SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
-------------------------------------------
AMENDMENT NO. 1 ON FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report
(Date of earliest event reported):
July 30, 1997
________________________________________
THERMOQUEST CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 1-14262 77-0407461
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification Number)
incorporation or
organization)
2215 Grand Avenue Parkway
Austin, Texas 78728-3812
(Address of principal executive offices) (Zip Code)
(617) 622-1000
(Registrant's telephone number
including area code)
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FORM 8-K/A
Item 2. Acquisition or Disposition of Assets
On July 30, 1997, ThermoQuest Corporation (the "Company") entered into
an agreement to acquire three business units within the Laboratory Products
Group (the "Laboratory Products Businesses") of the Life Sciences
International PLC ("Life Sciences") subsidiary of Thermo Instrument
Systems Inc. ("Thermo Instrument"), the Company's majority owner. The
Company also agreed to acquire Life Sciences' Hypersil operations
("Hypersil"). In March 1997, Thermo Instrument acquired approximately 95%
of the outstanding shares of Life Sciences, a London Stock Exchange-listed
company. Subsequently, Thermo Instrument acquired the remaining shares of
Life Sciences' capital stock. The Laboratory Products Businesses develop,
manufacture, and distribute laboratory equipment and supplies to the
research and analytical chemistry laboratory marketplace. Hypersil
manufactures liquid chromatography media and columns used in high
performance liquid chromatography in the pharmaceutical, food and beverage,
chemical production, and forensic science markets.
The aggregate purchase price for the Laboratory Products Businesses
and Hypersil is approximately $160.1 million, and represents the sum of the
net tangible book value of the acquired businesses at June 28, 1997, plus a
percentage of Thermo Instrument's total cost in excess of net assets
acquired associated with its acquisition of Life Sciences, based on the
1996 revenues of the acquired businesses relative to Life Sciences' 1996
consolidated revenues. The purchase price for the Laboratory Products
Businesses and Hypersil is subject to a post-closing adjustment based on
final determination of the net tangible book value of the acquired
businesses and a final calculation of Thermo Instrument's total cost in
excess of net assets acquired associated with the acquisition of Life
Sciences.
The acquisition is being made pursuant to an Asset and Share Purchase
Agreement dated as of July 30, 1997 (the "Agreement"), between the Company
and Thermo Instrument. The aggregate purchase price for the Laboratory
Products Businesses and Hypersil consists of (i) $107.0 million in cash,
(ii) 1,000 shares of common stock of the Company, and (iii) the assumption
of $53.1 million of debt payable to Thermo Instrument.
Because the Company, the Laboratory Products Businesses, and Hypersil
were deemed for accounting purposes to be under control of their common
majority owner, Thermo Instrument, the transaction has been accounted for
in a manner similar to a pooling of interests. Accordingly, the Company's
financial statements include the results of the Laboratory Products
Businesses and Hypersil from March 12, 1997, the date these businesses were
acquired by Thermo Instrument.
In connection with the acquisition of the Laboratory Products
Businesses and Hypersil, the Company is in the process of restructuring the
acquired businesses. This restructuring is expected to include reductions
in staffing levels, abandonment of excess facilities, and possible other
costs associated with exiting certain activities of the acquired
businesses. Except as set forth above, the Company has no present intention
to use the assets of the Laboratory Products Businesses and Hypersil for
purposes materially different from the purposes for which such assets were
used prior to the acquisition. However, the Company will continue to review
such businesses' assets, corporate structures, capitalizations, operations,
properties, policies, management, and personnel and, upon completion of
this review, may develop additional or alternative plans or proposals,
including mergers, transfers of a material amount of assets or other
additional transactions or changes relating to such businesses.
2PAGE
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FORM 8-K/A
Item 7. Financial Statements, Pro Forma Combined Condensed Financial
Information and Exhibits
(a) Financial Statements of Business Acquired
Attached hereto.
