Exhibit 99
FOR IMMEDIATE RELEASE
October 27, 2004
THE EASTERN COMPANY REPORTS RESULTS
FOR THE THIRD QUARTER AND NINE MONTHS OF 2004
Naugatuck, CT-The Eastern Company (AMEX-EML) today announced the results of its
operations for the third quarter and nine months of 2004. Sales for the quarter
were $25,500,000 compared to $21,900,000 for the same period in 2003 a 17%
increase, while net income was $1,506,000, or $0.40 per diluted share, compared
to the $943,000, or $0.26 per diluted share, reported in the third quarter of
2003, a 60% increase.
Year to date earnings for the nine-month period ended October 2, 2004 were
$3,344,000, or $0.90 per diluted share, compared to $2,833,000, or $0.78 per
diluted share for the same period in 2003, an 18% increase. Net sales for the
nine months were $75,400,000 compared to $65,000,000 for the first nine months
of the previous year, a 16% increase.
Leonard F. Leganza, President and CEO stated, "The sales increase in the third
quarter and nine month period reflected the increased business in the Company's
Industrial Hardware and Security Products segments. Sales in the Metal Products
segment were lower than the third quarter and nine months of the previous year.
Industrial Hardware sales increased in the utility and maintenance truck market
which, in addition to our many other products, utilize our new enhanced
electronic locking systems designed to keep service vehicle compartments secured
from unauthorized access. Within the government sector, there was greater demand
for our latching systems and other hardware used for military vehicles such as
the HumVee and military trucks. Sales were also greater in the heavy Class 8
truck market where we supply the "Sleeper Boxes" to Freightliner for use in
their Western Star tractor trailer trucks."
Mr. Leganza continued. "In the Security Products segment, sales increases were
partly due to the introduction of our new SearchAlert luggage lock early this
year. This lock makes it practical for airline passengers to lock their checked
luggage with less concern that the Transportation Security Administration
baggage screeners might damage their lock in order to gain access to their bags.
Our Lock features a color-coded window to indicate whether the baggage has been
entered.
In the Metal Products segment, sales declines reflected changes in underground
mining technology leading to fewer mine roof support anchors used than in the
past. However, with the current record high energy prices we could expect to see
some improvement in the Metal Products segment as demand for coal increases."
Mr. Leganza commented further, "Overall, this was the Company's fourth
consecutive quarter of improved sales and we anticipate the trend will continue
through the balance of 2004. Earnings improvements in the third quarter also
benefited from the higher volumes of production resulting in efficiencies and
cost savings. In addition, selective increases in pricing had a positive impact
on net earnings as the Company began to recoup some of the earlier rises in the
cost of steel and other raw material used in our manufacturing processes."
"The year to date earnings of $0.90 per diluted share have been impacted by the
legal expenses and mediated settlement of an alleged patent infringement suit,
as was reported in the first half of the year. Those charges, net of taxes,
through nine months were $484,000 or $0.13 per diluted share. Year to date
earnings also reflect the start up costs of our Shanghai China subsidiary
amounting to $394,000 or $0.11 per diluted share. Although, the start up of the
Shanghai operation has taken slightly longer than previously planned, we are
confident that this subsidiary will be an important competitive source of
product for our North American based companies and will also facilitate our
entry into the China markets with our many products"
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 NINE Months Ended
13 wks 13 wks 39 wks 39 wks
Oct. 2, 2004 Sept. 27, 2003 Oct. 2, 2004 Sept. 27, 2003
------------ -------------- ------------ --------------
Net Sales $25,494,490 $ 21,864,105 $75,357,662 $ 65,045,930
Net Income After Tax 1,506,435 942,759 3,343,534 2,832,824
Net Income Per Share:
Basic $ 0.41 $ 0.26 $ 0.92 $ 0.78
Diluted $ 0.40 $ 0.26 $ 0.90 $ 0.78
Weighted average shares outstandings:
Basic 3,631,028 3,612,748 3,625,627 3,622,791
Diluted 3,732,969 3,688,008 3,728,337 3,649,612