Company Quick10K Filing
Quick10K
Servotronics
Closing Price ($) Shares Out (MM) Market Cap ($MM)
$12.39 3 $32
10-Q 2019-03-31 Quarter: 2019-03-31
10-K 2018-12-31 Annual: 2018-12-31
10-Q 2018-09-30 Quarter: 2018-09-30
10-Q 2018-06-30 Quarter: 2018-06-30
10-Q 2018-03-31 Quarter: 2018-03-31
10-K 2017-12-31 Annual: 2017-12-31
10-Q 2017-09-30 Quarter: 2017-09-30
10-Q 2017-06-30 Quarter: 2017-06-30
10-Q 2017-03-31 Quarter: 2017-03-31
10-K 2016-12-31 Annual: 2016-12-31
10-Q 2016-09-30 Quarter: 2016-09-30
10-Q 2016-06-30 Quarter: 2016-06-30
10-Q 2016-03-31 Quarter: 2016-03-31
10-K 2015-12-31 Annual: 2015-12-31
10-Q 2015-09-30 Quarter: 2015-09-30
10-Q 2015-06-30 Quarter: 2015-06-30
10-Q 2015-03-31 Quarter: 2015-03-31
10-K 2014-12-31 Annual: 2014-12-31
10-Q 2014-09-30 Quarter: 2014-09-30
10-Q 2014-06-30 Quarter: 2014-06-30
10-Q 2014-03-31 Quarter: 2014-03-31
10-K 2013-12-31 Annual: 2013-12-31
8-K 2019-05-14 Earnings, Exhibits
8-K 2019-04-30 Officers, Shareholder Vote
8-K 2019-03-14 Earnings, Exhibits
8-K 2018-11-13 Earnings, Exhibits
8-K 2018-08-13 Earnings, Exhibits
8-K 2018-05-25 Officers, Shareholder Vote
KSS Kohl's 11,160
X United States Steel 2,720
CHSP Chesapeake Lodging Trust 1,860
ATAX America First Multifamily Investors 413
TRX Tanzanian Royalty Exploration 99
IEC IEC Electronics 67
BIOL Biolase 46
YECO Yulong Eco-Materials 0
KAAC Kayne Anderson Acquisition 0
GRMM Grom Social Enterprises 0
SVT 2019-03-31
Item 2.Management's Discussion and Analysis of Financial Condition and Results of Operations Overview
Item 3.Quantitative and Qualitative Disclosures About Market Risk
Item 4.Controls and Procedures
Part II
Item 1.Legal Proceedings
Item 1A.Risk Factors
Item 2.Unregistered Sales of Equity Securities and Use of Proceeds
Item 3.Defaults Upon Senior Securities
Item 4.Mine Safety Disclosures
Item 5.Other Information
Item 6.Exhibits
EX-31.1 tv521222_ex31-1.htm
EX-31.2 tv521222_ex31-2.htm
EX-32.1 tv521222_ex32-1.htm
EX-32.2 tv521222_ex32-2.htm

Servotronics Earnings 2019-03-31

SVT 10Q Quarterly Report

Balance SheetIncome StatementCash Flow

10-Q 1 tv521222_10q.htm FORM 10-Q

 

 

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

Form 10-Q

 

(Mark One)

xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended March 31, 2019

 

or

 

¨TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

Commission File No. 1-07109

 

SERVOTRONICS, INC.

(Exact name of registrant as specified in its charter)

 

Delaware 16-0837866
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)

 

1110 Maple Street

Elma, New York 14059

(Address of principal executive offices) (zip code)

(716) 655-5990

(Registrant’s telephone number, including area code)

 

Securities registered pursuant to Section 12(b) of the Act:
Title of each class Ticker symbol(s) Name of each exchange on which registered
Common Stock SVT NYSE American

 

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x      No ¨

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes x     No ¨

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Securities Exchange Act.

 

Large accelerated filer ¨ Accelerated filer ¨ Non-accelerated filer x Smaller reporting company x Emerging growth company ¨

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.     ¨

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ¨      No x

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

 

Class   Outstanding at April 30, 2019
Common Stock, $.20 par value   2,580,880

 

 

 

 

 

 

INDEX

 

    Page No.
     
  PART I. FINANCIAL INFORMATION  
     
Item 1. Financial Statements (Unaudited):  
     
  a)   Condensed Consolidated Balance Sheets, March 31, 2019 and December 31, 2018 (Audited) 3
     
  b)  Condensed Consolidated Statements of Income for the three months ended March 31, 2019 and 2018 4
     
  c)  Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2019 and 2018 5
     
  d)  Notes to Condensed Consolidated Financial Statements 6
     
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 17
     
Item 3. Quantitative and Qualitative Disclosures About Market Risk 19
     
Item 4. Controls and Procedures 20
     
  PART II. OTHER INFORMATION  
     
Item 1. Legal Proceedings 21
     
Item 1A. Risk Factors 21
     
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 21
     
Item 3. Defaults Upon Senior Securities 21
     
Item 4. Mine Safety Disclosures 21
     
Item 5. Other Information 21
     
Item 6. Exhibits 22
     
Forward-Looking Statement 22
   
Signatures 23

 

- 2

 

 

SERVOTRONICS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

($000’s omitted except share and per share data)

 

   March 31,   December 31, 
   2019   2018 
   (Unaudited)   (Audited) 
Current assets:          
Cash and cash equivalents  $2,152   $2,598 
Accounts receivable, net   10,874    10,586 
Inventories, net   15,665    15,150 
Prepaid income taxes   331    314 
Other current assets   658    496 
Total current assets   29,680    29,144 
           
