Servotronics, Inc. Announces Year End Income And Revenues
ELMA, N.Y., April 1 /PRNewswire-FirstCall/ -- Servotronics, Inc. (NYSE Amex: SVT) reported net income of $1,903,000 (or $0.98 per share Basic and $0.92 Diluted) on revenues of $33,008,000 for the fiscal year ended December 31, 2009 as compared to net income and revenues for the fiscal year ended December 31, 2008 of $3,055,000 (or $1.58 per share Basic and $1.45 Diluted) and $34,170,000 respectively. The Company primarily attributes the period to period differences in net income to recession driven decreased sales at the Advanced Technology Group (ATG) that were not fully offset by increased sales at the Consumer Products Group (CPG) in combination with significant gross margin vagaries as a result of product mix in the relevant periods and the significant implementation costs to meet the Sarbanes-Oxley, Section 404 (SOX 404) requirements which are scheduled to be effective in 2010 for companies of our size.
The 2009 reduction in reported net income reflects the adverse effects of the current Global recession and the Aerospace industry-wide stretch-outs of commercial aircraft deliveries. Notwithstanding the reported reduction in year to year net income, the net income for 2009 was the 3rd highest net income reported by Servotronics during the past 25 years. Also, the 2009 reported net income was approximately 50% higher than the reported net income for the Company's 4th best year during the same 25 year period. The Company's 3 best years, as measured by net income during the past 25 years, occurred during the last 3 years (i.e., 2009, 2008 and 2007). Also encouraging is that certain major manufacturers of commercial aircraft have publicly announced that they have initiated plans to ramp up production to support forecasted increases in aircraft deliveries in late 2010, 2011 and 2012. Aircraft component suppliers are being advised to increase their capacity to support this accelerated aircraft production forecast. A Global economic recession will often bring companies with strong operational histories and balance sheets to the forefront. It is at such times that our Company's ability to convert challenges to opportunities becomes more apparent and important. The Aerospace Industry Association's report issued in December 2009 was cautiously optimistic and confident in the future of Aerospace.
Government procurements are expected to continue to be volatile and may result in significant period to period revenue fluctuations. The Company's marketing efforts continue to be enhanced by ongoing product developments at both the ATG and the CPG. The Company recently expanded its capabilities in its continuing efforts to add product lines and resources to the Company's inventory of skills and product offerings. The Company's many ATG products that are in a wide range of programs are expected to benefit from a recovering Global economy. The CPG's product developments and expanded capabilities have led to significant government procurements and the expansion of the CPG's product line.
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