EML

Shares of The Eastern Company EML have gained 1.4% since the company reported its earnings for the quarter ended July 4, 2026, outperforming the S&P 500 Index’s 0.2% change over the same period. However, over the past month, Eastern shares have declined 1.4% compared to the S&P 500’s 4.1% rise. Eastern’s second-quarter 2026 adjusted net income was 15 cents per share, down from 57 cents in the prior-year quarter. Net sales declined 12% year over year to $61.8 million from $70.2 million. Net income from continuing operations increased to $5.6 million from $2 million a year earlier. However, GAAP earnings included a one-time, non-cash bargain purchase gain of $6.5 million related to the Sungear and Crown Precision acquisitions. Excluding that gain and other adjustments, adjusted net income from continuing operations fell to $0.9 million from $3.5 million in the prior-year quarter. The Eastern Company price-consensus-eps-surprise-chart | The Eastern Company Quote Eastern ended the quarter with a backlog of $126.2 million, up 45% from $87.1 million a year earlier. The increase included $19 million of acquired aerospace orders as well as higher orders for truck mirror assemblies, returnable transport packaging, and latch and handle assemblies. Gross margin contracted to 20.6% from 23.3% a year ago. Adjusted EBITDA from continuing operations decreased approximately 49% to $3.4 million from $6.7 million. Cash flow showed improvement, with net cash provided by operating activities reaching $12 million during the first six months of 2026 versus $1.9 million a year earlier. Eastern finished the quarter with $15.1 million in cash, while long-term debt stood at $41.7 million, up from $33.9 million at year-end, primarily reflecting acquisition-related borrowings. Management said sequential improvement in results and a stronger order book increased confidence in the business heading into the second half. Heavy-truck build rates have improved, benefiting Velvac and Eberhard, while the returnable transport packaging business has broadened its customer base. Management also said the below-margin Big 3 rack contracts have run off, with new business being booked at healthier margins. The year-over-year revenue decline reflected $5.7 million of lower truck mirror assembly shipments, $3.4 million of lower returnable transport packaging shipments and $0.9 million of lower latch and handle assembly shipments. These declines were partly offset by $1.7 million of aerospace sales from the acquired businesses. Gross margin was pressured by lower volume, the runoff of the below-margin contracts and tariff costs on China-sourced products of about $1.9 million, most of which management said was recovered through pricing. Management expects a strong second half, supported by rising heavy-truck builds and backlog conversion. It expects the majority of the current backlog to convert to revenues during the balance of 2026, while the Big 3 rack backlog is largely filled through almost the remainder of the year. Management also expects gross margin to improve as second-half volume and product mix strengthen. Eastern acquired California-based precision manufacturers Sungear and Crown Precision effective June 1, expanding into aerospace and defense. The acquisitions contributed one month to second-quarter results. Management said the businesses could generate roughly $20 million of combined annual revenues and expects them to be accretive this year. Over time, Eastern is targeting gross margins of 20%-30% for the acquired operations through pricing, throughput and operational improvements. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Eastern Company (The) (EML): Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management attributed the 11.9% year-over-year sales decline to lower shipments in legacy truck and packaging segments, though sequential improvements in gross margin and EBITDA suggest a bottoming out of the cycle. The company successfully resolved a significant margin headwind at Big 3 Precision by running off low-margin rack contracts that were originally accepted to fill capacity during a demand trough. Operational recovery is being driven by a rebound in heavy truck build rates, which is fueling significant order growth at the Velvac and Eberhard business units. The acquisition of Sungear and Crown Precision marks a strategic entry into the aerospace and defense markets, intended to diversify the portfolio away from cyclical truck market exposure. Management implemented a more disciplined quoting process and strengthened accountability around pricing to ensure new business meets minimum margin thresholds. The company successfully navigated a major ERP system transition at Velvac, maintaining shipping schedules and closing the quarter on time despite the inherent complexities of the rollout. Backlog reached $126 million, a 45% year-over-year increase, with management expecting the majority to convert to revenue during the second half of 2026. Visibility for the second half of the year is significantly higher than in 2025, supported by a constructive demand environment and a recovery in the largest work truck body customers. Strategic priorities for the new aerospace platform include investing in people and equipment to increase throughput and shorten lead times to meet high customer demand. Automotive model launches are expected to drive significantly higher volume for the returnable rack business in 2026 and 2027 compared to the 2025 trough. Management intends for the new aerospace acquisitions to be accretive to overall results in 2026, despite initial margin pressure from inventory step-up accounting. Recorded a $6.5 million one-time non-cash bargain purchase gain because the fair value of acquired aerospace assets exceeded the $7.85 million purchase price. Tariff costs on China-sourced products totaled $1.9 million for the quarter, which management noted are largely recovered through live pricing adjustments with customers. The company maintained its long-standing dividend streak, marking 344 consecutive quarters of payments, alongside opportunistic share repurchases. Acquisition-related inventory step-up accounting is expected to temporarily weigh on gross margins for the aerospace segment for a few quarters until acquired inventory is sold. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management noted that while build rates improved in Q2, the impact was most significant in June and is expected to continue through the remainder of the year and into 2027. The increase in truck builds has transitioned from an 'impending increase' to firm orders, driving a 26% increase in legacy business backlog. Management explained the acquisitions target a bottleneck in the Tier 2 aerospace supply chain where demand significantly outweighs supply capacity. While the first month showed breakeven gross margins due to accounting step-ups, management expects to reach a 20% to 30% gross margin range through operational improvements and pricing actions. Management clarified that pricing adjustments for tariffs are managed 'live' and usually flow through the P&L within 30 days of a change. They noted that as some tariffs were reduced recently, prices to major customers were also lowered, preventing the company from retaining the full benefit of previous price hikes. Management confirmed that 2026 will be significantly better than 2025, with 2027 projected to be even higher due to high-value automotive model launches. The rack business backlog is currently full through almost the remainder of the year based on these specific project wins.

