Exhibit 99
FOR IMMEDIATE RELEASE
October 26, 2005
THE EASTERN COMPANY REPORTS RESULTS
FOR THE THIRD QUARTER AND NINE MONTHS OF 2005
Naugatuck, CT-The Eastern Company (AMEX-EML) today announced the results of its
operations for the third quarter and nine months of 2005. Sales for the quarter
were $27.2 million compared to $25.5 million for the same period in 2004, a 7%
increase, while net income was $1.3 million, or $0.32 per diluted share,
compared to the $1.5 million, or $0.40 per diluted share, reported in the third
quarter of 2004, a 17% decrease.
Net sales for the nine months ended October 1, 2005 were $80.9 million compared
to $75.4 million for the first nine months of the previous year, a 7% increase.
Year to date earnings for the nine-month period were $3.1 million, or $0.79 per
diluted share, compared to $3.3 million, or $0.90 per diluted share for the same
period in 2004, an 8% decrease.
Leonard F. Leganza, President and CEO stated, "All three segments of the
Company's operations experienced sales increases in the third quarter compared
to the prior year period. Several factors contributed to the strong sales
performance. This included a continuing demand for the Sleeper Boxes we produce
for Class 8 trailer trucks, increased demand for our Smart Card systems
furnished to the commercial laundry market as well as the demand for our
SearchAlertTM lock, a lock which has been approved by the T.S.A. for locking
checked bags while traveling. We anticipate that sales in the fourth quarter and
full year will continue to be strong."
Mr. Leganza also stated, "Of particular note, was that we experienced higher
demand in Canada for our mine roof anchors during the third quarter. In
addition, we continued to make progress in our initiative to furnish our anchors
to the China mining industry. Also of note is that after several months of
start-up operations, Eastern Industrial, our Shanghai subsidiary, began shipping
product to non-affiliated customers during the quarter as we continue to
increase our capabilities.
Mr. Leganza continued, "Our profit margins have been impacted by the pressure of
both external factors as well as internal decisions. External factors such as
increased costs of raw materials and energy and pricing pressure from foreign
competition are part of the current business landscape, which require special
efforts to overcome. In addition, we have made internal decisions, such as
expanding our presence in China, which have had some negative impact on
earnings. However, we believe those decisions will yield positive results for
the future."
Mr. Leganza concluded, "Our business backlogs and markets continue to be strong
and we anticipate they will remain strong for the remainder of 2005 and into
2006."
The Eastern Company is a 147-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. 1, 2005 Oct. 2, 2004 Oct. 1, 2005 Oct. 2, 2004
------------ ------------ ------------ ------------
Net Sales $27,204,815 $25,494,490 $80,893,693 $ 75,357,662
Net Income After Tax 1,256,367 1,506,435 3,070,338 3,343,534
Net Income Per Share:
Basic $ 0.35 $ 0.41 $ 0.84 $ 0.92
Diluted $ 0.32 $ 0.40 $ 0.79 $ 0.90
Weighted average
shares outstandings:
Basic 3,637,315 3,631,028 3,636,131 3,625,627
Diluted 3,918,767 3,732,969 3,890,409 3,728,337