ELMA, N.Y., Nov. 14, 2019 /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 September 30, 2019.
Revenues for the quarter were $12,362,000, approximately a (3.2) % decrease from $12,768,000 for the same period in 2018. The decrease in revenue is the result of decreases in commercial and government shipments at the CPG. This is partially offset by an increase in commercial and government shipments at the ATG.
Net income was $1,132,000 (or $0.49 per share Basic and $0.47 Diluted) for the third quarter ended September 30, 2019 compared to net income of $1,457,000 (or $0.63 per share Basic and $0.61 Diluted) for the comparable period ended September 30, 2018. This decrease is primarily the result of decreases in gross margin at the CPG and increases in selling, general and administrative expenses at the ATG.
"The beginning of the third quarter saw the switch over to our new ERP system and, as anticipated, we experienced the short-term effects that come with such a substantial change to our systems," noted Kenneth D. Trbovich, CEO and Chairman of the Board. "Our team worked closely with customers and vendors to minimize disruptions during the transition and we quickly returned to normal operations and expect to continue to realize the benefits of the new system through improved information flow and operating efficiencies. We believe that our investment in technology complements our investment in our people as we continue to pursue our employee hiring initiative which is designed to match the growing demand for our products. We are enthusiastic about the prospects of our company and remain focused on our ongoing strategy to invest in technologies and capabilities that we believe will drive growth."
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 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