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 September 28, 1996.
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934.
Commission File Number 1-11757
THERMO OPTEK CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 04-3283973
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
8E Forge Parkway
Franklin, Massachusetts 02038
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (617) 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 October 25, 1996
---------------------------- -------------------------------
Common Stock, $.01 par value 48,450,000
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PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
THERMO OPTEK CORPORATION
Consolidated Balance Sheet
(Unaudited)
Assets
September 28, December 30,
(In thousands) 1996 1995
------------------------------------------------------------------------
Current Assets:
Cash and cash equivalents $114,166 $116,890
Accounts receivable, less allowances of
$5,781 and $5,669 72,716 62,250
Unbilled contract costs and fees 2,101 1,130
Inventories:
Raw materials and supplies 31,943 29,523
Work in process and finished goods 28,851 13,463
Prepaid expenses 6,089 4,221
Prepaid income taxes 12,012 11,955
Due from Thermo Instrument and
affiliated companies 9,029 -
-------- --------
276,907 239,432
-------- --------
Property, Plant and Equipment, at Cost 73,365 58,646
Less: Accumulated depreciation and
amortization 20,347 16,645
-------- --------
53,018 42,001
-------- --------
Patents and Other Assets 10,532 11,400
-------- --------
Cost in Excess of Net Assets of Acquired
Companies (Note 2) 196,999 140,049
-------- --------
$537,456 $432,882
======== ========
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THERMO OPTEK CORPORATION
Consolidated Balance Sheet (continued)
(Unaudited)
Liabilities and Shareholders' Investment
September 28, December 30,
(In thousands except share amounts) 1996 1995
------------------------------------------------------------------------
Current Liabilities:
Notes payable and current maturities of
long-term obligations $ 27,820 $ 18,041
Accounts payable 21,569 19,657
Accrued payroll and employee benefits 9,754 7,551
Accrued commissions 6,332 5,301
Accrued installation and warranty expenses 11,172 4,194
Accrued income taxes 6,419 5,401
Deferred revenue 11,164 8,858
Other accrued expenses 31,708 25,833
Due to Thermo Instrument (Note 2) 55,197 55
-------- --------
181,135 94,891
-------- --------
Deferred Income Taxes 14,765 12,293
-------- --------
Other Deferred Items 3,369 3,631
-------- --------
Long-term Obligations:
5% Subordinated convertible debentures 96,250 96,250
Other 569 4,829
-------- --------
96,819 101,079
-------- --------
Shareholders' Investment (Note 3):
Common stock, $.01 par value, 100,000,000
shares authorized; 48,450,000 and
45,000,000 shares issued and outstanding 485 450
Capital in excess of par value 221,686 215,342
Retained earnings 21,408 5,262
Cumulative translation adjustment (2,211) (66)
-------- --------
241,368 220,988
-------- --------
$537,456 $432,882
======== ========
The accompanying notes are an integral part of these consolidated
financial statements.
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THERMO OPTEK CORPORATION
Consolidated Statement of Income
(Unaudited)
Three Months Ended
----------------------------
September 28, September 30,
(In thousands except per share amounts) 1996 1995
------------------------------------------------------------------------
Revenues $ 90,693 $ 45,932
-------- --------
Costs and Operating Expenses:
Cost of revenues 47,918 21,035
Selling, general and administrative
expenses 25,703 14,626
Research and development expenses 5,571 3,361
-------- --------
79,192 39,022
-------- --------
Operating Income 11,501 6,910
Interest Income 1,570 36
Interest Expense (1,676) (253)
-------- --------
Income Before Provision for Income Taxes 11,395 6,693
Provision for Income Taxes 4,969 2,777
-------- --------
Net Income $ 6,426 $ 3,916
======== ========
Earnings per Share $ .13 $ .09
======== ========
Weighted Average Shares 48,410 45,157
======== ========
The accompanying notes are an integral part of these consolidated
financial statements.