This article first appeared on GuruFocus. Net Sales: $61.8 million, down 11.9% year-over-year from $70.2 million. Gross Margin: $12.8 million, or 20.6% of net sales, down from 23.3% in the prior year period. Operating Profit: $1.7 million, or 2.7% of net sales, compared to $3.1 million (4.5%) a year ago. Net Income (GAAP): $5.6 million, or $0.94 per diluted share, including a $6.5 million noncash bargain purchase gain. Adjusted Net Income: $0.9 million, or $0.15 per diluted share, versus $3.5 million ($0.57) in the prior year. Adjusted EBITDA: $3.4 million, down approximately 49% from $6.7 million a year ago. Backlog: $126.2 million, up 45% year-over-year from $87.1 million. Cash Flow from Operations: $12 million in the first six months, up from $1.9 million a year ago. Long-Term Debt: $41.7 million at quarter end, up from $33.9 million at year-end. Capital Expenditures: $1.5 million invested in the first half of the year. Share Repurchases: 19,529 shares repurchased during the quarter; 256,000 shares remain under authorization. Warning! GuruFocus has detected 4 Warning Signs with EML. Is EML fairly valued? Test your thesis with our free DCF calculator. Release Date: August 12, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Sequential improvement in net sales, gross margin, and adjusted EBITDA from continuing operations. Backlog increased 45% year-over-year to $126.2 million, with broad-based strength across all businesses. Expansion into aerospace and defense markets through the acquisition of Sun Gear and Crown Precision, diversifying the portfolio. Recorded a one-time noncash bargain purchase gain of $6.5 million from the acquisitions. Strong cash flow from operations of $12 million in the first half, a substantial improvement from $1.9 million a year ago. Net sales decreased 11.9% year-over-year to $61.8 million. Gross margin declined to 20.8% from 23.3% in the prior year period. Adjusted EBITDA from continuing operations decreased approximately 49% year-over-year. Adjusted net income fell to $0.15 per diluted share from $0.57 per diluted share a year ago. Tariff costs on China-sourced products totaled approximately $1.9 million in the quarter, impacting margins. Q: Can you frame expectations for the level of revenue increase you can expect in the second half, given the accelerating truck build rates and how that flows through the P&L?A: Ryan Schroeder (CEO) stated that the improvement in truck build rates is being felt most notably at Velvac and Eberhard. The company expects the trend to continue upward for the remainder of the year and well into 2027, with the firm orders from the build increase being a major driver of the significant increase in the order backlog. Q: Given the recent acquisitions, what is the strategy for the new aerospace and defense platform, and how do you view the growth opportunities and cross-selling synergies?A: Ryan Schroeder (CEO) explained that the thesis is based on a massive need in the Tier 2 aerospace market, where supply chain shortages are the sole bottleneck. Eastern's operating scheme and long-term view uniquely position it to acquire and improve businesses like Crown and Sun Gear. This is seen as step one and two of many to diversify the company away from the truck segment and bring long-term shareholder value. Q: Can you provide more detail on the profitability of the acquired businesses and the plan to get them up to target margins?A: Ryan Schroeder (CEO) clarified that the acquisitions will be profitable this year and accretive to overall efforts. The targeted gross margin over time is in the 20% to 30% range, which will be achieved through improving throughput processes and taking necessary pricing actions. The current backlog is priced differently than historical performance, with the vast majority at appropriate and healthy levels. Q: Is the $5 million per quarter revenue run rate from the acquisitions accurate, and will the inventory step-up affect gross margins for a few quarters?A: Ryan Schroeder (CEO) confirmed that the combined businesses have the potential to reach close to $20 million a year in revenue. He also confirmed that the inventory step-up from the acquisition will cause gross margins to be around breakeven for a few quarters until the acquired inventory is burned through. Q: Can you provide an update on the ERP implementation at Velvac and any plans for other divisions?A: Ryan Schroeder (CEO) reported that the ERP changeover at Velvac went live on April 1. While there are still some issues to be resolved, the business is shipping orders and closing each month on time. He expects it to be completely normalized within the current quarter and confirmed there are no other ERP upgrades planned for any other businesses, including the new acquisitions. Q: How should we think about the impact of the lower-margin aerospace acquisition on overall gross margins, and what is the magnitude of the expected increase from trough levels?A: Ryan Schroeder (CEO) acknowledged a mix impact on gross margins but stated that the volume benefits from the stronger businesses will outweigh the negative impact. CFO Nicholas Vlahos added that the acquisition's impact on overall gross margin is about 120 basis points, which is not overly material. Q: Have the tariff costs been recovered through pricing, and has that flowed through the P&L yet?A: Ryan Schroeder (CEO) stated that the pricing increases needed to recover tariff costs have mostly flowed through the P&L, with changes managed in a live manner within about 30 days of tariff changes. When tariffs were reduced, prices with customers were also reduced accordingly. Q: Can you provide an outlook for the automotive model launches and the impact on the packaging business for the second half and into 2027?A: Ryan Schroeder (CEO) stated that 2026 is expected to be significantly better than 2025, with 2027 expected to be even higher. The backlog for the rack business is nearly filled for the remainder of the year due to high-value automotive model launches, which are coming to fruition as previously discussed. Q: What was the material cost inflation in the quarter, and is the company on a LIFO basis?A: CFO Nicholas Vlahos stated that material cost increases were minimal, at a couple of percent. He clarified that only one business, Eberhard, is on the LIFO inventory method, while the newer businesses are not. Q: Do you have a ballpark figure for the tariff refund amount?A: Ryan Schroeder (CEO) stated that the tariff refund is not overly significant at this point. The businesses, mostly Eberhard and Velvac, are working through the process, and there may be more to report at the next quarter presentation. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Interested in Eastern Company (The)? Here are five stocks we like better. Q2 results weakened: Continuing-operations sales fell 12% year over year to $61.8 million, while adjusted earnings declined to $0.15 per share from $0.57. GAAP earnings benefited from a one-time $6.5 million bargain-purchase gain related to acquisitions. Backlog and truck demand improved: Backlog rose 45% to $126.2 million, supported by recovering heavy-truck orders and gains across the company’s businesses. Management expects most of the backlog to convert into revenue during the remainder of fiscal 2026. Aerospace expansion provides growth potential: The acquisitions of Crown Precision and Sungear added aerospace and defense capabilities, approximately $18 million in combined backlog, and an estimated $5 million to $6 million in quarterly revenue potential. Eastern also reported stronger operating cash flow and continued its $0.11 quarterly dividend and share repurchases. Why Oil Refiners Are the Real Winners of $100 Oil Prices Eastern (NASDAQ:EML) reported lower second-quarter sales and adjusted earnings from continuing operations, while management pointed to a sharply higher backlog, improving heavy-truck demand and its newly acquired aerospace and defense businesses as support for a stronger second half of fiscal 2026. Net sales from continuing operations declined 12% to $61.8 million from $70.2 million in the prior-year quarter. Chief Financial Officer Nicholas Vlahos said the decline reflected lower shipments of truck mirror assemblies, returnable transport packaging, and latch and handle assemblies. Those