SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
-------------------------------------------
FORM 10-Q
(mark one)
[ X ] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the Quarter Ended July 4, 1998.
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934.
Commission File Number 1-14262
THERMOQUEST CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 77-0407461
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2215 Grand Avenue Parkway
Austin, Texas 78728-3812
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (781) 622-1000
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the Registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes [ X ]
No [ ]
Indicate the number of shares outstanding of each of the issuer's
classes of Common Stock, as of the latest practicable date.
Class Outstanding at July 31, 1998
---------------------------- ----------------------------
Common Stock, $.01 par value 51,501,281
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
THERMOQUEST CORPORATION
Consolidated Balance Sheet
(Unaudited)
Assets
July 4, January 3,
(In thousands) 1998 1998
- -------------------------------------------------------------------------
Current Assets:
Cash and cash equivalents (includes $88,939
and $60,376 under repurchase agreement
with affiliated company) $116,702 $ 91,898
Accounts receivable, less allowances of
$3,324 and $4,361 86,510 96,541
Inventories:
Raw materials and supplies 22,498 17,174
Work in process and finished goods 48,905 49,215
Prepaid expenses 3,416 2,490
Prepaid income taxes 13,135 12,542
Due from parent company and affiliated
companies - 750
-------- --------
291,166 270,610
-------- --------
Property, Plant, and Equipment, at Cost 88,217 89,316
Less: Accumulated depreciation and
amortization 25,375 22,580
-------- --------
62,842 66,736
-------- --------
Patents and Other Assets 3,609 2,845
-------- --------
Cost in Excess of Net Assets of Acquired
Companies 251,102 255,435
-------- --------
$608,719 $595,626
======== ========
2
<PAGE>
THERMOQUEST CORPORATION
Consolidated Balance Sheet (continued)
(Unaudited)
Liabilities and Shareholders' Investment
July 4, January 3,
(In thousands except share amounts) 1998 1998
- --------------------------------------------------------------------------
Current Liabilities:
Notes payable and current maturities of
long-term obligations $ 7,653 $ 7,147
Accounts payable 22,764 24,151
Accrued payroll and employee benefits 12,538 19,541
Accrued installation and warranty expenses 9,055 9,991
Accrued income taxes 23,316 21,331
Deferred revenue 11,434 9,939
Customer deposits 4,734 5,193
Other accrued expenses 14,105 16,907
Due to parent company and affiliated companies 2,479 -
-------- --------
108,078 114,200
-------- --------
Deferred Income Taxes 7,503 7,503
-------- --------
Accrued Pension and Other Deferred Items 15,444 15,064
-------- --------
Long-term Obligations:
5% Subordinated convertible debentures 76,641 80,591
Other 6,891 7,489
-------- --------
83,532 88,080
-------- --------
Shareholders' Investment:
Common stock, $.01 par value, 100,000,000
shares authorized; 51,453,220 and
51,185,127 shares issued 515 512
Capital in excess of par value 307,158 302,881
Retained earnings 98,120 78,229
Treasury stock at cost, 542 and 340 shares (9) (6)
Accumulated other comprehensive items (Note 3) (11,622) (10,837)
-------- --------
394,162 370,779
-------- --------
$608,719 $595,626
======== ========
The accompanying notes are an integral part of these consolidated financial
statements.
3
<PAGE>
THERMOQUEST CORPORATION
Consolidated Statement of Income
(Unaudited)
Three Months Ended
---------------------
July 4, June 28,
(In thousands except per share amounts) 1998 1997
- --------------------------------------------------------------------------
Revenues $ 98,123 $116,542
-------- --------
Costs and Operating Expenses:
Cost of revenues 50,044 60,937
Selling, general, and administrative expenses 25,016 29,096
Research and development expenses 8,129 7,741
Gain on sale of property (292) -
-------- --------
82,897 97,774
-------- --------
Operating Income 15,226 18,768
Interest Income (includes $353 from related
parties in 1997) 1,539 3,351
Interest Expense (includes $1,394 to related
parties in 1997) (1,970) (3,068)
-------- --------
Income Before Provision for Income Taxes 14,795 19,051
Provision for Income Taxes 6,214 8,418
-------- --------
Net Income $ 8,581 $ 10,633
======== ========
Earnings per Share (Note 2):
Basic $ .17 $ .21
======== ========
Diluted $ .16 $ .20
======== ========
Weighted Average Shares (Note 2):
Basic 51,287 50,220
======== ========
Diluted 56,381 56,149
======== ========
The accompanying notes are an integral part of these consolidated financial
statements.
