The Eastern Company Q4 FY2025 earnings call

• 2025 was defined by challenging end markets and significant operational progress. Primary end markets were under pressure but showed early signs of stabilization in Nov and Dec. - Made decisive structural changes: lowered cost structure with ~$4M annual savings from restructuring and footprint optimization, strengthened leadership by hiring and promoting leaders, streamlined portfolio by divesting underperforming divisions, addressed tariffs by neutralizing ~$10M exposure and building flexible supply chain, invested in future revenue through commercial realignment and product development with Asia business growing 25% YoY, strengthened balance sheet by refinancing credit facility, demonstrated capital discipline by reducing debt, returning cash to shareholders, and repurchasing shares. - Operating model showed resilience with 9% revenue decline resulting in only 20 basis point gross margin erosion in Q4 and sequential financial improvement and momentum in sales funnel suggesting Q3 was the trough

For the full year 2025, revenue was $249 million, down 9% year-over-year. Adjusted EBITDA was $19.4 million, representing a 7.8% margin, compared to $26.3 million, or a 9.6% margin last year. Fourth quarter revenue increased 4% from the third quarter, rising from $55.3 million to $57.5 million. Adjusted EBITDA improved by $1.1 million sequentially. Net sales in the fourth quarter of 2025 decreased 13.7% to $57.5 million from 66.7 million in the fourth quarter of 2024. For the full year 2025, net sales decreased 9% to 249 million from 272.8 million in 2024. Gross margin as a percentage of sales for the fourth quarter of 2025 was 22.8% compared to 23% in the fourth quarter of 2024. For the full year of 2025, gross margin as a percentage of sales was 22.9% compared to 24.7% in 2024. Operating profit for the fourth quarter of 2025 was $2.2 million, or 3.8% of net sales, compared to $3 million, or 4.5% of net sales in the prior year period. Net income from continuing operations for the fourth quarter of 2025 was 1.2 million, or 19 cents per diluted share compared to 1.6 million or 26 cents per diluted share for the same period in 2024. For the full year 2025, net income from continuing operations decreased 57% to 6 million or 98 cents per diluted share compared to 13.2 million or $2.13 per diluted share for 2024

• 2026 enters with a leaner cost base, strengthening commercial pipeline, and end market conditions moving in a more favorable direction. Leading indicators like order flow, OEM production signals, and opportunity funnel are more favorable than a year ago. - M&A continues to be an important component of long-term value creation strategy, actively evaluating opportunities meeting strategic and financial criteria, focused on targets that are strategically aligned and immediately accretive

• Forward-looking statements are subject to risks and uncertainties that could cause actual results or trends to differ significantly from those projected. - Refer to risk factors discussed in SEC filings, including Form 10-K filed on March 3, 2026, for fiscal year 2025

Q: None at the moment, A: OK. Well, thank you, Jenny. And thank you, everyone, for joining us today. To close, 2025 was the year that we built the foundation. We took decisive action to lower costs, strengthen our portfolio, reinforce our balance sheet, and invest for future growth, all while navigating a challenging market environment. As we enter 2026, we do so as a leaner, more focused, and more resilient organization. Early indicators are encouraging. Our commercial pipeline is strengthening, and our operating model has demonstrated its ability to perform across cycles. We remain disciplined, focused on execution, and committed to delivering long-term value for our shareholders. With that, I'd like to say thank you for your continued support in Eastern, and we look forward to updating you next quarter. Thank you very much. This does conclude today's conference. You may disconnect your phone lines at this time, and have a wonderful day. We thank you for your participation