Executive Summary

Q4 2024 delivered modest top-line growth but margin compression: net sales rose 4.5% year over year to $66.7M, while gross margin fell to 23.0% from 26.8% due to higher material costs and a prior-year favorable LIFO adjustment that did not recur . GAAP diluted EPS from continuing operations declined to $0.26 from $0.63 in Q4 2023 .
Backlog strengthened to $89.2M at year-end (up 15.7% YoY), supported by new Class 8 mirror program awards at Velvac; management highlighted ongoing share gains and an aftermarket opportunity set, positioning 2025 for operational execution under new leadership .
Non-GAAP profit quality mixed: Q4 adjusted EPS was $0.42 (ex-severance), down vs. $0.63 in Q4 2023, and adjusted EBITDA of $5.7M trailed Q3’s $8.7M on softer mix and cost headwinds .
Strategic reset underway: New CEO (Nov-2024) appointed new presidents at two businesses, is decentralizing operations, and emphasizing nimble, multi-sourced supply chains to manage tariffs and cost volatility .

What Went Well and What Went Wrong

What Went Well
- Backlog momentum and new platform wins: “Backlog as of December 28, 2024 rose 15.7% to $89.2 million… primarily driven by increased orders related to the launch of new mirror programs for the Class 8 truck at Velvac” .
- Leadership/actions to accelerate growth: “All three of the Company’s businesses are now headed by leaders with the hands-on operational expertise… needed to accelerate… revenue growth and profitability” and “top priority for 2025 is to execute faster and more effectively” .
- Aftermarket and platform expansion: “We’re launching a new Mirror platform… transitioning into production as we speak… forecasting our aftermarket business to continue to grow… significantly faster than the market overall” .
What Went Wrong
- Margin compression in Q4: Gross margin fell to 23.0% from 26.8%, driven by higher material costs and the absence of a favorable LIFO reserve adjustment that benefited Q4 2023 .
- Higher operating expenses: Q4 selling & administrative expenses rose 11% YoY, to 16.8% of sales (from 15.8%) due to payroll, legal/professional and selling costs .
- Mixed end-market demand: Q4 sales benefited from returnable transport packaging but were “partially offset by lower demand for truck accessories and truck mirror assemblies” .

Financial Results

All figures exclude discontinued operations unless noted.

Metric	Q4 2023	Q3 2024	Q4 2024
Revenue ($USD Millions)	$63.8	$71.3	$66.7
Gross Margin %	26.8%	25.5%	23.0%
GAAP Diluted EPS – Continuing Ops	$0.63	$0.75	$0.26
Adjusted EPS – Continuing Ops (non-GAAP)	$0.63	$0.75	$0.42
Adjusted EBITDA – Continuing Ops ($USD Millions)	$6.93	$8.75	$5.73

Notes:

Q4 2024 adjustments reflect severance/accrued compensation; see reconciliation table in the 8-K .
Q3 2024 benefited from stronger volume/mix, especially mirrors/packaging .

KPIs and Balance Sheet Indicators

KPI	Q4 2023	Q3 2024	Q4 2024
Backlog ($USD Millions)	$77.1	$97.2	$89.2
Product Development Expense % of Sales	2.1%	1.5%	1.7%
S&A % of Sales	15.8%	n/a	16.8%
Senior Net Leverage Ratio (x)	1.41:1 (FY23 YE)	1.36:1	1.23:1
Inventories ($USD Millions)	$58.40	$58.13	$55.21
Share Repurchases (shares in period)	n/a	50,000	39,337

Discontinued Operations (Big 3 Mold)

Q3 2024 recognized a $23.1M write-down to fair value upon classification as held for sale; FY2024 net loss from discontinued ops was $21.7M .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Quantitative guidance (revenue, margins, EPS)	2025/near term	—	None provided in press release or call	n/a
Dividends	FY 2024 actual	—	$0.44 per share paid in FY 2024 (actual)	n/a

