Exhibit 99
FOR IMMEDIATE RELEASE
October 24, 2007
THE EASTERN COMPANY REPORTS RESULTS
FOR THE THIRD QUARTER AND NINE MONTHS OF 2007
Naugatuck, CT-The Eastern Company (AMEX-EML) today announced the results of its
operations for the third quarter and nine months of 2007. Sales for the quarter
were $36.0 million, compared to $31.2 million for the same period in 2006, a 15%
increase, while net income showed a slight increase and is comparable to the
$1.7 million, or $0.29 per diluted share that was reported in the third quarter
2006.
Net sales for the nine months of 2007 were $122.5 million compared to $88.7
million for the first nine months of the previous year, a 38% increase. Year to
date earnings for the nine month period ended September 29, 2007 were $9.2
million or $1.54 per diluted share, compared to $4.0 million or $0.70 per
diluted share for the same period in 2006, a 128% increase.
Leonard F. Leganza, Chairman, President and CEO stated, "Profitability returned
to a more acceptable level in the third quarter of 2007 compared to the second
quarter, primarily the result of price increases to recover ever increasing raw
material costs that we have been experiencing. In addition to the items that
have been negatively impacting our profit margins, such as the increases in raw
materials, energy and health care, the third quarter and nine month periods in
2007 were also impacted by the external costs resulting from mandatory
compliance with the Sarbanes-Oxley Act of 2002. The Company's external costs of
compliance with Section 404 of the Sarbanes-Oxley Act have totaled approximately
$598,000 through the end of the third quarter of 2007. The external costs
incurred during the first nine months of 2007 were approximately $315,000 or
$0.04 per diluted share, not including difficult to determine internal costs."
Mr. Leganza continued, "As we stated in our second quarter news release, sales
and profits in the nine month period were impacted favorably by the sales of
door latching system components used in a military project which up-armored
existing Humvees. That project was completed during the first quarter of 2007.
In addition, the acquisitions of Royal Lock and Summit Manufacturing, which were
completed in the latter part of 2006, contributed approximately 9% of the sales
increase in the third quarter of 2007 and 10% of the increase in the nine month
period compared to the prior year periods. Excluding the impact of the military
project and acquisitions, sales increases were experienced in each of our "core"
business segments in both the third quarter and nine month periods compared to
the 2006 periods."
Mr. Leganza added, "The sales increase in the third quarter was our twentieth
consecutive quarter of improved year to year sales, an accomplishment that we
expect will end during the fourth quarter of 2007, because the fourth
quarter of 2006 reflected the large military project for up-armored Humvees. The
Company will continue to face the challenges of offsetting the increased costs
of raw materials, energy, health care and mandatory compliance with regulations,
such as Sarbanes-Oxley, by price increases, improvements in efficiency or by
global outsourcing."
Mr. Leganza concluded, "As I stated earlier this year, we continue to be
optimistic about our current and future opportunities and results. The Company
is continuing to seek additional military business including the retrofitting of
additional Humvees, the Mine Resistant Ambush Protected (MRAP) program and
various other projects being developed, we are also continuing our marketing
efforts for our mine roof anchors to be sold in China. The Company continues to
pursue complementary businesses and product lines. Despite all of the challenges
the Company has been faced with, the Company is on track to set new records for
both sales and profits for the full year 2007."
The Eastern Company is a 149-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
Sept. 29, 2007 Sept. 30, 2006 Sept. 29, 2007 Sept. 30, 2006
-------------- -------------- -------------- --------------
Net Sales $ 36,027,712 $ 31,206,388 $ 122,520,357 $ 88,735,730
Net Income After Tax $ 1,706,642 $ 1,667,167 $ 9,193,236 $ 4,023,489
Net Income Per Share:
Basic $ 0.30 $ 0.30 $ 1.64 $ 0.74
Diluted $ 0.29 $ 0.29 $ 1.54 $ 0.70
Weighted average
shares outstandings:
Basic 5,669,274 5,477,302 5,589,905 5,472,682
Diluted 5,942,529 5,766,147 5,974,234 5,739,458