4
<PAGE>
THERMOQUEST CORPORATION
Consolidated Statement of Income
(Unaudited)
Six Months Ended
---------------------
July 4, June 28,
(In thousands except per share amounts) 1998 1997
- --------------------------------------------------------------------------
Revenues $206,241 $205,895
-------- --------
Costs and Operating Expenses:
Cost of revenues 105,417 107,900
Selling, general, and administrative expenses 51,047 50,256
Research and development expenses 15,994 13,963
Gain on sale of property (1,048) -
-------- --------
171,410 172,119
-------- --------
Operating Income 34,831 33,776
Interest Income (includes $186 and $420 from
related parties) 2,877 5,955
Interest Expense (includes $1,642 to related
parties in 1997) (3,414) (5,163)
-------- --------
Income Before Provision for Income Taxes 34,294 34,568
Provision for Income Taxes 14,403 15,052
-------- --------
Net Income $ 19,891 $ 19,516
======== ========
Earnings per Share (Note 2):
Basic $ .39 $ .40
======== ========
Diluted $ .37 $ .38
======== ========
Weighted Average Shares (Note 2):
Basic 51,238 49,403
======== ========
Diluted 56,356 55,376
======== ========
The accompanying notes are an integral part of these consolidated financial
statements.
5
<PAGE>
THERMOQUEST CORPORATION
Consolidated Statement of Cash Flows
(Unaudited)
Six Months Ended
-----------------------
July 4, June 28,
(In thousands) 1998 1997
- ---------------------------------------------------------------------------
Operating Activities:
Net income $ 19,891 $ 19,516
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 7,351 6,369
Gain on sale of property (1,048) -
Provision for losses on accounts receivable (78) 445
Other noncash expenses 474 616
Changes in current accounts, excluding
the effects of acquisitions:
Accounts receivable 9,324 (15,348)
Inventories (4,213) (1,758)
Other current assets (1,555) (94)
Accounts payable (3,818) 3,646
Other current liabilities (8,135) (2,409)
Other 744 473
--------- ---------
Net cash provided by operating activities 18,937 11,456
--------- ---------
Investing Activities:
Acquisition of product line (1,300) -
Refund from parent company for acquisitions 5,953 -
Cash balance of acquired businesses - 6,107
Proceeds from sale and maturities of
available-for-sale investments - 5,600
Purchases of property, plant, and equipment (2,215) (1,586)
Proceeds from sale of property, plant,
and equipment 3,028 1,897
Other - 80
--------- ---------
Net cash provided by investing activities 5,466 12,098
--------- ---------
Financing Activities:
Net proceeds from issuance of Company
common stock 368 24,873
Increase (decrease) in short-term obligations 808 (591)
Repayment of long-term obligations (828) (1,017)
--------- ---------
Net cash provided by financing activities $ 348 $ 23,265
--------- ---------
6
<PAGE>
THERMOQUEST CORPORATION
Consolidated Statement of Cash Flows (continued)
(Unaudited)
Six Months Ended
-----------------------
July 4, June 28,
(In thousands) 1998 1997
- ---------------------------------------------------------------------------
Exchange Rate Effect on Cash $ 53 $ (793)
--------- ---------
Increase in Cash and Cash Equivalents 24,804 46,026
Cash and Cash Equivalents at Beginning
of Period 91,898 174,978
--------- ---------
Cash and Cash Equivalents at End of Period $ 116,702 $ 221,004
========= =========
Noncash Activities:
Fair value of assets of acquired companies $ 1,300 $ 187,885
Cash paid for acquired companies (1,300) -
Due to parent company for acquisitions - (160,111)
Stock issuable to parent company for
acquired companies - (16)
--------- ---------
Liabilities assumed of acquired companies $ - $ 27,758
========= =========
Conversions of convertible debentures $ 3,950 $ -
========= =========
The accompanying notes are an integral part of these consolidated financial
statements.
