10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D. C.   20549

Form 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2012

or

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File No. 1-07109

SERVOTRONICS, INC.

(Exact name of registrant as specified in its charter)

Delaware	16-0837866
(State or other jurisdiction of incorporation or organization)	(I. R. S. Employer Identification No.)

1110 Maple Street

Elma, New York   14059

(Address of principal executive offices) (zip code)

(716) 655-5990

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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 o

Indicate by checkmark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes x     No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer  o Accelerated filer o Non-accelerated filer o Smaller reporting company x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o      No x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class	Outstanding at October 31, 2012
Common Stock, $.20 par value	2,378,236

INDEX

				Page No.
	PART I. FINANCIAL INFORMATION
Item 1.		Financial Statements (Unaudited):
		a)	Consolidated Balance Sheets, September 30, 2012 and December 31, 2011	3
		b)	Consolidated Statements of Income (Loss) for the three and nine months ended September 30, 2012 and 2011	4
		c)	Consolidated Statements of Comprehensive Income (Loss) for the three and nine months ended September 30, 2012 and 2011	5
		d)	Consolidated Statements of Cash Flows for the nine months ended September 30, 2012 and 2011	6
		e)	Notes to Consolidated Financial Statements	7
Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations		17
Item 3.		Quantitative and Qualitative Disclosures About Market Risk		23
Item 4.		Controls and Procedures		23
	PART II. OTHER INFORMATION
Item 1.		Legal Proceedings		23
Item 1A.		Risk Factors		23
Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds		24
Item 3.		Defaults Upon Senior Securities		24
Item 4.		Mine Safety Disclosures		24
Item 5.		Other Information		24
Item 6.		Exhibits		25
		Signatures		27

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SERVOTRONICS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

($000’s omitted except per share and per share data)

	September 30,			December 31,
	2012			2011
Assets	(Unaudited)
Current assets:
Cash and cash equivalents	$	5,547		$	4,948
Accounts receivable, net		5,372			6,031
Inventories, net		11,406			11,607
Prepaid income taxes		458			133
Deferred income taxes		754			754
Other assets		711			505
Total current assets		24,248			23,978
Property, plant and equipment, net		5,614			6,103
Other non-current assets		364			342
Total Assets	$	30,226		$	30,423
Liabilities and Shareholders’ Equity
Current liabilities:
Current portion of long-term debt	$	191		$	202
Current portion of capital lease related party		-			81
Accounts payable		1,005			1,451
Accrued employee compensation and benefit costs		1,634			1,434
Other accrued liabilities		629			327
Total current liabilities		3,459			3,495
Long-term debt		2,838			2,855
Long-term portion of capital lease related party		-			333
Deferred income taxes		496			496
Commitments and contingencies (see Note 10)		-			-
Shareholders’ equity:
Common stock, par value $.20; authorized 4,000,000 shares; issued 2,614,506 shares; outstanding 2,144,316 (2,074,257 - 2011) shares		523			523
Capital in excess of par value		13,926			13,774
Retained earnings		12,034			12,490
Accumulated other comprehensive loss		(67	)		(67	)
Employee stock ownership trust commitment		(1,266	)		(1,266	)
Treasury stock, at cost 235,076 (305,135 - 2011) shares		(1,717	)		(2,210	)
Total shareholders’ equity		23,433			23,244
Total Liabilities and Shareholders’ Equity	$	30,226		$	30,423

See notes to consolidated financial statements

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SERVOTRONICS, INC. AND SUBSIDIARIES   

CONSOLIDATED STATEMENTS OF INCOME (LOSS)

($000’s omitted except per share data)
(Unaudited)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2012			2011			2012			2011
Revenue	$	7,516		$	8,550		$	23,302		$	24,592
Costs, expenses and other income:
Cost of goods sold, exclusive of depreciation and amortization		5,536			5,821			17,081			17,046
Selling, general and administrative		1,275			1,145			3,753			3,543
Interest expense		11			12			34			37
Depreciation and amortization		141			139			437			427
Other income, net		(2	)		(150	)		(12	)		(164	)
Total expenses		6,961			6,967			21,293			20,889
Income from continuing operations before income tax provision		555			1,583			2,009			3,703
Income tax provision		249			476			663			1,115
Income from continuing operations		306			1,107			1,346			2,588
Discontinued Operations:
Loss from operations of a discontinued component, net of income tax benefit		(188	)		(203	)		(591	)		(550	)
Loss on disposal of QCC and AMP, net of income tax benefit		(262	)		-			(530	)		-
Loss from discontinued operations		(450	)		(203	)		(1,121	)		(550	)
Net income (loss)	($	144	)	$	904		$	225		$	2,038
Income (loss) per share:
Basic
Income per share from continuing operations	$	0.14		$	0.56		$	0.63		$	1.31
Loss per share from discontinued operations		(0.21	)		(0.10	)		(0.53	)		(0.28	)
Total net income (loss) per share	($	0.07	)	$	0.46		$	0.10		$	1.03
Diluted
Income per share from continuing operations	$	0.14		$	0.53		$	0.63		$	1.23
Loss per share from discontinued operations		(0.21	)		(0.10	)		(0.52	)		(0.26	)
Total net income (loss) per share	($	0.07	)	$	0.43		$	0.11		$	0.97

See notes to consolidated financial statements

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SERVOTRONICS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

($000’s omitted)
(Unaudited)

	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2012			2011		2012		2011
Net income (loss)	$	(144	)	$	904	$	225	$	2,038
Other comprehensive income:
Retirement benefits adjustment		-			-		-		-
Total comprehensive income (loss)	$	(144	)	$	904	$	225	$	2,038

See notes to consolidated financial statements

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SERVOTRONICS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

($000’s omitted)

(Unaudited)

	Nine Months Ended
	September 30,
	2012			2011
Cash flows related to operating activities:
Net income	$	225		$	2,038
Adjustments to reconcile net income to net cash generated by operating activities -
Depreciation and amortization		484			498
Loss on disposal of QCC and AMP, net of income tax benefit		530			-
Increase in inventory reserve		59			52
Increase in allowance for doubtful accounts		33			3
Gain on disposal of property and equipment		(9	)		-
Change in assets and liabilities:
Accounts receivable		636			(455	)
Inventories		(1,106	)		(757	)
Prepaid income taxes		101			382
Other assets		(222	)		(117	)
Other non-current assets		(24	)		(29	)
Accounts payable		(446	)		38
Accrued employee compensation and benefit costs		196			179
Other accrued liabilities		152			111
Accrued income taxes		-			7
Net cash generated in operating activities		609			1,950
Cash flows related to investing activities:
Capital expenditures - property, plant and equipment		(394	)		(435	)
Proceeds from the sale of Queen Cutlery		640			-
Net cash generated (used) in investing activities		246			(435	)
Cash flows related to financing activities:
Principal payments on long-term debt		(29	)		(115	)
Proceeds from exercise of stock options		234			-
Principal payments on capital lease related party		(41	)		(60	)
Purchase of treasury shares		(62	)		-
Cash dividend		(358	)		(336	)
Purchase of stock options		-			(517	)
Net cash used in financing activities		(256	)		(1,028	)
Net increase in cash and cash equivalents		599			487
Cash and cash equivalents at beginning of period		4,948			4,447
Cash and cash equivalents at end of period	$	5,547		$	4,934

See notes to consolidated financial statements

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SERVOTRONICS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by United States generally accepted accounting principles for complete financial statements.

The accompanying consolidated financial statements reflect all adjustments which are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented. All such adjustments are of a normal recurring nature. Operating results for the three and nine months ended September 30, 2012 are not necessarily indicative of the results that may be expected for the year ending December 31, 2012. The consolidated financial statements should be read in conjunction with the 2011 annual report and the notes thereto.

2. Business Description and Summary of Significant Accounting Policies

Business Description

Servotronics, Inc. and its subsidiaries design, manufacture and market advanced technology products consisting primarily of control components and consumer products consisting of knives and various types of cutlery and other edged products.

Principles of Consolidation

The consolidated financial statements include the accounts of Servotronics, Inc. and its wholly-owned subsidiaries (the “Company”). All intercompany balances and transactions have been eliminated upon consolidation.

Cash and Cash Equivalents

The Company considers cash and cash equivalents to include all cash accounts and short-term investments purchased with an original maturity of three months or less.

Accounts Receivable

The Company grants credit to substantially all of its customers and carries its accounts receivable at original invoice amount less an allowance for doubtful accounts. On a periodic basis, the Company evaluates its accounts receivable and establishes an allowance for doubtful accounts based on history of past write-offs, collections, and current credit conditions. The allowance for doubtful accounts amounted to approximately $134,000 at September 30, 2012 and $101,000 at December 31, 2011.

Revenue Recognition

Revenues are recognized as services are rendered or as units are shipped and at the designated FOB point consistent with the transfer of title, risks and rewards of ownership. Such purchase orders generally include specific terms relative to quantity, item description, specifications, price, customer responsibility for in-process costs, delivery schedule, shipping point, payment and other standard terms and conditions of purchase.

Inventories

Inventories are stated at the lower of standard cost or net realizable value. Cost includes all costs incurred to bring each product to its present location and condition. Market provisions in respect of lower of cost or market adjustments and inventory expected to be used in greater than one year are applied to the gross value of the inventory through a reserve of approximately $574,000 and $773,000 at September 30, 2012 and December 31, 2011, respectively. Pre-production and start-up costs are expensed as incurred.

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SERVOTRONICS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The purchase of suppliers’ minimum economic quantities of material such as steel, etc. may result in a purchase of quantities exceeding one year of customer requirements. Also, in order to maintain a reasonable and/or agreed to lead time, certain larger quantities of other product support items may have to be purchased and may result in over one year’s supply.

Shipping and Handling Costs

Shipping and handling costs are classified as a component of cost of goods sold.

Property, Plant and Equipment

Property, plant and equipment is carried at cost; expenditures for new facilities and equipment and expenditures which substantially increase the useful lives of existing plant and equipment are capitalized; expenditures for maintenance and repairs are expensed as incurred. Upon disposal of properties, the related cost and accumulated depreciation are removed from the respective accounts and any profit or loss on disposition is included in income.

Depreciation is provided on the basis of estimated useful lives of depreciable properties, primarily by the straight-line method for financial statement purposes and by accelerated methods for tax purposes. Depreciation expense includes the amortization of capital lease assets. The estimated useful lives of depreciable properties are generally as follows:

Buildings and improvements	5-39 years
Machinery and equipment	5-15 years
Tooling	3-5 years

Income Taxes

The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of operating loss and credit carryforwards and temporary differences between the carrying amounts and the tax basis of assets and liabilities. The Company and its subsidiaries file a consolidated federal income tax return, combined New York and Texas state income tax returns and separate Pennsylvania and Arkansas state income tax returns.

The Company’s practice is to recognize interest and/or penalties related to income tax matters in income tax expense. The Company did not have any accrued interest or penalties included in its consolidated balance sheets at September 30, 2012 or December 31, 2011, and did not recognize any interest and/or penalties in its consolidated statements of income during the three and nine months ended September 30, 2012 and 2011.

Supplemental Cash Flow Information

Income taxes paid during the three months ended September 30, 2012 and 2011 amounted to zero and approximately $291,000, respectively, and amounted to approximately $256,000 and $517,000 for the nine months ended September 30, 2012 and 2011 respectively. Interest paid during the three months ended September 30, 2012 and 2011 amounted to approximately $12,000 and $14,000, respectively, and amounted to $38,000 and $44,000 for the nine months ended September 30, 2012 and 2011, respectively. During the three and nine months ended September 30, 2012, the Company reduced its tax liability by approximately $152,000 related to the exercise of stock options and was credited directly to capital in excess of par value.

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SERVOTRONICS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Employee Stock Ownership Plan

Contributions to the employee stock ownership plan are determined annually by the Company according to plan formula.

Impairment of Long-Lived Assets

The Company reviews long-lived assets for impairment whenever events or changes in business circumstances indicate, or at least annually, that the carrying amount of the assets may not be fully recoverable based on undiscounted future operating cash flow analyses. If an impairment is determined to exist, any related impairment loss is calculated based on fair value. Impairment losses on assets to be disposed of, if any, are based on the estimated proceeds to be received, less costs of disposal. The Company has determined that no impairment of long lived assets existed at September 30, 2012 and December 31, 2011.

Use of Estimates

The preparation of the consolidated financial statements in conformity with U.S. generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Reclassifications

Certain balances as previously reported were reclassified to conform with classifications adopted in the current period.

Research and Development Costs

Research and development costs are expensed as incurred.

Concentration of Credit Risks

Financial instruments that potentially subject the Company to concentration of credit risks principally consist of cash accounts in financial institutions. Although the accounts exceed the federally insured deposit amount, management does not anticipate nonperformance by the financial institutions. Refer to Note 12, Business Segments, for disclosures related to customer concentrations.

Fair Value of Financial Instruments

The carrying amount of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses are reasonable estimates of their fair value due to their short maturity. Based on variable interest rates and the borrowing rates currently available to the Company for loans similar to its long-term debt and capital lease, the fair value approximates its carrying amount.

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SERVOTRONICS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Recent Accounting Pronouncements

In June 2011, the FASB issued new accounting guidance related to the presentation of comprehensive income that eliminates the option to present components of other comprehensive income as part of the statement of changes in shareholders’ equity. The amendments require that all nonowner changes in stockholders’ equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The amendments do not change the items that must be reported in other comprehensive income or when an item of other comprehensive income (loss) must be reclassified to net income (loss). This guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011, with early adoption permitted. The Company adopted this pronouncement in the first quarter of 2012 and is presenting separate statements of comprehensive income (loss) in the consolidated financial statements. For the three and nine month periods ended September 30, 2012 and 2011, there were no items affecting comprehensive income (loss).

3. Discontinued Operations

As previously reported, during the second quarter of 2012, the Company committed to a plan to enhance profit margins through the expected sale of a component. On September 18, 2012, Queen Cutlery Company (QCC), a wholly owned subsidiary of Servotronics Inc., completed the disposition of substantially all of its assets for cash consideration of $650,000, less $10,000 in escrow. QCC is accounted for as a discontinued operation in the accompanying consolidated financial statements. During the three and nine months ended September 30, 2012, QCC reported a loss on disposal related to a write-down of certain assets to lower of cost or market resulting in a before tax loss of approximately zero and $406,000, respectively.

On July 23, 2013, Aero Metal Products, Inc. (“AMP”), a wholly owned subsidiary of Servotronics, Inc., gave notice of termination of a personal property capital lease for machinery and equipment previously reported under a $588,000 capital lease with a related party. Due to the termination, beginning in July 2012, this lease is accounted for as an operating lease rather than a capital lease for the remaining term and the related assets and liabilities were removed from the consolidated balance sheet. In the third quarter of 2012, AMP ceased all manufacturing operations. As such, AMP is accounted for as discontinued operations in the accompanying consolidated financial statements and the Company accrued for the remaining balance payable on the personal property lease of $67,500 in the accompanying September 30, 2012 financial statements. On October 23, 2012, AMP announced that it will surrender all assets under the personal property and real property lease to the lessor, Aero Inc., a previously reported related party, by November 3, 2012, which is the expiration date of the operating lease for the building. During the three and nine months ended September 30, 2012, AMP recorded a loss on disposal amounting to a before tax loss of approximately $397,000 relating to a write-down of certain assets to lower of cost or market, accrual of remaining balance on operating leases, and expected costs to surrender assets.

The following is a summary of discontinued operations:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2012			2011			2012			2011
Discontinued Operations:	($000’s omitted)
Revenue of QCC and AMP	$	221		$	256		$	899		$	901
Loss from operations of QCC and AMP	($	285	)	($	291	)	($	895	)	($	790	)
Income tax benefit		97			88			304			240
Net loss from operations of QCC and AMP		(188	)		(203	)		(591	)		(550	)
Loss on disposal of QCC and AMP		(397	)		-			(804	)		-
Income tax benefit		135			-			274			-
Net loss from disposal of QCC and AMP		(262	)		-			(530	)		-
Loss from discontinued operation	($	450	)	($	203	)	($	1,121	)	($	550	)

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SERVOTRONICS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

4. Inventories

		September 30,			December 31,
		2012			2011
		($000’s omitted)
Raw materials and common parts		$	5,917		$	5,727
Work-in-process			3,173			3,511
Finished goods			2,316			2,369
Total inventories, net of reserve		$	11,406		$	11,607
5.	Property, Plant and Equipment
		September 30,			December 31,
		2012			2011
		($000’s omitted)
Land		$	21		$	25
Buildings			7,021			7,181
Machinery, equipment and tooling (including capital lease)			12,116			12,930
			19,158			20,136
Less accumulated depreciation and amortization			(13,544	)		(14,033	)
Total property, plant and equipment		$	5,614		$	6,103

Property, plant and equipment includes land and building in Elma, New York, under a $5,000,000 capital lease which can be purchased for a nominal amount at the end of the lease term. As of September 30, 2012 and December 31, 2011, accumulated amortization on the building amounted to approximately $2,520,000 and $2,423,000, respectively. Amortization expense amounted to $32,000 for the three month periods ended September 30, 2012 and 2011, respectively and amounted to $97,000 for the nine month periods ended September 30, 2012 and 2011, respectively. The associated current and long-term liabilities are discussed in Note 6, Long-Term Debt, of the accompanying consolidated financial statements.

