years  presented and have been excluded from the per share
calculations.

Item 7.  Management's Discussion and Analysis of Financial Condition and Results
         of Operations

Acme United  Corporation  (the "Company") sold its medical  business  segment in
March  1999,  and has  classified  the  operating  results  of this  segment  as
discontinued operations in the accompanying financial statements.  Prior thereto
the Company operated in two principal  business segments - consumer and medical.
The Company's  continuing  operations  consist of a single  reportable  consumer
segment which operates in the United States, Canada, England and Germany.

On March 22, 1999,  the Company sold its medical  business,  including  customer
lists, inventory,  and certain equipment for cash of approximately $8.15 million
resulting in a gain of  approximately  $2.1 million.  Net sales of that business
had declined from  $13,435,000  in 1997 to $10,090,000 in 1998. The Company used
the net proceeds from the sale to reduce debt. The sale of the medical  business
enabled management to focus its sales efforts on scissors, rulers, and first aid
kits in the consumer market. The Company believes the consumer market provides a
strong foundation for growth.

The loss from continuing operations was $156,000 in 1999; $2,364,242 in 1998 and
$2,847,263 in 1997.

The following  comments on the results of operations  relate  exclusively to the
continuing operations of the Company's consumer business.

Results of Operations 1999 Compared with 1998

Net sales  from  continuing  operations  decreased  $2,147,196  or 6% in 1999 to
$34,309,491  compared to  $36,456,687  in 1998.  Net sales in the United  States
decreased  $191,490  or  1%.  Foreign  net  sales  decreased  $1,955,706  or 16%
primarily due to weak sales in England and a product  rationalization program in
Canada.

Net other income was $305,196 in 1999  compared to net other  expense of $51,758
in 1998. Net other income in 1999 includes foreign currency transaction gains of
$215,040 in 1999  compared to  currency  losses of $194,000 in 1998.  A currency
loss  of  $220,000  was  incurred  in 1998  related  to the  Company's  Canadian
operations.

Gross profit was 24% of net sales in 1999  compared to 21% of net sales in 1998.
Gross  profit  improved  in all  operating  entities  due to  purchasing  select
products   from  Asia  at  lower  costs  and   improvements   in   manufacturing
productivity.

<PAGE 7>
Selling,  general and  administrative  expenses were $7,609,361 in 1999 compared
with $8,519,808 in 1998, a decrease of $910,447 or 11%.  Decreased  compensation
expense   applicable  to  fewer  employees  was  offset  in  part  by  increased
advertising expense.

Interest expense decreased $437,336 in 1999 to $1,064,239 compared to $1,501,575
due to lower borrowings in 1999 as debt was paid down from the proceeds from the
sale of the medical business coupled with aggressive working capital management.

An income tax benefit of $26,554 was recognized in 1999 compared to a benefit of
$44,002 in 1998. The Company has  significant  net operating loss carryovers for
United States federal and state and foreign tax reporting purposes. The benefits
from such loss carryovers will only be recognized when realized.

Results of Operations 1998 Compared with 1997

Net sales from  continuing  operations  increased  $3,614,173  or 11% in 1998 to
$36,456,687  compared to  $32,842,514  in 1997.  Net sales in the United  States
increased  $2,233,000 or 10% driven mainly by increased  volume in the first aid
line and the new Tagit! scissors.  Foreign net sales increased $1,381,173 or 13%
primarily on increased volume in Canada,  including Rotex products.  The Company
purchased the majority of the inventory of the Rotex  division of Esselte Canada
on December 8, 1997.

Net other  expense was $51,758 in 1998  compared to net other income of $367,406
in 1997. Net other expense in 1998 includes foreign currency  transaction losses
of $194,000 in 1998  compared to currency  gains of $182,000 in 1997. A currency
loss  of  $220,000  was  incurred  in 1998  related  to the  Company's  Canadian
operations.

Gross profit was 21% of net sales in 1998  compared to 22% of net sales in 1997.
Temporary manufacturing  inefficiencies  negatively impacted manufacturing costs
for 1998. In addition,  customer  rebates which are netted against  sales,  were
higher in 1998 than 1997 as a percentage of gross sales.

Selling,  general and  administrative  expenses were $8,519,808 in 1998 compared
with  $8,678,687 in 1997, a decrease of $158,879 or 2%.  Decreased  compensation
expense   applicable  to  fewer  employees  was  offset  in  part  by  increased
advertising expense.

Interest expense increased $175,289 in 1998 to $1,501,575 compared to $1,326,286
in 1997 on higher borrowings to fund the purchase of the Rotex inventory and, in
part, to fund a portion of the net operating loss for the current year.

An income tax benefit of $44,002 was  recognized  in 1998 compared to an expense
of $94,317 in 1997. The Company has  significant  net operating loss  carryovers
for United States  federal and state,  and foreign tax reporting  purposes.  The
benefits from such carryovers will only be recognized when realized.

Liquidity and Capital Resources

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

                                               1999              1998
   ------------------------------------- ----------------- -----------------
   Working Capital                             $6,956,481        $3,616,421
   Current Ratio                                1.81 to 1         1.20 to 1
   Long - Term Debt to Equity Ratio                   .72              1.37

The increase in working  capital and current ratio in 1999 is primarily a result
of a decrease of inventories,  a decrease in accounts  payable and a decrease in
current portion of long-term debt.  Inventories  decreased  $4,971,358 or 37% in
1999 due to the Company's sale of the medical division and aggressive  inventory
management. The current portion of long-term debt decreased $6,911,685. On March
22, 1999, the Company sold its medical business for approximately $8,156,000. At
the  closing  the  Company  used  a  portion  of  the  cash  proceeds  to  repay
approximately $6,000,000 of debt.

<PAGE 8>
Long-term debt decreased $1,369,797 to $5,012,634 as of December 31, 1999 due to
a refinancing.  Net cash provided by operating  activities was $495,443 for 1999
compared to net cash provided by operating activities of $607,885 for 1998.

On January 19, 2000, the Company  entered into a loan agreement (the  Agreement)
with a bank to refinance debt.  Under the Agreement the Company may borrow up to
$11,500,000  through  January  19, 2003 (the  maturity  date) based on a formula
which  applies  specific  percentages  to balances of  accounts  receivable  and
inventories.  Throughout  2000,  the  Company  expects to have a minimum of $4.4
million  outstanding  under this arrangement.  Under the Agreement,  the Company
borrowed an  additional  $325,000  which is payable in monthly  installments  of
$5,417, plus interest,  commencing February 1, 2000 through November 1, 2002 and
a final installment of $140,822,  plus interest,  due December 1, 2002.  Amounts
outstanding  under the Agreement  bear interest at varying rates as provided for
in the Agreement.

Under a separate loan agreement with another bank which was amended  January 19,
2000, the Company will repay $500,000,  principal amount, of outstanding debt at
that date in monthly  installments of $13,889,  plus interest at the prime rate,
as defined, plus 2.5%, commencing February 1, 2000 through January 1, 2003.

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  January 19, 2000, and a
specified debt service  coverage ratio, as defined,  and a fixed charge coverage
ratio,  as  defined,  commencing  March 31,  2000.  The Company  believes  these
financial covenants will be met.

Capital  expenditures  during 1999 were $459,707  which were, in part,  financed
with debt. Capital expenditures in 2000 are not expected to be material.

Cash generated from operating  activities,  together with funds  available under
the  Agreement,  is expected,  under  current  conditions,  to be  sufficient to
finance the Company's planned operations in 2000.

Item 7A.  Qualitative and Quantitative Disclosures about Market Risk

Foreign Currency Risk:

The Company manufactures products in the United States and Germany. Further, the
Company engages in intracompany  sales which are denominated in currencies other
then those of the operating entity making the sale. As such,  these  transaction
give rise to foreign currency risk. The Company's  currency  exposures vary, but
are concentrated in the Canadian dollar, British pound, and German mark.

