The Eastern pany(US:EML)2026-03-03 21:45Financial Performance - Q4 2025 net sales decreased by 13.7% to $57.5 million from $66.7 million in Q4 2024, while FY 2025 net sales decreased by 9% to $249.0 million from $272.8 million in 2024[9]. - Q4 2025 net income was $1.2 million, or $0.19 per diluted share, down from $1.6 million, or $0.26 per diluted share in Q4 2024; FY 2025 net income decreased by 57% to $6.0 million, or $0.98 per diluted share, from $13.2 million, or $2.13 per diluted share in 2024[12]. - Adjusted EBITDA for Q4 2025 was $4.6 million, compared to $5.8 million in Q4 2024; for FY 2025, adjusted EBITDA was $19.4 million, down from $26.3 million in 2024[14]. - Net sales for the year ended January 3, 2026, were $248.97 million, a decrease of 8.7% from $272.75 million in the previous year[32]. - Gross margin decreased to $56.96 million, down 15.3% from $67.27 million in the prior year[33]. - Operating profit fell to $10.67 million, a decline of 47.1% compared to $20.15 million in the previous year[33]. - Net income from continuing operations was $5.97 million, down 54.8% from $13.22 million in the prior year[33]. - Basic earnings per share from continuing operations were $0.98, compared to $2.13 in the prior year, reflecting a decrease of 54.9%[33]. - Adjusted earnings per share (EPS) from continuing operations for Q4 2026 was $0.31, down from $0.42 in Q4 2024, a decrease of 26%[43]. - Adjusted EBITDA for the twelve months ended January 3, 2026, was $19,809,000, down from $27,052,000 in the previous year, a decrease of 27%[44]. Cost Management - The company generated $4 million in annualized savings through cost restructuring and mitigated approximately $10 million in tariffs via increased pricing and cost reductions[3]. - Selling and administrative expenses in Q4 2025 decreased by 10.5% compared to Q4 2024, but included $2.5 million of restructuring charges[11]. - The company incurred $1,368,000 in severance and accrued compensation related to executive departures during the reporting period[43]. Debt and Financial Flexibility - The company reduced outstanding debt by $8.7 million and returned $2.7 million to shareholders through dividends in 2025[4]. - The company has a new $100 million credit facility to enhance financial flexibility and support growth initiatives[5]. Market and Operational Insights - The backlog as of January 3, 2026, decreased by 10.5% to $81.1 million from $89.1 million on December 28, 2024, primarily due to lower orders for returnable transport packaging products[9]. - The company is focused on disciplined growth, with early signs of stabilization in the heavy-duty truck market and increased activity around new automotive model launches[5]. Asset and Liability Changes - Total assets decreased to $216.68 million, down 7.9% from $235.31 million in the previous year[39]. - Total liabilities decreased to $92.03 million, down 19.7% from $114.62 million in the prior year[39]. - Cash and cash equivalents at the end of the year were $7.41 million, a decrease of 50.1% from $14.84 million at the beginning of the year[42]. - The company reported a net cash provided by operating activities of $8.87 million, down from $19.39 million in the previous year[41]. Tax and Depreciation - Interest expense for Q4 2026 was $665,000, slightly down from $672,000 in Q4 2024[44]. - Provision for income taxes in Q4 2026 was $100,000, a significant decrease from $466,000 in Q4 2024[44]. - Depreciation and amortization for Q4 2026 was $1,736,000, an increase from $1,622,000 in Q4 2024[44].