SALT LAKE CITY, Oct. 23, 2018 (GLOBE NEWSWIRE) — via NEWMEDIAWIRE — In the third agenda division (3Q) and aboriginal nine months (9M) of 2018, Utah Medical Products, Inc. (Nasdaq: UTMD) accomplished after-effects which accommodate with its ahead appear goals for 2018.
Currencies in this address are denoted as $ or USD = U.S. Dollars; AUD = Australia Dollars; GBP = UK Pound Sterling; EUR = Euros; and CAD = Canadian Dollars. Bill amounts are in thousands, except per allotment amounts and area noted.
Financial after-effects in 3Q and 9M 2018, according to U.S. Generally Accepted Accounting Principles (GAAP), are masked by a favorable acclimation to UTMD’s antecedent conditional appraisal of its “one time” U.S. repatriation (REPAT) tax accountability constant from the “Tax Cuts and Jobs Act” (TCJA) allowable in December 2017. UTMD’s antecedent appraisal of the accumulated Federal and Utah State REPAT tax was $6,288, recorded in 4Q 2017 banking results, the aeon in which the TCJA was allowable by Congress. In 3Q 2018, afterwards added IRS advice became accessible and aback UTMD’s absolute tax admiral completed the 2017 assets tax return, it became accepted to the Aggregation that the absolute REPAT tax accountability is $3,058, constant in a favorable $3,230 acclimation to UTMD’s 3Q 2018 assets tax provision. In addition, there is a new All-around Abstract Low-Taxed Assets (GILTI) tax applicative for 2018 that resulted from the TCJA, an appraisal for which is included in the 3Q 2018 tax accouterment for the aboriginal time. All assets account categories of UTMD’s operating achievement are artless by the REPAT tax acclimation and GILTI tax appraisal except for Net Assets (NI), profits afterwards tax, and Antithesis Per Allotment (EPS). A added complete account of the assets tax changes follows afterwards in this report. UTMD administration believes that the presentation of after-effects excluding the favorable REPAT tax accountability adjustment, and the new 2018 GILTI tax, to its 3Q 2018 and 9M 2018 assets tax provision, provides allusive added advice to both administration and investors that is added acutely apocalyptic of UTMD’s operating after-effects in 2018 compared to 2017.
Summary of Banking ResultsThe constant non-GAAP NI and EPS, excluding the REPAT tax accouterment acclimation and the 2018 GILTI tax accouterment estimate, follow:
In summary, UTMD accomplished $3.19 in “normal” (non-GAAP) 9M 2018 EPS compared to $2.95 in 9M 2017, an 8% access fueled by a 3% access in sales.
UTMD’s changes in GAAP assets account after-effects compared to the aforementioned time periods in the above-mentioned agenda year follow:
Opposite to aboriginal bisected (1H) 2018, UTMD’s about 3Q 2018 sales achievement was bargain by a stronger USD. Revenues in 3Q 2018 would accept been $76 college appliance the aforementioned adopted bill barter (FX) ante as in the above-mentioned year (“constant dollars”). However, because of the weaker USD in 1H 2018, revenues in 9M 2018 would accept been $443 lower in connected dollars. The FX amount change represented 43% of the 9M 2018 sales access about to 9M 2017. UTMD’s FX ante for assets account purposes are transaction-weighted averages. The boilerplate ante from the applicative adopted bill to USD during 3Q 2018 and 9M 2018 compared to the aforementioned periods in 2017 follow:
UTMD’s revenues invoiced in the aloft adopted currencies represented 32.2% of absolute circumscribed USD sales in 3Q 2018 and 32.6% in 9M 2018.
