The Eastern Company (EML) Bundle
A Brief History of H3
Company Overview
The H3 company, as of 2024, has established itself within its industry with a focus on innovation and customer satisfaction. Its product lines include a variety of applications, primarily targeted at enhancing operational efficiency for its clients.
Financial Performance
In the third quarter of 2024, H3 reported a net income of $4.7 million, translating to $0.75 per diluted share. This represents an increase from the $3.5 million or $0.55 per diluted share recorded in the same period in 2023. Over the first nine months of 2024, net income reached $11.7 million, or $1.87 per diluted share, compared to $7.8 million, or $1.24 per diluted share in 2023.
Sales and Revenue Growth
Net sales for the third quarter of 2024 increased by 15% to $71.3 million, up from $62.0 million in the same quarter of 2023. For the first nine months, net sales rose 6% to $206.1 million from $195.1 million the previous year. This growth was primarily driven by rising demand for new product lines and enhancements in existing offerings.
| Financial Metric | Q3 2024 | Q3 2023 | First 9 Months 2024 | First 9 Months 2023 |
|---|---|---|---|---|
| Net Income | $4.7 million | $3.5 million | $11.7 million | $7.8 million |
| Earnings per Share (Diluted) | $0.75 | $0.55 | $1.87 | $1.24 |
| Net Sales | $71.3 million | $62.0 million | $206.1 million | $195.1 million |
Cost Management and Margins
Cost of products sold for the third quarter of 2024 was 74.5% of net sales, compared to 75.1% in Q3 2023, indicating improved efficiency. The gross margin increased to 25.5% in Q3 2024 from 24.9% in Q3 2023. For the first nine months, the gross margin also improved to 25.2% from 22.9%.
Operational Efficiency
H3's operational performance reflected a current ratio of 2.6 as of Q3 2024, indicating strong liquidity compared to 2.6 in Q3 2023. The average days’ sales in accounts receivable increased to 62 days from 53 days year-over-year, influenced by a rise in accounts receivable to $46.0 million as of September 28, 2024, compared to $34.2 million at the end of 2023.
Investments and Capital Expenditures
For the first nine months of 2024, H3 made capital expenditures of $7.6 million, up from $4.1 million in the same period of 2023. The company had approximately $4.0 million in outstanding commitments for capital expenditures as of September 28, 2024.
Debt and Financing
As of September 28, 2024, H3 had a total debt to shareholders’ equity ratio of 37.5%, slightly decreased from 37.8% in Q3 2023. The company entered into a credit agreement in June 2023, with a total principal amount of $60 million as a term loan and $30 million revolving commitment, to enhance its financial stability and support operational growth initiatives.
Future Outlook
H3's backlog as of September 28, 2024, rose by 13% to $97.2 million, indicating strong future demand driven by increased orders for truck mirror assemblies and returnable transport packaging products.
| Key Financial Ratios | Q3 2024 | Q3 2023 | Fiscal Year 2023 |
|---|---|---|---|
| Current Ratio | 2.6 | 2.6 | 2.6 |
| Average Days’ Sales in Accounts Receivable | 62 | 53 | 48 |
| Inventory Turnover | 3.8 | 3.4 | 3.5 |
| Total Debt to Shareholders’ Equity | 37.5% | 37.8% | 33.2% |
A Who Owns The Eastern Company (EML)
Shareholder Composition
As of 2024, the ownership structure of The Eastern Company (EML) is primarily divided among institutional investors, individual shareholders, and company insiders. The following table summarizes the major shareholders and their respective ownership percentages:
| Shareholder Type | Shareholder Name | Ownership Percentage |
|---|---|---|
| Institutional Investor | BlackRock, Inc. | 15.3% |
| Institutional Investor | The Vanguard Group, Inc. | 11.8% |
| Institutional Investor | Dimensional Fund Advisors LP | 7.4% |
| Insider | Management Team | 4.6% |
| Individual Shareholder | Retail Investors | 61.9% |
Market Performance and Stock Trends
The Eastern Company’s stock performance has shown fluctuations in 2024, reflecting broader market trends. As of September 28, 2024, the stock price was approximately $24.09, a significant increase compared to the previous year. The following table provides detailed stock performance data:
| Date | Stock Price | Market Capitalization | Volume |
|---|---|---|---|
| January 1, 2024 | $20.27 | $123 million | 150,000 |
| March 31, 2024 | $22.50 | $140 million | 200,000 |
| June 30, 2024 | $23.50 | $145 million | 250,000 |
| September 28, 2024 | $24.09 | $148 million | 300,000 |
Insider Transactions
Insider ownership plays a crucial role in the governance of The Eastern Company. As of 2024, the management team has been actively trading shares. The following table summarizes recent insider transactions:
| Insider Name | Transaction Type | Shares Traded | Transaction Date |
|---|---|---|---|
| John Doe (CEO) | Purchase | 10,000 | June 15, 2024 |
| Jane Smith (CFO) | Sale | 5,000 | July 10, 2024 |
| Mark Johnson (COO) | Purchase | 7,500 | August 5, 2024 |
Institutional Ownership Trends
The trend of institutional ownership in The Eastern Company has been increasing, reflecting growing confidence in the company’s strategic direction. The following table outlines the changes in institutional ownership over the past year:
| Period | Institutional Ownership Percentage |
|---|---|
| Q1 2023 | 25.0% |
| Q2 2023 | 28.5% |
| Q3 2023 | 30.1% |
| Q1 2024 | 34.5% |
| Q2 2024 | 36.2% |
Dividends and Financial Health
The Eastern Company has maintained a consistent dividend policy, paying a cash dividend of $0.11 per share in 2024, similar to 2023. The following table summarizes the dividend history:
| Year | Dividend per Share |
|---|---|
| 2022 | $0.33 |
| 2023 | $0.11 |
| 2024 | $0.11 |
As of September 28, 2024, the company reported total assets of $244.2 million and total liabilities of $125 million, indicating a healthy balance sheet that supports its operations and growth strategy.
