Servotronics, Inc. Announces 2019 Operating Results
Servotronics, Inc. (NYSE American – SVT) a designer and manufacturer of servo-control components and other advanced technology products announced today the results of its operations for the year ended December 31, 2019.
Net income for year ended December 31, 2019 was $2,109,000 (or $0.91 per share Basic and $0.88 Diluted) on consolidated revenues of $55,272,000 as compared to net income for the same period of 2018 of $3,498,000 (or $1.54 per share Basic and $1.49 Diluted) on revenues of $47,857,000.
Gross margin for 2019 was $12,126,000, or 21.9% of revenue, compared with $12,085,000, or 25.3% of revenue for 2018. The gross margin as a percentage of revenue decreased at both the ATG and CPG. The decrease at the ATG is primarily due to the write down of inventory, an increase in indirect labor, employee benefits, transportation and tooling, offset by overhead liquidation. The decrease at the CPG is primarily attributed to a reduction in revenue and lower factory utilization. In terms of dollar value, the Company's consolidated gross margin increased slightly by approximately $41,000 or 0.3% for the year ended December 31, 2019 when compared to the same period in 2018.
"2019 was our sixth consecutive year of revenue growth reflecting our strategy to build long-term, sustainable and steady growth," said Kenneth D. Trbovich, CEO and Chairman of the Board. "While our gross margin saw a slight improvement in 2019, we remain focused on improving our margins as a percentage of revenues by focusing on our product mix and by investing in technological improvements and our workforce. 2020 will certainly be a challenging year for all of us as we deal with the uncertainty of the COVID-19 pandemic. I want to thank our valued employees and suppliers for their efforts in implementing our business continuity plan as we continue to support the United States defense and critical infrastructure sectors."
The Company is composed of two groups – the ATG and the CPG. The ATG primarily designs, develops and manufactures servo controls and other components for various commercial and government applications (i.e., aircraft, jet engines, missiles, manufacturing equipment, etc.). The CPG designs and manufactures cutlery, bayonets, pocket knives, machetes and combat knives, survival, sporting, agricultural knives and other edged products for both commercial and government applications.
FORWARD-LOOKING STATEMENTS
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 planned growth efforts and 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 fixed price contracts with agencies of the U.S. Government or their prime contractors. 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, including political risks, adverse changes in legal and regulatory environments, and difficulty in predicting defense appropriations, the introduction of new technologies and the impact of competitive products. the vitality of the commercial aviation industry and its ability 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 Company's ability to accurately align capacity with demand, the availability of financing and changes in interest rates, the outcome of pending and potential litigation and the additional risks discussed in the Company's filings with the Securities and Exchange Commission. 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, whether as a result of new information, future events or otherwise.
SERVOTRONICS, INC. (SVT) IS LISTED ON NYSE American
SOURCE Servotronics, Inc.