UTMD’s FX ante for antithesis area purposes are the applicative ante at the end of anniversary advertisement period. The FX ante from the applicative adopted bill to USD for assets and liabilities at the end of September 2018 and the end of September 2017 follow:
Although sales were college than expected, UTMD accomplished burden on its operating accumulation margins in 3Q 2018. The associated key accumulation margins (profits as a allotment of sales) compared to the aforementioned time periods in the above-mentioned agenda year were as follows:
Excluding the noncash furnishings of depreciation, acquittal of abstract assets, remeasured amount of adopted bill coffer balances and non-cash banal advantage expense, circumscribed antithesis afore taxes added absorption amount (EBITDA) were $17,328 in 9M 2018 compared to $16,653 in 9M 2017, up 4%. Neither the REPAT tax acclimation nor the GILTI tax accouterment amount had any aftereffect on this EBITDA metric.
Compared to the end of September a year earlier, UTMD’s banknote and advance balances added $11.8 actor to $49,352. September catastrophe banknote balances represent about $13.15 per adulterated share. UTMD’s accepted arrangement as of September 30, 2018 was 12.4. The antithesis of Net Abstract Assets beneath $2.7 actor from a year beforehand due to acquittal and the change in FX rates. Net Abstract Assets were 30% of absolute assets on September 30, 2018 compared to 36% a year earlier.
Income Account Summary. Compared to 3Q 2017, sales in 3Q 2018 were $76 lower than they would accept been with connected FX. Compared to 9M 2017, sales in 9M 2018 were $443 college than they would accept been with connected FX. Connected bill USD sales for 3Q 2018 were up 3.4%, and 9M 2018 connected bill sales were up 1.9%.
In 3Q 2018 and 9M 2018, USD sales alfresco the U.S. (OUS) were 2% lower and 3% higher, respectively, compared to the aforementioned periods in 2017. The change in FX ante accounted for 84% of the 3Q 2018 change and 98% of the 9M 2018 change. U.S. Calm sales, including absolute sales to U.S. analytic facilities, OEM sales of apparatus and accomplished accessories to added companies, and sales of the Filshie Clip Arrangement to UTMD’s absolute U.S. distributor, CooperSurgical Inc. (CSI), were 7% college in 3Q 2018 compared to 3Q 2017, and 4% college in 9M 2018 compared to 9M 2017. Calm sales of the Filshie Clip Arrangement to CSI were 24% and 6% lower in 3Q 2018 and 9M 2018, respectively, compared to the aforementioned periods in 2017. OEM sales were 27% and 23% college in 3Q 2018 and 9M 2018 periods, respectively. Absolute sales to U.S. analytic accessories were 8% and 2% college in 3Q 2018 and 9M 2018, respectively.
UTMD’s circumscribed 3Q 2018 GPM was awkward about one allotment point primarily due to college absolute abstracts costs accumulated with abridgement of amount increases to customers. Absolute action abundance was constant with the above-mentioned year. A aerial division for U.S. accomplishment accessories aliment additionally helped access 3Q 2018 accomplishment aerial costs.
Consolidated Operating Costs (OE) were $284 college in 9M 2018 compared to 9M 2017. OE are comprised of accepted and authoritative (G&A), sales and business (S&M) and artefact development (R&D) expenses. Sixty-one percent of the access in absolute OE came from the UK accessory G&A. Included in G&A expenses, the UK acquittal of IIA was the aforementioned in GBP in 9M 2018 as in 9M 2017, but $91 college because of USD/GBP FX rates. Absolute 9M 2018 UK G&A costs were $81 college than in 9M 2017 alike admitting costs were aloof GBP 39 higher. The absolute college costs were due to college common S&M expenses, which were $137 college with absolute little appulse due to FX rates. U.S. S&M costs were $85 college in 9M 2018 than in 9M 2017, and OUS S&M amount were $52 higher, as a aftereffect of abacus added bodies and accretion barter appearance attendance.
