<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1999
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ____________________ to ____________________
Commission File No. 1 - 7109
SERVOTRONICS, INC.
- --------------------------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
Delaware 16-0837866
-------- ----------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
1110 Maple Street, Elma, New York 14059-0300
--------------------------------------------
(Address of principal executive offices)
716-655-5990
------------
(Issuer's telephone number, including area code)
Check whether the issuer: (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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 [ ]
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date.
Class Outstanding at July 31, 1999
- -------------------------------- ----------------------------
Common Stock, $.20 par value 2,405,488
(See Note 5 to Consolidated
Financial Statements)
Transitional Small Business Disclosure Format (Check one):
Yes [ ]; No [X]
-1-
<PAGE> 2
INDEX
-----
PART I. FINANCIAL INFORMATION Page No.
Item 1. Financial Statements
a) Consolidated Balance Sheet, June 30, 1999 3
b) Consolidated Statement of Income for the Three
and Six Months Ended June 30, 1999 and 1998 4
c) Consolidated Statement of Cash Flows for the Six
Months Ended June 30, 1999 and 1998 5
d) Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis or Plan of Operation 10
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders 12
Signatures 13
Item 6(a). Exhibits
27 Financial Data Schedule
-2-
<PAGE> 3
<TABLE>
<CAPTION>
PART I FINANCIAL INFORMATION
SERVOTRONICS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
June 30, 1999
($000's omitted except per share data)
(Unaudited)
<S> <C>
Assets
Current assets:
Cash $ 1,083
Accounts receivable 2,540
Inventories 9,728
Prepaid income taxes 28
Deferred tax asset 539
Other 1,511
--------
Total current assets 15,429
--------
Property, plant and equipment, net 7,211
Other assets 622
$ 23,262
========
Liabilities and Shareholders' Equity
Current liabilities:
Current portion of long-term debt $ 254
Demand loan 250
Accounts payable 985
Accrued employee compensation and benefit costs 940
Other accrued liabilities 217
--------
Total current liabilities 2,646
--------
Long-term debt 6,824
Non-current deferred tax liability 477
Other non-current liability 277
Shareholders' equity:
Common stock, par value $.20; authorized
4,000,000 shares; Issued 2,614,506 shares 523
Capital in excess of par value 13,324
Retained earnings 2,992
Accumulated other comprehensive income (43)
--------
16,796
Employee stock ownership trust commitment (2,741)
Treasury stock, at cost 209,018 shares (1,017)
--------
Total shareholders' equity 13,038
--------
$ 23,262
========
</TABLE>
See notes to consolidated financial statements.
-3-
<PAGE> 4
<TABLE>
<CAPTION>
SERVOTRONICS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
($000's omitted except per share data)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net revenues $4,614 $4,492 $ 8,205 $8,930
Costs and expenses:
Cost of goods sold 3,248 2,973 5,753 6,174
Selling, general and administrative 873 859 1,569 1,665
Interest 92 84 159 163
Depreciation and amortization 156 160 313 318
------ ------ ------- ------
4,369 4,076 7,794 8,320
------ ------ ------- ------
Income before income taxes and cumulative
effect of a change in accounting principle 245 416 411 610
Income tax provision 98 175 164 256
------ ------ ------- ------
Income before cumulative effect of a change
in accounting principle 147 241 247 354
Cumulative effect of a one-time change
in accounting principle -- -- (75) --
------ ------ ------- ------
Net income $ 147 $ 241 $ 172 $ 354
====== ====== ======= ======
Income (Loss) Per Share:
Basic
Income per share before cumulative effect of a
change in accounting principle $ 0.08 $ 0.14 $ 0.14 $ 0.20
Cumulative effect per share of a change in
accounting principle -- -- (0.04) --
------ ------ ------- ------
Net income per share $ 0.08 $ 0.14 $ 0.10 $ 0.20
====== ====== ======= ======
Diluted
Income per share before cumulative effect of a
