PROVISION FOR INCOME TAXES. The effective tax rate in fiscal 1998 is calculated as a percentage of income before taxes, exclusive of the non-recurring charges for in-process research and development. The effective tax rate decreased for fiscal 1998 to 33.6% of pre-tax income from 35.9% for fiscal 1997. This decrease was primarily due to utilization of foreign loss carrybacks, foreign tax credits, and research and development credits. QUARTERLY RESULTS The Company's operating results and cash flow have fluctuated in the past and may fluctuate significantly in the future as a result of a variety of factors, including purchasing patterns, timing of introductions of new solutions and enhancements by the Company and its competitors, and fluctuating economic conditions. Because license fees for the Company's software products are substantial and the implementation of the Company's solutions often requires the services of the Company's engineers over an extended period of time, the sales process for the Company's solutions is lengthy and can exceed one year. Accordingly, software revenue is difficult to predict, and the delay of any order could cause the Company's quarterly revenues to fall substantially below expectations. Moreover, to the extent that the Company succeeds in shifting customer purchases away from point solutions and toward integrated suites of its software and service solutions, the likelihood of delays in ordering may increase and the effect of any delay may become more pronounced. The Company ships software products within a short period after receipt of an order and usually does not have a material backlog of unfilled orders of software products. Consequently, revenues from software licenses, including license renewals in any quarter are substantially dependent on orders booked and shipped in that quarter. Historically, a majority of each quarter's revenues from software licenses has been derived from license agreements that have been consummated in the final weeks of the quarter. Therefore, even a short delay in the consummation of an agreement may cause revenues to fall below expectations for that quarter. The company's revenues in certain quarters of fiscal 1999 were lower than expected due to delayed decision making of economic difficulties among certain customers. These lower revenues resulted in lower than planned operating results and a net operating loss in each quarter of fiscal 1999. Additionally, since the Company's expense levels are based in part on anticipa...
PROVISION FOR INCOME TAXES. During 2004, we recorded an income tax provision of $2.1 million reflecting an effective tax rate of 33.7%. During 2003, we recorded an income tax provision of $1.0 million reflecting an effective tax rate of 31%. The increase in our effective tax rate for fiscal year 2004 resulted primarily from our tax-exempt investment income comprising a smaller percentage of our estimated total pre-tax income in 2004 as compared to 2003. YEARS ENDED DECEMBER 31, 2003 AND DECEMBER 31, 2002 REVENUES YEAR ENDED DECEMBER 31, ABSOLUTE INCREASE PERCENTAGE INCREASE 2002 2003 (DECREASE) (DECREASE) Revenues (in millions)......................... Revenues from research services (in millions).................................... $ 96.9 $ 71.0 $126.0 $ 92.3 $29.1 $21.3 30% 30% Advisory services and other revenues (in millions).................................... $ 26.0 $ 33.7 $ 7.7 30% Revenues attributable to customers outside of the United States (in millions).............. $ 27.8 $ 36.6 $ 8.8 32% Revenues attributable to customers outside of the United States as a percentage of revenue...................................... 29% 29% -- -- Number of clients.............................. 1,125 1,812 687 61% Number of research employees................... 101 193 92 91% Number of events............................... 14 8 (6) (43)% The increases in total revenues, revenues from research services and in the number of clients are primarily attributable to the Giga acquisition which closed on February 28, 2003, and as such, Giga's operations have been included in the consolidated financial statements since February 28, 2003. No single client company accounted for more than 3% of revenues during 2003 or 2002. The increase in advisory services and other revenues is primarily attributable to increases in the number of clients and in the number of research employees delivering advisory services, which more than offset the decrease in event revenue attributable to our holding fewer events during 2003 than during 2002. The increase in the number of clients and research employees in our research organization is primarily attributable to the acquisition of Giga. The increase in international revenues is primarily attributable to the acquisition of Giga. We invoice our United Kingdom customers in pound sterling, the functional currency of our London subsidiary; our continental European customers in euros, the functional currency of our Amsterdam subsidiary and all other international customers ...
PROVISION FOR INCOME TAXES. During 2002, we recorded a tax benefit of $311,000 reflecting an effective tax rate of (111.9%). In 2002, after subtracting our tax-exempt investment income, we had a loss before our income tax provision. During 2001, we recorded a tax provision of $8.9 million, reflecting, an effective tax rate of 33.0%. The decrease in our effective tax rate resulted primarily from a decrease in operating income coupled with our investments in tax-exempt marketable securities and our recording of a valuation allowance of $1.5 million associated with our operations in Germany. RESULTS OF QUARTERLY OPERATIONS The following tables set forth a summary of our unaudited quarterly operating results for each of our eight most recently ended fiscal quarters. We have derived this information from our unaudited interim consolidated financial statements, which, in the opinion of our management, have been prepared on a basis consistent with our financial statements contained elsewhere in this annual report and include all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation in accordance with generally accepted accounting principles in the United States when read in conjunction with our consolidated financial statements and related notes included elsewhere in this annual report. Certain reclassifications have been made to the quarterly presentation to conform with our year-end presentation. Historically, our total revenues, operating profit, and net income in the fourth quarter have reflected the significant positive contribution of revenues attributable to advisory services performed and Forum events held in the fourth quarter. As a result, we have historically experienced a decline in total revenues, operating profit, and net income from the quarter ended December 31 to the quarter ended March 31. Our quarterly operating results are not necessarily indicative of future results of operations. THREE MONTHS ENDED MAR. 31, JUN. 30, SEP. 30, DEC. 31, MAR. 31, JUN. 30, SEP. 30, DEC. 31, 2002 2002 2002 2002 2003 2003 2003 2003 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) Core research..................... $19,286 $17,221 $15,958 $14,915 $18,506 $25,865 $23,798 $24,120 Advisory services and other....... 6,770 8,212 5,980 8,594 5,976 8,113 8,410 11,211 Total revenues.................. 26,056 25,433 21,938 23,509 24,482 33,978 32,208 35,331 Cost of services and fulfillment..................... 8,981 8,873 7,540 8,632 9,525 14,330 12,525 13,667 S...
