-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LQMAiGAabJikqznO6NR5/TsJ8ivS6GQia4cStDNodW+9aQKx8AS4IMYRdmGSRSJd KlaafIquJwagirJ0Lo50ZQ== 0000031107-96-000006.txt : 19961113 0000031107-96-000006.hdr.sgml : 19961113 ACCESSION NUMBER: 0000031107-96-000006 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960928 FILED AS OF DATE: 19961112 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: EASTERN CO CENTRAL INDEX KEY: 0000031107 STANDARD INDUSTRIAL CLASSIFICATION: CUTLERY, HANDTOOLS & GENERAL HARDWARE [3420] IRS NUMBER: 060330020 STATE OF INCORPORATION: CT FISCAL YEAR END: 1230 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-00599 FILM NUMBER: 96659315 BUSINESS ADDRESS: STREET 1: 112 BRIDGE ST STREET 2: P O BOX 460 CITY: NAUGATUCK STATE: CT ZIP: 06770 BUSINESS PHONE: 2037292255 MAIL ADDRESS: STREET 1: 112 BRIDGE STREET STREET 2: P O BOX 460 CITY: NAUGATUCK STATE: CT ZIP: 06770 10-Q 1 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED Setember 28, 1996 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _________________ to ________________. Commission File Number 0-599 THE EASTERN COMPANY (Exact Name of Registrant as specified in its charter) Connecticut 06-0330020 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 112 Bridge Street, Naugatuck, Connecticut 06770 (Address of principal executive offices) (Zip Code) (203) 729-2255 (Registrant's Telephone Number, Including Area Code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ------- ------ Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Class Outstanding as of September 28, 1996 Common Stock, No par value 2,699,284 -1- 2 PART I FINANCIAL INFORMATION THE EASTERN COMPANY AND SUBSIDIARIES ITEM I CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED) - ------ -------------------------------------
ASSETS CURRENT ASSETS Sept. 28, 1996 Dec. 30, 1995 - -------------- ------------ ----------- Cash and cash equivalents $ 1,746,039 $ 1,521,361 Accounts receivable, less allowance: 8,268,586 7,810,742 1996- $573,000; 1995- $501,000 Inventories 11,454,276 11,792,876 Prepaid expenses and other current assets 1,837,322 2,010,332 ----------- ----------- Total Current Assets 23,306,223 23,135,311 Property, plant and equipment 27,416,239 25,090,676 Less accumulated depreciation (13,432,825) (11,405,013) ---------- ---------- 13,983,414 13,685,663 Prepaid pension cost 4,001,206 3,069,066 Other assets, net 2,194,004 1,200,059 ----------- ----------- TOTAL ASSETS $ 43,484,847 $ 41,090,099 =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities Notes payable current $ 3,349,296 $ 1,119,313 Accounts payable 2,649,084 3,004,297 Accrued compensation and withholding 1,483,137 908,297 Accrued expenses 967,343 863,749 ----------- ----------- TOTAL CURRENT LIABILITIES 8,448,860 5,895,656 Deferred federal income taxes 2,237,900 2,237,900 Long-term debt 288,249 339,856 Accrued postretirement benefits 2,819,003 2,810,003 SHAREHOLDERS' EQUITY Common Stock, no par value: Authorized shares - 25,000,000 Issued and outstanding shares: 8,045,863 8,017,738 1996-2,699,284; 1995-2,696,284 (Excluding shares in Treasury: 1996-610,987; 1995-610,987) Preferred Stock, no par value Authorized shares - 2,000,000 (No shares issued) Retained earnings 21,644,972 21,788,946 ----------- ----------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 43,484,847 $ 41,090,099 =========== ===========
See accompanying notes. -2- 3 THE EASTERN COMPANY AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF INCOME (UNAUDITED)
NINE MONTHS ENDED THREE MONTHS ENDED Sept.28,1996 Sept.30,1995 Sept.28,1996 Sept.30,1995 ------------ ------------ ------------ ------------ Net sales $43,607,683 $45,825,248 $13,715,095 $14,379,195 Interest income 90,474 95,096 19,944 24,473 ----------- ---------- ---------- ---------- Total 43,698,157 45,920,344 13,735,039 14,403,668 Cost of products sold 34,392,039 34,887,438 10,158,049 11,194,845 ----------- ----------- ---------- ---------- 9,306,118 11,032,906 3,576,990 3,208,823 Selling and admin. expenses 8,150,778 7,521,063 2,800,803 2,339,522 Interest expense 116,021 65,314 42,355 5,066 Other income - (66,787) - (37,700) ----------- ----------- ---------- ---------- INCOME FROM CONTINUING OPERATIONS 1,039,319 3,513,316 733,832 901,935 Income taxes 385,348 1,273,375 254,403 300,411 ----------- ----------- ---------- ---------- INCOME FROM CONTINUING OPERATIONS 653,971 2,239,941 479,429 601,524 Discontinued operations - (238,224) - (142,506) ----------- ----------- ---------- ---------- NET INCOME $ 653,971 $ 2,001,717 $ 479,429 $ 459,018 =========== =========== ========== ========== Income per share from continuing operations $ 0.24 $ 0.81 $ 0.18 $ 0.22 Net income per share $ 0.24 $ 0.72 $ 0.18 $ 0.16 Cash dividends per share $ 0.345 $ 0.345 $ 0.115 $ 0.115 Average shares outstanding 2,697,559 2,775,665 2,697,559 2,775,665
