XML 32 R19.htm IDEA: XBRL DOCUMENT v3.4.0.3
Income Taxes
6 Months Ended
Mar. 31, 2016
Income Tax Disclosure [Abstract]  
Income Taxes

13. Income Taxes

The Company recorded income tax provisions of $1.4 million and $1.5 million for the three months ended March 31, 2016 and 2015, respectively, representing effective tax rates of 62.2% and 32.7%, respectively. The Company recorded income tax provisions of $2.7 million and $3.0 million for the six months ended March 31, 2016 and 2015, respectively, representing effective tax rates of 44.3% and 30.7%, respectively. The difference between the U.S. federal statutory tax rate of 35.0% and the Company’s effective tax rate for the three-months and six-months ended March 31, 2016 and 2015 reflects the impact of permanent tax items, discrete tax benefits and state income taxes. The primary permanent items and discrete tax benefits are described below.

The discrete tax items in the fiscal 2016 and fiscal 2015 six-month periods include a $0.2 million discrete tax benefit associated with the signing of legislation in December 2015 and December 2014, respectively, which reinstated previously expired federal research and development income tax credits.

The three and six-month periods ended March 31, 2016 include permanent tax differences of $2.3 million and $4.3 million, respectively, primarily associated with the Creagh Medical and NorMedix acquisition non-deductible transaction costs, contingent consideration accretion, foreign net operating losses without tax benefit as a result of valuation allowances, and foreign currency translation expenses.

The three and six-month period ended March 31, 2015 income tax provisions included the impact of a $0.5 million gain from the sale of the Company’s investment in Intersect ENT, Inc. with an offsetting reversal of a capital loss carryforward valuation allowance.

  

The total amount of unrecognized tax benefits, excluding interest and penalties that, if recognized, would affect the effective tax rate as of March 31, 2016 and September 30, 2015, respectively, are $1.1 million and $0.9 million. Currently, the Company does not expect the liability for unrecognized tax benefits to change significantly in the next 12 months with the above balances classified on the condensed consolidated balance sheets in other long-term liabilities. Interest and penalties related to unrecognized tax benefits are recorded in income tax provision.

The Company files income tax returns, including returns for its subsidiaries, in the U.S. federal jurisdiction and in various state jurisdictions. Uncertain tax positions are related to tax years that remain subject to examination. U.S. income tax returns for years prior to fiscal 2012 are no longer subject to examination by federal tax authorities. For tax returns for state and local jurisdictions, the Company is no longer subject to examination for tax years generally before fiscal 2005.