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BUSINESS HIGHLIGHTS
+Added: On October 19, 2022, the Company sold its Argo EMS business (“Argo”).
+Added: Argo supplies printed circuit boards and other electronic assemblies to original equipment manufacturers in various industries, including measurement systems, semiconductor equipment manufacturing, and industrial control, medical, and military products.
On November 3, 2021, the Company sold its Greenwald Industries division (“Greenwald”).
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Frazer & Jones is a high quality ductile and malleable iron foundry located in Syracuse, NY.
−Removed: In the second fiscal quarter of 2021 the Company determined that the companies included in its Diversified Products segment, including Greenwald, Frazer & Jones, and Argo EMS, no longer fit with our long-term strategy and met the criteria to be treated as held for sale, and that the assets held for sale qualify for discontinued operations.
−Removed: On November 19, 2020, the Company sold its subsidiary Sesamee Mexicana, S.A.
−Removed: (“Sesamee Mexicana”).
−Removed: Sesamee Mexicana designs and manufactures composite panels and distributes industrial hardware.
−Removed: Eastern has exited the composite panels business as part of its strategy to streamline its business.
−Removed: On August 10, 2020, the Company acquired certain assets, including accounts receivable, inventories, furniture, fixtures and equipment, intellectual property rights and rights existing under all sales and purchase agreements, and assumed certain liabilities, of Hallink, RSB Inc.
−Removed: These assets are held in our subsidiary, Hallink Moulds, Inc.
−Removed: (“Hallink Moulds”).
−Removed: Hallink Moulds is a leader in innovative injection blow mold tooling and is a leading supplier of blow molds and change parts to the food, beverage, healthcare and chemical industries.
−Removed: Hallink Moulds specializes in the design, development and manufacture of 2-step stretch blow molds, and related components for the stretch blow molding industry offering integrated turnkey solutions to its customers worldwide.
−Removed: The total consideration for the acquisition of Hallink Moulds was approximately $7.2 million which was paid out of the Company’s cash reserves.
−Removed: On June 15, 2020, the Company sold its subsidiary, the Canadian Commercial Vehicles Corporation (“CCV”).
−Removed: CCV designs and manufactures composite panels.
−Removed: Eastern has exited the composite panels business as part of its strategy to streamline its business.
+Added: In the second fiscal quarter of 2021 the Company determined that the companies included in its Diversified Products segment, including Argo, Greenwald, and Frazer & Jones, no longer fit with our long-term strategy and met the criteria to be treated as held for sale, and that the assets held for sale qualify for discontinued operations.
Description of Business
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We believe Eastern’s businesses operate in industries with long-term macroeconomic growth opportunities.
−Removed: We look to acquire businesses that produce stable and growing earnings and cash flows.
−Removed: Eastern focuses on acquisitions that further strengthen its core business but may pursue acquisitions in industries other than those in which its businesses currently operate if an acquisition presents an attractive opportunity.
Eastern manages the financial, operational, and strategic performance of its businesses to increase cash generation, operating earnings, and long-term shareholder value.
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Hallink specializes in the design, development and manufacture of 2-step stretch blow molds, and related components for the stretch blow molding industry offering integrated turnkey solutions to its customers worldwide.
−Removed: In 2020, we combined all businesses associated with the Eberhard Manufacturing and Illinois Lock Company to create Eberhard, a global leader in the engineering and manufacturing of access and security hardware.
−Removed: Eberhard offers a standard product line of rotary latches, compression latches, draw latches, hinges, camlocks, key switches, padlocks, and handles among other products, as well as comprehensive development and program management services for custom electromechanical and mechanical systems designed for specific OEMs and customer applications.
+Added: Eberhard, a global leader in the engineering and manufacturing of access and security hardware, offers a standard product line of rotary latches, compression latches, draw latches, hinges, camlocks, key switches, padlocks, and handles, among other products, as well as comprehensive development and program management services for custom electromechanical and mechanical systems designed for specific OEMs and customer applications.
Eberhard’s products are found in an expansive range of applications and products globally.
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As such, our management team places significant focus and attention on the attraction, development, and retention of employees, as well as ensuring our corporate culture reflects Eastern’s values, and our Board of Directors (our “Board”) provides oversight for various employee initiatives.