change in accounting principle $ 0.08 $ 0.13 $ 0.14 0.20
Cumulative effect per share of a change in
accounting principle -- -- (0.04) --
------ ------ ------- ------
Net income per share $ 0.08 $ 0.13 $ 0.10 $ 0.20
====== ====== ======= ======
</TABLE>
See notes to consolidated financial statements
-4-
<PAGE> 5
<TABLE>
<CAPTION>
SERVOTRONICS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
($000's omitted)
(Unaudited)
Six Months Ended
June 30,
1999 1998
---- ----
<S> <C> <C>
Cash flows related to operating activities:
Net income $ 172 $ 354
Adjustments to reconcile net income to net
cash provided by operating activities -
Depreciation and amortization 313 318
Cumulative effect of change in accounting principle 75 --
Change in assets and liabilities -
Accounts receivable (342) (832)
Inventories (869) (283)
Prepaid income taxes 37 38
Other current assets (135) (78)
Other assets 8 8
Accounts payable 95 337
Accrued employee compensation & benefit costs 10 168
Other accrued liabilities 34 43
Accrued income tax -- 8
------- -------
Net cash (used in) provided by operating activities (602) 81
------- -------
Cash flows related to investing activities:
Capital expenditures - property, plant &
equipment (314) (279)
------- -------
Net cash used in investing activities (314) (279)
------- -------
Cash flows related to financing activities:
Increase in demand loan 350 150
Payments on demand loan (100) (350)
Acquisition of long-term debt 1,000 --
Principal payments on long-term debt (315) (111)
Issuance of common stock -- 26
Net cash proceeds from exercise of stock options 55 --
------- -------
Net cash provided by (used in) financing activities 990 (285)
------- -------
Net increase (decrease) in cash 74 (483)
Cash at beginning of period 1,009 1,185
------- -------
Cash at end of period $ 1,083 $ 702
======= =======
</TABLE>
See notes to consolidated financial statements
-5-
<PAGE> 6
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
($000 omitted in tables except for per share data)
1. The information set forth herein is unaudited. This financial information
reflects all normal accruals and adjustments which, in the opinion of
management, are necessary for a fair statement of the results for the periods
presented.
Revenue recognition
-------------------
The Company incurred costs for certain contracts which are long term.
These contracts are accounted for under the percentage of completion method
(cost-to-cost) which recognizes revenue as the work progresses towards
completion. Revenues on the remaining contracts are recognized when the terms of
purchase orders are met.
Included in other current assets are $1,064,000 of unbilled revenues
which represent revenue earned under the percentage of completion method
(cost-to-cost) not yet billable under the terms of the contracts.
Reclassification of prior year balances
---------------------------------------
Certain prior year balances have been reclassified to conform with the
current year presentation.
<TABLE>
<CAPTION>
2. Inventories June 30, 1999
----------- -------------
<S> <C>
Raw materials and common parts $ 1,489
Work-in-process (including engineering and other
support costs) 7,911
Finished goods 564
-------
9,964
Less common parts expected to be used after one year (236)
-------
$ 9,728
=======
</TABLE>
Engineering and other support costs are incurred in fulfilling certain
contracts which have a production cycle longer than one year. A portion of these
costs will, therefore, not be realized within one year.
On January 1, 1999, as required by the Accounting Standards Executive
Committee, the Company adopted the newly enacted Statement of Position No. 98-5
"Reporting on the Cost of Start-Up Activities" (SoP-98-5). The effect of
adopting SoP-98-5 resulted in the write-off of approximately $125,000 of
start-up costs which were appropriately capitalized to inventory in prior years.
An approximate $75,000 charge (net of tax of $50,000) was recorded as of January
1, 1999, which was recorded as a cumulative effect of a change in accounting
principle in the June 30, 1999 Consolidated Statement of Income.
