Eastern Reports Record Third Quarter Earnings

Eastern Reports Record Third Quarter Earnings10/13/1998NAUGATUCK, Conn.--(BUSINESS WIRE)--Oct. 13, 1998--The Eastern Company (AMEX:EML) today announced that third quarter net income increased to $1,407,000, or $0.59 per basic share, compared to $1,067,000 or $0.40 per basic share, for the same quarter in 1997. Year-to-date earnings for the nine-month period ended October 3 were $4,002,000, or $1.64 per basic share, compared to $2,514,000, or $0.93 per basic share, for the same period in the previous year.

Sales for the third quarter were $17,996,000, an 8 percent increase over sales of $16,664,000 for the same quarter in 1997. Sales for the nine-month period increased to $53,761,000 from sales of $49,518,000 for the same nine-month period of 1997.

Leonard F. Leganza, CEO and President, stated, "This growth in sales and earnings performance for the third quarter is in line with the projections we announced on Sept. 29, 1998. It is most gratifying that Eastern continues to conform to its business plan, which is generating improved operating results. We are pleased to announce that this represents the seventh consecutive quarter the company has announced an improvement in its earnings."

"Overall incoming orders and backlogs remain firm at our various facilities. One particular highlight has been the continued market strength at out Eberhard division's two manufacturing facilities in Ohio and Canada. Eberhard is the leading producer of locking bars and other vehicular hardware for truck trailers. Production of these items at Eberhard's Canadian operations is 40 percent higher than last year. To accommodate this increased activity, a 10,000 square foot expansion of its production facility is under way."

Leganza concluded, "Year-to-date earnings already exceed the record earnings for the entire full year of 1997. We also anticipate solid momentum in our fourth quarter performance. As a result, we should exceed last year's $1.40 per basic share earnings performance by about 50 percent."

The Eastern Company manufactures and markets a broad range of locks, latches, fasteners and other security hardware that meets diverse security and safety needs of industrial and commercial customers. Headquartered in Naugatuck, CT, the company has seven manufacturing locations in the U.S.A., Canada, Mexico and the Pacific Rim. It has paid consecutive quarterly dividends since 1940.

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.

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. 3, 1998  Sept. 27, 1997   Oct. 3,1998 Sept. 27, 1997             
Net                                                                  
 Sales        $17,995,724   $16,663,855     $53,760,887    $49,517,523               
Net Income                                                           
 After Tax      1,407,301     1,066,997       4,001,907      2,514,360              
Net Income                                                           
 Per Share:                                                          
  Basic       $      0.59   $      0.40     $      1.64    $      0.93              
  Diluted     $      0.56   $      0.40     $      1.57    $      0.92              
Weighted 
 Average                                                        
 shares                                                                 
  outstandings:                                                      
   Basic        2,381,009     2,624,150       2,444,426      2,702,431             
   Diluted      2,492,701     2,661,720       2,551,190      2,735,438             


     CONTACT: The Eastern Company
              John Dibble, 203/729-2255, Ext. 241