Core Insights - Eastern reported Q2 FY2025 results that exceeded analyst expectations for adjusted EPS and revenue, with adjusted EPS at $0.57 and GAAP revenue at $70.2 million, despite both metrics declining year-over-year [1][2] Financial Performance - Adjusted EPS from continuing operations was $0.57, beating the estimate of $0.54, but down 12.3% from $0.65 in Q2 FY2024 [2] - GAAP revenue was $70.2 million, surpassing the estimate of $68.87 million, but down 3.3% from $72.6 million in the same quarter last year [2] - Gross margin decreased to 23.3%, down 2.1 percentage points from 25.4% in Q2 FY2024 [2][6] - Adjusted EBITDA was $6.7 million, a decline of 16.3% from $8.0 million in Q2 FY2024 [2] - Net income from continuing operations fell to $2.0 million, down 50.2% from $4.1 million in the prior year [2][7] Operational Highlights - The company faced lower sales in key segments, with a 3% decrease in net sales compared to Q2 FY2024, primarily due to weak demand for heavy-duty truck mirror assemblies [5] - Eberhard's latch and lock hardware products saw increased sales due to contracts with the USPS for new vehicle fleet security hardware [5][9] - Velvac continued to struggle with weak production volumes impacting sales, but is focusing on expanding into aftermarket channels and vertical integration [10] - Big 3 Precision completed its restructuring and aims to streamline operations and lower costs by consolidating production [11] Strategic Initiatives - Eastern is reshaping its business portfolio by divesting lower-margin businesses and making targeted acquisitions in high-growth areas [4] - Management is implementing efficiency initiatives and cost management strategies to offset competitive pricing pressures and cyclical market swings [4][13] - The company anticipates approximately $4 million in annual cash cost savings starting in 2026 from ongoing restructuring efforts [7][13] Outlook - The company did not provide full-year financial guidance for FY2025 but emphasized a disciplined approach to capital allocation and targeted acquisitions [13] - Near-term caution is advised due to demand risks in core markets and elevated raw material costs [13][14]