The accumulated of college absolute OE and hardly lower GPM resulted in 9M 2018 OI about the aforementioned as in 9M 2017 with a 3% access in revenues. The 9% college non-GAAP NI in 9M 2018 was a aftereffect of 1) $551 college non-operating assets than in 9M 2017, mostly as a aftereffect of a $418 accretion from the 2Q 2018 auction of a accumulator adeptness in Utah, and 2) a lower assets tax accouterment amount in the U.S. For allegory purposes, a new 2018 GILTI tax appraisal of $50 was additionally bare from non-GAAP NI. NI in 9M 2018 compared to 9M 2017 per GAAP was up 37% as a aftereffect of the $3,230 REPAT tax favorable acclimation accustomed in 3Q 2018 beneath the new GILTI tax.
As a aftereffect of hardly college adulterated shares, the 8% access in 9M 2018 non-GAAP EPS was lower than the 9% access in non-GAAP NI. Non-GAAP EPS in 9M 2018 were $3.194 compared to $2.953 in 9M 2017. GAAP EPS (which includes the REPAT tax adjustment) in 9M 2018 were $4.041 compared to $2.953 in 9M 2017. Non-GAAP EPS in 3Q 2018 were $0.954 compared to $0.969 in 3Q 2017. GAAP EPS in 3Q 2018 were $1.802 compared to $0.969 in 3Q 2017. Non-GAAP EPS for the best contempo twelve months (TTM) were $4.139. TTM GAAP EPS (which includes the REPAT tax and a 2018 GILTI tax appraisal allowable in 4Q 2017) were $3.367.
Sales. U.S. calm sales were 7% ($356) college in 3Q 2018 than in 3Q 2017, and 4% ($577) college in 9M 2018 than in 9M 2017. Domestic sales were 51% of absolute circumscribed sales in 3Q 2018 compared to 49% in 3Q 2017, and 50% in 9M 2018 compared to 49% in 9M 2017. Sales of Femcare’s Filshie Clip Arrangement to CooperSurgical Inc. (CSI) for administration in the U.S. were $156 lower in 3Q 2018 compared to 3Q 2017, and $194 lower in 9M 2018 compared to 9M 2017. Femcare’s sales to CSI were 10% of absolute calm sales in 3Q 2018 compared to 13% in 3Q 2017, and 18% in 9M 2017 compared to 20% in 9M 2017. Per the administration agreement, CSI receives six about according shipments per year from Femcare, two anniversary in 1Q and 2Q, and one anniversary in 3Q and 4Q. Calm OEM sales were $224 college in 3Q 2018 compared to 3Q 2017, and $548 college in 9M 2018 compared to 9M 2017. Absolute sales to U.S. user accessories were $287 college in 3Q 2018 compared to 3Q 2017, and $223 college in 9M 2018 compared to 9M 2017.
OUS sales circumscribed in USD in 3Q 2018 were 2% ($91) lower than in 3Q 2017, and 3% ($452) college in 9M 2018 than in 9M 2017. In the aggregate, the sales differences were abundantly due to FX amount changes. Connected dollar OUS sales in 3Q 2018 would accept been $76 higher, and in 9M 2018 would accept been $443 lower. UK accessory USD-denominated OUS barter sales, including absolute sales to France analytic facilities, were 26% of absolute OUS sales in 3Q 2018 and 27% in 9M 2018. Australia accessory USD sales were 9% of absolute OUS sales in both 3Q 2018 and 9M 2018. Ireland accessory USD barter sales were 29% of absolute OUS sales in 3Q 2018 and 25% in 9M 2018. Canada accessory USD sales were 11% of absolute OUS sales in 3Q 2018 and 12% in 9M 2018.
In artefact categories, 3Q 2018 all-around claret burden ecology device/ apparatus (BPM) sales were 18% ( $327) higher, neonatal accessory sales were 6% ( $92) higher, obstetrics accessory sales were 11% ($131) lower, and gynecology/ electrosurgery/ urology (GYN) accessory sales were 0% ($23) lower compared to 3Q 2017. For 9M 2018 compared to 9M 2017 all-around sales in artefact categories, BPM sales were 6% ( $352) higher, neonatal accessory sales were 10% ( $474) higher, obstetrics accessory sales were 3% ($104) lower, and GYN accessory sales were 2% ( $307) higher. The college BPM artefact sales were due primarily to one U.S. OEM client of custom burden transducer kits which were $292 college in 3Q 2018 and $616 college in 9M 2018 compared to the aforementioned periods in 2017.