See accompanying notes. -3- 4 THE EASTERN COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
NINE MONTHS ENDED Sept 28, 1996 Sept 30, 1995 ------------- ------------- OPERATING ACTIVITIES: Net income $ 653,971 $ 2,001,717 Adjustments to reconcile net income to net cash provided from operations: Depreciation and amortization 2,211,386 1,938,918 Loss (gain) on sale of equip. and other assets 335 (15,212) Postretirement benefits other than pensions 9,000 8,696 Provision for losses on accounts receivable 39,011 83,523 Changes in Operating Assets and Liabilities: Accounts receivable (499,271) 865,485 Inventories 336,792 (1,785,123) Prepaid expenses 172,977 356,082 Prepaid pension (932,140) (252,857) Accounts payable (351,919) (127,484) Accrued expenses 807,172 804,257 Other assets (376,106) (222,517) ---------- ----------- NET CASH PROVIDED BY OPERATING ACTIVITIES 2,071,208 3,655,485 INVESTING ACTIVITIES: Purchases of property, plant, and equipment (2,348,758) (2,142,177) Proceeds from sale of equipment and other assets 13,600 1,226,598 Other - (148,756) ---------- ----------- NET CASH USED FOR INVESTING ACTIVITIES (2,335,158) (1,064,335) FINANCING ACTIVITIES: Payment on line of credit - (1,400,000) Proceeds from line of credit 1,500,000 - Principal payments on long-term debt (109,439) (810,000) Proceeds from sales of Common Stock 28,125 29,510 Purchases of Common Stock for the treasury - (29,509) Dividends paid (930,911) (957,707) ---------- ----------- NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES 487,775 (3,167,706) Effect of exchange rate changes on cash 853 1,672 ---------- ----------- NET INCREASE(DECREASE)IN CASH AND CASH EQUIVALENTS 224,678 (574,884) Cash and Cash Equivalents at Beginning of Year 1,521,361 2,610,244 ---------- ----------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 1,746,039 $ 2,035,360 =========== ===========
See accompanying notes. -4- 5 THE EASTERN COMPANY AND SUBSIDIARIES COMPUTATION OF EARNINGS PER SHARE (UNAUDITED)
NINE MONTHS ENDED THREE MONTHS ENDED Sept 28,1996 Sept 30,1995 Sept 28,1996 Sept 30,1995 ------------ ------------- ------------- ------------ Primary: Average Shares Outstanding 2,697,559 2,775,665 2,697,559 2,775,665 Net effect of dilutive stock options -- based on the treasury stock method using average market price 33,996 50,510 33,996 50,510 --------- --------- --------- --------- Total 2,731,555 2,826,175 2,731,555 2,826,175 ========= ========= ========= ========= Income from continuing operations per share $ 653,971 $2,239,941 $ 479,429 $ 601,524 ========== ========== ========== ========= Net Income $ 653,971 $2,001,717 $ 479,429 $ 459,018 =========== ========== ========== ========= Income from continuing operations per share $0.24 $0.79 $0.18 $0.21 ===== ===== ===== ===== Net income per share $0.24 $0.71 $0.18 $0.16 ===== ===== ===== ===== Fully Diluted: Average Shares Outstanding 2,697,559 2,775,665 2,697,559 2,775,665 Net effect of dilutive stock options -- based on the treasury stock method using quarter-end market price, if higher than average market price 40,763 50,510 40,763 50,510 --------- --------- -------- --------- Total 2,738,322 2,826,175 2,738,322 2,826,175 ========= ========= ========= ========= Income from continuing operations per share $ 653,971 $2,239,941 $ 479,429 $ 601,524 ========== ========== ========== ========= Net Income $ 653,971 $2,001,717 $ 479,429 $ 459,018 ========== ========== ========== ========= Income from continuing operations per share $0.24 $0.79 $0.18 $0.21 ===== ===== ===== ===== Net income per share $0.24 $0.71 $0.18 $0.16 ===== ===== ===== =====