At times,  the Company  utilizes  forward  foreign  exchange  contracts to hedge
specific transactions with third parties denominated in foreign currencies.  The
terms of these forward foreign  exchange  contracts are typically under 90 days.
Because the  contracts  are  acquired  for  specific  transactions,  they are an
effective  hedge  against  fluctuations  in the  value of the  foreign  currency
underlying the transaction.  The Company does not hedge  intracompany  sales nor
does it enter into financial instruments for speculation or trading purposes.

The Company and its foreign  subsidiaries  utilize  bank loans to finance  their
operations.  To mitigate foreign currency risk, foreign loans are denominated in
the local currency of the foreign subsidiary wherever possible.

Interest Rate Risk:

The Company's interest expense on debt is most sensitive to changes in the level
of United States interest  rates. To mitigate the impact of these  fluctuations,
the Company periodically evaluates alternative interest rate arrangements.

<PAGE 9>
The Company's debt portfolio and associated interest rates follows:

<TABLE>
                                            2000           2001           2002           2003            Total         Fair Value
-------------------------------------- --------------- ------------- --------------- -------------- ----------------- --------------
<CAPTION>
<S>                                      <C>             <C>           <C>             <C>            <C>               <C>
Current Liabilities -Notes payable       $690,738                                                      $690,738          $690,738
Average interest rate                       8.6%                                                          8.6%              8.6%
-------------------------------------- --------------- ------------- --------------- -------------- ----------------- --------------
Long-term Debt:
   Fixed rate                            $907,856                                                      $907,856          $907,856
   Average interest rate                    6.3%                                                          6.3%              6.3%
   Variable rate:
   To be refinanced                      $212,366        $231,672      $367,097        $4,413,865     $5,225,000        $5,225,000
   Average interest rate                   10.0%           10.0%         10.0%            10.0%          10.0%             10.0%
   Other                                 $911,871                                                      $911,871          $911,871
   Average interest rate                   10.0%                                                         10.0%             10.0%
</TABLE>

Impact of Year 2000

In prior years,  the Company  discussed  the nature and progress of its plans to
become Year 2000 ready. In late 1999, the Company  completed its remediation and
testing of systems.  As a result of those planning and  implementation  efforts,
the  Company   experienced  no  significant   disruptions  in  mission  critical
information technology and non-information technology systems and believes those
systems  successfully  responded  to the Year  2000  date  change.  The  Company
expensed  approximately  $50,000 during 1999 in connection with  remediating its
systems.  The Company is not aware of any material problems  resulting from Year
2000 issues, either with its products, its internal systems, or the products and
services  of third  parties.  The Company  will  continue to monitor its mission
critical computer applications and those of its suppliers and vendors throughout
the year 2000 to ensure  that any latent  Year 2000  matters  that may arise are
addressed promptly.

Inflation

Inflation had a negligible  effect on the Company's  operations  during 1999 and
1998. The Company estimates that inflationary  effects,  in the aggregate,  were
generally  recovered or offset through  increased  pricing or cost reductions in
both years.

Forward-Looking Information

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

<PAGE 10>
Item 8.  Financial Statements and Supplementary Data

<TABLE>
Acme United Corporation and Subsidiaries
CONSOLIDATED  STATEMENTS OF OPERATIONS AND  COMPREHENSIVE  INCOME (LOSS)
For the years ended December 31, 1999, 1998 and 1997

                                                                           1999            1998             1997
---------------------------------------------------------------- ----------------- ---------------- -----------------
<CAPTION>
<S>                                                                  <C>             <C>              <C>
Net Sales                                                            $ 34,309,491    $ 36,456,687     $ 32,842,514
Other Income/(Expense) - Net                                              275,787         (51,758)         367,406
---------------------------------------------------------------- ----------------- ---------------- -----------------
                                                                       34,585,278      36,404,929       33,209,920
Costs and Expenses:
    Cost of Goods Sold                                                 26,094,668      28,791,790       25,572,257
    Selling, General and Administrative Expenses                        7,609,361       8,519,808        8,678,687
    Interest Expense                                                    1,064,239       1,501,575        1,326,286
    Restructuring and Other Charges                                             -               -          385,636
---------------------------------------------------------------- ----------------- ---------------- -----------------
                                                                       34,768,268      38,813,173       35,962,866
---------------------------------------------------------------- ----------------- ---------------- -----------------
Loss from Continuing Operations before Income Taxes                      (182,990)     (2,408,244)      (2,752,946)
Income Taxes (Benefit)                                                    (26,554)        (44,002)          94,317
---------------------------------------------------------------- ----------------- ---------------- -----------------
Loss from Continuing Operations                                          (156,436)     (2,364,242)      (2,847,263)
Discontinued Operations:
     Income from Discontinued Operations                                  223,840         698,000        3,050,000
     Gain from Sale of Discontinued Operations                          2,101,000               -                -
---------------------------------------------------------------- ----------------- ---------------- -----------------
Income from Discontinued Operations                                     2,324,840         698,000        3,050,000
---------------------------------------------------------------- ----------------- ---------------- -----------------
Net Income/(Loss)                                                       2,168,404      (1,666,242)         202,737
Other Comprehensive Expense - Foreign Currency Translation                (55,223)         (8,675)        (250,436)
---------------------------------------------------------------- ----------------- ---------------- -----------------
Comprehensive Income/(Loss)                                          $  2,113,181    $ (1,674,917)    $    (47,699)
================================================================ ================= ================ =================

Earnings/(Loss) Per Share:
   Continuing Operations                                             $       (.05)   $       (.70)    $       (.85)
   Discontinued Operations                                                    .69             .21              .91
---------------------------------------------------------------- ----------------- ---------------- -----------------
Net Income/(Loss)                                                    $        .64    $       (.49)    $        .06
================================================================ ================= ================ =================
</TABLE>
See accompanying notes.

<PAGE 11>
<TABLE>
Acme United Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
Years ended December 31,  1999, 1998 and 1997
                                                                                                 Accumulated
                                                                                                    Other
                                  Outstanding                                                   Comprehensive
                                   Shares of                                    Additional          Loss-           Retained
                                 Common Stock    Common Stock     Treasury       Paid-In         Translation        Earnings
                                                                   Stock         Capital         Adjustment         (Deficit)
------------------------------- ---------------- -------------- ------------- --------------- ------------------ ---------------
<CAPTION>
<S>                                <C>            <C>            <C>            <C>               <C>             <C>
Balances, December 31, 1996        3,387,620      $ 8,586,550    $  (357,631)   $ 2,179,494       $  (976,104)    $(2,916,979)
Net Income                                                                                                            202,737
Exercise of Stock Options             39,375           98,438                        58,734
Purchase of Treasury Stock           (64,620)                       (331,178)
Translation Adjustment                                                                               (250,436)
------------------------------- ---------------- -------------- ------------- --------------- ------------------ ---------------
Balances, December 31, 1997        3,362,375        8,684,988       (688,809)     2,238,228        (1,226,540)     (2,714,242)
Net Loss                                                                                                           (1,666,242)
Exercise of Stock Options              8,500           21,250                        12,375
Issuance of Treasury Stock             6,613                          40,809        (17,898)
Translation Adjustment                                                                                 (8,675)
------------------------------- ---------------- -------------- ------------- --------------- ------------------ ---------------
Balances, December 31, 1998        3,377,488        8,706,238       (648,000)     2,232,705        (1,235,215)     (4,380,484)
Net Income                                                                                                          2,168,404
Issuance of Common Stock in
  Payment of Accrued
  Compensation                       129,567          323,917                      (194,351)
Translation Adjustment                                                                                (55,223)
------------------------------- ---------------- -------------- ------------- --------------- ------------------ ---------------
Balances, December 31, 1999        3,507,055      $ 9,030,155    $  (648,000)   $ 2,038,354       $(1,290,438)    $(2,212,080)
=============================== ================ ============== ============= =============== ================== ===============
</TABLE>
See accompanying notes.

