Atlantic Machinery's Technology & Advancement Blog

Found yourself in the market for a new press brake? The best (and easiest) first step is to contact your Sales Engineer. Set up a virtual or in-person appointment to review machine options and how they would fit into your production flow. Your Sales Engineer can walk you through options for controls, backgauges, material support, and automation; as well as brainstorm machine capabilities which would assist in growth and increased productivity.

 In addition to reviewing options your Sales Engineer can help you decide what tonnage and bed length would suit your needs. They spend their days solving problems for metal fabricators and can offer helpful recommendations from past experiences.

Key factors when asking yourself – “should I buy a Hydraulic, Hybrid, or Electric Press Brake?”

Advantages of a Hydraulic Press Brake

When considering a new hydraulic brake look for a machine with a solid foundation, energy-saving technology, and options that automate the bending process. A well-built hydraulic press brake will have:

·       Widest variety of options and configurations

·       Configurations from a simple machine to a highly sophisticated machine, with a wide variety in between

·       Wide range of budget options

·       Potential for significantly higher tonnages and lengths

·       Wider variety of tooling options from planer tooling to precision

           Heavy-Duty Options

Keep in mind, if you are bending BIG and need 650 to 3000+ ton capability to do it, the High-Tonnage Hydraulic Press Brakes are your answer. These machines are built with oversized components, powerful gauging devices, and increased open heights/stroke lengths. When considering high tonnage, you want a press brake that is tough, durable and will stand up to any forming challenge.  

Advantages of an Electric Press Brake

These brakes run on electric motors that turn on during the bending sequence and shut off automatically when not in use. The ram descends quickly, stops at a preset position, creeps downward to make the bend, then moves quickly upward to start the process again. The short list of perks for electric brakes includes:

·       High speed and productivity

·       Designs (check out the SafanDarley models) require minimal crowning

·       Impressively high forming tolerances

·       Extremely quiet and clean – make for a nice working environment

·       Saving in electricity

 Advantages of a Hybrid Press Brake

A hybrid press brake uses both hydraulic cylinder technology and a servo-drive motor – combining the best of both the hydraulic brake and electric brake. They are built with hydraulics to assist the bending process, but without gear pumps. Like an electric press brake, the hybrids shut off to conserve energy when not performing bending functions. A hybrid brake can be 20-30% more energy efficient than a hydraulic press brake.

·       Close to the productivity of electric with more size options

·       Less drive system maintenance then a hydraulic brake

·       Same high tolerances as an electric brake

Which Press Brake Machine Is Best?

Purchasing a new press brake should be like ordering at a restaurant: choosing options based on your preferences and needs, with the goal of ordering a machine built to help achieve your production goals.

How revisions to NOLCB open up an opportunity to invest in machinery in 2020

The Coronavirus Aid, Relief, and Economic Security (CARES) Act contains provisions to the US law as a result of COVID19. You have most likely read about, or directly interacted with, parts of the new laws involving insurance coverage, unemployment, and adjustments for loans, taxes and grants. Additionally, the CARES Act includes support for the global COVID19 response, paid sick leave, nutrition assistance and other programs and efforts. For S-Corps, C-Corps and LLC’s there is one edit to the federal tax laws which you may find interesting. Net Operating Loss Carryback (NOLCB) is a standing law that gives the ability for companies to deduct their current year tax losses against income from a prior tax year.

A BASIC EXAMPLE UTILIZING NOLCB:

A farming business has two profitable years which result in large federal tax payments. Then a drought causes the reporting of a loss. In order to smooth the tax burden during hard times, the loss carryback provision allows for the losses incurred in the third year to carryback to the first and secondyears.

With a goal of improving businesses’ cash flow, the CARES Act revises the NOLCB tax law in two key ways:

Provides for the carryback of losses after December 31, 2017

to each of the five taxable years preceding 2020.

Suspends the NOLCB limit of 80 percent of taxable income.

This means that companies may deduct to eliminate all (100%) of their taxable income in a given year. In the past, a company could not exceed 80 percent.

Through NOLCB, tax payments from up to five years ago can be refunded due to a loss of profit reported in the current year. While it in imperative that you discuss NOLCB with your Tax Advisor or CPA, there is definitely an opportunity herefor companies who are looking to purchase large machines in 2020 and:

Are an S-Corp, C-Corp or LLC

Have reported profits on their taxes going back as far as 5

business years (so forget anything prior to 2015)

Are in a position to “weather the storm” of 2020

A MFG EXAMPLE...

...closer to your manufacturing company may shed light on this new tax concept that not only corporate decision makers, but CPAs and Tax Advisors are studying.

Your company is on track for report a net income of $300,000. in 2020.

You are considering the purchase of a $1,000,000. machine.

In your 2020 tax return you are allowed a $1,000,000. depreciation deduction which puts your company in a tax loss of $700,000.

The Act allows this loss to be carried back and applied to your taxable income for up to five years. So, starting in 2015 and moving forward.

The 2015 taxable income is reduced by $700,000., creating a tax refund of $245,000. if the company fell in the 2015 federal corporate tax rate of 35%. If the loss is not fully absorbed by 2015 income, we pull from the 2016 and then 2017 returns until the loss is fully absorbed.

SO, WHAT?

As in the past, companies have the option to finance the purchase of a machine. With a plan in place to make only a few payments in 2020, a company would receive 100% depreciation on the new machine when filing their 2020 federal tax returns. The loss would carry back to previously profitable years when the federal tax rates were higher than they are now. For a C-Corp, we are looking at tax rate differentials of 21% for 2020 versus 35% in 2015. A company would receive a larger refund from the government, in US Corporate Tax Dollars, creating cash flow while investing in their own growth.

If your strategic planning this past January included new technology and machinery, it is worth having a conversation with your Tax Advisor or CPA. While it might be against your business instincts during this downturn, for many manufacturers the NOLCB revisions to the tax law may create an opportunity to bounce back stronger than ever. Don’t hesitate to reach out to the AMA Team with questions – we are here to help and support you in any way that we can.