-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, J89iLAe4VP7uD77g5Rat3zvJp1EfpEgs5xGr3mOeUnkkww5RBO/LlRuNqF41ck3J vx3Y6zQ+BES22m87jg5jKg== 0001110550-04-000090.txt : 20040816 0001110550-04-000090.hdr.sgml : 20040816 20040816130343 ACCESSION NUMBER: 0001110550-04-000090 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20040630 FILED AS OF DATE: 20040816 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SERVOTRONICS INC /DE/ CENTRAL INDEX KEY: 0000089140 STANDARD INDUSTRIAL CLASSIFICATION: CUTLERY, HANDTOOLS & GENERAL HARDWARE [3420] IRS NUMBER: 160837866 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 001-07109 FILM NUMBER: 04977356 BUSINESS ADDRESS: STREET 1: 1110 MAPLE ST CITY: ELMA STATE: NY ZIP: 14059 BUSINESS PHONE: 7166335990 MAIL ADDRESS: STREET 1: P O BOX 300 STREET 2: ELMA STATE: NY ZIP: 14059-0300 10QSB 1 tenqsb.txt TENQSB 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, 2004 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 - 07109 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, 2004 ---------------------------- ---------------------------- Common Stock, $.20 par value 2,492,901 Transitional Small Business Disclosure Format (Check one): Yes ; No X ------ ------ INDEX ----- PART I. FINANCIAL INFORMATION Page No. -------- Item 1. Financial Statements (Unaudited) a) Consolidated balance sheet, June 30, 2004 3 b) Consolidated statement of operations for the three and six months ended June 30, 2004 and 2003 4 c) Consolidated statement of cash flows for the six months ended June 30, 2004 and 2003 5 d) Notes to consolidated financial statements 6 Item 2. Management's Discussion and Analysis or Plan of Operation 9 Item 3. Controls and Procedures 11 PART II. OTHER INFORMATION Item 2. Changes in Securities and Small Business Issuer Purchases of Equity Securities 11 Item 6. Exhibits and Reports on Form 8-K 11 Signatures 13 -2- PART I FINANCIAL INFORMATION SERVOTRONICS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET ($000's omitted except per share data) (Unaudited)
June 30, 2004 Assets ------------- Current assets: Cash $ 1,908 Accounts receivable 3,236 Inventories 6,785 Prepaid income taxes 73 Deferred income taxes 368 Other assets (See Note 1 to consolidated financial statements) 1,372 ------------ Total current assets 13,742 ------------ Property, plant and equipment, net 6,447 Other non-current assets 546 ------------ $ 20,735 Liabilities and Shareholders' Equity ============ Current liabilities: Current portion of long-term debt $ 386 Accounts payable 826 Accrued employee compensation and benefit costs 894 Other accrued liabilities 296 Accrued income taxes 63 ------------ Total current liabilities 2,465 ------------ Long-term debt 5,086 Deferred income taxes 358 Other non-current liability 244 Shareholders' equity: Common stock, par value $.20; authorized 4,000,000 shares; Issued 2,614,506 shares 523 Capital in excess of par value 13,033 Retained earnings 1,889 Accumulated other comprehensive loss (107) ------------- 15,338 Employee stock ownership trust commitment (2,236) Treasury stock, at cost 121,605 shares (520) ------------- Total shareholders' equity 12,582 ------------ $ 20,735 ============
See notes to consolidated financial statements -3- SERVOTRONICS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF OPERATIONS ($000's omitted except per share data) (Unaudited)
Three Months Ended Six Months Ended June 30, June 30, 2004 2003 2004 2003 ---- ---- ---- ---- Net revenues $ 5,640 $ 3,945 $ 10,968 $ 7,774 Costs and expenses: Cost of goods sold, exclusive of depreciation 4,145 2,921 8,142 5,806 Selling, general and administrative 951 845 1,832 1,680 Interest 36 41 72 84 Depreciation and amortization 165 173 327 351 --------- --------- --------- ---------- 5,297 3,980 10,373 7,921 --------- --------- --------- ---------- Income (loss) before income taxes 343 (35) 595 (147) Income tax provision (benefit) 128 (13) 222 (54) --------- --------- --------- ---------- Net income (loss) $ 215 $ (22) $ 373 $ (93) ========= ========= ========= ========== Income (Loss) Per Share: Basic - ----- Net income (loss) per share $ 0.11 $ (0.01) $ 0.18 $ (0.05) ========= ========= ========= ========== Diluted - ------- Net income (loss) per share $ 0.10 $ (0.01) $ 0.18 $ (0.05) ========= ========= ========= ==========
See notes to consolidated financial statements -4- SERVOTRONICS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CASH FLOWS ($000's omitted) (Unaudited)
Six Months Ended June 30, 2004 2003 ---- ---- Cash flows related to operating activities: Net income (loss) $ 373 $ (93) Adjustments to reconcile net income (loss) to net cash provided by operating activities - Depreciation and amortization 327 351 Change in assets and liabilities - Accounts receivable (748) 50 Inventories 25 (409) Other assets 214 (302) Other current assets 3 3 Accounts payable 277 251 Accrued employee compensation & benefit costs 162 30 Accrued income taxes 63 36 Other accrued liabilities 121 192 ------- ------- Net cash provided by operating activities 817 109 ------- ------- Cash flows related to investing activities: Capital expenditures - property, plant & equipment (213) (78) -------- -------- Net cash used in investing activities (213) (78) -------- -------- Cash flows related to financing activities: Increase in demand loan - 50 Payments on demand loan - (50) Principal payments on long-term debt (202) (104) -------- -------- Net cash used in financing activities (202) (104) -------- -------- Net increase (decrease) in cash 402 (73) Cash at beginning of period 1,506 679 ------- ------- Cash at end of period $ 1,908 $ 606 ======== =======
