Servotronics Announces Improved First Quarter 2025 Financial Results
Servotronics (SVT) reported improved Q1 2025 financial results, with revenue increasing 12% to $11.7 million from $10.4 million in Q1 2024. The company achieved a significant turnaround, posting a net income of $0.1 million ($0.06 per share) compared to a net loss of $0.4 million (-$0.15 per share) in Q1 2024. Gross profit margin expanded by 360 basis points to 20.2%, driven by higher volumes and operational efficiencies. Operating income improved by $0.5 million to $0.2 million, reversing a previous loss of $0.3 million. The company is actively pursuing strategic alternatives and has begun discussions with potential partners while implementing pricing improvements expected to enhance margins through 2026.
Servotronics (SVT) ha riportato risultati finanziari migliorati nel primo trimestre 2025, con un fatturato in crescita del 12%, passando da 10,4 milioni di dollari nel Q1 2024 a 11,7 milioni di dollari. L'azienda ha registrato una significativa inversione di tendenza, ottenendo un utile netto di 0,1 milioni di dollari (0,06 dollari per azione) rispetto a una perdita netta di 0,4 milioni di dollari (-0,15 dollari per azione) nel Q1 2024. Il margine lordo è aumentato di 360 punti base raggiungendo il 20,2%, grazie a volumi più elevati e a una maggiore efficienza operativa. L'utile operativo è migliorato di 0,5 milioni di dollari, attestandosi a 0,2 milioni, invertendo una precedente perdita di 0,3 milioni. L'azienda sta attivamente valutando alternative strategiche e ha avviato discussioni con potenziali partner, mentre sta implementando miglioramenti nei prezzi che si prevede aumenteranno i margini fino al 2026.
Servotronics (SVT) reportó mejores resultados financieros en el primer trimestre de 2025, con ingresos que aumentaron un 12%, alcanzando 11,7 millones de dólares frente a 10,4 millones en el Q1 de 2024. La compañía logró un giro significativo, registrando un ingreso neto de 0,1 millones de dólares (0,06 dólares por acción) en comparación con una pérdida neta de 0,4 millones (-0,15 dólares por acción) en el Q1 de 2024. El margen bruto se amplió en 360 puntos básicos hasta un 20,2%, impulsado por mayores volúmenes y eficiencias operativas. El ingreso operativo mejoró en 0,5 millones hasta 0,2 millones, revirtiendo una pérdida previa de 0,3 millones. La empresa está activamente buscando alternativas estratégicas y ha iniciado conversaciones con posibles socios, mientras implementa mejoras en los precios que se espera aumenten los márgenes hasta 2026.
Servotronics (SVT)는 2025년 1분기 재무 실적이 개선되었으며, 매출이 2024년 1분기 1,040만 달러에서 12% 증가한 1,170만 달러를 기록했습니다. 회사는 큰 전환점을 맞아 2024년 1분기 40만 달러 순손실(-주당 0.15달러)에서 10만 달러 순이익(주당 0.06달러)을 기록했습니다. 총이익률은 360 베이시스 포인트 증가하여 20.2%를 달성했으며, 이는 더 높은 판매량과 운영 효율성 덕분입니다. 영업이익은 50만 달러 증가하여 20만 달러 흑자로 전환되었으며, 이전의 30만 달러 손실에서 반전된 결과입니다. 회사는 전략적 대안을 적극적으로 모색 중이며 잠재적 파트너와 논의를 시작했으며, 2026년까지 마진 향상을 기대하는 가격 정책 개선도 시행 중입니다.
Servotronics (SVT) a annoncé une amélioration de ses résultats financiers au premier trimestre 2025, avec un chiffre d'affaires en hausse de 12% à 11,7 millions de dollars, contre 10,4 millions au premier trimestre 2024. La société a réalisé un retournement significatif, affichant un bénéfice net de 0,1 million de dollars (0,06 dollar par action) contre une perte nette de 0,4 million (-0,15 dollar par action) au premier trimestre 2024. La marge brute s'est accrue de 360 points de base pour atteindre 20,2%, grâce à des volumes plus élevés et à une meilleure efficacité opérationnelle. Le résultat d'exploitation s'est amélioré de 0,5 million pour atteindre 0,2 million, inversant une perte précédente de 0,3 million. L'entreprise explore activement des alternatives stratégiques et a entamé des discussions avec des partenaires potentiels, tout en mettant en œuvre des ajustements tarifaires qui devraient améliorer les marges jusqu'en 2026.