Property, plant and equipment, net   12,243    11,875 
           
Deferred income taxes   295    295 
           
Other non-current assets   433    371 
           
Total Assets  $42,651   $41,685 
           
Liabilities and Shareholders' Equity          
           
Current liabilities:          
Current portion of long-term debt  $548   $548 
Current portion of capitalized lease obligations   175    175 
Dividend payable   9    13 
Accounts payable   3,427    2,494 
Accrued employee compensation and benefits costs   1,910    1,908 
Other accrued liabilities   1,028    865 
Total current liabilities   7,097    6,003 
           
Long-term debt   2,229    2,410 
           
Post retirement obligation   1,784    1,759 
           
Shareholders' equity:          
Common stock, par value $0.20; authorized 4,000,000 shares; issued 2,614,506 shares; outstanding  2,483,998 (2,392,207 - 2018) shares   523    523 
Capital in excess of par value   14,264    14,250 
Retained earnings   18,886    18,788 
Accumulated other comprehensive income   35    35 
Employee stock ownership trust commitment   (561)   (561)
Treasury stock, at cost 130,508 (117,979 - 2018) shares   (1,606)   (1,522)
Total shareholders' equity   31,541    31,513 
           
Total Liabilities and Shareholders' Equity  $42,651   $41,685 

 

See notes to condensed consolidated financial statements

 

- 3

 

 

SERVOTRONICS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

($000’s omitted except per share data)

(Unaudited)

 

   Three Months Ended 
   March 31, 
   2019   2018 
         
Revenue  $12,003   $10,559 
           
Cost of goods sold, inclusive of depreciation and amortization   9,930    8,510 
Gross margin   2,073    2,049 
           
Operating Expenses:          
Selling, general and administrative   1,927    1,627 
Interest expense   27    25 
           
Total operating expenses   1,954    1,652 
           
Income before income tax provision   119    397 
           
Income tax provision   21    66 
           
Net income  $98   $331 
           
Income per share:          
Basic          
Net income per share  $0.04   $0.14 
           
Diluted          
Net income per share  $0.04   $0.14 

 

See notes to condensed consolidated financial statements

 

- 4

 

 

SERVOTRONICS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

($000’s omitted)

(Unaudited)

 

   Three Months Ended 
   March 31, 
   2019   2018 
Cash flows related to operating activities:          
Net Income  $98   $331 
Adjustments to reconcile net income to net cash provided (used) by operating activities:          
Depreciation and amortization   274    244 
Loss on disposal of property   -    1 
Stock based compensation   58    - 
(Decrease) increase in inventory reserve   (78)   21 
Increase in allowance for doubtful accounts   10    - 
Increase in warranty reserve   39    112 
Change in assets and liabilities:          
Accounts receivable   (298)   (706)
Inventories   (437)   (350)
Prepaid income taxes   (17)   - 
Other current assets   (162)   (170)
Other non-current assets   (62)   4 
Accounts payable   933    648 
Accrued employee compensation and benefit costs   27    (250)
Accrued income taxes   -    64 
Other accrued liabilities   120    (62)
           
Net cash provided (used) by operating activities   505    (113)
           
Cash flows related to investing activities:          
Capital expenditures - property, plant and equipment   (642)   (511)
           
Net cash used in investing activities   (642)   (511)
           
Cash flows related to financing activities:          
Proceeds from lease line of credit   -    92 
Principal payments on long-term debt   (136)   (137)
Principal payments on equipment financing obligations   (45)   (35)
Purchase of treasury shares   (128)   (117)
           
Net cash used in financing activities   (309)   (197)
           
Net decrease in cash and cash equivalents   (446)   (821)
           
Cash and cash equivalents at beginning of period   2,598    4,707 
           
Cash and cash equivalents at end of period  $2,152   $3,886 

 

See notes to condensed consolidated financial statements

 

- 5

 

 

SERVOTRONICS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

1.Basis of Presentation

 

The accompanying unaudited condensed consolidated financial statements (“consolidated financial statements”) have been prepared in accordance with United States generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by United States generally accepted accounting principles for complete financial statements.

 

The accompanying consolidated financial statements reflect all adjustments which are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented. All such adjustments are of a normal recurring nature. Operating results for the three months ended March 31, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019. The consolidated financial statements should be read in conjunction with the 2018 annual report and the notes thereto.

 

2.Business Description and Summary of Significant Accounting Policies

 

Business Description

 

Servotronics, Inc. and its subsidiaries design, manufacture and market advanced technology products consisting primarily of control components, and consumer products consisting of knives and various types of cutlery and other edged products.

 

Principles of Consolidation

 

The consolidated financial statements include the accounts of Servotronics, Inc. and its wholly-owned subsidiaries (the “Company”). All intercompany balances and transactions have been eliminated upon consolidation.

 

Cash and Cash Equivalents

 

The Company considers cash and cash equivalents to include all cash accounts and short-term investments purchased with an original maturity of three months or less.

 

Accounts Receivable

 

The Company grants credit to substantially all of its customers and carries its accounts receivable at original invoice amount less an allowance for doubtful accounts. On a periodic basis, the Company evaluates its accounts receivable and establishes an allowance for doubtful accounts based on history of past write-offs, collections, and current credit conditions. The allowance for doubtful accounts amounted to approximately $180,000 at March 31, 2019 and $170,000 at December 31, 2018. The Company does not accrue interest on past due receivables.

 

Revenue Recognition

 

Revenues are recognized at the time of shipment of goods, transfer of title and customer acceptance, as required. Our revenue transactions generally consist of a single performance obligation to transfer contracted goods and are not accounted for under-industry-specific guidance. Purchase orders generally include specific terms relative to quantity, item description, specifications, price, customer responsibility for in-process costs, delivery schedule, shipping point, payment and other standard terms and conditions of purchase. Service sales, principally representing repair, are recognized at the time of shipment of goods.

