2003 Annual Meeting Report
1110 Maple Street ¨ P.O. Box 300 ¨ Elma, New York 14059-0300 ¨ 716-655-5990 ¨ FAX 716-655-6012
July 3, 2003
SERVOTRONICS, INC. (AMEX-SVT)
Servotronics, Inc.’s Chairman and President, Dr. Nicholas D. Trbovich, reviewed the Company’s operations and financial performance in 2002 within the context of the current depressed commercial aviation industry, the general economy and a recently completed strong report on the long-term future of the U.S. Aerospace Industry. He noted that although the Company reported a net loss of $229,000 for 2002, the Company had a 48% year-to-year increase in positive Cash Flow – from $626,000 to $924,000 and its Current Ratio improved to 6.36 to 1 from 4.88 to 1 and Working Capital continues strong at over 10 million dollars. The Financial Report for the year 2002 was previously publicly reported.
It was reported that the Company’s development of new products, new applications and the penetration of new markets in conjunction with its M & A evaluations create significant front-end costs that are expensed immediately. However, the resulting anticipated long-term benefits are cumulative and form the foundation for the Company’s future.
A recently completed report that was commissioned by Congress to study and evaluate the future of the Aerospace Industry stated that, “For this nation to maintain its present proud heritage and leadership in the global arena, we must remain dedicated to a strong and prosperous Aerospace Industry.” Also, Dr. Trbovich noted that the forecasted upturn in orders for commercial jetliners in 2004, the long-term strength and recommended increased support for the U.S. Aerospace Industry, the continuing growth of selected military and government procurements, the development of new products, applications and markets all combine to generate confidence for the future – and for Servotronics.
Also reviewed were the substantial efforts of the Consumer Products Group (CPG) to become the designer and dominant supplier for certain special purpose military and government knives. The CPG’s most recent success in this area is the previously announced U.S. Marine Corps’ new combination combat knife and bayonet, scheduled for production deliveries in the last half of 2003 and all of 2004. The U.S. Marine Corps’ requirements for this new bayonet system have resulted in approximately $4,000,000 in purchase orders to date.
Re-elected as Company Directors at the meeting were Dr. Nicholas D. Trbovich, Donald W. Hedges, Dr. William H. Duerig, and Nicholas D. Trbovich, Jr.
Servotronics’ 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.). Its Consumer Products Group designs and manufactures cutlery, bayonets, machetes and combat, survival, sporting, agriculture, and pocket knives 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