Quarterly Report for Quarter Ending September 27, 2025 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion is intended to highlight significant changes in the financial position and results of operations of The Eastern Company (together with its consolidated subsidiaries, the "Company," "we," "us" or "our") for the three and nine months ended September 27, 2025. This Management's Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the Consolidated Financial Statements and Notes thereto for the fiscal year ended December 28, 2024 and the related Management's Discussion and Analysis of Financial Condition and Results of Operations, both of which are contained in the Company's Annual Report on Form 10-K for the fiscal year ended December 28, 2024, which was filed with the Securities and Exchange Commission (the "SEC") on March 11, 2025 (the "2024 Form 10-K").

The Company's fiscal year is a 52-53-week fiscal year ending on the Saturday nearest to December 31. References in this Quarterly Report on Form 10-Q for the quarterly period ended September 27, 2025 (this "Form 10-Q") to 2024, fiscal year 2024 or fiscal 2024 mean the 52-week period ended on December 28, 2024, and references to 2025, fiscal year 2025 or fiscal 2025 mean the 53-week period ending on January 3, 2026. In a 52-week fiscal year, each quarter has 13 weeks. In a 53-week fiscal year, the first three quarters each have 13 weeks, and the fourth quarter has 14 weeks. References to the third quarter of 2024, the third fiscal quarter of 2024 or the three months ended September 28, 2024 mean the 13-week period from June 30, 2024 to September 28, 2024. References to the third quarter of 2025, the third fiscal quarter of 2025 or the three months ended September 27, 2025 mean the 13-week period from June 29, 2025 to September 27, 2025. References to the first nine months of 2024 or the nine months ended September 28, 2024 mean the period from December 31, 2023 to September 28, 2024. References to the first nine months of 2025 or the nine months ended September 27, 2025 mean the period from December 29, 2024 to September 27, 2025.

Safe Harbor for Forward-Looking Statements

Statements contained in this Form 10-Q that are not based on historical facts are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. 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:

	·	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;
	·	the impact of tariffs, trade sanctions or political instability on the availability or cost of raw materials;
	·	the impact of higher raw material and component costs and cost inflation, supply chain disruptions and shortages, particularly with respect to steel, plastics, scrap iron, zinc, copper, and electronic components;
	·	delays in delivery of our products to our customers;
	·	the impact of global economic conditions and interest rates, and more specifically conditions in the automotive, construction, aerospace, energy, oil and gas, transportation, electronic, and general industrial markets, including the impact, length and degree of economic downturns on the customers and markets we serve and demand for our products, reductions in production levels, the availability, terms and cost of financing, including borrowings under credit arrangements or agreements, the potential impact of bank failures on our ability to access financing or capital markets, and the impact of market conditions on pension plan funded status;
	·	restrictions on operating flexibility imposed by the agreement governing our credit facility;
	·	the inability to achieve the savings expected from global sourcing of materials;
	·	lower-cost competition;
	·	our ability to design, introduce and sell new or updated products and related components;
	·	market acceptance of our products;
	·	the inability to attain expected benefits from acquisitions or the inability to effectively integrate acquired businesses and achieve expected synergies;
	·	costs and liabilities associated with environmental compliance;
	·	the impact of climate change, natural disasters, geopolitical events, and public health crises, including pandemics and epidemics, and any related Company or government policies or actions, including any potential adverse economic impacts resulting from the U.S. federal government shutdown;
	·	military conflict (including the Russia/Ukraine conflict, the conflict in the Middle East, the possible expansion of such conflicts and geopolitical consequences) or terrorist threats and the possible responses by the U.S. and foreign governments;
	·	failure to protect our intellectual property;
	·	cyberattacks; and
	·	materially adverse or unanticipated legal judgments, fines, penalties, or settlements.

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The Company is also subject to other risks identified and discussed in this Management's Discussion and Analysis of Financial Condition and Results of Operations, in Part I, Item 1A, Risk Factors, and in Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations, of the 2024 Form 10-K, 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.