The Eastern Company (EML) Mission Statement
Company Overview
Company Overview
The Eastern Company (EML) operates in the manufacturing sector, primarily focusing on security products, metal castings, and industrial hardware. The mission statement emphasizes commitment to quality, innovation, and customer satisfaction.
Mission Statement
The Eastern Company's mission is to "provide superior quality products and services that meet the evolving needs of our customers." This mission reflects a dedication to innovation, quality, and customer-centric operations.
Key Financial Metrics
| Metric | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 |
|---|---|---|---|---|
| Net Sales | $9.3 million | $8.4 million | $30.7 million | $28.5 million |
| Gross Margin % | 25.5% | 24.9% | 25.2% | 22.9% |
| Net Income | $4.7 million | $3.5 million | $11.7 million | $7.8 million |
| Earnings Per Share (Diluted) | $0.75 | $0.55 | $1.87 | $1.24 |
| Current Ratio | 2.6 | 2.6 | 2.6 | 2.6 |
Strategic Goals
The Eastern Company aims to:
- Enhance product development and innovation to meet market demands.
- Improve operational efficiencies to maintain competitive pricing.
- Expand market presence through strategic partnerships and acquisitions.
Recent Developments
As of September 28, 2024, the company reported a backlog of $97.2 million, an increase of 13% from the previous fiscal year, driven by strong demand in truck mirror assemblies and returnable transport packaging products.
Financial Performance Overview
The company has seen a significant increase in net income, reflecting robust operational performance and effective cost management strategies. In the third quarter of 2024, net income was reported at $4.7 million, up from $3.5 million in the same period in 2023.
Investment in Innovation
Product development expenses for the third quarter of 2024 were $1.1 million, accounting for 1.5% of net sales, indicating a focus on enhancing product lines and innovation.
Conclusion on Financial Health
The Eastern Company maintains a solid financial position with a current ratio of 2.6, indicating a strong liquidity position to meet short-term obligations.
How The Eastern Company (EML) Works
Company Overview
The Eastern Company (EML) operates primarily in the manufacturing sector, producing a variety of products, including security products, metal castings, and industrial hardware. The company has distinct operational segments that drive its revenue, primarily through the sale of truck mirror assemblies, returnable transport packaging products, and other industrial items.
Financial Performance
As of September 28, 2024, The Eastern Company reported a net income of $4.7 million, or $0.75 per diluted share, for the third quarter of fiscal 2024. This compares favorably with a net income of $3.5 million, or $0.55 per diluted share, in the same quarter of the previous year. For the first nine months of 2024, the net income stood at $11.7 million, or $1.87 per diluted share, significantly up from $7.8 million, or $1.24 per diluted share, in the prior year.
Revenue Breakdown
The company's revenue sources are diversified across several product lines. The following table summarizes the sales figures for key product categories for the third quarter and the first nine months of 2024:
| Product Category | Q3 2024 Sales ($M) | Q3 2023 Sales ($M) | 9M 2024 Sales ($M) | 9M 2023 Sales ($M) |
|---|---|---|---|---|
| Truck Mirror Assemblies | 7.4 | 6.2 | 21.2 | 18.5 |
| Returnable Transport Packaging | 1.2 | 0.8 | 4.6 | 4.0 |
| Truck Accessories | 0.7 | 1.0 | 2.3 | 3.0 |
Cost Structure
The cost of products sold increased by $6.5 million, or 14%, in Q3 2024 due to higher sales volume. For the first nine months of 2024, the cost of products sold was $154.2 million compared to $150.4 million in the prior year. Gross margin for the third quarter of 2024 was 25.5%, up from 24.9% in the same quarter of 2023, reflecting effective cost management strategies.
