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TAX LAW CHANGE TO LOWER EFFECTIVE TAX RATE AND INCREASE LITTELFUSE EARNINGS

 DES PLAINES, Ill., Sept. 9 /PRNewswire/ -- Littelfuse, Inc. (NASDAQ: LFUS), the world's technological leader in advanced circuit protection devices, announced today that the recent federal income tax law changes making all intangibles tax deductible will lower its current effective tax rate and allow more of its operating earnings to flow through to net income.
 The cumulative earnings increase for all of 1993 will be approximately $2.1 million or 18 cents per share. Of this amount, $1.85 million or 16 cents per share will be recorded in the third quarter 1993 and $0.27 million or 2 cents per share will be recorded in the fourth quarter 1993. For the remaining eighteen years amortization period, the favorable impact will be approximately $1.1 million or 9 cents per share per year based upon current equivalent share calculations.
 Howard B. Witt, chairman, president and chief executive officer, called the new tax law's provision on intangibles an appropriate and beneficial change for business, particularly for a company in Littelfuse's position. "This is another very positive development in the accelerating normalization of our financial structure," Witt said. "The tax law change coupled with the completion just nine days ago of our $110 million refinancing led by the First National Bank of Chicago substantially increases the company's financial strength and strategic flexibility."
 James F. Brace, vice president, treasurer and chief financial officer, said that the intangibles provision of the Revenue Reconciliation Act of 1993 enacted on Aug. 10, 1993, provides that certain purchased intangible assets which were previously not amortizable for tax purposes are now amortizable over 15 years. The provision generally applies to property acquired after Aug. 10, 1993. However a taxpayer may elect to retroactively apply the provision to property acquired after July 25, 1991. Therefore, the company's reorganization on Dec. 27, 1991 qualifies for the above mentioned retroactive tax treatment.
 "The company will elect to retroactively apply the provisions of this law and deduct the amortization of the reorganization value and trademarks previously not deductible for tax purposes," Brace said. The effect of this treatment is to reduce the income tax provision and increase net income by $1.85 million in the third quarter of this year. This represents the tax effect of amortization which can now be deducted for tax purposes for the period from Dec. 27, 1991 to Sept. 30, 1993. The new rules will reduce the company's future annual income tax provision and increase annual income by approximately $1.1 million.
 "The combination of last month's refinancing and this tax law change will allow us to realize our strategic growth objectives more aggressively and fully than we could before, " Witt said. "Our improved financial strength and strategic flexibility will help us to stay out front in today's highly competitive global economy, and that's what we are determined to do," Witt said.
 Littelfuse is the leading producer of advanced, innovative circuit protection devices for the electronic, electrical power, and automotive industries worldwide. In addition to its Des Plaines world headquarters, Littelfuse has manufacturing facilities in England, Switzerland and Mexico, as well as in Centralia, Arcola and Watseka, Ill. It also has sales, distribution and engineering facilities in The Netherlands, Singapore, and Farmington Hills, Mich. near Detroit.
 -0- 9/9/93
 /CONTACT: Jim Brace, vice president, treasurer and CFO, or Art Skwerski, director of communications of Littelfuse, Inc., 708-824-1188/
 (LFUS)


CO: Littelfuse, Inc. ST: Illinois IN: SU:

TS -- NY007 -- 0121 09/09/93 08:33 EDT
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Publication:PR Newswire
Date:Sep 9, 1993
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