0001654954-26-002506
SEC filingThe Eastern Company reported net sales of $249.0 million for fiscal year 2025 (ended January 3, 2026), a decrease from $272.8 million in 2024. Net income from continuing operations was $6.0 million ($0.98 per diluted share), down from $13.2 million ($2.13 per diluted share) in the prior year. The decline was primarily driven by decreased sales in the Engineered Solutions segment, particularly for returnable transport packaging products, as indicated by a backlog reduction from $89.2 million to $81.1 million. The company completed the sale of the ISBM division of Big 3 Mold in April 2025 and reclassified remaining Big 3 Mold divisions to continuing operations. With 1,246 employees and operations across North America and Asia, Eastern focuses on engineered solutions for industrial markets while maintaining a working capital to sales ratio of 28.8% in 2025.
The Eastern Company reported net sales of $248,970,345 for fiscal year 2025 (ended January 3, 2026), representing an 8.7% decrease from $272,751,967 in fiscal year 2024. Net income from continuing operations declined 54.8% to $5,967,104 ($0.98 per diluted share) from $13,215,524 ($2.13 per diluted share) in the prior year. The company's backlog decreased to $81.1 million as of January 3, 2026, from $89.2 million on December 28, 2024, primarily due to decreased orders for returnable transport packaging products. Fourth quarter 2025 sales were $57.5 million compared to $66.7 million in the same period of 2024, with net income of $1.2 million ($0.19 per diluted share) versus $1.6 million ($0.26 per diluted share) in the comparable 2024 period.
The company operates with one reportable segment: Engineered Solutions, which generated $248,970,345 in net sales for 2025, down from $272,751,967 in 2024. Geographically, United States sales accounted for $243,623,167 (97.9%) of total revenue, while foreign sales represented $5,347,178 (2.1%). The company noted that foreign sales were not significant for fiscal years 2025 and 2024. One customer represented 13% of total accounts receivable for 2025 and generated $33.1 million in revenue (13% of Engineered Solutions segment total revenue). In 2024, one customer represented 14% of total accounts receivable with $35.6 million in revenue (12% of segment revenue).
Gross margin decreased to $56,958,543 (22.9% of sales) in 2025 from $67,267,160 (24.7% of sales) in 2024. Operating profit declined to $10,673,309 (4.3% operating margin) from $20,149,004 (7.4% operating margin) in the prior year. Cost of products sold was $192,011,802 in 2025 compared to $205,484,807 in 2024. Product development expense decreased to $4,064,474 from $4,888,496, while selling and administrative expenses remained relatively stable at $42,220,760 versus $42,229,660. The company's inventory reserve for excess or obsolete inventory was $1.8 million as of January 3, 2026, compared to $1.9 million as of December 28, 2024.
Net cash provided by operating activities was $8,865,383 in 2025, down from $19,386,050 in 2024. Cash and cash equivalents decreased to $7,412,019 as of January 3, 2026, from $14,010,388 as of December 28, 2024. Total assets were $216,676,616 compared to $235,308,747 in the prior year. Long-term debt, less current portion, was $33,902,353 as of January 3, 2026, down from $38,640,576. The company's working capital (current assets less current liabilities) to sales ratio was 28.8% in 2025 and 25.1% in 2024. Accounts receivable, less allowances, decreased to $30,128,669 from $35,515,632, while inventories increased to $56,343,756 from $55,209,598.
The company's backlog decreased to $81.1 million as of January 3, 2026, from $89.2 million on December 28, 2024, primarily due to decreased orders for returnable transport packaging products. The company continues to monitor working capital needs with the goal of reducing the ratio of working capital to sales. Management believes the company has sufficient human capital to operate its business successfully with 1,246 employees as of January 3, 2026. The company faces competition from imports from Asia and Latin America with favorable currency exchange rates and low-cost labor, creating additional pricing pressure. The company competes by offering high-quality, custom engineered products on a timely basis, deploying internal engineering resources, maintaining cost-effective manufacturing capabilities through wholly owned Asian subsidiaries, and maintaining sufficient inventory for fast turnaround of customer orders.