On July 23, 2012, the Company gave notice of termination of a capital lease for machinery and equipment previously reported under a $588,000 capital lease with a related party. Due to the termination, beginning in July 2012, this lease is accounted for as an operating lease rather than a capital lease for the remaining term and the related assets and liabilities were removed from the consolidated balance sheet. See also, Note 7, Capital Lease – Related Party, of the accompanying consolidated financial statements for more information. Amortization expense related to the capital lease related party, included in the loss from operations of a discontinued component, net of tax, amounted to zero and approximately $21,000 for the three month periods ended September 30, 2012 and 2011, respectively, and $42,000 and $63,000 for the nine month periods ended September 30, 2012 and 2011, respectively.

Depreciation expense from continuing operations amounted to $107,000 and $106,000 for the three month periods ended September 30, 2012 and 2011, respectively, and amounted to $334,000 and $323,000 for the nine month periods ended September 30, 2012 and 2011, respectively. The combined depreciation and amortization expense from continuing operations amounted to $141,000 and $139,000 for the three month periods ended September 30, 2012 and 2011, respectively, and amounted to $437,000 and $427,000 for the nine month periods ended September 30, 2012 and 2011, respectively.

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SERVOTRONICS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

6. Long-Term Debt

	September 30,			December 31,
	2012			2011
	($000’s omitted)
Industrial Development Revenue Bonds; secured by an equivalent letter of credit from a bank with interest payable monthly at a floating rate (0.43% at September 30, 2012)(A)	$	2,960		$	2,960
Secured term loan payable to a government agency; monthly payments of $1,950 including interest fixed at 3% payable through fourth quarter of 2015		69			86
Secured term loan payable to a government agency; monthly principal payments of approximately $2,200 with interest waived payable through second quarter of 2012		-			11
		3,029			3,057
Less current portion		(191	)		(202	)
	$	2,838		$	2,855

(A) The 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 bank an annual fee of 1% of the amount secured thereby and pays the remarketing agent for the bonds an annual fee of 1/4% 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.

During the nine months ended September 30, 2012, the Company increased the amount available on the unsecured line of credit from $1,000,000 to $2,000,000. There was no balance outstanding at September 30, 2012 and December 31, 2011. The line of credit is available through June of 2013.

Certain lenders require the Company to comply with debt covenants as described in the specific loan documents, including a debt service ratio. At September 30, 2012 and December 31, 2011, the Company was in compliance with its debt covenants.

7. Capital Lease – Related Party

On November 3, 2009, the Company entered into a capital lease with a related party of the Company for certain equipment to be used at AMP. On July 23, 2012, the Company gave notice of termination of the lease and as a result of the termination, beginning in July 2012, this lease is accounted for as an operating lease rather than a capital lease for the remaining term and the related assets and liabilities were removed from the consolidated balance sheet. There is no material gain or loss associated with the cancellation of such agreement. Under the terms of the Agreement, monthly payments of $7,500 still continue through July 2013. The Company has accrued for the remaining balance payable of $67,500 in the September 30, 2012 financial statements as a result of the discontinued operation discussed in Note 3. There are no other future obligations under this lease.

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SERVOTRONICS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

8. Income Taxes

The Company did not have any material uncertain tax positions or unrecognized tax benefits or obligations as of September 30, 2012 and December 31, 2011.

The Company and/or its subsidiaries file income tax returns in the United States federal jurisdiction and in the states of New York, Pennsylvania, Arkansas and Texas. Also, during the third quarter of 2010, the Internal Revenue Service commenced an examination of the Company’s Federal Income tax returns for years 2008 and 2009. In the first quarter of 2011, the examination was completed and resulted in no material adjustments to the originally filed returns. The 2009 through 2011 federal and state tax returns remain open under statute.

9. Shareholders’ Equity

	($000's omitted)
	Common Stock
	Number of shares issued		Amount		Capital in excess of par value		Retained earnings			ESOP			Treasury Stock			Accumulated Other Comprehensive Loss			Total Shareholders’ Equity
Balance December 31, 2011		2,614,506	$	523	$	13,774	$	12,490		($	1,266	)	($	2,210	)	($	67	)	$	23,244
Net income		-		-		-		225			-			-			-			225
Cash dividend		-		-		-		(358	)		-			-			-			(358	)
Purchase of treasury shares		-		-		-		-			-			(62	)		-			(62	)
Exercise of stock options, net of income tax benefit		-		-		152		(323	)		-			555			-			384
Balance September 30, 2012		2,614,506	$	523	$	13,926	$	12,034		($	1,266	)	($	1,717	)	($	67	)	$	23,433

In January of 2006, the Company’s Board of Directors authorized the purchase by the Company of up to 250,000 shares of its common stock in the open market or in privately negotiated transactions. On October 31, 2008, the Company announced that its Board of Directors authorized the purchase of an additional 200,000 shares of the Company’s common stock under the Company’s current purchase program. As of September 30, 2012, the Company has purchased 245,529 shares and there remain 204,471 shares available to purchase under this program. There were 7,441 and zero shares purchased by the Company during the nine month periods ended September 30, 2012 and 2011, respectively.

In the second quarter of 2012 certain option holders, including the independent directors, Chief Executive Officer and the Chief Operating Officer, elected to exercise 71,000 options, of which 2,500 were bought back by the Company resulting in 68,500 net shares issued out of treasury stock for net proceeds of approximately $215,000. Such transactions were properly reported on Form 4 with the Securities and Exchange Commission. A tax benefit to the Company of approximately $152,000 associated with these transactions reduced taxes payable and was credited directly to capital in excess of par value. Also in the first quarter of 2012, one option holder elected to exercise 9,000 options, resulting in 9,000 shares issued out of treasury stock for proceeds of approximately $18,000.

On May 14, 2012 the Company announced that its Board of Directors declared a $0.15 per share cash dividend. The dividend was subsequently paid on July 2, 2012 to shareholders of record on June 1, 2012 and was approximately $358,000 in the aggregate. These dividends do not represent that the Company will pay dividends on a regular or scheduled basis. The amount is recorded in dividends payable on the accompanying consolidated balance sheet.

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SERVOTRONICS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 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.

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2012			2011			2012			2011
	($000’s omitted except per share data)
Income from continuing operations	$	306		$	1,107		$	1,346		$	2,588
Loss from discontinued operations		(450	)		(203	)		(1,121	)		(550	)
Net income (loss)	($	144	)	$	904		$	225		$	2,038
Weighted average common shares outstanding (basic)		2,146			1,982			2,125			1,982
Incremental shares from assumed conversions of stock options		6			89			19			117
Weighted average common shares outstanding (diluted)		2,152			2,071			2,144			2,099
Basic
Income per share from continuing operations	$	0.14		$	0.56		$	0.63		$	1.31
Loss per share from discontinued operations		(0.21	)		(0.10	)		(0.53	)		(0.28	)
Total net income (loss) per share	($	0.07	)	$	0.46		$	0.10		$	1.03
Diluted
Income per share from continuing operations	$	0.14		$	0.53		$	0.63		$	1.23
Loss per share from discontinued operations		(0.21	)		(0.10	)		(0.52	)		(0.26	)
Total net income (loss) per share	($	0.07	)	$	0.43		$	0.11		$	0.97

10. Commitments and Contingencies

The Company has a probable contingent liability related to the termination of an employment agreement for an Executive Officer of the Company, effective September 29, 2012. The Company is unable to reasonably or accurately estimate the amount of the liability at this time. Under the terms of the agreement, management estimates that the compensation in the form of future medical benefits and severance payments could result in additional liabilities as high as approximately $1,400,000. However, the Company is disputing these amounts and is currently in negotiation with the former officer to settle the potential liability. Accordingly, no additional liability has been accrued as of September 30, 2012 related to this item.

The Company leases certain equipment and real property pursuant to operating lease arrangements. Total rental expense in the three and nine month periods ended September 30, 2012 and 2011 and future minimum payments under such leases are not material to consolidated financial statements. The Company also leases certain real and personal property being accounted for under capital leases. See also Note 5, Property, Plant and Equipment, Note 6, Long-Term Debt, Note 7, Capital Lease – Related Party and Note 11, Related Party Transactions of the accompanying consolidated financial statements for information on the leases.

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SERVOTRONICS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

11. Related Party Transactions

During 2009 the Company formed a new wholly owned subsidiary that leased certain personal property from a related party through the execution of a capital lease. As previously reported, on July 23, 2012, the Company gave notice of termination of the Personal Property Lease dated as of November 3, 2009 (the “Agreement”). Under the terms of the Agreement, monthly payments of $7,500 still continue to July 2013. The Company has accrued for the remaining balance payable of $67,500 in the accompanying September 30, 2012 financial statements. See Note 7, Capital Lease-Related Party, of the accompanying consolidated financial statements. The Company also entered into a real property operating lease agreement, with the same related party, which provided for annual rental of $60,000. The term of the real property lease ended on November 3, 2012 and AMP has surrendered the property by such date. There are no other future obligations under these leases.

12. Business Segments

The Company operates in two business segments, Advanced Technology Group (“ATG”) and Consumer Products Group (“CPG”). 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 ATG primarily involve the design, manufacture, and marketing of servo-control components (i.e., torque motors, control valves, actuators, etc.) for government, commercial and industrial applications. CPG’s operations involve the design, manufacture and marketing of a variety of cutlery and other edged products for use by consumers and government agencies. The sale of QCC and the closure of AMP are not expected to have a material impact on either government or commercial sales. The result of these discontinued operations eliminates primarily gentlemen folding blades and various shears to the CPG product lines. The Company derives its primary sales revenue from domestic customers, although a portion of finished products are for foreign end use.

As of September 30, 2012, the Company had identifiable assets of approximately $30,226,000 ($30,423,000 – December 31, 2011) of which approximately $19,919,000 ($18,004,000 – December 31, 2011) was for ATG and approximately $10,307,000 ($12,419,000 – December 31, 2011) was for CPG.

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SERVOTRONICS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Information regarding the Company’s operations in these segments is summarized as follows ($000’s omitted):

	ATG						CPG						Consolidated
	Nine Months Ended						Nine Months Ended						Nine Months Ended
	September 30,						September 30,						September 30,
	2012			2011			2012			2011			2012			2011
Revenues from unaffiliated customers	$	16,671		$	15,817		$	6,631		$	8,775		$	23,302		$	24,592
Cost of goods sold, exclusive of depreciation and amortization		(11,445	)		(10,571	)		(5,636	)		(6,475	)		(17,081	)		(17,046	)
Selling, general and administrative		(2,411	)		(2,201	)		(1,342	)		(1,342	)		(3,753	)		(3,543	)
Interest expense		(34	)		(37	)		-			-			(34	)		(37	)
Depreciation and amortization		(323	)		(319	)		(114	)		(108	)		(437	)		(427	)
Other income, net		5			153			7			11			12			164
Income (loss) from continuing operations before income tax provision		2,463			2,842			(454	)		861			2,009			3,703
Income tax provision (benefit)		812			855			(149	)		260			663			1,115
Income (loss) from continuing operations		1,651			1,987			(305	)		601			1,346			2,588
Discontinued Operations:
Loss from operations of a discontinued component, net of income tax benefit		-			-			(591	)		(550	)		(591	)		(550	)
Loss on disposal of QCC and AMP, net of income tax benefit		-			-			(530	)		-			(530	)		-
Loss from discontinued operations		-			-			(1,121	)		(550	)		(1,121	)		(550	)
Net income (loss)	$	1,651		$	1,987		($	1,426	)	$	51		$	225		$	2,038
Capital expenditures	$	327		$	151		$	67		$	284		$	394		$	435

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SERVOTRONICS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

	ATG						CPG						Consolidated
	Three Months Ended						Three Months Ended						Three Months Ended
	September 30,						September 30,						September 30,
	2012			2011			2012			2011			2012			2011
Revenues from unaffiliated customers	$	5,783		$	5,409		$	1,733		$	3,141		$	7,516		$	8,550
Cost of goods sold, exclusive of depreciation and amortization		(4,080	)		(3,522	)		(1,456	)		(2,299	)		(5,536	)		(5,821	)
Selling, general and administrative		(842	)		(704	)		(433	)		(441	)		(1,275	)		(1,145	)
Interest expense		(11	)		(12	)		-			-			(11	)		(12	)
Depreciation and amortization		(104	)		(105	)		(37	)		(34	)		(141	)		(139	)
Other income, net		-			145			2			5			2			150
Income (loss) from continuing operations before income tax provision		746			1,211			(191	)		372			555			1,583
Income tax provision (benefit)		335			365			(86	)		111			249			476
Income (loss) from continuing operations		411			846			(105	)		261			306			1,107
Discontinued Operations:
Loss from operations of a discontinued component, net of income tax benefit		-			-			(188	)		(203	)		(188	)		(203	)
Loss on disposal of QCC and AMP, net of income tax benefit		-			-			(262	)		-			(262	)		-
Loss from discontinued operations		-			-			(450	)		(203	)		(450	)		(203	)
Net income (loss)	$	411		$	846		$	(555	)	$	58		$	(144	)	$	904
Capital expenditures	$	234		$	70		$	24		$	180		$	258		$	250

13. Other Income

Components of other income include interest income on cash and cash equivalents, and other amounts not directly related to the sale of the Company’s products. Other income is immaterial in relationship to the consolidated financial statements.

14. Subsequent Events  

In October 2012, Servotronics, Inc. entered into an agreement with a local contractor for the construction of a new 30 x 36 foot testing facility that will be located in Elma, New York. The facility expansion is in response to an increase in demand and is expected to cost up to $700,000, including related equipment. The expansion is expected to be funded from operating cash flows and the target completion date is in the first quarter of 2013.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations Management Discussion

During the three months ended September 30, 2012 and 2011 approximately 26% and 43%, respectively, and 31% and 42% for the nine months ended September 30, 2012 and 2011, respectively, of the Company’s revenues from continuing operations were derived from contracts with agencies of the U.S. Government or their prime contractors and their subcontractors. Sales of products sold for government applications decreased when comparing the results of the three and nine months ended September 30, 2012 to September 30, 2011, due to decreased government shipments at the Consumer Products Group in the amount of approximately $1,716,000 and $3,141,000, respectively, while shipments to the government at the Advanced Technology Group remained consistent. The Company believes that government involvement in military operations overseas will continue to have an impact on the financial results for both the ATG’s and CPG’s markets. While the Company is optimistic in relation to these potential 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.

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The Company’s commercial business is affected by such factors as uncertainties in today’s global economy, global competition, the vitality and ability of the commercial aviation industry to purchase new aircraft, the effects of terrorism and the threat of terrorism, market demand and acceptance both for the Company’s products and its customers’ products which incorporate Company made components.

The ATG continues its aggressive business development efforts in its primary markets and is broadening its activities to include new domestic and foreign markets that are consistent with its core competencies. There are substantial uncertainties in the current global economy which in turn may affect the Company’s sales revenues from period to period in 2012 and beyond. Although the ATG backlog continues to be strong, actual scheduled shipments may be delayed/changed as a function of the Company’s customers’ final delivery determinations that are based on changes in the global economy and other factors.

The Company’s CPG develops new commercial products and products for government and military applications. Included in the significant uncertainties in the near and long term are the effects of the U. S. and world stimulus plans and the difficulty to accurately project the net effect of the vagaries inherent in the government procurement process and programs notwithstanding that the U.S government may not process or otherwise delay subject procurements. The ATG and CPG continue to respond to U.S. government procurement requests for quotes. New product development activities are ongoing along with the acquisition and development of new product lines. The sale of QCC and the closure of AMP are not expected to have a material impact on either government or commercial sales. The result of these discontinued operations eliminates primarily gentleman folding blades and various shears to the CPG product lines.