<TABLE>
<CAPTION>
3. Property, plant and equipment
June 30, 1999
-------------
<S> <C>
Land $ 11
Buildings 6,156
Machinery, equipment and tooling 8,773
--------
14,940
Less accumulated depreciation (7,729)
--------
$ 7,211
========
</TABLE>
-6-
<PAGE> 7
Property, plant and equipment includes land and building under a
$5,000,000 capital lease which can be purchased for a nominal amount at the
end of the lease term.
<TABLE>
<CAPTION>
4. Long-term debt
--------------- June 30, 1999
-------------
<S> <C>
Industrial Development Revenue Bonds; secured by a letter of credit
from a bank with interest payable monthly at a floating rate
(4.0% at June 30, 1999) $ 5,000
Unsecured term note; payable to a financial institution with
interest on $464,000 at LIBOR plus 2% (7.09% at June 30, 1999) and
interest on the remaining $500,000 at a current rate of 5.86%;
quarterly principal payments of $35,714 through February 1, 2006 964
Various other secured term notes payable to government agencies 1,114
-------
7,078
Less current portion (254)
-------
$ 6,824
=======
</TABLE>
Industrial Development Revenue Bonds were issued by a
government agency to finance the construction of the Company's new
headquarters/Advanced Technology facility. Annual sinking fund payments of
$170,000 commence December 1, 2000 and continue through 2013, with a final
payment of $2,620,000 due December 1, 2014. The Company has agreed to reimburse
the issuer of the letter of credit if there are draws on that letter of credit.
The Company pays the letter of credit bank an annual fee of 1% of the amount
secured thereby and pays the remarketing agent for the bonds an annual fee of
.25% of the principal amount outstanding. The Company's interest under the
facility capital lease has been pledged to secure its obligations to the
government agency, the bank and the bondholders.
The letter of credit reimbursement agreement, the unsecured term note
agreement and a secured term note contain, among other things, covenants
relative to maintenance of working capital and tangible net worth and
restrictions on capital expenditures, leases and additional borrowings.
The Company also has a $1,000,000 line of credit on which there was
$250,000 outstanding at June 30, 1999.
-7-
<PAGE> 8
<TABLE>
<CAPTION>
5. Common shareholders' equity
---------------------------
Common stock
-------------- Accumulated
Number Capital in other
of shares excess of Retained Treasury Comprehensive comprehensive
issued Amount par value earnings ESOP stock income income
---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance December
31, 1998 2,614,506 $523 $13,324 $2,904 ($ 2,741) ($ 1,156) ($ 43)
========= ==== ======= ====== ========= ======= ==========
Comprehensive income
Net income - - - $ 172 - - $ 172 -
Other comprehensive income,
net of tax - - - - - - - -
Minimum pension liability
adjustment - - - - - - - -
Other comprehensive income - - - - - - - -
-------
Comprehensive income - - - - - - $ 172 -
=======
Issuance of common stock - - - (84) - - -
Compensation expense - - - - - - -
Treasury stock - - - - - 139 -
Exercise of stock options - - - - - - -
--------- ---- ------- ------ -------- -------- ----------
Balance June 30, 1999 2,614,506 $523 $13,324 $2,992 ($ 2,741) ($ 1,017) ($ 43)
========= ==== ======= ====== ======== ======== ==========
</TABLE>
Earnings per share
- ------------------
Basic earnings per share is computed by dividing net earnings by the
weighted average number of shares outstanding during the period. 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 earnings per share were outstanding for the period.
