HAMPTON, Va., Oct 30 /PRNewswire-FirstCall/ -- Measurement Specialties, Inc. (Nasdaq: MEAS), a designer and manufacturer of sensors and sensor-based systems, announces the impact of the recently adopted German Business Tax Reform 2008 on current year financial statements.
The German Business Tax Reform 2008, which became effective on August 17, 2007, reduces the corporate income tax rate in Germany, resulting in a reduction in the combined German tax rate from approximately 39% to 31%. Although this tax rate change will have a favorable impact on tax expense associated with profits earned in Germany in FY08 and beyond, the Company is required by financial accounting standards to revalue its net deferred tax asset due to this change.
The Company's net deferred tax asset in Germany is primarily due to the tax benefit resulting from the Net Operating Loss carry-forward acquired through the purchase of HL Planartechnik in November 2005. As a result of the new tax reform and associated decrease in effective tax rate in Germany, the value of the deferred tax asset has been reduced by approximately $1 million, from $4.3 million to $3.3 million. This charge will be reflected in the Company's second quarter results.
Mark Thomson, Company CFO commented, "While this tax rate change is
expected to result in an additional income tax expense of approximately 7
cents per diluted share in the second quarter of FY08, this is a discrete,
non-cash income tax expense driven by the revaluation of the net deferred
tax asset, and will help to lower our overall effective tax rate in future
years as our profits in Germany increase as a percent of total global
earnings. Other than the impact of the discrete non-cash adjustmen
|SOURCE Measurement Specialties, Inc.|
Copyright©2007 PR Newswire.
All rights reserved