Servotronics, Inc. Announces Second Quarter and Six Month Results for the Periods Ended June 30, 2011
ELMA, N.Y., Aug. 12, 2011 /PRNewswire/ -- Servotronics, Inc. (NYSE Amex: SVT) reported that net income for the second quarter ended June 30, 2011 showed a significant increase when compared to the net income for the first quarter ended March 31, 2011. The net income for the second quarter ended June 30, 2011 increased approximately 70% to $716,000 (or $0.36 per share Basic and $0.34 Diluted) on revenues of $8,413,000 as compared to the reported net income of $418,000 (or $0.21 per share Basic, $0.19 per share Diluted) on revenues of $8,275,000 for the first quarter ended March 31, 2011. The net income for the three month period ended June 30, 2011, was reported at $716,000 (or $0.36 per share Basic, $0.34 per share Diluted) on revenues of $8,413,000 as compared to net income for the same three month period ended June 30, 2010 of $778,000 (or $0.40 per share Basic, $0.37 per share Diluted) on revenues of $8,203,000. Net income for the six month period ended June 30, 2011 was reported at $1,134,000 (or $0.57 per share Basic, $0.54 per share Diluted) on revenues of $16,688,000 as compared to net income for the same six month period ended June 30, 2010 of $1,401,000 (or $0.71 per share Basic, $0.66 per share Diluted) on revenues of $16,087,000. The Company primarily attributes the 2011 increase in revenues to increased shipments at the Company's Advanced Technology Group (ATG) partially offset by decreased shipments at the Company's Consumer Products Group (CPG). The resulting variations in net income represent a combination of product mix and the write-off of start-up costs related to new product lines/products primarily at the CPG.
Government procurements are expected to continue to be volatile and may result in significant period to period product delivery variances at the CPG and, to a lesser degree, at the ATG. The Company's aggressive marketing efforts are enhanced by ongoing product developments at both the ATG and the CPG. The Company continues to expand its capabilities in both the domestic and foreign markets by adding product lines, new products and resources to the Company's inventory of skills and expertise while simultaneously evaluating operational consolidation alternatives. The Company's current product developments, expanded capabilities and a self-sustaining global economy are expected to be beneficial to the Company's operations and the formation of a larger Company foundation for future growth.
Aircraft component suppliers such as Servotronics have been customer advised to increase their manufacturing capabilities to support the forecasted increases in aircraft production. Although certain economists are stating that the current recession is in a recovery mode that may have the potential to be self-sustainable, they are also cautioning that the economy is subject to inflationary pressures that result from the substantial U.S. Government increases in the money supply that were originally intended to support and stimulate the economy. In addition, it is difficult to predict with any certainty when governments of the world and their respective economies will be sufficiently stable to support self-sustaining, positive economic conditions.
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, 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 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
SOURCE Servotronics, Inc.
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