The Eastern Company Reports Third Quarter 2024 Results
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.
- 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)
- $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.
Notable is the strategic decision to divest the Big 3 Mold business, resulting in a
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 2023Gross margin from continuing operations increases to
25.5% in Q3 2024 compared to24.9% in Q3 2023Earnings per diluted share from continuing operations increase
36% to$0.75 in Q3 2024 compared to$0.55 in Q3 2023Eastern 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
"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
Third Quarter and Nine Months 2024 Financial Results
The following analysis excludes discontinued operations.
Net sales for the third quarter of 2024 increased
Gross margin as a percentage of sales was
Selling, general and administrative expenses increased
Other income and expense increased
Net income for the third quarter of fiscal 2024 was
Adjusted net income from continuing operations (a non-GAAP measure) for the third quarter of fiscal 2024 was
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 |
|
|
|
|
|
|
|
|
|
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|
|
|
|
| |
|
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| |
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 |
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
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 - |
| 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 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
(
| 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
(
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
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