Shareholders' Equity

9 Months Ended

Sep. 30, 2017

Equity [Abstract]

Shareholders' Equity

6. Shareholders’ Equity

					($000's omitted except for share data)
	Common Stock															Accumulated
	Number				Capital in											Other			Total
	of shares				excess of		Retained						Treasury			Comprehensive			shareholders'
	issued		Amount		par value		earnings			ESOT			stock			Loss			equity
Balance at December 31, 2016		2,614,506	$	523	$	14,160	$	14,768		$	(763	)	$	(1,551	)	$	(20	)	$	27,117
Net income								802												802
Purchase of treasury shares						-								(203	)					(203	)
Cash dividend								(376	)											(376	)
Stock based compensation, net of tax benefit		-		-		8		-			-			176			-			184
Balance at September  30, 2017		2,614,506	$	523	$	14,168	$	15,194		$	(763	)	$	(1,578	)	$	(20	)	$	27,524

The Company’s Board of Directors authorized the purchase of up to 450,000 shares of its common stock in the open market or in privately negotiated transactions. As of September 30, 2017, the Company has purchased 349,330 shares and there remains 100,670 shares available to purchase under this program. There were 19,917 shares purchased by the Company during the nine month period ended September 30, 2017.

On April 11, 2016, the Company issued 51,000 shares of restricted stock to Executive Officers and certain key management of the Company under the Company’s 2012 Long-Term Incentive Plan. The restricted share awards have varying vesting periods between January 2017 and January 2018; however, these shares have voting rights and accrue dividends prior to vesting. The aggregate amount of expense to the Company, measured based on grant date fair value is expected to be approximately $370,000 and will be recognized over the requisite service period.

Included in the nine months ended September 30, 2017 and 2016 is approximately $176,000 and $386,000, respectively, of stock-based compensation expense related to the restrictive share awards.

On January 1, 2017, 39,750 shares of restricted stock vested of which 15,991 shares were withheld and repurchased by the Company for approximately $160,000 to satisfy statutory minimum withholding tax requirements for those participants who elected this option as permitted under the Company’s 2012 Long-Term Incentive Plan. Additionally, upon the death of Servotronics’ Chairman of the Board and Chief Executive Officer (CEO), 15,000 restricted shares awarded to the Chairman and CEO vested.

On May 16, 2017 the Company announced that its Board of Directors declared a $0.15 per share cash dividend. The dividend was subsequently paid on July 14, 2017 to shareholders of record on June 30, 2017 and was approximately $376,000 in the aggregate. These dividends do not represent that the Company will pay dividends on a regular or scheduled basis. The amount is a reduction to retained earnings on the accompanying consolidated balance sheet.

Earnings Per Share

Basic earnings per share is computed by dividing net earnings by the weighted average number of shares outstanding during the period. The weighted average number of common shares outstanding does not include any potentially dilutive securities or any unvested restricted shares of common stock. These unvested restricted shares, although classified as issued and outstanding, are considered forfeitable until the restrictions lapse and will not be included in the basic EPS calculation until the shares are vested. 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 the earnings per share that were outstanding for the period. Incremental shares from assumed conversions are calculated as the number of shares that would be issued, net of the number of shares that could be purchased in the marketplace with the cash received upon stock option exercise. The dilutive effect of unvested restrictive stock is determined using the treasury stock method.

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2017		2016		2017		2016
	($000's omitted except per share data)
Net Income	$	671	$	366	$	802	$	1,628
Weighted average common shares outstanding (basic)		2,262		2,219		2,264		2,203
Unvested restricted stock		29		92		29		92
Weighted average common shares outstanding (diluted)		2,291		2,311		2,293		2,295
Basic
Net income per share	$	0.30	$	0.17	$	0.35	$	0.74
Diluted
Net income per share	$	0.29	$	0.16	$	0.35	$	0.71