declines were partially offset by $1.7 million in aerospace sales from the company’s newly acquired businesses. → SoundHound AI Sends a Loud Signal After Its Q2 Earnings Beat Does A&F's Q2 Earnings Win Point to a Strong Holiday Season? Eastern recorded GAAP net income from continuing operations of $5.6 million, or $0.94 per diluted share, compared with $2 million, or $0.33 per diluted share, a year earlier. The result included a one-time, non-cash bargain purchase gain of approximately $6.5 million tied to the acquisitions of Sungear, LLC and Crown Precision. Excluding the bargain purchase gain and other items, adjusted net income from continuing operations was $0.9 million, or $0.15 per diluted share, down from $3.5 million, or $0.57 per diluted share, in the second quarter of 2025. Adjusted EBITDA from continuing operations fell 49% to $3.4 million from $6.7 million. → AST SpaceMobile Earnings Just Reminded Investors How Risky Space Can Be Chief Executive Officer Ryan Schroeder said Eastern saw sequential improvement in sales, gross margin and adjusted EBITDA, even though year-over-year results remained lower. The company’s backlog stood at $126.2 million as of July 4, up $39 million, or 45%, from $87.1 million a year earlier and up from $82.2 million at the end of the first quarter. The backlog increase included $19 million of acquired aerospace orders, along with higher orders for truck mirror assemblies, returnable transport packaging, and latch and handle assemblies. Management said roughly half of the year-over-year backlog increase came from existing operations, with the rest stemming from the new aerospace and defense platform. → First Solar’s Profit Engine Faces a New Policy Test in Washington Schroeder said the majority of the backlog is expected to convert to revenue during the remainder of 2026. Backlog increased across each business, including sequential gains of 29% at Velvac and 19% at Eberhard. Heavy-truck build-rate recovery has been a primary driver of demand at Velvac and Eberhard, according to management. Schroeder said the company saw stronger activity from customers including PACCAR and Daimler Truck North America during June and July, and expects the trend to continue through the rest of 2026 and into 2027. At Eberhard, the company’s largest work-truck body customer is emerging from a prolonged downturn, while a new door and actuation program for a customer’s next-generation side-by-side ATV remains on schedule. Velvac is managing higher demand while completing the stabilization of an enterprise resource planning system that went live April 1. Gross margin was 20.6% in the second quarter, compared with 23.3% in the year-earlier period. Vlahos attributed the year-over-year decline to lower volume, the runoff of below-margin contracts at Big 3 Precision, and tariff-related costs on China-sourced products. The company incurred approximately $1.9 million in tariff costs in the quarter, compared with approximately $2.4 million a year earlier, and said it recovered most of those costs through pricing. Management said tariff-related price adjustments have generally flowed through within about 30 days of tariff changes. Schroeder said Big 3 had accepted a block of rack orders below its minimum margin threshold to fill capacity during a weaker demand period. The company tightened its quoting process and added review and accountability measures for pricing decisions. Those lower-margin contracts have now largely run off, he said, while new business is being booked at normal margins. Management reported meaningful improvement in Big 3 gross margin in the final month of the quarter and further improvement in July. Big 3’s order book has also been bolstered by automotive model launches, with Schroeder saying the rack backlog is largely filled through the remainder of the year. Eastern completed the acquisitions of California-based Crown Precision and Sungear on June 1 for $7.85 million. The businesses manufacture high-tolerance components for commercial aerospace and defense applications and contributed one month of sales during the quarter. Management said the two businesses could generate roughly $5 million to $6 million of quarterly revenue, or close to $20 million annually, although their first month under Eastern was softer. Their combined backlog was just over $18 million, with management expecting about half to be suitable for 2026 revenue. The acquired operations had near break-even gross margins during the first month, partly reflecting acquisition accounting inventory step-up effects. Vlahos said Eastern’s longer-term gross-margin target for the businesses is 20% to 30%, supported by pricing actions, operational improvements and efforts to increase throughput. Schroeder said the acquired businesses were profitable during the first half of 2026 after pricing actions taken last year and are expected to be accretive to Eastern’s results this year. He described the acquisitions as the first steps in building a precision manufacturing platform serving aerospace and defense markets. Cash from operations totaled $12 million during the first six months of 2026, compared with $1.9 million in the prior-year period. Eastern ended the quarter with $15.1 million in cash, $66 million of inventory and $36.8 million of accounts receivable. Long-term debt was $41.7 million at quarter end, up from $33.9 million at year-end, primarily reflecting borrowings for the acquisitions. The company had $59 million available under its $100 million revolving credit facility and said it remained in compliance with its loan covenants. Eastern paid a quarterly dividend of $0.11 per share and repurchased 19,529 shares during the second quarter, bringing first-half repurchases to more than 40,000 shares. As of July 4, 256,000 shares remained available under the existing repurchase authorization. The company also invested $1.5 million in capital expenditures during the first half. Eastern (NASDAQ:EML), based in West Haven, Connecticut, is a diversified industrial manufacturer specializing in secure hardware and metal finishing services. The company operates through two primary segments: Industrial Hardware Products and Security Products, complemented by a Metal Coatings division. Its Industrial Hardware Products segment produces cold-headed fasteners, forgings, hinges and precision components for heavy commercial vehicles, hydraulic cylinders and industrial machinery. The Security Products segment designs and manufactures a wide range of lock and latch solutions, including padlocks, door hardware, cabinet locks and rental security towers for commercial and institutional applications. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Eastern Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

Acquired Two Precision Manufacturers, Extending Eastern into the Aerospace and Defense Markets Backlog Increased 45% Year-Over-Year to $126.2 Million, Driven by Acquired Aerospace Orders and Strengthening Demand for Truck Mirror Assemblies, Returnable Transport Packaging and Latch and Handle Assemblies Repurchased 19,529 Shares in the Second Quarter, with 256,275 Shares Remaining Available Under Existing Repurchase Program Entering the Second Half with Strong Momentum and Enhanced Visibility to Support Improving Underlying Profitability Over the Balance of 2026 SHELTON, CT / ACCESS Newswire / August 11, 2026 / The Eastern Company ("Eastern" or the "Company") (NASDAQ:EML), an industrial manufacturer of engineered products and solutions serving commercial transportation, logistics, and other industrial markets, today announced its results of operations for the second fiscal quarter of 2026 ended July 4, 2026. Results for the reported period reflect the June 1, 2026, acquisition of Sungear, LLC and Sinecera, LLC (dba Crown Precision), two California-based precision manufacturers serving the aerospace, defense, and adjacent end markets. Ryan Schroeder, Eastern's President and CEO, stated, "Second quarter net sales and gross margin improved sequentially as order execution strengthened and demand improved across our core commercial transportation businesses, though both remained below prior year levels. The unfavorably priced contracts within our returnable transport packaging business, as discussed in our first quarter 2026 earnings call, are