Servotronics Announces Second Quarter 2024 Financial Results
Servotronics (NYSE American: SVT) reported strong financial results for Q2 2024. Revenue increased 15.3% to $12.3 million, driven by higher volumes and improved pricing. Gross profit rose to $3.1 million (25% of revenue), up from $1.6 million (14.6%) in Q2 2023. Operating income improved to $0.7 million (5.4% of revenue) compared to a loss of $1.7 million last year. Net income from continuing operations was $0.6 million ($0.22 per diluted share), a significant improvement from a net loss of $3.3 million in Q2 2023.
The company attributed the strong performance to increased customer demand, operational efficiencies, and reduced SG&A expenses. Servotronics expects continued strong demand in key end markets for the remainder of the year.
Servotronics (NYSE American: SVT) ha riportato risultati finanziari solidi per il secondo trimestre del 2024. I ricavi sono aumentati del 15,3% a 12,3 milioni di dollari, grazie a volumi più elevati e a un miglioramento dei prezzi. Il profitto lordo è salito a 3,1 milioni di dollari (25% dei ricavi), rispetto a 1,6 milioni (14,6%) nel secondo trimestre del 2023. Il reddito operativo è migliorato a 0,7 milioni di dollari (5,4% dei ricavi) rispetto a una perdita di 1,7 milioni dell'anno scorso. Il reddito netto delle operazioni continuative è stato di 0,6 milioni di dollari (0,22 dollari per azione diluita), un miglioramento significativo rispetto a una perdita netta di 3,3 milioni nel secondo trimestre del 2023.
L'azienda ha attribuito le forti performance a un aumento della domanda dei clienti, a efficienze operative e a una riduzione delle spese SG&A. Servotronics prevede una domanda costante e forte nei principali mercati finali per il resto dell'anno.
Servotronics (NYSE American: SVT) reportó resultados financieros sólidos para el segundo trimestre de 2024. Los ingresos aumentaron un 15.3% a 12.3 millones de dólares, impulsados por mayores volúmenes y precios mejorados. La utilidad bruta se elevó a 3.1 millones de dólares (25% de los ingresos), en comparación con 1.6 millones (14.6%) en el segundo trimestre de 2023. El ingreso operativo mejoró a 0.7 millones de dólares (5.4% de los ingresos) frente a una pérdida de 1.7 millones del año anterior. El ingreso neto de las operaciones continuas fue de 0.6 millones de dólares (0.22 dólares por acción diluida), una mejora significativa respecto a una pérdida neta de 3.3 millones en el segundo trimestre de 2023.
La compañía atribuyó el sólido desempeño a un aumento en la demanda de los clientes, eficiencias operacionales y reducción de gastos SG&A. Servotronics espera una continua fuerte demanda en los principales mercados finales durante el resto del año.
Servotronics(NYSE American: SVT)는 2024년 2분기 강력한 재무 결과를 보고했습니다. 수익은 15.3% 증가하여 1,230만 달러에 도달했습니다. 이는 더 높은 물량과 개선된 가격 덕분입니다. 총 이익은 310만 달러(수익의 25%)로 증가했습니다. 이는 2023년 2분기의 160만 달러(14.6%)에서 상승한 수치입니다. 운영 이익은 70만 달러(수익의 5.4%)로 개선되어 지난해의 170만 달러 손실과 비교됩니다. 지속 운영으로 인한 순수익은 60만 달러(희석 주당 0.22달러)로, 2023년 2분기의 330만 달러 순손실에서 크게 개선되었습니다.
회사는 강력한 성과를 고객 수요 증가, 운영 효율성 및 SG&A 비용 감소에 기인했다고 밝혔습니다. Servotronics는 올해 나머지 기간 동안 주요 최종 시장에서 지속적인 강력한 수요를 기대하고 있습니다.
Servotronics (NYSE American: SVT) a annoncé des résultats financiers solides pour le deuxième trimestre 2024. Les revenus ont augmenté de 15,3 % pour atteindre 12,3 millions de dollars, grâce à des volumes plus élevés et à une amélioration des prix. Le bénéfice brut a augmenté à 3,1 millions de dollars (25 % des revenus), contre 1,6 million de dollars (14,6 %) au deuxième trimestre 2023. Le revenu opérationnel a été amélioré à 0,7 million de dollars (5,4 % des revenus) par rapport à une perte de 1,7 million de dollars l'année dernière. Le revenu net des opérations continues s'élevait à 0,6 million de dollars (0,22 dollar par action diluée), une amélioration significative par rapport à une perte nette de 3,3 millions de dollars au deuxième trimestre 2023.