3PAGE
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LABORATORY PRODUCTS BUSINESSES OF LIFE SCIENCES INTERNATIONAL PLC
Combined Financial Statements
For the Year Ended December 31, 1996
PAGE
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Independent Auditors' Report
The Board of Directors and Shareholders of
ThermoQuest Corporation:
We have audited the accompanying combined balance sheet of the Laboratory
Products Businesses (as defined in Note 1) of Life Sciences International
PLC as of December 31, 1996, and the related combined statements of income,
invested equity, and cash flows for the year then ended. These combined
financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these combined financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
In our opinion, the combined financial statements referred to above present
fairly, in all material respects, the combined financial position of the
Laboratory Products Businesses of Life Sciences International PLC as of
December 31, 1996, and the results of their operations and their cash flows
for the year then ended, in conformity with generally accepted accounting
principles.
KPMG Peat Marwick LLP
Pittsburgh, Pennsylvania
February 4, 1997, except as to the
first paragraph of Note 1, which is
as of July 30, 1997
2PAGE
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LABORATORY PRODUCTS BUSINESSES OF LIFE SCIENCES INTERNATIONAL PLC
Combined Balance Sheet
December 31, 1996
(Amounts in thousands)
Assets
Current Assets:
Cash and cash equivalents $ 10,593
Accounts receivable, net of allowance for
uncollectible accounts of $177 23,725
Accounts receivable from affiliates (note 5) 21,411
Inventories (note 3) 21,125
Deferred tax assets (note 8) 1,174
Other current assets 1,001
--------
Total current assets 79,029
--------
Advances to affiliates (note 5) 14,900
Property, plant, and equipment, net (note 4) 21,718
Goodwill (note 1) 31,592
--------
Total assets (note 9) $147,239
========
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LABORATORY PRODUCTS BUSINESSES OF LIFE SCIENCES INTERNATIONAL PLC
Combined Balance Sheet (continued)
Liabilities and Invested Equity
Current Liabilities:
Loans from parent company, current (note 5) $ 30,618
Bonds payable, current (note 6) 200
Accounts payable 5,103
Accounts payable to affiliates (note 5) 15,542
Accrued compensation (note 7) 4,865
Accrued liabilities 4,927
--------
Total current liabilities 61,255
--------
Bonds payable, net of current portion (note 6) 200
Loans from parent company (note 5) 36,500
Advances from affiliates (note 5) 8,712
Deferred tax liability (note 8) 611
--------
Total liabilities 107,278
--------
Invested Equity:
Contributed capital (note 1) 18,208
Retained earnings 22,063
Cumulative translation adjustment (310)
--------
Total invested equity 39,961
--------
Total liabilities and invested equity $147,239
========
See accompanying notes to combined financial statements.
4PAGE
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LABORATORY PRODUCTS BUSINESSES OF LIFE SCIENCES INTERNATIONAL PLC
Combined Statement of Income
Year Ended December 31, 1996
(Amounts in thousands)
Sales (including sales to affiliates
of $16,018) (notes 5 and 9) $148,628
Cost of sales (including cost of sales
to affiliates of $10,760) (note 5) 91,603
--------
Gross profit 57,025
Selling, general, and administrative expenses (including
management fees to affiliates of $946) (note 5) 32,481
Research and development expenses 5,521
--------
Operating income (note 9) 19,023
Other income (expense):
Interest income 285
Interest income - affiliates (note 5) 949
Interest expense (116)
Interest expense - affiliates (note 5) (6,082)
--------
Income before provision for income taxes 14,059
Provision for income taxes (note 8) 6,862
--------
Net income $ 7,197
========
See accompanying notes to combined financial statements.