Although the Company believes it has an appropriate business strategy and the resources necessary for its operations, future revenue and margin trends cannot be reliably predicted, and the Company may alter its business strategies to address changing conditions. Also, the Company makes estimates and assumptions that may materially affect reported amounts and disclosures. These relate to valuation allowances for accounts receivable and excess and obsolete inventories, accruals for pensions and other postretirement benefits (including forecasted future cost increases and returns on plan assets), provisions for depreciation (estimating useful lives), uncertain tax positions, and, on occasion, accruals for contingent losses. 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.

Recent Developments

On July 4, 2025, the One Big Beautiful Bill Act ("OBBBA") became law. Among other provisions, the OBBBA extends permanently, with modifications, tax provisions enacted as part of the 2017 Tax Cuts and Jobs Act and restores and makes permanent many business provisions, such as full expensing for research and development and capital investments. In addition, the OBBBA contains other new tax relief measures and various revenue raising measures. We are currently assessing the potential impact of the OBBBA on our business and financial results.

For the nine months ended September 27, 2025, we incurred approximately $7.0 million in tariff and tariff-related expenses. However, we have been able to mitigate most of the impact of the tariffs implemented through price increases. However, the tariff environment has been dynamic over the last several months, with changes occurring on an ongoing basis, and it is likely that additional developments will occur over the next several months, particularly as the U.S. continues to negotiate with trade partners. While the long-term effects remain uncertain, we continue to closely monitor the evolving tariff environment which presents a mix of impacts, such as higher pricing, as well as higher product and operating costs. See Part I, Item 1A, Risk Factors in the 2024 Form 10-K for a discussion regarding tariff-related risks.

On February 14, 2025, the Company acquired certain assets under asset and real estate purchase agreements from Centralia Industrial Painting, Inc. and Ronald R. Rainwater, respectively. These assets are held in our Big 3 Precision Products, Inc. ("Big 3") subsidiary. We expect the acquisition will enable the Company to become more competitive with respect to cost and quality of the products sold by Big 3.

In the third quarter of 2024, we determined that the Big 3 Mold business met the criteria to be held for sale and that the assets held for sale qualified for discontinued operations. As such, the financial results of the Big 3 Mold business are reflected in our unaudited condensed consolidated statements of operations as discontinued operations for all periods presented. Additionally, current and non-current assets and liabilities of discontinued operations are reflected in the unaudited condensed consolidated balance sheets for both periods presented. On April 30, 2025, the Company sold the equipment, workforce and customer list of the ISBM division of Big 3 Mold.

The following analysis excludes discontinued operations.

Net sales for the third quarter of 2025 decreased 22% to $55.3 million from $71.3 million in the corresponding period in 2024. Net sales for the first nine months of 2025 decreased 7% to $191.4 million from $206.1 million in the corresponding period in 2024. Sales decreased in the third quarter of 2025 primarily due to decreased shipments of returnable transport packaging products and truck mirror assemblies of $9.9 million and $6.4 million, respectively. Sales decreased in the first nine months of 2025 primarily due to decreased shipments of truck mirror assemblies and returnable transport packaging products of $13.4 million and $1.0 million, respectively. Our backlog as of September 27, 2025 decreased $23.6 million, or 24%, to $74.3 million from $97.2 million as of September 28, 2024, driven by decreased orders for returnable transport packaging products of $15.2 million and latch and handle assemblies of $4.7 million and truck mirror assemblies of $3.6 million.

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Net sales of existing products decreased 28.3% for the third quarter of 2025 and decreased 13.0% for the first nine months of 2025 compared to the corresponding periods in 2024. Price increases and new products increased net sales by 6.2% in the third quarter of 2025 and 6.2% in the first nine months of 2025 compared to the corresponding periods in 2024. New products included various truck mirror and latch assemblies .

Cost of products sold decreased $10.1 million, or 19%, for the third quarter of 2025 and $6.5 million, or 4%, for the first nine months of 2025 compared to the corresponding period in 2024 primarily due to lower sales volume. Additionally, the Company paid tariff costs on China-sourced products of approximately $4.0 million and $7.0 million in the third quarter and first nine months of 2025 respectively, compared to $0.6 million and $1.9 million in the third quarter and first nine months of 2024, respectively. Most tariffs on China-sourced products have been recovered through price increases.