now behind us, and new orders are booking at stronger margins. We also expanded into the aerospace and defense markets through the acquisition of Sungear and Crown Precision. These businesses complement our existing portfolio by adding embedded positions within long-cycle programs and exposure to multi-year procurement tailwinds. We ended the quarter with a backlog of $126.2 million, a 45% increase from a year ago, supported by acquired aerospace orders together with strengthening demand for truck mirror assemblies, returnable transport packaging, and latch and handle assemblies. "We enter the second half of the year with strong momentum and improved visibility across our businesses," continued Mr. Schroeder. "Our manufacturing expertise supplies key components to some of America's most admired industrial companies. Heavy-truck build rates have risen, benefiting both Eberhard Manufacturing and Velvac, and bringing Eberhard's largest customer back into the market for mechanical access systems after an extended slowdown, driving meaningful backlog growth. As production volume builds, our product mix improves, and we integrate the acquired operations, we remain focused on disciplined execution to translate this momentum into improving underlying profitability through the remainder of 2026." Second Quarter 2026 Financial Results The following analysis excludes discontinued operations. Net sales for the second quarter of 2026 decreased 12% to $61.8 million from $70.2 million for the corresponding period in 2025. The decrease in sales was due to lower shipments of truck mirror assemblies, returnable transport packaging and latch and handle assemblies of $5.7 million, $3.4 million, and $0.9 million, respectively, partially offset by $1.7 million in aerospace sales from the acquisition of Sungear and Crown Precision. Net sales for the first six months of 2026 decreased 11% to $121.5 million from $136.1 million for the corresponding period in 2025. Sales decreased in the first six months of 2026 due to lower shipments of returnable transport packaging, truck mirror assemblies and latch and handle assemblies of $10.9 million, $4.5 million, and $0.9 million, respectively, partially offset by a $1.7 million increase in aerospace sales from the acquisition of Sungear and Crown Precision. Gross margin as a percentage of sales was 20.6% for the second quarter of 2026 and 20.3% for the first six months of 2026, compared to 23.3% and 23.1%, respectively, for the corresponding periods in 2025. Selling and administrative expenses decreased $2.1 million, or 17.5%, for the second quarter of 2026 compared to the corresponding period in 2025 due to $1.9 million of lower restructuring charges, lower personnel costs of $0.1 million, lower amortization of $0.1 million and other expenses of $0.4 million, partially offset by higher computer expenses of $0.4 million. Selling and administrative expenses decreased $2.9 million, or 12.9% for the first six months of 2026 due to $1.9 million of lower restructuring charges, lower personnel costs of $0.5 million, lower amortization of $0.2 million, lower commission expenses of $0.4 million and other expenses of $0.6 million, partially offset by higher legal expenses of $0.3 million and higher computer expenses of $0.4 million. Net income from continuing operations for the second quarter of fiscal 2026 was $5.6 million, or $0.94 per diluted share, compared to net income of $2.0 million, or $0.33 per diluted share, for the comparable period in 2025. For the first six months of 2026, net income from continuing operations was $6.3 million, or $1.04 per diluted share, compared to $4.2 million, or $0.69 per diluted share, for the comparable period in 2025. Net income from continuing operations in both periods included a one-time, non-cash bargain purchase gain of $6.5 million recognized in connection with the recently completed acquisition of Sungear and Crown Precision, which is excluded from the adjusted measures described below. Adjusted net income from continuing operations (a non-GAAP measure) for the second quarter of fiscal 2026 was $0.9 million, or $0.15 per diluted share, compared to adjusted net income from continuing operations of $3.5 million, or $0.57 per diluted share, for the corresponding period in 2025. For the six months ended July 4, 2026, adjusted net income from continuing operations was $1.6 million, or $0.26 per diluted share, compared to $5.7 million, or $0.93 per diluted share, for the comparable 2025 period. Adjusted EBITDA from continuing operations (a non-GAAP measure) for the second quarter of 2026 was $3.4 million compared to $6.7 million for the corresponding period in 2025, a decrease of $3.3 million or approximately 49%. For the six months ended July 4, 2026, adjusted EBITDA from continuing operations was $6.4 million compared to $11.7 million in the corresponding 2025 period. See "Non-GAAP Financial Measures" below and the reconciliation table accompanying this release. During the second quarter of fiscal 2026, total debt increased by $8.8 million to $41.7 million, reflecting borrowings to complete the acquisition of Sungear and Crown Precision. In addition, the Company repurchased 19,529 shares of common stock under its share repurchase program authorized in April 2025. As of July 4, 2026, 256,275 shares remained available for repurchase under the program. Conference Call and Webcast The Eastern Company will host a conference call to discuss its results for the second quarter of 2026 and related matters on Wednesday, August 12, 2026, at 9:00AM Eastern Time. Participants can access the conference call by phone at 888-506-0062 (toll-free in the US and Canada) or 973-528-0011 (international), using access code 573591. Participants can also join via the web at https://www.webcaster5.com/Webcast/Page/1757/54302. About The Eastern Company The Eastern Company manages businesses that design, manufacture and sell engineered solutions for industrial markets. The Company operates from locations in the U.S., Canada, Mexico, Taiwan, and China. More information on the Company can be found at www.easterncompany.com. Safe Harbor for Forward-Looking Statements Statements contained in this press release that are not based on historical facts are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of forward-looking terminology such as "would," "should," "could," "may," "will," "expect," "believe," "estimate," "anticipate," "intend," "continue," "plan," "potential," "opportunities," or similar terms or variations of those terms or the negative of those terms. There are many factors that affect the Company's business and the results of its operations and that may cause the actual results of operations in future periods to differ materially from those currently expected or anticipated. These factors include: risks associated with doing business overseas, including fluctuations in exchange rates and the inability to repatriate foreign cash, the impact on our cost structure and on economic conditions as a result of actual and threatened increases in trade tariffs and the impact of political, economic, and social instability; the impact of tariffs, trade sanctions or political instability on the availability or cost of raw materials; the impact of higher raw material and component costs and cost inflation, supply chain disruptions and shortages, particularly with respect to steel, plastics, scrap iron, zinc, copper, and electronic components; delays in delivery of our products to our customers; the impact of global economic conditions and interest rates, and more specifically conditions in the automotive, construction, aerospace, energy, oil and gas, transportation, electronic, and general industrial markets, including the impact, length and degree of economic downturns on the customers and markets we serve and demand for our products, reductions in production levels, the availability, terms and cost of financing, including borrowings under credit arrangements or agreements, and the impact of market conditions on pension plan funded status; restrictions on operating flexibility imposed by the agreement governing our credit facility; the inability to achieve the savings expected from global sourcing of materials; lower-cost competition; our ability to design, introduce and sell new or updated products