Company to record pretax severance expense of approximately $5 million and other pretax expenses of approximately $3 million.Engelhard (NYSE: EC), an Iselin-based surface and materials science company, said Monday it plans to discontinue manufacturing operations at its Carteret facility, where it makes specialty precious metal products.
In a filing with the U.S. Securities and Exchange Commission, the company said the decision comes after a long evaluation of the plant’s economic performance and unsuccessful attempts to find a suitable buyer for the operation.
Engelhard expects to record pretax severance expense of approximately $5 million. While the timing of severance actions is not certain, the bulk of the severance expense is expected to be recorded in the second quarter.
In addition to the severance charge, the company will incur other pretax expenses of $3 million. These other expenses include the write-off of raw materials and work-in-process inventories, and other site exit costs.
All manufacturing and layoffs are expected to be substantially complete by the end of the third quarter, Engelhard said.
Tax benefits associated with the charges are expected to be $3 million.
Of the $8 million of pretax expenses, total future cash expenditures associated with the plant closure are expected to be $6 million.
At the close of trading, Engelhard shares were up $0.05 to $29.20.