Worcester Business Journal

wbjournal.com | February 5, 2018 | Worcester Business Journal 19 B A N K I N G & F I N A N C E F O C U S We're happy to welcome back Patrick Royce to our team. For over 16 years, he has served a variety of customers in different industries, developing an expansive network of contacts and referrals. As our Business Lending Officer, he brings this wealth of experience to helping our customers find the right financing solution for their needs. PATRICK IS BACK IN BUSINESS. AND READY TO HELP YOURS. MEET PATRICK ROYCE, BUSINESS LENDING OFFICER. Webster • Dudley • Oxford • Auburn • Worcester • Shrewsbury NMLS #523049 Learn more about Patrick at web5.com/patrick. KHJ24122_WEB-453 Patrick Royce Intro Ad_MECH.indd 1 1/25/18 9:53 AM earnings reports, saying they are rein- vesting in their operations stateside thanks to the new 21-percent corporate tax rate, down from 35 percent. In a conference call with investors about the company's fourth-quarter earnings, Milford medical supplier company Waters Cop. Chairman and CEO Chris O'Connell said the lower tax rates will allow more money to be rein- vested into the company, enhance the company's balance sheet and return capital to shareholders. O'Connell highlighted the revamped repatriation tax, which provides for a one-time tax to encourage companies to bring back foreign earnings at a clip of between 8 and 15.5 percent. After that one-time tax, companies with for- eign subsidiaries will no longer pay 35 percent in taxes on all foreign earnings. Instead, companies will be taxed at the rates in which it does business. That would result in the Waters pay- ing about $550 million, most of which is linked bringing the company's for- eign earnings back to the the U.S. Once that tax is paid, Waters will have access to extra cash due to a lower tax rate. That's big for the company, which does about 70 percent of its business outside of the U.S., O'Connell said. According to its full-year earnings report, Waters did about $809 million in sales last year in the Americas, while taking in $862 million from Asian sales and $636 million in European sales. Crediting the new tax law, companies like Walmart, AT&T, CVS, National Grid, Eversource Energy and Exxon Mobil have grabbed headlines by announcing changes to their financials, such as reducing prices for customers and offering raises to employees. Westford-based 1A Auto, an online auto parts retailer, announced raises for employees due to the new tax policy, though the company did not say how much the raises would be. Waltham-based weapons and defense manufacturer Raytheon is predicting an effective tax rate – the average tax rate of a company's pre-taxed profits – of about 19 percent, down from 35.8 per- cent in 2017. Hologic, a Marlborough-based medi- cal device maker, announced it expects its effective tax rate to be about 23 per- cent, down from last year's 31 percent. Worcester tech company Cinch IT is planning to hire additional employees this year, said owner Rick Porter. "Everything looks positive for small businesses like ours," Porter said. Too soon to tell on federal taxes After a Republican-backed federal tax bill passed Congress, companies across the country are reporting they have more cash to go around, including for raises and new initiatives. When polled online, the majority of WBJ readers said they didn't yet know how their businesses will be impacted. F L A S H P O L L What is your company doing with its savings from the new federal tax code? We're giving all of our employees a raise or bonus. 14% "Literally, all of the tax savings we anticipate getting in 2018 will be erased by how much our health insurance costs went up." COMMENTS: "Declare dividend and pay back loans to shareholders." "Thank goodness for President Trump." We're expanding our operations like building a new facility or acquiring another company. 11% Nothing. The savings aren't substantial enough for us. 21% It's too soon to tell if savings are great enough to be able to invest or pass on to employees. 54% W

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