STOCK TITAN

The Eastern Company Reports Third Quarter 2024 Results

Rhea-AI Impact
(Moderate)
Rhea-AI Sentiment
(Neutral)
Tags

The Eastern Company (NASDAQ:EML) reported strong Q3 2024 results with net sales from continuing operations increasing 15% to $71.3 million compared to $62.0 million in Q3 2023. Gross margin improved to 25.5% from 24.9%, while earnings per diluted share rose 36% to $0.75. The company announced Ryan Schroeder as new CEO effective November 6, 2024. Eastern's backlog increased 13% to $97.2 million, driven by increased orders for truck mirror assemblies and returnable transport packaging products. The company has classified Big 3 Mold business as discontinued operations, recording a $23.1 million write-down to fair value.

The Eastern Company (NASDAQ:EML) ha riportato risultati solidi per il terzo trimestre del 2024, con vendite nette dalle operazioni continuative aumentate del 15% a 71,3 milioni di dollari rispetto ai 62,0 milioni di dollari nel terzo trimestre del 2023. Il margine lordo è migliorato al 25,5% rispetto al 24,9%, mentre l'utile per azione diluita è aumentato del 36% a 0,75 dollari. L'azienda ha annunciato Ryan Schroeder come nuovo CEO con effetto dal 6 novembre 2024. Il backlog di Eastern è aumentato del 13% a 97,2 milioni di dollari, grazie a un aumento degli ordini per gli assemblaggi di specchietti per camion e per i prodotti di imballaggio trasportabili. L'azienda ha classificato il business Big 3 Mold come operazioni cessate, registrando una svalutazione di 23,1 milioni di dollari per il valore equo.

The Eastern Company (NASDAQ:EML) reportó sólidos resultados para el tercer trimestre de 2024, con ventas netas de operaciones continuas aumentando un 15% a 71.3 millones de dólares en comparación con 62.0 millones de dólares en el tercer trimestre de 2023. El margen bruto mejoró al 25.5% desde el 24.9%, mientras que las ganancias por acción diluida aumentaron un 36% a 0.75 dólares. La compañía anunció a Ryan Schroeder como nuevo CEO, a partir del 6 de noviembre de 2024. La cartera de pedidos de Eastern aumentó un 13% a 97.2 millones de dólares, impulsada por un aumento en los pedidos de ensamblajes de espejos para camiones y productos de embalaje transportables. La compañía ha clasificado el negocio Big 3 Mold como operaciones descontinuadas, registrando un ajuste a valor justo de 23.1 millones de dólares.

The Eastern Company (NASDAQ:EML)는 2024년 3분기 실적이 강하게 보고되었으며, 계속 운영되는 매출이 15% 증가한 7130만 달러를 기록했으며, 이는 2023년 3분기의 6200만 달러에 비해 증가한 것입니다. 총 마진은 24.9%에서 25.5%로 개선되었고, 희석 기준 주당 순이익은 36% 증가한 0.75달러에 달했습니다. 회사는 Ryan Schroeder를 2024년 11월 6일부터 새로운 CEO로 임명한다고 발표했습니다. Eastern의 주문 잔고는 13% 증가한 9720만 달러에 달하며, 이는 트럭 미러 조립품과 리턴 가능한 운송 포장 제품에 대한 주문 증가에 의해 촉진되었습니다. 회사는 Big 3 Mold 사업을 중단된 운영으로 분류하고, 공정 가치로 2310만 달러의 손실을 기록했습니다.

The Eastern Company (NASDAQ:EML) a annoncé de solides résultats pour le troisième trimestre de 2024, avec des ventes nettes des opérations continues augmentant de 15% à 71,3 millions de dollars par rapport à 62,0 millions de dollars au troisième trimestre de 2023. La marge brute s'est améliorée à 25,5% contre 24,9%, tandis que le bénéfice par action diluée a augmenté de 36% pour atteindre 0,75 dollar. L'entreprise a annoncé la nomination de Ryan Schroeder en tant que nouveau PDG à compter du 6 novembre 2024. Le carnet de commandes d'Eastern a augmenté de 13% pour atteindre 97,2 millions de dollars, grâce à une augmentation des commandes pour les ensembles de miroirs de camion et les produits d'emballage réutilisables. L'entreprise a classé l'activité Big 3 Mold comme opérations abandonnées, enregistrant une amortissement de 23,1 millions de dollars à la valeur juste.