 

The costs incurred for nonrecurring engineering, development and repair activities of our products under agreements with commercial customers are expensed as incurred. Subsequently, the revenue is recognized as products are delivered to the customers with the approval by the customers.

 

- 6

 

 

SERVOTRONICS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

Inventories

 

Inventories are stated at the lower of cost or net realizable value. Cost includes all costs incurred to bring each product to its present location and condition. Market provisions in respect of lower of cost or market adjustments and inventory expected to be used in greater than one year are applied to the gross value of the inventory through a reserve of approximately $1,465,000 and $1,543,000 at March 31, 2019 and December 31, 2018, respectively. Pre-production and start-up costs are expensed as incurred.

 

The purchase of suppliers’ minimum economic quantities of material such as steel, etc. may result in a purchase of quantities exceeding one year of customer requirements. Also, in order to maintain a reasonable and/or agreed to lead time, certain larger quantities of other product support items may have to be purchased and may result in over one year’s supply. These amounts are not included in the inventory reserve discussed above.

 

Shipping and Handling Costs

 

Shipping and handling costs are classified as a component of cost of goods sold.

 

Property, Plant and Equipment

 

Property, plant and equipment is carried at cost; expenditures for new facilities and equipment and expenditures which substantially increase the useful lives of existing plant and equipment are capitalized; expenditures for maintenance and repairs are expensed as incurred. Upon disposal of properties, the related cost and accumulated depreciation are removed from the respective accounts and any profit or loss on disposition is included in income.

 

Depreciation is provided on the basis of estimated useful lives of depreciable properties, primarily by the straight-line method for financial statement purposes and by accelerated methods for income tax purposes. Depreciation expense includes the amortization of capital lease assets. The estimated useful lives of depreciable properties are generally as follows:

 

Buildings and improvements   5-40 years
Machinery and equipment   5-20 years
Tooling   3-5 years

 

Income Taxes

 

The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax basis of assets and liabilities, as well as operating loss and credit carryforwards. The Company and its subsidiaries file a consolidated federal income tax return, combined New York and Texas state income tax returns and separate Pennsylvania and Arkansas income tax returns.

 

The Company’s practice is to recognize interest and/or penalties related to income tax matters in income tax expense. The Company did not have any accrued interest or penalties included in its consolidated balance sheets at March 31, 2019 or December 31, 2018, and did not recognize any interest and/or penalties in its consolidated statements of income during the three months ended March 31, 2019 and 2018. The Company did not have any material uncertain tax positions or unrecognized tax benefits or obligations as of March 31, 2019 and December 31, 2018. The 2015 through 2017 federal and state tax returns remain subject to examination.

 

- 7

 

 

SERVOTRONICS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

Supplemental Cash Flow Information

 

There were no income taxes paid during the three months ended March 31, 2019 and 2018. Interest paid amounted to approximately $27,000 and $25,000, respectively, during the three months ended March 31, 2019 and 2018.

 

Employee Stock Ownership Plan

 

Contributions to the employee stock ownership plan are determined annually by the Company according to plan formula.

 

Impairment of Long-Lived Assets

 

The Company reviews long-lived assets for impairment annually or whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable based on undiscounted future operating cash flow analyses. If an impairment is determined to exist, any related impairment loss is calculated based on fair value. Due to the losses incurred by our CPG segment, we performed a test for recoverability of the long-lived assets by comparing its carrying value to the future undiscounted cash flows that we expect will be generated by the asset group. Impairment losses on assets to be disposed of, if any, are based on the estimated proceeds to be received, less costs of disposal. The Company has determined that no impairment of long-lived assets existed at March 31, 2019 and December 31, 2018.

 

Use of Estimates

 

The preparation of the consolidated financial statements in conformity with U.S. generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

 

Reclassifications

 

Certain balances, as previously reported, were reclassified to conform with classifications adopted in the current period.

 

Research and Development Costs

 

Research and development costs are expensed as incurred.

 

Concentration of Credit Risks

 

Financial instruments that potentially subject the Company to concentration of credit risks principally consist of cash accounts in financial institutions. Although the accounts exceed the federally insured deposit amount, management does not anticipate nonperformance by the financial institutions.

 

Fair Value of Financial Instruments

 

The carrying amount of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses are reasonable estimates of their fair value due to their short maturity. Based on variable interest rates and the borrowing rates currently available to the Company for loans similar to its long-term debt, the fair value approximates its carrying amount.

 

- 8

 

 

SERVOTRONICS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

Revenue Recognition

 

Revenues are recognized at the time of shipment of goods, transfer of title and customer acceptance, as required. Our revenue transactions generally consist of a single performance obligation to transfer contracted goods and are not accounted for under industry-specific guidance. Purchase orders generally include specific terms relative to quantity, item description, specifications, price, customer responsibility for in-process costs, delivery schedule, shipping point, payment and other standard terms and conditions of purchase. Service sales, principally representing repair, are recognized at the time of shipment of goods.

 

The costs incurred for nonrecurring engineering, development and repair activities of our products under agreements with commercial customers are expensed as incurred. Subsequently, the revenue is recognized as products are delivered to the customers with the approval by the customers.

 

Revenue is recognized at an amount that reflects the consideration to which the Company expects to be entitled in exchange for transferring goods and services to a customer. The Company determines revenue recognition using the following five steps: (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when the company satisfies a performance obligation.