and related components; market acceptance of our products; the inability to attain expected benefits from acquisitions or dispositions or the inability to effectively integrate acquired businesses and achieve expected synergies; costs and liabilities associated with environmental compliance; the impact of climate change, natural disasters, geopolitical events, and public health crises, including pandemics and epidemics, and any related Company or government policies or actions, including any potential adverse economic impacts resulting from a U.S. federal government shutdown; military conflict (including the Russia/Ukraine conflict, the conflict in the Middle East, the possible expansion of such conflicts and geopolitical consequences) or terrorist threats and the possible responses by the U.S. and foreign governments; failure to protect our intellectual property; cyberattacks, data breaches or interruptions or failures of our information technology systems; and materially adverse or unanticipated legal judgments, fines, penalties, or settlements. The Company is also subject to other risks identified and discussed in Part I, Item 1A, Risk Factors, and in Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations, of the 2025 Form 10-K/A which was filed with the Securities and Exchange Commission on March 19, 2026, and that may be identified from time to time in our quarterly reports on Form 10-Q, current reports on Form 8-K and other filings we make with the SEC. Although the Company believes it has an appropriate business strategy and the resources necessary for its operations, future revenue and margin trends cannot be reliably predicted, and the Company may alter its business strategies to address changing conditions. Also, the Company makes estimates and assumptions that may materially affect reported amounts and disclosures. These relate to valuation allowances for accounts receivable and excess and obsolete inventories, accruals for pensions and other postretirement benefits (including forecasted future cost increases and returns on plan assets), provisions for depreciation (estimating useful lives), uncertain tax positions, and, on occasion, accruals for contingent losses. The Company undertakes no obligation to update, alter, or otherwise revise any forward-looking statements, whether written or oral, that may be made from time to time, whether as a result of new information, future events, or otherwise, except as required by law. Non-GAAP Financial Measures The non-GAAP financial measures we provide in this press release should be viewed in addition to, and not as an alternative for, results prepared in accordance with U.S. GAAP. To supplement the condensed consolidated financial statements prepared in accordance with U.S. GAAP, we have presented Adjusted Net Income from Continuing Operations, Adjusted Earnings Per Share from Continuing Operations, and Adjusted EBITDA from Continuing Operations, which are considered non-GAAP financial measures. The non-GAAP financial measures presented may differ from similarly titled non-GAAP financial measures presented by other companies, and other companies may not define these non-GAAP financial measures in the same way. These measures are not substitutes for their comparable U.S. GAAP financial measures, such as net sales, net income, diluted earnings per share, or other measures prescribed by U.S. GAAP, and there are limitations to using non-GAAP financial measures. Adjusted Net Income from Continuing Operations is defined as net income from continuing operations excluding, when incurred, gains or losses that we do not believe reflect our ongoing operations, including, for example, the impacts of impairment losses, gains/losses on the sale of subsidiaries, property and facilities, transaction expenses primarily relating to acquisitions and divestitures, factory start-up costs, factory relocation expenses, executive severance, and restructuring costs. This measure also excludes credit agreement refinancing expenses, when applicable because we do not believe these expenses are reflective of our ongoing operations. Adjusted Net Income from Continuing Operations is a tool that can assist management and investors in comparing our performance on a consistent basis across periods by removing the impact of certain items that management believes do not directly reflect our underlying operating performance. Adjusted Earnings Per Share from Continuing Operations is defined as earnings per share from continuing operations excluding, when incurred, certain per share gains or losses that we do not believe reflect our ongoing operations, including, for example, the impacts of impairment losses, gains/losses on the sale of subsidiaries, property and facilities, transaction expenses primarily relating to acquisitions and divestitures, factory start-up costs, factory relocation expenses, executive severance, and restructuring costs. This measure also excludes credit agreement refinancing expenses, when applicable, because we do not believe these expenses are reflective of our ongoing operations. We believe that Adjusted Earnings Per Share from Continuing Operations provides important comparability of underlying operational results, allowing investors and management to assess operating performance on a consistent basis from period to period. Adjusted EBITDA from Continuing Operations is defined as net income from continuing operations before interest expense, provision for income taxes, and depreciation and amortization and excluding, when incurred, the impacts of certain losses or gains that we do not believe reflect our ongoing operations, including, for example, impairment losses, gains/losses on sale of subsidiaries, property and facilities, transaction expenses primarily relating to acquisitions and divestitures, factory start-up costs, factory relocation expenses, executive severance, and restructuring expenses. This measure also excludes credit agreement refinancing expenses, when applicable, because we do not believe these expenses are reflective of our ongoing operations. Adjusted EBITDA from Continuing Operations is a tool that can assist management and investors in comparing our performance on a consistent basis by removing the impact of certain items that management believes do not directly reflect our underlying operations. Management uses such measures to evaluate performance period over period, to analyze the underlying trends in our business, to assess our performance relative to our competitors, and to establish operational goals and forecasts that are used in allocating resources. These financial measures should not be considered in isolation from, or as a replacement for, U.S. GAAP financial measures. We believe that presenting non-GAAP financial measures in addition to U.S. GAAP financial measures provides investors greater transparency to the information used by our management for its financial and operational decision-making. We further believe that providing this information better enables our investors to understand our operating performance and to evaluate the methodology used by management to evaluate and measure such performance. Investor Relations Contacts The Eastern Company Ryan Schroeder or Nicholas Vlahos203-729-2255 THE EASTERN COMPANYCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS THE EASTERN COMPANYCONDENSED CONSOLIDATED BALANCE SHEETS THE EASTERN COMPANYCONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED) THE EASTERN COMPANYCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) Reconciliation of Non-GAAP MeasuresAdjusted Net Income from Continuing Operations and Adjusted Earnings per Share from Continuing Operations CalculationFor the Three and Six Months ended July 4, 2026 and June 28, 2025($000's, except for per share data) Reconciliation of Non-GAAP MeasuresAdjusted EBITDA CalculationFor the Three and Six Months ended July 4, 2026 and June 28, 2025($000's) SOURCE: The Eastern Company View the original press release on ACCESS Newswire

