Get Started for Free Contexxia identifies hard-to-find pieces of information in SEC filings. No more highlighters, no more redlining, no more poring over huge documents. Symmetry Medical Inc. (1292055) 10-Q published on Nov 06, 2014 at 10:36 am
Reporting Period: Sep 26, 2014
Revenue from Contracts with Customers: In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), which supersedes the revenue recognition requirements in Accounting Standards Codification (“ASC”) 605, Revenue Recognition. This ASU is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. The ASU also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. The effective date will be the first quarter of fiscal year 2017 using one of two retrospective application methods. The Corporation is currently assessing the potential impact of the adoption of ASU 2014-09 on its financial statements and related disclosures.
Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity : In April 2014, the FASB issued ASU 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant and Equipment (Topic 360), Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. This update modifies the requirements for reporting discontinued operations. Under the amendments in ASU 2014-08, the definition of discontinued operation has been modified to only include those disposals of an entity that represent a strategic shift that has (or will have) a major effect on an entity’s operations and financial results. This update also expands the disclosure requirements for disposals that meet the definition of a discontinued operation and requires entities to disclose information
about disposals of individually significant components that do not meet the definition of discontinued operations. This update is effective for annual and interim periods beginning after December 15, 2014. The Corporation does not expect this ASU to have an impact on its financial position, results of operations or cash flows.
The Corporation's policy with respect to interest and penalties associated with reserves for uncertain tax positions is to classify such interest and penalties in income tax expense in the statements of operations. As of September 27, 2014, the total amount of unrecognized income tax benefits computed under ASC 740 was approximately $1,003, all of which, if recognized, would impact the effective income tax rate of the Corporation. As of September 27, 2014, the Corporation had recorded a total of $45 in accrued interest and penalties related to uncertain tax positions. The Corporation does not foresee material changes in its reserves for uncertain income tax positions as reasonably possible during the next 12 months. During 2014, certain reserves relating to federal income tax positions expired due to the statutes of limitations. As such, the consolidated statement of operations was benefited $838 through a reduction in income tax expense and associated interest expense. As of September 27, 2014, the Corporation is subject to unexpired statutes of limitations for U.S. federal income taxes for the year 2011. The Corporation is also subject to unexpired statutes of limitations for Indiana generally for the years 2011-2013.
On September 29, 2014, a purported class action complaint challenging the Merger and Separation Transaction (as defined below) was filed on behalf of Resolution Partners, an alleged stockholder of the Corporation, and all others similarly situated, in the Kosciusko Circuit Court in the state of Indiana. The complaint generally alleges, among other things, that the members of the SMI board of directors breached their fiduciary duties to Resolution Partners and SMI stockholders during merger negotiations and by entering into the Merger Agreement and approving the Merger, and that Genstar and Tecomet allegedly aided and abetted such alleged breaches of fiduciary duties. The complaint further alleges that the joint proxy statement/prospectus filed by Symmetry Surgical with the SEC on September 5, 2014, which contained the preliminary proxy statement of SMI, was misleading or omitted certain allegedly material information. The complaint seeks, among other relief, injunctive relief enjoining consummation of the Merger, compensatory and/or rescissory damages in an unspecified amount and costs and fees. The defendants believe that the claims asserted against them in the lawsuit are without merit, but express no view on the possible outcomes of the litigation.
On September 29, 2014, a purported class action complaint challenging the Merger and Separation Transaction was filed on behalf of Resolution Partners, an alleged stockholder of the Corporation, and all others similarly situated, in the Kosciusko Circuit Court in the state of Indiana. The complaint generally alleges, among other things, that the members of the SMI board of directors breached their fiduciary duties to Resolution Partners and SMI stockholders during merger negotiations and by entering into the Merger Agreement and approving the Merger, and that Genstar and Tecomet allegedly aided and abetted such alleged breaches of fiduciary duties. The complaint further alleges that the joint proxy statement/prospectus filed by Symmetry Surgical with the SEC on September 5, 2014, which contained the preliminary proxy statement of SMI, was misleading or omitted certain allegedly material information. The complaint seeks, among other relief, injunctive relief enjoining consummation of the Merger, compensatory and/or rescissory damages in an unspecified amount and costs and fees.
On October 15, 2014, the plaintiff filed a Motion for a Preliminary Injunction, Expedited Discovery and a Hearing Date to Continue the Preliminary Injunction Pending Trial. On October 23, 2014, the parties agreed to a compromise on expedited discovery, mooting that aspect of plaintiff’s motion, and stipulated to a briefing schedule on plaintiff’s motion for a preliminary injunction. The Court has set a hearing for the plaintiff’s motion, which is currently scheduled for December 1, 2014.