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Results of Operations

The following table compares the Company’s consolidated statements of income data for the nine and three months ended September 30, 2012 and 2011 ($000’s omitted).

	Nine Months Ended September 30,								2012 vs. 2011
	2012				2011				Dollar		% Increase
	Dollars		% of Sales		Dollars		% of Sales		Change		(Decrease)
Revenue:
Advanced Technology	$	16,671		71.5%	$	15,817		64.3%	$	854		5.4%
Consumer Products		6,631		28.5%		8,775		35.7%		(2,144)		(24.4%)
		23,302		100.0%		24,592		100.0%		(1,290)		(5.2%)
Cost of goods sold, exclusive of depreciation and amortization		17,081		73.3%		17,046		69.3%		35		0.2%
Selling, general and administrative		3,753		16.1%		3,543		14.4%		210		5.9%
Depreciation and amortization		437		1.9%		427		1.7%		10		2.3%
Total costs and expenses		21,271		91.3%		21,016		85.4%		255		1.2%
Operating income, net		2,031		8.7%		3,576		14.6%		(1,545)		(43.2%)
Interest expense		34		0.1%		37		0.2%		(3)		(8.1%)
Other income, net		(12)		(0.1%)		(164)		(0.7%)		152		(92.7%)
Income tax provision		663		2.8%		1,115		4.5%		(452)		(40.5%)
Income from continuing operations		1,346		5.9%		2,588		10.6%		(1,242)		(48.0%)
Discontinued Operations:
Loss from operations of a discontinued component, net of income tax benefit		(591)		(2.5%)		(550)		(2.2%)		(41)		7.5%
Loss on disposal of QCC and AMP, net of income tax benefit		(530)		(2.3%)		-		0.0%		(530)	100.0%
Loss from discontinued operations		(1,121)		(4.8%)		(550)		(2.2%)		(571)		103.8%
Net income	$	225		1.1%	$	2,038		8.4%	$	(1,813)		(89.0%)

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	Three Months Ended September 30,								2012 vs. 2011
	2012				2011				Dollar			% Increase
	Dollars		% of Sales		Dollars		% of Sales		Change			(Decrease)
Revenue:
Advanced Technology	$	5,783		76.9%	$	5,409		63.3%	$	374			6.9%
Consumer Products		1,733		23.1%		3,141		36.7%		(1,408)			(44.8%)
		7,516		100.0%		8,550		100.0%		(1,034)			(12.1%)
Cost of goods sold, exclusive of depreciation and amortization		5,536		73.7%		5,821		68.1%		(285)			(4.9%)
Selling, general and administrative		1,275		17.0%		1,145		13.4%		130			11.4%
Depreciation and amortization		141		1.9%		139		1.6%		2			1.4%
Total costs and expenses		6,952		92.6%		7,105		83.1%		(153)			(2.2%)
Operating income, net		564		7.4%		1,445		16.9%		(881)			(61.0%)
Interest expense		11		0.1%		12		0.1%		(1)			(8.3%)
Other income, net		(2)		0.0%		(150)		(1.8%)		148			(98.7%)
Income tax provision		249		3.3%		476		5.6%		(227)			(47.7%)
Income from continuing operations		306		4.0%		1,107		13.0%		(801	)		(72.4%)
Discontinued Operations:
Loss from operations of a discontinued component, net of income tax benefit		(188)		(2.5%)		(203)		(2.4%)		15			(7.4%)
Loss on disposal of QCC and AMP, net of income tax benefit		(262)		(3.5%)		-		0.0%		(262)		100.0%
Loss from discontinued operations		(450)		(6.0%)		(203)		(2.4%)		(247)			121.7%
Net income (loss)	$	(144)		(2.0%)	$	904		10.6%	$	(1,048)			(115.9%)

Revenue

The Company’s consolidated revenues for continuing operations decreased approximately $1,034,000 or 12.1% for the three month period ended September 30, 2012 and $1,290,000 or 5.2% for the nine month period ended September 30, 2012 when compared to the same three and nine month periods in 2011. The decrease is due to decreased shipments at the Consumer Products Group (CPG) mainly due to a decrease in shipments related to orders from the U.S. Government and its prime vendors. These decreases are not fully offset by increases in commercial shipments at the CPG and ATG. Procurements and timing of shipments under Government contracts at the CPG may, at times, significantly impact operating results from period to period.

Cost of Goods Sold

Cost of goods sold as a percentage of revenues increased for the three and nine month periods ended September 30, 2012 and 2011 due to a decrease in government sales at the CPG with disproportionate decreases in labor and overhead costs and additional costs at the ATG related to customer driven process improvement. These additional costs were approximately $100,000 and were expensed in the third quarter of 2012. Also included in the third quarter of 2012 was approximately $75,000 in retroactive pay adjustments for production employees. Fluctuation in cost of goods sold as a percentage of revenues also results from the mix of products sold in the period.

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Selling, General and Administrative Expenses

Selling, general and administrative (SG&A) expenses as a percentage of revenue increased for the three and nine month periods ended September 30, 2012 as compared to the same period in 2011. Selling, general and administrative expenses are attributable to marketing of products (i.e., costs of internal and external sales efforts, catalog production, and the promotion of new and existing products in current and new markets). Also included in SG&A expenses are the labor and related costs for general and administrative support, accounting, professional, legal and information technology costs. The increase is primarily due to $130,000 of additional costs in professional and legal expenses for the nine months ended September 30, 2012 as well as $26,000 in retroactive pay adjustments for non-production employees during the third quarter of 2012.

Interest Expense

Interest expense remained relatively consistent for the three and nine month periods ended September 30, 2012 compared to the same periods in 2011 due to interest rates which have remained consistent. See also Note 6, Long-Term Debt, of the accompanying consolidated financial statements for information on long-term debt.

Depreciation and Amortization Expense

Depreciation and amortization expense remained relatively consistent for the three and nine month periods ended September 30, 2012 compared to the same periods in 2011. Depreciation expense fluctuates due to variable estimated useful lives of depreciable property (as identified in Note 2, Summary of Significant Accounting Policies, of the accompanying consolidated financial statements) as well as the amount and nature of capital expenditures in current and previous periods. It is anticipated that the Company’s future capital expenditures will, at a minimum, follow the Company’s requirements to support its manufacturing delivery commitments and to meet certain information technology related capital expenditure requirements.

Other Income

Components of other income include interest income on cash and cash equivalents and other amounts not directly related to the sale of the Company’s products. Other income is immaterial in relationship to the consolidated financial statements.

Income Taxes

The Company’s continuing operations effective tax rate was approximately 44.9% and 30.1% for the three month periods ended September 30, 2012 and 2011, respectively, and approximately 33% and 30.1% for the nine month periods ended September 30, 2012 and 2011, respectively and the discontinued operations effective tax rate was approximately 34.0% for the three and nine month periods ended September 30, 2012 and 30.1% for the same periods of 2011. The effective tax rates reflect the estimated annual effective rates for federal and state income taxes, permanent non-deductible expenditures and the expected tax benefit for manufacturing deductions allowable under the American Jobs Creation Act of 2004. See also Note 8, Income Taxes, of the accompanying consolidated financial statements for information concerning income tax.

Income From Continuing Operations

Income from continuing operations for the three month period ended September 30, 2012 decreased $801,000 or 72.4% when compared to the same period ended September 30, 2011. Income from continuing operations for the nine month period ended September 30, 2012 decreased $1,242,000 or 48.0% when compared to the same period ended September 30, 2011. The decrease in income from continuing operations is primarily the result of decreased revenues and shipments of products with lower margins at the Company’s Consumer Products Group.

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Discontinued Operations

As previously reported, during the second quarter of 2012, the Company committed to a plan to enhance profit margins through the expected sale of a component. On September 18, 2012, Queen Cutlery Company (“QCC”), a wholly owned subsidiary of Servotronics Inc., completed the disposition of substantially all of its assets for cash consideration of $650,000, less $10,000 in escrow. QCC is accounted for as a discontinued operation in the accompanying consolidated financial statements. During the three and nine months ended September 30, 2012, QCC reported a loss on disposal related to a write-down of certain assets to lower of cost or market resulting in a before tax loss of approximately zero and $406,000, respectively.

On July 23, 2013, Aero Metal Products, Inc. (“AMP”), a wholly owned subsidiary of Servotronics, Inc., gave notice of termination of a personal property capital lease for machinery and equipment previously reported under a $588,000 capital lease with a related party. Due to the termination, beginning in July 2012, this lease is accounted for as an operating lease rather than a capital lease for the remaining term and the related assets and liabilities were removed from the consolidated balance sheet. In the third quarter of 2012, AMP ceased all manufacturing operations. As such, AMP is accounted for as discontinued operations in the accompanying consolidated financial statements and the Company accrued for the remaining balance payable on the personal property lease of $67,500 in the accompanying September 30, 2012 financial statements. On October 23, 2012, AMP announced that it will surrender all assets under the personal property and real property lease to the lessor, Aero Inc., a previously reported related party, by November 3, 2012, which is the expiration date of the operating lease for the building. During the three and nine months ended September 30, 2012, AMP recorded a loss on disposal amounting to a before tax loss of approximately $397,000 relating to a write-down of certain assets to lower of cost or market, accrual of remaining balance on operating leases, and expected costs to surrender assets.

Liquidity and Capital Resources

The Company’s primary liquidity and capital requirements relate to working capital needs; primarily inventory and accounts receivable as well as capital expenditures for property, plant and equipment and principal and interest payments on debt. At September 30, 2012, the Company had working capital of approximately $20,789,000 ($20,483,000 – December 31, 2011) of which approximately $5,547,000 ($4,948,000– December 31, 2011) was comprised of cash and cash equivalents.

The Company generated approximately $609,000 in cash from operations during the nine months ended September 30, 2012. Cash was generated primarily through net income, collection of receivables, an increase in accrued employee compensation and benefit costs as well as an increase to other accrued liabilities. The primary use of cash for the Company’s operating activities for the nine months ended September 30, 2012 include working capital requirements, mainly inventory, prepayments on insurances and property tax, other current assets and prepaid income taxes. Cash generated and used in operations is consistent with sales volume, customer expectations and competitive pressures. The Company’s primary use of cash in its financing and investing activities in the first nine months of 2012 included approximately $358,000 for cash dividends paid on July 2, 2012. The Company also expended approximately $394,000 for capital expenditures during the nine months ended September 30, 2012. These uses are partially offset by cash generated in the amount of $640,000 for the sale of Queen Cutlery Company.

- 22 -

At September 30, 2012, there are no material commitments for capital expenditures; however, subsequent to September 30, 2012, the Company entered into an agreement with a local contractor for the construction of a new 30 x 36 foot testing facility that will be located in Elma, New York.  It is expected to cost up to $700,000 including related equipment and to be funded from operating cash flows.  The Company also has an unsecured $2,000,000 line of credit on which there is no balance outstanding at September 30, 2012. If needed, this can be used to fund cash flow requirements. The Company believes that it has adequate internal and external resources available to fund expected working capital and capital expenditure requirements through fiscal 2012 as supported by the level of cash/cash equivalents on hand, cash flow from operations and bank line of credit.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

The Company is a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and is not required to provide the information required under this item.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

The Company carried out an evaluation under the supervision and with the participation of its management, including the Company’s Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of the Company’s disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e)) as of September 30, 2012. Based upon that evaluation, the CEO and CFO concluded that the Company’s disclosure controls and procedures are effective to ensure that the information required to be disclosed by the Company in SEC reports under the Exchange Act (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and (ii) is accumulated and communicated to the Company’s management, including the CEO and CFO, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Controls

During the nine month period ended September 30, 2012, there were no changes in internal controls over financial reporting that have materially affected, or are reasonably likely to affect, the Company’s internal controls over financial reporting.

PART II

OTHER INFORMATION

Item 1. Legal Proceedings

There are no legal proceedings which are material to the Company currently pending by or against the Company other than ordinary routine litigation incidental to the business which is not expected to materially adversely affect the business or earnings of the Company.

Item 1A. Risk Factors

The Company is a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and is not required to provide the information required under this item.

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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

(c)   Company Purchases of Company’s Equity Securities

2012 Periods	Total Number of Shares Purchased	Average Price $ Paid Per Share	Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares that may yet be Purchased under the Plans or Programs
January 1– March 31, 2012	-	-	-	211,912
April 1 – June 30, 2012	2,765	8.00	2,765	209,147
July 1 – September 30, 2012	4,676	8.48	4,676	204,471
Total	7,441	8.30	7,441	204,471

In January of 2006, the Company’s Board of Directors authorized the purchase by the Company of up to 250,000 shares of its common stock in the open market or in privately negotiated transactions. On October 31, 2008, the Company announced that its Board of Directors authorized the purchase of an additional 200,000 shares of the Company’s common stock under the Company’s current purchase program. As of October 31, 2012, the Company has purchased 246,723 shares and there remain 203,277 shares available to purchase under this program.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

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Item 6. Exhibits

2.1 Asset Purchase Agreement as of September 18, 2012 by and between Daniels Family Cutlery Corporation and Queen Cutlery Company (incorporated by reference to Exhibit 2.1 to the Company’s Form 8-K filed with the SEC on September 24, 2012)

2.2 Agreement for the Sale of Real Estate dated September 18, 2012 by and between Daniels Family Cutlery Corporation and Queen Cutlery Company (incorporated by reference to Exhibit 2.2 to the Company’s Form 8-K filed with the SEC on September 24, 2012)

4.1 Servotronics, Inc. Shareholder Rights Plan dated as of October 15, 2012, which includes the form of Rights Certificate as Exhibit A, the Summary of Rights to Purchase Preferred Stock as Exhibit B, and the Certificate of Designation, Preferences and Rights of Series A Junior Participating Preferred Stock as Exhibit C (incorporated by reference to Exhibit 4.1 to the Company’s Form 8-K filed with the SEC on October 17, 2012)

10 Material Contracts (*Indicates management contract or compensatory plan or arrangement)

10.1* Servotronics, Inc. 2012 Long-Term Incentive Plan (incorporated by reference to Appendix A to the Company’s proxy statement for the 2012 Annual meeting of Shareholders)

10.2* Amendment to employment contract for Dr. Nicholas D. Trbovich dated August 13, 2012 (Filed herewith)

10.3* Employment contract for Kenneth D. Trbovich dated June 15, 2012 (Filed herewith)

10.4* Amendment to employment contract for Kenneth D. Trbovich dated August 13, 2012 (Filed herewith)

31.1 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 (Filed herewith)

31.2 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 (Filed herewith)

32.1 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 (Filed herewith)

32.2 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 (Filed herewith)

101 The following materials from Servotronics, Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2012, formatted in XBRL (eXtensible Business Reporting Language):  (i) consolidated balance sheets, (ii) consolidated statements of income, (iii) consolidated statements of comprehensive income, (iv) consolidated statements of cash flows and (v) the notes to the consolidated financial statements, tagged as block of text.**

**  Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

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FORWARD-LOOKING STATEMENTS

In addition to historical information, certain sections of this Form 10-Q 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-Q. 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.

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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: November 13, 2012

SERVOTRONICS, INC.
By:	/s/ Cari L. Jaroslawsky, Chief Financial Officer
	Cari L. Jaroslawsky Chief Financial Officer
By:	/s/ Dr. Nicholas D. Trbovich, Chief Executive Officer
	Dr. Nicholas D. Trbovich Chief Executive Officer

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EX-10.2

Exhibit 10.2

As of August 13, 2012

Dr. Nicholas D. Trbovich (Nicholas D. Trbovich, Sr.)

28 Tanglewood Drive, West

Orchard Park, NY 14127

Dear Dr. Nicholas D. Trbovich (Nicholas D. Trbovich, Sr.):

You and Servotronics, Inc. (the “Company”) are parties to an Employment Agreement, dated July 1, 2005 and ratified on June 30, 2006 pursuant to which you are employed by the Company. This letter confirms such Amended Employment Agreement and subsequent ratification and subsequent Amendments dated August 4, 2006, July 6, 2007, July 9, 2008, December 31, 2008, July 2, 2009, February 22, 2010, July 22, 2010, April 3, 2011, August 12, 2011, and January 27 , 2012 any and all other relevant amendments (the “Amended Agreement”).

