Eastern Company (the) · NASDAQ:EML
Eastern Company (the) — The Eastern Company — Investor Presentation (November 2023)
25 slides from Eastern Company (the)'s investor presentation, November 2023
Slide 1: The Eastern Company Investor Presentation
The Eastern Company NASDAQ: EML Investor Presentation November 2023
Slide 2: Disclosures
Disclosures Forward-Looking Statements 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, regulatio
Slide 3: Portfolio of Attractive Businesses
Portfolio of Attractive Businesses Global manufacturer and designer of access hardware systems, providing custom-engineered industrial, vehicular and specialty hardware to a wide variety of industries. Innovator in vision systems and components to truck, recreational and specialty vehicle OEMs and 4
Slide 4: Investment Highlights
Investment Highlights Well positioned to capitalize on industry trends to electrification, digitization and automation. New CEO and CFO implementing rapid financial and operational improvements. Executing four-pronged plan to restore consistent, sustainable profitability and make value-adding acquis
Slide 5: Eberhard Manufacturing Electrifying Vehicular Hardware
Eberhard Manufacturing Electrifying Vehicular Hardware • Industry leader in hardware solutions for domestic commercial vehicle and vehicle accessory manufacturers. • Strong recurring sales from participation in leading OEM programs. • Highly engineered, value-added product offering, supported by one
Slide 6: IOT Drives Demand for Electro-Mechanical Devices
IOT Drives Demand for Electro-Mechanical Devices Eberhard End-to-End Electro-Mechanical Solutions Control systems RFID Bluetooth Actuators Locks and latches Accessories Source: Grandview Research, Inc. Industrial IoT Market Size & Share Report - 2023 6
Slide 7: Velvac Vision Systems for Commercial Vehicles
Velvac Vision Systems for Commercial Vehicles • Leader in commercial vehicle vision system design and production. • Strong recurring sales to very long-term commercial vehicle programs – average program life 10+ years. • Well positioned to continue to grow and consolidate vision system opportunities
Slide 8: Vision-based Blind Spot Detection
Vision-based Blind Spot Detection Target Markets Motorhomes Cut-away vans • Camera-based object detection Medium duty chassis • Configurable detection zone • Rear-facing detection up to 80” • Indicator icon in the mirror Heavy duty trucks or monitor • Proprietary/exclusive software algorithms 8
Slide 9: Big 3 Precision Products Returnable Packaging
Big 3 Precision Products Returnable Packaging Tier 1 component suppliers • Industry leader in ~$1.0-1.5 billion market for custom returnable packaging solutions for supply chain applications. Component Custom returnable transport • Highly engineered, value-added, and turn-key product packaging offer
Slide 10: Large, Diverse Custom Returnable Packaging Market
Large, Diverse Custom Returnable Packaging Market Returnable Packaging Market – North America Primary End-Markets 100% = approximately $4 billion • Automotive Plastic totes Metal Custom • Commercial vehicles 23% racks engineered 32% = approx. Plastic $1.0-1.5 • Other industrial bulk billion 18% Dunn
Slide 11: New Leadership Team
New Leadership Team Mark Hernandez Nick Vlahos Chief Executive Officer Vice President and and Board Member Chief Financial Officer • 30+ years of experience in commercial • 19 years of finance and business experience vehicle business • Previously VP of Finance, Treasurer and • Joined EML as Board me
Slide 12: Pillars of Value-Creation Strategy
Pillars of Value-Creation Strategy 1 2 3 4 Disciplined Optimum Capital Focused Value-Adding Operations Utilization Commercial Acquisitions Business Creating a bigger, better and more profitable company. 12
Slide 13: Operational Transformation Plan Underway