<PAGE 12>
<TABLE>
Acme United Corporation and Subsidiaries
CONSOLIDATED BALANCE SHEETS
December 31,  1999 and 1998
                                                                                      1999              1998
-------------------------------------------------------------------------------- ---------------- -----------------
<CAPTION>
<S>                                                                                 <C>              <C>
ASSETS
Current Assets:
   Cash and cash equivalents                                                        $    88,468      $    39,805
   Accounts receivable, less allowance                                                6,702,148        7,721,699
   Inventories                                                                        8,297,631       13,268,989
   Prepaid expenses and other current assets                                            508,011          423,772
-------------------------------------------------------------------------------- ---------------- -----------------
Total current assets                                                                 15,596,258       21,454,265

Plant, Property and Equipment:
   Land                                                                                 190,884          219,249
   Buildings                                                                          2,047,593        2,178,805
   Machinery and equipment                                                            8,616,263       16,216,082
-------------------------------------------------------------------------------- ---------------- -----------------
Total plant, property and equipment                                                  10,854,740       18,614,136
Less accumulated depreciation                                                         6,868,588       12,572,886
-------------------------------------------------------------------------------- ---------------- -----------------
Net plant, property and equipment                                                     3,986,152        6,041,250
Goodwill and other, less accumulated amortization                                       192,510          504,848
Other assets                                                                            992,530          895,156
-------------------------------------------------------------------------------- ---------------- -----------------
Total Assets                                                                        $20,767,450      $28,895,519
================================================================================ ================ =================


LIABILITIES
------------------------------------------------------------------------------- ----------------- -----------------
Current Liabilities:
   Notes payable                                                                   $   690,738       $   881,538
   Accounts payable                                                                  2,763,272         4,422,315
   Other accrued liabilities                                                         3,153,674         3,384,544
   Current portion of long-term debt                                                 2,032,093         8,943,778
------------------------------------------------------------------------------- ----------------- -----------------
Total current liabilities                                                            8,639,777        17,632,175
Long-term debt, less current portion                                                 5,012,634         6,382,431
Other                                                                                  197,048           205,669
------------------------------------------------------------------------------- ----------------- -----------------
Total Liabilities                                                                   13,849,459        24,220,275
------------------------------------------------------------------------------- ----------------- -----------------

Commitments and Contingencies

STOCKHOLDERS' EQUITY
Common Stock, par value $2.50: authorized 4,000,000 shares; issued -
  3,612,062 shares in 1999 and 3,482,495 shares in 1998, including Treasury
  Stock                                                                              9,030,155         8,706,238
Treasury Stock, at cost,  105,007 shares                                              (648,000)         (648,000)
Additional paid-in capital                                                           2,038,354         2,232,705
Accumulated other comprehensive loss - translation adjustment                       (1,290,438)       (1,235,215)
Retained - earnings deficit                                                         (2,212,080)       (4,380,484)
------------------------------------------------------------------------------- ----------------- -----------------
Total Stockholders' Equity                                                           6,917,991         4,675,244
------------------------------------------------------------------------------- ----------------- -----------------
Total Liabilities and Stockholders' Equity                                         $20,767,450       $28,895,519
=============================================================================== ================= =================
</TABLE>
See accompanying notes.

<PAGE 13>
<TABLE>
Acme United Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOW
Years ended December 31,  1999, 1998 and 1997
                                                                       1999             1998              1997
---------------------------------------------------------------- ----------------- ---------------- -----------------
<CAPTION>
<S>                                                               <C>               <C>              <C>
Operating activities:
Net income (loss)                                                 $  2,168,404      $ (1,666,242)    $    202,737
Adjustments to reconcile net income (loss) to net cash
  provided (used) by operating activities
     Gain on sale of discontinued operations                        (2,101,000)                -                -
     Gain on sale of marketing rights                                        -                 -         (846,178)
     Depreciation                                                      950,000         1,242,605          979,196
     Amortization                                                       29,710            33,421           92,480
     Loss (gain) on disposal of plant, property and equipment          240,873           (98,264)               -
     Changes in operating assets and liabilities
       Accounts receivable                                           1,004,551          (275,860)        (709,695)
       Inventories                                                   1,648,394           812,362       (4,030,034)
       Prepaid expenses and other current assets                       (84,239)         (247,549)        (114,580)
       Other assets                                                     74,254           (69,796)        (196,518)
       Accounts payable                                             (1,659,043)          897,731        1,034,140
       Other accrued liabilities                                    (1,776,461)          (20,523)         231,487
---------------------------------------------------------------- ----------------- ---------------- -----------------
Total adjustments                                                   (1,672,961)        2,274,127       (3,559,702)
---------------------------------------------------------------- ----------------- ---------------- -----------------
Net cash provided (used) by operating activities                       495,443           607,885       (3,356,965)
---------------------------------------------------------------- ----------------- ---------------- -----------------
Investing activities:
Capital expenditures                                                  (459,707)       (1,572,516)       (1,824,394)
Proceeds from sales of plant, property and equipment                   384,432           326,000           345,106
Proceeds from sale of marketing rights                                       -                 -         1,915,178
Proceeds from sale of medical division                               8,156,000                 -                 -
---------------------------------------------------------------- ----------------- ---------------- -----------------
Net cash provided (used) by investing activities                     8,080,725        (1,246,516)          435,890
---------------------------------------------------------------- ----------------- ---------------- -----------------
Financing activities:
Net (repayments) borrowings on notes payable and revolving
   credit facilities                                                (8,031,802)         (400,375)        3,661,074
Borrowings of long-term debt                                         2,500,000         1,266,557           600,000
Payments of long term debt                                          (2,940,480)         (237,402)       (1,903,896)
Exercise of stock options                                                                 33,625           157,172
---------------------------------------------------------------- ----------------- ---------------- -----------------
Net cash (used) provided for financing activities                   (8,472,282)          662,405         2,514,350
---------------------------------------------------------------- ----------------- ---------------- -----------------
Effect of exchange rate changes                                        (55,223)           (8,675)            4,229
---------------------------------------------------------------- ----------------- ---------------- -----------------
Net increase (decrease) in cash and cash equivalents                    48,663            15,099          (402,496)
Cash and cash equivalents at beginning of year                          39,805            24,706           427,202
---------------------------------------------------------------- ----------------- ---------------- -----------------
Cash and cash equivalents at end of year                          $     88,468      $     39,805     $      24,706
================================================================ ================= ================ =================
</TABLE>
See accompanying notes.

<PAGE 14>
Acme United Corporation and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.  Continuing Operations

The continuing  operations of Acme United Corporation (the Company) consist of a
single  reportable  "consumer"  segment.  The consumer  segment  operates in the
United States, Canada, England and Germany.  Principal consumer segment products
are scissors,  shears,  rulers,  first aid kits, and related  products which are
sold primarily to wholesale, contract and retail stationery distributors, office
supply super stores,  school supply distributors,  drug store retailers and mass
market  retailers.  Revenues related to sales of such products are recognized at
the time of  shipment.  Continuous  credit  evaluations  are made of  customers;
collateral is not required.  Allowances  for credit losses are provided and have
been within management's expectations. Net sales for 1999, 1998 and 1997 include
two customers which aggregate  approximately  26% in 1999 and 20% for each year,
1998 and 1997.