5PAGE
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LABORATORY PRODUCTS BUSINESSES OF LIFE SCIENCES INTERNATIONAL PLC
Combined Statement of Invested Equity
Year Ended December 31, 1996
(Amounts in thousands)
Cumulative
Contributed Retained Translation
Capital Earnings Adjustment Total
------------------------------------------------------------------------
Balance as of
December 31, 1995 $18,208 $21,146 $ (626) $38,728
Translation adjustment - - 316 316
Dividend payment to parent
company - (6,280) - (6,280)
Net income - 7,197 - 7,197
------- ------- ------- -------
Balance as of
December 31, 1996 $18,208 $22,063 $ (310) $39,961
======= ======= ======= =======
See accompanying notes to combined financial statements.
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LABORATORY PRODUCTS BUSINESSES OF LIFE SCIENCES INTERNATIONAL PLC
Combined Statement of Cash Flows
Year Ended December 31, 1996
(Amounts in thousands)
Cash flows from operating activities:
Net income $ 7,197
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 5,807
Deferred income taxes 432
Loss on disposal of equipment 37
Change in:
Accounts receivable (1,084)
Inventories 258
Accounts receivable from affiliates (5,783)
Other current assets (25)
Accounts payable 323
Accounts payable to affiliates 8,501
Accrued compensation 1,916
Accrued liabilities 96
-------
Net cash provided by operating activities 17,675
-------
Cash flows used in investing activities:
Capital expenditures (2,356)
-------
Cash flows used in financing activities:
Repayment of advances from affiliates (592)
Dividend payment to parent company (6,280)
Repayment of bonds payable (200)
Repayment of loan from parent company (3,402)
-------
Net cash used in financing activities (10,474)
-------
Effect of exchange rate changes on cash and
cash equivalents 316
-------
Net increase in cash and cash equivalents 5,161
Cash and cash equivalents at beginning of year 5,432
-------
Cash and cash equivalents at end of year $10,593
=======
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest $ 7,081
Income taxes $ -
See accompanying notes to combined financial statements.
7PAGE
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LABORATORY PRODUCTS BUSINESSES OF LIFE SCIENCES INTERNATIONAL PLC
Notes to Combined Financial Statements
December 31, 1996
(Amounts in thousands)
1. Basis of Presentation and Combination
On July 30, 1997, ThermoQuest Corporation (ThermoQuest) entered into
an agreement to acquire certain businesses from Life Sciences
International PLC (Life Sciences), a subsidiary of Thermo
Instrument Systems Inc. (Thermo Instrument). Thermo Instrument
acquired Life Sciences on March 12, 1997.
These combined financial statements include the following businesses
acquired by ThermoQuest: Forma Scientific, Inc. (Forma Scientific)
and its subsidiaries, International Equipment Company, Inc. and
Savant, Inc. (Savant), Life Sciences International GmbH, Life
Sciences International UK Limited, Life Sciences International Hong
Kong Limited, E-C Apparatus Limited and Hypersil, a division of
Life Sciences International Europe Limited. The combination of the
businesses listed above is collectively referred to herein as the
Laboratory Products Businesses of Life Sciences International PLC
or "the Company."
All material transactions between the companies combined herein have
been eliminated. Transactions with other companies within the Life
Sciences group are described as "affiliate" transactions.
The Company develops, manufactures, and distributes laboratory
equipment and supplies to the research and analytical chemistry
laboratory marketplace.
2. Significant Accounting Policies
Revenue Recognition
The Company recognizes product revenues upon shipment of its products
and recognizes service contract revenues ratably over the term of
the contract. The Company provides a reserve for its estimate of
warranty and installation costs at the time of shipment.
Cash and Cash Equivalents
Cash equivalents include only highly liquid debt instruments purchased
with original maturity dates of three months or less.
Inventories
Inventories are stated at the lower of cost (on a first-in, first-out
or weighted average basis) or market value and include materials,
labor, and manufacturing overhead, as applicable.