 

Revenue excludes taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction and collected by the Company from a customer (e.g., sales and use taxes). Revenue includes payments for shipping activities that are reimbursed by the customer to the Company.

 

Revenue on a significant portion of our contracts is currently recognized at the time of shipment of goods, transfer of title and customer acceptance, as required. Our revenue transactions generally consist of a single performance obligation to transfer contracted goods and are not accounted for under industry-specific guidance.

 

Performance obligations are satisfied as of a point in time. Performance obligations are supported by contracts with customers, providing a framework for the nature of the distinct goods, services or bundle of goods and services. The timing of satisfying the performance obligation is typically indicated by the terms of the contract. As a significant portion of the Company’s revenue are recognized at the time of shipment, transfer of title and customer acceptance, there is no significant judgment applied to determine the timing of the satisfaction of performance obligations or transaction price.

 

The timing of satisfaction of our performance obligations does not significantly vary from the typical timing of payment. The Company generally receives payment for these contracts within the payment terms negotiated and agreed upon by each customer contract.

 

Warranty and repair obligations are assessed on all returns. Revenue is not recorded on any warranty returns. The Company warrants its products against design, materials and workmanship based on an average of twenty-seven months. The Company determines warranty reserves needed based on actual average costs of warranty units shipped and current facts and circumstances. As of March 31, 2019 and December 31, 2018 under the guidance of ASC460 the Company has recorded a warranty reserve of approximately $467,000 and $428,000, respectively. This amount is reflected in other accrued expenses in the accompanying balance sheet. Revenue is recognized on repair returns, covered under a customer contract, at the contractual price upon shipment to the customer.

 

- 9

 

 

SERVOTRONICS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

Recent Accounting Pronouncements Adopted

 

In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842).” The new standard requires a lessee to record on the balance sheet the assets and liabilities for the rights and obligations created by leases with lease terms of more than 12 months and requires both lessees and lessors to disclose certain key information about lease transactions. The standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company adopted this standard during the first quarter of 2019. The adoption of this guidance did not have a material impact on the Company’s financial statements and related disclosures. Currently the Company has one lease of equipment at an annual payment of less than $2,000. Finance lease assets are included in property, plant, and equipment, and liabilities are included in short-term and long-term debt. Under ASC 842, the Company will determine if a contract contains a lease at the inception of the contract. A contract contains a lease if it conveys to the Company the right to control the use of specified assets.

 

3.Inventories

 

   March 31,   December 31, 
   2019   2018 
   ($000's omitted) 
Raw material and common parts  $9,956   $9,088 
Work-in-process   5,211    5,123 
Finished goods   1,963    2,482 
    17,130    16,693 
Less inventory reserve   (1,465)   (1,543)
Total inventories  $15,665   $15,150 

 

4.Property, Plant and Equipment

 

   March 31,   December 31, 
   2019   2018 
   ($000's ommitted) 
Land  $7   $7 
Buildings   10,515    10,452 
Machinery, equipment and tooling   18,802    18,345 
Construction in progress (CIP)   1,378    1,258 
    30,702    30,062 
Less accumulated depreciation   (18,459)   (18,187)
   $12,243   $11,875 

 

Depreciation and amortization expense amounted to approximately $274,000 and $244,000 for the three months ended March 31, 2019 and 2018, respectively. Amortization expense primarily related to capital leases amounted to approximately $20,000 and $17,000 for the three months ended March 31, 2019 and 2018, respectively. The Company maintains property and casualty insurance in amounts adequate for the risk and nature of its assets and operations and which are generally customary in its industry.

 

- 10

 

 

SERVOTRONICS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

As of March 31, 2019, there is approximately $1,378,000 ($1,258,000 – December 31, 2018) of construction in progress (CIP) included in property, plant and equipment all of which is related to capital projects. There is approximately $683,000 in CIP for the implementation costs for the enterprise resource planning software that will be used as an integral part of the product process at the Advanced Technology Group (“ATG”) and the Consumer Products Group (“CPG”). In addition, there is approximately $405,000 primarily for IT equipment and software and the remainder of approximately $290,000 for machinery & equipment and self-constructed assets, not yet put into service.

 

5.Long-Term Debt

 

   March 31,   December 31, 
   2019   2018 
   ($000's omitted) 
Term loan payable to a financial institution; Interest rate  option of bank prime or Libor plus 1.4% (3.909% as of March 31, 2019), monthly prinicipal payments of $21,833 through 2021 with a balloon payment of $786,000 due December 1, 2021  $1,507   $1,572 
           
Term loan payable to a financial institution; Interest rate  option of bank prime or Libor plus 1.4% (3.909% as of   March 31, 2019), monthly prinicipal payments of $23,810 through December 1, 2021   786    857 
           
Lease line of credit for equipment; Interest rate fixed for term  of each funding based upon the Lender's lease pricing at time of funding. (Interest rate/factor 1.822758% - 1.869304% at time of funding), monthly principle payments of $12,675 through April 10, 2023   659    704 
    2,952    3,133 
Less current portion   (723)   (723)
   $2,229   $2,410 

 

Principal maturities of long-term debt are as follows: remainder 2019 - $542,000, 2020 - $723,000, 2021 - $1,509,000, 2022 - $165,000, and 2023 - $13,000.

 

The term loans are secured by all personal property of the Company with the exception of certain equipment that was purchased from proceeds of government grants.

 

Certain lenders require the Company to comply with debt covenants as described in the specific loan documents, including a debt service ratio. At March 31, 2019 and December 31, 2018 the Company was in compliance with these covenants.