This letter will also confirm your agreement and that of the Company (pursuant to a resolution of the Board of Directors passed at a meeting held on August 13, 2012) to amend Paragraph 3 of the Amended Agreement to delete “$545,170.00” and insert in its place “$556,070.00” (effective May 1, 2012) subject to your acceptance which will be indicated by your signature below.

If the foregoing meets with your approval and you are willing to become bound hereby, please sign and return to the undersigned the enclosed copy of this letter.

Very truly yours,

SERVOTRONICS, INC.

Bernadine E. Kucinski,

Assistant Corporate Secretary

ACCEPTED AND AGREED

Dr. Nicholas D. Trbovich                                                                As of August 13, 2012

Dr. Nicholas D. Trbovich                                                                                     Date

(Nicholas D. Trbovich, Sr.)

EX-10.3

Exhibit 10.3

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT  (“Agreement”) between SERVOTRONICS, INC. (“Employer”) and Kenneth D. Trbovich. (“Employee” ), June 15, 2012.

W I T N E S S E T H

WHEREAS, the Board of Directors of Employer believes it to be in the best interests of Employer and its shareholders to assure the Employee’s continued service to Employer, and Employee agrees to continue in the service of Employer under the terms set forth below;

NOW, THEREFORE, in consideration of his continued employment by Employer and other good and valuable consideration and intending to be legally bound, Employee hereby agrees to be employed by Employer, upon the following terms and conditions:

1.    Employer hereby employs Employee and Employee hereby accepts such employment for a multi-year term extending to and including December 31, 2018, on the terms and conditions hereinafter set forth. When one year remains on the original or any extended term of this Agreement, the term of this Agreement will be automatically extended for one additional year beyond its then expiration date unless either party previously has notified the other in writing that the term will not be extended beyond that expiration date. If Employer elects pursuant to this paragraph not to extend this Agreement, Employee shall be entitled to a severance payment in an amount equivalent to nine (9) months' salary and benefits at the rate in effect at the time of termination. Such amount shall be paid within 30 days following the date of expiration of this Agreement under this paragraph.

2.Employee shall perform the duties and functions of Vice President of Employer, which duties and functions will be similar to and generally consistent with those Employee is performing for Employer at the date of this Agreement.

3.Subject to the provisions of paragraphs 5, 6, 12 and 16 of this Agreement, Employer shall pay and Employee shall accept as full compensation for all services rendered hereunder a minimum annual salary of $107,500 or such greater amount as may be hereafter fixed by the Board, payable in equal installments every two weeks.

4.Employer will reimburse Employee for all reasonable expenses incurred in the performance of his services hereunder.

5.In addition to the compensation provided to Employee under paragraph 3 of this Agreement, Employee shall be entitled to participate in all employee benefit plans, including without limitation stock options, profit sharing, pension, bonus, participation, extra compensation, disability or deferred compensation plans, group insurance or other benefits or arrangements, to at least the same extent as do Employer's other senior executive officers, except as to any plan as to which Employee has specifically consented in writing to his exclusion therefrom. In its discretion the Board may grant Employee benefits in addition to or greater than those enumerated above and in paragraph 16 of this Agreement.

6.                Employment under this Agreement shall terminate prior to the expiration of its term or any extended term upon the death or total disability of Employee.

“Total disability” is Employee's inability to substantially perform his duties and obligations under this Agreement for a consecutive period of four months by reason of illness or physical or mental impairment. If either party asserts that total disability has occurred and the other party disputes that assertion, Employer and Employee shall submit the dispute (for a written decision as described below) to a physician jointly selected by them who (i) is licensed to practice in New York, (ii) has professional experience in the area or branch of medicine related to the cause of the claimed disability, (iii) has rendered no professional services to or on behalf of either party within the two prior years and (iv) is not a shareholder, officer, director or employee of, or in a business relationship with, Employer or Employee. Employer shall pay all expenses incurred by both parties to resolve the dispute in this manner. After making such examinations and investigations as he shall deem necessary, that physician shall make his decision in writing, and the decision shall be given to both Employer and Employee in accordance with paragraph 19. Neither party shall contest the physician's decision, which shall be final and conclusive, except for fraud. If the physician decides that total disability has not occurred, this Agreement and Employee's employment hereunder shall continue as if no dispute had occurred.

Termination of employment shall be effective upon Employee's death. Termination of Employment for total disability shall be effective five business days after either party has given written notice to the other of the existence of total disability unless, before the expiration of that five-day period, the party receiving notice shall give the other party written notice that he or it disputes the existence of total disability; if the notice of dispute is so given, termination of employment will occur when the physician gives notice to both parties of his decision in accordance with paragraph 19.

In the event of termination of employment due to Employee's total disability or death, Employer shall pay to the Employee, or in the event of Employee's death, to Employee's designated beneficiary, or if none, to his estate, compensation during the remainder of the term or extended term of this Agreement at the rate of 50% of the total compensation in effect under paragraphs 3 and 5 of this Agreement immediately prior to the termination. The foregoing payment shall be in lieu of the 9-month severance payment required by reason of termination of employment pursuant to paragraph 1 of this Agreement.

7.   Nothing contained in this Agreement shall deprive Employee of, or limit his entitlement to, any rights to pensions or other retirement payments, to stock options or other rights with respect to Employer's securities or to any other benefits granted or to be granted to Employee by Employer, whether or not such payments, options, rights or benefits are referred to in this Agreement, except that the disability payment provided in paragraph 6 and the severance payment in paragraph 13 shall be in lieu of the 9-month severance payment provided in paragraph 1.

8.   Employee agrees that from and after the date of this Agreement and during the term hereof he will not, unless acting as an officer or employee of Employer or with the prior written consent of Employer, directly or indirectly, engage or participate in, or own, manage, operate, join or control, or be connected as an officer, director, employee, partner, investor or otherwise with, any business manufacturing or selling products or services similar to or competing with products or services manufactured or sold by Employer or otherwise engage directly or indirectly in competition with Employer. Employee acknowledges that the remedy at law for any breach by him of the foregoing will be inadequate and that Employer shall be entitled to injunctive relief. Nothing herein contained, however, shall prevent Employee from purchasing for investment 3% or less of any outstanding class of securities of any company whose securities are held by the general public.

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9.  In consideration of past and future services performed by Employee on behalf of Employer, Employer agrees that it shall have no right to terminate this Agreement, or to terminate any obligation of Employer hereunder, prior to the end of the term or any extension hereof, except for the willful malfeasance of Employee in the performance of his duties hereunder. Any such termination shall be determined by Employer's Board of Directors at a meeting validly held and conducted as provided by Employer's By-laws and applicable law and shall be subject to Employee's rights set forth in paragraph 5. Employee will be entitled to be heard by the Board of Directors prior to any determination under this paragraph, to be advised during the hearing by an attorney of his choice and, if he chooses, to have his attorney be heard by the Board of Directors; Employer will pay the fees and disbursements of Employee's attorney for services rendered in this dispute if the Employee shall be the prevailing party. A decision by the Board of Directors hereunder is not final, but is subject to arbitration under paragraph 18.

10.Employee may terminate his employment hereunder for any one or more of the following reasons: (A) a change in control of Employer (as defined below), (B) a change in the responsibilities, titles or offices of Employee as currently in effect, without the express written consent of Employee, except in connection with the termination of Employee's employment for disability, retirement or pursuant to paragraph 8 above, (C) a relocation of Employee's office or principal place of work without his express written consent to a location more than 50 miles from 1110 Maple Street, P.O. Box 300, Elma, New York, except for required travel on Employer's business to an extent substantially consistent with Employee's business travel practices as currently in effect, or (D) a failure by Employer to comply with any provision of this Agreement which has not been cured within five days after notice of such noncompliance has been given by Employee to Employer. For purposes of this Agreement, a “change in control of Employer” shall mean a change in control of a nature that would be required to be reported in response to Item 5.01 of Form 8-K promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or any similar successor provision; provided that, without limitation, such a change in control shall be deemed to have occurred if (X) any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act or any similar successor provision), other than Employee, is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act or any similar successor provision), directly or indirectly, of securities of Employer representing 22% or more of the combined voting power of Employer's then outstanding securities, or (Y) Employee, while living, shall cease to be a director of Employer, unless Employee shall have voluntarily resigned his position on the Board in writing or consented in writing to not be included in the slate of nominees for director proposed by the Board for election at any meeting of the shareholders of Employer at which directors are to be elected, or (Z) if at any time more than one-third of the members of the Board shall be persons who shall have been elected by the shareholders of Employer or appointed by the Board in opposition to Employee’s recommendation and without having received the affirmative vote of Employee either as a shareholder or as a Director.

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11.                 Any termination of Employee's employment by Employee shall be communicated by written Notice of Termination to Employer. For purposes of this Agreement, a “Notice of Termination” shall mean a notice which shall indicate the specific termination provision or provisions in this Agreement relied upon (although the failure to include in such notice any other termination provision shall not be deemed to be a waiver of such provision). No failure of Employee to exercise his right to terminate this Agreement shall, by reason of lapse of time or otherwise, be deemed to constitute a waiver of such right; and no Notice of Termination in which Employee notifies Employer that he is terminating this Agreement because of a breach of this Agreement by Employer shall be deemed to constitute a waiver by Employee of his right to terminate the Agreement because of a change in control of Employer, notwithstanding that a change in control may have occurred prior to Employee's Notice of Termination.

12.“Date of Termination” shall mean, if Employee's employment is terminated pursuant to paragraph 10 above, the date on which a Notice of Termination is given. The date on which a Notice of Termination is given shall be the date when hand-delivered in person to any officer of Employer except Employee or the next business day after deposit thereof in the U.S. mail, postage prepaid, for delivery as registered or certified mail, return receipt requested, addressed to the corporate headquarters of Employer.

13.If (A) Employer shall terminate Employee's employment in breach of this Agreement (it being understood that, without limitation, a breach shall have occurred if a termination pursuant to paragraph 9 hereof is thereafter found upon arbitration pursuant to paragraph 18 to be not justifiable or otherwise improper) or (B) Employee shall terminate his employment for any reason specified in paragraph 10, then

           (i)  Employer shall pay Employee his full salary and benefits through the Date of Termination at the rate in effect at the time Notice of Termination is given;

           (ii)            in lieu of any salary payments to Employee for periods subsequent to the Date of Termination and in lieu of the 9-month severance pay provided in paragraph 1, Employer shall pay as severance pay to Employee an amount equal to the product of 2.99 multiplied by a base amount equal to the average annual compensation paid by Employer to Employee which was includible in Employee's gross income for federal income tax purposes for the most recent five taxable years ending before the date on which the change in control of Employer occurs;

           (iii)            the parties intend that the base amount in the preceding subparagraph (ii) shall be the highest base amount permitted by Section 280G of the Internal Revenue Code of 1986, as amended, or any successor provisions without causing any portion of the severance pay to constitute an “excess parachute payment” thereunder, and if any amendment of Section 280G or any successor provision defines such a base amount so as to permit a greater amount than defined in the preceding sentence, the greater base amount permitted by the amended provision shall be applicable, provided, however, that (1) nothing contained herein shall reduce the severance payment below the amount resulting from applying the base amount set forth in subparagraph (ii) and (2) this subparagraph (iii) shall not be applicable after July 1, 2018 unless the parties hereto expressly agree in writing to the extension of the applicability of this subparagraph;

           (iv)          if termination of Employee's employment arises out of a breach by Employer of this Agreement, Employer shall pay all other damages to which Employee may be entitled as a result of such breach, including but not limited to damages for any loss of benefits to Employee and including all legal fees and expenses incurred by him as a result of such termination.

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14.                Any payment of Employer to Employee required by paragraph 13 above shall be made in full no later than the next business day following the date on which Notice of Termination is given as determined in paragraph 12 above or, if applicable, within five (5) business days of an arbitrator’s ruling pursuant to paragraph 18 of this Agreement (the “Payment Date”). Any failure by Employer to make payment in full to Employee on or before the Payment Date of all amounts required to be paid to Employee pursuant to this Agreement shall entitle Employee, in addition to such amounts, to liquidated damages equivalent to the amount of salary and benefits to which Employee would have been entitled pursuant to paragraph 3 of this Agreement (as such paragraph may hereafter be amended) if this Agreement had not been terminated during the period beginning with and including the Payment Date and ending on and including the date on which Employer pays to Employee all sums owing to Employee pursuant to this Agreement.

15.Employee shall not be required to mitigate the amount of any payment provided for in this Agreement by seeking other employment or otherwise.

16.In recognition of Employee’s decades of service to Employer, Employer agrees that after termination of Employee’s employment hereunder for any reason, whether such termination is pursuant to paragraph 1, 6, 9, 10 or 13 of this Agreement (other than a termination due to death pursuant to paragraph 6), Employer shall provide and pay for, at a minimum, disability, medical, hospital and other health care benefits and life insurance benefits that are no less than the maximum benefits which were provided to Employee and any spouse and/or children of his that were covered under Employer’s plans at the time Employee’s employment is terminated (hereinafter “Post Employment Benefits”).

a. Employer further agrees that Employee will not be required to assume co-pay or employee contribution costs greater than he had been required to assume (if any) during that period of his employment when maximum benefits were provided to him.

              b.  Employer shall pay the cost of all of Post Employment Benefits until the Employee’s death, except that Employer’s obligation to provide and pay for Post Employment Benefits for Employee’s spouse and/or children shall terminate when said spouse and/or child dies or otherwise becomes ineligible for benefits under any of the applicable plans, if such an event occurs prior to Employee’s death.

c.            If Employer is unable to provide the Post Employment Benefits as part of the plan or plans which provide benefits to other employees of the Employer, it shall create a special or individual plan or plans to provide the benefits; and if Employer is unable to provide such benefits through a special or individual plan, it shall pay Employee monthly an amount, which will equal the sum of the cost to Employee of his obtaining benefits equivalent to the Post Employment Benefits plus any additional federal and state income tax cost, to Employee of receiving such payments in lieu of Post Employment Benefits.

d.            Because of the uncertainty of the effect on certain terms of this Agreement of Internal Revenue Code (“Code”) Section 409A and the regulations and guidance interpreting and implementing Code Section 409A, with Employee’s prior written consent, Employer agrees to timely make such amendments to this Agreement as may be necessary to avoid the imposition of penalties, interest and additional taxes under Code Section 409A and agrees that any such amendment will provide Employee with economically the same payments and benefits as would have been provided hereunder prior to such amendment.

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17.If, by reason of any amendment to the Internal Revenue Code of 1986, as amended, subsequent to the date of this agreement, there may be imposed upon Employee any federal tax in excess of the amount of federal income tax that would otherwise be imposed upon Employee upon the recognition by Employee of any payment by Employer to Employee pursuant to paragraph 13 above as ordinary income of Employee for federal income tax purposes, then Employee, at his sole option, may elect to receive from Employer such lesser amount of severance pay as Employee shall designate in his sole discretion. Such election shall be deemed to have been properly made by Employee if set forth in Employee's Notice of Termination provided to Employer in accordance with paragraph 11 above.

18.Any controversy, claim or dispute arising out of or relating to this Agreement, including, without limitation, any claim for breach of this Agreement, shall be settled by arbitration in accordance with the Rules of the American Arbitration Association except as otherwise specifically provided in this paragraph. Judgment upon any award rendered by the arbitrators pursuant hereto may be entered in any court having jurisdiction thereof. Either party shall have the right to initiate arbitration proceedings except that (i) no arbitration shall be commenced on a controversy arising under paragraph 9 until a decision has been made by the Board of Directors as provided therein, but Employee may initiate arbitration prior to such a decision if he shall have been terminated without that decision having occurred or if Employer shall have refused to pay the fees and disbursements of Employee's counsel; (ii) paragraph 6 provides the exclusive method of determining a dispute as to whether Employee has total disability, and (iii) Employer must apply to a court having proper jurisdiction to obtain the injunctive relief referred to in paragraph 8. Any arbitration shall take place in the County of Erie, State of New York, unless both parties shall consent to another location. Employer shall pay the costs of the arbitration.

19.Subject to the provisions of paragraph 12 of this Agreement, a notice to a party shall be effectively given to the Employee when hand-delivered to the Employee and to the Employer when hand-delivered to any officer of Employer except Employee. Notice may also be effectively given on the next business day after deposit in the U.S. mail, postage prepaid, for delivery as registered or certified mail, return receipt requested, addressed as follows:

                              To Employee, at 2370 Lewis Road, South Wales, NY 14139, unless Employee notifies Employer in writing of a new address.

