Servotronics Announces Strategic Vision to Maximize Long-Term Shareholder Value By Investing.com

Progress throughout 2022 Supports Focus on Core Business to Drive Long-term Profitable Growth —

Servotronics, Inc. (NYSE American – SVT) a designer and manufacturer of servo-control components and other advanced technology products today announced details of its strategic vision to improve operational effectiveness and help drive sustainable growth and long-term shareholder value.

Within the last twelve months the Company made considerable progress in revitalizing its leadership and culture. Steps included:

• Named William F. Farrell, Jr. as Chief Executive Officer to lead a transformation and revitalization of the culture and business results.
• Refreshed the Board of Directors with three new independent directors and a non-executive Chairman to enhance overall governance and bring fresh perspectives to leadership.
• Enhanced governance with the early elimination of the Company’s shareholder rights plan for greater shareholder accountability.
• Developed an updated strategic plan, identifying tactics to guide the organization in realizing its potential.
• Strengthened the corporate leadership team, including the addition of a new Director of Human Resources and two executives to lead its Advanced Technology Group (ATG) and Consumer Products Group (CPG) segments.
• Announced the pursuit of strategic alternatives for CPG to align long-term strategic focus on Servotronics’ core aerospace business.

“Our team has made tremendous progress over the past year to revitalize our culture and define a long-term strategic vision for the business,” said Chief Executive Officer William F. Farrell, Jr. “Our efforts to create additional value for all stakeholders began with the refresh of our corporate culture to drive integrity and accountability. In addition, we have added leadership team members that exemplify this change and bring capabilities to improve the performance of our Company. This transformation will enhance our operational effectiveness, create profitable growth, and result in long-term value for our employees, customers, and shareholders.”

The core of Servotronics’ new strategic vision is centered on four key objectives that will collectively drive shareholder value. They are:

1. Profitable Growth: Significant post-pandemic recovery is occurring in the Commercial Aerospace market. Servotronics is well positioned with long-term contracts on major programs to capitalize on this growth. In addition, new products are being added to expand the Company’s portfolio within these markets. Opportunities are also being explored in new markets that require the safety-critical products in which Servotronics excels. Each area for growth has also been evaluated to insure profit targets are being achieved.
2. People Centric Culture: The organization is building a culture of integrity and accountability. These improvements, and investments in our employees, are helping to attract, retain, and develop talent that is critical to Servotronics’s future.
3. Operational Excellence: The Company is focused on exceeding customers’ quality and delivery expectations. Continuous improvement efforts are underway to improve manufacturing efficiency and ensure the safety of processes and products.
4. Quality: With the safety critical applications of its products, Servotronics continues to focus on quality and compliance with industry Zero-Defect initiatives.

In support of the implementation of the Company’s new long-term strategic vision, the Leadership Team has developed a 5-year operating plan to drive profitable growth. By executing the strategic plan, targeted improvements in financial results include:

• Mid-single-digit revenue growth which is in line with, or slightly higher than, projected industry growth.
• A return to pre-pandemic gross margins, representing meaningful improvement in profitability over the 5-year time horizon.

Chief Executive Officer William F. Farrell, Jr. concluded, “Our refreshed Board of Directors and new Leadership Team are guiding the Company through a culture change, and driving our updated strategy. We are respecting Servotronics’s historical strengths and are accelerating to the future on our newly developed strategic path. This transformation will create improved financial performance and value for all of our stakeholders.”

Servotronics has provided an updated investor presentation with detailed information regarding the strategic plan, business segment performance and long-term outlook. The presentation is available on the investor relations section of the Company’s website.