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LABORATORY PRODUCTS BUSINESSES OF LIFE SCIENCES INTERNATIONAL PLC
Notes to Combined Financial Statements (continued)
2. Significant Accounting Policies (continued)
Property, Plant, and Equipment
The costs of additions and improvements are capitalized, while
maintenance and repairs are charged to expense as incurred. The
Company provides for depreciation and amortization using the
straight-line method over the estimated useful lives of the
property as follows: buildings and improvements, 5 to 40 years and
machinery and equipment, 3 to 10 years.
Goodwill
Goodwill recorded in connection with Life Sciences' acquisition of
Forma Scientific and Savant is amortized using the straight-line
method with lives ranging from 16 to 22 years. The Company
periodically assesses the future useful life of these assets, and
in particular whenever events or changes in circumstances indicate
that the current useful life has diminished. The Company considers
the future undiscounted cash flows of the acquired companies in
assessing the recoverability of these assets. If impairment has
occurred, any excess of carrying value over fair value is recorded
as a loss.
Income Taxes
The Laboratory Products businesses' operations are included in groups
that file consolidated or combined income tax returns with other
Life Sciences operations. Life Sciences' intercompany tax
allocation policy has been based on the income taxes calculated on
a separate return basis for each subsidiary. Income taxes payable
are therefore included with accounts payable to affiliates in the
accompanying combined balance sheet.
The Company accounts for income taxes in accordance with the
provisions of Statement of Financial Accounting Standards (SFAS)
No. 109, "Accounting for Income Taxes." Under the asset and
liability method of SFAS No. 109, deferred tax assets and
liabilities are recognized for the future tax consequences
attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their
respective tax bases. Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are
expected to be recovered or settled. Under SFAS No. 109, the effect
on deferred tax assets and liabilities of a change in tax rates is
recognized in income in the period that includes the enactment
date.
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LABORATORY PRODUCTS BUSINESSES OF LIFE SCIENCES INTERNATIONAL PLC
Notes to Combined Financial Statements (continued)
2. Significant Accounting Policies (continued)
Foreign Currency
All assets and liabilities of the Company's foreign units included in
the accompanying combined financial statements are translated at
year-end exchange rates, and revenues and expenses are translated
at average exchange rates for the year. Resulting translation
adjustments are reflected as a separate component of invested
equity titled "Cumulative translation adjustment." Foreign currency
transaction gains and losses are included in the accompanying
combined statement of income and are not material for the year
presented.
Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of
assets and liabilities, disclosure of contingent assets and
liabilities as of the date of the financial statements, and the
reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
3. Inventories
Inventories as of December 31, 1996, consisted of the following:
Raw materials $ 8,029
Work-in-process 4,029
Finished goods 9,067
-------
$21,125
=======
4. Property, Plant, and Equipment
Property, plant, and equipment as of December 31, 1996, consisted of
the following:
Land $ 3,099
Buildings and improvements 14,847
Machinery and equipment 17,955
-------
35,901
Less: Accumulated depreciation 14,183
-------
$21,718
=======
Depreciation expense for the year ended December 31, 1996, was $2,737.
10PAGE
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LABORATORY PRODUCTS BUSINESSES OF LIFE SCIENCES INTERNATIONAL PLC
Notes to Combined Financial Statements (continued)
5. Related-party Transactions
The Company had the following transactions with related parties during
the year ended December 31, 1996.
Accounts Receivable from/Payable to Affiliates - Accounts receivable
from affiliates totaling $21,411 as of December 31, 1996, result
primarily from the sale of products made in the ordinary course of
business to other Life Sciences' businesses not combined herein.
Accounts payable to affiliates totaling $15,542 as of December 31,
1996, result from the purchase of products and services made in the
ordinary course of business from other Life Sciences' businesses
not combined herein and from centralizing cash balances from
several of Life Sciences' U.S. operations. These accounts
receivable and accounts payable are considered due on demand and
have therefore been classified as current assets or current
liabilities, as applicable.
