The Eastern Company Anticipates Record Second-Quarter and 1998 Financial Results

The Eastern Company Anticipates Record Second-Quarter and 1998 Financial Results6/23/1998NEW YORK-- June 23, 1998-- At a meeting with institutional investors, Leonard F. Leganza, president and chief executive officer of The Eastern Company (AMEX: EML), announced that he expects Eastern to report the highest quarterly financial results in the company's 140-year-old history. Eastern, a leading manufacturer of locks, latches, and industrial hardware, anticipates that it will report second-quarter net income of approximately $1.3 million, or between $0.50 and $0.55 per basic share, which compares to 1997's second-quarter net income of $833,000 or $0.30 per basic share. Eastern's expected second-quarter earnings will mark the sixth consecutive quarter that the Company has reported higher earnings. Sales for the second quarter of 1998 are expected to be in the range of $18 million to $20 million, compared with $16.9 million in 1997.

Leganza stated, ``We continue to see growth in each of the market areas that we serve. Incoming orders have been strong and our sales backlog continues to grow. The financial goals and business plans that were put in place in mid-1997 are providing us with the framework necessary for producing strong results. In addition to our solid financial performance, we also raised our annual dividend to shareholders during the quarter -- the second increase in our dividend in the past six months.''

During the meeting, Leganza commented, ``Eastern's product diversity is a true asset. For example, our Eberhard division continues to enjoy success with its latching devices used for compartments on upscale sport pick-up trucks while it also expands its position as the nation's top producer of heavy locking bars for truck trailers. Our Frazer & Jones division is continuing to win new contract casting business and a major domestic motorcycle manufacturer is planning to use our locks for its soon-to-be-introduced models. The combination of these and other initiatives now underway should contribute to our performance in 1998 and beyond.''

Leganza also discussed his outlook for 1998, stating, ``Previously, Eastern had announced that it anticipated 20 to 30 percent earnings growth in 1998 on sales growth in the range of 10 to 20 percent. Given our expected second-quarter results and our growth initiatives, we continue to believe that these projections are sound. In addition, we remain committed to exploring strategic alliances that will allows us to expand our current market positions or enable us to enter new, but related markets.''

Eastern expects to release its second-quarter results during the week of July 13, 1998.

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

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 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:
     The Eastern Company
     John Dibble, 203/729-2255, Ext. 241
      or
     Amy Gordon, 203/729-2255, Ext. 232