PROVISION FOR INCOME TAXES. The pro forma adjustment to the provision for income taxes was calculated using the statutory federal income tax rate of 35.0%, as detailed below: Three Months Ended Year Ended ($ in millions) March 31, 2016 March 31, 2015 December 31, 2015 Cost of Goods Sold Adjustment $ (0.3 ) $ (0.9 ) $ (2.6 ) Tax expense 0.1 0.3 0.9 Interest Expense and Debt Issuance Costs Adjustment 9.5 9.3 36.8 Tax benefit (3.3 ) (3.3 ) (12.9 ) SG&A Expenses Adjustment 0.2 (0.4 ) (1.7 ) Tax (benefit) expense (0.1 ) 0.2 0.6 Total Adjustment for Pro Forma Tax Benefit $ (3.3 ) $ (2.8 ) $ (11.4 )
PROVISION FOR INCOME TAXES. No provision for income taxes have been recorded due to net operating loss carryforwards totaling approximately $3,000 that will be offset against future taxable income. These NOL carryforwards begin to expire in the year 2009. No tax benefit has been reported in the financial statements because the Company believes there is a 50% or greater chance the carryforward will expire unused.
PROVISION FOR INCOME TAXES. No provision for income taxes have been recorded due to net operating loss carry forwards totaling approximately $6,000 that will be offset against future taxable income. These NOL carryforwards begin to expire in the year 2009. No tax benefit has been reported in the financial statements because the Company believes there is a 50% or greater chance the carryforward will expire unused. Canadian Northern Lites, Inc. (formerly Unimex Transnational Consultants, Inc.) (A Development Stage Company) Notes to the Consolidated Financial Statements April 30, 1996 (Unaudited), December 31, 1995, and 1994 NOTE I - Summary of Significant Accounting Policies (Continued)
PROVISION FOR INCOME TAXES. Reflects the income tax effect of the pro forma adjustments for the year ended December 31, 2017, which was calculated using a blended 38% U.S. federal, state and local statutory tax rate, net of federal tax benefit. The effective tax rate of the combined company could be significantly different from what is presented in these unaudited pro forma financial statements for a variety of reasons, including post Acquisition activities (in thousands). Pro forma selling, general and administrative expense adjustment $ (2,162 ) Pro forma interest expense adjustment (2,435 ) Pro forma redeemable preferred interest adjustment (3,760 ) Pro forma adjustments (8,357 ) Estimated effective tax rate 38.0 % Pro forma income tax provision adjustment $ (3,176 )
PROVISION FOR INCOME TAXES. The provision for income taxes for the years ended May 31 consists of the following: 1985 1984 ---- ---- State income taxes: Currently payable $ 285,000 $ 36,000 Deferred 37,000 174,000 Federal income taxes: Currently payable (refundable) 524,000 (278,000) Deferred 218,000 797,000 ---------- -------- $1,064,000 $729,000 ---------- -------- ---------- -------- Continued AEHR TEST SYSTEMS AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued ----------
PROVISION FOR INCOME TAXES. The provision for income taxes increased $39.9 million to $126.3 million in 2006 from $86.3 million in 2005 primarily due to an increase in taxable income. Our effective tax rate increased to 38.0% in 2006 compared to 37.1% in 2005 primarily as a result of changes in tax legislation in Texas and Canada.
PROVISION FOR INCOME TAXES. The provision for income taxes amounted to $13.3 million in 2002 and $14.2 million in 2001. The effective tax rate was 25.9% and 29.1% in 2002 and 2001, respectively. The decline in the effective tax rate was attributable to the Bank having a higher proportion of income exempt from taxes in 2002 compared with 2001. Tax-exempt income is derived primarily from the securities portfolio and bank owned life insurance. CLOSING OF BRANCHES During the fourth quarter 2003, the Bank completed the previously announced closing of 9 in-store branches, recognizing a pretax charge of $0.8 million. This was in addition to the one in-store branch closed during the second quarter 2003 at an insignificant cost. In January 2004, the Bank announced plans to close an additional twenty in-store branches, continuing a strategy of closing under-performing locations. These closings are expected to occur no later than May 2004, prior to the anticipated closing of the merger with NFB. It is estimated that a pretax charge of $7.0 million will be recognized in the second quarter 2004 with respect to the twenty branches that are being closed. Consistent with its previous experience, the Bank believes that it will retain a major portion of the deposits and customer relationships of these branches. The Bank estimates that the 29 in-store closings will contribute $4.0 million in pretax earnings on an annual basis. AVERAGE BALANCE, INTEREST AND AVERAGE YIELDS AND RATES The following table sets forth certain information relating to our average interest-earning assets and average interest-bearing liabilities and reflects the average yield on assets and the average cost of liabilities for the periods indicated. Such yields and costs are derived by dividing income or expense by the average balances of assets or liabilities, respectively, for the periods shown. The tables also present information for the periods indicated with respect to the difference between the weighted average yield earned on interest- earning assets and the weighted average rate paid on interest-bearing liabilities, or "interest rate spread," which banking institutions have traditionally used as an indicator of profitability. Another indicator of an institution's net interest income is its "net interest margin," which is its net interest income divided by its average balance of interest-earning assets. Net interest income is affected by the interest rate spread and by the relative amounts of interest-earning assets and inte...