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
Income before cumulative effect of a
change in accounting principle $ 147 $ 241 $ 247 $ 354
Cumulative effect of a change in
accounting principle -- -- (75) --
--------- --------- --------- ---------
Net earnings $ 147 $ 241 $ 172 $ 354
Weighted average common shares
outstanding (basic) 1,811 1,739 1,801 1,733
Incremental shares from assumed
conversions of stock options 4 62 5 62
Weighted average common
shares outstanding (diluted) 1,815 1,801 1,806 1,795
Income (Loss) Per Share:
Basic
-----
Income per share before cumulative effect of a
change in accounting principle $ 0.08 $ 0.14 $ 0.14 $ 0.20
Cumulative effect per share of a change in
accounting principle -- -- (0.04) --
--------- --------- --------- ---------
Net income per share $ 0.08 $ 0.14 $ 0.10 $ 0.20
========= ========= ========= =========
Diluted
-------
Income per share before cumulative effect of a
change in accounting principle $ 0.08 $ 0.13 $ 0.14 $ 0.20
Cumulative effect per share of a change in
accounting principle -- -- (0.04) --
--------- --------- --------- ---------
Net income per share $ 0.08 $ 0.13 $ 0.10 $ 0.20
========= ========= ========= =========
</TABLE>
-8-
<PAGE> 9
6. Business segments
-----------------
The Company operates in two business segments, Advanced Technology
Products and Consumer Products. The Company's reportable segments are strategic
business units that offer different products and services. The segments are
separate corporations and are managed separately. Operations in Advanced
Technology Products involve the design, manufacture, and marketing of
servo-control components for government and commercial industrial applications.
Consumer Products operations involve the design, manufacture and marketing of a
variety of cutlery products for use by consumer and government agencies. The
Company derives substantially all of its sales revenue from domestic customers.
<TABLE>
<CAPTION>
Advanced
Period ended Technology Consumer
June 30, 1999 Products Products Consolidated
------------- -------- -------- ------------
<S> <C> <C> <C>
Revenues from unaffiliated customers $ 4,976 $ 3,230 $ 8,205
========= ======== =========
Operating profit $ 870 $ (88) $ 782
========= =========
Interest expense (159)
General corporate expense (212)
Income before income taxes and
cumulative effect of change in
accounting principle $ 411
=========
</TABLE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
---------------------------------------------------------
The following table sets forth for the periods indicated the percentage
relationship of certain items in the consolidated statement of income to net
revenues and the percentage increase or decrease of such items as compared to
the indicated prior period.
<TABLE>
<CAPTION>
Relationship to Period to Relationship to Period to
net revenues period $ net revenues period $
three months ended increase six months ended increase
June 30 (decrease) June 30 (decrease)
1999 1998 99-98 1999 1998 99-98
---- ---- ----- ---- ---- -----
<S> <C> <C> <C> <C> <C> <C>
Net revenues
Advanced technology products 62.7% 62.7% 3.8% 60.6% 61.9% (9.1%)
Consumer products 37.3% 37.3% 0.9% 39.4% 38.1% (6.5%)
----- ----- ---- ----- ----- -----
100.0% 100.0% 2.7% 100.0% 100.0% (8.1%)
Cost of goods sold, exclusive of
depreciation 70.4% 66.2% 9.2% 70.1% 69.1% (6.8%)
----- ----- ---- ----- ----- -----
Gross profit 29.6% 33.8% (10.1%) 29.9% 30.9% (11.0%)
----- ----- ----- ----- ----- ------
Selling, general and administrative 18.9% 19.1% 1.6% 19.1% 18.6% (5.8%)
Interest 2.0% 1.9% 9.5% 1.9% 1.8% (2.5%)
Depreciation and amortization 3.4% 3.6% (2.5%) 3.8% 3.6% (1.6%)
---- ---- ---- ---- ---- -----
24.3% 24.6% 8.6% 24.8% 24.0% (9.9%)
----- ----- ---- ----- ----- -----
Income before income taxes and cumulative
effect of a change in accounting principle 5.3% 9.2% (41.1%) 5.1% 6.9% (32.6%)
Income tax provision 2.1% 3.8% (44.0%) 2.1% 2.9% (35.9%)
---- ---- ----- ---- ---- ------
Net income before cumulative effect of a change
in accounting principle 3.2% 5.4% (39.0%) 3.0% 4.0% (30.2%)
---- ---- ----- ---- ---- ------
Cumulative effect of a change in accounting principle -- -- - (0.9%) -- --
---- ---- ---- ----
Net income 3.2% 5.4% (39.0%) 2.1% 4.0% (51.4%)
==== ==== ====== ==== ==== ======
</TABLE>
-9-
<PAGE> 10
Management Discussion
- ---------------------
During the six month period ended June 30, 1999 and for the comparable
period ended June 30, 1998, approximately 15% and 23% respectively, of the
Company's revenues were derived from contracts with agencies of the U.S.