Loans from Parent Company - Forma Scientific issued a $42,000 note
payable bearing interest at 10% per annum to Life Sciences
International Europe Limited on November 12, 1984. The note
requires repayment of the outstanding balance, $30,618 as of
December 31, 1996, on November 12, 1997. The Company has other
intercompany loans payable to Life Sciences totaling $36,500 as of
December 31, 1996. The loans bear interest at rates ranging from
6.2% to 8.7%, but do not have formal repayment terms. As repayment
was not expected within one year, the loans have been classified as
noncurrent.
Advances to/from Affiliates - Advances to affiliates and advances from
affiliates do not have specified repayment terms and have been
classified as noncurrent since settlement is not expected within
one year. Interest free advances to affiliates totaled $925 and
interest free advances from affiliates totaled $8,124 as of
December 31, 1996. The remaining advances bear interest at rates
which averaged approximately 7% for the year ended December 31,
1996.
Sales to/Purchases from Affiliates - Sales to and purchases from
affiliates occurred in the normal course of business under the Life
Sciences operating structure. The Company believes these
transactions were made at arms-length terms.
Management Fees - Life Sciences charged management fees totaling $946
to the Company for the year ended December 31, 1996.
11PAGE
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LABORATORY PRODUCTS BUSINESSES OF LIFE SCIENCES INTERNATIONAL PLC
Notes to Combined Financial Statements (continued)
6. Indebtedness
The Company has outstanding $400 of Industrial Development Revenue
Bonds bearing interest at a variable rate, which averaged 3.7% for
the year ended December 31, 1996. The bonds mature as follows:
December 1, 1997, $200; December 1, 1998, $200.
7. Employee Benefit Plans
Forma Scientific sponsors a defined benefit pension plan that covers
substantially all of its employees. The benefits are based on years
of service and the employee's compensation. Forma Scientific makes
annual contributions to the plan based on the funding standard
developed by the plan's actuary. The contributions required to fund
the plan were determined according to projected unit credit method.
The following table sets forth the plan's funded status and amounts
recognized in the Company's balance sheet as of December 31, 1996.
The following table sets forth the plan's funded status and amounts
recognized in the Company's balance sheet as of December 31, 1996.
Actuarial present value of benefit obligation
Vested benefit obligation $(5,871)
Nonvested benefit obligations (557)
-------
Accumulated benefit obligation $(6,428)
=======
Projected benefit obligation $(8,715)
Plan assets at fair value 7,818
-------
Projected benefit obligation in excess
of plan assets (897)
Unrecognized prior service cost (31)
Unrecognized net loss 26
-------
Accrued pension costs included in accrued
compensation $ (902)
=======
The assets of the plan are held in a trust and are invested in a
variety of debt and equity securities.
12PAGE
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LABORATORY PRODUCTS BUSINESSES OF LIFE SCIENCES INTERNATIONAL PLC
Notes to Combined Financial Statements (continued)
7. Employee Benefit Plans (continued)
Net pension cost for the year ended December 31, 1996, under this plan
included the following components:
Service cost $ 466
Interest cost 586
Actual return on plan assets (828)
Net deferral and amortization 216
-------
Net pension cost $ 440
=======
Assumptions used in accounting for this pension plan as of and for the
year ended December 31, 1996, were as follows:
Discount rate 7.50%
Rate of increase in compensation levels 4.50%
Expected long-term rate of return on assets 8.75%
The Company also sponsors several defined contribution plans.
Participating employees contribute various percentages of their
salary on a pre-tax basis. The companies provide matching
contributions which are limited to a specified percentage of the
employees salary (generally 4%). The charge to operations for the
Company's matching contributions was $527 for the year ended
December 31, 1996.