Servotronics (SVT) meldete verbesserte Finanzergebnisse für das erste Quartal 2025, wobei der Umsatz um 12% auf 11,7 Millionen US-Dollar gegenüber 10,4 Millionen US-Dollar im ersten Quartal 2024 stieg. Das Unternehmen erzielte eine deutliche Wende und verzeichnete einen Nettogewinn von 0,1 Millionen US-Dollar (0,06 US-Dollar pro Aktie) im Vergleich zu einem Nettoverlust von 0,4 Millionen US-Dollar (-0,15 US-Dollar pro Aktie) im ersten Quartal 2024. Die Bruttogewinnmarge stieg um 360 Basispunkte auf 20,2%, bedingt durch höhere Volumina und operative Effizienzsteigerungen. Das Betriebsergebnis verbesserte sich um 0,5 Millionen auf 0,2 Millionen US-Dollar und kehrte somit einen vorherigen Verlust von 0,3 Millionen um. Das Unternehmen verfolgt aktiv strategische Alternativen, hat Gespräche mit potenziellen Partnern aufgenommen und führt Preisanpassungen durch, die voraussichtlich die Margen bis 2026 verbessern werden.
- Revenue grew 12% year-over-year to $11.7 million
- Gross margin improved significantly by 360 basis points to 20.2%
- Returned to profitability with $0.1 million net income vs. $0.4 million loss year-over-year
- Adjusted EBITDA improved to $0.5 million from -$0.01 million in Q1 2024
- Successfully negotiated improved pricing terms with key customers for future margin enhancement
- SG&A expenses increased 5% to $2.1 million due to strategic review and proxy costs
- Unfavorable product mix partially offset revenue gains
- Cash position decreased to $37,000 from $111,000 at year-end 2024
- Line of credit usage increased to $3.7 million from $2.1 million at year-end 2024
Insights
Servotronics achieved profitability with 12% revenue growth and substantial margin improvement, driven by higher volumes and operational efficiencies.
Servotronics has delivered a significant turnaround in Q1 2025, returning to profitability after posting losses in the comparable period last year. The company reported
The gross profit metrics are particularly impressive. Gross profit jumped
Operating income showed a remarkable turnaround, swinging to a positive
From a balance sheet perspective, there are some points worth monitoring. The company has increased its line of credit to
The company's non-GAAP adjusted EBITDA (which excludes one-time costs related to strategic alternatives review and proxy contest) was
Management has highlighted ongoing pricing term improvements with key customers that are expected to further bolster margins in the coming quarters, with more significant benefits expected in 2026. They also noted they're in discussions with potential strategic partners, indicating possible M&A activity or significant business restructuring on the horizon as part of their strategic alternatives review.
-- Rebounding Industry Demand Drives
Highlights for the first quarter financial results include:
- Revenues of
$11.7 million 12.0% from$10.4 million - Gross profit saw a
36.0% increase to$2.4 million 20.2% of revenue, in the first quarter, up significantly from$1.7 million 16.6% of revenue, in the first quarter of 2024. The increase was the result of increased volumes, higher fixed cost absorption and enhanced operational efficiencies. - Operating income significantly improved by
$0.5 million $0.2 million ( in the first quarter of 2024, driven by increased gross profit and enhanced cost absorption from higher production volumes, partially offset by higher SG&A costs.$0.3) million - Net income from continuing operations was
$0.1 million $0.06 $0.4 million $0.15
"As industry conditions have begun to rebound, Servotronics has benefited from the increase in volumes, noticeable in both our top-line and margin strength during the first quarter. We saw a significant turnaround in our operating income that was a direct result of our ongoing attention to process improvements and revenue enhancing strategies," commented Chief Executive Officer William F. Farrell, Jr. "We are also seeing the benefits of efforts in growing our business with both current and new customers in the military and commercial aerospace markets. The strength of our performance during the quarter is a testament to the team's dedication to the continued success of Servotronics and the focus we have on achieving our long-term strategic goals."