The Eastern Company (NASDAQ:EML) berichtete über starke Ergebnisse für das dritte Quartal 2024, wobei die Nettoverkäufe aus fortgeführten Betrieben um 15% auf 71,3 Millionen US-Dollar stiegen im Vergleich zu 62,0 Millionen US-Dollar im dritten Quartal 2023. Die Bruttomarge verbesserte sich von 24,9% auf 25,5%, während das Ergebnis pro verwässerter Aktie um 36% auf 0,75 US-Dollar anstieg. Das Unternehmen gab bekannt, dass Ryan Schroeder am 6. November 2024 neuer CEO wird. Der Auftragsbestand von Eastern stieg um 13% auf 97,2 Millionen US-Dollar, was durch erhöhte Bestellungen für Lkw-Spiegelsysteme und wiederverwendbare Transportverpackungsprodukte angetrieben wurde. Das Unternehmen hat das Big 3 Mold-Geschäft als nicht fortgeführte Betriebe eingestuft und einen Wertverlust von 23,1 Millionen US-Dollar bilanziert.

Positive
  • Net sales increased 15% YoY to $71.3 million in Q3 2024
  • Earnings per diluted share grew 36% to $0.75
  • Gross margin improved to 25.5% from 24.9%
  • Backlog increased 13% to $97.2 million
  • Strong demand growth in returnable transport packaging ($7.4M) and truck mirror assemblies ($1.2M)
Negative
  • $23.1 million write-down of Big 3 Mold business
  • Selling, general and administrative expenses increased 22.1% YoY
  • $0.8 million operating loss in discontinued operations
  • Softening demand in commercial vehicle market noted

Insights

The Q3 2024 results show significant improvements across key metrics. $71.3M in net sales represents a robust 15% YoY growth, while gross margin expanded to 25.5%. The 36% increase in EPS to $0.75 and 13% growth in backlog to $97.2M demonstrate strong operational execution.

Notable is the strategic decision to divest the Big 3 Mold business, resulting in a $23.1M write-down. This portfolio optimization, combined with improved operational efficiency and the "One Eastern" strategy, positions the company for stronger focus on core industrial markets. The 22.1% increase in SG&A expenses warrants monitoring but appears manageable given the revenue growth.

The appointment of Ryan Schroeder as CEO, with his extensive experience at Plaskolite, IMI Norgen and Parker Hannifin, signals a strategic shift toward operational excellence and growth. His background in managing multi-facility operations and track record in both organic growth and acquisitions aligns well with Eastern's transformation goals.

The decision to divest Big 3 Mold reflects a disciplined portfolio approach, allowing better resource allocation to core competencies in commercial vehicle and industrial markets. The company's positioning to benefit from industry dual-sourcing trends shows strategic foresight, though softening demand in the commercial vehicle market requires careful navigation.

  • Net sales from continuing operations increase to $71.3 million in Q3 2024 compared to $62.0 million in Q3 2023

  • Gross margin from continuing operations increases to 25.5% in Q3 2024 compared to 24.9% in Q3 2023

  • Earnings per diluted share from continuing operations increase 36% to $0.75 in Q3 2024 compared to $0.55 in Q3 2023

  • Eastern advances its business transformation by reporting Big 3 Mold business as discontinued operations

  • Eastern announces transition to new CEO – Ryan Schroeder

SHELTON, CT / ACCESSWIRE / November 5, 2024 / The Eastern Company ("Eastern" or the "Company") (NASDAQ:EML), an industrial manufacturer of unique engineered solutions serving commercial transportation, logistics, and other industrial markets, today announced the results of operations for the third fiscal quarter ended September 28, 2024 and that its Board of Directors has named Ryan Schroeder the Company's next Chief Executive Officer, effective November 6, 2024. Mr. Schroeder, a seasoned executive with a proven history of leading manufacturing companies to sustained long-term growth, will succeed Mark Hernandez as CEO.

James Mitarotonda, Chair of the Board of Directors, said "We are pleased that Ryan will be joining Eastern as CEO. He is a seasoned executive with a history of leading manufacturing companies to peer-beating, sustained long-term growth, and he will succeed Mark Hernandez, who has separated from service as CEO, a position he has held since 2023, and has resigned from the Company's Board of Directors after having served in such capacity since 2022. Ryan brings a track record for growing businesses both organically and through acquisition, most recently as CEO at Plaskolite LLC. Prior to that, Ryan spent four years at IMI Norgen as president, leading approximately 2,200 employees across 17 facilities, and prior to joining IMI Norgen, he spent 12 years at Parker Hannifin in a variety of roles, including general manager of global valves, plant manager, and supply chain manager of the company's Mobile Cylinders division."

Board Chairman James Mitarotonda continued, "Eastern turned in an excellent operating performance for the third quarter, with notable year-over-year improvements in the Company's net sales, gross margin, operating profit, and earnings per share from continuing operations. These results, in tandem with a 13% year-over-year increase in backlog, demonstrate the success of the many steps we have taken under our value-creation program.

