Eastern Co. reports falling sales, profit


The Eastern Co.’s headquarters on Bridge Street in Naugatuck. –RA ARCHIVE
The Eastern Co.’s headquarters on Bridge Street in Naugatuck. –RA ARCHIVE

NAUGATUCK — The Eastern Co. reported Wednesday that sales and profit fell in both the second quarter and the first six months of the year, in part because of the slow economic recovery.

The Naugatuck-based industrial conglomerate said net income fell 17 percent in the second quarter to $2.2 million, or 35 cents per diluted share, from $2.6 million, or 42 cents per diluted share, in the second quarter of 2012. Sales for the quarter were $39.2 million, down 6 percent from $41.6 million for the second quarter last year.

Through the first six months of the year ended June 29, net income was $3.2 million, or 51 cents per diluted share, down 32 percent from $4.7 million, or 75 cents per diluted share, through the same period last year. Net sales for the first six months of the year were $73.9 million, down 10 percent from $82.1 million in the same period last year.

“For the first six months of 2013, sales levels in all of our business segments lagged behind 2012 levels as a result of the slow economic recovery,” said Leonard Leganza, Eastern’s chairman, president and chief executive officer. “Although we have seen glimpses of improvement, we also hear of continuing uncertainties in the overall economy.”

Leganza said second-quarter sales did show “good improvement following the slow start we experienced in the first quarter of this year, but were still behind the second quarter of 2012. However, the company remains well positioned to meet the demand of future growth we anticipate in most of the many diversified markets that we serve.”

Eastern is a 155-year-old company that makes vehicular and industrial hardware, locks, latches, metal castings, coin-vending and smart-card products and a proprietary line of mine roof expansion anchors used to secure the roofs of underground coal and metallurgical mines. The products are made in 10 manufacturing plants in the United States, Canada, Mexico, Taiwan and China.

The company employs about 730 people in the United States and Canada, and another 500 in China.

Despite the lagging performance in the second quarter, Leganza also said Wednesday the company’s board of directors voted to increase Eastern’s regular quarterly dividend by 10 percent to 11 cents per share for the third quarter of 2013, payable on Sept. 16. It will be the company’s 292nd consecutive quarterly dividend, meaning Eastern has issued a dividend for 73 straight years.

“The focus and emphasis we have placed on cash flow during the recent years of economic uncertainties have maintained the company in solid financial position,” Leganza said, “and we are confident our current liquidity will be sufficient and strong enough to support our dividend policy, meet our debt-service requirements and replace and upgrade our capital equipment programs as needed.”