2.  Discontinued Operations

On March 22, 1999 the  Company  sold its medical  business,  including  customer
lists,  inventory,  and certain  equipment for cash of approximately  $8,156,000
realizing a gain of $2,101,000.  The  consolidated  statements of operations for
1999, 1998 and 1997 reflect the  discontinuance of the medical business segment.
Substantially  all assets of the medical business segments have been disposed of
at December 31, 1999. The 1998 consolidated balance sheet includes the assets of
the discontinued medical business. A summary of those assets follows:

                                                                 1998
   --------------------------------------------------------- --------------
   Current assets:
     Accounts receivable                                     $  1,121,000
     Inventories                                                3,464,000
     Other                                                        150,000
   --------------------------------------------------------- --------------
                                                                4,735,000
   Equipment, net and other                                     1,215,000
   --------------------------------------------------------- --------------
                                                             $  5,950,000
   ========================================================= ==============

The condensed statements of operations relating to the medical business follow:
<TABLE>
                                                 1999             1998             1997
   -------------------------------------- ---------------- ---------------- ---------------
<CAPTION>
<S>                                        <C>              <C>              <C>
   Net sales                               $  5,536,000     $ 10,090,000     $ 13,435,000
   Costs and expenses                         5,312,160        9,392,000       11,231,000
   -------------------------------------- ---------------- ---------------- ---------------
                                                223,840          698,000        2,204,000

   Gain on sale of marketing rights (A)               -                -          846,000
   -------------------------------------- ---------------- ---------------- ---------------
   Income from operations (B)              $    223,840     $    698,000     $  3,050,000
   ====================================== ================ ================ ===============
</TABLE>
(A)  On March 3, 1997, the Company sold  marketing  rights of certain wound care
     products  applicable to the medical business for approximately $2.0 million
     which resulted in a gain of $846,000.

(B)  Income taxes related to the medical business are not material.

3.  Accounting Policies

Estimates - The preparation of financial statements in conformity with generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions  that affect the reported  amounts of assets and liabilities and the
disclosure of  contingent  assets and  liabilities  at the date of the financial
statements  and the  reported  amounts  of  revenues  and  expenses  during  the
reporting period. Actual results could differ from those estimates.

Principles of Consolidation - The consolidated  financial statements include the
accounts of the Company and its subsidiaries, all of which are wholly owned. All
significant intercompany accounts are eliminated in consolidation.

<PAGE 15>
Translation of Foreign Currency - For foreign operations, assets and liabilities
are translated at rates in effect at the end of the year;  revenues and expenses
are  translated  at  average  rates  in  effect  during  the  year.  Translation
adjustments are shown as a separate component of stockholders'  equity.  Foreign
currency  transaction  gains and losses are recognized at the time of settlement
of the underlying  purchase  transactions  and treated as purchasing  variances.
Resulting  translation  adjustments are made directly to a separate component of
stockholders'   equity--"Accumulated  other  comprehensive  loss  -  translation
adjustment".  Foreign currency  transaction gains (losses) which are included in
other income (expense) were $215,000 in 1999, $(194,000) in 1998 and $182,000 in
1997.

Hedging  Activity - Foreign  currency  contracts are  occasionally  purchased as
hedges against foreign currency  fluctuation  risk related to specific  purchase
commitments.  The Company does not engage in foreign currency exchange contracts
for  speculative  purposes and  accordingly,  the contracts are accounted for as
hedges.  There were no significant foreign currency contracts  outstanding as of
December 31, 1999 and 1998.

Cash Equivalents - Investments with an original maturity of three months or less
at the date of purchase are considered cash equivalents.

Accounts  Receivable  -  Accounts  receivable  are shown less an  allowance  for
doubtful accounts of $125,862 in 1999 and $195,325 in 1998.

Inventories - Inventories  are stated at the lower of average cost determined by
the first in, first out method or market.

Plant,  Property and Equipment and Depreciation - Plant,  property and equipment
is recorded at cost.  Depreciation is computed by the straight-line  method over
the estimated useful lives of the assets.

Goodwill  -  Goodwill  represents  the  excess  of the  cost of  investments  in
businesses acquired over the net asset values at acquisition.  Goodwill is being
amortized by the straight  line method over periods  ranging from 3 to 40 years.
Accumulated  amortization  thereon aggregated  $299,143 and $269,433 at December
31, 1999 and 1998, respectively.

Asset  Impairments -The Company  evaluates the propriety of the carrying amounts
of its long-lived assets,  including goodwill, as well as their estimated useful
lives,  when current events and circumstances  indicate a potential  impairment.
The Company  believes that there are no significant  impairments of the carrying
amounts of such  assets and no  reduction  in their  estimated  useful  lives is
warranted.

Deferred  Income Taxes - Deferred  income taxes are provided on the  differences
between the financial  statement and tax bases of assets and  liabilities and on
operating  loss  carryovers  using enacted tax rates in effect in years in which
the differences are expected to reverse.

Research and  Development  - Research and  development  costs  ($18,688 in 1999,
$90,651 in 1998 and $385,000 in 1997) are charged to operations as incurred.

Advertising  - Advertising  costs  ($2,444,343  in 1999,  $2,353,188 in 1998 and
$2,044,179 in 1997) are expensed as incurred.

Reclassifications - Certain prior year amounts have been reclassified to conform
to the current year presentation.

<PAGE 16>
4.  Inventories

Inventories consists of:
                                                1999             1998
    -------------------------------------- ---------------- ----------------
    Finished goods                         $   5,354,828    $   7,122,146
    Work in process                              648,404        1,240,055
    Materials and supplies                     2,294,399        4,906,788
    -------------------------------------- ---------------- ----------------
                                           $   8,297,631    $  13,268,989
    ====================================== ================ ================

5.  Other Assets

Other assets consist of:
                                                 1999             1998
    -------------------------------------- ----------------- ---------------
    Prepaid pension costs                  $     980,395     $   867,540
    Other                                         12,135          27,616
    -------------------------------------- ----------------- ---------------
                                           $     992,530     $   895,156
    ====================================== ================= ===============

6.  Other Accrued Liabilities

Other accrued liabilities consist of:

                                                 1999             1998
    -------------------------------------- ----------------- ---------------
    Vendor rebates                           $ 1,743,722     $   1,278,226
    Other                                      1,229,603         2,106,318
    -------------------------------------- ----------------- ---------------
                                             $ 3,153,674     $   3,384,544
    ====================================== ================= ===============

7.  Pension and Profit Sharing

United States  employees,  hired prior to July 1, 1993, are covered by a funded,
defined benefit pension plan. The benefits are based on years of service and the
average  compensation of the highest three consecutive years during the last ten
years of employment. In December 1995, the Company's Board of Directors approved
an  amendment  to the United  States  pension  plan  ceasing all future  benefit
accruals as of February 1, 1996, without terminating the pension plan.

<PAGE 17>
Other disclosures related to the pension plan follow:
<TABLE>
                                                                          1999             1998
    --------------------------------------------------------------- ----------------- ----------------
<CAPTION>
<S>                                                                  <C>               <C>
    Changes in benefit obligation
       Benefit obligation at beginning of year                       $ (5,311,539)     $ (5,306,010)
       Interest cost                                                     (363,481)         (381,457)
       Plan participants' contributions                                   (27,934)
       Actuarial gain/(loss)                                              312,480          (350,647)
       Benefits paid                                                      535,425           726,575
    --------------------------------------------------------------- ----------------- ----------------
       Benefit obligation at end of year                             $ (4,855,049)     $ (5,311,539)
    --------------------------------------------------------------- ----------------- ----------------

    Changes in plan assets
       Fair value of plan assets at beginning of year                $  5,870,338      $  5,911,452
       Actual return on plan assets                                       825,671           685,461
       Plan participants' contributions                                    27,934
       Benefits paid                                                     (535,425)         (726,575)
    --------------------------------------------------------------- ----------------- ----------------
       Fair value of plan assets at end of year                      $  6,188,518      $  5,870,338
    --------------------------------------------------------------- ----------------- ----------------

    Funded status                                                    $  1,333,469      $    558,799
    Unrecognized (gain)/loss                                             (353,074)          308,741
    --------------------------------------------------------------- ----------------- ----------------
    Prepaid benefit costs                                            $    980,395      $    867,540
    =============================================================== ================= ================
</TABLE>