Looking forward, sales in 4Q 2018 are accepted to be lower than in 4Q 2017 from two basic sources which are both accompanying to the timing of shipments to third affair distributors:
The accumulated of these fluctuations in benefactor shipments is accepted to be $670 in lower 4Q 2018 sales compared to 4Q 2017. UTMD considers the lower 4Q 2018 benefactor sales to be acclimation arrangement fluctuations, not a trend. Despite the lower projected 4Q 2018 sales, UTMD expects to accommodated or beat its alpha of year bump of collapsed sales for the year as a whole.
Gross Profit. Gross Accumulation (GP) is Revenues (sales) bare the amount of accomplishment or purchasing accomplished articles for resale. The amount of accomplishment (CGS) is comprised of absolute action (DL), absolute abstracts (DM) and accomplishment aerial (MOH). UTMD’s circumscribed 3Q 2018 GPM at 60.7% was abundant lower than the 64.2% GPM in 3Q 2017. DM amount represented 53.6% of CGS in 3Q 2018 compared to 50.3% of CGS in 3Q 2017. The 3Q 2017 GPM was helped by a favorable $80 acclimation in UTMD’s U.S. bloom plan assets (representing about 0.8 GPM allotment credibility for the quarter) due to bigger than accepted agent medical amount experience, which did not recur in 3Q 2018. Except for that ancient 3Q 2017 assets adjustment, DL and MOH abundance in both 3Q and 9M 2018 was constant with the above-mentioned year’s periods. The circumscribed GPM in 9M 2018 was 62.7%, compared to 63.8% in 9M 2017. With alone a few exceptions, UTMD has not yet aloft its accomplished accessory prices in acknowledgment to college DM costs.
Operating Income. Operating Assets (OI) is GP bare OE. Circumscribed USD-denominated OE were $1,892 in 3Q 2018 (18.2% of circumscribed revenues) compared to $1,817 in 3Q 2017 (17.9% of circumscribed revenues). Circumscribed OE were $5,771 in 9M 2018 (17.9% of revenues) compared to $5,487 in 9M 2017 (17.6% of revenues).
S&M costs were 4.3% of revenues in 3Q 2018 compared to 3.6% of revenues in 3Q 2017. In 9M 2018, S&M costs were 4.0% of revenues compared to 3.7% of revenues in 9M 2017. Circumscribed S&M costs added because UTMD added a business being in the U.S. and a chatty French-speaking S&M being in the UK to advice bigger account absolute accounts in France. UTMD additionally broadcast accord in analytic barter shows in 9M 2018. In addition, although afflicted FX ante did not access 3Q 2018 OUS accessory S&M costs about to 3Q 2017, they did access 9M 2018 OUS S&M amount by $15. In added words, 11% of the 9M circumscribed S&M amount access was due to FX amount differences.
G&A costs were 12.8% of revenues in 3Q 2018 compared to 13.3% of revenues in 3Q 2017. In both 9M 2018 and 9M 2017, G&A costs were 12.8% of revenues. G&A costs accommodate the acquittal of identifiable abstract assets (IIA) which resulted from the 2011 Femcare acquisition. Although the acquittal amount in GBP was the aforementioned for the corresponding periods in both 2018 and 2017, in USD agreement 3Q 2018 acquittal of IIA was $2 lower than in 3Q 2017, and in 9M 2018 $91 college than in 9M 2017. In added words, the FX amount change appulse on IIA asset acquittal amount represented 61% of the access in circumscribed 9M 2018 G&A expenses. Including all G&A expenses, the FX amount change represented 92% of the $149 access in absolute circumscribed G&A costs in 9M 2018 compared to 9M 2017. The FX amount change represented 49% of the $18 abatement in absolute circumscribed G&A costs in 3Q 2018 compared to 3Q 2017. In added words, in the accumulated there were no cogent changes to G&A costs added than the FX amount impact.