L'entreprise a attribué cette forte performance à une augmentation de la demande des clients, à des gains d'efficacité opérationnelle et à une réduction des dépenses SG&A. Servotronics s'attend à une demande soutenue et forte sur les principaux marchés finaux pour le reste de l'année.
Servotronics (NYSE American: SVT) hat starke Finanzergebnisse für das zweite Quartal 2024 angekündigt. Der Umsatz stieg um 15,3% auf 12,3 Millionen Dollar, angetrieben durch höhere Volumina und verbesserte Preise. Der Bruttogewinn stieg auf 3,1 Millionen Dollar (25% des Umsatzes), im Vergleich zu 1,6 Millionen Dollar (14,6%) im zweiten Quartal 2023. Der operative Gewinn verbesserte sich auf 0,7 Millionen Dollar (5,4% des Umsatzes) im Vergleich zu einem Verlust von 1,7 Millionen Dollar im letzten Jahr. Der Nettogewinn aus fortführenden Betrieben betrug 0,6 Millionen Dollar (0,22 Dollar je verwässerte Aktie), eine signifikante Verbesserung im Vergleich zu einem Nettverlust von 3,3 Millionen Dollar im zweiten Quartal 2023.
Das Unternehmen schrieb die starke Performance der gestiegenen Kundennachfrage, betrieblichen Effizienzen und gesenkten SG&A-Ausgaben zu. Servotronics erwartet auch für den Rest des Jahres eine anhaltend starke Nachfrage in wichtigen Endmärkten.
- Revenue increased 15.3% year-over-year to $12.3 million
- Gross profit margin improved to 25% from 14.6% in Q2 2023
- Operating income turned positive at $0.7 million, compared to a loss of $1.7 million last year
- Net income from continuing operations was $0.6 million ($0.22 per diluted share)
- Operating cash flows improved by approximately $6.6 million compared to the same period in 2023
- Strong customer demand and improved pricing contributed to revenue growth
- Unfavorable sales mix partially offset revenue growth
Insights
Servotronics' Q2 2024 results show significant improvement, indicating a strong turnaround. Revenue increased by
The reduction in SG&A expenses by
Improved cash flow and debt reduction enhance the company's financial flexibility, allowing for strategic investments. However, investors should monitor inventory levels, which have increased to support growth, ensuring they don't become a drag on working capital.
Servotronics' performance reflects a robust demand in the aerospace sector. The
The improved pricing power indicates a favorable market position, possibly due to supply chain constraints benefiting established suppliers. However, the mention of an unfavorable sales mix warrants attention. It could suggest a shift towards lower-margin products or increased competition in high-value segments.
The company's ability to improve margins while growing revenue is particularly impressive in the aerospace industry, known for its tight margins. This efficiency gain could provide a competitive edge as the sector continues to recover. Investors should watch for sustained demand in key end markets and Servotronics' ability to maintain its operational improvements in a highly cyclical industry.
-- Continued market demand and operating performance results in year-over-year revenue and profit growth --
Highlights for the second quarter financial results include the following:
- Consolidated revenues were
$12.3 million 15.3% from$10.7 million - Gross profit increased to
$3.1 million 25.0% of revenue in the second quarter, up from$1.6 million 14.6% of revenue in the second quarter of 2023. The improvement in gross profit was driven primarily by increased volume and operational efficiencies. - Selling, general and administrative (SG&A) expenses decreased
$0.9 million $2.4 million $3.3 million - Operating income for the quarter was
$0.7 million 5.4% of revenue compared to an operating loss of$1.7 million - Net income from continuing operations was
$0.6 million $0.22 ( , or ($3.3) million $1.33
"I am very pleased with our second quarter results and our rebound from the slow start to the year. I am particularly proud of our continuous improvement efforts that have directly impacted our strong top-line growth, accelerated margins, and favorable operating income as we continue to properly manage our operating costs," said Chief Executive Officer William F. Farrell, Jr.
