The Eastern pany(US:EML)2026-03-03 22:22Financial Performance - 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[195]. - Gross margin decreased to $56.96 million, down 15.2% from $67.27 million year-over-year[195]. - Operating profit fell to $10.67 million, a decline of 47.1% compared to $20.15 million in the prior year[195]. - Net income from continuing operations was $5.97 million, down 54.8% from $13.22 million in the previous year[195]. - The Eastern Company reported a net income of $7.13 million for the year ended January 3, 2026, compared to a net loss of $8.53 million in the previous year[202]. - Income from continuing operations was $5.97 million, a decrease from $13.22 million in the prior year[202]. - The company generated $8.87 million in net cash from operating activities, down from $19.39 million in the previous year[202]. - Earnings per share from continuing operations were $0.98, down from $2.13 year-over-year[195]. Assets and Liabilities - Total assets decreased to $216.68 million from $235.31 million, reflecting a decline of 7.9%[193]. - Total liabilities decreased to $92.03 million from $114.62 million, a reduction of 19.7%[192]. - Cash and cash equivalents decreased to $7.41 million from $14.01 million, a decline of 47.1%[188]. - Total assets of discontinued operations amounted to $5.07 million as of January 3, 2026, with total liabilities at $2.14 million[218]. - The Company has 17 operating leases with a total lease liability of $16.0 million and 8 finance leases with a liability of $4.0 million as of January 3, 2026[243]. Discontinued Operations - The company reported a loss from discontinued operations of $1.17 million, compared to a loss of $21.74 million in the previous year[195]. - The gross margin from discontinued operations was $16,724, significantly lower than $2.15 million in the previous year[216]. - The company incurred a loss from discontinued operations of $1.17 million, compared to a loss of $21.74 million in the prior year[217]. Cash Flow and Dividends - Cash dividends per share remained stable at $0.44[195]. - Cash and cash equivalents at the end of the year were $7.41 million, down from $14.84 million at the beginning of the year[203]. - The Company paid interest of $2,458,000 in 2025, a decrease from $3,224,798 in 2024, indicating improved debt management[270]. Taxation - The U.S. federal statutory tax rate for the year ended January 3, 2026, is $1,887,090, representing 21.0%[284]. - The provision for income taxes and effective tax rate for the same period is $1,853,354, which is 20.6%[285]. - The total cash paid for income taxes, net of refunds, for the year ended January 3, 2026, is $1,924,358[292]. - The balance of unrecognized tax benefits at the end of the year is $399,894, down from $494,358 the previous year[295]. - The company recognized accrued interest related to unrecognized tax benefits amounting to $65,008 as of January 3, 2026[296]. Pension and Benefits - The net periodic benefit cost for the Company's pension benefit plans in fiscal year 2025 is $1,464,582, a slight decrease from $1,492,140 in 2024[305]. - The fair value of plan assets for pension benefit plans increased to $61,094,642 in 2025 from $59,311,220 in 2024[307]. - The accumulated benefit obligation for all defined benefit pension plans is $75,493,395 as of January 3, 2026, down from $75,916,060 in 2024[309]. - The estimated future benefit payments for the Company's pension plans are projected to be $5.4 million in 2026 and a total of $28.4 million from 2031 through 2035[310]. - The Company expects to make cash contributions of approximately $2.8 million to its qualified pension plans in 2026[311]. Stock and Equity - As of January 3, 2026, the Company had 780,962 shares of common stock reserved for future grants under the 2020 Stock Incentive Plan[276]. - Stock-based compensation expense for 2025 was $254,000, significantly lower than $1,030,000 in 2024, reflecting a reduction in stock awards and options granted[275]. - The weighted average shares outstanding decreased from 6,207,754 in 2024 to 6,092,374 in 2025, a reduction of about 1.8%[326]. Segment Performance - Net sales for the Engineered Solutions segment decreased from $272,751,967 in 2024 to $248,970,345 in 2025, representing a decline of about 8.7%[330]. - Gross margin decreased from $67,267,160 in 2024 to $56,958,543 in 2025, a reduction of approximately 15.3%[330]. - Operating profit fell from $20,149,004 in 2024 to $10,673,309 in 2025, a decrease of around 47.1%[330]. Investments - The Company has approximately 31% of available cash located outside the United States in foreign subsidiaries[226]. - The Company has a long-term target allocation of 50% in equities and 50% in fixed income for its pension plan assets, with periodic reviews and rebalancing to maintain these targets[321]. - The Company recorded a loss of $570,097 from designated foreign currency hedge contracts for the twelve months ended January 3, 2026[339].