R&D costs were 1.0% of sales in both 3Q 2018 and 3Q 2017. R&D costs were 1.0% of sales in 9M 2018 compared to 1.1% of sales 9M 2017. As about all R&D costs were in the U.S., there was no FX amount impact.
Tightly managing OE remained a key to UTMD’s accomplished profitability.
Income afore Tax (EBT). EBT after-effects from abacus net non‑operating amount (NOE) from, or abacus net non-operating assets (NOI) to, OI. NOE includes 1) any accommodation interest, which there was none in 2017 or 2018, 2) coffer fees and 3) losses from remeasuring the amount of EUR banknote coffer balances in the UK, and GBP banknote balances in Ireland, in USD terms, bare NOI from 1) hire of underutilized property, 2) advance income, 3) assets from remeasuring the amount of EUR banknote coffer balances in the UK, and GBP banknote balances in Ireland, in USD terms, 4) assets from the auction of assets and 5) royalties accustomed from licensing the Company’s technology. NOI is abrogating NOE. For clarity, the REPAT tax acclimation and 2018 GILTI tax estimated accretion do not affect EBT.
Consolidated 3Q 2018 EBT was $4,481 (43.1% of sales) compared to $4,696 (46.4% of sales) in 3Q 2017. The aberration was about absolutely due to lower GP in 3Q 2018 than in 3Q 2017. Circumscribed 9M 2018 EBT was $15,046 (46.7% of sales) compared to $14,503 (46.5% of sales) in 9M 2017. In 9M 2018, $275 college GP was account by $284 college OE. Consequently, the $542 ( 3.7%) college EBT in 9M 2018 compared to 9M 2017 was about due to college NOI. There was a $450 accretion from sales of assets in 2Q 2018 that did not action in 2017. The remeasured bill accretion in 9M 2018 was $10 compared to $5 in 9M 2017. The absolute aberration was due to college absorption assets from UTMD’s banknote coffer balances.
The EBT of UTMD’s subsidiaries in Ireland and the UK after-effects not alone from barter sales but additionally intercompany sales. For clarity, the accessory accumulation constant from intercompany sales is alone in UTMD’s circumscribed assets results. Utah Medical Products, Ltd’s (Ireland) EBT was EUR 2,499 in 9M 2018 compared to EUR 2,229 in 9M 2017. The college 9M 2018 EBT in Ireland was due to 9% college accumulated barter and intercompany sales. EBT of Femcare Group Ltd (Femcare Ltd., UK and Femcare Australia Pty Ltd) was GBP 2,841 in 9M 2018 compared to GBP 3,141 in 9M 2017. The lower Femcare Group EBT in 9M 2018 was due to the accumulated of 1) above-mentioned 2017 all-embracing sales from the UK adapted to Ireland in 2018, and 2) 12.9% lower Australia sales (in AUD) accumulated with a 6.6% weaker AUD compared to the GBP. The EBT of Utah Medical Articles Canada, Inc. in 9M 2018 was CAD 1,246 compared to CAD 1,497 in 9M 2017. The lower Canada EBT was due to 13.1% lower CAD sales in 9M 2018 compared to 9M 2017.
Excluding the noncash furnishings of depreciation, acquittal of abstract assets and banal advantage expense, 3Q 2018 circumscribed EBT excluding the noncash remeasured coffer antithesis bill accretion or accident and absorption amount (“adjusted circumscribed EBITDA”) were $5,206 compared to $5,417 in 3Q 2017. The lower 3Q 2018 EBITDA was due to the lower GP in 3Q 2018. Adapted circumscribed EBITDA in 9M 2018 were $17,328 compared to $16,653 in 9M 2017. Based on the 9M 2018 EBITDA results, administration expects 2018 EBITDA for the year as a accomplished will be college than the $21,979 EBITDA for 2017.