The employees of Hypersil and Life Sciences International UK Limited
participate in the Life Sciences' defined benefit pension plan
under which benefits are based on final pensionable salary. The
assets of the plan are maintained in a separate trust and the plan
was fully funded as of April 1, 1995, the date of the latest
actuarial valuation. For purposes of these combined financial
statements, this pension plan has been treated as a multi-employer
arrangement. No pension expense was allocated to the Company under
this plan since such amount was not material.
8. Income Taxes
The components of income before provision for income taxes are as
follows:
Domestic $ 9,697
Foreign 4,362
-------
$14,059
=======
13PAGE
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LABORATORY PRODUCTS BUSINESSES OF LIFE SCIENCES INTERNATIONAL PLC
Notes to Combined Financial Statements (continued)
8. Income Taxes (continued)
The components of the current and deferred portions of provision for
income taxes for the year ended December 31, 1996, are as follows:
Current income taxes:
Federal $ 3,965
Foreign 1,520
State 945
-------
6,430
-------
Deferred income taxes:
Federal 349
State 83
-------
432
-------
$ 6,862
=======
The Company's provision for income taxes for the year ended December
31, 1996, differs from the provision calculated at the federal
statutory rate of 35% due to the following factors:
Statutory federal income tax $ 4,921
State tax on income (net of
federal income tax benefit) 668
Goodwill amortization 1,086
Nondeductible expenses 141
Other 46
-------
$ 6,862
=======
Significant components of the Company's deferred tax assets and
liabilities as of December 31, 1996, are as follows:
Deferred tax assets:
Inventory $ 463
Accrued compensation 205
Other reserves and accruals 506
-------
1,174
-------
Deferred tax liabilities:
Tax depreciation in excess of book 611
-------
Net deferred tax assets $ 563
=======
14PAGE
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LABORATORY PRODUCTS BUSINESSES OF LIFE SCIENCES INTERNATIONAL PLC
Notes to Combined Financial Statements (concluded)
8. Income Taxes (continued)
There was no valuation allowance established against the deferred tax
assets as of December 31, 1996. The ultimate realization of the
deferred tax assets is dependent upon the generation of sufficient
future taxable income which management believes is more likely than
not at this time.
9. Geographic Information and Export Sales
The Company operates in a single segment: developing, manufacturing,
and distributing laboratory equipment and supplies for the research
and analytical chemistry laboratory marketplace. A summary of
information based on the Company's legal entity locations by
geographical area as of and for the year ended December 31, 1996,
follows:
Sales Sales Operating Identi-
to to Total Income fiable
Customers Affiliates Sales (Loss) Assets
--------- ---------- -------- ------- --------
United States $ 96,649 $14,698 $111,347 $14,826 $129,860
United Kingdom 23,790 733 24,523 4,530 11,796
Germany 11,802 54 11,856 (257) 4,600
Far East and
Australia 369 533 902 (76) 983
-------- ------- -------- ------- --------
$132,610 $16,018 $148,628 $19,023 $147,239
======== ======= ======== ======= ========
United States sourced sales to external customers include export
sales as follows:
Europe $ 6,094
Far East and Australia 8,832
Other 9,442
-------
$24,368
=======
10. Contingencies
In the normal course of its operation, the Company is subjected to
claims and legal actions, including product liability claims,
contract disputes, and employment-related disputes or litigation.
In the opinion of management, based upon information presently
available, none of these matters are likely to have a significant
adverse effect on the Company's results of operations or financial
position.
15PAGE
<PAGE>
FORM 8-K/A
Item 7. Financial Statements, Pro Forma Combined Condensed Financial
Information and Exhibits
(b) Pro Forma Combined Condensed Financial Information
The following unaudited pro forma combined condensed financial
statement sets forth the results of operations for the year ended December
28, 1996, as if the acquisition of the Laboratory Products Businesses by
the Company had occurred at the beginning of 1996 and assuming there are no
post-closing purchase price adjustments.