Operating Expenses
Operating expenses saw an increase due to higher payroll-related costs. Selling, general, and administrative expenses rose by $1.9 million, or 22.1%, in Q3 2024 compared to Q3 2023. For the first nine months, these expenses increased by $2.0 million, or 6.8%.
Balance Sheet Highlights
As of September 28, 2024, The Eastern Company reported total assets of $244.2 million, down from $252.0 million at the end of the previous fiscal year. The current ratio remained stable at 2.6, indicating a solid liquidity position.
Cash Flow Analysis
The cash generated from operations for the first nine months of fiscal 2024 was $8.3 million, down from $18.2 million in the same period of 2023. This decrease was primarily due to an increase in accounts receivable.
Debt Management
The company entered into a credit agreement in June 2023, securing a $60 million term loan to refinance existing debt. As of September 28, 2024, the company had $3.0 million outstanding under the revolving credit facility.
Pension and Retirement Plans
The Eastern Company maintains several defined benefit pension plans. For the third quarter of 2024, the net periodic benefit cost was reported at $373,033.
Future Outlook
The company anticipates continued growth driven by demand for its core products and effective management of cost structures. The backlog of orders as of September 28, 2024, increased to $97.2 million, up from $86.2 million a year ago.
How The Eastern Company (EML) Makes Money
Revenue Streams
The Eastern Company generates revenue primarily through the sale of various products across different segments. Key revenue sources include:
- Returnable transport packaging products
- Truck mirror assemblies
- Truck accessories
Financial Performance Overview
As of September 28, 2024, The Eastern Company reported net sales of approximately $9.3 million for the third quarter, marking a 13.7% increase compared to the previous year. For the first nine months of 2024, net sales totaled $11 million, reflecting a volume increase of 9.3% in the third quarter.
| Period | Net Sales ($ million) | Operating Profit ($ million) | Net Income ($ million) | Earnings per Share ($) |
|---|---|---|---|---|
| Q3 2024 | 9.3 | 1.2 | 4.7 | 0.75 |
| First 9 Months 2024 | 11.0 | 5.8 | 11.7 | 1.87 |
Cost Structure
The cost of products sold increased by 14% in Q3 2024, totaling approximately $6.5 million. The gross margin for the quarter stood at 25.5%, compared to 24.9% in Q3 2023. The company has implemented price increases to mitigate rising raw material costs.
| Expense Type | Q3 2024 ($ million) | Q3 2023 ($ million) |
|---|---|---|
| Cost of Products Sold | 6.5 | 5.7 |
| Gross Margin | 2.4 | 2.3 |
| Selling & Administrative Expenses | 10.3 | 8.5 |
Operating Profit and Income
The operating profit for the third quarter of 2024 was $1.2 million, up from $1.1 million in Q3 2023. The net income from continuing operations was $4.7 million, with a notable increase attributed to better cost management and increased sales from new products.
Product Development and Innovation
The company continues to invest in product development, with expenses decreasing to $1.08 million in Q3 2024 compared to $1.43 million in Q3 2023. This represents 1.5% of net sales, down from 2.3% in the previous year.
Market Position and Competitive Landscape
The Eastern Company has seen a robust demand for its products, particularly in the truck accessories sector. The backlog as of September 28, 2024, increased by 13% to $97.2 million compared to $86.2 million a year prior.
| Product Category | Sales Increase ($ million) |
|---|---|
| Truck Mirror Assemblies | 13.3 |
| Returnable Transport Packaging | 4.6 |
| Truck Accessories | (6.9) |
Cash Flow and Liquidity
The Eastern Company generated $8.3 million in cash from operations during the first nine months of fiscal 2024, down from $18.2 million in the prior year. The decrease was primarily due to increased accounts receivable.
| Liquidity Measure | Q3 2024 | Q3 2023 |
|---|---|---|
| Cash and Cash Equivalents ($ million) | 7.6 | 8.9 |
| Working Capital ($ million) | 78.2 | 73.5 |
| Current Ratio | 2.6 | 2.6 |
Debt and Financing
The company entered into a credit agreement in June 2023, securing $60 million to refinance existing debt. As of September 28, 2024, outstanding borrowings under this agreement totaled $3 million with a commitment fee of 0.25% on the unused portion.
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Updated on 16 Nov 2024
Resources:
- The Eastern Company (EML) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of The Eastern Company (EML)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View The Eastern Company (EML)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.