(

)

Exit and Disposal Activities

February 21, 2017,

the Board of Directors approved a modified exit or disposal plan with respect to the Broadway Plant, which included the relocation of production to other Company facilities, as needed, and/or the closure of the plant. The relocation of production was complete as of the end of

2017.

The Company has relocated certain assets from the Broadway Plant to other manufacturing facilities, as needed, to serve its existing and target customer base and identified underutilized or non-core assets for disposal. Management expects to apply the proceeds from the sale of any underutilized or non-core assets to help fund the costs to transfer any additional equipment from the Broadway Plant. Management is currently evaluating options for the real estate and any remaining assets in the Broadway Plant.

As a result of these initiatives, the Company recorded charges of

$1,088,000,

$0.05

per share, and

$2,235,000,

$0.11

per share, during the

first

nine

months of

2018

and

2017,

respectively, related to the transition of production from the Broadway Plant, which is included in severance, relocation and other costs in the consolidated statement of operations. All

$1,088,000

incurred during the

nine

months ended

September

30,

2018

was recorded within Sypris Technologies. Of these costs,

$254,000

was for equipment relocation costs and

$834,000

was primarily related to mothball costs associated with the closed facility. The charges for the

nine

months ended

October

2017

included

$1,017,000

for severance and benefit related costs and

$1,218,000

for equipment relocation costs. A summary of the total pre-tax charges is as follows (in thousands):

			Costs Incurred
			Nine Months		Total		Remaining
	Total		Ended		Recognized		Costs to be
	Program		Sept. 30, 2018		to date		Recognized
Severance and benefit related costs	$	1,350	$	0	$	1,350	$	0
Asset impairments		188		0		188		0
Equipment relocation costs		1,804		254		1,678		126
Other		1,302		834		877		425
	$	4,644	$	1,088	$	4,093	$	551

A summary of costs and related reserves for the transition of production from the Broadway Plant at

September

30,

2018

is as follows (in thousands):

	Accrued				Cash			Accrued
	Balance at				Payments			Balance at
	Dec. 31,		2018		or Asset			Sept. 30,
	2017		Charge		Write-Offs			2018
Severance and benefit-related costs	$	145	$	0	$	(145	)	$	0
Equipment relocation costs		0		254		(254	)		0
Other		0		834		(834	)		0
	$	145	$	1,088	$	(1,233	)	$	0

The Company expects to incur additional pre-tax costs of approximately

$551,000

within Sypris Technologies, the majority of which is expected to be cash expenditures.

As noted above, management expects to apply proceeds from the sale of underutilized or non-core assets to help fund the costs to transfer additional equipment from the Broadway Plant and the transition of the related production. The following assets have been segregated and included in assets held for sale in the consolidated balance sheets (in thousands):

	September 30,			December 31,
	2018			2017
	(Unaudited)

Machinery, equipment, furniture and fixtures	$	16,819		$	28,874
Accumulated depreciation		(14,803	)		(25,976	)
Total assets	$	2,016		$	2,898