Net Assets (NI). NI in 3Q 2018 per GAAP was essentially afflicted by a $3,230 favorable acclimation in UTMD’s adding of its “one-time” REPAT tax due beneath the TCJA allowable in December 2017. In addition, in 3Q 2018, UTMD added its best appraisal of the new GILTI tax beneath the TCJA, although the IRS has yet to accommodate complete advice on the adding and the State of Utah has yet to accommodate any guidance. As there was no REPAT tax or GILTI tax adding included in 3Q and 9M 2017 results, comparing period-to-period banking after-effects net of assets taxes does not accommodate allusive advice to stockholders, in UTMD’s opinion. Therefore, in accession to the GAAP results, UTMD is accouterment a non-GAAP NI and EPS allegory which ignores the REPAT tax acclimation and GILTI tax accretion in 3Q 2018.
In 3Q 2018, non-GAAP NI of $3,582 (34.5% of sales) was 1.1% lower than the 3Q 2017 NI of $3,622 (35.8% of sales). Non-GAAP NI in 9M 2018 of $11,982 (37.2% of sales) was 8.7% college than the NI of $11,027 (35.3% of sales) in 9M 2017. The college non-GAAP NI in 9M 2018 was due to 3.7% college EBT in accumulated with a lower accumulated assets tax amount in the U.S. The non-GAAP circumscribed assets tax accouterment ante in 3Q 2018 and 9M 2018 were 20.1% and 20.4% respectively, compared to accouterment ante of 22.9% in 3Q 2017 and 24.0% in 9M 2017 (before the achievement of the TCJA which bargain the U.S. accumulated assets tax amount from 34% to 21%).
In 3Q 2018, GAAP NI of $6,762 was 86.7% college than the 3Q 2017 NI of $3,622. GAAP NI in 9M 2018 of $15,162 was 37.5% college than the NI of $11,027 in 9M 2017. For the accessible account of stockholders, a added altercation of assets taxes is included below.
Earnings Per Allotment (EPS). Non-GAAP EPS of $0.954 in 3Q 2018 were 1.5% lower than the 3Q 2017 EPS of $0.969. Non-GAAP EPS of $3.194 in 9M 2018 were 8.1% college than the EPS of $2.953 in 9M 2017. The 8.1% college 9M 2018 non-GAAP EPS was due to 8.7% college NI adulterated by 0.5% college adulterated shares. Looking forward, administration continues to apprehend to beat its alpha of year bump for abounding year 2018 non-GAAP EPS.
In 3Q 2018, GAAP EPS of $1.802 were 85.9% college than the 3Q 2017 EPS of $0.969. GAAP EPS in 9M 2018 of $4.041 were 36.8% college than the EPS of $2.953 in 9M 2017.
Diluted shares outstanding acclimated to account 3Q 2018 EPS were 3,753,111 compared to 3,738,190 in 3Q 2017. The cardinal of shares added as a concoction agency in 3Q 2018 was 19,876 compared to 19,300 in 3Q 2017. Adulterated shares outstanding acclimated to account 9M 2018 EPS were 3,751,830 compared to 3,734,102 in 9M 2017. The cardinal of shares added as a concoction agency in 9M 2018 was 22,235 compared to 17,647 in 9M 2017.
Exercises of agent options and concoction from a college allotment amount for unexercised options added adulterated shares. In 9M 2018, no new agent options were awarded. UTMD has not to date in 2018 repurchased any of its shares in the accessible market.
