Q2 2026 Eastern Company Earnings Call Transcript
Key Points
- Sequential improvement in net sales, gross margin, and adjusted EBITDA from continuing operations.
- Backlog increased 45% year-over-year to $126.2 million, with broad-based strength across all businesses.
- Expansion into aerospace and defense markets through the acquisition of Sun Gear and Crown Precision, diversifying the portfolio.
- Recorded a one-time noncash bargain purchase gain of $6.5 million from the acquisitions.
- Strong cash flow from operations of $12 million in the first half, a substantial improvement from $1.9 million a year ago.
- Net sales decreased 11.9% year-over-year to $61.8 million.
- Gross margin declined to 20.8% from 23.3% in the prior year period.
- Adjusted EBITDA from continuing operations decreased approximately 49% year-over-year.
- Adjusted net income fell to $0.15 per diluted share from $0.57 per diluted share a year ago.
- Tariff costs on China-sourced products totaled approximately $1.9 million in the quarter, impacting margins.
Good day, everyone. Welcome to The Eastern Company second quarter fiscal year 2026 earnings call. (Operator Instructions)
It is my pleasure to turn the floor over to your host, Vice President and Chief Financial Officer, Nicholas Vlahos. The floor is yours.
Good morning, everyone, and thank you for joining us for a review of The Eastern Company's results for the second quarter of 2026. With me on the call is Ryan Schroeder, Chief Executive Officer.
The company issued its press release yesterday after market close. If anyone has not yet seen the release, please visit the Investor Information section of the company's website, www.easterncompany.com, where you will find the release under financial news.
Please note that some of the information you'll hear during today's call will consist of forward-looking statements about the company's future financial performance and business prospects
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