                             To Employer, at its corporate headquarters. For all purposes of this paragraph and paragraph 11, Employee may assume that the Employer's corporate headquarters is 1110 Maple Street, P.O. Box 300, Elma, New York 14059, unless Employer notifies Employee in writing of a new address.

20.This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and any amendment or modification of this Agreement is without effect unless it is in a writing duly executed by both parties hereto.

21.This Agreement is made in the State of New York and shall be interpreted under the laws of that State.

22.           If any term or provision of this Agreement shall be held to be invalid or unenforceable for any reason, such term or provison shall be ineffective to the extent of such invalidity or unenforceability without invalidating the remaining terms and provisions hereof, and this Agreement shall be construed as if such invalid or unenforceable term or provision had not been contained herein.

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23.This Agreement shall be binding upon the parties hereto, their successors and assigns; provided, however, neither party shall assign any of its rights hereunder without the prior written consent of the other party hereto. Employer may not transfer, convey or otherwise dispose of all or any substantial part of its assets or business (whether directly or indirectly, by sale, merger, consolidation or otherwise) unless the transferee assumes in writing the obligations of Employer hereunder or Employee in his sole discretion waives in writing compliance with this provision.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.

SERVOTRONICS, INC.

[SEAL]	By:	/s/ Cari L. Jaroslawsky, CFO and Treasurer
			Cari L. Jaroslawsky CFO and Treasurer
ATTEST:
/s/Bernadine E. Kucinski, Assistant Corporate Secretary
Bernadine E. Kucinski Assistant Corporate Secretary
		/s/Kenneth D. Trbovich
			Kenneth D. Trbovich

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EX-10.4

Exhibit 10.4

As of August 13, 2012

Kenneth D. Trbovich

2370 Lewis Road

South Wales, NY 14139-9711

Dear Mr. Kenneth D. Trbovich:

You and Servotronics, Inc. (the “Company”) are parties to an Employment Agreement, dated June 15, 2012 pursuant to which you are employed by the Company.  This letter confirms such Employment Agreement and subsequent ratification.

This letter will also confirm your agreement and that of the Company (pursuant to a resolution of the Board of Directors passed at a meeting held on August 13, 2012) to amend Paragraph 3 of the Agreement to delete “$107,500.00” and insert in its place “$130,000.00” (effective May 1, 2012) subject to your acceptance which will be indicated by your signature below.

If the foregoing meets with your approval and you are willing to become bound hereby, will you please sign and return to the undersigned the enclosed copy of this letter.

Very truly yours,

SERVOTRONICS, INC.

Bernadine E. Kucinski,

Assistant Corporate Secretary.

ACCEPTED AND AGREED

Kenneth D. Trbovich                                                      As of August 13, 2012

Kenneth D. Trbovich                                                      Date

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Dr. Nicholas D. Trbovich, certify that:

1.   I have reviewed this quarterly report on Form 10-Q 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 registrant as of, and for, the periods presented in this report;

4.   The registrant’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)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant 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 registrant, 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)   Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)   Evaluated the effectiveness of the registrant’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

d)   Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.   The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’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 registrant’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 registrant’s internal control over financial reporting.

Date: November 13, 2012
	/s/ Dr. Nicholas D. Trbovich, Chief Executive Officer
	Dr. Nicholas D. Trbovich Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Cari L. Jaroslawsky, certify that:

1.   I have reviewed this quarterly report on Form 10-Q 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 registrant as of, and for, the periods presented in this report;

4.   The registrant’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)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant 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 registrant, 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)   Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)   Evaluated the effectiveness of the registrant’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

d)   Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.   The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’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 registrant’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 registrant’s internal control over financial reporting.

Date: November 13, 2012
	/s/ Cari L. Jaroslawsky, Chief Financial Officer
	Cari L. Jaroslawsky Chief Financial Officer

EX-32.1

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-Q for the period ended September 30, 2012, I hereby certify solely for the purpose of complying with 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

1. Other than the completion of a review of the interim financial statements contained within this report by an independent accountant using professional review standards and procedures, the quarterly report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Act of 1934, and

2. The information contained in the quarterly report fairly represents, in all material respects, the financial condition and results of operations of the Company.

Date: November 13, 2012
	/s/ Dr. Nicholas D. Trbovich, Chief Executive Officer
	Dr. Nicholas D. Trbovich Chief Executive Officer

EX-32.2

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-Q for the period ended September 30, 2012, I hereby certify solely for the purpose of complying with 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

1. Other than the completion of a review of the interim financial statements contained within this report by an independent accountant using professional review standards and procedures, the quarterly report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Act of 1934, and

2. The information contained in the quarterly report fairly represents, in all material respects, the financial condition and results of operations of the Company.

Date: November 13, 2012	/s/ Cari L. Jaroslawsky, Chief Financial Officer
	Cari L. Jaroslawsky Chief Financial Officer

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Long-Term Debt (Detail Textuals 1) (USD $)	9 Months Ended
	Sep. 30, 2012
Letter Of Credit From Bank
Debt Instrument [Line Items]
Percentage Of Annual Fee Of Secured Amount	1.00%
Percentage Of Annual Fee Of Principal Amount Outstanding	0.25%
Line of Credit | Minimum
Debt Instrument [Line Items]
increase in unsecured line of credit	$ 1,000,000
Line of Credit | Maximum
Debt Instrument [Line Items]
increase in unsecured line of credit	2,000,000
Industrial Development Revenue Bonds; secured by an equivalent letter of credit from a bank with interest payable monthly at a floating rate (0.43% at September 30, 2012)
Debt Instrument [Line Items]
Annual sinking fund payments commenced December 1, 2000 through 2013	170,000
Final Sinking Fund Payment Due December 1, 2014	$ 2,620,000

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Business Segments (Detail Textuals) (USD $)	9 Months Ended
	Sep. 30, 2012 Segments	Dec. 31, 2011
Segment Reporting Information [Line Items]
Number of Operating Segments	2
Total identifiable assets	$ 30,226,000	$ 30,423,000
Advanced Technology Group
Segment Reporting Information [Line Items]
Total identifiable assets	19,919,000	18,004,000
Consumer Products Group
Segment Reporting Information [Line Items]
Total identifiable assets	$ 10,307,000	$ 12,419,000

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Related Party Transaction (Details Textuals) (Related Party One, USD $)	1 Months Ended	9 Months Ended
	Jul. 23, 2012	Sep. 30, 2012	Nov. 03, 2009
Related Party One
Related Party Transaction [Line Items]
Real Property Lease Agreement, Annual Rental Expenses			$ 60,000
Personal Property Lease,Monthly payments continue to July 2013	7,500	7,500
Accrued balance payable		$ 67,500

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Inventories - Summary (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Inventory Disclosure [Abstract]
Raw materials and common parts	$ 5,917	$ 5,727
Work-in-process	3,173	3,511
Finished goods	2,316	2,369
Total inventories, net of reserve	$ 11,406	$ 11,607

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Property, Plant and Equipment (Tables)

9 Months Ended

Sep. 30, 2012

Property, Plant and Equipment [Abstract]

Schedule of Property, Plant and Equipment

	September 30,			December 31,
	2012			2011
	($000’s omitted)
Land	$	21		$	25
Buildings		7,021			7,181
Machinery, equipment and tooling (including capital lease)		12,116			12,930
		19,158			20,136
Less accumulated depreciation and amortization		(13,544	)		(14,033	)
Total property, plant and equipment	$	5,614		$	6,103

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Shareholders' Equity - Calculation of earning per share (Details 1) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Equity [Abstract]
Income from continuing operations	$ 306	$ 1,107	$ 1,346	$ 2,588
Loss from discontinued operations	(450)	(203)	(1,121)	(550)
Net income (loss)	$ (144)	$ 904	$ 225	$ 2,038
Weighted average common shares outstanding (basic) (in shares)	2,146	1,982	2,125	1,982
Incremental shares from assumed conversions of stock options	6	89	19	117
Weighted average common shares outstanding (diluted) (in shares)	2,152	2,071	2,144	2,099
Basic
Income per share from continuing operations (in dollars per share)	$ 0.14	$ 0.56	$ 0.63	$ 1.31
Loss per share from discontinued operations (in dollars per share)	$ (0.21)	$ (0.10)	$ (0.53)	$ (0.28)
Total net income (loss) per share (in dollars per share)	$ (0.07)	$ 0.46	$ 0.10	$ 1.03
Diluted
Income per share from continuing operations (in dollars per share)	$ 0.14	$ 0.53	$ 0.63	$ 1.23
Loss per share from discontinued operations (in dollars per share)	$ (0.21)	$ (0.10)	$ (0.52)	$ (0.26)
Total net income (loss) per share (in dollars per share)	$ (0.07)	$ 0.43	$ 0.11	$ 0.97

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Long-Term Debt - Summary (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012		Dec. 31, 2011
Debt Instrument [Line Items]
Long-term Debt	$ 3,029		$ 3,057
Less current portion	(191)		(202)
Long-term debt, Noncurrent	2,838		2,855
Industrial Development Revenue Bonds; secured by an equivalent letter of credit from a bank with interest payable monthly at a floating rate (0.43% at September 30, 2012)
Debt Instrument [Line Items]
Long-term Debt	2,960	[1]	2,960	[1]
Secured term loan payable to a government agency; monthly payments of $1,950 including interest fixed at 3% payable through fourth quarter of 2015
Debt Instrument [Line Items]
Long-term Debt	69		86
Secured term loan payable to a government agency; monthly principal payments of approximately $2,200 with interest waived payable through second quarter of 2012
Debt Instrument [Line Items]
Long-term Debt			$ 11

[1] The 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 bank an annual fee of 1% of the amount secured thereby and pays the remarketing agent for the bonds an annual fee of 1/4% 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.

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Business Segments - Summary of company's operations (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Segment Reporting Information [Line Items]
Revenues from unaffiliated customers	$ 7,516	$ 8,550	$ 23,302	$ 24,592
Cost of goods sold, exclusive of depreciation and amortization	(5,536)	(5,821)	(17,081)	(17,046)
Selling, general and administrative	(1,275)	(1,145)	(3,753)	(3,543)
Interest expense	(11)	(12)	(34)	(37)
Depreciation and amortization	(141)	(139)	(437)	(427)
Other income, net	2	150	12	164
Income (loss) from continuing operations before income tax provision	555	1,583	2,009	3,703
Income tax provision (benefit)	249	476	663	1,115
Income (loss) from continuing operations	306	1,107	1,346	2,588
Discontinued Operations:
Loss from operations of a discontinued component, net of income tax benefit	(188)	(203)	(591)	(550)
Loss on disposal of QCC and AMP, net of income tax benefit	(262)		(530)
Loss from discontinued operation	(450)	(203)	(1,121)	(550)
Net income	(144)	904	225	2,038
Capital expenditures	258	250	394	435
Advanced Technology Group
Segment Reporting Information [Line Items]
Revenues from unaffiliated customers	5,783	5,409	16,671	15,817
Cost of goods sold, exclusive of depreciation and amortization	(4,080)	(3,522)	(11,445)	(10,571)
Selling, general and administrative	(842)	(704)	(2,411)	(2,201)
Interest expense	(11)	(12)	(34)	(37)
Depreciation and amortization	(104)	(105)	(323)	(319)
Other income, net		145	5	153
Income (loss) from continuing operations before income tax provision	746	1,211	2,463	2,842
Income tax provision (benefit)	335	365	812	855
Income (loss) from continuing operations	411	846	1,651	1,987
Discontinued Operations:
Loss from operations of a discontinued component, net of income tax benefit
Loss on disposal of QCC and AMP, net of income tax benefit
Loss from discontinued operation
Net income	411	846	1,651	1,987
Capital expenditures	234	70	327	151
Consumer Products Group
Segment Reporting Information [Line Items]
Revenues from unaffiliated customers	1,733	3,141	6,631	8,775
Cost of goods sold, exclusive of depreciation and amortization	(1,456)	(2,299)	(5,636)	(6,475)
Selling, general and administrative	(433)	(441)	(1,342)	(1,342)
Interest expense
Depreciation and amortization	(37)	(34)	(114)	(108)
Other income, net	2	5	7	11
Income (loss) from continuing operations before income tax provision	(191)	372	(454)	861
Income tax provision (benefit)	(86)	111	(149)	260
Income (loss) from continuing operations	(105)	261	(305)	601
Discontinued Operations:
Loss from operations of a discontinued component, net of income tax benefit	(188)	(203)	(591)	(550)
Loss on disposal of QCC and AMP, net of income tax benefit	(262)		(530)
Loss from discontinued operation	(450)	(203)	(1,121)	(550)
Net income	(555)	58	(1,426)	51
Capital expenditures	$ 24	$ 180	$ 67	$ 284

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Discontinued operations

9 Months Ended

Sep. 30, 2012

Discontinued Operations [Abstract]

Discontinued operations

3. Discontinued Operations

As previously reported, during the second quarter of 2012, the Company committed to a plan to enhance profit margins through the expected sale of a component. On September 18, 2012, Queen Cutlery Company (QCC), a wholly owned subsidiary of Servotronics Inc., completed the disposition of substantially all of its assets for cash consideration of $650,000, less $10,000 in escrow. QCC is accounted for as a discontinued operation in the accompanying consolidated financial statements. During the three and nine months ended September 30, 2012, QCC reported a loss on disposal related to a write-down of certain assets to lower of cost or market resulting in a before tax loss of approximately zero and $406,000, respectively.

On July 23, 2013, Aero Metal Products, Inc. (“AMP”), a wholly owned subsidiary of Servotronics, Inc., gave notice of termination of a personal property capital lease for machinery and equipment previously reported under a $588,000 capital lease with a related party. Due to the termination, beginning in July 2012, this lease is accounted for as an operating lease rather than a capital lease for the remaining term and the related assets and liabilities were removed from the consolidated balance sheet. In the third quarter of 2012, AMP ceased all manufacturing operations. As such, AMP is accounted for as discontinued operations in the accompanying consolidated financial statements and the Company accrued for the remaining balance payable on the personal property lease of $67,500 in the accompanying September 30, 2012 financial statements. On October 23, 2012, AMP announced that it will surrender all assets under the personal property and real property lease to the lessor, Aero Inc., a previously reported related party, by November 3, 2012, which is the expiration date of the operating lease for the building. During the three and nine months ended September 30, 2012, AMP recorded a loss on disposal amounting to a before tax loss of approximately $397,000 relating to a write-down of certain assets to lower of cost or market, accrual of remaining balance on operating leases, and expected costs to surrender assets.

