Exhibit 99
FOR IMMEDIATE RELEASE
July 28, 2004
THE EASTERN COMPANY REPORTS RESULTS
FOR THE SECOND QUARTER AND SIX MONTHS OF 2004
Naugatuck, CT-The Eastern Company (AMEX-EML) today announced the results of its
operations for the second quarter and six months of 2004. Sales for the quarter
were $25.3 million, compared to $21.6 million for the same period in 2003 a 17%
increase, while net income was $760,700, or $0.20 per diluted share compared to
the $936,700 or $0.26 per diluted share reported in the second quarter of 2003,
a 19% decrease.
Year to date earnings for the six-month period ended July 3, 2004 were $1.8
million or $0.49 per diluted share, compared to $1.9 million or $0.52 per
diluted share for the same period in 2003, a 3% decrease. Net sales for the six
months were $49.9 million compared to $43.2 million for the first six months of
the previous year, a 15% increase.
Leonard F. Leganza, President and CEO stated, "The 17% increase in second
quarter sales is the third consecutive quarter of improved sales and reflects a
strengthening of the manufacturing sector of the U.S. economy and particularly
the markets we serve. Our backlogs have continued to grow which gives us a
positive business outlook for the balance of 2004."
Mr. Leganza commented further, "Notwithstanding the strong sales performance,
net earnings were impacted by the legal expenses and mediated potential
settlement of an alleged patent infringement suit. The charges net of taxes were
$348,000 or $0.09 per diluted share in the second quarter and $457,000 or $0.12
per diluted share in the six month period. In addition, the second quarter
reflects the continuing start-up costs of our Eastern Industrial subsidiary in
Shanghai as well as increases in the cost of steel amounting to $356,000 or
$0.10 per diluted share. In the six month period these costs amounted to
$550,000 or $0.15 per diluted share."
Mr. Leganza continued, "All of our business units have shown very positive
results in the first six months of 2004 and our initiatives in China have gotten
off to a promising start, in both the mining and manufacturing sector despite
some initial up-front costs."
The Eastern Company is a 146-year-old manufacturer of industrial hardware,
security products and metal castings. It operates from nine locations in the
U.S., Canada, Mexico, Taiwan and China. The diversity of the Company's products
helps it to respond to the changing requirements of a broad array of markets.
Forward-Looking Statements: Information in this news release contains statements
which reflect the Company's current expectations regarding its future operating
performance and achievements. Actual results may differ due to the many economic
uncertainties that affect the Company's business environment. Further
information about the potential factors which could affect the Company's
financial results are included in the Company's reports and filings with the
Securities and Exchange Commission. The Company is not obligated to update or
revise the aforementioned statements for those new developments.
Contact: Leonard F. Leganza or John L. Sullivan III
(203) 729-2255
Statement of Consolidated Income (unaudited)
THE EASTERN COMPANY (AMEX - EML)
THREE Months Ended SIX Months Ended
13 wks 13 wks 26 wks 26 wks
July 3, 2004 June 28, 2003 July 3, 2004 June 28, 2003
------------ ------------- ------------ -------------
Net Sales $25,297,964 $21,591,111 $49,863,172 $43,181,825
Net Income $ 760,726 $ 936,688 $ 1,837,099 $1,890,065
Net Income Per Share:
Basic $ 0.21 $ 0.26 $ 0.51 $ 0.52
Diluted $ 0.20 $ 0.26 $ 0.49 $ 0.52
Weighted average shares outstandings:
Basic 3,628,818 3,625,310 3,622,926 3,627,807
Diluted 3,738,306 3,630,514 3,726,021 3,630,409