"During the quarter, we continued to evaluate Eastern's business portfolio for long-term performance. As a result of this exercise, we determined that the Big 3 Mold business no longer fits with our long-term strategy, and we recently began taking steps to sell that business. Making this structural change to our portfolio will enable us to focus all of our resources on our best-in-class manufacturing and assembly capabilities in commercial vehicle, automotive, and other industrial end markets."

Mr. Mitarotonda concluded, "With these steps, we have advanced the most important elements of the business transformation program. We expect to continue benefiting from our "One Eastern" strategy in the fourth quarter of 2024 and beyond, as well as from the trend toward dual-sourcing currently underway as industry players take further actions to protect their supply chain even as demand is currently softening in the commercial vehicle market. In summary, Eastern is now moving forward as a stronger organization that is well positioned to reach our key goal of consistently delivering solid performance and creating shareholder value."

Discontinued Operations

In accordance with the Company's decision to sell the Big 3 Mold business, the income statement results of the Big 3 Mold business have been reclassified as discontinued operations. Included in discontinued operations for the third quarter of 2024 are a $0.8 million operating loss and a $23.1 million write-down of the Big 3 Mold business to fair value.

Third Quarter and Nine Months 2024 Financial Results

The following analysis excludes discontinued operations.

Net sales for the third quarter of 2024 increased 15% to $71.3 million from $62.0 million for the corresponding period in 2023. Net sales for the first nine months of 2024 increased 6% to $206.1 million from $195.1 million in the corresponding period last year. Sales increased in the third quarter of 2024 primarily due to increased demand for returnable transport packaging products, truck mirror assemblies, and truck accessories of $7.4 million, $1.2 million, and $0.7 million, respectively. Sales increases in the first nine months of 2024 were driven by increased demand for truck mirror assemblies and returnable transport packaging products of $13.3 million and $4.6 million respectively, offset by lower demand for truck accessories of $6.9 million. Our backlog as of September 28, 2024 increased 13% to $97.2 million from $86.2 million as of September 30, 2023, primarily driven by increased orders for various truck mirror assemblies of $11.6 million and returnable transport packaging products of $3.2 million.

Gross margin as a percentage of sales was 25.5% in the third quarter of 2024 and 25.2% in the first nine months of 2024 compared to 24.9% in the third quarter of 2023 and 22.9% in the first nine months of 2023. Our gross margin in the third quarter of 2024 primarily reflects the impact of price increases to customers to recover increases in raw material costs and cost savings initiatives.

Selling, general and administrative expenses increased $1.9 million, or 22.1%, in the third quarter of 2024 when compared to the third quarter of 2023 primarily due to higher payroll-related expenses of $1.2 million, legal and professional expenses of $0.3 million, travel expenses of $0.1 million, and other selling and administrative expenses of $0.3 million. Selling and administrative expenses increased $2.0 million, or 6.8%, in the first nine months of 2024 when compared to the corresponding period in 2023 primarily due to higher payroll-related expenses of $1.7 million and other administrative costs.

Other income and expense increased $0.1 million in the third quarter of 2024 and decreased $1.1 million in the first nine months of 2024 when compared to the corresponding periods in 2023. The increase in other income and expense of $0.1 million in the third quarter of 2024 was primarily driven by lower pension expense of $0.1 million when compared to the third quarter of 2023. The decrease in other income and expense of $1.1 million for the first nine months of 2024 when compared to the corresponding period in 2023 was primarily driven by $0.3 million lower pension expense in the second quarter of 2023, and an unfavorable final working capital adjustment of $0.4 million related to the sale of the Greenwald business in the first quarter of 2023, partially offset by a $1.6 million favorable adjustment for the final settlement of our swap agreement with Santander in the second quarter of 2023.

Net income for the third quarter of fiscal 2024 was $4.7 million, or $0.75 per diluted share, compared to net income of $3.5 million, or $0.55 per diluted share, for the comparable period in 2023. In the first nine months of 2024, net income was $11.7 million, or $1.87 per diluted share, compared to net income of $7.8 million, or $1.24 per diluted share, for the comparable period in 2023.

Adjusted net income from continuing operations (a non-GAAP measure) for the third quarter of fiscal 2024 was $4.7 million, or $0.75 per diluted share, compared to adjusted net income from continuing operations of $3.5 million, or $0.55 per diluted share, for the comparable period in 2023. For the nine months ended September 29, 2024, adjusted net income from continuing operations was $11.7 million, or $1.87 per diluted share, compared to $9.1 million, or $1.44 per diluted share for the comparable 2023 period. Adjusted EBITDA from continuing operations (a non-GAAP measure) for the third quarter of fiscal 2024 was $8.7 million compared to adjusted EBITDA from continuing operations of $6.7 million for the 2023 period. For the nine months ended September 28, 2024, adjusted EBITDA from continuing operations was $21.3 million compared to $18.5 million in the 2023 period. See "Non-GAAP Financial Measures" below and the reconciliation table accompanying this release.

