RE:Q1 highlightsGood report. With the exception of Providence, there are no major issues with royalty partners.
However, there is one potential problem, over which Alaris has no control.
From the MD&A
In December of 2018 the U.S. Treasury issued proposed regulations which provided administrative guidance and clarified certain aspects of U.S. Tax Reform. The proposed regulations are complex and comprehensive, and considerable uncertainty continues to exist until the final regulations are released, which is expected to occur later in 2019. As these proposed regulations have not been enacted as at March 31, 2019, their impact has not been reflected in income tax expense. However, if the proposed regulations are enacted as currently drafted, certain provisions could be effective commencing January 1, 2019 and the resulting increase to income tax expense of the Company for the period ended, March 31, 2019 would be an increase of approximately $2.8 million.
Proposed tax regulations are rarely enacted as initially drafted but there is a possibility distributable income could be reduced by $11 million annually. That's over 30 cents per share, equivalent to a cut of approx 20%. Hopefully, there is some discussion of this issue on the conference call.