At  December  31,  1999 and  1998,  plan  assets  include  30,000  shares of the
Company's  Common  Stock  having a market  value of $33,750 and $67,500 at those
dates, respectively.
<TABLE>
                                                             1999            1998            1997
    --------------------------------------------------- --------------- --------------- ---------------
<CAPTION>
<S>                                                          <C>              <C>             <C>
    Assumptions:
      Discount rate                                          7.75%            6.5%            7.0%
      Expected return on plan assets                         8.5%             8.5%            8.5%
</TABLE>

<TABLE>
                                                                1999            1998            1997
    --------------------------------------------------- --------------- --------------- ---------------
<CAPTION>
<S>                                                      <C>             <C>             <C>
    Components of net benefit income:
      Interest cost                                      $   363,481     $   381,457     $   376,622
      Expected return on plan assets                        (476,336)       (480,121)       (446,996)
    --------------------------------------------------- --------------- --------------- ---------------
                                                         $  (112,855)    $   (98,664)    $   (70,374)
    =================================================== =============== =============== ===============
</TABLE>

The Company also has a qualified,  non-contributory profit sharing plan covering
substantially  all United States  employees.  Annual Company  contributions  are
determined  by the  Compensation  Committee  and have amounted to 2% of eligible
employee  earnings.  Total  contribution  expense  under this plan  approximated
$51,000, $102,000 and $104,000 for 1999, 1998, and 1997, respectively.

8.  Income Taxes

The amounts of income taxes (benefit) reflected in operations follow:
<TABLE>
                                                             1999            1998            1997
    --------------------------------------------------- --------------- --------------- ---------------
<CAPTION>
<S>                                                      <C>             <C>             <C>
    Current:
        State                                            $  (27,059)     $   29,808      $   49,800
        Foreign                                                 505         (73,810)         44,517
    --------------------------------------------------- --------------- --------------- ---------------
                                                         $  (26,554)     $  (44,002)     $   94,317
    =================================================== =============== =============== ===============
</TABLE>

The current  state tax  provision is  comprised  of the minimum  capital tax and
other  franchise  taxes  related  to the  jurisdictions  in which the  Company's
manufacturing plants are located.

<PAGE 18>
A summary of United States and foreign loss before income taxes from  continuing
operations follows:
<TABLE>
                                                        1999              1998             1997
    ---------------------------------------------- ---------------- ----------------- ----------------
<CAPTION>
<S>                                                 <C>              <C>               <C>
    United States                                   $    (61,829)    $ (1,443,434)     $ (2,280,601)
    Foreign                                             (121,161)        (964,810)         (472,345)
    ---------------------------------------------- ---------------- ----------------- ----------------
                                                    $   (182,990)    $ (2,408,244)     $ (2,752,946)
    ============================================== ================ ================= ================
</TABLE>

The following schedule reconciles the amounts of income taxes (benefit) computed
at  the  United  States  statutory  rate  to  the  actual  amounts  reported  in
continuing operations.
<TABLE>
                                                          1999              1998             1997
    ---------------------------------------------- ---------------- ----------------- ----------------
<CAPTION>
<S>                                                 <C>              <C>               <C>
    Federal income taxes (benefit) at 34%
      statutory rate                                $    (62,217)    $   (818,803)     $   (936,002)
    State and local taxes, net of federal income
      tax effect                                         (50,587)         (15,227)         (119,632)
    Foreign income taxes (benefit)                         1,332          (22,345)          (19,473)
    Deferred income tax asset valuation allowance       (334,172)         895,888         1,307,167
    Foreign permanent differences                        354,249
    Other                                                 64,841          (83,515)         (137,743)
    ---------------------------------------------- ---------------- ----------------- ----------------
    Provision (benefit) for income taxes            $    (26,554)    $    (44,002)     $     94,317
    ============================================== ================ ================= ================
</TABLE>

Income taxes paid,  net of refunds  received,  were $45,871 in 1999,  $66,363 in
1998 and $13,267 in 1997.

Deferred income taxes relate to:
<TABLE>
                                                                           1999             1998
    --------------------------------------------------------------- ----------------- ----------------
<CAPTION>
<S>                                                                    <C>               <C>
    Deferred income tax liabilities:
       Plant, property and equipment                                 $    445,695      $    373,115
       Pension                                                            351,830           301,170
       Other                                                               78,558                 -
    --------------------------------------------------------------- ----------------- ----------------
                                                                          876,083           674,285
    Deferred income tax assets:
       Asset valuations                                                   402,779           381,595
       Operating loss carryforwards                                     3,420,039         4,279,050
       Intangible assets                                                        -           126,962
       Other                                                               42,530            88,022
    --------------------------------------------------------------- ----------------- ----------------
                                                                        3,865,348         4,875,629
    --------------------------------------------------------------- ----------------- ----------------
    Net deferred income tax asset before valuation allowance            2,989,265         4,201,344
    Valuation allowance                                                (2,989,265)       (4,201,344)
    --------------------------------------------------------------- ----------------- ----------------
    Net deferred income taxes                                        $          -      $          -
    =============================================================== ================= ================
</TABLE>

The deferred income tax asset valuation  allowance was $3,622,743 as of December
31, 1997.

The Company provides deferred income taxes on foreign subsidiary  earnings which
are not considered permanently reinvested. Earnings permanently reinvested would
become taxable upon the sale or liquidation of a foreign  subsidiary or upon the
remittance  of  dividends.   Foreign  subsidiary   earnings  of  $1,335,000  and
$1,414,000  are  considered  permanently  reinvested as of December 31, 1999 and
1998,  respectively,  and the amount of deferred  income taxes thereon cannot be
reasonably determined.

Due to the uncertain nature of the realization of the Company's  deferred income
tax assets based on past  performance and  carryforward  expiration  dates,  the
Company has recorded a valuation allowance for the amount of deferred income tax
assets  which are not  expected to be  realized.  This  valuation  allowance  is
subject to periodic  review,  and if the  allowance is reduced,  the tax benefit
will be  recorded  in future  operations  as a reduction  of the  Company's  tax
expense.

<PAGE 19>
At  December  31,  1999,  the  Company  has  tax  operating  loss  carryforwards
aggregating  $11,404,000  of which  $4,642,000  relate to United States  Federal
income  taxes which expire from 2012 through  2019,  $2,842,000  relate to state
income  taxes  which  expire from 2000  through  2009 and  $3,920,000  relate to
foreign operations income taxes which can be carried forward indefinitely.

9.  Debt

The Company has short-term  lines of credit for its foreign  subsidiaries  which
expire in 2000. The aggregate  amount available under these lines is $773,348 of
which  $690,738 is  outstanding at December 31, 1999 and bears interest at rates
ranging  from  local  prime to local  prime plus  4.00%.  The  weighted  average
interest rate for outstanding borrowings was 8.61% at December 31, 1999 (8.3% at
December 31, 1998).

Long-term debt consists of:
<TABLE>
                                                1999             1998
   -------------------------------------- ----------------- ----------------
<CAPTION>
<S>                                         <C>               <C>
   Notes payable to Bank:
     To be refinanced                       $  5,225,000      $  6,613,630
     Other                                       754,741         7,120,533
   Other notes payable                         1,064,986         1,592,026
   -------------------------------------- ----------------- ----------------
                                               7,044,727        15,326,209
   Less current portion                        2,032,093         8,943,778
   -------------------------------------- ----------------- ----------------
                                            $  5,012,634      $  6,382,431
   ====================================== ================= ================
</TABLE>

On January 19, 2000, the Company  entered into a loan agreement (the  Agreement)
with a bank to refinance debt.  Under the Agreement the Company may borrow up to
$11,500,000  through  January  19, 2003 (the  maturity  date) based on a formula
which  applies  specific  percentages  to balances of  accounts  receivable  and
inventories.  Throughout  2000,  the  Company  expects to have a minimum of $4.4
million  outstanding  under this arrangement.  Under the Agreement,  the Company
borrowed an  additional  $325,000  which is payable in monthly  installments  of
$5,417, plus interest,  commencing February 1, 2000 through November 1, 2002 and
a final installment of $140,822,  plus interest,  due December 1, 2002.  Amounts
outstanding  under the Agreement  bear interest at varying rates as provided for
in the Agreement.