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THERMO OPTEK CORPORATION
Consolidated Statement of Income
(Unaudited)
Nine Months Ended
-----------------------------
September 28, September 30,
(In thousands except per share amounts) 1996 1995
------------------------------------------------------------------------
Revenues $253,682 $148,574
-------- --------
Costs and Operating Expenses:
Cost of revenues 134,987 72,677
Selling, general and administrative
expenses 73,175 43,822
Research and development expenses 16,644 9,892
-------- --------
224,806 126,391
-------- --------
Operating Income 28,876 22,183
Interest Income 4,255 72
Interest Expense (4,974) (982)
-------- --------
Income Before Provision for Income Taxes 28,157 21,273
Provision for Income Taxes 12,011 8,828
-------- --------
Net Income $ 16,146 $ 12,445
======== ========
Earnings per Share $ .35 $ .28
======== ========
Weighted Average Shares 46,442 45,157
======== ========
The accompanying notes are an integral part of these consolidated
financial statements.
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THERMO OPTEK CORPORATION
Consolidated Statement of Cash Flows
(Unaudited)
Nine Months Ended
-----------------------------
September 28, September 30,
(In thousands) 1996 1995
------------------------------------------------------------------------
Operating Activities:
Net income $ 16,146 $ 12,445
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 8,401 4,978
Provision for losses on accounts
receivable 1,483 1,023
Other noncash expenses 1,372 841
Increase (decrease) in deferred
income taxes (174) 552
Changes in current accounts, excluding
the effects of acquisitions:
Accounts receivable 5,721 (4,537)
Inventories and unbilled contract
costs and fees 931 (1,094)
Other current assets (683) 927
Accounts payable (10,175) (1,839)
Other current liabilities (2,859) (6,083)
Other 792 -
-------- --------
Net cash provided by operating
activities 20,955 7,213
-------- --------
Investing Activities:
Acquisitions, net of cash acquired (Note 2) (15,527) (12,593)
Cash payment to parent company for
acquisition of Mattson and Unicam (Note 2) (36,558) -
Purchases of property, plant and equipment (4,133) (1,860)
Other (66) (127)
-------- --------
Net cash used in investing
activities (56,284) (14,580)
-------- --------
Financing Activities:
Net proceeds from issuance of Company
common stock (Note 3) 42,937 -
Increase (decrease) in short-term obligations (5,816) 519
Repayment of long-term obligations (4,166) (412)
Transfer from parent company to fund
acquisition of Baird - 12,926
Net transfer from parent company - 1,099
-------- --------
Net cash provided by financing
activities $ 32,955 $ 14,132
-------- --------
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THERMO OPTEK CORPORATION
Consolidated Statement of Cash Flows (continued)
(Unaudited)
Nine Months Ended
-----------------------------
September 28, September 30,
(In thousands) 1996 1995
------------------------------------------------------------------------
Exchange Rate Effect on Cash $ (350) $ 149
-------- --------
Increase (Decrease) in Cash and
Cash Equivalents (2,724) 6,914
Cash and Cash Equivalents at Beginning
of Period 116,890 3,258
-------- --------
Cash and Cash Equivalents at End of Period $114,166 $ 10,172
======== ========
Noncash Activities (Note 2):
Fair value of assets of acquired companies $131,470 $ 20,901
Due to parent company for acquisition (55,197) -
Cash paid for acquired companies (16,869) (12,926)
-------- --------
Liabilities assumed of acquired companies $ 59,404 $ 7,975
======== ========
The accompanying notes are an integral part of these consolidated
financial statements.
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THERMO OPTEK CORPORATION
Notes to Consolidated Financial Statements
1. General
The interim consolidated financial statements presented have been
prepared by Thermo Optek 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
September 28, 1996, the results of operations for the three- and
nine-month periods ended September 28, 1996 and September 30, 1995, and
the cash flows for the nine-month periods ended September 28, 1996 and
September 30, 1995. Interim results are not necessarily indicative of
results for a full year.
The consolidated balance sheet presented as of December 30, 1995,
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 Registration
Statement on Form S-1 (Reg. No. 333-03630), filed with the Securities and
Exchange Commission.