See notes to consolidated financial statements -5- NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ($000 omitted in tables except for per share data) 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. 1. Summary of significant accounting policies ------------------------------------------ Risk factors - ------------ The aviation and aerospace industries as well as markets for the Company's consumer products are facing new and evolving challenges on a global basis. The success of the Company depends upon the trends of the economy, including interest rates, income tax laws, governmental regulation, legislation, and other risk factors. In addition, uncertainties in today's global economy, global competition, the effect of terrorism, difficulty in predicting defense and other government appropriations, 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, volatile market demand and the continued market acceptance of the Company's advanced technology and cutlery products make it difficult to predict the impact on future financial results. Revenue recognition - ------------------- The Company's revenues are principally recognized as units are shipped and as terms and conditions of purchase orders are met. The Company also 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. Included in other current assets are $669,000 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. 2. Inventories ----------- June 30, 2004 ------------- Raw materials and common parts $ 3,072 Work-in-process 3,606 Finished goods 343 --------- 7,021 Less common parts expected to be used after one year (236) --------- $ 6,785 ========= Inventories are stated generally at the lower of standard cost and net realizable value. Cost includes all cost incurred to bring each product to its present location and condition, which approximates actual cost (first-in, first-out). Market provisions in respect of net realizable value and obsolescence are applied to the gross value of the inventory. Pre-production and start-up costs are expensed as incurred. -6- 3. Property, plant and equipment ----------------------------- June 30, 2004 ------------- Land $ 25 Buildings 6,452 Machinery, equipment and tooling 9,973 --------- 16,450 Less accumulated depreciation (10,003) --------- $ 6,447 ========= 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. The Company believes that it maintains property and casualty insurance in amounts adequate for the risk and nature of its assets and operations and which are generally customary in its industry. 4. Long-term debt -------------- June 30, 2004 ------------- Industrial Development Revenue Bonds; secured by a letter of credit from a bank with interest payable monthly at a floating rate (1.25% at June 30, 2004) $ 4,320 Term loan payable to a financial institution interest at LIBOR plus 2% (3.11% at June 30, 2004); quarterly principal payments of $17,500 commencing January 1, 2005; payable in full October 1, 2009 500 Term loan payable to a financial institution interest at a rate of 3.38% at June 30, 2004; quarterly principal payments of $35,714 through February 1, 2006 250 Secured term loan payable to a government agency interest fixed at 6%, monthly payments of $2,778; payable in 2004 4 Secured term loan payable to a government agency, monthly payments of approximately $1,455 with interest waived payable through second quarter of 2012 172 Secured term loan payable to a government agency monthly payments of $1,950 including interest fixed at 3% payable through fourth quarter of 2015 226 --------- 5,472 Less current portion (386) --------- $ 5,086 ========= Industrial Development Revenue Bonds were issued by a government agency to finance the construction of the Company's headquarters/Advanced Technology facility. Annual sinking fund payments of $170,000 commenced 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 -7- 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 Company also has a $1,000,000 line of credit on which there was no balance outstanding at June 30, 2004. 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 loss -------------------------------------------------------------------------------------- Balance December 31, 2003 2,614,506 $523 $13,033 $1,516 ($ 2,236) ($ 520) ($107) ========= ==== ======= ===== ======= ======= ===== Comprehensive income Net income - - - $ 373 - - $ 373 - Other comprehensive income, net of tax - - - - - - - - Minimum pension liability adjustment - - - - - - - - Other comprehensive income - - - - - - - - ----- Comprehensive income - - - - - - $ 373 - ===== Compensation expense - - - - - - - --------- ---- ------- ------ ------ ------ ---- Balance June 30, 2004 2,614,506 $523 $13,033 $1,889 ($ 2,236) ($ 520) ($107) ========= ==== ======= ====== ======== ======== =====
Earnings per share - ------------------ Basic earnings per share are computed by dividing net earnings by the weighted average number of shares outstanding during the period. Diluted earnings per share are 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.
