The Eastern Company Reports Results for the First Quarter of 2001

4/17/2001 12:13:00 PM

NAUGATUCK, Conn.--(BUSINESS WIRE)--April 17, 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 first-quarter operations. Sales for the first quarter of 2001 increased to $22.7 million, compared to $ 20.2 million in the prior year, an increase of 12%. First-quarter net income was $1.2 million, or $.32 per basic share compared to the $ 1.5 million or $ .42 per basic share reported in the first quarter of 2000, a 24% decrease.

Leonard F. Leganza, President and CEO stated, "Our operations in the first quarter of 2001 were affected generally by uncertainties in the various sectors of the U.S. economy in which we participate. While sales increased overall, due in some part to the Company's recent acquisitions, sales volumes in the first quarter did not reach our planned expectations. The decrease in net earnings, compared to the first quarter of 2000, was the result primarily of higher interest costs and other charges associated with our recent acquisitions. Backlogs, however, remain fairly strong as do our operating income and margins and except for the softness in the metal casting segment of the company, our expectations for the year 2001 remain optimistic."

Mr. Leganza further commented, "One of our current initiatives is the consolidation of our two U. S. lock operations which involves moving our CCL Security Products Division from New Britain, Connecticut into our Illinois Lock Company Division in Wheeling, Illinois. This move is expected to be completed within the second quarter and one-time charges for closing and moving CCL are not expected to be material to the consolidated operating results of the Company. We anticipate manufacturing efficiencies and profit improvement when these operations have been fully integrated. The two units will continue to be run as separate divisions from one facility."

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 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 result 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)


                                          THREE Months Ended

                                     13 wks                13 wks
                                 March 31, 2001         April 1, 2000

Net Sales                          $ 22,676,922           $20,214,419

Net Income After Tax                  1,151,872             1,508,462

Net Income Per Share:
 Basic                                   $ 0.32                $ 0.42
 Diluted                                 $ 0.31                $ 0.41

Weighted average shares outstandings:
 Basic                                3,619,945             3,634,356
 Diluted                              3,701,955             3,717,448


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