SHELTON, CT / ACCESS Newswire / July 20, 2026 / The Eastern Company (NASDAQ:EML) today announced the declaration of its regular quarterly cash dividend of eleven cents ($0.11) per share, payable September 15, 2026, to common shareholders of record as of August 14, 2026. This dividend represents the Company's 344th consecutive quarterly dividend. About The Eastern Company The Eastern Company manages businesses that design, manufacture and sell engineered products and solutions for industrial markets. The Company operates from locations in the U.S., Canada, Mexico, Taiwan, and China. More information on the Company can be found at www.easterncompany.com. Safe Harbor for Forward-Looking Statements Statements contained in this release that are not based on historical facts are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of forward-looking terminology such as "would," "should," "could," "may," "will," "expect," "believe," "estimate," "anticipate," "intend," "continue," "plan," "potential," "opportunities," or similar terms or variations of those terms or the negative of those terms. There are many factors that affect the Company's business and the results of its operations and that may cause the actual results of operations in future periods to differ materially from those currently expected or anticipated. These factors include: risks associated with doing business overseas, including fluctuations in exchange rates and the inability to repatriate foreign cash, the impact on our cost structure and on economic conditions as a result of actual and threatened increases in trade tariffs and the impact of political, economic, and social instability; the impact of tariffs, trade sanctions or political instability on the availability or cost of raw materials; the impact of higher raw material and component costs and cost inflation, supply chain disruptions and shortages, particularly with respect to steel, plastics, scrap iron, zinc, copper, and electronic components; delays in delivery of our products to our customers; the impact of global economic conditions and interest rates, and more specifically conditions in the automotive, construction, aerospace, energy, oil and gas, transportation, electronic, and general industrial markets, including the impact, length and degree of economic downturns on the customers and markets we serve and demand for our products, reductions in production levels, the availability, terms and cost of financing, including borrowings under credit arrangements or agreements, and the impact of market conditions on pension plan funded status; restrictions on operating flexibility imposed by the agreement governing our credit facility; the inability to achieve the savings expected from global sourcing of materials; lower cost competition; our ability to design, introduce and sell new or updated products and related components; market acceptance of our products; the inability to attain expected benefits from acquisitions or dispositions or the inability to effectively integrate acquired businesses and achieve expected synergies; costs and liabilities associated with environmental compliance; the impact of climate change, natural disasters, geopolitical events, and public health crises, including pandemics and epidemics, and any related Company or government policies or actions, including any potential adverse economic impacts resulting from a U.S. federal government shutdown; military conflict (including the Russia/Ukraine conflict, the conflict in the Middle East, the possible expansion of such conflicts and geopolitical consequences) or terrorist threats and the possible responses by the U.S. and foreign governments; failure to protect our intellectual property; cyberattacks, data breaches or interruptions or failures of our information technology systems; materially adverse or unanticipated legal judgments, fines, penalties, or settlements. The Company is also subject to other risks identified and discussed in Part I, Item 1A, Risk Factors, and in Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations, of the Company's Annual Report on Form 10-K/A for the year ended January 3, 2026, filed with the Securities and Exchange Commission (the "SEC") on March 19, 2026, and that may be identified from time to time in our quarterly reports on Form 10-Q, current reports on Form 8-K and other filings we make with the SEC. Although the Company believes it has an appropriate business strategy and the resources necessary for its operations, future revenue and margin trends cannot be reliably predicted, and the Company may alter its business strategies to address changing conditions. Also, the Company makes estimates and assumptions that may materially affect reported amounts and disclosures. These relate to valuation allowances for accounts receivable and excess and obsolete inventories, accruals for pensions and other postretirement benefits (including forecasted future cost increases and returns on plan assets), provisions for depreciation (estimating useful lives), uncertain tax positions, and, on occasion, accruals for contingent losses. The Company undertakes no obligation to update, alter, or otherwise revise any forward-looking statements, whether written or oral, that may be made from time to time, whether as a result of new information, future events, or otherwise, except as required by law. Investor Relations Contacts The Eastern CompanyRyan Schroeder or Nicholas Vlahos 203-729-2255 SOURCE: The Eastern Company View the original press release on ACCESS Newswire

Shares of The Eastern Company EML have declined 7.6% since the company reported results for the quarter ended April 4, 2026, underperforming the S&P 500 index, which was essentially flat over the same period, with a 0.1% change. Over the past month, Eastern’s stock has fallen 7.8% compared with a 5% gain for the broader market. Eastern reported first-quarter 2026 net income of 11 cents per share, down from 32 cents per share a year earlier. Net sales of $59.7 million indicated a 5.7% decline from $63.3 million in the year-ago quarter, primarily due to lower shipments tied to softer demand for returnable transport packaging products. Net income fell to $0.6 million from $1.9 million a year earlier. Adjusted EBITDA declined about 35% year over year to $3 million from $4.6 million, while gross margin contracted to 20% from 22.4%. The Eastern Company price-consensus-eps-surprise-chart | The Eastern Company Quote Management said order activity strengthened across nearly all business segments during the quarter, helping backlog rise sequentially to $82.2 million from $81.1 million at fiscal 2025 year-end, though backlog remained below the $85.9 million recorded a year earlier. Executives attributed the sequential improvement to better order execution and a gradually improving demand environment. CEO Ryan Schroeder said the recovery identified in late 2025 “remains intact” and is beginning to broaden across the portfolio. The company cited improving momentum at Eberhard and Velvac, with Velvac benefiting from an early-stage recovery in heavy-duty truck production. Management also noted that customers are increasingly committing to orders for the second half of 2026, improving visibility relative to last year. Profitability was hurt by issues within the company’s racks business at Big 3 Precision. Management disclosed that contracts quoted during a prolonged slowdown were later found to be below targeted margin thresholds, negatively affecting first-quarter operating performance. The company said the issue pressured both gross margin and net income during the quarter. Gross profit fell to $11.9 million from $14.2 million a year ago as lower volumes, pricing pressure and labor inefficiencies weighed on results. Operating profit declined to $1.3 million from $3.2 million in the prior-year quarter. Management stated corrective actions have already been implemented, including tighter quoting controls, revised approval authority and expanded review processes. Executives expect the financial impact from these contracts to be largely contained to the first half of 2026 as the affected agreements run off. Eastern generated $3.5 million in operating cash flow during the quarter compared with a cash outflow of $1.8 million in the prior-year period. Inventory declined by $3.3 million sequentially to $53.1 million, while accounts receivable increased modestly to $32.6 million. The company continued deleveraging efforts during the quarter, reducing long-term debt by roughly $1 million to $32.9 million. Debt-to-equity improved to 26.6% from 34.3% a year