See accompanying notes. -5- 6 NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS September 28, 1996 Note A - Basis of Presentation The accompanying unaudited consolidated condensed financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. The accompanying consolidated condensed financial statements are unaudited. However, in the opinion of the management, all adjustments (consisting only of normal recurring accruals) necessary for a fair presentation of the results of operations for such interim periods have been reflected therein. Certain 1995 amounts have been reclassified to conform to the 1996 presentation. Note B - Net Income Per Share Net income per share of common stock is based on the weighted average number of shares outstanding during each period 1996- 2,697,559 shares; 1995 - 2,775,665 shares. Common stock equivalents (Stock Options) did not have a material dilutive effect on net income per share. The computation of net income per share of common stock on a fully diluted basis did not result in any material dilution in 1996 or 1995. Note C - Discontinued Operation In August 1995, the Company sold the business and substantially all assets of its construction segment retaining accounts receivable. At September 28, 1996 and December 30, 1995 accounts receivable include $481,996 and $582,627 respectively applicable to the discontinued construction segment. Note D - Litgation The Registrant is involved in litigation relating to environmental matters for which the ultimate outcome is not expected to have any material adverse impact on financial position, operating results or liquidity. See Part II Item 1 Legal Proceedings for further information. -6- 7 ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations Income from continuing operations for the third quarter 1996 was $479,429 or $.18 per share on sales of $13,715,095 versus income from continuing operations for the third quarter of 1995 of $601,524 or $.22 per share on sales of $14,379,195. Income from continuing operations for the first nine months of 1996 was $653,971 or $.24 per share on sales of $43,607,683 versus income from continuing operations for the first nine months of 1995 of $2,239,941 or $.81 per share on sales of $45,825,248. Net income for the first nine months of 1995 was $2,001,717 or $.72 per share after the loss from the discontinued construction segment of $238,224 or $.09 per share. Current third quarter sales were down 5% compared to the same period a year ago. Volume declined 9% in the third quarter primarily due to the continued down turn in the transportation industry. New product sales and price increases of 3% and 2% helped offset the decline in volume during the third quarter. For the first nine months of 1996 volume was down 9% while price increases and new product sales were each up 2%, respectively. New products include vehicular hardware produced and designed by Eberhard Manufacturing division; the "Gun Blok", a patented keyless trigger lock for securing most hand guns and rifles, offered by the CCL Security Products division; new malleable castings products manufactured by the Frazer & Jones division; and hardware components for the appliance industry offered by the Canadian subsidiary, Eberhard Hardware Manufacturing, Ltd. In August 1996, the Registrant announced that it entered into a long-term agreement to supply engineered mine roof fasteners to Excel Mining Systems, the Country's largest manufacturer of mine roof bolts. This agreement will ensure the Registrant's position as the largest and lowest cost producer of proprietary fasteners used in underground mining in North America. Sales for the first nine months of 1996 to the underground coal mining industry were down from the comparable period a year ago. Dispite the softness in the underground coal mining industry as a whole the Registrant expects that its business will increase as a result of the signing of the long-term supply agreement with Excel Mining Systems. Contract malleable casting sales continue to increase from the comparable periods a year ago helping to offset the decline in the mining business. Demand for the Registrant's heavy hardware servicing the tractor trailer industry continues to be on a down cycle with sales off 45% from the third quarter a year ago and down 34% for the nine months 1996 compared to the same period a year ago. The Registrant continues to engineer and develop new products to meet the security needs of industrial customers. Sales of custom locks were up 1.5% in the third quarter 1996 and 3.5% for the nine months ending September 28, 1996 versus the comparable periods a year ago. The Registrant's gross margin as a percentage of sales for the three and nine months ended September 28, 1996 was 26% and 21%, respectively, compared to 22% and 24% for comparable periods a year ago. Improved capacity utilization at the Frazer & Jones division helped improved gross margins in the third quarter 1996; production increased in anticipation of increased demand as the result of the aforementioned agreement with Excel Mining Systems. In addition, hardware components produced