2. Acquisitions
On December 1, 1995, Thermo Instrument Systems Inc. (Thermo
Instrument) acquired the assets of the analytical instruments division of
Analytical Technology, Inc. (ATI). On April 11, 1996, the Company
acquired the Mattson Instruments (Mattson) and Unicam divisions of ATI
from Thermo Instrument for $36.6 million in cash. Mattson is a
manufacturer of Fourier transform infrared (FT-IR) spectroscopy
instruments and Unicam is a manufacturer of atomic absorption and
ultraviolet/visable spectroscopy instruments. Because, as of
December 30, 1995, the Company, Mattson, and Unicam were deemed for
accounting purposes to be under control of their common majority owner,
Thermo Instrument, the accompanying 1995 historical financial information
includes the results of Mattson and Unicam from December 1, 1995, the
date these businesses were acquired by Thermo Instrument. Because the
Company had not disbursed the funds in connection with the acquisitions
of Mattson and Unicam as of December 30, 1995, the transfer of these
businesses was recorded as a contribution of capital in excess of par
value as of December 1, 1995. The $36.6 million payment from the Company
to Thermo Instrument was accounted for as a reduction of capital in
excess of par value as of April 11, 1996.
On March 29, 1996, Thermo Instrument acquired a substantial portion
of the businesses comprising the Scientific Instruments Division of
Fisons plc (Fisons), a wholly owned subsidiary of Rhone-Poulenc Rorer,
Inc. On November 4, 1996, the Company acquired two businesses formerly
part of Fisons, Applied Research Laboratories (ARL) and VG Elemental,
from Thermo Instrument for an aggregate $55.2 million in cash and the
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THERMO OPTEK CORPORATION
2. Acquisitions (continued)
assumption of $16.6 million in debt, subject to a post-closing adjustment
to be negotiated with Fisons by Thermo Instrument. ARL is a manufacturer
of wavelength-dispersive X-ray fluorescence instruments and arc/spark
atomic emission spectrometers and VG Elemental is a manufacturer of
inductively coupled plasma/mass spectrometers. The purchase price was
determined based on the net book value of ARL and VG Elemental at
March 29, 1996, and a pro rata allocation of Thermo Instrument's total
cost in excess of net assets of acquired companies recorded in connection
with the acquisition of the Fisons businesses. Because, as of March 30,
1996, the Company, ARL, and VG Elemental were deemed for accounting
purposes to be under control of their common majority owner, Thermo
Instrument, the accompanying 1996 historical financial information
includes the results of ARL and VG Elemental from March 29, 1996, the
date these businesses were acquired by Thermo Instrument. Because the
Company had not disbursed the funds in connection with the acquisition of
ARL and VG Elemental as of September 28, 1996, the purchase price for
these businesses has been recorded as a payable in the accompanying 1996
balance sheet.
In February 1996, the Company acquired Oriel Corporation (Oriel) and
Corion Corporation (Corion) for an aggregate $16.9 million in cash. Oriel
is a manufacturer and distributor of electro-optical instruments and
components and Corion is a manufacturer of commercial optical filters.
The acquisitions of Oriel and Corion have been accounted for using the
purchase method of accounting and their results of operations have been
included in the accompanying financial statements from their respective
dates of acquisition.
The cost of these acquisitions exceeded the estimated fair value of
the acquired net assets by $62.7 million, which is being amortized over
40 years. Allocation of the purchase price for these acquisitions was
based on estimates of the fair value of the net assets acquired and is
subject to adjustment upon finalization of the purchase price allocation.
Based on unaudited data, the following table presents selected
financial information for the Company, Mattson, Unicam, ARL, and VG
Elemental on a pro forma basis, assuming the companies had been combined
since the beginning of 1995. The effect of the acquisitions of Oriel and
Corion are not included in the pro forma data since these acquisitions
were not material to the Company's results of operations and financial
position.
