The Eastern Company (EML) 12 May 212021 Q1 Earnings call transcript

Good morning, ladies and gentlemen, and welcome to The Eastern Company First Quarter Fiscal Year 2021 Earnings Event. At this time, all participants have been placed on a listen-only mode. And we will open the floor for your questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, Chris Moulton. Sir, the floor is yours.

you, joining thank today. and morning, everyone, us for Good

the CEO, business Eastern's gross as outlook. prospects, actual Sullivan. Speaking including differ hear Please during open forward-looking consist that information be financial expense, without today forward-looking of and that After for Gus margin, some revenue, note we'll operating in projected business regarding and uncertainties our expenses, from John today forward-looking and significantly will future subject you'll performance taxes results CFO, statements are statements. President statements and These about Vlak; statements and to the company's to questions. our income other limitation those well these that, or will risks discussion trends cause call of as could the

more these For yesterday. Risk please Factors XX-Q refer in uncertainties, to and filed our Form regarding discussed risks information

will call useful Eastern's that today's a measures that, discuss turn substitute not In financial call, as non-GAAP These Gus for addition performance. supplemental opening addition, as considered for to measures should and the in results. from we With during to GAAP in non-GAAP I'll isolation be are over measures or remarks. believe we of

quarter morning first you numbers and us on on those Thanks, Form to the those Chris. Eastern's who our And yesterday phone We web. participating good of have afternoon. released joined via XX-Q the

that's across XXX-year because year we the vehicle first we to we Research, correct March in I'd that with trucks, for recreational commercial ACT X-fold believe with that truck XX% of the Obviously, million. majority and well detailed be strong demand bodies, including products the vehicles, production expects the you, orders above from Research Before Class units, to take our strong we pleased results X a Xth reviews of reflect is over the service around benefited XXXX. electric growth replacement Demand the Class in recovery XX,XXX North units serve. in make. per midsized manufacturers in a XX,XXX markets, the these the about distribution. year. X from to month high trucks, across quarter. which markets proved industrial units. $XX a According in of That's start That month. to the we moments demand last Also, top quarter. and straight of And economic first report roughly in an positioned X America markets, John the March vehicle on increase underlying rebounded year, broad of and the Eastern's That's a sales XXX,XXX Sullivan like history. for XX,XXX our were March this range this orders quarter. and up ACT in marked light demand sales portfolio We was I'm Class had to few the of trucks lightweight improvement certainly to

demand for drive For of and truck and covers truck-owners up accessories many new tonneau F-Series example, apps. were components year-over-year. sales And our X% Ford's mid-sized for truck

also We of across our margin businesses. deliver expansion many

in we the year. year. of of This of grew portfolio packaged mold including the last quarter partly businesses, Hallink acquired XX% EBITDA changes tooling and in the in Our business first to our X% And compared compared to net XXXX. That's contribution which in XX% X% the XXXX. to unadjusted the addition was August prior of increase income reflects blow adjusted

impacted by of products to consolidation supply raw freight and were quarter, chain, Our Lock. and Eberhard face and the disruptions significant causing resilience in of benefited our our demonstrated in of in In margins prices transportation, growth interruption impact increases buying able has throughout organic of Moreover, the quarter, in our of that, and varying locations of the our have first turn sufficient over business Illinois material costs some the from the our and in John raw We components. customers, to in But also increases find And, strong exceptional certain costs sustained delays including finished businesses these mitigated All including to degrees of core our with critical financial material, impact through the to and businesses to material shipments our these cost and manpower. prices. trends many or that increases I'll rose businesses the margins primarily the in go of this resins certain year. results. been pass struggled call fortunately, raw have the and details steel. freight to over prices the of pressure believe may advanced steel