The following is a summary of discontinued operations:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2012			2011			2012			2011
Discontinued Operations:	($000’s omitted)
Revenue of QCC and AMP	$	221		$	256		$	899		$	901
Loss from operations of QCC and AMP	($	285	)	($	291	)	($	895	)	($	790	)
Income tax benefit		97			88			304			240
Net loss from operations of QCC and AMP		(188	)		(203	)		(591	)		(550	)
Loss on disposal of QCC and AMP		(397	)		-			(804	)		-
Income tax benefit		135			-			274			-
Net loss from disposal of QCC and AMP		(262	)		-			(530	)		-
Loss from discontinued operation	($	450	)	($	203	)	($	1,121	)	($	550	)

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Shareholders' Equity (Detail Textuals) (Share Repurchase Program)	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Oct. 31, 2008	Jan. 31, 2006
Share Repurchase Program
Equity, Class of Treasury Stock [Line Items]
Number of shares authorized to be purchased				250,000
Remaining number of shares authorized to be purchased	204,471		200,000
Number of shares purchased under purchase program	245,529
Shares purchased during period	7,441	0

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Business Description and Summary of Significant Accounting Policies - Estimated useful lives of depreciable properties (Details)	9 Months Ended
	Sep. 30, 2012
Buildings and improvements | Maximum
Property, Plant and Equipment [Line Items]
Estimated useful lives of depreciable properties	39 years
Buildings and improvements | Minimum
Property, Plant and Equipment [Line Items]
Estimated useful lives of depreciable properties	5 years
Machinery and equipment | Maximum
Property, Plant and Equipment [Line Items]
Estimated useful lives of depreciable properties	15 years
Machinery and equipment | Minimum
Property, Plant and Equipment [Line Items]
Estimated useful lives of depreciable properties	5 years
Tooling | Maximum
Property, Plant and Equipment [Line Items]
Estimated useful lives of depreciable properties	5 years
Tooling | Minimum
Property, Plant and Equipment [Line Items]
Estimated useful lives of depreciable properties	3 years

XML

Business Segments (Tables)

9 Months Ended

Sep. 30, 2012

Segment Reporting [Abstract]

Schedule of Information regarding the Company's operations

	ATG						CPG						Consolidated
	Nine Months Ended						Nine Months Ended						Nine Months Ended
	September 30,						September 30,						September 30,
	2012			2011			2012			2011			2012			2011
Revenues from unaffiliated customers	$	16,671		$	15,817		$	6,631		$	8,775		$	23,302		$	24,592
Cost of goods sold, exclusive of depreciation and amortization		(11,445	)		(10,571	)		(5,636	)		(6,475	)		(17,081	)		(17,046	)
Selling, general and administrative		(2,411	)		(2,201	)		(1,342	)		(1,342	)		(3,753	)		(3,543	)
Interest expense		(34	)		(37	)		-			-			(34	)		(37	)
Depreciation and amortization		(323	)		(319	)		(114	)		(108	)		(437	)		(427	)
Other income, net		5			153			7			11			12			164
Income (loss) from continuing operations before income tax provision		2,463			2,842			(454	)		861			2,009			3,703
Income tax provision (benefit)		812			855			(149	)		260			663			1,115
Income (loss) from continuing operations		1,651			1,987			(305	)		601			1,346			2,588
Discontinued Operations:
Loss from operations of a discontinued component, net of income tax benefit		-			-			(591	)		(550	)		(591	)		(550	)
Loss on disposal of QCC and AMP, net of income tax benefit		-			-			(530	)		-			(530	)		-
Loss from discontinued operations		-			-			(1,121	)		(550	)		(1,121	)		(550	)
Net income (loss)	$	1,651		$	1,987		($	1,426	)	$	51		$	225		$	2,038
Capital expenditures	$	327		$	151		$	67		$	284		$	394		$	435

	ATG						CPG						Consolidated
	Three Months Ended						Three Months Ended						Three Months Ended
	September 30,						September 30,						September 30,
	2012			2011			2012			2011			2012			2011
Revenues from unaffiliated customers	$	5,783		$	5,409		$	1,733		$	3,141		$	7,516		$	8,550
Cost of goods sold, exclusive of depreciation and amortization		(4,080	)		(3,522	)		(1,456	)		(2,299	)		(5,536	)		(5,821	)
Selling, general and administrative		(842	)		(704	)		(433	)		(441	)		(1,275	)		(1,145	)
Interest expense		(11	)		(12	)		-			-			(11	)		(12	)
Depreciation and amortization		(104	)		(105	)		(37	)		(34	)		(141	)		(139	)
Other income, net		-			145			2			5			2			150
Income (loss) from continuing operations before income tax provision		746			1,211			(191	)		372			555			1,583
Income tax provision (benefit)		335			365			(86	)		111			249			476
Income (loss) from continuing operations		411			846			(105	)		261			306			1,107
Discontinued Operations:
Loss from operations of a discontinued component, net of income tax benefit		-			-			(188	)		(203	)		(188	)		(203	)
Loss on disposal of QCC and AMP, net of income tax benefit		-			-			(262	)		-			(262	)		-
Loss from discontinued operations		-			-			(450	)		(203	)		(450	)		(203	)
Net income (loss)	$	411		$	846		$	(555	)	$	58		$	(144	)	$	904
Capital expenditures	$	234		$	70		$	24		$	180		$	258		$	250

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Shareholders' Equity (Detail Textuals 1) (USD $)	9 Months Ended		6 Months Ended	3 Months Ended
	Sep. 30, 2012	May 14, 2012	Jun. 30, 2012 Management Stock Options	Sep. 30, 2012 Option Holder Stock Options
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Number of options elected to exercise			71,000	9,000
Number of shares repurchased under exercise of options			2,500
Net shares issued out of treasury stock			68,500	9,000
Exercise of Stock Options	$ 384,000		$ 215,000	$ 18,000
Tax benefit associated with option exercised			152,000
Cash dividend (in dollars per share)		$ 0.15
Dividends, Cash	$ 358,000

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Business Description and Summary of Significant Accounting Policies (Detail Texuals) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011	Dec. 31, 2011
Business Description and Summary Of Significant Accounting Policies [Abstract]
Allowance for Doubtful Accounts	$ 134,000		$ 134,000		$ 101,000
Inventory Reserve	574,000		574,000		773,000
Period of inventory expected to be used			1 year
Period of exceeding customer requirements of purchase quantities			1 year
Period of purchase of other products support items to maintain lead time and larger quantity			1 year
Income taxes paid	0	291,000	256,000	517,000
Interest paid	12,000	14,000	38,000	44,000
Exercise of stock options, net of income tax benefit	$ 152,000		$ 152,000

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Discontinued operations (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Discontinued Operations [Abstract]
Revenue of QCC and AMP	$ 221	$ 256	$ 899	$ 901
Loss from operations of QCC and AMP	(285)	(291)	(895)	(790)
Income tax benefit	97	88	304	240
Net loss from operations of QCC and AMP	(188)	(203)	(591)	(550)
Loss on disposal of QCC and AMP	(397)		(804)
Income tax benefit	135		274
Net loss from disposal of QCC and AMP	(262)		(530)
Loss from discontinued operation	$ (450)	$ (203)	$ (1,121)	$ (550)

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Business Description and Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2012

Business Description and Summary Of Significant Accounting Policies [Abstract]

Business Description and Summary of Significant Accounting Policies

2. Business Description and Summary of Significant Accounting Policies

Business Description

Servotronics, Inc. and its subsidiaries design, manufacture and market advanced technology products consisting primarily of control components and consumer products consisting of knives and various types of cutlery and other edged products.

Principles of Consolidation

The consolidated financial statements include the accounts of Servotronics, Inc. and its wholly-owned subsidiaries (the “Company”). All intercompany balances and transactions have been eliminated upon consolidation.

Cash and Cash Equivalents

The Company considers cash and cash equivalents to include all cash accounts and short-term investments purchased with an original maturity of three months or less.

Accounts Receivable

The Company grants credit to substantially all of its customers and carries its accounts receivable at original invoice amount less an allowance for doubtful accounts. On a periodic basis, the Company evaluates its accounts receivable and establishes an allowance for doubtful accounts based on history of past write-offs, collections, and current credit conditions. The allowance for doubtful accounts amounted to approximately $134,000 at September 30, 2012 and $101,000 at December 31, 2011.

Revenue Recognition

Revenues are recognized as services are rendered or as units are shipped and at the designated FOB point consistent with the transfer of title, risks and rewards of ownership. Such purchase orders generally include specific terms relative to quantity, item description, specifications, price, customer responsibility for in-process costs, delivery schedule, shipping point, payment and other standard terms and conditions of purchase.

Inventories

Inventories are stated at the lower of standard cost or net realizable value. Cost includes all costs incurred to bring each product to its present location and condition. Market provisions in respect of lower of cost or market adjustments and inventory expected to be used in greater than one year are applied to the gross value of the inventory through a reserve of approximately $574,000 and $773,000 at September 30, 2012 and December 31, 2011, respectively. Pre-production and start-up costs are expensed as incurred.

The purchase of suppliers’ minimum economic quantities of material such as steel, etc. may result in a purchase of quantities exceeding one year of customer requirements. Also, in order to maintain a reasonable and/or agreed to lead time, certain larger quantities of other product support items may have to be purchased and may result in over one year’s supply.

Shipping and Handling Costs

Shipping and handling costs are classified as a component of cost of goods sold.

Property, Plant and Equipment

Property, plant and equipment is carried at cost; expenditures for new facilities and equipment and expenditures which substantially increase the useful lives of existing plant and equipment are capitalized; expenditures for maintenance and repairs are expensed as incurred. Upon disposal of properties, the related cost and accumulated depreciation are removed from the respective accounts and any profit or loss on disposition is included in income.

Depreciation is provided on the basis of estimated useful lives of depreciable properties, primarily by the straight-line method for financial statement purposes and by accelerated methods for tax purposes. Depreciation expense includes the amortization of capital lease assets. The estimated useful lives of depreciable properties are generally as follows:

Buildings and improvements	5-39 years
Machinery and equipment	5-15 years
Tooling	3-5 years

Income Taxes

The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of operating loss and credit carryforwards and temporary differences between the carrying amounts and the tax basis of assets and liabilities. The Company and its subsidiaries file a consolidated federal income tax return, combined New York and Texas state income tax returns and separate Pennsylvania and Arkansas state income tax returns.

The Company’s practice is to recognize interest and/or penalties related to income tax matters in income tax expense. The Company did not have any accrued interest or penalties included in its consolidated balance sheets at September 30, 2012 or December 31, 2011, and did not recognize any interest and/or penalties in its consolidated statements of income during the three and nine months ended September 30, 2012 and 2011.

Supplemental Cash Flow Information

Income taxes paid during the three months ended September 30, 2012 and 2011 amounted to zero and approximately $291,000, respectively, and amounted to approximately $256,000 and $517,000 for the nine months ended September 30, 2012 and 2011 respectively. Interest paid during the three months ended September 30, 2012 and 2011 amounted to approximately $12,000 and $14,000, respectively, and amounted to $38,000 and $44,000 for the nine months ended September 30, 2012 and 2011, respectively. During the three and nine months ended September 30, 2012, the Company reduced its tax liability by approximately $152,000 related to the exercise of stock options and was credited directly to capital in excess of par value.

Employee Stock Ownership Plan

Contributions to the employee stock ownership plan are determined annually by the Company according to plan formula.

Impairment of Long-Lived Assets

The Company reviews long-lived assets for impairment whenever events or changes in business circumstances indicate, or at least annually, that the carrying amount of the assets may not be fully recoverable based on undiscounted future operating cash flow analyses. If an impairment is determined to exist, any related impairment loss is calculated based on fair value. Impairment losses on assets to be disposed of, if any, are based on the estimated proceeds to be received, less costs of disposal. The Company has determined that no impairment of long lived assets existed at September 30, 2012 and December 31, 2011.

Use of Estimates

The preparation of the consolidated financial statements in conformity with U.S. generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Reclassifications

Certain balances as previously reported were reclassified to conform with classifications adopted in the current period.

Research and Development Costs

Research and development costs are expensed as incurred.

Concentration of Credit Risks

Financial instruments that potentially subject the Company to concentration of credit risks principally consist of cash accounts in financial institutions. Although the accounts exceed the federally insured deposit amount, management does not anticipate nonperformance by the financial institutions. Refer to Note 12, Business Segments, for disclosures related to customer concentrations.

Fair Value of Financial Instruments

The carrying amount of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses are reasonable estimates of their fair value due to their short maturity. Based on variable interest rates and the borrowing rates currently available to the Company for loans similar to its long-term debt and capital lease, the fair value approximates its carrying amount.

Recent Accounting Pronouncements

In June 2011, the FASB issued new accounting guidance related to the presentation of comprehensive income that eliminates the option to present components of other comprehensive income as part of the statement of changes in shareholders’ equity. The amendments require that all nonowner changes in stockholders’ equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The amendments do not change the items that must be reported in other comprehensive income or when an item of other comprehensive income (loss) must be reclassified to net income (loss). This guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011, with early adoption permitted. The Company adopted this pronouncement in the first quarter of 2012 and is presenting separate statements of comprehensive income (loss) in the consolidated financial statements. For the three and nine month periods ended September 30, 2012 and 2011, there were no items affecting comprehensive income (loss).

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Discontinued operations (Detail Textuals) (USD $)	1 Months Ended	3 Months Ended	9 Months Ended
	Sep. 18, 2012	Sep. 30, 2012	Sep. 30, 2012
Queen Cutlery Company (QCC)
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Disposition of assets for cash consideration	$ 650,000
Amount excluded from disposition of assets	10,000
Losses from operations before income tax benefit related to related to a write-down of assets		0	406,000
Aero Metal Products, Inc. (AMP)
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Losses from operations before income tax benefit related to related to a write-down of assets		397,000	397,000
Capital Lease Obligations Related Party		588,000	588,000
Accrued balance payable		$ 67,500	$ 67,500

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Capital Lease - Related Party (Detail Textuals) (Related Party One, USD $)	1 Months Ended	9 Months Ended
	Jul. 23, 2012	Sep. 30, 2012
Related Party One
Related Party Transaction [Line Items]
Monthly payments	$ 7,500	$ 7,500
Accrued balance payable		$ 67,500

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CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Current assets:
Cash and cash equivalents	$ 5,547	$ 4,948
Accounts receivable, net	5,372	6,031
Inventories, net	11,406	11,607
Prepaid income taxes	458	133
Deferred income taxes	754	754
Other assets	711	505
Total current assets	24,248	23,978
Property, plant and equipment, net	5,614	6,103
Other non-current assets	364	342
Total Assets	30,226	30,423
Current liabilities:
Current portion of long-term debt	191	202
Current portion of capital lease related party		81
Accounts payable	1,005	1,451
Accrued employee compensation and benefit costs	1,634	1,434
Other accrued liabilities	629	327
Total current liabilities	3,459	3,495
Long-term debt	2,838	2,855
Long-term portion of capital lease related party		333
Deferred income taxes	496	496
Commitments and contingencies (see Note 10)
Shareholders' equity:
Common stock, par value $.20; authorized 4,000,000 shares; issued 2,614,506 shares; outstanding 2,144,316 (2,074,257 - 2011) shares	523	523
Capital in excess of par value	13,926	13,774
Retained earnings	12,034	12,490
Accumulated other comprehensive loss	(67)	(67)
Employee stock ownership trust commitment	(1,266)	(1,266)
Treasury stock, at cost 235,076 (305,135 - 2011) shares	(1,717)	(2,210)
Total shareholders' equity	23,433	23,244
Total Liabilities and Shareholders' Equity	$ 30,226	$ 30,423

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Commitments and Contingencies (Detail Textuals) (USD $)	Sep. 30, 2012
Commitments and Contingencies Disclosure [Abstract]
Maximum estimated additional liabilities of future medical benefits and severance compensation	$ 1,400,000

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CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Cash flows related to operating activities:
Net income	$ 225	$ 2,038
Adjustments to reconcile net income to net cash generated by operating activities -
Depreciation and amortization	484	498
Loss on disposal of QCC and AMP, net of income tax benefit	530
Increase in inventory reserve	59	52
Increase in allowance for doubtful accounts	33	3
Gain on disposal of property and equipment	(9)
Change in assets and liabilities:
Accounts receivable	636	(455)
Inventories	(1,106)	(757)
Prepaid income taxes	101	382
Other assets	(222)	(117)
Other non-current assets	(24)	(29)
Accounts payable	(446)	38
Accrued employee compensation and benefit costs	196	179
Other accrued liabilities	152	111
Accrued income taxes		7
Net cash generated in operating activities	609	1,950
Cash flows related to investing activities:
Capital expenditures - property, plant and equipment	(394)	(435)
Proceeds from the sale of Queen Cutlery	640
Net cash generated (used) in investing activities	246	(435)
Cash flows related to financing activities:
Principal payments on long-term debt	(29)	(115)
Proceeds from exercise of stock options	234
Principal payments on capital lease related party	(41)	(60)
Purchase of treasury shares	(62)
Cash dividend	(358)	(336)
Purchase of stock options		(517)
Net cash used in financing activities	(256)	(1,028)
Net increase in cash and cash equivalents	599	487
Cash and cash equivalents at beginning of period	4,948	4,447
Cash and cash equivalents at end of period	$ 5,547	$ 4,934

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Property, Plant and Equipment (Detail Textuals) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011	Dec. 31, 2011
Property, Plant and Equipment [Line Items]
Depreciation	$ 107,000	$ 106,000	$ 334,000	$ 323,000
Depreciation and amortization	141,000	139,000	437,000	427,000
Buildings
Property, Plant and Equipment [Line Items]
Accumulated amortization	2,520,000		2,520,000		2,423,000
Amortization	32,000	32,000	97,000	97,000
Machinery and equipment
Property, Plant and Equipment [Line Items]
Amortization	$ 0	$ 21,000	$ 42,000	$ 63,000

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Business Description and Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2012

Business Description and Summary Of Significant Accounting Policies [Abstract]

Schedule of Property, Plant and Equipment

Buildings and improvements	5-39 years
Machinery and equipment	5-15 years
Tooling	3-5 years

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Property, Plant and Equipment (Detail Textuals 1) (Capital Lease Obligations, USD $)	Sep. 30, 2012 Land And Building Elma	Jul. 23, 2012 Machinery and equipment
Property, Plant and Equipment [Line Items]
Aggregate Nominal Amount Of Assets Under Capital Leases	$ 5,000,000
Capital Lease Obligations Related Party		$ 588,000

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Inventories (Table)

9 Months Ended

Sep. 30, 2012

Inventory Disclosure [Abstract]

Schedule of Inventories

	September 30,		December 31,
	2012		2011
	($000’s omitted)
Raw materials and common parts	$	5,917	$	5,727
Work-in-process		3,173		3,511
Finished goods		2,316		2,369
Total inventories, net of reserve	$	11,406	$	11,607

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Basis of Presentation

9 Months Ended

Sep. 30, 2012

Organization, Consolidation and Presentation Of Financial Statements [Abstract]

Basis of Presentation

1. Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by United States generally accepted accounting principles for complete financial statements.

