The Eastern Company Reports Record Earnings; Net Income Surpasses Previous Estimate

7/13/1999 11:34:00 AM

NAUGATUCK, Conn.--(BUSINESS WIRE)--July 13, 1999--The Eastern Company (AMEX:EML) today announced record sales and earnings for the second quarter of 1999. Net income increased to $1.6 million, or on a post-split basis $0.44 per basic share, compared to $1.3 million, or $0.36 per basic share for the same period in 1998. Sales for the second quarter were $20.0 million, which represents a 15% increase over sales of $17.4 million in the second quarter of 1998.

Year-to-date earnings for the six month period ended July 3rd were $3.0 million, or $0.84 per basic share, compared to $2.6 million, or $0.70 per basic share for the same period in the previous year on post-split basis. Six months sales totaled $39.4 million, which is a 10% gain over sales of the same period in the previous year.

Leonard F. Leganza, President and CEO of Eastern, stated, "This 22% growth in per share earnings in the second quarter surpasses the estimates that were announced on July 1st. It also represents the tenth consecutive quarter that the Company has exceeded the previous year's quarterly earnings performance."

"Of particular importance to Eastern are the solid sales and earnings performance of the Industrial Hardware Group. Our Eberhard operations in Ohio and Ontario, Canada have sustained high levels of activity in the design and sales of new latches and locking devices for both the vehicular markets and for other customers in the industrial sector. This particular segment of our business, with its future growth potential, is considered to be one of the important factors in The Eastern Company's evaluation of future strategic opportunities."

Mr. Leganza continued, "Incoming orders and backlogs are firm in all of our product groups, and given this continued strong economy for the full year of 1999, we foresee earnings growth in the range of 15 to 20% on a sales increase in the range of 10 to 15%."

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.

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           SIX Months Ended

                  13 wks        13 wks         26 wks        26 wks
               July 3, 1999  July 4, 1998   July 3, 1999  July 4, 1998

Net Sales      $20,029,666   $17,353,207    $39,413,320   $35,765,163

Net Income 
 After Tax      1,577,909      1,304,509      3,040,656     2,594,606

Net Income
 Per Share:
  Basic        $     0.44    $      0.36    $      0.84   $      0.70
  Diluted      $     0.42    $      0.35    $      0.81   $      0.67

Weighted average 
 shares outstanding: 
  Basic         3,621,688      3,638,787      3,621,911     3,714,480
  Diluted       3,739,512      3,768,128      3,744,834     3,870,932

     --30--kms/bos*  kc/bos

     CONTACT: The Eastern Company
              John Dibble
              (203)729-2255, ext. 102