Gross margin as a percentage of sales was 22.3% for the third quarter of 2025 and 22.9% for the first nine months of 2025 compared to 25.5% for the third quarter of 2024 and 25.2% for the first nine months of 2024. This decrease was primarily due to an increase in raw material costs incurred as we transitioned from customer-provided material to in-house sourcing on a mirror project, as well as the impact of reduced volumes.

Product development expenses decreased $0.1 million for the third quarter of 2025 and decreased $0.6 million for the first nine months of 2025 compared to the corresponding periods in 2024. As a percentage of net sales, product development costs were 1.6% and 1.8% for the first nine months of 2025 and 2024, respectively, as we continue to invest in new products at our businesses.

Selling, general and administrative expenses decreased $0.7 million, or 6.5%, for the third quarter of 2025 compared to the corresponding period in 2024 due to $1.1 million of lower compensation charges, offset by $0.3 million of restructuring charges. In connection with a reduction in workforce completed in the second quarter of 2025, the Company incurred aggregate charges of $2.2 million related to severance payments and other employee-related costs, and contract termination costs. Selling, general and administrative expenses increased $1.2 million in the first nine months of 2025 due to $2.2 million of restructuring charges and $0.6 million of commissions, offset by lower compensation costs of $1.5 million.

Interest expense decreased less than $0.1 million for both the third quarter of 2025 and the first nine months of 2025 compared to the corresponding periods in 2024 due to lower principal balances, offset by higher interest rates.

Other expenses, net increased $0.1 million for the third quarter of 2025 and $0.2 million in the first nine months of 2025 compared to the corresponding periods in 2024. The increases in the third quarter of 2025 is the result of lower lease income and the first nine months of 2025 is the result of lower lease income offset by gains on marketable equity securities.

Net income for the third quarter of fiscal 2025 was $0.6 million, or $0.10 per diluted share, compared to net income of $4.7 million, or $0.75 per diluted share, for the comparable period in 2024. For the first nine months of 2025, net income was $4.8 million, or $0.78 per diluted share, compared to $11.7 million, or $1.87 per diluted share, for the comparable period in 2024.

A more detailed analysis of the Company's results of operations and financial condition follows.

Results of Operations

The following table shows, for the periods indicated, selected line items from the condensed consolidated statements of operations as a percentage of net sales:

		Three Months Ended								Nine Months Ended
		September 27, 2025				September 28, 2024				September 27, 2025				September 28, 2024
Net sales			100.0	%			100.0	%			100.0	%			100.0	%
Cost of products sold			77.7	%			74.5	%			77.1	%			74.8	%
Gross margin			22.3	%			25.5	%			22.9	%			25.2	%
Product development expense			1.8	%			1.5	%			1.6	%			1.8	%
Selling and administrative expense			17.4	%			14.5	%			16.8	%			15.1	%
Operating Profit			3.1	%			9.5	%			4.5	%			8.3	%

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The following table shows the change in net sales and operating profit for the third quarter and first nine months of 2025 compared to the third quarter and first nine months of 2024 (dollars in thousands):

		Three Months				Nine Months
		Ended				Ended
		September 27, 2025				September 27, 2025
Net Sales		$	(15,938	)		$	(14,631	)
Volume			(28.5	)%			(13.3	)%
Price			0.2	%			0.3	%
New products			6.0	%			5.9	%
			(22.3	)%			(7.1	)%
Operating Profit		$	(5,072	)		$	(8,647	)

Liquidity and Sources of Capital

The Company generated $5.0 million of cash from operations during the first nine months of fiscal 2025 compared to generating $8.3 million during the first nine months of fiscal 2024. Cash flow from operations in the first nine months of 2025 was lower due to lower income from operations and higher payments of accounts payable offset by collections of receivables.

Additions to property, plant, and equipment were $1.6 million and $7.6 million for the first nine months of 2025 and 2024, respectively. As of September 27, 2025, there were approximately $1.2 million of outstanding commitments for capital expenditures.