−Removed: Eastern values and Code of Business Conduct and Ethics guide our actions, reflect our culture, and drive our performance.
+Added: Eastern values and our Code of Business Conduct and Ethics guide our actions, reflect our culture, and drive our performance.
We have made and continue to make investments in training, and we have a well-established performance management process.
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The Board established an Environment, Health and Safety Committee in 2019.
−Removed: There is a high-level of leadership engagement, ensuring installation and maintenance of appropriate safety equipment at all of our manufacturing sites worldwide combined with vigorous reviews of root causation and systemic corrective actions of any safety incidents that may occur.
+Added: There is a high level of leadership engagement, ensuring installation and maintenance of appropriate safety equipment at all our manufacturing sites worldwide combined with vigorous reviews of root causation and systemic corrective actions of any safety incidents that may occur.
In response to the emergence of COVID-19 in early 2020, we implemented a proactive internal procedure and complied with local, federal, and international governmental guidance that has enabled us to operate safely.
−Removed: Each of our facilities continues to adhere to these practices, and we have also adjusted our remote worker safety procedures to ensure that remote employees are better integrated into our safety and health systems.
+Added: Each of our facilities continues to adhere to such guidance as it has evolved, and we have also adjusted our remote worker safety procedures to ensure that remote employees are better integrated into our safety and health systems.
Employee levels are managed to align with business demand and management believes it currently has sufficient human capital to operate its business successfully.
−Removed: As of January 1, 2022, we employed 1,191 full-time employees:
+Added: As of December 31, 2022, we employed 1,191 full-time employees:
607 in the United States and 584 in other countries.
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During the second fiscal quarter of 2021, the Company announced plans to sell the companies included in our Diversified Products segment, these assets met the criteria to be treated as held for sale and reported as discontinued operations.
−Removed: Subsequently, in the fourth quarter of fiscal 2021, the Company sold its Greenwald Industries and Frazer & Jones divisions.
+Added: Subsequently, in the fourth quarter of fiscal 2021, the Company sold Greenwald and Frazer & Jones.
+Added: In the fourth quarter of 2022, the Company sold Argo.
The Company’s businesses are not subject to seasonal variations.
−Removed: Customers for the Company are broad-based by geography and by market, and sales are not highly concentrated by customer.
−Removed: Foreign sales were not significant.
+Added: Customers of the Company are broad-based by geography and by market, and sales are not highly concentrated by customer.
+Added: Only one customer exceeded 10% of accounts receivable for each of fiscal 2022 and 2021.
+Added: Foreign sales were not significant for fiscal years 2022 and 2021.
The Company encounters competition in its businesses.
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The Company does not anticipate that compliance with federal, state, or local environmental laws or regulations is likely to have a material effect on the Company’s capital expenditures, earnings, or competitive position.
−Removed: The Company obtains materials from nonaffiliated domestic, Asian affiliated and Asian nonaffiliated sources.
−Removed: Availability and prices of raw materials and outside services were affected by measures taken in response to the COVID-19 pandemic for some of the Company’s businesses during 2020 and 2021.
−Removed: We expect raw materials and outside services to be more readily available in 2022 unless resurgence of the COVID-19 pandemic occurs.
+Added: The Company obtains materials from nonaffiliated domestic sources, as well as from Company-affiliated and unaffiliated sources in Asia.
+Added: Availability and prices of raw materials and outside services were affected by measures taken in response to the COVID-19 pandemic, as well as by global trade restrictions, for some of the Company’s businesses during 2022.
+Added: We expect raw materials and outside services to be more readily available in 2023 unless resurgence of the COVID-19 pandemic occurs or trade restrictions continue, but prices may remain elevated or increase further.
The Company’s ratio of working capital (current assets less current liabilities) to sales was 26.1% in 2022 and 27.2% in 2021.
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The Company makes available, free of charge through its Internet website at http://www.easterncompany.com, its annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as soon as reasonably practicable after such material is electronically filed with or furnished to the SEC.
+Added: The information posted on the Company’s website is not incorporated into this Form 10-K and is not part of this Form-10K.
The Company’s reports filed with, or furnished to, the SEC are also available on the SEC’s website at www.sec.gov .
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.