Under a separate loan agreement with another bank which was amended  January 19,
2000, the Company will repay $500,000,  principal amount, of outstanding debt at
that date in monthly  installments of $13,889,  plus interest at the prime rate,
as defined, plus 2.5%, commencing February 1, 2000 through January 1, 2003.

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  January 19, 2000, and a
specified debt service  coverage ratio, as defined,  and a fixed charge coverage
ratio,  as  defined,  commencing  March 31,  2000.  The Company  believes  these
financial covenants will be met.

Current  maturities of long-term debt which reflect the refinancing  referred to
above  follow:  2000 - $2,032,093;  2001 - $231,672;  2002 - $367,097 and 2003 -
$4,413,865.

The interest rates of the other notes payable range from 6.35% to 9.75%.

Interest paid was $1,117,048 in 1999, $1,530,290 in 1998 and $1,306,694 in 1997.

Substantially  all  assets are  pledged  as  collateral  for  outstanding  debt,
including the portion refinanced January 19, 2000.

<PAGE 20>
10.  Commitments and Contingencies

The Company leases certain office,  manufacturing  and warehouse  facilities and
various equipment under non-cancelable  operating leases. Total rent expense was
$461,396 in 1999,  $684,000 in 1998 and $613,000 in 1997.  Minimum annual rental
commitments under  non-cancelable  leases with initial or remaining terms of one
year or more as of December 31, 1999 follow:  2000 - $375,724;  2001 - $106,511;
2002 - $71,962; 2003 - $46,024; 2004 - $43,004 and thereafter - $11,207.

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  five  lawsuits  remain,  they  are  still in
preliminary stages and it has not been determined whether 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.

11.  Geographic Data

Net sales of the  Company's  continuing  operations  by  geographic  area follow
(000's omitted):
<TABLE>
                                                     1999          1998          1997
   --------------------------------------------- ------------- ------------- -------------
<CAPTION>
<S>                                                <C>           <C>           <C>
   Net Sales:
     United States                                 $ 23,916      $ 24,108      $ 21,875
     Canada                                           5,166         5,880         4,235
     England                                          2,177         3,296         4,067
     Germany and other European countries             3,050         3,173         2,666
   --------------------------------------------- ------------- ------------- -------------
                                                   $ 34,309      $ 36,457      $ 32,843
   ============================================= ============= ============= =============

Long-lived assets by geographic area follow (000's omitted):

                                                     1999          1998          1997
   --------------------------------------------- ------------- ------------- -------------
   Long-Lived Assets:
     United States                                 $  2,506      $  4,354      $  3,730
     Canada                                              79            83            66
     England                                             32            78           517
     Germany                                          1,369         1,526         1,922
   --------------------------------------------- ------------- ------------- -------------
                                                   $  3,986      $  6,041      $  6,235
   ============================================= ============= ============= =============
</TABLE>

12.  Stock Option Plans

The Company has a stock option plan which  provides  incentive and  nonqualified
stock options for up to 520,000 shares of the Company's Common Stock to officers
and key employees (the  Employee's  Plan).  The Employee's Plan provides for the
purchase  of shares of the  Company's  Common  Stock at a price of not less than
100% of its fair market value at the date of grant.  Generally,  options granted
under the Employee's Plan prior to June 24, 1996 vested  immediately or within a
year;  after June 24, 1996,  25% of options  granted vest  immediately  with the
balance  vesting over the next three years.  The term of options  issued  cannot
exceed 10 years from the date of grant.

The Company  also has a stock  option  plan which  provides  nonqualified  stock
options for up to 120,000 shares of the Company's  Common Stock to  non-salaried
directors (the Director's  Plan).  The original  Director's Plan, as approved at
the 1996 Annual Meeting,  granted 10,000 options to new directors elected to the
Board at the 1996 Annual Meeting and for subsequent Annual Meetings which vested
one year after the grant date. The Director's  Plan was amended in 1997 to grant
10,000  options to directors  elected at the 1997 annual  meeting who were first
elected  prior  to  the  1996  Annual  Meeting  which  vested  immediately.  The
Director's  Plan  was  amended  again  in 1998 to grant  2,500  options  to each
director  re-elected  to the Board at the annual  meeting.  These  options  vest
immediately.  The  Director's  Plan  provides  for the purchase of shares of the
Company's Common Stock at a price of not less than 100% of its fair value at the
date of grant.

<PAGE 21>
A summary of changes in options  issued  under the  Company's  two stock  option
plans follows:
<TABLE>
                                                                   1999          1998          1997
   ----------------------------------------------------------- ------------- ------------- -------------
<CAPTION>
<S>                                                               <C>           <C>           <C>
   Options outstanding  at the beginning of the year              376,550       318,750       301,500
   Options granted                                                174,000        67,950        66,000
   Options canceled                                               (79,225)       (1,650)       (9,375)
   Options exercised                                                    -        (8,500)      (39,375)
   ----------------------------------------------------------- ------------- ------------- -------------
   Options outstanding  at the end of the year                    471,325       376,550       318,750
   =========================================================== ============= ============= =============

   Options exercisable at the end of the year                     340,694       292,563       245,000
   =========================================================== ============= ============= =============

   Options available for future grants at the end of the year      70,800       165,575        51,875
   =========================================================== ============= ============= =============

   Average price of options granted                                 $2.12         $4.62         $5.81
   Average price of options canceled                                $1.88         $4.17         $4.52
   Average price of options exercised                                   -         $3.96         $3.99
   Average price of options outstanding                             $3.65         $4.31         $4.23
   Average price of options exercisable                             $3.95         $4.14         $3.93
</TABLE>

A summary of options outstanding at December 31, 1999 follows:
<TABLE>
                                            Options Outstanding                        Options Exercisable
                             -------------------------------------------------    ------------------------------
                                             Weighted-Average
                                                Remaining     Weighted-Average                  Weighted-Average
                                 Number        Contractual        Exercise            Number        Exercise
   Range of Exercise Prices   Outstanding     Life (Years)          Price           Exercisable       Price

   ------------------------- --------------- ---------------- ----------------    --------------- --------------
<CAPTION>
<S>                              <C>                <C>             <C>               <C>             <C>
   $1.75 to $2.49                143,875            9               2.16               45,594         2.13
   $2.50 to $3.65                100,450            5               3.50               92,850         3.56
   $3.66 to $5.00                123,500            6               3.86              120,000         3.83
   $5.01 to $7.25                103,500            8               5.62               82,250         5.56
                             ===============                                      ===============
                                 471,325                                              340,694
                             ===============                                      ===============
</TABLE>

The weighted average remaining  contractual life of outstanding stock options is
7 years.

The  Company  applies  APB  Opinion  No.  25,  Accounting  for  Stock  Issued to
Employees,  and related  interpretations to recognize compensation expense under
its stock option plans.  As such,  no expense is  recognized  if, at the date of
grant,  the  exercise  price of the option is at least  equal to the fair market
value of the Company's  Common Stock.  No  compensation  expense  related to the
Company's  stock  option plans was  required to be  recognized  for its plans in
1999, 1998 and 1997.

If compensation expense for the Company's stock option plans had been determined
using the fair value  method  under SFAS No.  123,  Accounting  for Stock  Based
Compensation,  the Company would have reported net income of $2,056,538  ($.61 a
share) for 1999, a net loss of $1,814,064 ($.54 a share) for 1998 and net income
of $89,541 ($.03 a share) for 1997.

The  weighted  average  fair value at date of grant for options  granted  during
1999, 1998 and 1997 is $.75, $1.83, and $2.52 per option, respectively.