 

The Company established a lease line of credit for equipment financing in the amount of $1,000,000 available until June 28, 2019. This line is non-revolving and non-renewable. The lease term for equipment covered by the lease line of credit is 60 months. Monthly payments will be fixed for the term of each funding based upon the Lender’s lease pricing in effect at the time of such funding. There was approximately $659,000 outstanding at March 31, 2019.

 

- 11

 

 

SERVOTRONICS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

   March 31,   December 31, 
   2019   2018 
   ($000's omitted) 
         
2019   145    193 
2020   193    193 
2021   193    193 
2022   193    193 
2023   4    4 
Total principal and interest payments   728    776 
Less amount representing interest   (69)   (72)
Present value of net minimum lease payments   659    704 
Less current portion   (175)   (175)
Long term principle payments  $484   $529 

  

The Company established equipment financing in the amount of $2,500,000 available until November 30, 2019. This line is non-revolving and non-renewable. The financing term for the equipment covered by the loan is 60 months. Monthly payments will be fixed for the term of each funding based upon the Lender’s rate in effect at the time of such funding. There was no balance outstanding at March 31, 2019 and December 31, 2018.

 

The Company has a $2,000,000 line of credit on which there was no balance outstanding at March 31, 2019 and December 31, 2018.

 

- 12

 

 

SERVOTRONICS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

6.Shareholders’ Equity

 

   Common Stock   ($000's omitted except for share data) 
                           Accumulated     
   Number       Capital in               Other   Total 
   of shares       excess of   Retained       Treasury   Comprehensive   shareholders' 
   issued   Amount   par value   earnings   ESOT   stock   Loss   equity 
                                 
Balance at December 31, 2018   2,614,506   $523   $14,250   $18,788   $(561)  $(1,522)  $35   $31,513 
                                         
Net income   -    -    -    98    -    -    -    98 
Purchase of treasury shares   -    -    -    -    -    (128)        (128)
Stock based compensation      net of tax benefit   -    -    14    -    -    44    -    58 
Balance at March 31, 2019   2,614,506   $523   $14,264   $18,886   $(561)  $(1,606)  $35   $31,541 

 

   Common Stock   ($000's omitted except for share data) 
                           Accumulated     
   Number       Capital in               Other   Total 
   of shares       excess of   Retained       Treasury   Comprehensive   shareholders' 
   issued   Amount   par value   earnings   ESOT   stock   Loss   equity 
Balance at December 31, 2017   2,614,506   $523   $14,171   $15,709   $(662)  $(1,544)  $(32)  $28,165 
                                         
Net income   -    -    -    331    -    -    -    331 
Purchase of treasury shares   -    -    -    -    -    (117)   -    (117)
Balance at March 31, 2018   2,614,506   $523   $14,171   $16,040   $(662)  $(1,661)  $(32)  $28,379 

 

The Company’s Board of Directors authorized the purchase of up to 450,000 shares of its common stock in the open market or in privately negotiated transactions. As of March 31, 2019, the Company has purchased 357,423 shares and there remains 92,577 shares available to purchase under this program. There were 2,400 shares purchased by the Company during the three month period ended March 31, 2019.

 

On January 1, 2019, 26,250 shares of restricted stock vested of which 9,729 shares were withheld by the Company for approximately $99,000 to satisfy statutory minimum withholding tax requirements for those participants who elected this option as permitted under the Company’s 2012 Long-Term Incentive Plan.

 

On May 25, 2018, the Company issued 78,750 shares of restricted stock to Executive Officers and certain key management of the Company under the Company’s 2012 Long-Term Incentive Plan. The restricted share awards have varying vesting periods between January 2019 and January 2021; however, these shares have voting rights and accrue dividends prior to vesting. The accrued dividends are paid upon vesting of the restricted shares. The aggregate amount of expense to the Company, measured based on grant date fair value is expected to be approximately $735,000 and will be recognized over the requisite service period.

 

On May 25, 2018, the Company revised its director compensation policy pursuant to which non-employee directors receive a portion of their annual retainer in the form of restricted stock under the Company’s 2012 Long-Term Incentive Plan. An aggregate of 4,288 restricted shares were issued that vest quarterly over a twelve month service period. These shares have voting rights and accrue dividends that are paid upon vesting. The aggregate amount of expense for awards granted in 2018 was $40,000 and was recognized over the service period.

 

- 13

 

 

SERVOTRONICS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

On April 26, 2019, the Company increased its director compensation policy pursuant to which non-employee directors receive a portion of their annual retainer in the form of restricted stock from $10,000 to $25,000 under the Company’s 2012 Long-Term Incentive Plan. An aggregate of 7,836 restricted shares were issued that vest quarterly over a twelve month service period. These shares have voting rights and accrue dividends that are paid upon vesting. The aggregate amount of expense to the Company, measured based on the grant date fair value is expected to be approximately $100,000 and will be recognized over the requisite service period.

 

Earnings Per Share

 

Basic earnings per share is computed by dividing net earnings by the weighted average number of shares outstanding during the period. The weighted average number of common shares outstanding does not include any potentially dilutive securities or any unvested restricted shares of common stock. These unvested restricted shares, although classified as issued and outstanding, are considered forfeitable until the restrictions lapse and will not be included in the basic EPS calculation until the shares are vested. Diluted earnings per share is computed by dividing net earnings by the weighted average number of shares outstanding during the period plus the number of shares of common stock that would be issued assuming all contingently issuable shares having a dilutive effect on the earnings per share that were outstanding for the period. Incremental shares from assumed conversions are calculated as the number of shares that would be issued, net of the number of shares that could be purchased in the marketplace with the cash received upon stock option exercise. The dilutive effect of unvested restrictive stock is determined using the treasury stock method.

