Under the terms of the settlement, the company will pay the government $1.0 million, and will rebuild, at no charge to the government, three rescue hoists that were disassembled by the government as part of its investigation.Union’s TransTechnology (OTC: TTLG) said Tuesday it has reached an agreement in principle with the U.S. Department of Justice in connection with the civil and contractual issues arising from the government’s investigation of the overhaul and repair business of the company’s Breeze-Eastern division.
The criminal aspects of the investigation, which began in September 2003, were closed in March with the government not pressing any charges or actions against the company.
Under the terms of the settlement, the company will pay the government $1.0 million, and will rebuild, at no charge to the government, three rescue hoists that were disassembled by the government as part of its investigation.
The monetary part of the settlement will be paid in three installments: $100,000 upon execution of the settlement agreement; $300,000 on March 30, 2006; and $600,000 on September 30, 2006.
In connection with the settlement and associated costs of $200,000, TransTechnology expects to take an after-tax charge of $800,000, or $0.12 per share, in its fourth quarter ended March 31.
“The investigation and the company’s actions in responding to it have been costly to our company and distracting to our management, employees and customers. However, the top-to-bottom review we have performed and the operational changes we have implemented as a result have strengthened our company,” said Robert L.G. White, CEO of TransTechnology.
TransTechnology, operating as Breeze-Eastern, is a designer and manufacturer of sophisticated lifting devices for military and civilian uses. The company employs 175 people at its facility in Union. At the close of trading, the company’s shares were up $0.04 at $7.29.