The Eastern Company Announces the Sale of Argo EMS
NAUGATUCK, CT / ACCESSWIRE / October 19, 2022 / The Eastern Company (“Eastern” or the “Company”) (NASDAQ:EML), an industrial manufacturer of unique engineered solutions serving commercial transportation, logistics, and other industrial markets, today announced that it has sold its Argo EMS business (“Argo”).
August Vlak, Eastern’s President & CEO, said that “the divestiture of Argo will further streamline our portfolio of businesses and build scale in our largest businesses, which we believe will accelerate Eastern’s growth and strengthen our operating margins. With the sale of Greenwald Industries and Frazer & Jones, which we completed last year, this transaction further strengthens our focus on our three core businesses.”
Mr. Vlak added, “In August of last year, we announced our intent to divest our non-core businesses and began reporting these businesses as discontinued operations. With the transaction announced today, we have completed the sale of all non-core businesses.”
The Company expects to use the proceeds from the transaction primarily to reduce debt and strengthen its balance sheet. The Company also expects to record a gain on the sale of these assets in its fourth quarter of fiscal 2022.
The terms of the transaction were not disclosed.
About The Eastern Company
The Eastern Company 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 from locations in the U.S., Canada, Mexico, U.K., Taiwan, and China. More information on the Company can be found at www.easterncompany.com.
Safe Harbor for Forward-Looking Statements
Statements in this document that are not based on historical facts are “forward-looking statements” within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act. Forward-looking statements may be identified by the use of forward-looking terminology such as “would,” “should,” “could,” “may,” “will,” “expect,” “believe,” “estimate,” “anticipate,” “intend,” “continue,” “plan,” “potential,” “opportunities,” or similar terms or variations of those terms or the negative of those terms. There are many factors that affect the Company’s business and the results of its operations and that may cause the actual results of operations in future periods to differ materially from those currently expected or anticipated. These factors include the scope and duration of the COVID-19 pandemic and economic effects of the COVID-19 pandemic, including supply chain disruptions, cost inflation, rising interest rates, delays in delivery of our products to our customers, impact on demand for our products, reductions in production levels, increased costs, including costs of raw materials, the impact on global economic conditions, and the availability, terms, and cost of financing, including borrowings under credit arrangements or agreements. Other factors include, but are not limited to: risks associated with doing business overseas, including fluctuations in exchange rates and the inability to repatriate foreign cash, the impact on cost structure and on economic conditions as a result of actual and threatened increases in trade tariffs and the impact of political, economic and social instability; restrictions on operating flexibility imposed by the agreement governing our credit facility; the inability to achieve the savings expected from global sourcing of materials; the impact of higher raw material and component costs (including the impact of supply chain shortages and inflation), particularly steel, plastics, scrap iron, zinc, copper and electronic components; lower-cost competition; our ability to design, introduce and sell new products and related components; market acceptance of our products; the inability to attain expected benefits from acquisitions or the inability to effectively integrate such acquisitions and achieve expected synergies; domestic and international economic conditions, including the impact, length and degree of economic downturns on the customers and markets we serve and more specifically conditions in the automotive, construction, aerospace, energy, oil and gas, transportation, electronic, and general industrial markets; costs and liabilities associated with environmental compliance; the impact of climate change or terrorist threats and the possible responses by the U.S. and foreign governments; failure to protect our intellectual property; cyberattacks; materially adverse or unanticipated legal judgments, fines, penalties or settlements, and other risks identified and discussed in Item 1A, Risk Factors, and Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, of our Annual Report on Form 10-K for the fiscal year ended January 1, 2022, filed with the Securities and Exchange Commission (the “SEC””) on March 17, 2022, and that may be identified from time to time in our quarterly reports on Form 10-Q, current reports on Form 8-K and other filings we make with the SEC. The Company undertakes 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, except as required by law.
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SOURCE: The Eastern Company