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Lower costs and a more profitable product mix, helped Servotronics Inc. increase its fourth-quarter profits by 82 percent, the Elma servocontrol manufacturer said Monday.

Servotronics said its profits soared to $228,000, or 13 cents per share, from $125,000, or 7 cents per share, a year ago. The company's sales rose by 12 percent to $4.6 million from $4.1 million.

The sharp gains in earnings during the fourth quarter capped a year that saw Servotronics' profits fall by 29 percent from a year ago, when the company's earnings were inflated by a one-time gain of $639,000 before taxes from the sale of its former headquarters.

As a result, Servotronics' annual profits fell to $619,000, or 36 cents per share, from $874,000, or 52 cents per share, the year before. But without the one-time gain, Servotronics' operating profits rose by 23 percent to $1.01 million from $822,000 the year before.

The company's annual sales increased by 2 percent to $15.9 million from $15.6 million a year ago, as a 16 percent rise in revenues from its Advanced Technology Group offset a 14 percent drop in sales from its cutlery division.

Servotronics blamed the lower sales at its cutlery business on lower customer demand, as well as a shift in focus toward new, more profitable proprietary products, rather than other less lucrative private-label products.

Consequently, Servotronics was able to increase its gross profit margin to 32 percent from 30.8 percent the year before, the company said in a filing with the Securities and Exchange Commission.

Servotronics said its Advanced Technology Group's total backlog of orders grew by 27 percent to about $59.2 million at the end of December from $46.5 million a year ago. The unfunded portion of that backlog rose to $51.2 million from $38.1 million. About $38 million of that backlog is for products that will be delivered in the year 2000 and beyond.

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