The Eastern Company Reports Record Earnings of $2.31 Per Diluted Share for the Full Year of 2018

The Eastern Company (NASDAQ:EML) today announced the results of operations for the full year and fourth quarter of 2018. Sales for the full year and fourth quarter were $234.3 million and $56.6 million, respectively, compared to $204.2 and $54.1 million for the same periods in 2017. Net income for full year 2018 was $14.5 million or $2.31 per diluted share, compared to $5.0 million, or $0.80 per diluted share, for the prior year. Net income for the fourth quarter of 2018 was $4.4 million or $0.70 per diluted share, compared to a loss of ($0.2) million, or ($0.03) per diluted share, for the fourth quarter in 2017.

Mr. August Vlak, President and CEO, stated that “The fourth quarter of 2018 represents the fourth consecutive quarter of earnings per share growth. Management uses such measures to evaluate performance period over period, to analyze the underlying trends in our business including our business segments, to assess our performance relative to our competitors, and to establish operational goals and forecasts that are used in allocating resources.”

Mr. Vlak continued that “The increase in sales for the full year and fourth quarter of 2018 compared to the same periods in 2017 reflects sustained growth of demand for our products and the launch of significant new programs across both our Industrial Hardware and Security Products business segments. Our Industrial Hardware segment grew by 22% in for the full year of 2018 compared with 2017, primarily as a result of growth in the heavy duty truck, sports utility vehicles, and military markets, offsetting deterioration in the market for recreational vehicles. The Security Product segment sales grew by 6% in 2018 compared to 2017, in part due to the launch of several new programs in the market for truck accessories and the acquisition of Load N Lock Systems, Inc. In our Metal Products segment, full year 2018 sales were up 4% compared to full year 2017 due strong growth of new industrial products, which were offset slightly by slowing sales of mining products.”

Mr. Vlak added that “Net income increased 188% for the full year 2018 compared to 2017. The growth in net income was attributable to an increase in sales, higher operating margins, especially in our Industrial Hardware and Security Products segments, and the non-recurrence of one-time charges associated with the Tax Cut and Jobs Act of 2017. Operating earnings grew to 7.6% of sales in full year 2018, up from 6.0% of sales in 2017, in part due lower operating costs at Eberhard Manufacturing and the non-recurrence of one-time costs associated with the acquisition of Velvac Holdings, Inc. (“Velvac”) in 2017. Across the segments, our businesses successfully offset the impact of higher raw material prices and trade tariffs.”