Because the Company and the Laboratory Products Businesses were deemed
for accounting purposes to be under control of their common majority owner,
Thermo Instrument, the transaction has been accounted for in a manner
similar to a pooling of interests. Accordingly, the Company's financial
statements (including the financial statements included as part of the
Company's Quarterly Report on Form 10-Q for the quarter ended June 28,
1997) include the results of the Laboratory Products Businesses from March
12, 1997, the date these businesses were acquired by Thermo Instrument. As
a result, pro forma information has not been provided as of and for the six
months ended June 28, 1997.
The pro forma results of operations are not necessarily indicative of
future operations or the actual results that would have occurred had the
acquisition of the Laboratory Products Businesses been consummated at the
beginning of 1996. The financial statements of the Laboratory Products
Businesses filed under part (a) of this item should be read in conjunction
with the pro forma combined condensed financial statement.
4PAGE
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FORM 8-K/A
THERMOQUEST CORPORATION
PRO FORMA COMBINED CONDENSED STATEMENT OF INCOME
Year Ended December 28, 1996
(Unaudited)
Historical Pro Forma
----------------------- ----------------------
Laboratory
Products
ThermoQuest Businesses Adjustments Combined
----------- ------------ ----------- ---------
(In thousands except per share amounts)
Revenues (includes $16,018
from related party) $313,793 $148,628 $ - $462,421
-------- -------- -------- --------
Costs and Operating Expenses:
Cost of revenues (includes
$10,760 for related-party
revenues) 167,438 91,603 1,039 260,080
Selling, general, and
administrative expenses 77,371 32,481 280 110,132
Research and development
expenses 21,821 5,521 - 27,342
-------- -------- -------- --------
266,630 129,605 1,319 397,554
-------- -------- -------- --------
Operating Income 47,163 19,023 (1,319) 64,867
Interest Income (includes
$949 from related party) 8,905 1,234 (6,153) 3,986
Interest Expense (includes
$6,082 to related party) (7,328) (6,198) 3,029 (10,497)
-------- -------- -------- --------
Income Before Provision for
Income Taxes 48,740 14,059 (4,443) 58,356
Provision for Income Taxes 20,717 6,862 (2,001) 25,578
-------- -------- -------- --------
Net Income $ 28,023 $ 7,197 $ (2,442) $ 32,778
======== ======== ======== ========
Earnings per Share $ .59 $ .69
======== ========
Weighted Average Shares 47,677 1 47,678
======== ======== ========
See notes to pro forma combined condensed statement of income.
5PAGE
<PAGE>
FORM 8-K/A
THERMOQUEST CORPORATION
NOTES TO PRO FORMA COMBINED CONDENSED STATEMENT OF INCOME
(Unaudited)
Note 1 - Basis of Presentation
The allocation of the purchase price is based on an estimate of the
fair market value of the net assets acquired and is subject to adjustment.
To date, no information has been gathered that would cause the Company to
believe that the final allocation of the purchase price will be materially
different than the preliminary estimate.