7
<PAGE>
THERMOQUEST CORPORATION
Notes to Consolidated Financial Statements
1. General
The interim consolidated financial statements presented have been prepared
by ThermoQuest Corporation (the Company) without audit and, in the opinion of
management, reflect all adjustments of a normal recurring nature necessary for a
fair statement of the financial position at July 4, 1998, the results of
operations for the three- and six-month periods ended July 4, 1998, and June 28,
1997, and the cash flows for the six-month periods ended July 4, 1998, and June
28, 1997. Interim results are not necessarily indicative of results for a full
year.
The consolidated balance sheet presented as of January 3, 1998, has been
derived from the consolidated financial statements that have been audited by the
Company's independent public accountants. The consolidated financial statements
and notes are presented as permitted by Form 10-Q and do not contain certain
information included in the annual financial statements and notes of the
Company. The consolidated financial statements and notes included herein should
be read in conjunction with the financial statements and notes included in the
Company's Annual Report on Form 10-K for the fiscal year ended January 3, 1998,
filed with the Securities and Exchange Commission.
2. Earnings per Share
Basic and diluted earnings per share were calculated as follows:
Three Months Ended Six Months Ended
------------------- ------------------
(In thousands except July 4, June 28, July 4, June 28,
per share amounts) 1998 1997 1998 1997
- --------------------------------------------------------------------------
Basic
Net income $ 8,581 $10,633 $19,891 $19,516
------- ------- ------- -------
Weighted average shares 51,287 50,220 51,238 49,403
------- ------- ------- -------
Basic earnings per share $ .17 $ .21 $ .39 $ .40
======= ======= ======= =======
Diluted
Net income $ 8,581 $10,633 $19,891 $19,516
Effect of convertible
obligations 585 710 1,180 1,420
------- ------- ------- -------
Income available to common
shareholders, as adjusted $ 9,166 $11,343 $21,071 $20,936
------- ------- ------- -------
Weighted average shares 51,287 50,220 51,238 49,403
Effect of:
Convertible obligations 4,809 5,833 4,847 5,833
Stock options 285 96 271 140
------- ------- ------- -------
Weighted average shares,
as adjusted 56,381 56,149 56,356 55,376
------- ------- ------- -------
Diluted earnings per share $ .16 $ .20 $ .37 $ .38
======= ======= ======= =======
8
<PAGE>
2. Earnings per Share (continued)
The computation of diluted earnings per share excludes the effect of
assuming the exercise of certain outstanding stock options because the effect
would be antidilutive. As of July 4, 1998, there were 783,100 of such options
outstanding, with exercise prices ranging from $17.01 to $17.20 per share.
3. Comprehensive Income
During the first quarter of 1998, the Company adopted Statement of Financial
Accounting Standards (SFAS) No. 130, "Reporting Comprehensive Income." This
pronouncement sets forth requirements for disclosure of the Company's
comprehensive income and accumulated other comprehensive items. In general,
comprehensive income combines net income and "other comprehensive items," which
represents foreign currency translation adjustments, reported as a component of
shareholders' investment in the accompanying balance sheet. During the second
quarter of 1998 and 1997, the Company's comprehensive income totaled $9.5
million and $9.9 million, respectively. During the first six months of 1998 and
1997, the Company's comprehensive income totaled $19.1 million and $12.5
million, respectively.
4. Recently Released Accounting Pronouncement
During the fourth quarter of 1998, the Company will be required to adopt
SFAS No. 131, "Disclosures about Segments of an Enterprise and Related
Information." The Company has not completed the analysis to assess the effect of
the new pronouncement on its financial statements, although the Company expects
that the effect, if any, would represent additional disclosure requirements to
those that exist currently.
Item 2 - Management's Discussion and Analysis of Financial Condition and
Results of Operations
Forward-looking statements, within the meaning of Section 21E of the
Securities Exchange Act of 1934, are made throughout this Management's
Discussion and Analysis of Financial Condition and Results of Operations. For
this purpose, any statements contained herein that are not statements of
historical fact may be deemed to be forward-looking statements. Without limiting
the foregoing, the words "believes," "anticipates," "plans," "expects," "seeks,"
"estimates," and similar expressions are intended to identify forward-looking
statements. There are a number of important factors that could cause the results
of the Company to differ materially from those indicated by such forward-looking
statements, including those detailed under the heading "Forward-looking
Statements" in Exhibit 13 to the Company's Annual Report on Form 10-K for the
year ended January 3, 1998, filed with the Securities and Exchange Commission.