earlier. Eastern ended the quarter with approximately $67 million available under its revolving credit facility. Management also continued shareholder returns through dividends and stock repurchases. During the quarter, Eastern repurchased 21,120 shares for about $0.4 million under its authorized buyback program. Executives emphasized ongoing operational investments aimed at supporting future growth. At Eberhard, the company is implementing lean manufacturing initiatives to shorten lead times and reduce inventory requirements. One highlighted launch is a new door actuation program for a customer’s next-generation side-by-side ATV platform scheduled to ramp through the second and third quarters of 2026. At Big 3 Precision, Eastern is investing in automation and robotics intended to increase welding throughput without additional headcount. Meanwhile, Velvac recently implemented a new ERP system designed to improve inventory visibility and order management efficiency. Management said the demand environment for the remainder of 2026 appears “considerably more favorable” than conditions experienced in the second half of 2025. Executives added that the company expects to improve its financial performance as the year progresses. Eastern indicated it remains interested in selective merger-and-acquisition opportunities as its balance sheet strengthens. Management said its acquisition pipeline is “filling” and that the company intends to pursue disciplined M&A opportunities when they meet strategic and financial criteria. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Eastern Company (The) (EML): Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Image source: The Motley Fool. Wednesday, May 13, 2026 at 9 a.m. ET Chief Executive Officer — Ryan Schroeder Chief Financial Officer — Nicholas Vlahos Director of Investor Relations — Marianne Barr Marianne Barr: Marianne, the floor is yours. Good morning, and thank you, everyone, for joining us this morning for a review of The Eastern Company's results for the 2026. With me on the call are Ryan Schroeder, chief executive officer and Nicholas Vlahos, chief financial officer. The company issued its earnings press release yesterday after the market closed. If anyone has not yet seen the release, please visit the Investor Information section of the company's website www.easterncompany.com, where you will find the release under Financial News. Please note that some of the information you will hear during today's call will consist of forward-looking statements about the company's future financial performance and business prospects. Including, without limitation, statements regarding revenue, gross margins, operating expenses, other income and expenses, taxes, and business outlook. These forward-looking statements are subject to risks and uncertainties that could cause actual results or trends to differ significantly from those projected in these forward-looking statements. We undertake no obligation to review or update any forward-looking statements to reflect events or circumstances that occur after the call. For more information regarding these risks and uncertainties, please refer to risk factors discussed in our SEC filings including Form 10 ks filed with the SEC on 03/03/2026 for the fiscal year 2025. In addition, during today's call, we will discuss non GAAP financial measures that we believe are useful as supplemental measures of Eastern's performance. These non GAAP measures should be considered in addition to and not as a substitute for or in isolation from GAAP results. A reconciliation of each of the non GAAP measures discussed during today's call to the most directly comparable GAAP measure can be found in the earnings press release. With that introduction, I will turn the call over to Ryan. Ryan Schroeder: Thank you, Marianne, and good morning, everyone. Welcome to The Eastern Company's First Quarter 26 Earnings Conference Call. Following my prepared remarks, Nick will walk through the financial results in detail, after which we will open the line for questions. I want to start this morning with our headline view of our Q1 performance and the lens through which we are managing the business as we move into the second quarter and look ahead to the balance of 2026. This was a quarter with positives and negatives. On the positive side, net sales of $59.7 million improved sequentially from the fourth quarter by 4%. The sequential improvement reflects improved order execution and an improving demand environment. Notably, the sequential improvement was achieved despite continued softness in our returnable dunnage businesses. Which weighed on the year over year comparison. We also experienced a 1-time destocking action by a customer of Eberhard. Strengthening order conversion drove sequential backlog growth to $82.2 million for the second consecutive quarter, continuing the recovery from the trough we reported in 2025. Order rates strengthened across virtually all of our segments. The underlying demand recovery we identified coming out of Q4 is intact and is showing early signs of broadening. And we delivered a $5.4 million year over year improvement in cash flow from operations. Reversing a use of cash in 2025. On the other side of the ledger, an operating issue within our returnable racks businesses which resides within Big 3 Precision pressured consolidated gross margin and net income for the quarter. Consequently, we reported Q1 adjusted gross adjusted EBITDA of $3 million compared with 4.6 million in both 2025. Excluding the big 3 impact, the EBITDA across the rest of the portfolio was broadly in line with prior quarter and prior year periods. Our Q1 performance reflects 3 principal dynamics: and I want to walk through each in turn. Beginning with the operating issue at big 3. In Q1 , our Big 3 business recorded a below plan operating performance. I want to be clear about what happened what we have done about it, and the time frame over which the financial impact will work through our income statement. Within Big 3, to fill plant capacity against the prolonged period of soft demand, our racks team quoted orders in the fourth quarter, which were discovered to be below our margin threshold. Having identified and addressed the root cause of the below plan performance, we have heightened the quoting processes, adjusted the delegation of authority, and installed a cross functional review process that improves accountability. We have determined that the financial impact is contained to the first half 26 while the effective contracts run off. We are honoring our commitment to customers who receive these contracts preserving the relationship that matters to the long term value of this business. In fact, we continue to see backlog in this business grow. And despite this operational snafu, our operational turnaround is on track. Turning to demand to the demand environment. We are seeing improvements across virtually all of our business segments. The market signals are encouraging. Backlog grew sequentially for the second consecutive quarter. Reflecting strengthening order conversion across the portfolio. We are seeing building order momentum at both Eberhard and Belvac. Notably at Belvac, that activity is supported by an early stage recovery in heavy duty truck build rates at our major OEMs. Several of which have been adding capacity in their own plants. We also are seeing customers commit to orders for the second half of 2026, which gives us better visibility than we had at this point a year ago. Taken together, the demand environment heading into the remainder of 2026 is more constructive than it was in 2025. The trajectory of the order book and our customer engagement is moving in the direction that have been described for several quarters. That said, the macro backdrop continues to require active monitoring. And we are managing the business with appropriate caution as the recovery solidifies. Our operational and commercial work in Q1 included positioning each business to win more business, fulfill it profitably and capture operating leverage as demand recovers. Doing so ahead of new program launches scheduled across the second and third quarters. We believe these are the right investments at the right point in the cycle. At Eberhard, we are applying lean principles to compress lead