Second Quarter Business Results
Three Months Ended June 30, | ||||||||||||
(dollars in thousands) | 2024 | 2023 | 2024 vs 2023 | |||||||||
% | % | $ | % | |||||||||
Dollars | Sales | Dollars | Sales | Change | Change | |||||||
Revenues | 100.0 % | 100.0 % | $ 1,624 | 15.3 % | ||||||||
Cost of goods sold | 9,210 | 75.0 % | 9,092 | 85.4 % | 118 | 1.3 % | ||||||
Gross Profit | 3,063 | 25.0 % | 1,557 | 14.6 % | 1,506 | 96.7 % | ||||||
Selling, general and administrative | 2,397 | 19.5 % | 3,269 | 30.7 % | (872) | (26.7) % | ||||||
Operating income (loss) | 666 | 5.4 % | (1,712) | (16.1) % | 2,378 | 138.9 % | ||||||
Other expenses | 98 | 0.8 % | 89 | 0.8 % | 9 | 10.1 % | ||||||
Income (loss) before income taxes | 568 | 4.6 % | (1,801) | (16.9) % | 2,369 | 131.5 % | ||||||
Income (loss) from continuing operations | - | 0.0 % | 1,479 | 13.9 % | (1,479) | (100.0) % | ||||||
$ 568 | 4.6 % | $ (3,280) | (30.8) % | $ 3,848 | 117.3 % | |||||||
Servotronics' Chief Financial Officer Robert A. Fraass commented, "The growth in revenues and profitability combined with our effective working capital management resulted in a dramatic improvement in cash flow from operations in the first six months of the year. Increased cash flow and debt reduction provide us the liquidity to continue investing in our growth. As we evaluate our strategic initiatives, we will continue to invest capital where it has the greatest impact for our customers and shareholders."
The Company's operating cash flows increased by approximately
Mr. Farrell concluded, "The work we have done to position Servotronics for long-term, sustainable growth is now showing the results we anticipated. Looking at the remainder of the year, we expect strong demand in our key end markets. As we continue to execute on our long-term strategic goals, we believe that our commitment to meeting the needs of customers will result in enhanced shareholder value."
ABOUT SERVOTRONICS
Servotronics designs, develops and manufactures servo controls and other components for various commercial and government applications including aircraft, jet engines, missiles, manufacturing equipment and other aerospace applications at its operating facilities in
FORWARD-LOOKING STATEMENTS
This news release contains certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. When used in this report, the words "project," "believe," "plan," "anticipate," "expect" and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Forward-looking statements involve numerous risks and uncertainties which may cause the actual results of the Company to be materially different from future results expressed or implied by such forward-looking statements. There are a number of factors that will influence the Company's future operations, including: 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 on commercial activity and demand across our and our customers' businesses, and on global supply chains, the ability of the Company to obtain and retain key executives and employees 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 America
SERVOTRONICS, INC. AND SUBSIDIARIES | ||||||||
June 30, | December 31, | |||||||
2024 | 2023 | |||||||
(Unaudited) | (Audited) | |||||||
Current assets: | ||||||||
Cash | $ | 119 | $ | 95 | ||||
Cash, restricted | 150 | 150 | ||||||
Accounts receivable, net | 10,706 | 12,065 | ||||||
Inventories, net | 15,830 | 14,198 | ||||||
Prepaid and other current assets | 945 | 1,507 | ||||||
Assets related to discontinued operation | 1,480 | 1,552 | ||||||
Total current assets | 29,230 | 29,567 | ||||||
Property, plant and equipment, net | 7,082 | 6,978 | ||||||
Other non-current assets | 42 | 42 | ||||||
Total Assets | $ | 36,354 | $ | 36,587 | ||||
Liabilities and Shareholders' Equity | ||||||||
Current liabilities: | ||||||||
Line of credit | $ | 1,473 | $ | 2,103 | ||||
Current portion of post retirement obligation | 97 | 97 | ||||||
Accounts payable | 2,432 | 2,061 | ||||||
Accrued employee compensation and benefits costs | 989 | 1,003 | ||||||
Accrued warranty | 449 | 542 | ||||||
Other accrued liabilities | 1,827 | 1,909 | ||||||
Liabilities related to discontinued operation | 24 | 213 | ||||||
Total current liabilities | 7,291 | 7,928 | ||||||
Post retirement obligation | 4,202 | 4,165 | ||||||
Shareholders' equity: | ||||||||
Common stock, par value | 525 | 525 | ||||||
Capital in excess of par value | 14,762 | 14,617 | ||||||