Operational Transformation Plan Underway Effective Strong Value – Disciplined Capital Commercial Adding Operations Allocation and Business Acquisitions Utilization Focus • Ensuring COGS and • Instilling discipline in • Improving ROIC through • Acquire companies that can operating expenses meet worki
Slide 14: Financial Performance – First Months of 2023 Improvements
Financial Performance – First 9 Months of 2023 Improvements Inventory Working Capital • Net cash provided by operating activities as a percent of sales $68 28% improved $19.6 million YOY. $64.6 26% -6% 26% $64 Millions • Inventory down 6% versus year-end 2022. $60.6 24% $60 24% • Working capital as
Slide 15: Quarterly EPS Improvements
Quarterly EPS Improvements Adjusted EPS Growth in 2023 $ in millions (except earnings per share) Three Months Ended Q1 Q2 Q3 April 1, 2023 July 1, 2023 September 30, 2023 Net income from continuing operations 0.6 1.4 3.1 Unadjusted EPS Growth in 2023 Diluted earnings per share from continuing operat
Slide 16: Long-Term Growth Opportunities
Long-Term Growth Opportunities Industry Trends Eastern Capabilities Electrification of Automobiles and Commercial Vehicles Core Competencies • New Models • Lightweight Solutions • New Components • Charging Infrastructure • Sustainable Solutions • Infrastructure Development • Electromechanical Soluti
Slide 17: Shareholder Value Creation
Shareholder Value Creation Disciplined Strong margin Pay Innovation- Strategic operations focus and down led organic acquisitions and capital measured debt growth (bolt-on or stand- allocation SG&A spend alone) Capitalize on industry growth trends: Near-term performance priorities electrification, d
Slide 18: Appendix
Appendix 18
Slide 19: Top Ten Institutional Holders
Top Ten Institutional Holders Institution EML Shares % S/O 1 Barington Companies Investors, LLC 630,100 10.10 2 Forager Capital Management, LLC 553,527 8.87 3 GAMCO Asset Management, Inc. 546,407 8.76 4 Minerva Advisors, LLC 413,176 6.62 5 Dimensional Fund Advisors, L.P. (U.S.) 386,886 6.20 6 Teton
Slide 20: Streamlined Portfolio of Businesses
Streamlined Portfolio of Businesses November November October May 2017 2020 2021 2022 2023 Sale of Sale Of Consolidation Greenwald Argo EMS Closed of Eberhard Industries and Associated and ILC Frazer & Tool Makers, Ltd. Jones 2020 2021 2022 2023 2015 March November June 2020 2023 2020 Sale of Acquir
Slide 21: Statement of Operations
Statement of Operations $ in millions (except per share data) Three Months Ended Nine Months Ended September 30, 2023 October 1, 2022 September 30, 2023 October 1, 2022 Net sales $ 65.6 $ 71.6 $ 206.5 $ 210.2 Gross margin 16.4 16.6 47.0 47.1 Product development expense (1.4) (1.0) (4.3) (3.2) Sellin
Slide 22: Balance Sheet
Balance Sheet $ in millions September 30, 2023 (unaudited) December 31, 2022 Bank Covenant Metrics Current Assets Cash and cash equivalents $ 9.5 $ 10.2 Net Debt / Adjusted EBITDA Accounts receivable, net 42.8 42.9 4 Inventories 60.6 64.6 3.0x Other current assets 6.4 7.6 3 2.5x 2.3x Total Current A
Slide 23: Adjusted Earnings Reconciliation
Adjusted Earnings Reconciliation $ in millions (except earnings per share) Three Months Ended Nine Months Ended September 30, 2023 October 1, 2022 September 30, 2023 October 1, 2022 Net income from continuing operations 3.1 4.5 5.1 10.9 Diluted earnings per share from continuing operations as report
Slide 24: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation Three Months Ended Nine Months Ended September 30, 2023 October 1, 2022 September 30, 2023 October 1, 2022 Net income from continuing operations $3.1 $4.5 $5.1 $10.9 Interest expense 1.1 0.6 2.6 1.6 Provision for income taxes 1.0 1.4 1.7 3.5 Depreciation and amortizati
Slide 25: The Eastern Company Corporate Office
The Eastern Company Corporate Office 3 Enterprise Drive, Suite 408 Shelton, CT Phone: (203) 729-2255 info@easterncompany.com © 2022 The Eastern Company 25 21
The Eastern Company — Investor Presentation (November 2023) on 6ix