The accompanying consolidated financial statements reflect all adjustments which are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented. All such adjustments are of a normal recurring nature. Operating results for the three and nine months ended September 30, 2012 are not necessarily indicative of the results that may be expected for the year ending December 31, 2012. The consolidated financial statements should be read in conjunction with the 2011 annual report and the notes thereto.

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CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	Sep. 30, 2012	Dec. 31, 2011
Statement Of Financial Position [Abstract]
Common stock, par value (in dollars per share)	$ 0.20	$ 0.20
Common stock, shares authorized	4,000,000	4,000,000
Common stock, shares issued	2,614,506	2,614,506
Common stock, shares outstanding	2,144,316	2,074,257
Treasury stock, shares	235,076	305,135

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Related Party Transactions

9 Months Ended

Sep. 30, 2012

Related Party Transactions [Abstract]

Related Party Transactions

11. Related Party Transactions

During 2009 the Company formed a new wholly owned subsidiary that leased certain personal property from a related party through the execution of a capital lease. As previously reported, on July 23, 2012, the Company gave notice of termination of the Personal Property Lease dated as of November 3, 2009 (the “Agreement”). Under the terms of the Agreement, monthly payments of $7,500 still continue to July 2013. The Company has accrued for the remaining balance payable of $67,500 in the accompanying September 30, 2012 financial statements. See Note 7, Capital Lease-Related Party, of the accompanying consolidated financial statements. The Company also entered into a real property operating lease agreement, with the same related party, which provided for annual rental of $60,000. The term of the real property lease ended on November 3, 2012 and AMP has surrendered the property by such date. There are no other future obligations under these leases.

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Document and Entity Information	9 Months Ended
	Sep. 30, 2012	Oct. 31, 2012
Document and Entity Information [Abstract]
Entity Registrant Name	SERVOTRONICS INC /DE/
Entity Central Index Key	0000089140
Trading Symbol	svt
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		2,378,236
Document Type	10-Q
Document Period End Date	Sep. 30, 2012
Amendment Flag	false
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q3

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Business Segments

9 Months Ended

Sep. 30, 2012

Segment Reporting [Abstract]

Business Segments

12. Business Segments

The Company operates in two business segments, Advanced Technology Group (“ATG”) and Consumer Products Group (“CPG”). 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 ATG primarily involve the design, manufacture, and marketing of servo-control components (i.e., torque motors, control valves, actuators, etc.) for government, commercial and industrial applications. CPG’s operations involve the design, manufacture and marketing of a variety of cutlery and other edged products for use by consumers and government agencies. The sale of QCC and the closure of AMP are not expected to have a material impact on either government or commercial sales. The result of these discontinued operations eliminates primarily gentlemen folding blades and various shears to the CPG product lines. The Company derives its primary sales revenue from domestic customers, although a portion of finished products are for foreign end use.

As of September 30, 2012, the Company had identifiable assets of approximately $30,226,000 ($30,423,000 – December 31, 2011) of which approximately $19,919,000 ($18,004,000 – December 31, 2011) was for ATG and approximately $10,307,000 ($12,419,000 – December 31, 2011) was for CPG.

Information regarding the Company’s operations in these segments is summarized as follows ($000’s omitted):

	ATG						CPG						Consolidated
	Nine Months Ended						Nine Months Ended						Nine Months Ended
	September 30,						September 30,						September 30,
	2012			2011			2012			2011			2012			2011
Revenues from unaffiliated customers	$	16,671		$	15,817		$	6,631		$	8,775		$	23,302		$	24,592
Cost of goods sold, exclusive of depreciation and amortization		(11,445	)		(10,571	)		(5,636	)		(6,475	)		(17,081	)		(17,046	)
Selling, general and administrative		(2,411	)		(2,201	)		(1,342	)		(1,342	)		(3,753	)		(3,543	)
Interest expense		(34	)		(37	)		-			-			(34	)		(37	)
Depreciation and amortization		(323	)		(319	)		(114	)		(108	)		(437	)		(427	)
Other income, net		5			153			7			11			12			164
Income (loss) from continuing operations before income tax provision		2,463			2,842			(454	)		861			2,009			3,703
Income tax provision (benefit)		812			855			(149	)		260			663			1,115
Income (loss) from continuing operations		1,651			1,987			(305	)		601			1,346			2,588
Discontinued Operations:
Loss from operations of a discontinued component, net of income tax benefit		-			-			(591	)		(550	)		(591	)		(550	)
Loss on disposal of QCC and AMP, net of income tax benefit		-			-			(530	)		-			(530	)		-
Loss from discontinued operations		-			-			(1,121	)		(550	)		(1,121	)		(550	)
Net income (loss)	$	1,651		$	1,987		($	1,426	)	$	51		$	225		$	2,038
Capital expenditures	$	327		$	151		$	67		$	284		$	394		$	435

	ATG						CPG						Consolidated
	Three Months Ended						Three Months Ended						Three Months Ended
	September 30,						September 30,						September 30,
	2012			2011			2012			2011			2012			2011
Revenues from unaffiliated customers	$	5,783		$	5,409		$	1,733		$	3,141		$	7,516		$	8,550
Cost of goods sold, exclusive of depreciation and amortization		(4,080	)		(3,522	)		(1,456	)		(2,299	)		(5,536	)		(5,821	)
Selling, general and administrative		(842	)		(704	)		(433	)		(441	)		(1,275	)		(1,145	)
Interest expense		(11	)		(12	)		-			-			(11	)		(12	)
Depreciation and amortization		(104	)		(105	)		(37	)		(34	)		(141	)		(139	)
Other income, net		-			145			2			5			2			150
Income (loss) from continuing operations before income tax provision		746			1,211			(191	)		372			555			1,583
Income tax provision (benefit)		335			365			(86	)		111			249			476
Income (loss) from continuing operations		411			846			(105	)		261			306			1,107
Discontinued Operations:
Loss from operations of a discontinued component, net of income tax benefit		-			-			(188	)		(203	)		(188	)		(203	)
Loss on disposal of QCC and AMP, net of income tax benefit		-			-			(262	)		-			(262	)		-
Loss from discontinued operations		-			-			(450	)		(203	)		(450	)		(203	)
Net income (loss)	$	411		$	846		$	(555	)	$	58		$	(144	)	$	904
Capital expenditures	$	234		$	70		$	24		$	180		$	258		$	250

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CONSOLIDATED STATEMENTS OF INCOME (LOSS) (Unaudited) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Income Statement [Abstract]
Revenue	$ 7,516	$ 8,550	$ 23,302	$ 24,592
Costs, expenses and other income:
Cost of goods sold, exclusive of depreciation and amortization	5,536	5,821	17,081	17,046
Selling, general and administrative	1,275	1,145	3,753	3,543
Interest expense	11	12	34	37
Depreciation and amortization	141	139	437	427
Other income, net	(2)	(150)	(12)	(164)
Total expenses	6,961	6,967	21,293	20,889
Income from continuing operations before income tax provision	555	1,583	2,009	3,703
Income tax provision	249	476	663	1,115
Income from continuing operations	306	1,107	1,346	2,588
Discontinued Operations:
Loss from operations of a discontinued component, net of income tax benefit	(188)	(203)	(591)	(550)
Loss on disposal of QCC and AMP, net of income tax benefit	(262)		(530)
Loss from discontinued operations	(450)	(203)	(1,121)	(550)
Net income (loss)	$ (144)	$ 904	$ 225	$ 2,038
Basic
Income per share from continuing operations (in dollars per share)	$ 0.14	$ 0.56	$ 0.63	$ 1.31
Loss per share from discontinued operations (in dollars per share)	$ (0.21)	$ (0.10)	$ (0.53)	$ (0.28)
Total net income (loss) per share (in dollars per share)	$ (0.07)	$ 0.46	$ 0.10	$ 1.03
Diluted
Income per share from continuing operations (in dollars per share)	$ 0.14	$ 0.53	$ 0.63	$ 1.23
Loss per share from discontinued operations (in dollars per share)	$ (0.21)	$ (0.10)	$ (0.52)	$ (0.26)
Total net income (loss) per share (in dollars per share)	$ (0.07)	$ 0.43	$ 0.11	$ 0.97

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Long-Term Debt

9 Months Ended

Sep. 30, 2012

Debt Disclosure [Abstract]

Long-term Debt

6. Long-Term Debt

	September 30,			December 31,
	2012			2011
	($000’s omitted)
Industrial Development Revenue Bonds; secured by an equivalent letter of credit from a bank with interest payable monthly at a floating rate (0.43% at September 30, 2012)(A)	$	2,960		$	2,960
Secured term loan payable to a government agency; monthly payments of $1,950 including interest fixed at 3% payable through fourth quarter of 2015		69			86
Secured term loan payable to a government agency; monthly principal payments of approximately $2,200 with interest waived payable through second quarter of 2012		-			11
		3,029			3,057
Less current portion		(191	)		(202	)
	$	2,838		$	2,855

(A) The 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 bank an annual fee of 1% of the amount secured thereby and pays the remarketing agent for the bonds an annual fee of 1/4% 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.

During the nine months ended September 30, 2012, the Company increased the amount available on the unsecured line of credit from $1,000,000 to $2,000,000. There was no balance outstanding at September 30, 2012 and December 31, 2011. The line of credit is available through June of 2013.

Certain lenders require the Company to comply with debt covenants as described in the specific loan documents, including a debt service ratio. At September 30, 2012 and December 31, 2011, the Company was in compliance with its debt covenants.

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Property, Plant and Equipment

9 Months Ended

Sep. 30, 2012

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment

5.	Property, Plant and Equipment
		September 30,			December 31,
		2012			2011
		($000’s omitted)
Land		$	21		$	25
Buildings			7,021			7,181
Machinery, equipment and tooling (including capital lease)			12,116			12,930
			19,158			20,136
Less accumulated depreciation and amortization			(13,544	)		(14,033	)
Total property, plant and equipment		$	5,614		$	6,103

Property, plant and equipment includes land and building in Elma, New York, under a $5,000,000 capital lease which can be purchased for a nominal amount at the end of the lease term. As of September 30, 2012 and December 31, 2011, accumulated amortization on the building amounted to approximately $2,520,000 and $2,423,000, respectively. Amortization expense amounted to $32,000 for the three month periods ended September 30, 2012 and 2011, respectively and amounted to $97,000 for the nine month periods ended September 30, 2012 and 2011, respectively. The associated current and long-term liabilities are discussed in Note 6, Long-Term Debt, of the accompanying consolidated financial statements.

On July 23, 2012, the Company gave notice of termination of a capital lease for machinery and equipment previously reported under a $588,000 capital lease with a related party. Due to the termination, beginning in July 2012, this lease is accounted for as an operating lease rather than a capital lease for the remaining term and the related assets and liabilities were removed from the consolidated balance sheet. See also, Note 7, Capital Lease – Related Party, of the accompanying consolidated financial statements for more information. Amortization expense related to the capital lease related party, included in the loss from operations of a discontinued component, net of tax, amounted to zero and approximately $21,000 for the three month periods ended September 30, 2012 and 2011, respectively, and $42,000 and $63,000 for the nine month periods ended September 30, 2012 and 2011, respectively.

Depreciation expense from continuing operations amounted to $107,000 and $106,000 for the three month periods ended September 30, 2012 and 2011, respectively, and amounted to $334,000 and $323,000 for the nine month periods ended September 30, 2012 and 2011, respectively. The combined depreciation and amortization expense from continuing operations amounted to $141,000 and $139,000 for the three month periods ended September 30, 2012 and 2011, respectively, and amounted to $437,000 and $427,000 for the nine month periods ended September 30, 2012 and 2011, respectively.

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Discontinued Operations (Tables)

9 Months Ended

Sep. 30, 2012

Discontinued Operations [Abstract]

Schedule of summary of discontinued operations

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2012			2011			2012			2011
Discontinued Operations:	($000’s omitted)
Revenue of QCC and AMP	$	221		$	256		$	899		$	901
Loss from operations of QCC and AMP	($	285	)	($	291	)	($	895	)	($	790	)
Income tax benefit		97			88			304			240
Net loss from operations of QCC and AMP		(188	)		(203	)		(591	)		(550	)
Loss on disposal of QCC and AMP		(397	)		-			(804	)		-
Income tax benefit		135			-			274			-
Net loss from disposal of QCC and AMP		(262	)		-			(530	)		-
Loss from discontinued operation	($	450	)	($	203	)	($	1,121	)	($	550	)

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Other Income

9 Months Ended

Sep. 30, 2012

Other Income and Expenses [Abstract]

Other Income

13. Other Income

Components of other income include interest income on cash and cash equivalents, and other amounts not directly related to the sale of the Company’s products. Other income is immaterial in relationship to the consolidated financial statements.

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Shareholders' Equity

9 Months Ended

Sep. 30, 2012

Equity [Abstract]

Shareholders' Equity

9. Shareholders’ Equity

	($000's omitted)
	Common Stock
	Number of shares issued		Amount		Capital in  excess of par value		Retained earnings			ESOP			Treasury Stock			Accumulated Other Comprehensive Loss			Total  Shareholders’ Equity
Balance December 31, 2011		2,614,506	$	523	$	13,774	$	12,490		($	1,266	)	($	2,210	)	($	67	)	$	23,244
Net income		-		-		-		225			-			-			-			225
Cash dividend		-		-		-		(358	)		-			-			-			(358	)
Purchase of treasury shares		-		-		-		-			-			(62	)		-			(62	)
Exercise of stock options, net of income tax benefit		-		-		152		(323	)		-			555			-			384
Balance September 30, 2012		2,614,506	$	523	$	13,926	$	12,034		($	1,266	)	($	1,717	)	($	67	)	$	23,433

In January of 2006, the Company’s Board of Directors authorized the purchase by the Company of up to 250,000 shares of its common stock in the open market or in privately negotiated transactions. On October 31, 2008, the Company announced that its Board of Directors authorized the purchase of an additional 200,000 shares of the Company’s common stock under the Company’s current purchase program. As of September 30, 2012, the Company has purchased 245,529 shares and there remain 204,471 shares available to purchase under this program. There were 7,441 and zero shares purchased by the Company during the nine month periods ended September 30, 2012 and 2011, respectively.

In the second quarter of 2012 certain option holders, including the independent directors, Chief Executive Officer and the Chief Operating Officer, elected to exercise 71,000 options, of which 2,500 were bought back by the Company resulting in 68,500 net shares issued out of treasury stock for net proceeds of approximately $215,000. Such transactions were properly reported on Form 4 with the Securities and Exchange Commission. A tax benefit to the Company of approximately $152,000 associated with these transactions reduced taxes payable and was credited directly to capital in excess of par value. Also in the first quarter of 2012, one option holder elected to exercise 9,000 options, resulting in 9,000 shares issued out of treasury stock for proceeds of approximately $18,000.

On May 14, 2012 the Company announced that its Board of Directors declared a $0.15 per share cash dividend. The dividend was subsequently paid on July 2, 2012 to shareholders of record on June 1, 2012 and was approximately $358,000 in the aggregate. These dividends do not represent that the Company will pay dividends on a regular or scheduled basis. The amount is recorded in dividends payable 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. 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.