Three Months Ended Six Months Ended June 30, June 30, 2004 2003 2004 2003 ---- ---- ---- ---- Net income (loss) $ 215 $ (22) $ 373 $ (93) ====== ======= ====== ====== Weighted average common shares outstanding (basic) 2,048 1,972 2,048 1,972 Incremental shares from assumed conversions of stock options 52 0 32 0 Weighted average common shares outstanding (diluted) 2,100 1,972 2,080 1,972 Basic ----- Net income (loss) per share $ 0.11 $(0.01) $ 0.18 $(0.05) ==== ====== ====== ======= Diluted ------- Net income (loss) per share $ 0.10 $(0.01) $ 0.18 $(0.05) ==== ====== ====== =======
-8- 6. Business segments ----------------- The Company operates in two business segments, Advanced Technology Group and Consumer Products Group. The Company's reportable segments are strategic business units that offer different products and services. The segments are composed of separate corporations and are managed separately. Operations in Advanced Technology Group involve the design, manufacture, and marketing of servo-control components for government and commercial industrial applications. Consumer Products Group's operations involve the design, manufacture and marketing of a variety of cutlery products for use by consumers and government agencies. The Company derives its primary sales revenue from domestic customers, although a significant portion of finished products are for foreign end use. Six Month Advanced Consumer Period Ended Technology Products June 30, 2004 Group Group Consolidated ------------- ----- ----- ------------ Revenues from unaffiliated customers $ 5,329 $ 5,639 $ 10,968 ========= ========= ========== Profit $ 782 $ 476 $ 1,258 ========= ========= Depreciation and amortization (327) Interest expense (72) General corporate expense (264) ----------- Income before income taxes $ 595 ========== Three Month Advanced Consumer Period Ended Technology Products June 30, 2004 Group Group Consolidated ------------- ----- ----- ------------ Revenues from unaffiliated customers $ 2,658 $ 2,982 $ 5,640 ========= ========= ========== Profit $ 384 $ 292 $ 676 ========= ========= Depreciation and amortization (165) Interest expense (36) General corporate expense (132) ----------- Income before income taxes $ 343 ========== -9- Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION - ------- --------------------------------------------------------- The following table sets forth for the period indicated the percentage relationship of certain items in the consolidated statement of operations to net revenues, and the percentage increase or decrease of such items as compared to the indicated prior period.
