TransTechnology Moving to New Jersey

TransTechnology Corp., a struggling conglomerate that produces a wide array of industrial and defense-related products, said it will move its corporate headquarters from Sherman Oaks to Union, N.J., and is negotiating the sale of four divisions.

The company said the moves are designed to reduce costs and cut debt.

The relocation and asset sales were recommended to TransTechnology’s board by a special committee formed in September to decide what the company should do to improve its financial performance. Sales of other divisions in addition to the units currently on the block will likely be considered in the future, said Michael J. Berthelot, TransTechnology’s vice chairman.

Berthelot, an Ohio accountant and investor who owns 5.3% of TransTechnology’s stock, was recently appointed to the company’s board and has assumed an instrumental role in trying to turn the business around.

TransTechnology said the relocation would place its headquarters closer to its 18 manufacturing sites and would reduce its corporate staff from 26 to nine. The move, expected to be completed by March, should save more than $3 million in annual overhead costs.

But costs associated with the move and layoffs will result in a $2.6-million before-tax charge in the fiscal second quarter ended Sept. 30, TransTechnology said.

The divisions TransTechnology is trying to sell manufacture rubber products, textile finishing machines, weather instruments and graphics display terminals, and had combined sales of $23 million in the fiscal year that ended March 31. Each of the units has had significant losses or has been only marginally profitable in recent years, the company said.

Berthelot said the special committee is talking to potential buyers--which he declined to identify--and will report its findings to the board by mid-December. The divisions might not be sold if TransTechnology can’t get the prices it seeks, he said.

In recent years, TransTechnology has suffered because of the weak economy, defense spending cuts and a diversification strategy that left the company a hodgepodge of unrelated businesses. It posted a $4-million loss on $186.4 million in revenue in the fiscal year that ended March 31.

But a combination of cost-cutting and an emphasis on more profitable products helped the company to an $847,000 profit in the fiscal first quarter that ended June 30, while revenues fell 12% to $38.2 million.