The following table shows key financial ratios at the end of each specified period:

		Third Quarter 2025				Third Quarter 2024				Fiscal Year 2024
Current Ratio			3.0				2.6				2.6
Average days' sales in accounts receivables			43				62				48
Inventory Turnover			3.5				3.8				3.7
Total debt to shareholders' equity			28.4	%			37.5	%			37.9	%

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The following table shows important liquidity measures as of the balance sheet date for each specified period or for the period, as applicable (in millions):

		September 27, 2025				September 28, 2024				December 28, 2024
Held in the United States		$	7.4			$	5.9			$	12.4
Held by a foreign subsidiary			1.8				1.7				1.6
		$	9.2			$	7.6			$	14.0

		Nine months ended September 27, 2025				Nine months ended September 28, 2024				Fiscal Year Ended December 28, 2024
Working capital		$	66.9			$	78.2			$	67.9
Net cash provided by operating activities			5.0				8.3				19.4
Change in working capital impact on net cash provided by operating activities			(4.7	)			(8.2	)			4.9
Net cash provided by (used in) investing activities			1.8				(8.1	)			(7.9	)
Net cash used in financing activities			(12.6	)			(0.5	)			(4.8	)

Inventories of $56.8 million as of September 27, 2025 increased by $1.6 million, or 2.8%, when compared to $55.2 million at the end of fiscal year 2024 and decreased $1.3 million, or 2.2%, when compared to $58.1 million at the end of the third quarter of fiscal 2024. Accounts receivable, less allowances, were $30.0 million at September 27, 2025, as compared to $35.5 million at December 29, 2024 and $46.0 million at September 28, 2024.

On October 28, 2025, the Company entered into a credit agreement with the lenders from time to time party thereto, Citizens Bank, N.A., as the administrative agent, as an LC issuer, and as the swing line lender (the "Citizens Credit Agreement"). The Citizens Credit Agreement replaces the Company's prior credit facility with TD Bank, N.A. ("TD Bank"), which was repaid using borrowings under the Citizens Credit Agreement and terminated on October 28, 2025. See Note H, Debt, for additional information regarding the terms of the prior credit facility with TD Bank. The Citizens Credit Agreement establishes a new $100 million five-year unsecured revolving credit facility and provides for the extension of credit to the Company in the form of revolving loans, swing line loans and letters of credit, at any time and from time to time during the term of the Citizens Credit Agreement. See Note H, Debt, for additional information regarding the terms of the Citizens Credit Agreement, including repayment terms, interest rates, and applicable loan covenants. Under the terms of the Citizens Credit Agreement, the Company is subject to restrictive covenants that limit our ability to, among other things, incur additional indebtedness, pay dividends, or make other distributions, and consolidate, merge, sell or otherwise dispose of assets, as well as financial covenants that require us to maintain a maximum senior net leverage ratio and a minimum interest coverage ratio. These covenants may limit how we conduct our business, and in the event of certain defaults, our repayment obligations may be accelerated.

The Company was in compliance with all its covenants under its prior credit facility with TD Bank on September 27, 2025 and through the date of such termination. In addition, the Company was in compliance with all its covenants under the Citizens Credit Agreement at all times from entry into the Citizens Credit Agreement through the date of filing this Form 10-Q. The Company has $64 million available on its line of credit under the Citizens Credit Agreement as of the date of filing this Form 10-Q.

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Cash, cash flow from operating activities and funds available under the revolving credit portion of the Credit Agreement are expected to be sufficient to cover future foreseeable working capital requirements in the short-term (i.e., the next 12 months from September 27, 2025) and separately in the long-term (i.e., beyond the next 12 months). However, the Company cannot provide any assurances of the availability of future financing or the terms on which it might be available. In addition, the interest rate on borrowings under the Credit Agreement varies based on our senior net leverage ratio, and the Credit Agreement requires us to maintain a senior net leverage ratio not to exceed 3.50 to 1 and a fixed charge coverage ratio to be not less than 1.25 to 1. A decrease in earnings due to the impact of current economic conditions and inflationary pressures or the resulting harm to the financial condition of our customers, or an increase in indebtedness incurred to offset such a decrease in earnings, would have a negative impact on our senior net leverage ratio and our fixed charge coverage ratio, which in turn would increase the cost of borrowing under the Credit Agreement and could cause us to fail to comply with the covenants under our Credit Agreement.