Retained earnings | 13,127 | 12,954 | ||||||
Accumulated other comprehensive loss | (2,350) | (2,389) | ||||||
Employee stock ownership trust commitment | (56) | (56) | ||||||
Treasury stock, at cost 71,125 (87,525 - 2023) shares | (1,147) | (1,157) | ||||||
Total shareholders' equity | 24,861 | 24,494 | ||||||
Total Liabilities and Shareholders' Equity | $ | 36,354 | $ | 36,587 | ||||
SERVOTRONICS, INC. AND SUBSIDIARIES | ||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||||||
Revenue | $ | 12,273 | $ | 10,649 | $ | 22,719 | $ | 19,709 | ||||||||
Costs of goods sold, inclusive of depreciation and amortization | 9,210 | 9,092 | 17,921 | 17,168 | ||||||||||||
Gross profit | 3,063 | 1,557 | 4,798 | 2,541 | ||||||||||||
Operating expenses | ||||||||||||||||
Selling, general and administrative | 2,397 | 3,269 | 4,415 | 5,444 | ||||||||||||
Operating income (loss) | 666 | (1,712) | 383 | (2,903) | ||||||||||||
Other expense | ||||||||||||||||
Interest & other expense, net | 98 | 89 | 181 | 142 | ||||||||||||
Total other expense | 98 | 89 | 181 | 142 | ||||||||||||
Income (loss) from continuing operations before income taxes | 568 | (1,801) | 202 | (3,045) | ||||||||||||
Income taxes | - | 1,479 | - | 1,063 | ||||||||||||
Income (loss) from continuing operations, net of tax | 568 | (3,280) | 202 | (4,108) | ||||||||||||
Loss from discontinued operation before income taxes | (12) | (6,220) | (29) | (6,940) | ||||||||||||
Income taxes | - | - | - | - | ||||||||||||
Loss from discontinued operation, net of tax (Note 2) | (12) | (6,220) | (29) | (6,940) | ||||||||||||
Net income (loss) | $ | 556 | $ | (9,500) | $ | 173 | $ | (11,048) | ||||||||
Basic earnings (loss) per share: | ||||||||||||||||
Continuing operations | $ | 0.23 | $ | (1.33) | $ | 0.08 | $ | (1.67) | ||||||||
Discontinued operation | - | (2.53) | (0.01) | (2.82) | ||||||||||||
Basic earnings (loss) per share | $ | 0.23 | $ | (3.86) | $ | 0.07 | $ | (4.49) | ||||||||
Diluted earnings (loss) per share: | ||||||||||||||||
Continuing operations | $ | 0.22 | $ | (1.33) | $ | 0.08 | $ | (1.67) | ||||||||
Discontinued operation | - | (2.53) | (0.01) | (2.82) | ||||||||||||
Diluted earnings (loss) per share | $ | 0.22 | $ | (3.86) | $ | 0.07 | $ | (4.49) | ||||||||
SERVOTRONICS, INC. AND SUBSIDIARIES | ||||||||
Six Months Ended | ||||||||
June 30, | ||||||||
2024 | 2023 | |||||||
Cash flows related to operating activities: | ||||||||
Income (loss) from continuing operations | $ | 202 | $ | (4,108) | ||||
Adjustments to reconcile income (loss) from continuing operations to net cash provided | ||||||||
Depreciation and amortization | 543 | 517 | ||||||
Stock based compensation | 176 | 74 | ||||||
Allowance for credit losses | (18) | (25) | ||||||
Inventory reserve | 139 | 14 | ||||||
Warranty reserve | (93) | (2) | ||||||
Deferred income taxes | - | 1,072 | ||||||
Changes in assets and liabilities providing (using) cash: | ||||||||
Accounts receivable | 1,377 | (2,663) | ||||||
Inventories | (1,771) | (826) | ||||||
Prepaid and other current assets | 562 | (520) | ||||||
Accounts payable | 371 | 1,064 | ||||||
Accrued employee compensation and benefit costs | 25 | 301 | ||||||
Post retirement obligations | 37 | 66 | ||||||
Other accrued liabilities | (82) | (105) | ||||||
Net cash provided (used) by operating activities from continuing operations | 1,468 | (5,141) | ||||||
Cash flows related to investing activities: | ||||||||
Purchase of property, plant and equipment | (647) | (403) | ||||||
Net cash used by investing activities from continuing operations | (647) | (403) | ||||||
Cash flows related to financing activities: | ||||||||
(Payments on) proceeds from line of credit | (630) | 3,697 | ||||||
Purchase of treasury shares | (21) | - | ||||||
Principal payments on finance lease obligations | - | (501) | ||||||
Net cash (used) provided by financing activities from continuing operations | (651) | 3,196 | ||||||
Discontinued Operation | ||||||||
Cash used by operating activities | (146) | (568) | ||||||
Net cash used by operating activities from discontinued operation | (146) | (568) | ||||||
Net increase (decrease) in cash and restricted cash | 24 | (2,916) | ||||||
Cash and restricted cash at beginning of period | 245 | 3,812 | ||||||
Cash and restricted cash at end of period | $ | 269 | $ | 896 | ||||
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SOURCE Servotronics, Inc.
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