Outstanding shares at the end of 3Q 2018 were 3,734,165 which included 9M 2018 agent and alfresco administrator advantage contest of 15,172 shares. The cardinal of shares acclimated for artful antithesis per allotment was college than catastrophe shares because of a time-weighted adding of boilerplate outstanding shares added concoction from unexercised agent and administrator options. The absolute cardinal of outstanding unexercised agent and alfresco administrator options at September 30, 2018 was 39,168 shares at an boilerplate exercise amount of $46.24/ share, including shares awarded but not vested. This compares to 57,019 unexercised advantage shares outstanding at September 30, 2017 at an boilerplate exercise amount of $45.35/ share.
The closing allotment amount at the end of 3Q 2018 was $94.20 compared to $81.40 at the end of agenda year 2017, and $73.55 at the end of 3Q 2017.
CEO Kevin Cornwell states.
“Prior to appliance of assets tax law changes, UTMD’s 3Q 2018 banking after-effects were weaker than in 3Q 2017, but 3Q 2018 after-effects did beat UTMD’s operating plan which was acclimated to about action 2018 after-effects at the alpha of the year. We feel acceptable about the 3Q 2018 performance.
In aggravating to advice stockholders bigger accept the appulse on UTMD of the TCJA allowable in backward December 2017, I now affliction some opinions I bidding in the January 30, 2018 columnist absolution announcement UTMD’s 2017 banking results, the Anniversary Address to Shareholders and the 2017 SEC 10-K Report.
In particular, I had adumbrated agitation that the abrogating appulse of the “one time” REPAT tax payable over eight years would acceptable be greater than the absolute appulse of the lower accumulated assets tax rate. With the acclimation in the REPAT tax accustomed in 3Q 2018, this is no best the case. The abridgement in the federal assets tax amount from 34% to 21%, as connected as it is not added afresh by a approaching Congress, will accommodate a account for stockholders net of the REPAT tax. In addition, although I still do not accept the chastity of the State of Utah ambitious over $1 actor in REPAT tax on adopted accessory banknote and accumulative antithesis (E&P), we did not apperceive that the State would accomplish its own abundant (sic) accumulated assets tax amount abridgement from 5% to 4.95%. However, the Congress additionally slipped in a GILTI tax into the new tax law which we additionally did not absorb into projections at the time, which allegedly acutely negates statements of adopted assembly that approaching OUS antithesis would not be taxed.”
Further Comments on Assets Taxes.For the account of stockholders, UTMD believes that added altercation of its accepted compassionate of the appulse of tax law changes constant from the TCJA adeptness be helpful.
As stockholders acceptable remember, 4Q 2017 after-effects according to U.S. Generally Accepted Accounting Principles (GAAP) were afflicted by the accepting of an estimated “one-time” U.S. repatriation tax (REPAT tax) on adopted E&P constant from the TCJA allowable by Congress in December 2017. UTMD’s reasonable absolute REPAT tax appraisal was $6,288 ($1.68 per share), including an estimated Utah State appraisal of $1,065 and a $362 Federal REPAT tax acclaim for the State REPAT tax.
UTMD and its tax consultants had little time to assay the appropriate appraisal above-mentioned to advertisement 4Q 2017 banking results. As added advice apropos the REPAT tax rules became available, and in affiliation with commutual and filing its 2017 tax returns, UTMD abstruse that it bare to acclimatize its conditional appraisal as it completed a “more acceptable than not” appraisal in 3Q 2018. The after-effects of the appraisal are a absolute REPAT tax of $3,058, including an estimated Utah State appraisal of $1,066 and a $362 Federal REPAT tax acclaim for the State REPAT tax.
The $3,230 ($0.86 per allotment based on 3Q 2018 adulterated shares) adapted lower REPAT tax accountability has been included in 3Q 2018 banking after-effects per SEC SAB 118. The acclimation was primarily due to the appliance of a Adopted Tax Acclaim adding per IRS rules instead of abbreviation the REPAT tax obligation alone by the absolute adopted taxes paid, which was the base for the antecedent estimate.
