Costa Mesa-based CIMCO, a manufacturer of thermoplastic components and materials, said it will expand its Compounding Technology Inc. subsidiary by opening a plant in Charlotte, N.C., a move that company officials say will cause a short-term drop in earnings before its investment begins to pay off.
The start-up investment of about $1 million will go toward the purchase of equipment used to compound and test thermoplastics, said CIMCO spokeswoman Linda M. Thomas.
The company will lease its new facility, Thomas said. Key employees will be transferred from CIMCO's Corona plant, and others will be hired in Charlotte, she said, but the company payroll is not expected to increase substantially.
Company officials expect that short-term earnings "might be down slightly" from analysts' projections of $1.10 to $1.15 per share, Thomas said. Earnings could drop by two or three cents a share, she said, "but it (the expansion) will contribute in fiscal 1989 and 1990. It's basically a small investment for a large return."