 

   Three Months Ended 
   March 31, 
   2019   2018 
   ($000's omitted except per share data) 
Net Income  $98   $331 
Weighted average common shares outstanding (basic)   2,328    2,297 
Unvested restricted stock   53    - 
Weighted average common shares outstanding (diluted)   2,381    2,297 
Basic          
Net income per share  $0.04   $0.14 
Diluted          
Net income per share  $0.04   $0.14 

 

7.Commitments and Contingencies

 

Post retirement obligation. As previously disclosed in filings with the Securities and Exchange Commission (“SEC”), the Company, under an employment agreement, is expected to pay post- employment health related benefits to a former Executive Officer of the Company (the “Former Employee”), of which approximately $1,115,000 has been accrued as of March 31, 2019 and December 31, 2018, and is reflected as Post Retirement Obligation in the accompanying balance sheet. After termination of the Former Employee, the scope of the health related benefits coverage in the agreement became an issue. In June 2016 an Arbitrator was selected by the parties to hear this matter. A final opinion and award was issued on March 22, 2018 resulting in the increased accrual at March 31, 2018. Additionally, the Company paid approximately $367,000 in fees, comprised of $304,000 in legal fees, $54,000 in health related costs, and $9,000 in interest costs pursuant to the arbitration award as of March 31, 2019.

 

- 14

 

 

SERVOTRONICS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

Employment Agreements. The Company provides certain post-employment health and life insurance benefits for its Chief Executive Officer and President Kenneth Trbovich. Upon retirement and after attaining at least the age of 65, the Company will pay for the retired Executive’s and dependent’s health benefits and will continue the Company-provided life insurance offered at the time of retirement. The retiree’s health insurance benefits ceases upon the death of the retired executive. Approximately $669,000 and $644,000 has been accrued as of March 31, 2019 and December 31, 2018, respectively, and is reflected as Post Retirement Obligation in the accompanying balance sheet.

 

8.Litigation

 

Litigation. The Company has pending litigation relative to leases of certain equipment and real property with a former related party, Aero, Inc. Aero, Inc. is suing Servotronics, Inc. and its wholly owned subsidiary and has alleged damages in the amount of $3,000,000. The Company has filed a response to the Aero, Inc. lawsuit and has also filed a counter-claim in the amount of $3,191,000. The Company considers the risk of loss remote, and is unable to reasonably or accurately estimate the likelihood and amount of any liability or benefit that may be realized as a result of this litigation. Accordingly, no gain or loss has been recognized in the accompanying financials statements related to this litigation.

 

There are no other legal proceedings currently pending by or against the Company other than litigation incidental to the business which is not expected to have a material adverse effect on the business or earnings of the Company.

 

9.Related Party Transactions

 

The Company paid legal fees and disbursements of approximately $19,000 and $47,000 in the three month periods ended March 31, 2019 and 2018, respectively, for services provided by a law firm that is owned by a member of the Company’s Board of Directors. Additionally, the Company did not have any unpaid legal expenses for this law firm as of March 31, 2019 and had approximately $40,000 accrued at March 31, 2018.

 

10.Business Segments

 

The Company operates in two business segments, ATG and CPG. The Company’s reportable segments are strategic business units that offer different products and services. The segments are comprised of separate corporations and are managed separately. Operations in ATG primarily involve the design, manufacture, and marketing of servo-control components (i.e., torque motors, control valves, actuators, etc.) for government, commercial and industrial applications. CPG’s operations involve the design, manufacture and marketing of a variety of cutlery products for use by consumers and government agencies. The Company derives its primary sales revenue from domestic customers, although a portion of finished products are for foreign end use.

 

As of March 31, 2019, the Company had identifiable assets of approximately $42,651,000 ($41,685,000 – December 31, 2018) of which approximately $32,580,000 ($31,639,000 – December 31, 2018) was for ATG and approximately $10,071,000 ($10,046,000 – December 31, 2018) was for CPG.

 

- 15

 

 

SERVOTRONICS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

Information regarding the Company’s operations in these segments is summarized as follows:

 

   ($000's omitted except per share data) 
   ATG   CPG   Consolidated 
   Three Months Ended   Three Months Ended   Three Months Ended 
   March 31,   March 31,   March 31, 
   2019   2018   2019   2018   2019   2018 
Revenues from unaffiliated customers  $10,595   $9,115   $1,408   $1,444   $12,003   $10,559 
                               
Cost of goods sold, inclusive of depreciation   (8,467)   (7,084)   (1,463)   (1,426)   (9,930)  $(8,510)
Gross margin (loss)   2,128    2,031    (55)   18    2,073    2,049 
Gross margin %   20.1%   22.3%   -3.9%   1.2%   17.3%   19.4%
                               
Selling, general and administrative   (1,280)   (1,228)   (647)   (399)   (1,927)   (1,627)
Interest   (19)   (17)   (8)   (8)   (27)   (25)
Total costs and expenses   (9,766)   (8,329)   (2,118)   (1,833)   (11,884)   (10,162)
                               
Income/(loss) before income tax provision   829    786    (710)   (389)   119    397 
                               
Income tax provision (benefit)   145    130    (124)   (64)   21    66 
Net income/(loss)  $684   $656   $(586)  $(325)  $98   $331 
Capital expenditures  $599   $405   $43   $106   $642   $511 

 

- 16

 

 

Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations Overview

 

The Company’s commercial business is affected by such factors as uncertainties in today’s global economy, global competition, the vitality and ability of the commercial aviation industry to purchase new aircraft, the effects and threats of terrorism, market demand and acceptance both for the Company’s products and its customers’ products which incorporate Company made components.

