1110 Maple Street
Post Office Box 300
Elma, New York 14059

2005 Annual Meeting Report

1110 Maple Street ¨ P.O. Box 300 ¨ Elma, New York 14059-0300 ¨ 716-655-5990 ¨ FAX 716-655-6012

July 1, 2005


Servotronics, Inc.’s annual meeting was held in Buffalo, New York on Friday, July 1, 2005 . The Company’s current status and progress were reviewed and presented. The year 2004 was one of significant progress. Revenue and net income for the year ended December 31, 2004 increased by 26% and 190% respectively when compared to the Company’s financial performance in 2003. Revenues for 2004 were $22,113,000 with a net income of $734,000 (or 0.36 per share basic, 0.35 per share diluted) as compared to revenues of $17,574,000 with a net income of $254,000 (or 0.13 per share – basic and diluted) for 2003. Working capital at December 31, 2004 increased to approximately $12,100,000. The Current Ratio is 6.5 to 1. The Quick Ratio is 2.47 to 1 and year-to-year cash on hand increased approximately 40% from $1,506,000 to over $2,100,000. The significant year to year improvement in performance was the result of a broad range of cost containment and cost reduction activities in conjunction with the production realization of certain development efforts and the expansion of marketing activities.

As previously reported, the Company has entered into multi-year agreements with certain of its customers. More recently, Servotronics, after an intensive competitive evaluation and operational audit negotiated a 5 year exclusive agreement for certain control products that are being used in the Standard Missile Program. The first year release against this agreement amounted to over $2,400,000. A minimum of another (4) four annual buys are expected to be issued. Servotronics’ control products are now being used in a wide range of applications such as equipment for eye surgery, semi-conductor manufacturing equipment and an increasing number of new aircraft, jet engine and aerospace applications.

Servotronics exhibited at the Paris International Air Show where the current upward trend in commercial jetliner development and production in conjunction with continued growth in aerospace purchases by the Department of Defense were clearly evident. These are positive indicators for the future and for the Company and its Advanced Technology Group’s continuing strong backlog. The Company’s products are used in such programs as the Airbus A380 (and other Airbus 300 Series aircraft), the newest model of the Boeing 777 and the Boeing 787 Dreamliner aircraft (and other Boeing 700 Series aircraft), various helicopter applications, the F-35, F-18 and other jet fighters, various business aircraft, a number of Pratt & Whitney and Rolls Royce jet engines and other aerospace and non-aerospace applications.

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.