In addition to funding capital requirements, we may use available cash to pay down our indebtedness, to make investments, which may include investments in publicly traded securities, or to make acquisitions that we believe will complement or expand our existing businesses.

As of the end of the third quarter of 2025, the Company does not have any off-balance sheet arrangements that have or are reasonably likely to have a material current or future effect on the Company's financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Critical Accounting Estimates

The preparation of financial statements in accordance with accounting principles generally accepted in the United States ("U.S. GAAP") requires management to make judgments, estimates and assumptions regarding uncertainties that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses. For a full description of our critical accounting estimates, refer to Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations of the 2024 Form 10-K. While there have been no material changes to our critical accounting estimates since the filing of the 2024 Form 10-K, we continue to monitor the methodologies and assumptions underlying such critical accounting estimates.

Non-GAAP Financial Measures

The non-GAAP financial measures we provide in this report should be viewed in addition to, and not as an alternative for, results prepared in accordance with U.S. GAAP.

To supplement the condensed consolidated financial statements prepared in accordance with U.S. GAAP, we have presented Adjusted Net Income from Continuing Operations, Adjusted Earnings Per Share from Continuing Operations, Adjusted EBITDA from Continuing Operations, Adjusted EBITDA from Discontinued Operations and Adjusted EBITDA, which are considered non-GAAP financial measures. The non-GAAP financial measures presented may differ from similarly titled non-GAAP financial measures presented by other companies, and other companies may not define these non-GAAP financial measures in the same way. These measures are not substitutes for their comparable U.S. GAAP financial measures, such as net income from continuing operations, diluted earnings per share from continuing operations, net (loss) income from discontinued operations, net income (loss) or other measures prescribed by U.S. GAAP, and there are limitations to using non-GAAP financial measures.

Adjusted Net Income from Continuing Operations is defined as net income from continuing operations excluding, when incurred, gains or losses that we do not believe reflect our ongoing operations, including, for example, the impacts of impairment losses, gains/losses on the sale of subsidiaries, property and facilities, transaction expenses primarily relating to acquisitions and divestitures, factory start-up costs, factory relocation expenses, executive severance, and restructuring costs. Adjusted Net Income from Continuing Operations is a tool that can assist management and investors in comparing our performance on a consistent basis across periods by removing the impact of certain items that management believes do not directly reflect our underlying operating performance.

Adjusted Earnings Per Share from Continuing Operations is defined as earnings per share from continuing operations excluding, when incurred, certain per share gains or losses that we do not believe reflect our ongoing operations, including, for example, the impacts of impairment losses, gains/losses on the sale of subsidiaries, property and facilities, transaction expenses primarily relating to acquisitions and divestitures, factory start-up costs, factory relocation expenses, executive severance, and restructuring costs. We believe that Adjusted Earnings Per Share from Continuing Operations provides important comparability of underlying operational results, allowing investors and management to access operating performance on a consistent basis from period to period.

Adjusted EBITDA from Continuing Operations is defined as net income from continuing operations before interest expense, provision for income taxes, and depreciation and amortization and excluding, when incurred, the impacts of certain losses or gains that we do not believe reflect our ongoing operations, including, for example, impairment losses, gains/losses on sale of subsidiaries, property and facilities, transaction expenses primarily relating to acquisitions and divestitures, factory start-up costs, factory relocation expenses, executive severance, and restructuring expenses. Adjusted EBITDA from Continuing Operations is a tool that can assist management and investors in comparing our performance on a consistent basis by removing the impact of certain items that management believes do not directly reflect our underlying operations.

