Financial Data and Key Metrics Changes - Revenues for the first quarter of 2025 were $63.3 million, a slight decrease from $64.6 million in Q1 2024, representing a 2% decline [5][10] - EBITDA for the quarter was $4.8 million, with earnings per share at $0.31, close to expectations [5] - Gross margin as a percentage of net sales decreased to 22.4% from 23.9% in the prior year, primarily due to higher raw material costs [11] - Net income from continuing operations was $1.9 million or $0.31 per diluted share, down from $2.1 million or $0.34 per diluted share in the previous year [12] - Adjusted net income from continuing operations was $2 million or $0.32 per diluted share, compared to $2.1 million or $0.34 per diluted share for the prior year [12] - Senior net leverage ratio increased to 1.45 from 1.23 at the end of 2024 [13] Business Line Data and Key Metrics Changes - The decline in net sales was primarily due to decreased sales of truck mirror assemblies and truck accessories, offset by increased sales of returnable transport packaging products [10] - The backlog decreased by 9% to $85.9 million compared to $94 million in the previous year, driven by decreased orders in several product categories [10] Market Data and Key Metrics Changes - The medium and heavy-duty truck markets have experienced significant impacts, with a noted softness in build rates expected to continue [19] - The returnable packaging market, particularly in the automotive segment, has been quiet, with a potential for pent-up demand as production shifts back to the U.S. [29][32] Company Strategy and Development Direction - The company plans to enhance strategic growth plans, eliminate bureaucracy, and optimize cash flow in 2025 [8] - Key initiatives include a focus on new product development and a nimble supply chain to adapt to market changes [18][21] - The company is also prioritizing mergers and acquisitions, with a disciplined approach to potential deals [41] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in the marketplace but expressed optimism about the company's positioning and future growth opportunities [5][39] - The company is actively managing tariff impacts and has been able to neutralize some of the effects thus far [40] - There is a belief that the company is currently in a trough and expects a recovery as customers begin to move forward with their programs [30] Other Important Information - The company completed a share buyback program of 200,000 shares and has authorized an additional program for 400,000 shares [6][13] - Leadership transitions have been completed, with a new board member joining who has significant industry experience [7] Q&A Session Summary Question: Outlook for returnable packaging business - Management noted a quiet market in returnable packaging, particularly in automotive, but believes they are well-positioned to capitalize on any future demand as production shifts back to the U.S. [29][30] Question: Gross margin expectations - Management indicated that while gross margins are currently lower, they expect to improve margins through better sales mix and cost management [33][34]
The Eastern pany(EML) - 2025 Q1 - Earnings Call Transcript