Government or their prime contractors. For the second quarter of 1999 and 1998,
approximately 15% and 26% of the Company's revenues were derived from comparable
sources. The Company's business is performed under fixed price contracts. It is
noted that the many uncertainties in today's global economy, and difficulty in
predicting defense appropriations (both actual and proposed) preclude any
guarantees or even assurances that current programs will be continued or that
programs in the prototype stages will ultimately result in production
applications. It is because of such uncertainties and because such adverse
occurrences may not be counterbalanced with new programs or otherwise, that
cyclical downturns in operational performances are realistic expectations.
Results of Operations
- ---------------------
The Company's consolidated results of operations for the six month
period ended June 30, 1999 showed an approximate 8.1% decrease in net revenues
and a decrease in net income of approximately 30.2%, before the $75,000
cumulative effect of a change in accounting principle, when compared to the same
six month period of 1998. For the second quarter of 1999, net sales increased
approximately 2.7% with a decrease in net income of 39%. The six month decrease
in revenues is primarily the result of the stretch-out of certain Advanced
Technology Group's deliveries offset by increased revenues in the second quarter
due to revenue recognized on contracts accounted for under the percentage of
completion method [cost-to-cost (See Note 1)]. These same factors contributed to
the fluctuations in net income and operating profit as discussed below.
The Advanced Technology Group's total backlog (funded and unfunded) as
of June 30, 1999 increased by approximately $3,400,000 from a year earlier. The
June 30, 1999 total backlog is approximately $58,900,000 as compared to
$55,500,000 of which $50,200,000 and $48,200,000 were unfunded in each of the
respective comparative periods. Approximately $36,400,000 of the June 30, 1999
backlog is for product deliveries beyond 2001. The unfunded portion of the
backlog is based on the Company's customers' estimated quantities for multi-year
agreements for which the Company has not received firm orders.
Operating profit as a percentage of net revenues for the six month
period ended June 30, 1999 decreased to 5.1% from 6.9% as reported for the same
six month period of 1998. For the second quarter of 1999, operating profit as a
percent of net revenue decreased to 5.3% from 9.2% when compared to the same
period of 1998. The fluctuations in operating profit as a percentage of net
revenues are primarily the result of differences in product mix.
Selling, general and administrative costs as a percentage of net
revenues remained reasonably consistent for the six and three month periods
ended June 30, 1999 when compared to the comparable period of 1998.
Income taxes for the six and three month periods ended June 30, 1999
decreased as a percentage of income before taxes when compared to the comparable
period of 1998 because of the effects of variable state income taxes.
Liquidity and Capital Resources
- -------------------------------
Certain contracts of the Advanced Technology Group require development
and engineering costs in addition to hardware and the maintenance of inventory
for replacement
-10-
<PAGE> 11
and/or overhaul. The replacement and/or overhaul units are billed at the time of
shipment. The inventories at June 30, 1999, include costs associated with the
initiation and maintenance of certain programs and costs in anticipation of
increased demands upon the Company to support new programs and the request of
customers for shorter production lead times.
During the six month period ended June 30, 1999, the Company expended
$314,000 on capital expenditures.
There are no material commitments for capital expenditures at June 30,
1999.
Year 2000 Initiatives
- ---------------------
The Company is reliant on systems that use time-based mechanisms for
asset and information management. Management recognizes that such systems may
have potential problems affecting their capabilities because of the Year 2000
date change. The Company also has relationships with vendors, services and
product suppliers, customers and financial institutions among others, which are
reliant on such systems. It is possible that Year 2000 problems encountered by
the Company or these outside parties could result in a loss of business that is
potentially material to the Company.