times and reduce inventory with no material capital required. The result is a more responsive footprint for both existing products and new program launches. Most significant of those launches is a new door actuation program for our customer's next generation side by side ATV that is ramping up across the second and third quarters of this year. At Big 3, alongside corrective action measures taken we have taken we are making capacity investments designed to deliver operating leverage. Includes automation and robotics, that expand welding throughput without adding headcount and enabling lights out and weekend production. At Belvac, we went live on a new ERP system on the first day of the second quarter. The new platform is expected to support more efficient order management inventory visibility, and financial close processes as Velvac continues to capture the recovery underway in the heavy duty truck market. We are into week 6 of this major initiative, and while it is not a finished project just yet, we are taking, making and shipping orders and have been able to successfully close the month of April. And now moving on to the balance sheet and capital allocation. Deleveraging the balance sheet remains a clear priority. In Q1 , we continue to reduce debt continued our regular quarterly dividend repurchased shares under the authorized program, and generated meaningful cash from operations. Strengthening the balance sheet gives us the capacity to absorb periods of operational pressure like the 1 we are reporting today, without compromising the businesses or our strategic plan. It also preserves our optionality on M&A, Allowing us to move on opportunities when they meet our criteria. I will now turn the call over to Nick to review our financial results for the first quarter. Nick? Nicholas Vlahos: Over to you. Thanks, Ryan. Beginning with net sales for the 2026, net sales decreased approximately 6% to $59.7 million from $63.3 million in 2025. Due primarily to decreased shipments resulting from lower order volume of returnable transport packaging products. The decrease was partially offset by increased sales of truck mirror assemblies. Our backlog as of 04/04/2026 was 82.2 million down approximately 8% from $85.9 million a year ago. Primarily reflecting softer order activity in returnable transport Notably, backlog increased modestly on a sequential basis from $81.1 million at fiscal year end. Gross margin as a percentage of net sales for the 2026 was 20% or 11.9 million compared to 22.4% or 14.2 million in 2025. This decrease reflects a decline in volumes on existing products which spread manufacturing costs across a smaller revenue base, and below plan operating performance at Big 3 as Ryan detailed. These factors were partially offset by new product contributions, and price increases on existing products. As a percentage of net sales, product development costs were 1.7% in the 2026 compared to 1.8% in the prior period. This reflects continued investment in new products across our business units while maintaining cost discipline relative to our revenue base. Selling and administrative expenses for the 2026 decreased $300 thousand, or 2.8%, to $9.6 million compared to 9.8 million in 2025. The decrease was driven by lower compensation and related charges and lower commission charges that were partially offset by higher legal and professional expenses. Operating profit for the 2026 was $1.3 million or 2.2% of net sales compared to 3.2 million or 5.1% of net sales in the prior year period. Other income and expense for the 2026 was $13 thousand of income compared to $200 thousand of expense in the prior period. Interest expense in the 2026 was $528 thousand, a modest decline from interest expense of 617 thousand in the same period in the prior year. Net income from continuing operations for the first quarter was $600 thousand or $0.11 per diluted share compared to 1.9 million or $0.31 per diluted share in the prior year period. Turning to adjusted EBITDA, first quarter 26 adjusted EBITDA from continuing operations was 3 million or 5% of net sales compared to $4.6 million or 7.3% of net sales in the prior year period. The 32 basis point margin compression reflects 2 factors listed in the order of magnitude. The most significant driver was Big 3's, below plan operating performance. And lower volume in returnable transport packaging. Turning to the balance sheet, I want to highlight several dynamics that underscore our financial stability and the continued progress we are making on our capital structure priorities. Total assets at the end of the first quarter were $217 million essentially flat compared to $217 million at fiscal year end. On working capital, we ended the quarter at 71.3 million compared to $66.1 million in the prior year period. With a current ratio of 3.5x. Inventory declined $3.3 million to 53.1 million representing approximately a 5.9% from year end. Accounts receivables were $32.6 million up modestly from 30.1 million at year end. On debt and leverage, we continue to reduce our long term debt. Ending the quarter with a balance of $33 million at quarter end. Our total debt to equity ratio improved to 26.6%, down substantially from 34.3% at the end of 2025. We remain comfortably within all of our covenants under our Citizens Bank credit agreement and we have 67 million of availability on our 100 million revolving facility that provides us with significant financial flexibility as we look ahead. Cash generated from operations in the quarter was $3.5 million, a strong reversal from the $1.9 million usage in the prior year first quarter. Capital expenditures were 900 thousand Consistent with our capital allocation policy, we repurchased approximately 21 thousand shares during the quarter. To summarize, our strengthening balance sheet and borrowing capacity gives us the flexibility to fund organic growth and selectively pursue disciplined M&A pipeline. That completes my financial review. I will now turn the call back to Ryan. Ryan? Ryan Schroeder: Thanks, Nick. Before we open the line for questions, I want to leave you with a couple of key takeaways. Our corporate strategy is unchanged. And we are staying the course. We continue to deleverage and strengthen the balance sheet The commercial orientation of our businesses remain focused on an organic growth mindset. We are investing in the people, processes, and programs to support that orientation and our pipeline of potential acquisition targets is filling. And we are well positioned to move decisively when the right opportunity meets our criteria. With that, I will open up for questions. Operator: Thank you very much. At this time, we will be conducting our question-and-answer session. If you would like to ask a question, A confirmation tone will indicate that your line is in the queue. You may press Star 2 if you would like to remove your question from the queue. And for anyone using speaker equipment, it might be necessary to pick up your handset before you press the keys. Please wait a moment whilst we poll for questions. Just a reminder there. If you would like to ask a question, you can do so by pressing star 1 on your phone keypad now. I am not seeing anyone in the queue at this moment. There are no further questions at this time. I would like to turn the floor back over to Ryan Schroeder for closing comments. Ryan Schroeder: Thank you for attending our call today. And I would like to thank you for your continued support in Eastern. Please reach out to me or Nick if you have any additional questions. We look forward to updating you in the next quarter. Thank you very much. Operator: This does conclude today's conference. You may disconnect your phone lines at this time and have a wonderful day. We thank you for your participation. Before you buy stock in Eastern, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Eastern wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $472,744!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,353,500!* Now, it’s worth noting Stock Advisor’s total average return is 991% — a market-crushing outperformance compared to 207% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of May 13, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Eastern (EML) Q1 2026 Earnings Call Transcript was originally published by The Motley Fool