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Income Taxes
9 Months Ended
Jun. 30, 2016
Income Tax Disclosure [Abstract]  
Income Taxes

13. Income Taxes

For interim income tax reporting, we are required to estimate our annual effective tax rate and apply it to year-to-date pretax income excluding unusual or infrequently occurring discrete items.  Tax jurisdictions with losses for which tax benefits cannot be realized are excluded.  The Company recorded income tax provisions of $2.9 million and $1.9 million for the three months ended June 30, 2016 and 2015, respectively, representing effective tax rates of 41.6% and 33.0%, respectively. The Company recorded income tax provisions of $5.5 million and $4.9 million for the nine months ended June 30, 2016 and 2015, respectively, representing effective tax rates of 42.9% and 31.5%, respectively. The effective income tax rates for the three and nine months ended June 30, 2016 differ from the U.S. federal statutory tax rate of 35.0% primarily due to transaction costs and contingent consideration accretion associated with the Creagh Medical and NorMedix acquisitions, the domestic production manufacturing deduction and the U.S. federal research and development income tax credit.  The effective income tax rate for the three and nine months ended June 30, 2016 differs from the three and nine months ended June 30, 2015 primarily due to transaction costs, contingent consideration accretion, and foreign currency gain (losses) associated with the fiscal 2016 acquisitions.

 

The total amount of unrecognized tax benefits, excluding interest and penalties that, if recognized, would affect the effective tax rate as of June 30, 2016 and September 30, 2015, respectively, are $1.0 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.