During the third quarter of fiscal 2024, the Company repurchased 50,000 shares of common stock under its share repurchase program authorized in August 2023.

Conference Call and Webcast

The Eastern Company will host a conference call to discuss its results for the third quarter of 2024 and other matters on Wednesday, November 6, 2024 at 11:00 AM Eastern Time. Participants can access the conference call by phone at 888-506-0062 (toll-free in the US and Canada) or 973-528-0011 (international), using access code 594322. Participants can also join via the web at https://www.webcaster4.com/Webcast/Page/1757/51396

About The Eastern Company

The Eastern Company manages industrial businesses that design, manufacture and sell unique engineered solutions to markets. Eastern's businesses operate in industries that offer long-term macroeconomic growth opportunities. The Company operates from locations in the U.S., Canada, Mexico, Taiwan, and China. More information on the Company can be found at www.easterncompany.com.

Safe Harbor for Forward-Looking Statements

Statements contained in this press release that are not based on historical facts are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of forward-looking terminology such as "would," "should," "could," "may," "will," "expect," "believe," "estimate," "anticipate," "intend," "continue," "plan," "potential," "opportunities," or similar terms or variations of those terms or the negative of those terms. There are many factors that affect the Company's business and the results of its operations and that may cause the actual results of operations in future periods to differ materially from those currently expected or anticipated. These factors include:

  • the impact of higher raw material and component costs and cost inflation, supply chain disruptions and shortages, particularly with respect to steel, plastics, scrap iron, zinc, copper, and electronic components;

  • delays in delivery of our products to our customers;

  • the impact of global economic conditions and rising interest rates, and more specifically conditions in the automotive, construction, aerospace, energy, oil and gas, transportation, electronic, and general industrial markets, including the impact, length and degree of economic downturns on the customers and markets we serve and demand for our products, reductions in production levels, the availability, terms and cost of financing, including borrowings under credit arrangements or agreements, the potential impact of bank failures on our ability to access financing or capital markets, and the impact of market conditions on pension plan funded status;

  • restrictions on operating flexibility imposed by the agreement governing our credit facility;

  • risks associated with doing business overseas, including fluctuations in exchange rates and the inability to repatriate foreign cash, the impact on cost structure and on economic conditions as a result of actual and threatened increases in trade tariffs and the impact of political, economic, and social instability;

  • the inability to achieve the savings expected from global sourcing of materials;

  • lower-cost competition;

  • our ability to design, introduce and sell new or updated products and related components;

  • market acceptance of our products;

  • the inability to attain expected benefits from acquisitions or the inability to effectively integrate acquired businesses and achieve expected synergies;

  • costs and liabilities associated with environmental compliance;

  • the impact of climate change, natural disasters, geopolitical events and elections, including a change in administration from the upcoming U.S. presidential election, and public health crises, including pandemics (such as COVID-19) and epidemics, and any related Company or government policies or actions;

  • military conflict (including the Russia/Ukraine conflict, the conflict in the Middle East, the possible expansion of such conflicts and geopolitical consequences) or terrorist threats and the possible responses by the U.S. and foreign governments;

  • failure to protect our intellectual property;

  • cyberattacks; and

  • materially adverse or unanticipated legal judgments, fines, penalties, or settlements.

The Company is also subject to other risks identified and discussed in Part I, Item 1A, Risk Factors, and in Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations, of the Company's Annual Report on Form 10-K for the fiscal year ended December 30, 2023, which was filed with the Securities and Exchange Commission on March 12, 2024, and that may be identified from time to time in our quarterly reports on Form 10-Q, current reports on Form 8-K and other filings we make with the SEC.

Although the Company believes it has an appropriate business strategy and the resources necessary for its operations, future revenue and margin trends cannot be reliably predicted, and the Company may alter its business strategies to address changing conditions. Also, the Company makes estimates and assumptions that may materially affect reported amounts and disclosures. These relate to valuation allowances for accounts receivable and excess and obsolete inventories, accruals for pensions and other postretirement benefits (including forecasted future cost increases and returns on plan assets), provisions for depreciation (estimating useful lives), uncertain tax positions, and, on occasion, accruals for contingent losses. The Company undertakes no obligation to update, alter, or otherwise revise any forward-looking statements, whether written or oral, that may be made from time to time, whether as a result of new information, future events, or otherwise, except as required by law.