Note 2 - Pro Forma Adjustments to Pro Forma Combined Condensed
Statement of Income (In thousands, except in text)
Year Ended
December 28,
1996
-------------
Debit (Credit)
Cost of Revenues
Increase in the finished goods inventory of
the Laboratory Products Businesses to the
estimated selling price, less the sum of the
costs of disposal and a reasonable profit
allowance for the Company's selling efforts
(i.e., purchase accounting adjustment due to
acquisition by Thermo Instrument) $ 1,039
-------
Selling, General, and Administrative Expenses
Reversal of management fee charged to
the Laboratory Products Businesses by
Life Sciences and included in the
historical statement of income of the
Laboratory Products Businesses for the
year ended December 31, 1996 (946)
Service fee of 1.0% of the revenues of
the Laboratory Products Businesses for
the year ended December 31, 1996, for
services that would have been provided
under a services agreement between the
Company and Thermo Electron 1,486
Reversal of amortization of cost in excess
of net assets of acquired companies
included in the historical statement of
income of the Laboratory Products Businesses
for the year ended December 31, 1996 (3,070)
Amortization over 40 years of $112,394,000
of cost in excess of net assets of acquired
companies created by the acquisition of
the Laboratory Products Businesses by
Thermo Instrument 2,810
-------
280
-------
6PAGE
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FORM 8-K/A
THERMOQUEST CORPORATION
NOTES TO PRO FORMA COMBINED CONDENSED STATEMENT OF INCOME (concluded)
(Unaudited)
Note 2 - Pro Forma Adjustments to Pro Forma Combined Condensed
Statement of Income (In thousands, except in text) (continued)
Year Ended
December 28,
1996
-------------
Debit (Credit)
Interest Income
Decrease in interest income earned
attributable to the lower cash
position as a result of the cash
payment of $107.0 million to
acquire the Laboratory Products
Businesses, calculated using the
90-day Commercial Paper Composite
Rate plus 25 basis points, or 5.75% $ 6,153
--------
Interest Expense
Increase in interest expense as a
result of borrowings from Thermo
Instrument of $53.1 million related
to the acquisition of the Laboratory
Products Businesses, calculated using
the 90-day Commercial Paper Composite
Rate plus 25 basis points, or 5.75%.
The borrowings from Thermo Instrument
replaced existing indebtedness to
Life Sciences. 3,053
Reversal of interest expense on indebtedness
to Life Sciences included in the historical
statement of income of the Laboratory
Products Businesses for the year ended
December 31, 1996 (6,082)
--------
(3,029)
--------
Provision for Income Taxes
Income tax benefit associated with the
adjustments above (excluding the
amortization of cost in excess of
net assets of acquired companies) (2,001)
--------
7PAGE
<PAGE>
FORM 8-K/A
THERMOQUEST CORPORATION
NOTES TO PRO FORMA COMBINED CONDENSED STATEMENT OF INCOME (concluded)
(Unaudited)
Note 2 - Pro Forma Adjustments to Pro Forma Combined Condensed
Statement of Income (In thousands, except in text) (concluded)
Year Ended
December 28,
1996
-------------
Weighted Average Shares
Increase in weighted average shares
outstanding due to the assumed issuance
of 1,000 shares of the Company's
common stock related to the acquisition
of the Laboratory Products Businesses
8PAGE
<PAGE>
FORM 8-K/A
Item 7. Financial Statements, Pro Forma Combined Condensed Financial
Information and Exhibits
(c) Exhibits
2 Asset and Share Purchase Agreement dated as of July 30,
1997, between the Company and Thermo Instrument Systems
Inc. (filed as Exhibit 2 to the Company's Quarterly Report
on Form 10-Q for the Quarter Ended June 28, 1997 [File No.
1-14262] and incorporated herein by reference).
23 Consent of KPMG Peat Marwick LLP.
9PAGE
<PAGE>
FORM 8-K/A
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized, on this 14th day of October
1997.
THERMOQUEST CORPORATION
Paul F. Kelleher
-------------------
Paul F. Kelleher
Chief Accounting Officer
Exhibit 23
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
ThermoQuest Corporation:
We consent to the incorporation by reference in Registration Statement
No. 333-08795 on Form S-8, Registration Statement No. 333-08797 on Form
S-8, Registration Statement No. 333-08799 on Form S-8, and Registration
Statement No. 333-24321 on Form S-3 of ThermoQuest Corporation of our
report dated February 4, 1997, except as to the first paragraph of Note 1,
which is as of July 30, 1997, with respect to the combined balance sheet of
the Laboratory Products Businesses of Life Sciences International PLC as of
December 31, 1996, and the related combined statements of income, invested
equity, and cash flows for the year then ended, which report appears in the
Form 8-K/A of ThermoQuest Corporation dated October 14, 1997.
KPMG Peat Marwick LLP
Pittsburgh, Pennsylvania
October 10, 1997