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) 2004 2003 04-03 2004 2003 04-03 ---- ---- ----- ---- ---- ----- Net revenues Advanced technology products 47.1% 63.1% 6.8% 48.6% 64.2% 6.7% Consumer products 52.9% 36.9% 104.7% 51.4% 35.8% 102.8% ----- ----- ----- ----- 100.0% 100.0% 43.0% 100.0% 100.0% 41.1% Cost of goods sold, exclusive of depreciation 73.5% 74.0% 41.9% 74.2% 74.7% 40.2% ----- ----- ----- ----- Gross profit 26.5% 26.0% 46.0% 25.8% 25.3% 43.6% ----- ----- ---- ----- ----- ----- Selling, general and administrative 16.9% 21.4% 12.5% 16.7% 21.6% 9.0% Interest 0.6% 1.0% (12.2%) 0.7% 1.1% (14.3%) Depreciation and amortization 2.9% 4.4% (4.6%) 3.0% 4.5% (6.8%) ---- ---- --- ---- ---- --- 20.4% 26.8% 8.8% 20.4% 27.2% 5.5% ----- ----- ----- ----- Income (loss) before income taxes 6.1% (0.8%) - 5.4% (1.9%) - --- --- Income tax provision (benefit) 2.3% (0.2%) - 2.0% (0.7%) - ---- ----- ---- ----- Net income (loss) 3.8% (0.6)% - 3.4% (1.2%) - ==== ====== ==== =====
Management Discussion - --------------------- During the six month period ended June 30, 2004 and for the comparable period ended June 30, 2003, approximately 47% and 37% respectively, of the Company's revenues were derived from contracts with agencies of the U.S. Government or their prime contractors and their subcontractors. The Company's business is performed under fixed price contracts. Allocations of defense expenditures and government involvement in overseas military operations have had an impact on the Company's financial results. Sales of products sold for government applications have increased approximately 71% for the six month period ended June 30, 2004 compared to the corresponding period of 2003 and are expected to remain strong. While the Company remains optimistic in relation to these opportunities, it recognizes that sales to the government are affected by defense budgets, the foreign policies of the U.S. and other nations, the level of military operations and other factors and, as such, it is difficult to predict the impact on future financial results. Results of Operations - --------------------- The Company's consolidated results of operations for the six month period ended June 30, 2004 showed an approximate $3,194,000 or 41.1% increase in net revenues with a turnaround in income before taxes of approximately $742,000. The Company's consolidated results of operations for the three month period ended June 30, 2004 showed an approximate $1,695,000 or 43.0% increase in net revenues with a turnaround in income before taxes of approximately $378,000. The increase in revenues is primarily attributed to increased government business. Gross profit increased 43.6% and 46.0% for the six and three month periods ended June 30, 2004 respectively, when compared to the same periods in 2003. During 2003, the Company incurred significant front-end costs associated with prototype, preproduction and start-up activities for the Consumer Products Group's combination combat knife and bayonet. The majority of such up-front costs were incurred and expensed in 2003 and prior. While the Company continues -10- to incur such costs on an ongoing basis associated with products for both the Advanced Technology Group (ATG) and Consumer Products Group (CPG), the timing of such costs directly contributes to the fluctuation in gross profit from period to period because these costs are expensed as they occur and, as such, are not matched to their future revenues and benefits. Selling, general and administrative (SG&A) costs increased approximately 9.0% when compared to the same six month period in 2003 and increased 12.5% for the three month period ended June 30, 2004 when compared to the same three month period in 2003. The increase in SG&A costs is primarily attributed to increased marketing and expanded sales efforts of the ATG and CPG and the increased costs for professional services and corporate governance necessitated by the Sarbanes-Oxley Act and related regulations. Such costs are expected to continue to be significant expense factors. Interest expense decreased for the six months and quarter ended June 30, 2004 when compared to the same period in 2003 primarily due to a decrease in institutional debt. The Company continues to take advantage of the tax benefit for extraterritorial sales, which is reflected in the effective tax rate of approximately 37%. Liquidity and Capital Resources - ------------------------------- The Company's primary liquidity and capital requirements relate to the Company's working capital needs; primarily inventory, accounts receivable, capital investments in facilities, machinery, tools/dies and equipment and principal/interest payments on indebtedness. The Company's primary sources of liquidity in 2004 have been from positive cash flows from operations. As of June 30, 2004 there are no material commitments for capital expenditures. The Company also has a $1,000,000 line of credit on which there was no balance outstanding at June 30, 2004. Off Balance Sheet Arrangements - ------------------------------ None. Critical Accounting Policies - ---------------------------- The Company prepares the consolidated financial statements in accordance with accounting principles generally accepted in the United States of America. As such, we are required to make certain estimates, judgments and assumptions that the Company believes are reasonable based upon the information available. These estimates and assumptions affect the reported amounts of assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the periods presented. Actual results could differ significantly from those estimates under different assumptions and conditions. The Company believes that the following discussion addresses our most critical accounting policies, which are those that are most important to the portrayal of our financial condition and results of operations and which require our most difficult and subjective judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. Note 1 to the accompanying consolidated financial statements includes a summary of the significant accounting policies used in the preparation of the consolidated financial statements. Item 3. CONTROLS AND PROCEDURES - ------- ----------------------- Our management has reviewed our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15 and 15d-15). Our management believes that as of the end of the Company's most recent fiscal quarter, such disclosure controls and procedures are adequate to ensure that material information relating to the Company is made known to management by others within the Company. -11- In addition, our management reviewed our internal controls and, to management's knowledge, there have been no significant changes in the Company's internal controls or in other factors that could significantly adversely affect internal controls subsequent to the date of their last evaluation. PART II OTHER INFORMATION Item 2. CHANGES IN SECURITIES AND SMALL BUSINESS ISSUER PURCHASES OF EQUITY ----------------------------------------------------------------------- SECURITIES ---------- The Company's Board of Directors has previously authorized the repurchase of shares of its outstanding common stock. The Company did not repurchase any shares during the six months ended June 30, 2004. There are 88,955 shares that are still available for repurchase under this general authorization. Item 6. EXHIBITS AND REPORTS ON FORM 8-K - ------- -------------------------------- (a) Exhibits 31.1 Certification of Chief Financial Officer pursuant to Rule 13a-14 or 15d-14 of the Securities Exchange act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.2 Certification of Chief Executive Officer pursuant to Rule 13a-14 or 15d-14 of the Securities Exchange act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32.1 Certification of Chief Financial Officer pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 32.2 Certification of Chief Executive Officer pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (b) Reports on Form 8-K An 8-K was furnished on April 1, 2004 incorporating the Press Release of Servotronics, Inc. dated March 30, 2004. An 8-K was furnished on May 18, 2004 incorporating the Press Release of Servotronics, Inc. dated May 17, 2004 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, and difficulty in predicting defense appropriations, 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 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- SIGNATURES In accordance with the requirements of the Securities Exchange Act of 1934, the Registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Date: August 12, 2004 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- EX-31.1 2 exthirtyoneone.txt CERTIFICATION EXHIBIT 31.1 CERTIFICATION I, Lee D. Burns, certify that: 1. I have reviewed this quarterly report on Form 10-QSB of Servotronics, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report; 4. The small business issuer's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the small business issuer and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Evaluated the effectiveness of the small business issuer's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and c) Disclosed in this report any change in the small business issuer's internal control over financial reporting that occurred during the small business issuer's most recent fiscal quarter (the small business issuer's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer's internal control over financial reporting; and 5. The small business issuer's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the audit committee of the small business issuer's board of directors (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer's ability to record, process, summarize and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer's internal control over financial reporting. Date: August 12, 2004 -------------------------------- Lee D. Burns Chief Financial Officer EX-31.2 3 exthirtyonetwo.txt CERTIFICATION EXHIBIT 31.2 CERTIFICATION I, Nicholas D. Trbovich, certify that: 1. I have reviewed this quarterly report on Form 10-QSB of Servotronics, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report; 4. The small business issuer's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the small business issuer and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Evaluated the effectiveness of the small business issuer's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and c) Disclosed in this report any change in the small business issuer's internal control over financial reporting that occurred during the small business issuer's most recent fiscal quarter (the small business issuer's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer's internal control over financial reporting; and 5. The small business issuer's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the audit committee of the small business issuer's board of directors (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer's ability to record, process, summarize and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer's internal control over financial reporting. Date: August 12, 2004 --------------------------- Nicholas D. Trbovich Chief Executive Officer EX-32.1 4 exthirtytwoone.txt CERTIFICATION EXHIBIT 32.1 CERTIFICATION PURSUANT TO 18. U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of Servotronics, Inc. (the "Company") on Form 10-QSB for the period ended June 30, 2004 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Lee D. Burns, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. 1350, as adopted pursuant to 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge: (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. --------------------------- Lee D. Burns Chief Financial Officer August 12, 2004 EX-32.2 5 exthirtytwotwo.txt CERTIFICATION EXHIBIT 32.2 CERTIFICATION PURSUANT TO 18. U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of Servotronics, Inc. (the "Company") on Form 10-QSB for the period ended June 30, 2004 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Nicholas D. Trbovich, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. 1350, as adopted pursuant to 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge: (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. --------------------------- Nicholas D. Trbovich Chief Executive Officer August 12, 2004 -----END PRIVACY-ENHANCED MESSAGE-----