9
<PAGE>
Overview
The Company's Analytical Products Group develops, manufactures, sells, and
services instruments, including mass spectrometers, liquid chromatographs, and
gas chromatographs. These analytical instruments are used in the quantitative
and qualitative chemical analysis of chemical compounds at ultratrace levels of
detection. The Company's Scientific Equipment Group develops, manufactures,
sells, and services systems for the preparation and preservation of chemical
samples. In addition, the Company manufactures consumables for the
chromatography industry. The Company's products are used primarily by
pharmaceutical companies for drug research, testing, and quality control; by
environmental laboratories for testing water, air, and soil samples for
compliance with environmental regulations; by chemical companies for research
and quality control; by manufacturers for testing in certain industrial
applications, such as the manufacture of silicon chips, and for quality control;
by food and beverage companies for quality control and to test for product
contamination; and in forensic applications.
The Company sells its products worldwide. Although the Company seeks to
charge its customers in the same currency as its operating costs, the Company's
financial performance and competitive position can be affected by currency
exchange rate fluctuations. Where appropriate, the Company uses forward
contracts to reduce its exposure to currency fluctuations.
Results of Operations
Second Quarter 1998 Compared With Second Quarter 1997
Revenues decreased to $98.1 million in the second quarter of 1998 from
$116.5 million in the second quarter of 1997. Revenues from the Analytical
Products Group decreased by $15.6 million in 1998 from 1997. Of the $15.6
million decrease, $9.0 million was attributable to a decline in revenues from
Europe and North America, primarily due to orders being received late in the
quarter, while a decrease of $4.0 million in revenues from Asia was the result
of unstable economic conditions there. In addition, revenues from the Analytical
Products Group decreased $2.2 million as a result of the strengthening of the
U.S. dollar relative to foreign currencies in countries in which the Company
operates. The Analytical Products Group backlog increased by $7.2 million to
$41.8 million as of July 4, 1998, from $34.6 million as of April 4, 1998.
Revenues from the Scientific Equipment Group decreased by $3.3 million,
primarily due to a change in distribution channels of an affiliated company,
which began selling its products directly to third parties and which no longer
uses the Company's sales offices. Such sales had low margins due to the
Company's sole role as a distributor.
The gross profit margin increased to 49% in the second quarter of 1998 from
48% in the second quarter of 1997, primarily due to improved manufacturing
efficiencies and a shift in product mix.
Selling, general, and administrative expenses as a percentage of revenues
remained unchanged at 25% in the second quarter of 1998 and
10
<PAGE>
Second Quarter 1998 Compared With Second Quarter 1997 (continued)
1997. Selling, general, and administrative expenses decreased to $25.0 million
in 1998 from $29.1 million in 1997, primarily due to the implementation of
expense control measures. Research and development expenses increased to $8.1
million in 1998 from $7.7 million in 1997, an increase of 5% that is consistent
with the Company's objective to develop and market new products.
In the second quarter of 1998, the Company recorded a gain of $0.3 million
relating to the sale of two buildings at a sales office facility in England.
Interest income decreased to $1.5 million in the second quarter of 1998 from
$3.4 million in the second quarter of 1997, primarily due to a reduction in cash
as a result of a cash payment of $160.4 million to Thermo Instrument Systems
Inc. in September 1997 for the acquisition of three business units within Life
Sciences International PLC's Laboratory Products Group, as well as Life
Sciences' Hypersil operation. Interest expense decreased to $2.0 million in 1998
from $3.1 million in 1997, primarily due to the repayment to Thermo Instrument
in September 1997 of debt assumed in connection with the acquisition of the
Laboratory Products businesses and the conversion of a portion of the Company's
5% subordinated convertible debentures into common stock of the Company.
The effective tax rate decreased to 42% in the second quarter of 1998 from
44% in the second quarter of 1997, primarily due to lower income from the
Company's Japanese subsidiary, which is taxed at a higher rate. The effective
tax rates exceeded the statutory federal income tax rate primarily due to the
effect of state income taxes, foreign tax rate and tax law differentials, and
nondeductible amortization of cost in excess of net assets of acquired
companies.
The Company is currently assessing the potential impact of the year 2000 on
the processing of date-sensitive information by the Company's computerized
information systems and on products sold as well as products purchased by the
Company. The Company believes that its internal information systems and current
products are either year 2000 compliant or will be so prior to the year 2000
without incurring material costs. There can be no assurance, however, that the
Company will not experience unexpected costs and delays in achieving year 2000
compliance for its internal information systems and current products, which
could result in a material adverse effect on the Company's future results of
operations.
