ELMA, N.Y., March 15, 2017 /PRNewswire/ -- Servotronics, Inc.
(NYSE MKT: SVT) a designer and manufacturer of servo-control
components and other advanced technology products announced today
the results of its operations for the year ended December 31, 2016.
Net income for the twelve month period ended December 31, 2016 was $1,753,000 (or $0.79 per share Basic and $0.76 Diluted) on revenues of $38,587,000 as compared to net income for the
same period of 2015 of $4,597,000 (or
$2.11 per share Basic and
$2.03 Diluted) on revenues of
$36,729,000 which included a
previously disclosed insurance settlement related to an arbitration
award. Excluding the non-recurring items, the Company's adjusted
net income increased approximately 6% from $1,660,000 for the twelve-month period ended
December 31, 2015 to $1,753,000 for the same period of 2016.
Gross profit for 2016 was $10.0
million, or 26.0% of revenue, compared with $9.1 million, or 24.7% of revenue for 2015.
The increase in gross profit in dollars and as a percentage of
revenue is primarily due to the mix of product sold as well as the
realization of certain expected operational efficiencies
attributable to increased production volumes for in-house and
outsourced operations. Operating income for 2016 was
$2.5 million, or 6.6% of revenue,
compared to $2.2 million, or 6.0% of
revenue for 2015.
"Our annual financial performance shows that the Company has
again achieved record sales with an over 5% increase in revenues
from 2015," observed Kenneth D.
Trbovich, President. "The investments in our employees and
equipment in 2016 have been made with a long-term outlook towards
improving efficiencies and structural cost reductions at both the
ATG and CPG. We continue to execute our strategy that we believe is
building the foundation necessary for us to achieve our long-term
goals for growth in sales and profitability."
On March 9, 2017, the Company sold
certain unused commercial real property in Franklinville, New York for approximately
$180,000. While the gain/loss
on the sale is immaterial to the Company's financial statements,
the elimination of the carrying costs (taxes, insurance,
maintenance, etc.) associated with the property will reduce the
CPG's operating expenses going forward.
Reconciliation of Non-GAAP Financial Measures
This press release contains financial information determined by
methods other than in accordance with U.S. Generally Accepted
Accounting Principles, ("GAAP"). The Company's management uses the
non-GAAP measure "adjusted net income" in their analysis of the
Company's performance. This measure, as used by Servotronics,
adjusts net income determined in accordance with GAAP to reflect
changes in financial results associated with the highlighted
charges and income items. Management believes the presentation of
this financial measure provides important supplemental information
in evaluating the operating results of the Company and allows
management to evaluate and compare the core operating performance
of the Company from period to period by removing nonrecurring items
that are not indicative of ongoing operating results. This non-GAAP
disclosure has limitations as an analytical tool, should not be
viewed as a substitute for net earnings determined in accordance
with GAAP, and should not be considered in isolation or as a
substitute for analysis of the Company's results as reported under
GAAP, nor is it necessarily comparable to non-GAAP performance
measures that may be presented by other companies. This
supplemental presentation should not be construed as an inference
that the Company's future results will be unaffected by similar
adjustments to net income determined in accordance with
GAAP.
Included below is a reconciliation of non-GAAP adjusted
financial measures to reported amounts ($000's omitted).
|
Twelve Months
Ended
|
|
December
31,
|
Net Income
reconciliation
|
2016
|
2015
|
As reported net
income
|
$
1,753
|
$
4,597
|
|
Non-GAAP adjustments,
net of tax
|
|
|
|
|
Non-recurring
arbitration award expense
|
-
|
33
|
|
|
Non-recurring
insurance settlement related to arbitration
|
-
|
(2,970)
|
Non-GAAP adjusted net
income
|
$
1,753
|
$
1,660
|
Per share
amounts:
|
|
|
Non-GAAP adjusted net
income per share (basic)
|
$
0.79
|
$
0.76
|
Basic weighted average
common shares
|
2,215
|
2,182
|
The Company is composed of two groups – the ATG and the CPG. The
ATG primarily designs, develops and manufactures servo controls and
other components for various commercial and government applications
(i.e., aircraft, jet engines, missiles, manufacturing equipment,
etc.). The CPG designs and manufactures cutlery, bayonets, pocket
knives, machetes and combat knives, survival, sporting,
agricultural knives and other edged products for both commercial
and government applications.
FORWARD-LOOKING STATEMENTS
Certain paragraphs of this release contain forward-looking
statements within the meaning of Section 27A of the Securities Act
of 1933 and Section 21E of the Securities Exchange Act of 1934,
such as those pertaining to the Company's planned growth efforts
and expectation of new business and success in its entry into new
product programs. Forward-looking statements involve numerous risks
and uncertainties. The Company derives a material portion of its
revenue from fixed price contracts with agencies of the U.S.
Government or their prime contractors. The following factors, among
others, could cause actual results and future events to differ
materially from those set forth or contemplated in the
forward-looking statements: uncertainties in today's global
economy, including political risks, adverse changes in legal and
regulatory environments, and difficulty in predicting defense
appropriations, the introduction of new technologies and the impact
of competitive products. the vitality of the commercial aviation
industry and its ability to purchase new aircraft, the willingness
and ability of the Company's customers to fund long-term purchase
programs, and market demand and acceptance both for the Company's
products and its customers' products which incorporate Company-made
components, the Company's ability to accurately align capacity with
demand, the availability of financing and changes in interest
rates, the outcome of pending and potential litigation and the
additional risks discussed in the Company's filings with the
Securities and Exchange Commission. Readers are cautioned not to
place undue reliance on forward-looking statements, which reflect
management's analysis only as of the date hereof. The Company
assumes no obligation to update forward-looking statements, whether
as a result of new information, future events or otherwise.
SERVOTRONICS, INC. (SVT) IS LISTED ON NYSE
MKT
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SOURCE Servotronics, Inc.