Larry, there is nothing in the 10k to suggest higher tax rates for next year, but I always use a pro forma tax rate of 35% (if domiciled in US and bulk of business is in the states).
In ANII's case, I think they still have a bit of a tax shield in front of them:
Deferred tax assets and liabilities consisted of the following net tax effects of operating losses and temporary differences between the carrying amounts of assets and liabilities for financial reporting and tax purposes at September 30, 2004:
F-12
ADVANCED NUTRACEUTICALS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Current assets: Loss carryforwards $ 2,420,000 Receivable allowance for doubtful accounts 112,000 Inventory valuation write-offs 4,000 Other 29,000 ----------- Deferred tax assets 2,565,000 Less valuation allowance (1,090,000) ----------- Net current deferred tax assets 1,475,000 ===========
Non-current assets: Loss carryforwards 928,000 Fixed assets (37,000) Less valuation allowance (341,000) ----------- Net non-current deferred tax assets $ 550,000 ===========
At September 30, 2004, the Company has a net operating loss carryforward of approximately $5.5 million, which expires through 2022. Additionally, the Company has obtained net operating losses of approximately $2.3 million, which expire primarily in 2011 and are subject to annual usage limitations. The Company also has capital loss carryforwards of approximately $1.2 million, expiring through 2005, which may only be used to offset capital gains during the carryforward period. As the Company is unable to determine that it is more likely than not that the future taxable income of the Company will be sufficient to utilize the operating loss carryforwards subject to the annual usage limitations and the capital loss carryforwards, a valuation allowance has been established against those assets. The net change during the year in the valuation allowance was $3,016,000.
=================== -snipped from the 2004 10k for ANII.ob
I see these tax deferred assets as clearly being exhausted at some point this year or next.....so for me, its a one-time benefit that won't last. By FY06, they will probably be paying closer to statutory rates if the next year goes pretty well.
Sorry for any confusion I may have caused, but I'm a stickler on this issue.