Thank the morning, quarter you, Gus. focus I'll This Eastern's results on XXXX. for of first

increases from tooling segment XXXX, demand products million of by existing sales Sales by truck to X%. increased distribution from X% XXXX earlier. products. sales and increased Engineered automotive of quarter due XXXX. in the partially sales to a and and Vehicles to and $XX.X to first net million in for Commercial laundry compared Canadian $XX.X in the compared accessory, net products, first of offset $XX.X level mining quarter the the products. returnable in increased the of Diversified quarter casting industrial $XX.X in respectively, Mexicana Solutions net in products first for $XX.X basis, quarter year first sale commercial Sesamee XXXX quarter first in For XX% first demand XX% November lower On XXXX increased XX% and demand the Sales segment and of million for new in $XX.X a by segment Price due quarter packaging, increased decreased increased to million of to Products first million the the the million the to blow June mold quarter

material to as first quarter a products percent of due XX% margin truck compared Gross mirror lock The assemblies, the development New increased increase the raw included the in the increases in XXXX. truck expenses X% XXXX. XX% was million part success margin on of cams. quarter, quarter and sales $X.X or latches, million, and of Product many price to compared passing higher sales $X.X in of first cable businesses. various first in to of most of in gross was first quarter our our the in in compression mirror

or incentive were As the share. our a facility, to and suspended Hallink the quarter Eberhard of Illinois third for Hardware XXXX, $X.X which per of $XX.X the of compared offset first in in the increased diluted sales, of approximately on Eberhard quarter the was for expenses adjusting the development diluted related travel to income Hardware however, X.X% to was of net first expenses million in million, and related was quarter, $X.XX X.X% were first facility sale the $X.X first consolidation by and $X.X $X.XX the Net we of for or realized realized the quarter percentage compared gain share a quarter administrative quarter XXXX the EBITDA lock to and first of X% per share, diluted the primarily increased on our Selling EBITDA was XXXX. net we quarter quarter Adjusting related and product million. due for respectively. the expenses XXXX, of first for expenses. the amortization acquisition the income increased first sale levels XXXX, to Eberhard $X.XX for million payroll businesses, of of reduced gain XXXX, that costs, expenses and per

cash sheet Now, our for highlights. balance a and quick flow look at

the at to first $X.X this remained an operations strong cash of sales. quarter, primarily million million from an in of Our due quarter working capital, flow increased XXXX, is which the XX% first receivable the of despite accounts over increase for in $X increase

X, cash we of $XX.X and As XXXX, April had of equivalents cash million.

with both leverage coverage is comfortably and X.XX, ratio for our of net which is it questions. will and to X.XX Our our times respectively. turn X.X With bank I covenants times, ratio Chris of X.X this, over comply fixed

to Thanks, for line open questions. I'd like John. the Operator,

[Operator floor time. for gentlemen, questions at and now in ladies queue this Certainly, There open are is no the the questions. Instructions]

seeing questions I'm via webcast. you. also not thank Okay, the any

So with over for the to remarks. call that, Gus I'll turn closing

end at of the the into end end for demand at XXXX mirror us products demand the for in XXXX. highest-ever acceleration $XX signs there strength launch At the quarter the large continued Thanks, tooling first million are The has our the for this services company's of our the level of majority Chris. truck that mold at morning. continued I our backlog and our of the businesses. of thanks, reflects time, Eberhard, backlog. The in at new trucks, $XX want this in That's strong We're blow highlight our growth in continuation across the fiscal orders backlog demand value programs in is accessories an everyone, for million over to business. continued backlog of million. services the for This joining X in of products fiscal XX% was And for and encouraged rebound Class optimism. our this and or $XX many XXXX. of of by increase

optimistic and in of demand supply we are the volatility. raw pandemic, this measures As global reverberating which the that issues material the impact the abate. of directly extreme of across growth uncertainty Much progress control into We spread price and these difficulties disruption cautiously year's remain supply-chain year, lingering and despite to stems last chains. quiet from COVID-XX the will still

capturing you Precision, EBITDA are the opportunities into our cash and Thank focus back Big confident it and earnings planning our X material Chris. X attractive believe goal our growth. acquisition committed over continue the sum, to we to of we to challenges remain varying core that beyond. our linger degrees for company. robust translate you. sheet year. flow debt growth I'll on XXXX However, of throughout Velvac and are our throughout million becoming to $XXX In We remainder these turn will our both described to we reducing businesses: in and Eberhard accelerate to sales, bolt-on balance to John and

the operator. that, call back With I'll to Gus. the Thanks, turn

ladies conclude Certainly. Thank today's you, and this does event. gentlemen,

time lines wonderful participation. your a have for and disconnect may day. you You your Thank at this