Non-GAAP Financial Measures

The non-GAAP financial measures we provide in this press release should be viewed in addition to, and not as an alternative for, results prepared in accordance with U.S. GAAP.

To supplement the condensed consolidated financial statements prepared in accordance with U.S. GAAP, we have presented Adjusted Net Income from Continuing Operations, Adjusted Earnings Per Share from Continuing Operations, Adjusted EBITDA from Continuing Operations, Adjusted EBITDA from Discontinued Operations and Adjusted EBITDA, which are considered non-GAAP financial measures. The non-GAAP financial measures presented may differ from similarly titled non-GAAP financial measures presented by other companies, and other companies may not define these non-GAAP financial measures in the same way. These measures are not substitutes for their comparable U.S. GAAP financial measures, such as net sales, net income, diluted earnings per share, or other measures prescribed by U.S. GAAP, and there are limitations to using non-GAAP financial measures.

Adjusted Net Income from Continuing Operations is defined as net income from continuing operations excluding, when incurred, gains or losses that we do not believe reflect our ongoing operations, including, for example, the impacts of impairment losses, gains/losses on the sale of subsidiaries, property and facilities, transaction expenses primarily relating to acquisitions and divestitures, factory start-up costs, factory relocation expenses, executive severance, and restructuring costs. Adjusted Net Income from Continuing Operations is a tool that can assist management and investors in comparing our performance on a consistent basis across periods by removing the impact of certain items that management believes do not directly reflect our underlying operating performance.

Adjusted Earnings Per Share from Continuing Operations is defined as earnings per share from continuing operations excluding, when incurred, certain per share gains or losses that we do not believe reflect our ongoing operations, including, for example, the impacts of impairment losses, gains/losses on the sale of subsidiaries, property and facilities, transaction expenses primarily relating to acquisitions and divestitures, factory start-up costs, factory relocation expenses, executive severance, and restructuring costs. We believe that Adjusted Earnings Per Share from Continuing Operations provides important comparability of underlying operational results, allowing investors and management to access operating performance on a consistent basis from period to period.

Adjusted EBITDA from Continuing Operations is defined as net income from continuing operations before interest expense, provision for income taxes, and depreciation and amortization and excluding, when incurred, the impacts of certain losses or gains that we do not believe reflect our ongoing operations, including, for example, impairment losses, gains/losses on sale of subsidiaries, property and facilities, transaction expenses primarily relating to acquisitions and divestitures, factory start-up costs, factory relocation expenses, executive severance, and restructuring expenses. Adjusted EBITDA from Continuing Operations is a tool that can assist management and investors in comparing our performance on a consistent basis by removing the impact of certain items that management believes do not directly reflect our underlying operations.

Adjusted EBITDA from Discontinued Operations is defined as net income from discontinued operations before interest expense, provision for income taxes, and depreciation and amortization and excluding, when incurred, the impacts of certain losses or gains that we do not believe reflect our ongoing operations, including, for example, impairment losses, gains/losses on sale of subsidiaries, property and facilities, transaction expenses primarily relating to acquisitions and divestitures, factory start-up costs, factory relocation expenses, executive severance, and restructuring expenses. Adjusted EBITDA from Discontinued Operations is a tool that can assist management and investors in comparing our performance on a consistent basis by removing the impact of certain items that management believes do not directly reflect our underlying operations.

Adjusted EBITDA is defined as net income before interest expense, provision for income taxes, and depreciation and amortization and excluding, when incurred, the impacts of certain losses or gains that we do not believe reflect our ongoing operations, including, for example, impairment losses, gains/losses on sale of subsidiaries, property and facilities, transaction expenses primarily relating to acquisitions and divestitures, factory start-up costs, factory relocation expenses, executive severance, and restructuring expenses. Adjusted EBITDA is a tool that can assist management and investors in comparing our performance on a consistent basis by removing the impact of certain items that management believes do not directly reflect our underlying operations.

Management uses such measures to evaluate performance period over period, to analyze the underlying trends in our business, to assess our performance relative to our competitors, and to establish operational goals and forecasts that are used in allocating resources. These financial measures should not be considered in isolation from, or as a replacement for, U.S. GAAP financial measures.

We believe that presenting non-GAAP financial measures in addition to U.S. GAAP financial measures provides investors greater transparency to the information used by our management for its financial and operational decision-making. We further believe that providing this information better enables our investors to understand our operating performance and to evaluate the methodology used by management to evaluate and measure such performance.

