Naugatuck, Conn.-based Eastern Co. is selling the mold division of Big3 Precision Products because it no longer fits with company officials' long-term strategy to focus on the automotive and industrial markets.
Eastern Co. has a new CEO, too, with the board of directors appointing Ryan Schroeder to succeed Mark Hernandez, who resigned effective Nov. 6.
Schroeder previously was CEO at Plaskolite LLC and has served as president of IMI Norgen and held various positions at Parker Hannifin, including general manager of global valves, plant manager, and supply chain manager of the company's mobile cylinders division.
The management change coincides with the decision to sell one of the two divisions of Centralia, Ill.-based Big3’s business, which also has a products unit.
The products area, which supports returnable packaging in the automotive and heavy truck markets, isn’t for sale.
Company officials are looking for potential suitors for the mold unit that offers injection blow molding (IBM), injection stretch blow molding (ISBM) and two-stage blow molding tooling services.
Founded in 1970, Big3 has served the household, personal, medical and pharmaceutical markets with mold design and manufacturing capabilities in addition to the automotive and industrial markets.
"During the quarter, we continued to evaluate Eastern's business portfolio for long-term performance. As a result of this exercise, we determined that the Big 3 Mold business no longer fits with our long-term strategy, and we recently began taking steps to sell that business," Chairman James Mitarotonda said in a Nov. 5 news release.
"Making this structural change to our portfolio will enable us to focus all of our resources on our best-in-class manufacturing and assembly capabilities in commercial vehicle, automotive, and other industrial end markets."
The plans to sell Big3 also was mentioned in a third quarter Form-10Q filing under a heading called "discontinued operations."
"The mold business is cyclical in nature, requires significant capital investment to remain competitive, and serves different markets than our other businesses. Selling the Big 3 Mold business will allow management to focus on our core capabilities, offerings and markets served," the filing says.
The loss recognized in the write-down of the Big 3 Mold business to fair value in the third quarter of 2024 was $19.2 million, net of tax, the filing also says.
Big3 has sites in Chesterfield Township, Mich., Holliston, Mass.; Millville, N.J.; and St. Jospeh, Mo., in addition to the Illinois headquarters, according to LinkedIn.
The mold division offers bottle producers IBM project validation and sampling on a variety of machines at its Massachusetts and New Jersey sites while ISBM project sampling and validation is done at the Illinois base, the company website says.
The mold business generated $9.6 million for the nine months ended Sept. 28, 2024, according to the quarterly filing. That was down from $11.4 million for the first nine months of 2023.
Overall, third-quarter sales for Eastern Co. increased 15 percent to $71.3 million from $62 million compared to the prior year.
For the first nine months of 2024, sales increased 6 percent to $206.1 million from $195.1 million compared to a year ago.
The uptick is primarily due to increased demand for returnable transport packaging products, truck mirror assemblies and truck accessories.
The company's backlog as of Sept. 28 increased 13 percent to $97.2 million from the prior year, primarily driven by $11.6 million of increased orders for various truck mirror assemblies and $3.2 million in orders for returnable transport packaging products.