During the previous and current years, the Company formulated,
initiated and continued the implementation of a three-phase plan to determine
and, when appropriate, address any internal or external Year 2000 problems to
the extent they existed. Phase I identified internal and external (outside
parties with a material relationship to the Company) Year 2000 compliance
concerns. Phase II assessed the Year 2000 readiness of the Company. Phase III is
the implementation of solutions and contingency plans for the potential problems
identified during Phase I and Phase II.
To date, the Company has assessed its internal computing systems and
determined that there are no apparent material Year 2000 issues, although
certain reprogramming of internal systems were determined to be desirable and
have been completed. With respect to external compliance, the Company has
developed and mailed a Year 2000 survey to its suppliers, customers and
financial institutions to determine their Year 2000 readiness and compliance. As
of July 31, 1999, the Company has not received notification from any such
outside parties that any material Year 2000 readiness or compliance issues have
been identified.
The Company has implemented Phase III and is unaware of any internal
Year 2000 issues that will not be resolved by the end of 1999. Should the
Company become aware of any internal or external Year 2000 issues that will not
be resolved by the end of 1999, it will immediately formulate and implement the
appropriate solutions and contingency plans. In any event, it is anticipated
that the Company will complete all phases of its Year 2000 plan by the end of
1999.
The Company does not believe that the costs of Year 2000 compliance
will be material and anticipates such costs will be funded out of working
capital. At this time, the Company cannot predict the final outcome of the
on-going survey and assessment of the outside parties considered important to
the Company's business or the ability of such outside parties to achieve Year
2000 Compliance by the end of 1999.
-11-
<PAGE> 12
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
- ------ ---------------------------------------------------
The annual meeting of shareholders of the Registrant was held on June
29, 1999. At the meeting, each of the directors of the Registrant was elected to
serve until the next annual meeting of shareholders until his successor is
elected and qualified. The following table shows the results of the voting at
the meeting.
<TABLE>
<CAPTION>
Withheld
Name of Nominee For Authority
--------------- --- ---------
<S> <C> <C>
Dr. William H. Duerig 2,266,371 4,309
Donald W. Hedges 2,266,371 4,309
Nicholas D. Trbovich, Jr. 2,266,588 4,092
Dr. Nicholas D. Trbovich 2,266,588 4,092
</TABLE>
FORWARD-LOOKING STATEMENTS
In addition to historical information, certain sections of this Form 10-QSB
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.
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, difficulty in predicting
defense appropriations, the vitality and ability of the commercial aviation
industry 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-QSB. 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.
-12-
<PAGE> 13
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: August 12, 1999
SERVOTRONICS, INC.
By: /s/Lee D. Burns, Treasurer
-----------------------------------------
Lee D. Burns, Treasurer and
Chief Financial Officer
By: /s/Raymond C. Zielinski, Vice President
-----------------------------------------
Raymond C. Zielinski, Vice President
-13-
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 1,083
<SECURITIES> 0
<RECEIVABLES> 2,540
<ALLOWANCES> 0
<INVENTORY> 9,728
<CURRENT-ASSETS> 15,429
<PP&E> 7,211
<DEPRECIATION> 0
<TOTAL-ASSETS> 23,262
<CURRENT-LIABILITIES> 2,646
<BONDS> 6,824
0
0
<COMMON> 523
<OTHER-SE> 13,038
<TOTAL-LIABILITY-AND-EQUITY> 23,262
<SALES> 0
<TOTAL-REVENUES> 8,205
<CGS> 5,753
<TOTAL-COSTS> 7,794
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 159
<INCOME-PRETAX> 411
<INCOME-TAX> 164
<INCOME-CONTINUING> 247
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> (75)
<NET-INCOME> 172
<EPS-BASIC> $0.10
<EPS-DILUTED> $0.10
</TABLE>
