ELMA, N.Y., April 6, 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 year ended
December 31, 2020.
Net income for year ended December 31,
2020 was $100,000 (or
$0.04 per share Basic and Diluted) on
consolidated revenues of $49,844,000
as compared to net income for the year ended
December 31, 2019 of $2,447,000 (or $1.05 per share Basic and $1.03 Diluted) on revenues of $55,272,000.
Gross margin for 2020 was $8,240,000, or 16.5% of revenue, compared with
$12,126,000, or 21.9% of revenue for
2019. The gross margin as a percentage of revenue decreased
at the ATG and increased at the CPG. The decrease at the ATG is
primarily due to lower units shipped and an increase in costs per
units shipped including the underutilization of production
resources as compared to the same period in 2019. The increase at
the CPG is primarily attributed to an increase in units shipped and
an improvement in utilization of production resources.
"By any standard, 2020 was a challenging year," said Kenneth D.
Trbovich, CEO and Chairman of the Board. "We started
the year with the highest quarterly revenue in our Company's
history and then COVID-19 hit. We faced significant and persistent
headwinds during the remainder of the year as we anticipated and
then experienced lower shipments as customers began deferring
orders due to the uncertainty of the pandemic. Throughout it all,
our team demonstrated dedication, flexibility and creative
problem-solving as we adjusted various areas of our operations to
maintain a competitive cost structure while safeguarding our
employees. While the economic outlook for 2021 remains uncertain,
we believe the Company is positioned to build on our pre-pandemic
successes as business conditions normalize."
The Company continues to monitor government programs and actions
being implemented or expected to be implemented to counter the
economic impacts of the COVID-19 pandemic. In the second quarter of
2020, the Company received a loan in the amount of $4,000,000 as part of the Paycheck Protection
Program (the "PPP Loan") under the Coronavirus Aid, Relief, and
Economic Security Act (the "CARES Act"). As of December 31, 2020, the Company incurred payroll
costs and other eligible qualifying expenses within the applicable
24-week covered period that the Company believes to be consistent
with the terms of the PPP Loan. The Company anticipates submitting
a forgiveness application in connection with its PPP Loan within
the required time frame, however, no assurance can be given that
the Company will obtain forgiveness of the PPP Loan in whole or in
part.
Additionally, in December 2020 and
again in March 2021, the U.S.
government revised the eligibility requirements for certain
refundable employee retention credits ("ERC") under the CARES Act
and extended those credits through the end of 2021. The ERC is
available to offset all federal employment withholdings owed in a
particular quarter. To the extent that the credit exceeds
employment withholdings, the employer may request a refund of prior
taxes paid. The Company qualified for the ERC for the first quarter
of 2021 and will continue to monitor its eligibility for future
quarters.
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 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
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SOURCE Servotronics, Inc.