The Company is presently assessing the effect that the year 2000 issue may
have on its previously sold products. The Company is also assessing whether its
key suppliers are adequately addressing this issue and the effect this might
have on the Company. The Company has not completed its analysis and is unable to
conclude at this time that the year 2000 issue as it relates to its previously
sold products and products purchased from key suppliers is not reasonably likely
to have a material adverse effect on the Company's future results of operations.
11
<PAGE>
First Six Months 1998 Compared With First Six Months 1997
Revenues were $206.2 million in the first six months of 1998, compared with
$205.9 million in the first six months of 1997. Revenues from the Analytical
Products Group decreased by $20.2 million in 1998, primarily due to a decline in
revenues of $12.0 million from Asia due to the unstable economic conditions
there and a decrease in revenues of $6.2 million due to the strengthening of the
U.S. dollar relative to foreign currencies in countries in which the Company
operates. Revenues from the Scientific Equipment Group increased by $18.9
million, primarily due to the acquisition of the Laboratory Products businesses
from Thermo Instrument, effective March 12, 1997. This increase was offset in
part by a change in distribution channels of an affiliated company as discussed
in the results of operations for the second quarter.
The gross profit margin increased to 49% in the first six months of 1998
from 48% in first six months 1997, primarily due to improved manufacturing
efficiencies and a shift in product mix and, to a lesser extent, the inclusion
in the 1997 period of an adjustment to expense of $1.0 million relating to the
sale of inventories revalued on the date the Laboratory Products businesses were
acquired.
Selling, general, and administrative expenses as a percentage of revenues
increased to 25% in the first six months of 1998 from 24% in the first six
months of 1997. An increase in selling, general, and administrative expenses,
primarily due to the inclusion of the Laboratory Products businesses and
Hypersil for a full period in 1998, was offset in part by the implementation of
expense control measures. Research and development expenses increased to $16.0
million in 1998 from $14.0 million in 1997, primarily due to the inclusion of
the Laboratory Products businesses and Hypersil for a full period in 1998.
In the first six months of 1998, the Company recorded gains of $1.0 million
relating to the sale of a parcel of land at a manufacturing facility in
California and two buildings at a sales office facility in England.
Interest income decreased to $2.9 million in the first six months of 1998
from $6.0 million in the first six months of 1997. Interest expense decreased to
$3.4 million in 1998 from $5.2 million in 1997. These decreases were due to the
reasons discussed in the results of operations for the second quarter.
The effective tax rate decreased to 42% in the first six months of 1998 from
44% in the first six months of 1997, primarily due to lower income from the
Company's Japanese subsidiary, which is taxed at a higher rate. The effective
tax rates exceeded the statutory federal income tax rate primarily due to the
effect of state income taxes, foreign tax rate and tax law differentials, and
nondeductible amortization of cost in excess of net assets of acquired
companies.
12
<PAGE>
Liquidity and Capital Resources
Consolidated working capital was $183.1 million at July 4, 1998, compared
with $156.4 million at January 3, 1998. Included in working capital are cash and
cash equivalents of $116.7 million at July 4, 1998, compared with $91.9 million
at January 3, 1998. Cash provided by operating activities was $18.9 million in
the first six months of 1998. A decrease in accounts receivable provided $9.3
million of cash, primarily due to lower revenues in the second quarter of 1998.
Cash of $4.2 million was used to fund an increase in inventories, primarily due
to replenishing year-end levels at the Company's European sales offices and a
build-up in inventory in preparation for a new product release. Cash of $8.1
million was used to reduce other current liabilities, primarily due to a
reduction in accrued payroll and related benefits.
At July 4, 1998, $22.8 million of the Company's cash and cash equivalents
was held by its foreign subsidiaries. While this cash can be used outside of the
United States, including for acquisitions, repatriation of this cash into the
United States would be subject to foreign withholding taxes and could also be
subject to a United States tax.
The Company's investing activities provided $5.5 million of cash in the
first six months of 1998. The Company received an aggregate refund of $6.0
million from Thermo Instrument in connection with the acquisition of businesses
from Thermo Instrument in 1997 and 1996. The Company expended $1.3 million for
the acquisition of a product line and $2.2 million for purchases of property,
plant, and equipment. The Company received $3.0 million in proceeds from the
sale of property, plant, and equipment, primarily from the sale of a parcel of
land at a manufacturing facility in California and two buildings at a sales
office facility in England. During the reminder of 1998, the Company plans to
expend approximately $6.0 million for property, plant, and equipment.
