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The Eastern Company (EML) investor relations material

The Eastern Company Q3 2025 earnings summary

Complete event summary combining all related documents: earnings call transcript, report, and slide presentation.
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Q3 2025 earnings summary5 Nov, 2025

Executive summary

  • Q3 2025 revenue from continuing operations was $55.3 million, down 22% year-over-year, with EBITDA at $3.5 million and EPS at $0.10; nine-month sales were $191.4 million, down 7% year-over-year.

  • Net income from continuing operations was $0.6 million ($0.10 per diluted share), down from $4.7 million ($0.75 per share) last year; adjusted net income was $0.8 million ($0.13 per share).

  • Performance was impacted by significant declines in Class 8 truck and automotive markets, with OE truck production down 36% and fewer new EV model launches.

  • Proactive restructuring, including workforce optimization, SG&A reduction, operational footprint reorganization, and divestiture of an underperforming unit, resulted in $1.8 million in cost savings and $2.2 million in charges year-to-date.

  • Product innovation, customer diversification, and a new $100 million revolving credit facility are key pillars for long-term growth.

Financial highlights

  • Net sales decreased 22% to $55.3 million from $71.3 million in Q3 2024, mainly due to lower sales in returnable transport packaging and truck mirror assemblies.

  • Gross margin fell to 22.3% from 25.5% year-over-year, impacted by higher raw material costs and lower volumes.

  • Adjusted EBITDA from continuing operations was $3.5 million for Q3 2025 (down from $8.7 million in Q3 2024) and $15.2 million for the nine months (down from $21.3 million year-over-year).

  • Operating profit margin fell to 3.1% in Q3 2025 from 9.5% in Q3 2024; operating profit was $1.7 million, down from $6.8 million.

  • Backlog as of September 27, 2025, was $74.3 million, down 24% year-over-year.

Outlook and guidance

  • Marginal improvements in Q4 volumes are being observed, but a soft first half of 2026 is expected, with incremental improvements later in the year.

  • Gross margins are expected to improve as volumes recover, returning toward historical norms.

  • Management anticipates capitalizing on market recovery, focusing on product innovation, customer diversification, and operational efficiency.

  • Ongoing investment in product development and expansion into new end markets are key pillars of the growth strategy.

  • Management expects cash, operating cash flow, and available credit to be sufficient for foreseeable working capital needs.

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Frequently asked questions

The Eastern Company manufactures industrial hardware, security products, and metal castings for a variety of markets including commercial, industrial, and military sectors. The company’s product portfolio includes locks, latches, access control systems, and custom-engineered solutions. Eastern serves OEMs and distributors globally with specialized hardware products. The company is headquartered in Shelton, Connecticut, and its shares are listed on the NASDAQ.

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