The Eastern Company Reports Earnings of $0.60 Per Diluted Share for the Third Quarter of 2018, an Increase of 71% over the Same Period in 2017

The Eastern Company (NASDAQ:EML) today announced the results of operations for the third quarter of 2018. Sales for the third quarter were $57.4 million, compared to $56.0 million for the same period in 2017. Net income for the third quarter of 2018 was $3.8 million, or $0.60 per diluted share, compared to $2.2 million, or $0.35 per diluted share, for the same period last year.

Mr. August Vlak, President and CEO, stated that “the increase in sales for the third quarter of 2018 compared to the same period in 2017 reflects sustained growth across our Industrial Hardware and Security Products business segments. Our Industrial Hardware segment grew by 4% in the third quarter of 2018 compared with the third quarter of 2017. Our businesses are well-positioned to take advantage of growth in the heavy duty trucks, sports utility vehicles, and military markets, which more than offset deterioration in the market for recreational vehicles. Strong execution at our Eberhard Manufacturing business delivered two all-time record sales months in the third quarter of 2018. Sales in our Security Product segment grew by 5% in the third quarter of 2018 compared to the same period in 2017 due primarily to the strong growth of our Illinois Lock business and the acquisition of certain assets of Load N Lock Systems, Inc. In the third quarter of 2018, Illinois Lock completed the seamless integration of Load N Lock while earning ISO certification at the same time. In our Metal Products segment, sales for the third quarter of 2018 were down 10% compared to the third quarter of 2017 due primarily to lower sales of mining products, partially offset by strong growth of new industrial markets.”

Net income increased 69% to $3.8 million for the third quarter of 2018 from $2.2 million for the comparable period of 2017. The growth in net income was primarily attributable to increased profitability of the Company’s Eberhard Manufacturing and Illinois Lock businesses. While the Company increased total investment in new product development, it significantly reduced its investments in certain programs, including Road-iQ. Gross margins were 25% of net sales for the third quarter of 2018 compared to 21% of net sales for the third quarter of 2017. Mr. Vlak commented that “the favorable impact from changes in the product mix and price increases in response to higher raw material costs and cost absorption was partially offset by higher prices for steel, zinc, copper and scrap iron.”