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A steep drop in military knife sales, coupled with losses stemming from the sale and shutdown of a pair of small consumer knife businesses, caused Servotronics to lose $144,000 during the third quarter, the Elma manufacturer of motion-control equipment and cutlery said Tuesday.

While the company’s motion-control equipment business continued to grow, Servotronics’ cutlery sales plunged by 45 percent during the summer as the U.S. government’s purchases of military knives tumbled by $1.7 million.

Beyond that, Servotronics absorbed $450,000 in losses resulting from the $640,000 sale in September of its Queen Cutlery Co. pocketknife business in Pennsylvania, coupled with the shutdown of its Aero Metal Products unit in Arkansas that makes scissors and shears. Servotronics executives said the sale and shutdown of those two businesses were part of a push to eliminate weak or unprofitable product lines.

Servotronics’ loss, which equaled 7 cents per share, compared with a profit of $904,000, or 43 cents per share, a year ago. Excluding the impact of the two discontinued cutlery businesses, Servotronics’ remaining businesses remained profitable, but their operating profits plunged by 72 percent, to $306,000, from $1.1 million.

Sales slid by 12 percent, to $7.5 million, from $8.6 million, as a 7 percent rise in sales of its motion-control equipment was offset by the 45 percent drop in cutlery revenues.

Servotronics’ Advanced Technology Group, which accounts for more than three-quarters of the company’s sales, saw its operating profits drop by more than half, to $411,000, from $846,000 a year ago, mainly because of a spike in expenses and a more than threefold increase in capital spending. Those higher expenses offset a 7 percent increase in sales of the company’s motion-control equipment, which rose to $5.8 million, from $5.4 million.

Overall, the company’s cutlery business lost $555,000 during the quarter, compared with a profit of $58,000 a year ago, largely because of the lower military knife sales and losses from the two discontinued units that more than doubled. Sales of cutlery products fell to $1.7 million, from $3.1 million.

The company also said it is spending up to $700,000 to build an 1,100-square-foot testing facility at its Elma factory.

email: drobinson@buffnews.com