The Company's financing activities provided $0.3 million of cash in the
first six months of 1998, primarily from the net proceeds on the issuance of the
Company's common stock. Cash of $0.8 million provided by an increase in
short-term borrowings was offset by $0.8 million of cash used for the repayment
of long-term obligations.
Although the Company expects to have positive cash flow from its existing
operations, the Company anticipates it will require significant amounts of cash
to pursue the acquisition of complementary businesses. The Company expects that
it will finance acquisitions through a combination of internal funds and/or
short-term borrowings from Thermo Instrument or Thermo Electron Corporation,
although there is no agreement with these companies to ensure that funds will be
available on acceptable terms or at all. The Company believes that its existing
resources are sufficient to meet the capital requirements of its existing
businesses for the foreseeable future.
13
<PAGE>
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings
As previously disclosed, the Company's Finnigan Corporation subsidiary filed
complaints against Bruker-Franzen Analytik GmbH, its U.S. affiliate, and The
Hewlett-Packard Company for alleged violation of two U.S. patents owned by
Finnigan. The United States International Trade Commission (ITC) has determined
that the defendants did not engage in unfair practices in U.S. import trade with
respect to the Finnigan patents, and that the Finnigan patents are invalid
and/or not infringed. Finnigan has appealed the ITC's determination with respect
to one of its patents to the United States Court of Appeals for the Federal
Circuit (CAFC). The CAFC is expected to hear arguments in the appeal during the
first or second quarter of 1999.
Item 4 - Submission of Matters to a Vote of Security Holders
On June 1, 1998, at the Annual Meeting of Shareholders, the
shareholders elected seven incumbent directors to a one-year term expiring
in 1999. The Directors elected at the meeting were: Dr. Richard W.K.
Chapman, Dr. George N. Hatsopoulos, Frank Jungers, Earl R. Lewis, Anthony
J. Pellegrino, Dr. Michael E. Porter, and Arvin H. Smith. Each director
received 50,051,213 shares voted in favor of his election and 2,708 shares
voted against. No abstentions or broker nonvotes were recorded on the
election of directors.
Item 5 - Other Information
Pursuant to recent amendments to the rules relating to proxy statements
under the Securities Exchange Act of 1934, as amended (the Exchange Act),
shareholders of the Company are hereby notified that any shareholder proposal
not included in the Company's proxy materials for its 1999 Annual Meeting of
Shareholders (the Annual Meeting) in accordance with Rule 14a-8 under the
Exchange Act will be considered untimely for the purposes of Rules 14a-4 and
14a-5 under the Exchange Act if notice thereof is received by the Company after
March 9, 1999. Management proxies will be authorized to exercise discretionary
voting authority with respect to any shareholder proposal not included in the
Company's proxy materials for the Annual Meeting unless (a) the Company receives
notice of such proposal by March 9, 1999 and (b) the conditions set forth in
Rule 14a-4(c)(2)(i)-(iii) under the Exchange Act are met.
Item 6 - Exhibits
See Exhibit Index on the page immediately preceding exhibits.
14
<PAGE>
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 as of the 10th day of August 1998.
THERMOQUEST CORPORATION
Paul F. Kelleher
---------------------------
Paul F. Kelleher
Chief Accounting Officer
John N. Hatsopoulos
---------------------------
John N. Hatsopoulos
Chief Financial Officer and
Senior Vice President
15
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description of Exhibit
- ------------------------------------------------------------------------------
27.1 Financial Data Schedule for the Quarter Ended July 4, 1998.
27.2 Financial Data Schedule for the Quarter Ended March 29, 1997
(restated for the acquisition of the Laboratory Products
businesses and Hypersil, effective March 12, 1997).
27.3 Financial Data Schedule for the Quarter Ended March 30, 1996
(restated for the acquisition of CE Instruments and MassLab
Instruments, effective March 29, 1996).
27.4 Financial Data Schedule for the Quarter Ended June 29, 1996
(restated for the acquisition of CE Instruments and MassLab
Instruments, effective March 29, 1996).