Investor Relations Contacts

The Eastern Company
Nicholas Vlahos
203-729-2255

THE EASTERN COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

Three Months Ended

Nine Months Ended

September 28, 2024

September 30, 2023

September 28, 2024

September 30, 2023

Net sales

$

71,274,757

$

62,001,347

$

206,068,490

$

195,062,061

Cost of products sold

(53,085,087

)

(46,556,952

)

(154,161,980

)

(150,371,589

)

Gross margin

18,189,670

15,444,395

51,906,510

44,690,472

Product development expense

(1,077,930

)

(1,425,159

)

(3,739,214

)

(4,257,468

)

Selling and administrative expenses

(10,316,788

)

(8,452,163

)

(31,014,022

)

(29,051,436

)

Operating profit

6,794,952

5,567,073

17,153,274

11,381,568

Interest expense

(709,680

)

(854,223

)

(2,049,655

)

(2,059,912

)

Other (expense) income

(82,703

)

(135,839

)

(92,415

)

1,025,582

Income from continuing operations before income taxes

6,002,569

4,577,011

15,011,204

10,347,238

Income tax expense

(1,333,771

)

(1,113,587

)

(3,335,489

)

(2,574,393

)

Net income from continuing operations

$

4,668,798

$

3,463,424

$

11,675,715

$

7,772,845

Discontinued Operations (see note B)

Loss from operations of discontinued unit

$

(766,990

)

$

(530,764

)

$

(2,750,844

)

$

(3,600,060

)

Loss on classification as held for sale

(23,087,775

)

-

(23,087,775

)

-

Income tax benefit

3,888,522

129,298

4,320,904

895,695

Loss on discontinued operations

$

(19,966,243

)

$

(401,466

)

$

(21,517,715

)

$

(2,704,365

)

Net (loss) income

$

(15,297,445

)

$

3,061,958

$

(9,842,000

)

$

5,068,480

Earnings per share from continuing operations:

Basic

$

0.75

$

0.55

$

1.88

$

1.25

Diluted

$

0.75

$

0.55

$

1.87

$

1.24

Loss per share from discontinued operations:

Basic

$

(3.22

)

$

(0.06

)

$

(3.46

)

$

(0.43

)

Diluted

$

(3.21

)

$

(0.06

)

$

(3.45

)

$

(0.43

)

Total (loss) earnings per share:

Basic

$

(2.47

)

$

0.49

$

(1.58

)

$

0.82

Diluted

$

(2.46

)

$

0.49

$

(1.58

)

$

0.81

Cash dividends per share

$

0.11

$

0.11

$

0.33

$

0.33

THE EASTERN COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS

September 28, 2024

December 30, 2023

(unaudited)

ASSETS

Current Assets

Cash and cash equivalents

$

7,670,541

$

8,048,127

Marketable securities

2,034,602

986,477

Accounts receivable, less allowances: 2024 - $470,870; 2023 - $534,476

45,999,803

34,204,581

Inventories

58,125,362

58,396,679

Current portion of notes receivable

239,261

573,269

Prepaid expenses and other assets

2,356,524

5,443,778

Current assets held for sale

9,643,534

4,583,797

Total Current Assets

126,069,627

112,236,708

Property, Plant and Equipment

59,890,704

52,684,476

Accumulated depreciation

(31,095,676

)

(29,162,438

)

Property, Plant and Equipment, Net

28,795,028

23,522,038

Goodwill

58,576,197

58,576,198

Trademarks

3,946,651

3,914,409

Patents and other intangibles net of accumulated amortization

9,373,296

11,182,167

Long-term notes receivable, less current portion

238,002

374,932

Deferred Income Taxes

2,536,357

2,283,571

Right of Use Assets

14,645,336

17,064,137

Other Long-Term Assets

42,510

-

Long-term assets held for sale

-

22,885,041

Total Other Assets

89,358,349

116,280,455

TOTAL ASSETS

$

244,223,004

$

252,039,201

THE EASTERN COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS (continued)

September 28, 2024

December 30, 2023

(unaudited)

LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities

Accounts payable

$

23,988,401

$

24,554,117

Accrued compensation

5,142,966

5,194,830

Other accrued expenses

8,252,803

3,965,335

Current portion of operating lease liability

3,373,500

4,336,794

Current portion of finance lease liability

721,178

175,231

Current portion of long-term debt

3,228,935

2,871,870

Other current liabilities

578,071

-

Current liabilities held for sale

2,541,189

1,635,549

Total Current Liabilities

47,827,043

42,733,726

Other long-term liabilities

640,724

730,970

Operating lease liability, less current portion

11,271,835

12,727,344

Finance lease liability, less current portion

3,050,529

715,669

Long-term debt, less current portion

41,487,366

41,063,865

Accrued postretirement benefits

594,167

554,758

Accrued pension cost

20,111,130

21,025,365

Long-term liabilities held for sale

-

6,920

Total Liabilities

124,982,794

119,558,617

Shareholders' Equity

Voting Preferred Stock, no par value:

