The Eastern Company (EML) Q1 2025 earnings summary

Executive summary

• Net sales for Q1 2025 were $63.3 million, down 2% year-over-year, mainly due to lower truck mirror and accessory sales, partially offset by higher returnable transport packaging sales.

• Net income from continuing operations was $1.9 million ($0.31 per diluted share), down from $2.1 million ($0.34 per share) last year.

• Adjusted EBITDA from continuing operations was $4.6 million, compared to $4.8 million in the prior year.

• Completed sale of ISBM Blow Mold Business and closure of Dearborn facility; acquired assets for Big 3 Precision Products and continued divestiture of Big 3 Mold business.

• Completed 200,000-share buyback and authorized a new 400,000-share repurchase program through May 2030.

Financial highlights

• Gross margin declined to 22.4% from 23.9% year-over-year, impacted by higher raw material costs and product mix.

• Operating profit was $3.2 million, down from $3.4 million in Q1 2024.

• Adjusted net income from continuing operations was $2.0 million, compared to $2.1 million a year ago.

• Cash used in operations was $1.8 million, compared to $2.8 million provided in Q1 2024.

• Backlog decreased 9% to $85.9 million, mainly due to lower orders for transport packaging and truck mirror assemblies.

Outlook and guidance

• 2025 will focus on strategic growth, operational efficiency, and cash flow optimization.

• Management expects revamped Big 3 Precision operations to improve costs by Q2 2025 and is actively seeking acquisition targets.

• Cash, operating cash flow, and available credit are expected to be sufficient for working capital needs.

• Management expects continued cost discipline and nimble supply chain management amid tariff and market uncertainties.

• Most tariff costs have been recovered through price increases, but long-term effects remain uncertain.