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The Eastern Company Announces Record First Quarter Earnings

13 April 1999

The Eastern Company Announces Record First Quarter Earnings; Company Reports Ninth Consecutive Quarter of Year-to-Year Earnings Growth

    NAUGATUCK, Conn.--April 13, 1999--The Eastern Company (AMEX:EML) today reported record first quarter earnings of $1.5 million or $0.61 per basic share, compared with $1.3 million or $0.50 per basic share, in the first quarter of 1998. Sales for the first quarter of 1999 were $19.4 million, compared with $18.4 million for the same quarter of the previous year.
    Leonard F. Leganza, president and CEO, stated, "Eastern's earnings increase of 22 percent per basic share represents the ninth consecutive quarter in which the company has exceeded the previous year's quarterly earnings performance. Our success is the result of our determination to achieve the company's business objectives of improving our market position and profitability in the niche markets that we serve. The strong quarterly performance also reflects the ongoing impact of our new product introductions as well as cost savings and productivity programs now in effect at all our operating locations."
    Leganza continued, "Incoming orders and backlogs remain firm at all of our operations. In addition to the overall strength of our ongoing business, we continue to focus on growth markets that we believe will lead to increased new business. Among these are various proprietary latching devices and other vehicular hardware that respond to America's continuing love affair with SUVs and pick-up trucks. Another example is our custom-designed locks for a growing number of manufacturers in the computer peripheral, server and business P.C. industries."
    Leganza concluded, "We foresee another superb year for The Eastern Company in both sales and earnings. With this strong performance in the first quarter, we can anticipate 15-20 percent increase in earnings for the full year. This optimism was reflected in last month's announcement of a 10 percent dividend increase and a 3-for-2 stock split effective on June 15, 1999."
    The Eastern Company manufactures and markets a broad range of locks, latches, fasteners and other security hardware that meets diverse security and safety needs of industrial and commercial customers. Headquartered in Naugatuck, Conn., the company has seven manufacturing locations in the U.S.A., Canada, Mexico and the Pacific Rim.

    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
            
                                        13 wks          13 wks   
                                    April 3, 1999   April 4, 1998

Net Sales                            $19,383,654     $18,411,956

Net Income After Tax                   1,462,747       1,290,097

Net Income Per Share:
 Basic                               $      0.61     $      0.50
 Diluted                             $      0.59     $      0.49

Weighted average shares (basic)        2,414,723       2,559,255