 

During the three months ended March 31, 2019 and 2018 approximately 10% and 9%, respectively, of the Company’s revenues were derived from contracts with agencies of the U.S. Government or their prime contractors and their subcontractors. The Company believes that government involvement in military operations overseas will continue to have an impact on the financial results in both the Advanced Technology and Consumer Products markets. While the Company is optimistic in relation to these potential opportunities, it recognizes that sales to the government are affected by defense budgets, the foreign policies of the U.S. and other nations, the level of military operations and other factors, and as such, it is difficult to predict the impact on future financial results.

 

The ATG engages in business development efforts in its primary markets and is broadening its activities to include new domestic and foreign markets that are consistent with its core competencies. We believe our business remains particularly well positioned in the strong commercial aircraft market driven by the replacement of older aircraft with more fuel efficient alternatives and the increasing demand for air travel in emerging markets. Although the ATG backlog continues to be strong, actual scheduled shipments may be delayed/changed as a function of the Company’s customers’ final delivery determinations based on changes in the global economy and other factors.

 

The CPG consumer products are marketed throughout the United States and in select foreign markets. Consumer sales are moderately seasonal. Sales are direct to consumer, through national and international distributors, and through retailers such as big box, hardware, supermarket, variety, department, discount, gift, drug, outdoors and sporting stores. The CPG also sells knives and tools, principally machetes, bayonets, survival knives and kitchen knives, to various branches of the United States Government which accounted for less than 2% of the Company’s consolidate revenues in the three months ended March 31, 2019 and 2018.

 

See also Note 10, Business Segments, for information concerning business segment operating results.

 

- 17

 

 

Results of Operations

 

The following table compares the Company’s consolidated statements of income data for the three months ended March 31, 2019 and 2018 ($000’s omitted):

 

   ($000's omitted except per share data)     
   Three Months Ended March 31,     
           2019 vs 2018 
   2019   2018   Dollar   % Increase 
   Dollars   % of Sales   Dollars   % of Sales   Change   (Decrease) 
Revenues:                              
Advanced Technology  $10,595    88.3%  $9,115    86.3%  $1,480    16.2%
Consumer Products   1,408    11.7%   1,444    13.7%   (36)   (2.5)%
    12,003    100.0%   10,559    100.0%   1,444    13.7%
                               
Cost of goods sold, inclusive of depreciation and amortization   9,930    82.7%   8,510    80.6%   1,420    16.7%
Gross margin   2,073    17.3%   2,049    19.4%   24    1.2%
Gross margin %   17.3%        19.4%               
                               
Selling, general and administrative   1,927    16.1%   1,627    15.4%   300    18.4%
Interest expense   27    0.2%   25    0.2%   2    8.0%
Total costs and expenses   11,884    99.0%   10,162    96.2%   1,722    16.9%
                               
Income tax provision   21    0.2%   66    0.6%   (45)   (68.2)%
Net income  $98    0.8%  $331    3.1%  $(233)   (70.4)%

 

Revenue

 

The Company’s consolidated revenues from operations increased approximately $1,444,000 or 13.7% for the three month period ended March 31, 2019 when compared to the same period in 2018. The increase in revenue is attributable to an increase in commercial and government shipments at the ATG in addition to an increase in government shipments at the CPG. This is partially offset by a decrease in commercial shipments at the CPG. Commercial and government shipments increased approximately $1,278,000 or 15.4% and $202,000 or 25.1% at the ATG for the three month period ended March 31, 2019 when compared to the same period in 2018. This is offset by a net decrease in CPG shipments. CPG government shipments increased approximately $23,000 of 17.6% and commercial shipments decreased approximately $59,000 or (4.5%) for the three month period ended March 31, 2019 compared to the same period in 2018.

 

Gross Margin

 

The Company’s consolidated gross margin increased approximately $24,000 or 1.2% for the three month period ended March 31, 2019 when compared to the same period in 2018.

 

Gross margin increased in the three month period ended March 31, 2019 due to the increase in units shipped of approximately $267,000 and decreased due to average prices and mix of product sold of approximately $170,000 at the ATG as compared to the same period of 2018. This is partially offset by a decrease in units shipped of approximately $64,000 and decreased due to average prices and mix of product sold of approximately $9,000 at the CPG as compared to the same period of 2018.

 

Selling, General and Administrative Expenses

 

Selling, general and administrative (SG&A) expenses increased approximately $300,000 or (18.4)% for the three month period ended March 31, 2019 compared to the same period in 2018. This is primarily driven by an increase in sales promotions, sales support, increased attendance at trade shows and travel expenditures for the CPG for the three month period ended March 31, 2019 compared to the same period in 2018.

 

- 18

 

 

Interest Expense

 

Interest expense remained consistent for the three month period ended March 31, 2019 compared to the same period in 2018. See also Note 5, Long-Term Debt, of the accompanying consolidated financial statements for information on long-term debt.

 

Net Income

 

Income from operations decreased approximately $233,000 or (70.4)% when comparing the three month period ended March 31, 2019 to the same period in 2018. This decrease is the result of a pretax increased revenue partially offset by increases in cost of goods sold and SG&A as discussed earlier.

 

Liquidity and Capital Resources

 

The Company’s primary liquidity and capital expenditure requirements relate to working capital needs; primarily inventory, accounts receivable, accounts payable, capital expenditures for property, plant and equipment and principal payments on debt. At March 31, 2019, the Company had working capital of approximately $22,583,000 ($23,141,000 – 2018) of which approximately $2,152,000 ($2,598,000 – 2018) was comprised of cash and cash equivalents. The improvement in working capital is attributable to a decrease in number of days receivable and an increase in the number of days payable.

