The Eastern Company Reports Results for the Second Quarter of 2001

7/16/2001 10:54:00 AM

NAUGATUCK, Conn.--(BUSINESS WIRE)--July 16, 2001--The Eastern Company (AMEX: EML) a leading manufacturer of vehicular and industrial hardware, locks, metal castings, coin collection and smart card products, today announced the results of its second-quarter operations. Sales for the second quarter of 2001 increased slightly to $20.7 million, compared to $20.3. Second-quarter net income was $550,000, or $.15 per basic share compared to $1.7 million or $.47 per basic share reported in the second quarter of 2000.

Year-to-date earnings for the six-month period ended Jun 30 were $1.7 million or $.47 per basic share, compared to $3.2 million or $.88 per basic share for the same period in 2000. Net sales for six months were $43.3 million compared to $40.5 million for the first six months of the previous year.

Leonard F. Leganza, President and CEO stated, "Our operations in the second quarter of 2001 continued to be adversely affected by the overall weakness in the manufacturing sector of the economy. These slowdowns and uncertainties exist in most of the market sectors in which we participate. In addition, the one-time relocation costs of integrating our CCL Security Products division into our Illinois Lock operation in Wheeling, Illinois also had a negative affect on our earnings in the second quarter. We expect to realize significant efficiency gains as a result of that integration."

Mr.Leganza further commented, "Although we expect the third quarter to continue to be affected by the slowdown in the economy, we have and will continue to invest in our sales, marketing, product, development, and other areas for the development of future growth, notwithstanding these economic conditions."

The Eastern Company is a 143-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 enables 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 acheivements. 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 result are indicated 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)


                     THREE Months Ended           SIX Months Ended
                    13 wks        13 wks         26 wks       26 wks
                   June 30,       July 1,       June 30,      July 1,
                     2001          2000           2001         2000

Net Sales        $20,690,102   $20,324,617   $43,367,024   $40,539,036
Net Income
 After Tax       $   550,215     1,695,468     1,702,087     3,203,930
Net Income Per Share:
    Basic        $      0.15   $      0.47   $      0.47   $      0.88
    Diluted      $      0.15   $      0.46   $      0.46   $      0.87

Weighted average
 shares outstandings:
    Basic          3,621,569     3,617,873     3,620,765     3,626,166
    Diluted        3,690,577     3,646,295     3,696,274     3,681,923


CONTACT: The Eastern Company
Leonard F. Leganza or John L. Sullivan III
(203) 729-2255