NAUGATUCK, Conn.--(BUSINESS WIRE)--The Eastern Company (“Eastern”) (NASDAQ:EML), an industrial manufacturer of unique engineered solutions serving niche industrial markets, today provided an update on the impact of the COVID-19 pandemic on the Company's business and the many actions it has taken to respond.
President and CEO August Vlak commented, "COVID-19 has affected everyone at Eastern. We recognize the health and economic devastation caused by the pandemic. At this time, our top priorities have been to protect the health and welfare of our employees; to continue serving our customers; and to navigate today’s challenges so that we are in a strong position when the environment improves. We have taken decisive actions to mitigate the financial impact to our businesses, to ensure that we continue to maintain ample liquidity and protect our ability to generate long term value for our shareholders. In addition, I am proud of our businesses for finding innovative ways to contribute to the fight against the pandemic in the communities in which they operate.”
Across the Company, we have implemented a broad range of policies and procedures to ensure that employees across all our locations remain healthy. We listened to and learned a great deal from our colleagues in China, who began feeling the impact of COVID-19 in late 2019, and took early-on decisive action across our North American operations, accordingly. Steps that we have taken to reduce COVID-19 risk to our employees include, among others: implementing social distancing measures, staggering staff and shifts, enabling work from home for as many employees as possible, and implementing an enhanced cleaning program across all sites. We are advising our employees on the importance of wearing face masks to reduce the spread of the coronavirus. We continue to seek and implement additional methods to continue to reduce COVID-19 risk to our employees.
As of April 10, all our domestic businesses are considered Essential Business or critical suppliers to Essential Business in the nine states where we operate, and 13 of our 18 locations in North America and all of our three Asian locations are operating. While we have experienced some minor disruptions in a few of our locations, at this time, we are able to serve our customers and meet demand for our products.
The Company has taken decisive action to maintain financial flexibility. We believe that Eastern has a solid balance sheet with ample resources to operate in the current business environment. Our management team has run a range of scenarios for 2020 and 2021, and we believe that the strength of our businesses and the actions we have taken to control our expenses are sufficient to withstand a significant economic downturn. We have suspended all hiring for salaried positions, ceased discretionary spending, temporarily reduced work hours, initiated furloughs, cancelled certain regularly scheduled merit-based salary increases, and limited capital spending to critical maintenance, safety, and regulatory projects. In addition, we are also working closely with our lenders to keep them informed of the developments in our businesses.
In times of crisis, it is more important than ever for companies to step in and contribute to the health and safety of our communities. Our Big 3 Precision subsidiary responded to the anticipated hospital bed shortages due to the pandemic and has begun the production of frames for emergency response hospital beds that can be used by healthcare facilities across the U.S. and the world. Several of our businesses are contributing safety masks to healthcare workers, including our Velvac subsidiary, which donated 7,000 safety masks to hospitals in its community.
Mr. Vlak concluded, “I am proud of our employees for working together during the crisis. The high degree of collaboration reflects our Company’s 161-year history of working together, during which we have successfully weathered many storms. By making tough and necessary decisions we believe that we are better positioned to navigate future uncertainties and disruptions caused by COVID-19 and to maintain a healthy business. In the meantime, our thoughts and sympathies are with those adversely impacted by the virus.”
About The Eastern Company
The Eastern Company is a 161 year old company which manages industrial businesses that design, manufacture and sell unique engineered solutions to niche markets, focusing on industries that offer long-term macroeconomic growth opportunities. The Company operates in three business segments -- Industrial Hardware, Security Products and Metal Products -- from 21 locations in the U.S., Canada, Mexico, U.K., Taiwan and China.
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Statements in this document about our future expectations, beliefs, goals, plans or prospects constitute forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and the rules, regulations and releases of the Securities and Exchange Commission. Any statements that are not statements of historical fact, including statements containing the words "believes," "intends," "continues," "reflects," "plans," "anticipates," "expects," and similar expressions, should also be considered to be forward-looking statements. Readers should not place undue reliance on these forward-looking statements, which are based upon management's current beliefs and expectations. These forward-looking statements are subject to risks and uncertainties, and actual results might differ materially from those discussed in, or implied by, the forward-looking statements. Among the risks and uncertainties that could cause actual results or events to differ materially from those indicated by such forward-looking statements include, but are not limited to changing customer preferences, lack of success of new products, loss of customers, cybersecurity breaches, changes in competition in our markets, and increased prices for raw materials resulting from tariffs on imported goods or otherwise. There are important, additional factors that could cause actual results or events to differ materially from those indicated by such forward-looking statements, including those set forth in our reports and filings with the Securities and Exchange Commission. We undertake no obligation to update, alter, or otherwise revise any forward-looking statements, whether written or oral, that may be made from time to time, whether as a result of new information, future events, or otherwise.