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EML Nasdaq· Eastern Co.
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EML Nasdaq· Eastern Co.
Earnings report Q3 2023

EML's Revenue Declines in Latest Quarter

Segments of revenue

In the latest quarter, EML reported net sales of $65.64 million, a decrease of 8.4% compared to the same period last year. The decline in revenue was driven by a decrease in volume of 14.0%, partially offset by an increase in price of 4.6%. New product sales contributed 1.0% to the overall revenue.

Strengths

Despite the decline in revenue, EML's management highlighted some strengths in their financial performance. They mentioned that the decrease in net sales was primarily due to a reduction in inventory and accounts receivable, which resulted in improved cash flow from operations compared to the previous year. Additionally, the company continued to invest in new products, which contributed to a 1.0% increase in revenue from new product sales.

Challenges

EML faced some challenges in the latest quarter. The decrease in volume by 14.0% indicates a decline in demand for their products. This could be a result of various factors such as market competition or changing customer preferences. Additionally, the decrease in net sales led to a decline in operating profit, which was reported as a loss of $197,000 in the quarter.

Noteworthy

It is worth mentioning that EML's selling general and administrative expenses decreased by $400,000 in the latest quarter compared to the same period last year. This reduction was primarily due to lower legal, professional, and selling costs, as well as payroll-related expenses. However, selling general and administrative expenses increased by $2.8 million in the first nine months of the year, primarily due to severance and other accrued compensation expenses related to the elimination of the chief operating officer position.

Summary

EML experienced a decline in net sales in the latest quarter, primarily driven by a decrease in volume. However, the company's management highlighted improvements in cash flow from operations and continued investment in new products. EML also managed to reduce selling general and administrative expenses in the quarter. Going forward, the company will need to address the challenges of declining demand and focus on strategies to increase revenue and profitability.

Source documents

Form 10-Q  filed on Nov 07, 2023
88 pages scanned

Reference data

Company financials Q3 revenue 65.6M
Analyst estimates Q3 EPS missed by NaN%
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