Servotronics Inc. is thinking about selling its cutlery business as part of a move to focus more on its business that makes servocontrols for airplanes, rockets and missiles.
As part of that planned restructuring, the Elma-based company said Thursday it is talking with other companies that it is interested in acquiring as part of its bid to expand the operations of its Advanced Technology Group, which accounts for about 62 percent of the company's sales.
At the same time, the company also is considering the sale of "non-core operations." While Lee Burns, Servotronics' treasurer, declined to elaborate on the company's plans, sources indicated that the company's consumer products group, which makes sporting knives, cutlery and machetes, is the prime target for a potential sale.
Servotronics, whose stock is down 27 percent this year after falling 26 percent in 1998, plans to hire an investment banker to advise it about possible acquisitions for its Advanced Technology Group and the possible sale of other operations. Burns said the company has not yet retained an adviser.
Servotronics stock fell 1/8 Thursday to 5.
The cutlery business, which provided 38 percent of the company's sales this year, saw its sales fall by 8 percent during the first three quarters of this year. Likewise, revenues from the Advanced Technology Group were down by nearly 9 percent over the same period.
But Servotronics' profits fell at a much faster pace, declining by 50 percent during the first three quarters of the current fiscal year.
The company also said its board of directors has authorized it to buy back an additional 200,000 shares of its stock. The shares acquired under the repurchase program could be used to help pay for any acquisitions Servotronics makes, as well as to cover stock options that might be exercised in the future, among other things, the company said.
Servotronics already has bought back 256,045 shares of its stock under a repurchase program that already was in effect. The latest extension boosts the total authorization to 550,000 shares, which means the company now has permission to buy back another 294,000 shares of its own stock.