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SMTC Corporation Message Board

  • s.k_tammy s.k_tammy Feb 10, 2014 2:34 PM Flag

    HUGE ONE TIME TAX BENEFIT FROM MEXICO WILL BOOST NET INCOME AND NEUTRALIZE INVENTORY CHARGE-OFF....

    Fron Key Tronics (KTCC) eranings release last week....another EMS company

    Net income for the second quarter of fiscal year 2014 was $3.1 million or $0.28 per diluted share, compared to $3.6 million or $0.33 per diluted share for the same period of fiscal year 2013. Results for the second quarter of fiscal year 2014 include a one-time tax benefit of approximately $1.5 million or $0.13 per diluted share due to changes in Mexico's tax laws enacted in December of 2013. For the first six months of fiscal year 2014, net income was $4.8 million or $0.44 per diluted share, compared to $7.3 million or $0.67 per diluted share for the same period of fiscal year 2013.

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    • Company says that they will get a credit as well due to the change in Mexico's tax law. I imagine of similar magnitude as KTCC's which means that it would negate the projected 4Q 2013 write off due to inventory issues.

    • From KTCC 10-Q...reason for the tax break. The same applies to SMTX

      ....."Mexican tax reform was signed into law in December 2013 creating a discrete benefit of approximately $1.5 million that was recognized during the second quarter as a result of a change in applicable tax regimes. In recent years, the Company had been subject to a Mexican business flat tax called Impuesto Empresarial a Tasa Unica (IETU). However, effective January 1, 2014, IETU was repealed as part of a larger reform of the Mexican tax system. The Company is now subject to the general Mexican tax regime (ISR). The effective tax rate for the six months ended December 28, 2013 is based on the anticipated annualized effects of both the IETU and ISR regimes for fiscal year 2014......"

    • Great find!!

      Thanks!

      I will add some more now

 
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