Eastern Co. reports fourth quarter gain, fiscal year loss


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

The Eastern Company posted a net gain in profit for the fourth quarter of 2013, but saw a decrease for the fiscal year.

The Naugatuck-based company on Thursday reported a 12 percent increase in its fourth-quarter net income for 2013 to $1.9 million, or 31 cents per diluted share, from $1.7 million, or 28 cents per share, in the same period in 2012.

The gain in net income came despite a 4 percent decrease in fourth-quarter sales, to $34.3 million in 2013 from $35.8 million in 2012.

The firm’s fiscal-year net income fell 20 percent to $6.9 million, or $1.11 per diluted share, for 2013 from $8.6 million, or $1.38 per diluted share, for the previous year. The decline came on a 10 percent decrease in fiscal-year sales to $142.5 million in 2013 from $157.5 million in 2012.

The firm’s sales for 2013 declined across all three company segments — Security Products, Industrial Hardware and Metal Products — yet sales and earnings did improve during the year after “a bit of softness” in the first quarter, Leonard Leganza, the company’s chairman, president and CEO, said in a news release. While remaining stable in the manufacturing sector, the company did not experience the stronger economy predicted for the fourth quarter, he said.

“These uncertain general economic conditions seem to continue,” Leganza said in a statement.

The Security Products Group is made up of Chester-based Greenwald Industries, which makes coin acceptors for laundromats, and Illinois Lock Co./CCL Security Products, a Wheeling, Ill.-based producer of keyless locks.

The Industrial Hardware Group, led by Strongville, Ohio-based Eberhard Manufacturing Co., manufactures latches, locks and other security hardware used throughout the transportation and industrial sector.

The Metal Products Group is comprised of Frazer & Jones Co., which makes anchoring devices for supporting underground mine roofs.

 The products are made in 10 factories — four in the United States, two in Canada, one Mexico, one Taiwan and two China. One of the China facilities is Reworld Securities Products, a new subsidiary in the Security Products Division that began making locks in last year’s third quarter.

The company employs about 600 people in the United States and Canada, and another 300 in China.

Despite the uncertainty, Eastern continued to invest in 2013 in its product development efforts and to support its growth, particularly in the Class 8 truck market of large trucks, Leganza said in the release. Infrastructure investments included a 20,000-square-foot expansion to its Eberhard facility to warehouse products for the Class 8 truck market, and making structural upgrades to the Frazer & Jones operation, he said.

Leganza said Eastern’s “focus and emphasis” on cash flow during the recent years of economic uncertainty have kept the company in “solid financial position.” The firm is confident that its current liquidity will be “sufficient and strong enough” to support its dividend policy, meet its debt service requirements and replace and upgrade equipment as needed.

Eastern’s shares, which trade on Nasdaq under the symbol EML, gained 19 cents Thursday to close at $15.55.