for the appliance industry contributed favorably to the gross margin in the third quarter 1996 versus the same period a year ago. -7- 8 Third quarter selling and administrative expenses were up 20% or $461 thousand from the same period a year ago. Increased sales staffing, higher commission, increased advertising, additional amortization expense associated with the agreement with Excel Mining Systems, and additional legal expenses account for the increases. Selling and administrative expenses for the nine months ended September 28, 1996 were up 8% or $630 thousand from the same period a year ago. The majority of the increase in expenses arose in the third quarter. Other income for the three and nine months ended September 28, 1996, was down $38 thousand and $67 thousand respectively compared to the same periods a year ago. An agreement under which the Registrant received commission income expired in August 1995. The effective tax rate for the third quarter and first nine months of 1996 was 35% and 37%, respectively, versus the comparable periods a year ago of 33% and 36%, respectively. The overall increase in the effective tax rate for 1996 was due to higher effective foreign taxes. Liquidity and Sources of Capital Cash flows from operations were $2.071 million for the first nine months of 1996 versus $3.655 million in the first nine months of 1995. The change in cash flows resulted from the timing differences collecting accounts receivable and payments of liabilities, and the build up of inventory. The Registrant drew down $1.5 million under its short-term line of credit in the first nine months of 1996 for normal liquidity needs. Additions to property, plant and equipment were $2.3 million during the first nine months of 1996 versus $2.1 million for the comparable period a year ago. Total 1996 capital expenditures are expected to approximate the $2.5 million level of depreciation for the year. Inventory increased from the 1995 year-end level by $337 thousand with an inventory turnover rate of 5 turns per year versus the year-end level of 6 turns per year. A slight build up in inventory was required to fulfill the supply agreement with Excel Mining Systems. The Registrant anticipates current inventory levels will approximate the year-end balance. The average day's sales in accounts receivable increased to 55 days for collection versus the end of 1995 collection average of 53 days. The prime reason for the increase in collection days results from accounts receivable still being collected from the discontinued Construction segment where the balance of uncollected accounts receivable was $482 thousand at the end of September 1996. The Registrant continues to pursue the collection of the remaining outstanding receivables from this segment. The Registrant drew down an additional $1 million on its short-term line of credit in October 1996 to use towards the Excel Mining System purchase agreement. Other Matters On June 24, 1994 the Registrant settled all claims with both the Beacon Heights Coalition and the Laurel Park Coalition and the respective complaints against the Registrant on behalf of the Coalitions were dismissed by stipulation. Claims against the Registrant and certain other defendants filed by the two governments agencies as described in Part II, Item 1 below were dismissed by the Court. A final judgement was entered by the U.S. District Court in the consolidated proceedings on March 17, 1995. Appeals, however, were filed by the two government agencies as described in Part II, Item 1 below. -8- 9 On November 1, 1996, the United States Court of Appeals for the Second Circuit reversed the U.S. District Court's ruling dismissing government agencies environmental claims against the Registrant and certain other defendants, and the environmental claims by the Laurel Park and Beacon Heights Coalitions against numerous defendants. The Court of Appeals remanded the case to the U.S. District Court in Connecticut for further proceedings. See further description in Part II, Item 1 below. The Registrant continues to actively monitor the situation. It is management's opinion that the resolution of these matters will not have a material adverse effect on the Registrant's financial position, operating results or liquidity. -9- 10 PART II OTHER INFORMATION ITEM 1 LEGAL PROCEEDINGS In April 1988, Murtha Enterprises Inc. and related parties (collectively "Murtha"), as the result of a February 1987 suit (docket number N-87-52 PCD) brought by the U. S. Environmental Protection