Pacific Scientific Expects Loss Due to Cleanup Costs

Citing environmental cleanup costs and expenses related to the relocation of a division, Pacific Scientific Co. said Tuesday that it expects to report a loss of up to $1.5 million for its fourth quarter ending Dec. 28.

Chairman Edgar S. Brower said the Newport Beach-based industrial and military products manufacturer expects to record a $4-million charge against its earnings for the quarter. Without the charge, the company said its estimated earnings would be $2.5 million.

The writeoff includes $1.35 million for the estimated cost of cleaning up a chemical spill on Anaheim property the company owned until late last year. The spill involved trichloroethylene, a degreasing agent that the company used in manufacturing restraint systems and shock absorbers for nuclear power plants. The 50-gallon spill occurred more than five years ago, Brower said.

Brower said the chemical spill is lodged in the soil and poses no threat to the water supply or public health. The cleanup, which involves pumping water into the contaminated area and drawing it back out for disposal, will take about four years, Brower said.

The spill was detected last year during an environmental review of the property in preparation for its sale to a developer. It took nine months for the company to evaluate the extent of the spill, Brower said. The site, on State College Boulevard between Katella Avenue and Ball Road, is being transformed into an industrial complex, Brower said.

The company said it will also take a charge against earnings of $150,000 for environmental cleanup costs at a plant in Puerto Rico. The company is disposing of an electrical power transformer containing polychlorinated biphenyls, or PCBs.

Finally, the company said it will report previously unexpected costs of $1.5 million related to the relocation of its Fischer Pierce manufacturing division from Puerto Rico to Weymouth, Mass. The unit makes outdoor lighting-control products.

For the third quarter ended Sept. 28, Pacific Scientific reported earnings of $1.2 million, up 9% from $1.1 million a year earlier. Revenue was $46.2 million, up 12.1% from a year earlier.