Servotronics Reports 12% Revenue Growth and Net Income Turnaround in Q1 2025

Servotronics, Inc. reported a notable financial performance for the first quarter of 2025, with revenues reaching $11.7 million, a 12% increase from $10.4 million in the same period last year. The company achieved a gross profit of $2.36 million, reflecting a gross margin of 20.2%, up from 16.6% in the prior year. This improvement in profitability was attributed to higher sales volumes and price increases, which collectively contributed approximately $763,000 and $451,000, respectively, to revenue growth. The company also reported a net income of $128,000, a significant turnaround from a net loss of $383,000 in the first quarter of 2024.

In terms of operational changes, Servotronics has streamlined its focus on its servo-control business, which is critical for aerospace applications. The company has also made strategic decisions, including the sale of certain assets of The Ontario Knife Company (OKC) in August 2023, which has been classified as a discontinued operation. This divestiture has allowed Servotronics to concentrate on its core competencies in the aerospace and defense sectors, where it has established long-term contracts with major customers.

The company’s balance sheet showed total assets of $36.7 million as of March 31, 2025, an increase from $34.8 million at the end of 2024. Current liabilities rose to $8.6 million, primarily due to increased borrowings on its line of credit, which stood at $3.7 million compared to $2.1 million at the end of the previous year. The increase in accounts receivable, which rose to $11.4 million from $9.3 million, indicates a growing customer base and higher sales activity. However, cash and restricted cash decreased to $187,000 from $261,000, reflecting the company's investment in working capital.

Looking ahead, Servotronics remains optimistic about its growth prospects, particularly in the commercial aerospace market, which is recovering from previous supply chain disruptions. The company plans to continue expanding its services in both commercial and defense sectors, leveraging its reputation for quality and reliability. Management has indicated that they are actively reviewing strategic alternatives to enhance shareholder value, which may include further investments in technology and operational efficiencies.

Overall, the first quarter of 2025 has positioned Servotronics for potential sustained growth, supported by improved operational performance and a strategic focus on its core business areas. The company’s management is committed to executing its growth strategy while maintaining financial discipline to ensure long-term profitability.