2004 Annual Meeting Report
1110 Maple Street ¨ P.O. Box 300 ¨ Elma, New York 14059-0300 ¨ 716-655-5990 ¨ FAX 716-655-6012
July 2, 2004
SERVOTRONICS, INC. (AMEX-SVT) ANNUAL MEETING REPORT
Servotronics, Inc.’s annual meeting was held in Buffalo, New York on Friday, July 2, 2004. The Company’s current successes were reviewed and presented. It was noted that the adverse effects of the events of 9/11 have been substantially mitigated and year to year total revenues increased by 12.6% to $17,574,000 for the year ended 12/31/03 as compared to $15,607,000 a year earlier. The Company had reported net income of $254,000 for 2003 and an over 45% increase in year to year cash flow from operations for the second consecutive year. The cash flow in 2003 was $1,353,000 as compared to $924,000 in 2002 and $626,000 in 2001. Cash on hand increased approximately 122% to $1,506,000 from $679,000 a year earlier while institutional debt was reduced. These positive results were primarily attributed to the successful replacement of lost 9/11 related revenues, productivity improvements, cost containment activities and production realization of previous engineering and marketing efforts.
A significant increase in new orders during the first 6 months of 2004 was reported. The dollar value of new purchase orders for the Advanced Technology Group (ATG) during this period exceeded the total dollar value of all the ATG’s purchase orders that were received during the full 12 month period in 2003. Also reported was a continuing strong backlog in the Company’s Consumer Products Group (CPG) as a result of purchase orders from the government for combat knives, bayonets and other specialty cutlery products.
The current upward trend in commercial jetliner production in conjunction with the increasing Department of Defense budget were cited as positive developments for Servotronics’ business outlook. The Company’s continued successful prototype and development efforts were reviewed with specific mention being made of certain development hardware for the Joint Strike Fighter and other prototype components for use on auxiliary power units, main engine fuel controls, environmental controls and other applications ranging from industrial manufacturing equipment and vibration damping to an air turbine starter and various actuator controls. The Company’s products are used in such programs, but not limited to, the Airbus A380 (and other Airbus 300 Series aircraft), the 700 Series of Boeing aircraft, various helicopter applications, the F-18 and other jet fighters, various business aircraft and a number of Pratt & Whitney and Rolls Royce jet engines. Also, the CPG is the exclusive supplier of the U. S. Marine Corps new design combat knife/bayonet, and has various special purpose knives under development for other military branches.
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