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Servotronics (SVT) Earnings & Revenues Increase Y/Y in Q2
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Servotronics, Inc. (SVT - Free Report) , a leading manufacturer of servo-control components, delivered a robust performance in the second quarter of 2024, marked by a strong rebound in revenue and profitability. The company's results reflect the successful execution of strategic initiatives aimed at driving operational efficiency and meeting rising market demand, positioning Servotronics for sustained growth.
Servotronics, Inc. Price, Consensus and EPS Surprise
Servotronics reported second-quarter 2024 earnings per share of 22 cents against a loss of $1.33 per share in the year-ago quarter.
Total quarterly revenues of $12.3 million increased 15.3% from $10.6 million in the prior-year quarter. This increase was primarily due to higher volumes from strong customer demand and improved pricing, though it was partially offset by an unfavorable sales mix.
Profitability
Gross profit reached $3.1 million, a significant increase from $1.6 million in the same period last year. The growth in gross profit was driven by increased volumes and operational efficiencies.
Operating income was $0.7 million, a significant improvement from the operating loss of $1.7 million in the second quarter of 2023. This was due to higher gross profit and lower SG&A costs.
Net income from continuing operations was $0.6 million against a net loss of $3.3 million in the prior-year quarter.
Overall net income for second-quarter 2024 was $0.6 million against a net loss of $9.5 million in the second quarter of 2023. The prior year's figures were heavily impacted by losses from discontinued operations.
Costs
SG&A expenses decreased $0.9 million to $2.4 million compared with $3.3 million in the second quarter of 2023. This reduction was primarily due to lower professional and legal costs, reflecting elevated non-recurring costs in the previous year related to bank refinancing, proxy contests, and corporate restructuring.
The cost of goods sold (COGS) slightly increased to $9.2 million from $9.1 million in the second quarter of 2023. The modest increase in COGS in absolute terms, combined with higher revenue, resulted in improved gross profit margins.
Cash and Debt
Servotronics saw a notable enhancement in its cash position and a reduction in debt levels. Cash and restricted cash totaled $0.27 million at the end of second-quarter 2024, up from $0.25 million at the beginning of the year. The company’s line of credit was reduced to $1.473 million from $2.103 million at the end of 2023, reflecting a focused effort on debt repayment.
Management View
The company expressed confidence in its strategic positioning for long-term sustainable growth, emphasizing expected strong demand in key end markets for the remainder of the year and a commitment to meeting customer needs, which is anticipated to enhance shareholder value. The company also expressed satisfaction with its rebound from a slow start to the year, noting that continuous improvement efforts positively impacted top-line growth, margins, and operating income.
The company highlighted the improvements in cash flow from operations, which increased approximately $6.6 million compared to the same period in 2023, driven mainly by higher net income and reductions in accounts receivable despite increases in inventory to support volume growth. The decrease in SG&A expenses significantly contributed to the improved operating income, with additional savings from lower non-recurring professional and legal costs compared to the previous year, leading to a marked improvement in overall profitability.
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Servotronics (SVT) Earnings & Revenues Increase Y/Y in Q2
Servotronics, Inc. (SVT - Free Report) , a leading manufacturer of servo-control components, delivered a robust performance in the second quarter of 2024, marked by a strong rebound in revenue and profitability. The company's results reflect the successful execution of strategic initiatives aimed at driving operational efficiency and meeting rising market demand, positioning Servotronics for sustained growth.
Servotronics, Inc. Price, Consensus and EPS Surprise
Servotronics, Inc. price-consensus-eps-surprise-chart | Servotronics, Inc. Quote
Q2 Results
Servotronics reported second-quarter 2024 earnings per share of 22 cents against a loss of $1.33 per share in the year-ago quarter.
Total quarterly revenues of $12.3 million increased 15.3% from $10.6 million in the prior-year quarter. This increase was primarily due to higher volumes from strong customer demand and improved pricing, though it was partially offset by an unfavorable sales mix.
Profitability
Gross profit reached $3.1 million, a significant increase from $1.6 million in the same period last year. The growth in gross profit was driven by increased volumes and operational efficiencies.
Operating income was $0.7 million, a significant improvement from the operating loss of $1.7 million in the second quarter of 2023. This was due to higher gross profit and lower SG&A costs.
Net income from continuing operations was $0.6 million against a net loss of $3.3 million in the prior-year quarter.
Overall net income for second-quarter 2024 was $0.6 million against a net loss of $9.5 million in the second quarter of 2023. The prior year's figures were heavily impacted by losses from discontinued operations.
Costs
SG&A expenses decreased $0.9 million to $2.4 million compared with $3.3 million in the second quarter of 2023. This reduction was primarily due to lower professional and legal costs, reflecting elevated non-recurring costs in the previous year related to bank refinancing, proxy contests, and corporate restructuring.
The cost of goods sold (COGS) slightly increased to $9.2 million from $9.1 million in the second quarter of 2023. The modest increase in COGS in absolute terms, combined with higher revenue, resulted in improved gross profit margins.
Cash and Debt
Servotronics saw a notable enhancement in its cash position and a reduction in debt levels. Cash and restricted cash totaled $0.27 million at the end of second-quarter 2024, up from $0.25 million at the beginning of the year. The company’s line of credit was reduced to $1.473 million from $2.103 million at the end of 2023, reflecting a focused effort on debt repayment.
Management View
The company expressed confidence in its strategic positioning for long-term sustainable growth, emphasizing expected strong demand in key end markets for the remainder of the year and a commitment to meeting customer needs, which is anticipated to enhance shareholder value. The company also expressed satisfaction with its rebound from a slow start to the year, noting that continuous improvement efforts positively impacted top-line growth, margins, and operating income.
The company highlighted the improvements in cash flow from operations, which increased approximately $6.6 million compared to the same period in 2023, driven mainly by higher net income and reductions in accounts receivable despite increases in inventory to support volume growth. The decrease in SG&A expenses significantly contributed to the improved operating income, with additional savings from lower non-recurring professional and legal costs compared to the previous year, leading to a marked improvement in overall profitability.