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Adjusted EBITDA from Discontinued Operations is defined as net income from discontinued operations before interest expense, provision for income taxes, and depreciation and amortization and excluding, when incurred, the impacts of certain losses or gains that we do not believe reflect our ongoing operations, including, for example, impairment losses, gains/losses on sale of subsidiaries, property and facilities, transaction expenses primarily relating to acquisitions and divestitures, factory start-up costs, factory relocation expenses, executive severance, and restructuring expenses. Adjusted EBITDA from Discontinued Operations is a tool that can assist management and investors in comparing our performance on a consistent basis by removing the impact of certain items that management believes do not directly reflect our underlying operations.

Adjusted EBITDA is defined as net income before interest expense, provision for income taxes, and depreciation and amortization and excluding, when incurred, the impacts of certain losses or gains that we do not believe reflect our ongoing operations, including, for example, impairment losses, gains/losses on sale of subsidiaries, property and facilities, transaction expenses primarily relating to acquisitions and divestitures, factory start-up costs, factory relocation expenses, executive severance, and restructuring expenses. Adjusted EBITDA is a tool that can assist management and investors in comparing our performance on a consistent basis by removing the impact of certain items that management believes do not directly reflect our underlying operations.

Management uses such measures to evaluate performance period over period, to analyze the underlying trends in our business, to assess our performance relative to our competitors, and to establish operational goals and forecasts that are used in allocating resources. These financial measures should not be considered in isolation from, or as a replacement for, U.S. GAAP financial measures.

We believe that presenting non-GAAP financial measures in addition to U.S. GAAP financial measures provides investors greater transparency to the information used by our management for its financial and operational decision-making. We further believe that providing this information better enables our investors to understand our operating performance and to evaluate the methodology used by management to evaluate and measure such performance.

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Reconciliation of Non-GAAP Measures
Adjusted Net Income from Continuing Operations and Adjusted Earnings per Share
from Continuing Operations Calculation
For the Three and Nine Months ended September 27, 2025 and September 28, 2024
($000's)
		Three Months Ended								Nine Months Ended
		September 27, 2025				September 28, 2024				September 27, 2025				September 28, 2024
Net income from continuing operations as reported per generally accepted accounting principles (GAAP)		$	579			$	4,669			$	4,782			$	11,676
Earnings per share from continuing operations as reported under GAAP:
Basic		$	0.10			$	0.75			$	0.78			$	1.88
Diluted		$	0.10			$	0.75			$	0.78			$	1.87
Adjustments:
Restructuring			285	(a)			-				2,172	(a)			-
Non-GAAP tax impact of adjustments (b)			(60	)			-				(459	)			-
Total adjustments (Non-GAAP)		$	225			$	-			$	1,713			$	-
Adjusted net income from continuing operations (Non-GAAP)		$	804			$	4,669			$	6,495			$	11,676
Adjusted earnings per share from continuing operations (Non-GAAP):
Basic		$	0.13			$	0.75			$	1.06			$	1.88
Diluted		$	0.13			$	0.75			$	1.06			$	1.87

(a)	Consists of personnel related and facility costs
(b)	We estimate the tax effect of the items identified to determine a non-GAAP annual effective tax rate applied to the pre-tax amount in order to calculate the non-GAAP provision for income taxes

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Reconciliation of Non-GAAP Measures
Adjusted EBITDA from Continuing Operations Calculation
For the Three and Nine Months ended September 27, 2025 and September 28, 2024
($000's)
		Three Months Ended								Nine Months Ended
		September 27, 2025				September 28, 2024				September 27, 2025				September 28, 2024
Net income from continuing operations as reported per generally accepted accounting principles (GAAP)		$	579			$	4,669			$	4,782			$	11,676
Interest expense			688				710				2,019				2,050
Provision for income taxes			298				1,334				1,422				3,335
Depreciation and amortization			1,633				2,033				4,847				4,266
Severance and accrued compensation			285	(a)			-				2,172	(a)			-
Adjusted EBITDA from continuing operations (Non-GAAP)		$	3,483			$	8,745			$	15,242			$	21,327

(a)	Consists of personnel related and facility costs

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