The Eastern Company Reports Results for the Third Quarter of 2001

    NAUGATUCK, Conn.--Oct. 23, 2001--The Eastern Company (AMEX-EML) today announced the results of its third-quarter operations. Sales for the third quarter of 2001 were $20.6 million, compared to $24.7 for the same period in 2000. Third-quarter net income was $529,000, or $.15 per basic share compared to the $2.0 million or $ .56 per basic share reported in the third quarter of 2000.
    Year-to-date earnings for the nine-month period ended September 29 were $2.2 million or $.62 per basic share, compared to $5.2 million or $1.44 per basic share for the same period in 2000. Net sales for the nine months were $63.9 million compared to $65.2 million for the first nine months of the previous year.
    Leonard F. Leganza, President and CEO stated, "As we had earlier anticipated, our third quarter results were affected by reduced sales volumes as a result of the continuing weakness in the nations economy. Although it now appears that this economic trend may continue into the fourth quarter of the year, we have not abandoned our development initiatives for the future growth of the Company. We have, however, responded where practical to the current economic conditions."
    The Eastern Company is a 143-year-old leading manufacturer of vehicular and industrial hardware, locks, metal castings, coin collection and smart card products. It operates from nine locations in the U.S., Canada, Mexico, Taiwan and China. The diversity of the Company's products enables it to respond to the changing requirements of a broad array of markets.

    Forward-Looking Statements: Information in this news release contains statements which reflect the Company's current expectations regarding its future operating performance and achievements. Actual results may differ due to the many economic uncertainties that affect the Company's business environment. Further information about the potential factors which could affect the Company's financial result are included in the Company's reports and filings with the Securities and Exchange Commission. The Company is not obligated to update or revise the aforementioned statements for those new developments.

Statement of Consolidated Income (unaudited)

THE EASTERN COMPANY (AMEX - EML)



                     THREE Months Ended          NINE Months Ended

                    13 wks        13 wks        39 wks        39 wks
                   Sept. 29,     Sept. 30,     Sept. 29,     Sept. 30,
                     2001          2000          2001          2000

Net Sales        $20,551,161   $24,695,211   $63,918,185   $65,234,247


Net Income
 After Tax           529,272     2,011,555     2,231,359     5,215,485


Net Income
 Per Share:
 Basic           $      0.15   $      0.56   $      0.62   $      1.44
 Diluted         $      0.15   $      0.56   $      0.61   $      1.42

Weighted average
 shares
 outstandings:
 Basic             3,624,180     3,615,556     3,621,924     3,622,594
 Diluted           3,648,714     3,617,468     3,680,441     3,660,403