Why hello Mr. Masterson,
(1) I don't believe there was any implication that they would be able to fully use the NOL in 2008. From the wording in the statement, the implication was that now that the company appears to be solidly profitable on a consistent basis and is expected to be so in the future, it becomes reasonable to book the income
I see you have detected my "loony bin"... once again. No doubt you are correct on this particular non-grassy NOL. ;)
From what my googling has detected to this point... We may be able to look forward to about 18 or so more years of Tax offsets... depending on how profitable they make RMTR.
But the big question for me is how they came up with the $7.6M as an appropriate valuation to be recorded for this particular period's "tax benefit?"
I am now at least 99% certain that tax benefits, as carry-forwards, are limited both as to time and amount. But that's apparently the easy part. Trying to figure out how and when is different matter.
I also understand but, alas, remain only 5% certain that to record a tax benefit in the income statement a CPA must be satisfied that the tax payer is "more likely than not" to have sufficient future pre-tax income against which to offset the tax benefit. Unfortunately I have 0% certainty that such "future pre-tax income" has to be generated in the next year, two years, three years, or X years. <ack><sigh><ack>
I hope its clear why it might become important to understand with a high degree of certainty (a) how the $7.6M was determined; (b) during what taxing period(s) it is expected be used; and (c) how much more much in NOLs will be left for use in future tax periods.
(2) However, I don't believe that anyone's "valuation" model has suddenly needed to be adjusted because they now realize that the company will have to pay taxes, as someone else mentioned. Am somewhat baffled, however, at the weak stock price response to the earnings. Perhaps manipulation? Perhaps just a case of investors leaving for their ski trips over the P-day holiday. Perhaps a case of investors expecting exactly the types of earnings and guidance which they received. I had (perhaps falsely) assumed that actually delivering the results and hence removing the uncertainty would be worth something, but we shall see next week.
Indeed... suffice to say you have probably touched on every contributing factor. Although... I believe we might have to add a substantial ignorance by all concerned as to the "a-b-c's" to explain at least a portion of Friday's reaction.
My recollection is that 3 or 4 years ago the accumulated NOL's of the company was around $300M total. We may have lost a little do to the lapse of time, but in any case we must still have much more than $7.6M piled up and available.
Depending on a full and complete understanding of the facts surrounding this tax-0-mania, Friday's confusion and uncertainty may well become next week's mindless bullish stampede... perhaps yet another explosive round to our various financial crania... or possibly the commencement of formal proceedings against The Secrets of V.I.N.H.! <Hoo><Haa>
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