ELMA, N.Y., May 14, 2021 /PRNewswire/ — 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 quarter ended March 31, 2021.
“The aviation industry continues to be impacted by COVID-19,” said Kenneth D. Trbovich, CEO and Chairman of the Board. “The deferral of customer orders at the ATG resulted in a decline in revenue for the first quarter of 2021. While the economic outlook for the remainder of 2021 remains uncertain, we continue to adjust our operations while seeking to retain our skilled employees that we believe will be critical to our success as business conditions normalize.”
In the first quarter of 2021, Servotronics reported net income of $541,000 (or $0.23 per share Basic and $0.22 Diluted) on consolidated revenues of $9,060,000 as compared to net income of $1,898,000 (or $0.80 per share Basic and $0.79 Diluted) on revenues of $15,448 for the comparable period ended March 31, 2020.
The decrease in revenue for the three month period ended in March 31, 2021 when compared to the same three month period ended March 31, 2020 is attributable to a decrease in units shipped at the ATG of approximately $7,055,000 offset slightly by an increase in price/mix of units shipped of approximately $464,000. Additionally, there was an increase in shipments at the CPG of approximately $149,000 and an increase of approximately $54,000 in price/mix of units shipped as compared to the same period ended March 31, 2020.
Net income at the ATG was lower by approximately $1,470,000 while the net loss at the CPG decreased by approximately $113,000. The consolidated decrease in net income is primarily the result of decreases in revenue partially offset by the employee retention credit and decreases in selling, general and administrative expenses.
As permitted under the Coronavirus Aid, Relief, and Economic Security Act, the Company recognized a $1,730,000 employee retention credit (ERC) during the quarter ended March 31, 2021. The ERC is a refundable tax credit against certain employment taxes and is recognized in other income.
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.
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 capital resources and profitability, the severity, magnitude and duration of the COVID-19 pandemic, including impacts of the pandemic and of businesses’ and governments’ responses to the pandemic on the Company’s operations and personnel, and on commercial activity and demand across the Company’s and its customers’ businesses, and on global supply chains; and the Company’s inability to predict the extent to which the COVID-19 pandemic and related impacts will continue to adversely impact our business operations. 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.
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