Agency (the "EPA") and others, concerning the Beacon Heights and Laurel Park landfills, instituted third- party actions against approximately 200 companies or individuals including the Registrant. The underlying suit against Murtha was settled with EPA and the other parties and the Consent Decree has been approved by the Court. On September 22, 1988, the EPA filed a complaint against the Registrant and seven other defendants seeking recovery of present and future response costs incurred by the United States in connection with the Beacon Heights landfill. The complaint alleged total damages of approximately $1.8 million ($1.3 million actual and $.5 million future). On October 31, 1988 the court consolidated the EPA action against the Registrant with the other cases under docket number N-87-52 (PCD). By complaint dated September 6, 1990, the Beacon Heights Coalition (the "Beacon Coalition"), a group of parties who have entered into a consent order with EPA, instituted a direct action against the Registrant and approximately 400 other named parties concerning the Beacon Heights landfill. The Beacon Coalition claimed that these defendants generated or transported hazardous substances disposed of at the Beacon Heights landfill, and are therefore responsible for a share of the Beacon Coalition's response costs. In March 1991, a Laurel Park Coalition which did not include the Registrant entered into Consent Decree and Administrative Order by Consent with the EPA and the State of Connecticut to remediate the Laurel Park landfill. The Consent Decree has been approved by the Court. In May 1991, EPA and the State of Connecticut ("State") each filed a complaint against the Registrant and three other defendants seeking recovery of present and future response costs incurred in connection with the Laurel Park landfill. The EPA claimed costs in excess of $1.8 million and the state claimed costs in excess of $2.5 million. On July 1, 1991, the court consolidated these actions against the Registrant with the other cases under docket number N-87-52 (PCD). By order dated February 8, 1994, the court granted a motion filed by Registrant for judgement on the pleadings against EPA and the state with respect to each of their claims against Registrant. By motions dated February 22, 1994 and February 23, 1994, EPA and the State respectively moved for reconsideration of the court's order, which motions were denied. By order dated February 8, 1994, the court permitted the Laurel Park Coalition to file a complaint against eight parties including the Registrant, which claims were to be assigned for trial if the Coalition filed a complaint. On June 24, 1994 , the Registrant settled all claims with both the Beacon Heights Coalition and the Laurel Park Coalition and the respective complaints against the Registrant on behalf of the Coalitions were dismissed by stipulation. -10- 11 On March 17, 1995, the U.S. District Court entered a final judgement in the consolidated proceedings (docket number N-87-52(PCD)) which included the granting of Registrant's motion for judgement on the pleadings. As a result of this judgement, no complaints were then pending in the U.S. District Court involving the Registrant. On April 17, 1995, the State filed its notice of appeal from this final judgement with the U.S. District Court. On May 10, 1995, EPA filed its notice of appeal from the judgement. On November 1, 1996 the U.S. Court of Appeals for the Second Circuit reversed the District Court ruling dismissing EPA and State of Connecticut environmental claims against the Registrant and environmental claims by the Laurel Park and Beacon Heights Coalitions against numerous defendants. The Court of Appeals remanded the case to the U.S. District Court in Connecticut for further proceedings. The governmental lawsuits, brought after governmental settlements with the Coalitions, seek to recover remediation costs of the governments unreimbursed by the Coalition settlements or the settlement with the owner/operator in connection with the Laurel Park and Beacon Heights landfills. The EPA has claimed that the Registrant and five other defendants (two corporate and three individual) are responsible for an aggregate of $4.2 million in remediation costs with respect to the Beacon Heights landfill and that the Registrant and one other corporate defendant are responsible for an aggregate of $2.5 million in remediation costs with respect to the Laurel Park landfill; Connecticut has claimed that the Registrant and one other defendant