Exhibit 99
FOR IMMEDIATE RELEASE
February 8, 2006
THE EASTERN COMPANY REPORTS
RESULTS FOR 2005 FOURTH QUARTER AND YEAR-END
Naugatuck, CT-The Eastern Company (AMEX-EML) today announced its operating
results for the fourth quarter and full year of 2005. Sales for the fourth
quarter of 2005 were $28.2 million, compared to $24.8 million in 2004, an
increase of 13.9%, while sales for the full year 2005 were $109.1 million, an
increase of 9.0% when compared to sales of $100.1 million in 2004.
For the fourth quarter of 2005 net income of $1.3 million or $0.34 per diluted
share, compared to the $1.4 million or $0.37 per diluted share reported in the
fourth quarter of 2004. For the full year 2005, net income decreased 8.2% to
$4.4 million or $1.12 per diluted share, compared to net income of $4.8 million
or $1.27 per diluted share in 2004.
Leonard F. Leganza, President and CEO stated, "The Company's sales for the year
2005 reached a historical record of $109 million and fourth quarter sales
represented the thirteenth straight quarter of improved sales when compared to
the prior year quarter. The positive results of our product development programs
and marketing efforts were important factors contributing to our continuing
sales progress. In addition, the sectors of the general economy which affect our
markets continued to be robust during 2005. In particular, the Industrial
Hardware and Security segments of the Company had very positive results in both
sales and earnings in 2005 and anticipate strong results in 2006. We anticipate
sales and earnings progress in all Company units in 2006."
Mr. Leganza continued, "Two important areas where the Company initiated longer
term projects did have a negative impact on full year 2005 earnings. We
continued to increase our manufacturing capabilities at our subsidiary, Eastern
Industrial Ltd., in Shanghai, China. The charges to earnings resulting from the
start up costs and expenses attributable to that expansion impacted our 2005
earnings by $0.23 per diluted share. We are now able to more effectively supply
the off-shoring needs of our domestic units as well as to produce product for
non-affiliated customers, and we anticipate further growth and positive results
from this unit in 2006. One of our long term strategic objectives is to
participate in the current expansion of off-shoring not only to support the
requirements of our domestic units but also to produce product for unaffiliated
customers and to take advantage of any future sales potential in the Asian
markets."
Mr. Leganza commented further, "Our Metal Casting operations also sustained
charges which impacted our earnings negatively in the amount of $0.21 per
diluted share. The charges incurred were principally the result of reduced
capacity utilization because of the lower demand for our proprietary mine roof
anchor products. We also re-focused the division's operations to emphasize and
increase our capability in the production of ductile iron products in addition
to the malleable iron products for which we are well known. We continued our
initiative to introduce our mine roof support products into the China market."
The Eastern Company is a 148-year-old leading manufacturer of vehicular and
industrial hardware, locks, metal castings, coin collection and smart card
products. It operates from nine locations in the U.S., Canada, Mexico, Taiwan
and China. The diversity of the Company's products enables 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 TWELVE Months Ended
13 wks 13 wks 52 wks 52 wks
Dec. 31, 2005 Jan. 1, 2005 Dec. 31, 2005 Jan. 1, 2005
------------- ------------ ------------- ------------
Net Sales $ 28,213,597 $ 24,772,496 $109,107,290 $100,130,158
Net Income After Tax 1,296,849 1,414,167 4,367,187 4,757,701
Net Income Per Share:
Basic $ 0.36 $ 0.39 $ 1.20 $ 1.31
Diluted $ 0.34 $ 0.37 $ 1.12 $ 1.27
Weighted average shares outstandings:
Basic 3,638,460 3,633,316 3,636,715 3,627,541
Diluted 3,862,891 3,797,826 3,885,891 3,745,701