Authorized and unissued: 1,000,000 shares

Nonvoting Preferred Stock, no par value:

Authorized and unissued: 1,000,000 shares

Common Stock, no par value, Authorized: 50,000,000 shares

34,864,634

33,950,859

Issued: 9,127,700 shares as of 2024 and 9,091,815 shares as of 2023

Outstanding: 6,183,179 shares as of 2024 and 6,217,370 shares as of 2023

Treasury Stock: 2,894,521 shares as of 2024 and 2,874,445 shares as of 2023

(25,196,598

)

(23,280,467

)

Retained earnings

132,912,235

144,805,168

Accumulated other comprehensive loss:

Foreign currency translation

(1,394,461

)

(866,599

)

Unrealized loss on foreign currency swap, net of tax

(535,561

)

-

Unrecognized net pension and postretirement benefit costs, net of tax

(21,410,039

)

(22,128,377

)

Accumulated other comprehensive loss

(23,340,061

)

(22,994,976

)

Total Shareholders' Equity

119,240,210

132,480,584

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

$

244,223,004

$

252,039,201

THE EASTERN COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

Nine Months Ended

September 28, 2024

September 30, 2023

Operating Activities

Net (loss) income

$

(9,842,000

)

$

5,068,480

Less: Loss from discontinued operations

(21,517,715

)

(2,704,365

)

Income from continuing operations

$

11,675,715

$

7,772,845

Adjustments to reconcile net income to net cash provided

by operating activities:

Depreciation and amortization

4,266,038

3,914,160

Reduction in carrying amount of ROU assets

2,418,801

3,579,223

Unrecognized pension and postretirement benefits

(353,257

)

635,677

Loss on sale of equipment and other assets

53,311

331,474

Provision for doubtful accounts

(24,570

)

(88,353

)

Stock compensation expense

913,775

151,300

Changes in operating assets and liabilities:

Accounts receivable

(11,739,823

)

1,069,630

Inventories

300,720

4,501,969

Prepaid expenses and other

2,874,825

1,108,094

Other assets

(236,934

)

(262,212

)

Accounts payable

693,653

1,821,223

Accrued compensation

(190,904

)

353,773

Change in operating lease liability

(2,418,801

)

(3,579,223

)

Other accrued expenses

115,403

(3,152,809

)

Net cash provided by operating activities

8,347,952

18,156,771

Investing Activities

Marketable securities

(999,960

)

-

Business acquisition

-

(547,638

)

Payments received from notes receivable

470,937

2,265,730

Proceeds from sale of equipment

18,925

-

Purchases of property, plant, and equipment

(7,634,265

)

(4,089,705

)

Net cash used in investing activities

(8,144,363

)

(2,371,613

)

Financing Activities

Proceeds from new long-term debt financing

-

60,000,000

Principal payments on long-term debt

(2,365,500

)

(74,919,004

)

Proceeds (payments) on short term borrowings (revolver)

3,000,000

(300,029

)

Financing leases, net

2,819,262

674,558

Purchase common stock for treasury

(1,916,130

)

(245,546

)

Dividends paid

(2,050,933

)

(2,069,043

)

Net cash used in financing activities

(513,301

)

(16,859,064

)

Discontinued Operations

Cash provided by operating activities

411,778

1,092,876

Cash used in investing activities

(217,101

)

(628,968

)

Cash provided by discontinued operations

194,677

463,908

Effect of exchange rate changes on cash

(67,874

)

(36,737

)

Net change in cash and cash equivalents

(182,909

)

(646,735

)

Cash and cash equivalents at beginning of period

8,299,453

10,187,521

Cash and cash equivalents at end of period ??

$

8,116,544

$

9,540,786

Supplemental disclosure of cash flow information

Interest

$

2,443,448

$

2,574,890

Income taxes

3,945,295

1,321,170

Non-cash investing and financing activities

Right of use asset

2,418,801

3,579,222

Lease liability

(462,004

)

(4,484,838

)

?? includes cash from assets held for sale of $0.4 million as of September 28, 2024 and $0.7 million as of September 30, 2023

Reconciliation of Non-GAAP Measures
Adjusted Net Income from Continuing Operations and Adjusted Earnings per Share
from Continuing Operations Calculation
For the Three and Nine Months ended September 28, 2024 and September 30, 2023
($000's)

Three Months Ended

Nine Months Ended

September 28, 2024

September 30, 2023

September 28, 2024

September 30, 2023

Net income from continuing operations as reported per generally accepted accounting principles (GAAP)