are responsible for an aggregate of $.08 million in remediation costs with respect to the Laurel Park landfill. The Registrant intends to continue to vigorously contest any liability relating to these governmental claims. The Registrant would also pursue its rights of contribution against the other defendants in the event of any liability, which the Registrant expects would significantly reduce any liability imposed. In addition, it would file claims against its insurance carriers. In its decision, the Second Circuit also reversed the U.S. District Court's dismissal of numerous actions brought by the Beacon Heights and Laurel Park Coalitions against non-settling parties. These Coalitions assumed full responsibility for cleaning up the two landfill sites and, as noted above, the Registrant has settled with both Coalitions with respect to liability at these sites in 1994. It is believed that many of the defendants in the pending Coalition actions and certain other persons who have not been sued by the governments have a responsibility for remediation cost and may be brought into these actions as co-defendants with the Registrant. The Registrant intends to resist the EPA and State claims and if necessary bring these other persons into the action to share the costs of reimbursements to the governments if ultimately imposed. The Registrant will continue to vigorously pursue its legal interest in this matter. The Registrant believes that these actions will not have a materially adverse impact on the Registrant's consolidated financial position, operating results or liquidity. The Registrant is currently involved in two actions with MMI Investments, LLC ("MMI"). The first action is captioned MMI Investments, LLC vs. The Eastern Company, Docket number CV 96-134473 ("MMI's action"). The second action is The Eastern Company vs. MMI Investments, LLC, docket number CV 96-134839 ("Eastern's action"). The two actions have been consolidated and are pending in the Connecticut Superior Court for the Judicial District of Waterbury at Waterbury. MMI's action was filed on or about August 15, 1996. The Registrant's action was filed on or about September 9, 1996. In MMI's action, MMI is seeking an order of mandamus from the Court to compel the Registrant to turn over a copy of its shareholder list to MMI. The Registrant has denied the request and -11- 12 defended the action on the grounds that MMI has not satisfied the requirements of Connecticut law governing shareholder requests for a shareholder list. In the Registrant's action, it seeks injunctive relief enjoining MMI (purporting to represent 10% of the Registrant's shares) from calling or attempting to call a special meeting of the Registrant's shareholders on the grounds that (A) the request does not comport with the threshold requirement under Connecticut Law and the Registrant's bylaws that the request be made by holders of at least 35% of the Registrant's shares and (B) that the purported purposes submitted by MMI for the special meeting are improper. The Registrant also seeks declaratory relief regarding these two issues. There are no other material legal proceedings, other than ordinary routine litigation incidental to the business, to which either the Registrant or any of its subsidiaries is a party of or which any of their property is the subject. ITEM 2 CHANGES IN SECURITIES None ITEM 3 DEFAULTS UPON SENIOR SECURITIES None ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None ITEM 5 OTHER INFORMATION None ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K On July 29, 1996, The Board of Directors of The Eastern Company (the "Registrant") amended the By-laws of the Registrant as set forth in Exhibit 1 of Form 8K filed with the Commission on July 29, 1996 pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. -12- 13 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. THE EASTERN COMPANY (Registrant) DATE: November 12, 1996 By /s/ STEDMAN G. SWEET --------------------- Stedman G. Sweet President and Chief Executive Officer DATE: November 12, 1996 By /s/ DONALD E. WHITMORE, JR. --------------------------- Donald E. Whitmore, Jr., Vice President and Chief Financial Officer -13- EX-27 2
5 9-MOS DEC-30-1995 SEP-28-1996 1,746,039 0 8,268,586 573,000 11,454,276 23,306,223 27,416,239 13,432,825 43,484,847 8,448,860 0 8,045,863 0 0 21,644,972 43,484,847 43,607,683 43,698,157 34,392,039 34,392,039 8,079,013 71,765 116,021 1,039,319 385,348 653,971 0 0 0 653,971 .24 .24
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