Management emphasized execution priorities and supply-chain agility but did not issue numerical guidance ranges for 2025 on the call or in the 8-K/press release .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 2024)	Previous Mentions (Q3 2024)	Current Period (Q4 2024)	Trend
Supply chain agility / dual-sourcing	Highlighted agility; converted supply disruptions into business; piloting plastics vertical integration	Continued emphasis; Mold business classified as held for sale to focus resources	“Nimble supply chains… multiple sourcing options… manage tariffs and pricing fluctuations”	Consistent; operationalization under new leadership
Commercial vehicle cycle / Class 8	Market softening impacting packaging; focus on backlog conversion	Backlog +13% YoY; demand in mirrors/packaging; margin lift from price/cost	New Class 8 mirror platform launch; aftermarket growth expected to outpace market; sleeper cab demand seen improving	Positive share-gain narrative despite cyclical backdrop
Leadership/strategy	Operational transformation, value-creation pillars	New CEO announced (effective Nov-6-2024)	CEO appointed new presidents at Eberhard/Big 3; decentralized, execution-first model	Step-up in pace and accountability
Pricing/cost/margin	Price-cost alignment cited in margin improvement	Q3 GM 25.5% on improved price/cost and savings	Q4 GM fell on material costs, no LIFO tailwind; FY GM improved YoY	Near-term headwind; longer-term tailwind intact
Capital allocation	Capex to enable vertical integration; buybacks ongoing	Buybacks continued; operating cash flow lower on AR build	FY24 capex ~$9.7M; 39k shares repurchased in Q4 (150k cumulative)	Balanced reinvestment and returns

Management Commentary

Strategic posture and 2025 priorities: “Our top priority for 2025 is to execute faster and more effectively… positioning all of Eastern’s businesses for stronger long-term competitiveness” .
Leadership moves to accelerate growth: “We have appointed new presidents for two of our three operating businesses… leaders with the hands-on operational expertise… to accelerate… revenue growth and profitability” .
Supply chain positioning: “All… businesses have been hard at work developing nimble supply chains… multiple sourcing options to address costs, made in America, lead times and tariffs” .
Product expansion opportunities: “We’re launching a new Mirror platform… transitioning into production… [and]… opportunities [at Eberhard] to upgrade/electrify products and pursue tangential opportunities” .

Q&A Highlights

Class 8 outlook and share gains: Management expects OE mirror business to broadly track Class 8 builds with incremental uplift from a new mirror platform recently launched; aftermarket expected to grow faster than the market overall .
Sleeper cab demand: Eberhard-exposed sleeper cab build rates have been compressed ~1.5 years; management is “forecasting some improvement” as demand unlocks .
Emissions pre-buy dynamics: Potential pre-buy ahead of future emissions changes could affect build cadence; if regulations are adjusted, production could level-load rather than spike .

Estimates Context

S&P Global consensus: No active Wall Street consensus for quarterly EPS or revenue was available for Q4 2024 (or Q1 2025), so a traditional beat/miss assessment versus estimates is unavailable.*
Actual results for Q4 2024: Revenue $66.7M; GAAP diluted EPS (cont. ops) $0.26; Adjusted EPS $0.42 .

Metric	Q4 2024 Consensus	Q4 2024 Actual
Revenue ($USD Millions)	n/a*	$66.7
GAAP Diluted EPS – Continuing Ops	n/a*	$0.26
Adjusted EPS – Continuing Ops (non-GAAP)	n/a*	$0.42

*Values retrieved from S&P Global.

Key Takeaways for Investors

Backlog strength and new platform ramps suggest revenue durability into 2025 despite a softer CV cycle; Class 8 mirror platform launch and aftermarket initiatives are key near-term catalysts .
Margin compression in Q4 reflects transient factors (material costs and absence of prior LIFO tailwind); the FY gross margin expanded YoY on pricing and cost actions, supporting a recovery path as mix normalizes .
Operating discipline and decentralization under a new CEO/presidents should quicken decision cycles and drive accountability at Eberhard, Big 3, and Velvac .
Cash deployment remains balanced: FY24 capex of ~$9.7M to support operations; buybacks continued (39k shares in Q4; ~150k cumulatively), and $0.44/share dividends paid in FY24 .
Discontinued operations (Big 3 Mold) de-risk portfolio and sharpen focus on core strengths; the Q3 write-down is non-recurring and excluded from continuing ops analysis .
With no published consensus, positioning and execution updates (backlog conversion, mirror platform ramp, aftermarket penetration) may be the primary stock drivers into the next print .
Watch S&A intensity and material cost trends; Q4’s higher S&A and input costs weighed on margins, but inventory reduction and leverage ratio improvement are positives heading into 2025 .

EASTERN CO (EML)·Q4 2024 Earnings Summary