16
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THERMOQUEST
CORPORATION'S REPORT ON FORM 10-Q FOR THE PERIOD ENDED JULY 4, 1998 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-02-1999
<PERIOD-END> JUL-04-1998
<CASH> 116,702
<SECURITIES> 0
<RECEIVABLES> 89,834
<ALLOWANCES> 3,324
<INVENTORY> 71,403
<CURRENT-ASSETS> 291,166
<PP&E> 88,217
<DEPRECIATION> 25,375
<TOTAL-ASSETS> 608,719
<CURRENT-LIABILITIES> 108,078
<BONDS> 83,532
0
0
<COMMON> 515
<OTHER-SE> 393,647
<TOTAL-LIABILITY-AND-EQUITY> 608,719
<SALES> 206,241
<TOTAL-REVENUES> 206,241
<CGS> 105,417
<TOTAL-COSTS> 105,417
<OTHER-EXPENSES> 15,994
<LOSS-PROVISION> (78)
<INTEREST-EXPENSE> 3,414
<INCOME-PRETAX> 34,294
<INCOME-TAX> 14,403
<INCOME-CONTINUING> 19,891
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 19,891
<EPS-PRIMARY> 0.39
<EPS-DILUTED> 0.37
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS RESTATED SUMMARY FINANCIAL INFORMATION
FOR THERMOQUEST CORPORATION FOR THE PERIOD ENDED
MARCH 29, 1997
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-03-1998
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<CASH> 205,928
<SECURITIES> 7,477
<RECEIVABLES> 109,473
<ALLOWANCES> 4,598
<INVENTORY> 72,018
<CURRENT-ASSETS> 404,937
<PP&E> 87,881
<DEPRECIATION> 17,090
<TOTAL-ASSETS> 751,953
<CURRENT-LIABILITIES> 296,228
<BONDS> 104,781
0
0
<COMMON> 502
<OTHER-SE> 330,020
<TOTAL-LIABILITY-AND-EQUITY> 751,953
<SALES> 89,353
<TOTAL-REVENUES> 89,353
<CGS> 46,963
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<EPS-PRIMARY> 0.18
<EPS-DILUTED> 0.18
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS RESTATED SUMMARY FINANCIAL INFORMATION FOR
THERMOQUEST CORPORATION FOR THE PERIOD ENDED MARCH 30, 1996
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-28-1996
<PERIOD-END> MAR-30-1996
<CASH> 177,199
<SECURITIES> 0
<RECEIVABLES> 84,723
<ALLOWANCES> 4,940
<INVENTORY> 63,171
<CURRENT-ASSETS> 330,020
<PP&E> 76,619
<DEPRECIATION> 23,491
<TOTAL-ASSETS> 533,159
<CURRENT-LIABILITIES> 130,740
<BONDS> 105,291
0
0
<COMMON> 480
<OTHER-SE> 273,959
<TOTAL-LIABILITY-AND-EQUITY> 533,159
<SALES> 67,299
<TOTAL-REVENUES> 67,299
<CGS> 35,410
<TOTAL-COSTS> 35,410
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<LOSS-PROVISION> 5
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<NET-INCOME> 5,842
<EPS-PRIMARY> 0.13
<EPS-DILUTED> 0.13
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS RESTATED SUMMARY FINANCIAL INFORMATION FOR
THERMOQUEST CORPORATION FOR THE PERIOD ENDED JUNE 29, 1996
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-28-1996
<PERIOD-END> JUN-29-1996
<CASH> 183,328
<SECURITIES> 1,752
<RECEIVABLES> 76,273
<ALLOWANCES> 5,000
<INVENTORY> 61,424
<CURRENT-ASSETS> 328,586
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<DEPRECIATION> 23,946
<TOTAL-ASSETS> 529,853
<CURRENT-LIABILITIES> 115,645
<BONDS> 105,063
0
0
<COMMON> 485
<OTHER-SE> 285,856
<TOTAL-LIABILITY-AND-EQUITY> 529,853
<SALES> 148,991
<TOTAL-REVENUES> 148,991
<CGS> 80,134
<TOTAL-COSTS> 80,134
<OTHER-EXPENSES> 10,783
<LOSS-PROVISION> 5
<INTEREST-EXPENSE> 3,599
<INCOME-PRETAX> 21,668
<INCOME-TAX> 9,139
<INCOME-CONTINUING> 12,529
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<EPS-PRIMARY> 0.27
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</TABLE>