<PAGE 22>
The fair value of options at date of grant was estimated using the Black-Scholes
model with the following weighted average assumptions:

                                          1999          1998          1997
    --------------------------------- ------------- ------------- -------------

    Expected Life in Years                 5             5             5
    Interest Rate                        5.67%         5.69%         6.65%
    Volatility                           27.3%         37.2%         36.4%
    Dividend Yield                         0%            0%            0%

13.  Earnings Per Share

The denominators used in the earnings (loss) per share  computations  consist of
the weighted  average  shares of Common Stock  outstanding of 3,390,977 in 1999,
3,371,099 in 1998,  and 3,353,581 in 1997.  The effects of the weighted  average
number of stock  options  outstanding  were  antidilutive  in 1998 and have been
excluded  from the per share  calculations.  Further,  because the Company had a
loss from continuing  operations in 1999 and 1997 the weighted average number of
stock options outstanding were also excluded from the per share calculations.

14.  Financial Instruments

The  carrying  values  of  financial  instruments  (cash  and cash  equivalents,
accounts  receivable,  accounts  payable,  and debt) as of December 31, 1999 and
1998  approximate  fair value.  Fair value was based on expected  cash flows and
current market conditions.

15.  Purchase of Inventory from Rotex Division of Esselte Canada

On December 8, 1997, the Company  purchased the majority of the inventory of the
Rotex Division of Esselte Canada. This inventory was purchased for $967,000 with
a debt  financing  of  $564,800,  and  assumed  liabilities  of  $402,200.  This
represents  an expansion of the  Company's  office  products  business in Canada
where the Company  distributes  a broad range of office  products to most of the
major distributors and retail chains.

16.  Restructuring and Other Charges

In 1997 the Company abandoned certain property and plant resulting in a $530,000
charge to  operations.  Also in 1997 the Company  recorded a $144,000  change in
estimate relating to a restructuring charge recorded in 1996.

<PAGE 23>
Report of Ernst & Young LLP, Independent Auditors

To the Board of Directors and Stockholders of Acme United Corporation:

We have  audited the  accompanying  consolidated  balance  sheets of Acme United
Corporation  and  subsidiaries as of December 31, 1999 and 1998, and the related
consolidated  statements of operations and comprehensive income (loss),  changes
in  stockholders'  equity,  and cash flows for the years then ended.  Our audits
also  included  the  financial  statement  schedule  listed in the Index at Item
14(a).  These financial  statements and schedule are the  responsibility  of the
Company's  management.  Our  responsibility  is to  express  an opinion on these
financial statements and schedule based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable  assurance about whether the financial  statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting  the amounts and  disclosures in the financial  statements.  An audit
also includes assessing the accounting principles used and significant estimates
made by  management,  as well as  evaluating  the  overall  financial  statement
presentation.  We believe  that our audits  provide a  reasonable  basis for our
opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all  material  respects,  the  consolidated  financial  position  of Acme United
Corporation and Subsidiaries at December 31, 1999 and 1998, and the consolidated
results  of their  operations  and their  cash flows for the years then ended in
conformity with accounting  principles  generally accepted in the United States.
Also, in our opinion, the related financial statement schedule,  when considered
in relation to the basic financial statements taken as a whole,  presents fairly
in all material respects the information set forth therein.



                                                           /s/ Ernst & Young LLP

Hartford, Connecticut
March 9, 2000

<PAGE 24>
Report of PricewaterhouseCoopers LLP, Independent Accountants

To the Board of Directors and Stockholders of Acme United Corporation:

We have audited the  accompanying  consolidated  statements  of  operations  and
comprehensive  income (loss),  changes in stockholders' equity and cash flows of
Acme United  Corporation  for the year ended December 31, 1997.  These financial
statements   are  the   responsibility   of  the   Company's   management.   Our
responsibility  is to express an opinion on these financial  statements based on
our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards  require that we plan and perform the audit to obtain reasonable
assurance   about  whether  the  financial   statements  are  free  of  material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the consolidated  results of Acme United  Corporation's
operations  and their  cash  flows for the year  ended  December  31,  1997,  in
conformity with generally accepted accounting principles.



/s/ PricewaterhouseCoopers LLP

Hartford, Connecticut
March 19, 1998, except as to the information  presented in Note 2, for which the
date is March 26, 1999

<PAGE 25>
Item 9.  Changes in and Disagreements with Accountants on Accounting and
         Financial Disclosure

There have been no  disagreements  with  accountants  related to accounting  and
financial disclosures in 1999.

PART III

Item 10.  Directors and Executive Officers of the Registrant

The following table sets forth certain information with respect to the directors
and executive officers of the Company.  All directors of the Company hold office
until the next annual meeting of the shareholders or until their successors have
been  elected  and  qualified.  Executive  officers  are elected to the Board of
Directors to hold office until their successors are elected and qualified.

           Name                Age            Position Held with Company
-------------------------- ------------ ----------------------------------------

Walter C. Johnsen              49       President, Chief Executive Officer
                                        and Director

Gary D. Penisten               68       Chairman of the Board and Director

Brian S. Olschan               43       Executive Vice President and
                                        Chief Operating Officer

Ronald P. Davanzo              37       Vice President and Chief Financial
                                        Officer, Secretary and Treasurer

David W. Clark, Jr.            62       Director

George R. Dunbar               76       Director

Richmond Y. Holden, Jr.        46       Director

Wayne R. Moore                 69       Director


Walter C. Johnsen has served as director  since 1995 and as President  and Chief
Executive  Officer since November 30, 1995.  Prior to that he was Executive Vice
President since January 24, 1995. He also was Chief Financial Officer from March
26, 1996 until June 30, 1996.  Before  joining the Company he was Vice  Chairman
and a principal of Marshall Products, Inc., a medical supply distributor.

Gary D.  Penisten  has served as director  since 1994 and  Chairman of the Board
since  February 27, 1996.  He is a Director of D. E. Foster & Partners  L.P., an
executive  search  firm.  From 1977 to 1988,  he was Senior  Vice  President  of
Finance,  Chief  Financial  Officer and a Director of Sterling  Drug Inc. in New
York City.

Brian S.  Olschan  served as Senior  Vice  President-Sales  and  Marketing  from
September 10, 1996 until  February 22, 1999.  From 1991 to 1996, he was employed
by General Cable  Corporation  in various  executive  positions  including  Vice
President and General Manager of the Cordset and Assembly  Business from 1994 to
1996.  Effective  January 23, 1999, he was promoted to Executive  Vice President
and Chief Operating Officer.

Ronald P.  Davanzo has served as Vice  President  and Chief  Financial  Officer,
Secretary  and  Treasurer  since  March  18,  1999.  Prior  to that he was  Vice
President-International  since  April 27,  1998 and  continues  to serve in that
capacity.  Mr. Davanzo joined Acme on May 19, 1997.  From 1985 to 1997 he served
in several  increasingly  responsible  positions in Sterling Drug, Inc., Eastman
Kodak, and Sanofi S.A. In his final position before joining Acme he was Director
of Finance for Sanofi's Oscar de la Renta fragrance business.

<PAGE 26>
David W. Clark,  Jr. has served as director since 1980. He is Managing  Director
of Pryor & Clark Company,  an investment  company.  From July 1988 to June 1992,
Mr. Clark was President of Corcap,  Inc.  which was spun out of Lydall,  Inc. in
July 1988.  Mr.  Clark  joined  Lydall in 1972 as Vice  President-Treasurer  and
Director.  He became  Executive  Vice  President in 1977 and  President in 1986.
Until  July of 1992,  Mr.  Clark was also  Chairman  of the  Board of  CompuDyne
Corporation of which he remains a Director.  He is also a Director of Checkpoint
Systems, Inc., Thorofare, NJ and SSC Technologies, Bloomfield, Connecticut.

George R. Dunbar has served as director  since 1977.  He is  President of Dunbar
Associates,  a  municipal  management  consulting  firm.  He is a  Former  Chief
Administrative  Officer  for the City of  Bridgeport  and  served  as  President
(1972-1987)  of  the  Bryant   Electric   Division  of   Westinghouse   Electric
Corporation,  manufacturer of electrical  distribution and utilization products,
Bridgeport, Connecticut.