Servotronics' Chief Financial Officer Robert A. Fraass commented, "During the first quarter we worked diligently with key customers to improve pricing terms for the foreseeable future. Revised pricing will bolster our margins with improvements starting this year and picking up pace in 2026. This initiative is a validation of the value Servotronics delivers to the aerospace industry and the trust our customers place in us."
First Quarter Business Results | |||||||||||||
Three Months Ended March 31, | |||||||||||||
2025 | 2024 | 2025 vs 2024 | |||||||||||
(in thousands) | Dollars | % Sales | Dollars | % Sales | Change $ | Change % | |||||||
Revenue | 100.0 % | 100.0 % | $ 1,257 | 12.0 % | |||||||||
Costs of goods sold | 9,343 | 79.8 % | 8,711 | 83.4 % | 632 | 7.3 % | |||||||
Gross profit | 2,360 | 20.2 % | 1,735 | 16.6 % | 625 | 36.0 % | |||||||
Selling, general and administrative | 2,118 | 18.1 % | 2,018 | 19.3 % | 100 | 5.0 % | |||||||
Operating income (loss) | 242 | 2.1 % | (283) | -2.7 % | 525 | 185.5 % | |||||||
Interest & other expense, net | 97 | 0.8 % | 83 | 0.8 % | 14 | 16.9 % | |||||||
Income (loss) from continuing operations before income taxes | 145 | 1.2 % | (366) | -3.5 % | 511 | 139.6 % | |||||||
Income tax expense | - | 0.0 % | - | 0.0 % | - | 0.0 % | |||||||
Income (loss) from continuing operations, net of tax | $ 145 | 1.2 % | $ (366) | -3.5 % | $ 511 | 139.6 % | |||||||
Non-GAAP measure: | |||||||||||||
Operating income (loss) | $ 242 | 2.1 % | $ (283) | -2.7 % | $ 525 | 185.5 % | |||||||
Addback: depreciation & amort | 218 | 1.9 % | 271 | 2.6 % | (53) | 19.6 % | |||||||
Addback: one-time costs | 65 | 0.6 % | - | 0.0 % | 65 | 0.0 % | |||||||
Adjusted EBITDA | $ 525 | 4.5 % | $ (12) | -0.1 % | $ 537 | 4475.0 % | |||||||
Revenues increased to
For the first quarter, gross profit increased
First-quarter selling, general and administrative (SG&A) expenses increased
Net income from continuing operations was
From a non-GAAP standpoint, adjusted EBITDA (adjusted for one-time costs related to the review of strategic alternatives and the proxy contest) was
Mr. Farrell concluded, "I am pleased with our start to this year and our team's achievements. With markets continuing to improve, we are actively evaluating all opportunities in front of us and selectively choosing margin-accretive projects to further drive revenues, operational efficiencies, and bottom-line results. As our team executes our strategic plan, we expect to generate improved financial results, positioning us well as we continue evaluating strategic alternatives with the Board. We have already begun conversations with potential strategic partners and have received positive responses as we seek to realize the full potential value of our business."
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 release, 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, 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 our operations and personnel, 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 CONSOLIDATED BALANCE SHEETS (in thousands except share and per share data) | ||||
March 31, | December 31, | |||
2025 | 2024 | |||
(Unaudited) | (Audited) | |||
Current Assets: | ||||
Cash | $ 37 | $ 111 | ||
Cash, restricted | 150 | 150 | ||
Accounts receivable, net | 11,362 | 9,288 | ||
Inventories, net | 15,488 | 15,826 | ||
Prepaid and other current assets | 1,142 | 968 | ||
Assets related to discontinued operation | 1,450 | 1,436 | ||
Total current assets | 29,629 | 27,779 | ||
Property, plant and equipment, net | 7,031 | 7,005 | ||
Other non-current assets | 48 | 48 | ||
Total Assets | $ 36,708 | $ 34,832 | ||
Liabilities and Shareholders' Equity | ||||
Current Liabilities: | ||||
Line of credit | $ 3,725 | $ 2,127 | ||
Current portion of post-retirement obligation | 84 | 84 | ||
Accounts payable | 2,737 | 2,413 | ||
Accrued employee compensation and benefits costs | 794 | 705 | ||
Accrued warranty | 337 | 333 | ||