$

4,669

$

3,463

$

11,676

$

7,773

Earnings per share from continuing operations as reported under generally accepted accounting principles (GAAP):

Basic

$

0.75

$

0.55

$

1.88

$

1.25

Diluted

$

0.75

$

0.55

$

1.87

$

1.24

Adjustments:

Severance and accrued compensation

-

-

-

1,799

a

Greenwald final sale adjustment

-

-

-

390

b

Non-GAAP tax impact of adjustments (1)

-

-

-

(909

)

Total adjustments (non-GAAP)

$

-

$

-

$

-

$

1,280

Adjusted net income from continuing operations (non-GAAP)

$

4,669

$

3,463

$

11,676

$

9,053

Adjusted earnings per share from continuing operations (non-GAAP):

Basic

$

0.75

$

0.56

$

1.88

$

1.45

Diluted

$

0.75

$

0.55

$

1.87

$

1.44

(1) We estimate the tax effect of the items identified to determine a non-GAAP annual effective tax rate applied to the pre-tax amount in order to calculate the non-GAAP provision for income taxes

a) Severance expenses associated with accrued compensation and severance related to the elimination of the Chief Operating Officer position and the departure of the Chief Executive Officer

b) Final settlement of working capital adjustment associated with Greenwald sale

Reconciliation of Non-GAAP Measures
Calculations of Adjusted EBITDA from Continuing Operations, Adjusted EBITDA from Discontinued Operations and Adjusted EBITDA
For the Three and Nine Months ended September 28, 2024 and September 30, 2023
($000's)

Three Months Ended

Nine Months Ended

September 28, 2024

September 30, 2023

September 28, 2024

September 30, 2023

Net income from continuing operations as reported per generally accepted accounting principles (GAAP)

$

4,669

$

3,463

$

11,676

$

7,773

Interest expense

710

854

2,050

2,060

Provision for income taxes

1,334

1,114

3,335

2,574

Depreciation and amortization

2,033

1,317

4,266

3,914

Severance and accrued compensation

-

-

-

1,799

a

Greenwald final sale adjustment

-

-

-

390

b

Adjusted EBITDA from continuing operations (non-GAAP)

$

8,745

$

6,748

$

21,327

$

18,510

Net income from discontinued operations as reported per generally accepted accounting principles (GAAP)

$

(19,966

)

$

(401

)

$

(21,518

)

$

(2,704

)

Interest expense

177

214

512

515

Provision for income taxes

(3,889

)

(129

)

(4,321

)

(896

)

Depreciation and amortization

546

534

1,595

1,558

Loss on classification as held for sale

23,088

c

-

23,088

c

-

Adjusted EBITDA from discontinued operations (non-GAAP)

$

(44

)

$

217

$

(644

)

$

(1,527

)

Net income as reported per generally accepted accounting principles (GAAP)

$

(15,297

)

$

3,062

$

(9,842

)

$

5,068

Interest expense

887

1,068

2,562

2,575

Provision for income taxes

(2,555

)

984

(985

)

1,679

Depreciation and amortization

2,579

1,851

5,861

5,472

Severance and accrued compensation

-

-

-

1,799

a

Greenwald final sale adjustment

-

-

-

390

b

Loss on classification as held for sale

23,088

c

-

23,088

c

-

Adjusted EBITDA (non-GAAP)

$

8,701

$

6,965

$

20,683

$

16,983

a) Severance expenses associated with accrued compensation and severance related to the elimination of the Chief Operating Officer position and the departure of the Chief Executive Officer
b) Final settlement of working capital adjustment associated with Greenwald sale
c) Impact of classifying Big 3 Mold business as held for sale

SOURCE: The Eastern Company



View the original press release on accesswire.com

FAQ

What was Eastern Company's (EML) Q3 2024 earnings per share?

Eastern Company reported earnings of $0.75 per diluted share in Q3 2024, a 36% increase from $0.55 in Q3 2023.

How much did Eastern Company's (EML) sales grow in Q3 2024?

Eastern Company's net sales grew 15% to $71.3 million in Q3 2024, compared to $62.0 million in Q3 2023.

Who is the new CEO of Eastern Company (EML) announced in November 2024?

Ryan Schroeder was named as Eastern Company's new CEO, effective November 6, 2024, succeeding Mark Hernandez.

What was Eastern Company's (EML) backlog as of Q3 2024?

Eastern Company's backlog increased 13% to $97.2 million as of September 28, 2024, compared to $86.2 million in the previous year.

Eastern Company

NASDAQ:EML

EML Rankings

EML Latest News

EML Stock Data

205.23M
6.23M
7.74%
74.05%
1.58%
Tools & Accessories
Cutlery, Handtools & General Hardware
Link
United States of America
SHELTON