GILTI Tax. Supposedly, the TCJA afflicted the U.S. tax arrangement from one area common assets of U.S. corporations was burdened (when adopted accessory profits were repatriated) to one which alone taxes assets becoming aural the U.S. The REPAT tax was explained to be a “one-time” tax of 15.5% on aqueous assets and 8% on illiquid assets constant from accumulative adopted E&P, behindhand of whether or not above-mentioned antithesis had been repatriated. In actuality, Congress absolved aback from the abstraction of not demanding approaching adopted antithesis by bottomward in a new “Global Abstract Low-taxed Income” (GILTI) tax. This tax allegedly was aimed at corporations like Apple which had transferred abstract assets to low tax sovereignties, i.e. managed accomplished profits to be generated in the everyman burdened countries. Although UTMD does accept abundant OUS abstract assets acquired in the accretion of Femcare in 2011, these assets were acutely developed in the UK. Although there was a low boilerplate adopted tax amount beginning over which a aggregation like UTMD apparently would not accept to pay a GILTI tax, it appears now that because of the way that the tax is affected by IRS anatomy rules, that about every aggregation with all-embracing abstract assets will end up advantageous GILTI assets taxes action forward. The GILTI tax seems akin to the AMT for individuals.
To date, the IRS has not provided bright rules for artful the GILTI tax, and the State of Utah hasn’t adumbrated anything. Appliance 2017 achievement as a basis, d the accumulated tax amount is not added afresh during the aing eight years and UTMD’s accepted GILTI tax assumption is close, the net anniversary accretion to stockholders amid the boilerplate payments of the REPAT and GILTI taxes and the college NI constant from lower assets tax ante on approaching EBT is estimated to be about $280/ year, or about $.07/ allotment appliance accepted adulterated cardinal of shares.
In UTMD’s accessible disclosures, administration attempts to explain its expectations in advanced statements for the account of its stockholders. However, administration additionally acknowledges that banking estimates and added business projections are accountable to change, and that the Aggregation assumes no obligation to amend or acknowledge revisions to its above-mentioned advanced statements.
Balance Sheet.UTMD’s September 30, 2018 antithesis area compared with its December 31, 2017 antithesis area demonstrates connected strengthening. Working basic added $10,377 in 9M 2018. Basic expenditures for acreage and accessories were $255 in 9M 2018, compared to abrasion amount of $577. In 9M 2018 UTMD broadcast $3,018 in banknote assets to its stockholders.
Key antithesis area changes as of September 30, 2018 from the end of 2017:
Financial ratios as of September 30, 2018 follow:1) Accepted Arrangement = 12.42) Days in Receivables (based on 3Q 2018 sales activity) = 393) Average Inventory Turns (based on 3Q 2018 CGS) = 3.34) Year-to-Date ROE = 19% (prior to allotment payments and excluding REPAT tax adjustment) = 14% (after accretion of actor assets and excluding REPAT tax adjustment)
Risk factors that could account after-effects to alter materially in approaching abode accommodate analytic accepting of products, timing of authoritative approvals of new articles and of distributing absolute articles in assorted bounded areas, government action in the bloom affliction marketplace, administration restrictions by anticompetitive hospital authoritative agreements, adopted bill barter rates, the Company’s adeptness to calmly manufacture, market, and advertise its articles globally, the appulse of abeyant barter wars, amid added factors that accept been categorical in UTMD’s accessible acknowledgment filings with the SEC. The SEC Anatomy 10-Q for 3Q 2018 will be filed with the SEC by November 9.
Utah Medical Products, Inc., with accurate absorption in bloom affliction for women and their babies, develops, articles and markets a ample ambit of disposable and reusable specialty medical accessories accustomed by clinicians in over a hundred countries about the apple as the accepted for accepting optimal connected appellation outcomes for their patients. For added advice about Utah Medical Products, Inc., amuse appointment UTMD’s website at www.utahmed.com.
Utah Medical Products, Inc.
Crystal Rios (801) 566-1200
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