Richmond  Y.  Holden,  Jr. has served as director  since 1998.  He has served as
President and Chief Executive Officer of J.L. Hammett Co. since 1992;  Executive
Vice President from 1989 to 1992. J.L. Hammett Co. is a distributor and retailer
of educational  products throughout the United States, and is one of the largest
distributors to the K-12 educational marketplace.

Wayne R. Moore has served as director since 1976. He is presently a Director and
Chairman  Emeritus of The  Producto  Machine  Company,  manufacturer  of machine
tools,  special machines,  and tool die and mold components.  He was Chairman of
the  Board  of  The  Producto   Machine  Company  and  of  Moore  Tool  Company,
manufacturer of machine tools,  measuring machines and metrology  products.  Mr.
Moore was Chairman of the Association for Manufacturing Technology/U.S.  Machine
Tool Builders  (1985-1986) and Committee Member of U.S. Eximbank (1984). He is a
Trustee of the  American  Precision  Museum and on the Board of  advisors of the
Fairfield University School of Engineering.

Item 11.  Executive Compensation

          (Refer to Proxy Statement pages 6-10)

Item 12.  Security Ownership of Certain Beneficial Owners and Management

          (Refer to Proxy Statement pages 1-2)

Item 13.  Certain Relationships and Related Transactions

          (None)

<PAGE 27>
PART IV

Item 14.  Exhibits, Financial Statement Schedules and Reports on Form 8-K

     (a)  Documents filed as part of this report:

         1. Financial Statements
                                                                         Page(s)

            Consolidated Balance Sheets                                      12
            Consolidated Statements of Operations and Comprehensive
              Income(Loss)                                                   10
            Consolidated Statements of Changes in Stockholders' Equity       11
            Consolidated Statements of Cash Flows                            13
            Notes to Consolidated Financial Statements                       14
            Report of Ernst & Young LLP, Independent Auditors                23
            Report of PricewaterhouseCoopers LLP, Independent Accountants    24


         2. Financial Statement Schedules

            Schedule II - Valuation and Qualifying Accounts                  28

Schedules  other than those listed above have been omitted  because the required
information  is contained in the  financial  statements  and notes  thereto,  or
because such schedules are not required or applicable.

         3. Exhibits

            Exhibit 21 - Parents and Subsidiaries                            29
            Exhibit 23 - Consent of Ernst & Young LLP, Independent Auditors  29
                       - Consent of PricewaterhouseCoopers LLP, Independent  29
                         Accountants

The following  basic documents are contained in S-1  Registration  Statement No.
230682 filed with the  Commission on November 7, 1968 and amended by Substantive
Amendment No. 1 on December 31, 1968 and by No. 2 on January 31, 1969:

            Certificate of Organization of Registrant
            Amendment to Certificate of Incorporation of Registrant dated
              September 24, 1968
            Proof of Common Stock Certificates

The following basic documents were filed with Form 10-K for 1971:

            Amendment to Certificate of Incorporation of Registrant dated
              April 27, 1971
            Amendment to Certificate of Incorporation dated June 29, 1971
            Proof of Common Stock Certificate
            Proof of Preferred Stock Certificate

     (b)  No Form 8-K was filed by the Company during the quarter ended
            December 31,1999.

<PAGE 28>
<TABLE>
SCHEDULE II
Acme United Corporation and Subsidiaries
VALUATION AND QUALIFYING ACCOUNTS
For the years ended December 31, 1999, 1998 and 1997

                                                  Balance at        Charged to      Deductions and
                                                 Beginning of       Costs and      Other Adjustments   Balance at End
                                                    Period           Expenses                            of Period
                                                ---------------- ----------------- ------------------ -----------------
<CAPTION>
<S>                                                <C>               <C>                <C>                <C>
1999
Allowance for doubtful accounts                    $195,325          $ 64,944           $134,107           $125,862

1998
Restructuring liability                              27,688                 -             27,688                  -
Allowance for doubtful accounts                     252,079            35,889             92,643            195,325

1997
Restructuring liability (A)                         755,440           385,636          1,113,388 (A)         27,688
Allowance for doubtful accounts                     197,755           155,622            101,298            252,079

(A) Reflects the write-down of abandoned property and plant of $530,000.
</TABLE>

<PAGE 29>
EXHIBIT 21

                            PARENTS AND SUBSIDIARIES

The Company was  organized as a  partnership  in 1867 and  incorporated  in 1882
under  the laws of the  State of  Connecticut  as The Acme  Shear  Company.  The
corporate name was changed to Acme United Corporation in 1971.

There is no parent of the registrant.

Registrant has the following subsidiaries, all of which are totally held:

Name                                           State or Country of Incorporation
----                                           ---------------------------------
Acme United Limited                                         Canada
Acme United, Ltd.                                           England
Emil Schlemper GmbH                                         Germany
Westcott Ruler Company, Inc.                                New York
The Acme Shear Company                                      Connecticut

Only  Acme  United  Limited  (Canada),  Acme  United,  Ltd.  (England)  and Emil
Schlemper GmbH are active and included in the consolidated financial statements.


EXHIBIT 23

               Consent of Ernst & Young LLP, Independent Auditors

We consent to the  incorporation  by  reference in the  Registration  Statements
(Form S-8 Nos. 333-84499,  33-98918 and 333-26737) pertaining to the Acme United
Corporation Amended and Restated Stock Option Plan, the Registration  Statements
(Form  S-8  Nos.  333-84505  and  333-26739)   pertaining  to  the  Acme  United
Corporation  Non-Salaried  Director  Stock  Option  Plan  and  the  Registration
Statement  (Form S-8 No.  333-84509)  pertaining to the Acme United  Corporation
Deferred  Compensation Plan for Directors and Acme United  Corporation  Deferred
Compensation  Plan for Walter C. Johnsen of our report dated March 9, 2000, with
respect to the  consolidated  financial  statements  and schedule of Acme United
Corporation and subsidiaries  included in this Annual Report (Form 10-K) for the
year ended December 31, 1999.


                                                           /s/ Ernst & Young LLP

Hartford, Connecticut
March 27, 2000


         Consent of PricewaterhouseCoopers LLP, Independent Accountants

We  hereby  consent  to the  incorporation  by  reference  in  the  registration
statements of Acme United  Corporation  and  Subsidiaries on Forms S-8 (File No.
33-98918, File No. 333-26737,  and File No. 333-26739) of our report dated March
19, 1998,  except as to the information  presented in Note 2, for which the date
is  March  26,  1999  relating  to the  consolidated  financial  statements  and
financial statement schedule of Acme United Corporation and Subsidiaries for the
year ended  December 31, 1997,  which is included in this Annual  Report on Form
10-K.

                                                  /s/ PricewaterhouseCoopers LLP

Hartford, Connecticut
March 28, 2000

<PAGE 30>
Pursuant to the  requirements of Section 13 or 15(d) 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, on March 27,2000.


ACME UNITED CORPORATION
(Registrant)

Signatures                               Titles

s/ Walter C. Johnsen
-----------------------------
   Walter C. Johnsen                     Chief Executive Officer and Director

s/ Gary D. Penisten
-----------------------------
   Gary D. Penisten                      Chairman of the Board and Director

s/ Ronald P. Davanzo
-----------------------------
   Ronald P. Davanzo                     Vice President and Chief Financial
                                         Officer, Secretary and Treasurer

s/ David W. Clark, Jr.
-----------------------------
   David W. Clark, Jr.                   Director

s/ George R. Dunbar
-----------------------------
   George R. Dunbar                      Director

s/ Richmond Y. Holden, Jr.
-----------------------------
   Richmond Y. Holden, Jr.               Director

s/ Wayne R. Moore
-----------------------------
   Wayne R. Moore                        Director