The Eastern Company's Board of Directors Approves Three-for-Two Stock Split; Company Increases Quarterly Dividend by 10 Percent

3/12/1999 3:02:00 PM

NAUGATUCK, Conn.--(BUSINESS WIRE)--March 12, 1999--The Eastern Company (AMEX:EML) announced today that its board of directors has approved a three-for-two stock split of the Company's common shares and increased the quarterly dividend by 10%.

"This stock split and dividend increase are a reflection of Eastern's solid performance during the past two years," said Leonard F. Leganza, Eastern's president and chief executive officer. "This action reaffirms our confidence that our momentum in both sales and earnings will be sustained in 1999. A further demonstration of this optimism is the fact that Eastern has purchased 228,042 shares of its own stock within the past year. We believe the stock split will bring the value of Eastern's shares to an attractive level for individual investors, as well as improve our liquidity and create a broader shareholder base for the Company. The three-for-two stock split will increase the number of outstanding Eastern common shares from approximately 2.4 million to approximately 3.6 million."

The board of directors also announced a 10 percent increase in its quarterly dividend, from 15 cents (10 cents after split) to 16.5 cents (11 cents after split) per share. The 11 cent quarterly dividend will be payable on June 15, 1999 to stockholders of record as of May 28, 1999. As a result, the annual indicated dividend will increase from 40 cents to 44 cents per after split share. This will be The Eastern Company's 235th consecutive quarterly dividend since 1940 and the third dividend increase since December 1997.

As a result of the stock split, shareholders of record on May 28, 1999 will be entitled to receive one additional share for every two shares they own on that date. The Company will arrange for issuance of these shares June 15, 1999. Any fractional shares created as a result of this split will be paid by cash. The date on which the shares will begin trading at the split price is June 16, 1999. Eastern's common stock purchase rights under its Rights Agreement dated August 21, 1998, will also be appropriately adjusted to reflect the stock split.

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 of revise the aforementioned statements for those new developments.


     CONTACT: The Eastern Company
              John Dibble
              (203)729-2255 ext. 241