May 7, 2010 (FinancialWire) — Breeze-Eastern Corp. (AMEX: BZC) said that it has completed its move from Union, New Jersey to Whippany, New Jersey. The company also said that during its fiscal year-end reviews, it has determined that it must adjust its estimates of inventory obsolescence and environmental reserves.

According to Breeze-Eastern, the changes will impact the company’s fiscal fourth quarter earnings. They include an inventory reserve brought on by the move. In the process of moving, the company reviewed its inventory and identified $2.2 million of items, which would cost more to move and restock than their current or projected future market value; these items have been scrapped.

The amount was more than management expected, prompting change in assessment methodology the will increase the company's estimate of inventory obsolescence to $2.5 million at the end of March. The combination of these two events will result in a one-time pretax charge of around $3.3 million against fiscal fourth quarter earnings.

Breeze-Eastern is also re-evaluating its environmental reserve. During the past several months, the company received and evaluated new information regarding several of its environmental sites, which it said triggered a reassessment of its environmental liability estimates.

To support this reassessment, Breeze-Eastern retained the services of WSP Environment and Energy, an environmental consulting firm. Based upon the new information and WSP’s analysis and recommendations, the company has determined that its best estimate of its reserves for environmental liabilities is now about $14.5 million, which will result in a one-time pretax charge of around $8.2 million against fiscal fourth quarter earnings.

These charges are due to sites related to previously divested businesses, and involve a combination of previously-unforeseen work that is now required and extensions of the timeframes required to complete previously-agreed remediation and monitoring plans.

New Jersey-based Breeze-Eastern is a designer and manufacturer of lifting and pulling devices for military and civilian aircraft and vehicles, including rescue hoists, cargo hooks, cargo and retrieval winches, and weapons-lifting systems.

The company reported sales of $75 million in the fiscal year ended March 31, 2009.

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