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2012			2011			2012			2011
	($000’s omitted except per share data)
Income from continuing operations	$	306		$	1,107		$	1,346		$	2,588
Loss from discontinued operations		(450	)		(203	)		(1,121	)		(550	)
Net income (loss)	($	144	)	$	904		$	225		$	2,038
Weighted average common shares outstanding (basic)		2,146			1,982			2,125			1,982
Incremental shares from assumed conversions of stock options		6			89			19			117
Weighted average common shares outstanding (diluted)		2,152			2,071			2,144			2,099
Basic
Income per share from continuing operations	$	0.14		$	0.56		$	0.63		$	1.31
Loss per share from discontinued operations		(0.21	)		(0.10	)		(0.53	)		(0.28	)
Total net income (loss) per share	($	0.07	)	$	0.46		$	0.10		$	1.03
Diluted
Income per share from continuing operations	$	0.14		$	0.53		$	0.63		$	1.23
Loss per share from discontinued operations		(0.21	)		(0.10	)		(0.52	)		(0.26	)
Total net income (loss) per share	($	0.07	)	$	0.43		$	0.11		$	0.97

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Capital Lease- Related Party

9 Months Ended

Sep. 30, 2012

Leases [Abstract]

Capital Lease- Related Party

7. Capital Lease – Related Party

On November 3, 2009, the Company entered into a capital lease with a related party of the Company for certain equipment to be used at AMP. On July 23, 2012, the Company gave notice of termination of the lease and as a result of the termination, beginning in July 2012, this lease is accounted for as an operating lease rather than a capital lease for the remaining term and the related assets and liabilities were removed from the consolidated balance sheet. There is no material gain or loss associated with the cancellation of such agreement. Under the terms of the Agreement, monthly payments of $7,500 still continue through July 2013. The Company has accrued for the remaining balance payable of $67,500 in the September 30, 2012 financial statements as a result of the discontinued operation discussed in Note 3. There are no other future obligations under this lease.

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Income Taxes

9 Months Ended

Sep. 30, 2012

Income Tax Disclosure [Abstract]

Income Taxes

8. Income Taxes

The Company did not have any material uncertain tax positions or unrecognized tax benefits or obligations as of September 30, 2012 and December 31, 2011.

The Company and/or its subsidiaries file income tax returns in the United States federal jurisdiction and in the states of New York, Pennsylvania, Arkansas and Texas. Also, during the third quarter of 2010, the Internal Revenue Service commenced an examination of the Company’s Federal Income tax returns for years 2008 and 2009. In the first quarter of 2011, the examination was completed and resulted in no material adjustments to the originally filed returns. The 2009 through 2011 federal and state tax returns remain open under statute.

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2012

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

10. Commitments and Contingencies

The Company has a probable contingent liability related to the termination of an employment agreement for an Executive Officer of the Company, effective September 29, 2012. The Company is unable to reasonably or accurately estimate the amount of the liability at this time. Under the terms of the agreement, management estimates that the compensation in the form of future medical benefits and severance payments could result in additional liabilities as high as approximately $1,400,000. However, the Company is disputing these amounts and is currently in negotiation with the former officer to settle the potential liability. Accordingly, no additional liability has been accrued as of September 30, 2012 related to this item.

The Company leases certain equipment and real property pursuant to operating lease arrangements. Total rental expense in the three and nine month periods ended September 30, 2012 and 2011 and future minimum payments under such leases are not material to consolidated financial statements. The Company also leases certain real and personal property being accounted for under capital leases. See also Note 5, Property, Plant and Equipment, Note 6, Long-Term Debt, Note 7, Capital Lease – Related Party and Note 11, Related Party Transactions of the accompanying consolidated financial statements for information on the leases.

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Property, Plant and Equipment - Summary (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Property, Plant and Equipment [Line Items]
Total Gross Property, Plant and Equipment	$ 19,158	$ 20,136
Less accumulated depreciation and amortization	(13,544)	(14,033)
Total property, plant and equipment	5,614	6,103
Land
Property, Plant and Equipment [Line Items]
Total Gross Property, Plant and Equipment	21	25
Buildings
Property, Plant and Equipment [Line Items]
Total Gross Property, Plant and Equipment	7,021	7,181
Machinery, equipment and tooling (including capital lease)
Property, Plant and Equipment [Line Items]
Total Gross Property, Plant and Equipment	$ 12,116	$ 12,930

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Business Description and Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2012

Business Description and Summary Of Significant Accounting Policies [Abstract]

Principles of Consolidation

Principles of Consolidation

The consolidated financial statements include the accounts of Servotronics, Inc. and its wholly-owned subsidiaries (the “Company”). All intercompany balances and transactions have been eliminated upon consolidation.

Cash and Cash Equivalents

Cash and Cash Equivalents

The Company considers cash and cash equivalents to include all cash accounts and short-term investments purchased with an original maturity of three months or less.

Accounts Receivable

Accounts Receivable

The Company grants credit to substantially all of its customers and carries its accounts receivable at original invoice amount less an allowance for doubtful accounts. On a periodic basis, the Company evaluates its accounts receivable and establishes an allowance for doubtful accounts based on history of past write-offs, collections, and current credit conditions. The allowance for doubtful accounts amounted to approximately $134,000 at September 30, 2012 and $101,000 at December 31, 2011.

Revenue Recognition

Revenue Recognition

Revenues are recognized as services are rendered or as units are shipped and at the designated FOB point consistent with the transfer of title, risks and rewards of ownership. Such purchase orders generally include specific terms relative to quantity, item description, specifications, price, customer responsibility for in-process costs, delivery schedule, shipping point, payment and other standard terms and conditions of purchase.

Inventories

Inventories

Inventories are stated at the lower of standard cost or net realizable value. Cost includes all costs incurred to bring each product to its present location and condition. Market provisions in respect of lower of cost or market adjustments and inventory expected to be used in greater than one year are applied to the gross value of the inventory through a reserve of approximately $574,000 and $773,000 at September 30, 2012 and December 31, 2011, respectively. Pre-production and start-up costs are expensed as incurred.

The purchase of suppliers’ minimum economic quantities of material such as steel, etc. may result in a purchase of quantities exceeding one year of customer requirements. Also, in order to maintain a reasonable and/or agreed to lead time, certain larger quantities of other product support items may have to be purchased and may result in over one year’s supply.

Shipping and Handling Costs

Shipping and Handling Costs

Shipping and handling costs are classified as a component of cost of goods sold.

Property, Plant and Equipment

Property, Plant and Equipment

Property, plant and equipment is carried at cost; expenditures for new facilities and equipment and expenditures which substantially increase the useful lives of existing plant and equipment are capitalized; expenditures for maintenance and repairs are expensed as incurred. Upon disposal of properties, the related cost and accumulated depreciation are removed from the respective accounts and any profit or loss on disposition is included in income.

Depreciation is provided on the basis of estimated useful lives of depreciable properties, primarily by the straight-line method for financial statement purposes and by accelerated methods for tax purposes. Depreciation expense includes the amortization of capital lease assets. The estimated useful lives of depreciable properties are generally as follows:

Buildings and improvements	5-39 years
Machinery and equipment	5-15 years
Tooling	3-5 years

Income Taxes

Income Taxes

The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of operating loss and credit carryforwards and temporary differences between the carrying amounts and the tax basis of assets and liabilities. The Company and its subsidiaries file a consolidated federal income tax return, combined New York and Texas state income tax returns and separate Pennsylvania and Arkansas state income tax returns.

The Company’s practice is to recognize interest and/or penalties related to income tax matters in income tax expense. The Company did not have any accrued interest or penalties included in its consolidated balance sheets at September 30, 2012 or December 31, 2011, and did not recognize any interest and/or penalties in its consolidated statements of income during the three and nine months ended September 30, 2012 and 2011.

Supplemental Cash Flow Information

Supplemental Cash Flow Information

Income taxes paid during the three months ended September 30, 2012 and 2011 amounted to zero and approximately $291,000, respectively, and amounted to approximately $256,000 and $517,000 for the nine months ended September 30, 2012 and 2011 respectively. Interest paid during the three months ended September 30, 2012 and 2011 amounted to approximately $12,000 and $14,000, respectively, and amounted to $38,000 and $44,000 for the nine months ended September 30, 2012 and 2011, respectively. During the three and nine months ended September 30, 2012, the Company reduced its tax liability by approximately $152,000 related to the exercise of stock options and was credited directly to capital in excess of par value.

Employee Stock Ownership Plan

Employee Stock Ownership Plan

Contributions to the employee stock ownership plan are determined annually by the Company according to plan formula.

Impairment of Long-Lived Assets

Impairment of Long-Lived Assets

The Company reviews long-lived assets for impairment whenever events or changes in business circumstances indicate, or at least annually, that the carrying amount of the assets may not be fully recoverable based on undiscounted future operating cash flow analyses. If an impairment is determined to exist, any related impairment loss is calculated based on fair value. Impairment losses on assets to be disposed of, if any, are based on the estimated proceeds to be received, less costs of disposal. The Company has determined that no impairment of long lived assets existed at September 30, 2012 and December 31, 2011.

Use of Estimates

Use of Estimates

The preparation of the consolidated financial statements in conformity with U.S. generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Reclassifications

Reclassifications

Certain balances as previously reported were reclassified to conform with classifications adopted in the current period.

Research and Development Costs

Research and Development Costs

Research and development costs are expensed as incurred.

Concentration of Credit Risks

Concentration of Credit Risks

Financial instruments that potentially subject the Company to concentration of credit risks principally consist of cash accounts in financial institutions. Although the accounts exceed the federally insured deposit amount, management does not anticipate nonperformance by the financial institutions. Refer to Note 12, Business Segments, for disclosures related to customer concentrations.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

The carrying amount of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses are reasonable estimates of their fair value due to their short maturity. Based on variable interest rates and the borrowing rates currently available to the Company for loans similar to its long-term debt and capital lease, the fair value approximates its carrying amount.

Recent Accounting Pronouncements

 Recent Accounting Pronouncements

In June 2011, the FASB issued new accounting guidance related to the presentation of comprehensive income that eliminates the option to present components of other comprehensive income as part of the statement of changes in shareholders’ equity. The amendments require that all nonowner changes in stockholders’ equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The amendments do not change the items that must be reported in other comprehensive income or when an item of other comprehensive income (loss) must be reclassified to net income (loss). This guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011, with early adoption permitted. The Company adopted this pronouncement in the first quarter of 2012 and is presenting separate statements of comprehensive income (loss) in the consolidated financial statements. For the three and nine month periods ended September 30, 2012 and 2011, there were no items affecting comprehensive income (loss).

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Long-Term Debt (Tables)

9 Months Ended

Sep. 30, 2012

Debt Disclosure [Abstract]

Schedule Of Long-Term Debt

	September 30,			December 31,
	2012			2011
	($000’s omitted)
Industrial Development Revenue Bonds; secured by an equivalent letter of credit from a bank with interest payable monthly at a floating rate (0.43% at September 30, 2012)(A)	$	2,960		$	2,960
Secured term loan payable to a government agency; monthly payments of $1,950 including interest fixed at 3% payable through fourth quarter of 2015		69			86
Secured term loan payable to a government agency; monthly principal payments of approximately $2,200 with interest waived payable through second quarter of 2012		-			11
		3,029			3,057
Less current portion		(191	)		(202	)
	$	2,838		$	2,855

(A) The 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 bank an annual fee of 1% of the amount secured thereby and pays the remarketing agent for the bonds an annual fee of 1/4% 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.

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Subsequent Events (Detail Textuals) (Subsequent Event, USD $)	1 Months Ended
	Oct. 31, 2012
Subsequent Event
Subsequent Event [Line Items]
Equipment facility expansion expected cost	$ 700,000

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Shareholders' Equity (Details) (USD $)	3 Months Ended		9 Months Ended				9 Months Ended				9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012 Common stock	Dec. 31, 2011 Common stock	Sep. 30, 2012 Capital in excess of par value	Sep. 30, 2012 Retained earnings	Sep. 30, 2012 ESOP	Dec. 31, 2011 ESOP	Sep. 30, 2012 Treasury stock	Sep. 30, 2012 Accumulated Other Comprehensive Loss	Dec. 31, 2011 Accumulated Other Comprehensive Loss
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Balance			$ 23,244,000		$ 523,000	$ 523,000	$ 13,774,000	$ 12,490,000	$ (1,266,000)	$ (1,266,000)	$ (2,210,000)	$ (67,000)	$ (67,000)
Balance (shares)			2,614,506		2,614,506	2,614,506
Net income	(144,000)	904,000	225,000	2,038,000				225,000
Cash dividend			(358,000)					(358,000)
Purchase of treasury shares			(62,000)								(62,000)
Exercise of stock options, net of income tax benefit			384,000				152,000	(323,000)			555,000
Balance	$ 23,433,000		$ 23,433,000		$ 523,000	$ 523,000	$ 13,926,000	$ 12,034,000	$ (1,266,000)	$ (1,266,000)	$ (1,717,000)	$ (67,000)	$ (67,000)
Balance (shares)	2,614,506		2,614,506		2,614,506	2,614,506

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Statement Of Income and Comprehensive Income [Abstract]
Net income (loss)	$ (144)	$ 904	$ 225	$ 2,038
Other comprehensive income:
Retirement benefits adjustment
Total comprehensive income (loss)	$ (144)	$ 904	$ 225	$ 2,038

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Inventories

9 Months Ended

Sep. 30, 2012

Inventory Disclosure [Abstract]

Inventories

4. Inventories

	September 30,		December 31,
	2012		2011
	($000’s omitted)
Raw materials and common parts	$	5,917	$	5,727
Work-in-process		3,173		3,511
Finished goods		2,316		2,369
Total inventories, net of reserve	$	11,406	$	11,607

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Shareholders' Equity (Tables)

9 Months Ended

Sep. 30, 2012

Equity [Abstract]

Schedule of stockholders equity of the company

	($000's omitted)
	Common Stock
	Number of shares issued		Amount		Capital in  excess of par value		Retained earnings			ESOP			Treasury Stock			Accumulated Other Comprehensive Loss			Total  Shareholders’ Equity
Balance December 31, 2011		2,614,506	$	523	$	13,774	$	12,490		($	1,266	)	($	2,210	)	($	67	)	$	23,244
Net income		-		-		-		225			-			-			-			225
Cash dividend		-		-		-		(358	)		-			-			-			(358	)
Purchase of treasury shares		-		-		-		-			-			(62	)		-			(62	)
Exercise of stock options, net of income tax benefit		-		-		152		(323	)		-			555			-			384
Balance September 30, 2012		2,614,506	$	523	$	13,926	$	12,034		($	1,266	)	($	1,717	)	($	67	)	$	23,433

Schedule of earnings per share of the company

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2012			2011			2012			2011
	($000’s omitted except per share data)
Income from continuing operations	$	306		$	1,107		$	1,346		$	2,588
Loss from discontinued operations		(450	)		(203	)		(1,121	)		(550	)
Net income (loss)	($	144	)	$	904		$	225		$	2,038
Weighted average common shares outstanding (basic)		2,146			1,982			2,125			1,982
Incremental shares from assumed conversions of stock options		6			89			19			117
Weighted average common shares outstanding (diluted)		2,152			2,071			2,144			2,099
Basic
Income per share from continuing operations	$	0.14		$	0.56		$	0.63		$	1.31
Loss per share from discontinued operations		(0.21	)		(0.10	)		(0.53	)		(0.28	)
Total net income (loss) per share	($	0.07	)	$	0.46		$	0.10		$	1.03
Diluted
Income per share from continuing operations	$	0.14		$	0.53		$	0.63		$	1.23
Loss per share from discontinued operations		(0.21	)		(0.10	)		(0.52	)		(0.26	)
Total net income (loss) per share	($	0.07	)	$	0.43		$	0.11		$	0.97

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Long-Term Debt (Detail Textuals) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2012
Industrial Development Revenue Bonds; secured by an equivalent letter of credit from a bank with interest payable monthly at a floating rate (0.43% at September 30, 2012) | Letter Of Credit From Bank
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	0.43%
Secured term loan payable to a government agency; monthly payments of $1,950 including interest fixed at 3% payable through fourth quarter of 2015
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	3.00%
Debt Instrument, Periodic Payment	$ 1,950
Secured term loan payable to a government agency; monthly principal payments of approximately $2,200 with interest waived payable through second quarter of 2012
Debt Instrument [Line Items]
Debt Instrument, Periodic Payment	$ 2,200

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Subsequent Events

9 Months Ended

Sep. 30, 2012

Subsequent Events [Abstract]

Subsequent Events

14. Subsequent Events  

In October 2012, Servotronics, Inc. entered into an agreement with a local contractor for the construction of a new 30 x 36 foot testing facility that will be located in Elma, New York. The facility expansion is in response to an increase in demand and is expected to cost up to $700,000, including related equipment. The expansion is expected to be funded from operating cash flows and the target completion date is in the first quarter of 2013.