Other accrued liabilities | 851 | 1,170 | ||
Liabilities related to discontinued operation | 23 | 23 | ||
Total Current Liabilities | 8,551 | 6,855 | ||
Long-Term Liabilities: | ||||
Post-retirement obligation | 4,121 | 4,097 | ||
Post-retirement obligation, current | (84) | (84) | ||
Post-retirement obligation, net | 4,037 | 4,013 | ||
Other long-term liabilities | 425 | 460 | ||
Total long-term liabilities | 4,462 | 4,473 | ||
Shareholders' Equity: | ||||
Common stock, par value | 526 | 526 | ||
Capital in excess of par value | 14,862 | 14,828 | ||
Retained earnings | 11,459 | 11,331 | ||
Accumulated other comprehensive loss | (2,042) | (2,059) | ||
Treasury stock, at cost 69,020 shares (75,513 shares as of December 31,2024) | (1,110) | (1,122) | ||
Total shareholders' equity | 23,695 | 23,504 | ||
Total Liabilities and Shareholders' Equity | $ 36,708 | $ 34,832 | ||
SERVOTRONICS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands except per share data) (Unaudited) | ||||
Three Months Ended | ||||
March 31, | ||||
2025 | 2024 | |||
Revenue | $ 11,703 | $ 10,446 | ||
Costs of goods sold | 9,343 | 8,711 | ||
Gross profit | 2,360 | 1,735 | ||
Selling, general and administrative | 2,118 | 2,018 | ||
Operating income (loss) | 242 | (283) | ||
Interest & other expense, net | 97 | 83 | ||
Income (loss) from continuing operations before income taxes | 145 | (366) | ||
Income tax expense | - | - | ||
Income (loss) from continuing operations, net of tax | 145 | (366) | ||
Loss from discontinued operation before income taxes | (17) | (17) | ||
Loss from discontinued operation, net of tax (see Note 2) | (17) | (17) | ||
Net income (loss) | $ 128 | $ (383) | ||
Basic and diluted income (loss) per share: | ||||
Continuing operations | $ 0.06 | $ (0.15) | ||
Discontinued operation | (0.01) | (0.01) | ||
Basic and diluted income (loss) per share | $ 0.05 | $ (0.16) | ||
SERVOTRONICS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (Unaudited) | ||||
Three Months Ended | ||||
March 31, | ||||
2025 | 2024 | |||
Cash flows related to operating activities: | ||||
Income (loss) from continuing operations | $ 145 | $ (366) | ||
Adjustments to reconcile income (loss) from continuing operations to net cash (used) provided by operating activities: | ||||
Depreciation and amortization | 218 | 271 | ||
Stock based compensation | 46 | 63 | ||
(Decrease) increase allowance for credit losses | (3) | 3 | ||
(Decrease) increase inventory reserve | (6) | 38 | ||
Increase (decrease) warranty reserve | 4 | (59) | ||
Changes in assets and liabilities (using) providing cash: | ||||
Accounts receivable | (2,071) | 1,589 | ||
Inventories | 344 | (769) | ||
Prepaid and other current assets | (174) | (412) | ||
Accounts payable | 324 | 77 | ||
Accrued employee compensation and benefit costs | 89 | (164) | ||
Other accrued liabilities | (378) | 118 | ||
Post-retirement obligations | 41 | 24 | ||
Other long-term liabilities | (168) | - | ||
Net cash (used) provided by operating activities from continuing operations | (1,589) | 413 | ||
Cash flows related to investing activities: | ||||
Purchase of property, plant and equipment | (69) | (152) | ||
Disposal of property, plant and equipment | 17 | - | ||
Net cash used by investing activities from continuing operations | (52) | (152) | ||
Cash flows related to financing activities: | ||||
Proceeds from (payments on) line of credit, net | 1,598 | (94) | ||
Net cash provided (used) by financing activities from continuing operations | 1,598 | (94) | ||
Discontinued Operation | ||||
Cash used by operating activities | (31) | (126) | ||
Net cash used by discontinued operation | (31) | (126) | ||
Net (decrease) increase in cash and restricted cash | (74) | 41 | ||
Cash and restricted cash at beginning of period | 261 | 245 | ||
Cash and restricted cash at end of period | $ 187 | $ 286 | ||
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SOURCE Servotronics, Inc.
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