 

The Company generated approximately $505,000 in cash from operations during the three month period ended March 31, 2019 as compared to a usage of cash of approximately $113,000 during the same period in 2018. Cash was generated primarily through net income of approximately $98,000, adjustments to reconcile net income to net cash of approximately $303,000 and timing of accounts payable. The primary use of cash for the Company’s operating activities for the three month period ended March 31, 2019 include working capital requirements, mainly an increase in accounts receivables and inventories of approximately $298,000 and $437,000, respectively. Cash generated and used in operations is consistent with sales volume, customer expectations and competitive pressures.

 

The Company’s primary use of cash in its financing and investing activities in the three month period ended March 31, 2019 included approximately $181,000 of current principal payments on long-term debt, approximately $128,000 for the purchase of treasury shares, as well as capital expenditures of approximately $642,000 to increase production requirements at the ATG.

 

The Company obtained a lease line of credit for equipment financing in the amount of $1,000,000 available until June 28, 2018. The lease term for equipment covered by the lease line of credit is sixty months. Monthly payments are fixed for the term of each funding based upon the lender’s lease pricing in effect at the time of funding. These was approximately $659,000 outstanding at March 31, 2019.

 

The Company has a $2,000,000 line of credit available until June 19, 2019.

 

The Company believes its cash generating capability and financial condition, together with available credit facilities will be adequate to meet our future operating, investing and financing needs.

 

Item 3.Quantitative and Qualitative Disclosures About Market Risk

 

The Company is a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and is not required to provide the information required under this item.

 

- 19

 

 

Item 4.Controls and Procedures

 

Disclosure Controls and Procedures

 

The Company carried out an evaluation under the supervision and with the participation of its management, including the Company’s Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of the Company’s disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e)) as of March 31, 2019. Based upon that evaluation, the CEO and CFO concluded that the Company’s disclosure controls and procedures are effective to ensure that the information required to be disclosed by the Company in SEC reports under the Exchange Act (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and (ii) is accumulated and communicated to the Company’s management, including the CEO and CFO, as appropriate to allow timely decisions regarding required disclosure.

 

Changes in Internal Controls

 

During the three month period ended March 31, 2019, there were no changes in internal controls over financial reporting that have materially affected, or are reasonably likely to affect, the Company’s internal controls over financial reporting.

 

- 20

 

 

PART II

OTHER INFORMATION

 

Item 1.Legal Proceedings

 

Except as set forth in Note 8, Litigation, there are no other legal proceedings which are material to the Company currently pending by or against the Company other than litigation incidental to the business, which is not expected to have a material adverse effect on the business or earnings of the Company.

 

Item 1A.Risk Factors

 

Not applicable.

 

Item 2.Unregistered Sales of Equity Securities and Use of Proceeds

 

(c)   Company Purchases of Company’s Equity Securities

 

2019 Periods  Total Number of
Shares
Purchased/Withheld
       Weighted Average
Price $ Paid Per Share
   Total Number of
Shares Purchased as
Part of Publicly
Announced Plans or
Programs (1)
   Maximum Number of
Shares that may yet be
Purchased under the
Plans or Programs (1)
 
January   9,729(2)    $10.13    -    94,977 
February   -         -    -    94,977 
March   2,400         11.98    2,400    92,577 
Total   12,129        $10.51    2,400    92,577 

 

(1)      The Company’s Board of Directors authorized the purchase of up to 450,000 shares of its common stock in the open market or in privately negotiated transactions. As of March 31, 2019, the Company has purchased 357,423 shares and there remains 92,577 shares available to purchase under this program. There were 2,400 shares purchased by the Company during the three month period ended March 31, 2019.

 

(2)       Includes 9,729 shares withheld by the Company in January 2019 to satisfy statutory minimum withholding tax requirements for those participants who elected this option as permitted under the Company’s 2012 Long-Term Incentive Plan.

 

Item 3.Defaults Upon Senior Securities

 

Not applicable.

 

Item 4.Mine Safety Disclosures

 

Not applicable.

 

Item 5.Other Information

 

Not applicable

 

- 21

 

 

Item 6.Exhibits

 

31.1   Certification of Principal Executive Officer pursuant to Rule 13a-14 or 15d-14 of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Filed herewith)
     
31.2   Certification of Chief Financial Officer pursuant to Rule 13a-14 or 15d-14 of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Filed herewith)
     
32.1   Certification of Chief Executive Officer pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Filed herewith)
     
32.2   Certification of Chief Financial Officer pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Filed herewith)
     
101   The following materials from Servotronics, Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2019, formatted in XBRL (eXtensible Business Reporting Language):  (i) consolidated balance sheets, (ii) consolidated statements of income, (iii) consolidated statements of comprehensive income, (iv) consolidated statements of cash flows and (v) the notes to the consolidated financial statements.

 

FORWARD-LOOKING STATEMENTS

 

In addition to historical information, certain sections of this Form 10-Q 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 timing and amount of payment obligation relating to the arbitration award and the Company’s ability to pay these obligations. Forward-looking statements involve numerous risks and uncertainties. The Company derives a material portion of its revenues 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 discussed herein, 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, and difficulty in predicting defense appropriations, 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 success of the Company also depends upon the trends of the economy, including interest rates, income tax laws, governmental regulation, legislation, population changes and those risk factors discussed elsewhere in this Form 10-Q. 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.

 

- 22

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

Date: May 13, 2019

 

  SERVOTRONICS, INC.  
     
  By: /s/ Kenneth D. Trbovich, Chief Executive Officer  
    Kenneth D. Trbovich  
    Chief Executive Officer  
     
  By: /s/ Lisa F. Bencel, Chief Financial Officer  
    Lisa F. Bencel  
    Chief Financial Officer  

 

- 23