Servotronics Announces First Quarter Results
1110 Maple Street ¨ P.O. Box 300 ¨ Elma, New York 14059-0300 ¨ 716-655-5990 ¨ FAX 716-655-6012
May 15, 2002
SERVOTRONICS, INC. (AMEX-SVT)
ANNOUNCES FIRST QUARTER RESULTS
Elma, NY — Servotronics, Inc. (Amex – SVT) reported a net income of $106,000 (or $0.06 per share – Basic and Diluted) on revenue of $3,834,000 for the quarter ended March 31, 2002 as compared to net income of $122,000 (or $0.06 per share – Basic and Diluted) on revenue of $4,482,000 for the comparable period ended March 31, 2001. This approximate 13% decrease in net income in 2002 is attributable to an overall decrease in sales revenue of approximately 14%. Nonetheless, the net income for the first quarter of 2002 represents an approximate 60% increase in net income when compared to the first quarter of 2000 and the continuation of an overall six year positive trend. The 2002 first quarter decrease in revenue is the result of the reduction and stretch-outs in commercial aircraft production and decreased demand in other commercial markets, partially offset by an approximate 19% growth in government and defense revenue when comparing the quarter ended March 31, 2002 to the comparable period of 2001. The actual decrease in commercial aircraft production resulting from the events of 9/11/01 is consistent with earlier reports from Boeing and BAE.
The Advanced Technology Group’s funded backlog as of March 31, 2002 continues to be strong and the Company is expecting an increase in purchase orders for the second quarter of 2002 as compared to the first quarter of 2002. Notwithstanding the positive indicators, it is generally recognized that the events of 9/11/01 have had a significant negative impact on the U.S. and global economies which is being offset or partially offset by increases in government and defense spending. Therefore, while the Company is optimistic, it is unable to predict or quantify with certainty the net effect that these events will have on the Company. However, the Company has a long successful history of expanding capabilities which are often enhanced by the cyclical nature of the aerospace and defense industries.
Servotronics, Inc. is currently providing products for a significant number of aerospace programs such as the F/A-18 E/F Super Hornet and other jet fighters; the Bell/Boeing MV-22 Osprey Tiltrotor, Joint Service Aircraft, the Blackhawk, Apache, A-10 and other helicopters, the Standard Missile, numerous business and regional jet aircraft, Raytheon’s Hawker Horizon Aircraft, Embraer new TwinTurbo Fan aircraft, the Airbus and Boeing commercial aircraft, DeHavilland DHC8-40 and various other programs.
Servotronics, Inc, is composed of two operating groups – the Advanced Technology Group and the Consumer Products Group. The Advanced Technology Group designs, develops and manufactures servo control and other components for various commercial and government applications (i.e., aircraft, jet engines, missiles, satellite launch vehicles, etc.). The Consumer Products Group designs and manufactures sporting knives, cutlery, bayonets and machetes for both commercial and government applications.
Certain paragraphs of this release contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, such as those pertaining to the Company’s expectation of new business and success in its entry into new product programs. Forward-looking statements involve numerous risks and uncertainties. The Company derives a material portion of its revenue from contracts with agencies of the U.S. Government or their prime contractors. The Company’s business is performed under fixed price contracts and the following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements: uncertainties in today’s global economy and global competition, difficulty in predicting defense appropriations, the vitality and ability of the commercial aviation industry to purchase new aircraft, the willingness and ability of the Company’s customers to fund long-term purchase programs, and market demand and acceptance both for the Company’s products and its customers’ products which incorporate Company-made components. The success of the Company also depends upon the trends that affect the national and international economy. Readers are cautioned not to place undue reliance on forward-looking statements, which reflect management’s analysis only as of the date hereof. The Company assumes no obligation to update forward-looking statements.
SERVOTRONICS, INC. (SVT) IS LISTED ON NYSE Amex