Servotronics, Inc. Announces 6 Month and 2nd Quarter Results
1110 Maple Street ¨ P.O. Box 300 ¨ Elma, New York 14059-0300 ¨ 716-655-5990 ¨ FAX 716-655-6012
August 14, 2002
SERVOTRONICS, INC. (AMEX-SVT)
ANNOUNCES 6 MONTH AND 2nd QUARTER RESULTS
Elma, NY — Servotronics, Inc. (Amex – SVT) reported second quarter net income of $133,000 (or $0.07 per share – Basic and Diluted) on revenue of $4,300,000 as compared to net income of $214,000 (or $0.11 per share – Basic and Diluted) on revenue of $4,714,000 for the same period in 2001. Net income for the six month period ended June 30, 2002 was $239,000 (or $0.13 per share – Basic and $0.12 – Diluted) on revenue of $8,134,000 as compared to net income of $336,000 (or $0.18 per share – Basic and Diluted) on revenue of $9,196,000 for the same period in 2001. As previously reported, the decrease in revenue is primarily the result of the reduction and delivery stretch-outs in commercial aircraft and component production caused by the events of 9/11/01, continuing terrorist threats and an economic recession. This reduction in revenue directly results in the Company’s fixed costs becoming a larger portion of total revenue and thereby is adversely affecting net income at this time. Currently, increases in government related sales are partially offsetting the decrease in the Company’s commercial aerospace revenue. The government related sales are now 24% of total revenue in 2002 as compared to 18% for the comparable period in 2001.
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 at least partially offset by increases in government and defense spending. Therefore, while the Company is optimistic, it is unable to precisely quantify with certainty the net long term effect that these events will have on the Company. However, the Company has a long successful history of improving its capabilities and successfully moving forward notwithstanding the cyclical nature of the aerospace industry, recessions or other adverse circumstances.
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