Three Nine
Months Ended Months Ended
------------- ------------------------------
(In thousands except September 30, September 28, September 30,
per share amounts) 1995 1996 1995
------------------------------------------------------------------------
Revenues $ 82,007 $271,210 $255,685
Net income 2,905 16,233 4,061
Earnings per share .06 .35 .09
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THERMO OPTEK CORPORATION
2. Acquisitions (continued)
The pro forma results are not necessarily indicative of future
operations or the actual results that would have occurred had the
acquisitions of Mattson, Unicam, ARL, and VG Elemental been made at the
beginning of 1995.
In connection with the acquisitions of Mattson, Unicam, ARL, and VG
Elemental, the Company has undertaken a restructuring of the acquired
businesses. In accordance with the requirements of Emerging Issues Task
Force Pronouncement 95-3 (EITF 95-3), the Company is in the process of
developing a plan that 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. As
part of the cost of the acquisitions, the Company established reserves
totaling $11.6 million and $4.7 million for estimated severance, excess
facilities, and other exit costs associated with the acquisition of
Mattson and Unicam and the acquisition of ARL and VG Elemental,
respectively. During the first nine months of 1996, $5.8 million and $1.8
million of the reserves of Mattson and Unicam and ARL and VG Elemental,
respectively, were expended. Unresolved issues existing at September 28,
1996, included identifying specific employees for termination and
locations to be abandoned or consolidated, among other decisions
concerning the integration of the acquired businesses into the Company.
In accordance with EITF 95-3, finalization of the Company's plan for
restructuring the acquired businesses will not occur beyond one year from
the respective dates of acquisition. Any changes in estimates of these
costs prior to such finalization will be recorded as adjustments to cost
in excess of net assets of acquired companies. These reserves are
included in other accrued expenses in the accompanying balance sheet.
3. Initial Public Offering
In June and July 1996, the Company sold 3,450,000 shares of its
common stock in an initial public offering at $13.50 per share for net
proceeds of approximately $42.9 million. Following the offering, Thermo
Instrument, a majority-owned subsidiary of Thermo Electron Corporation,
owned 93% of the Company's outstanding common stock.
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.
These statements involve a number of risks and uncertainties, including
those detailed in Item 5 of this Quarterly Report on Form 10-Q.
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THERMO OPTEK CORPORATION
Overview
The Company's principal operating units include Thermo Jarrell Ash
Corporation (TJA), a manufacturer and distributor of atomic absorption
(AA) and atomic emission spectrometry products, and Nicolet Instrument
Corporation (Nicolet), a manufacturer and distributor of Fourier
transform infrared (FT-IR) and FT-Raman spectrometry products. Both TJA
and Nicolet have worldwide sales and service organizations with a strong
overseas presence in Europe, Japan, and China.
The Company also has a subsidiary, Thermo Vision Corporation (Thermo
Vision), which pursues applications of the Company's technologies for
cost-effective, application-specific instruments and for optical
components, systems, and subassemblies for analytical instrumentation and
other applications. In September 1996, the Company announced its intent
to spin out Thermo Vision through a distribution of 100 percent of its
outstanding capital stock in the form of a dividend to the Company's
shareholders. The Company anticipates completing the spinout by the
second quarter of 1997. The Company intends to seek a Letter Ruling from
the Internal Revenue Service stating that this proposed spinout would
have no current tax effect on the Company or its shareholders. There can
be no assurance that a favorable Letter Ruling will be obtained. The
Company would distribute the shares upon receipt of the Letter Ruling and
satisfaction of other conditions, including listing of the Thermo Vision
shares on the American Stock Exchange. Thermo Vision had revenues of $8.4
million and $22.6 million for the three- and nine-month periods ended
September 28, 1996, respectively.
The Company's strategy is to supplement its internal growth with the
acquisition of businesses and technologies that complement and augment
its existing product lines. On December 1, 1995, Thermo Instrument
Systems Inc. (Thermo Instrument) acquired the assets of the analytical
instruments division of Analytical Technology, Inc. (ATI). In April 1996,
the Company acquired the Mattson Instruments (Mattson) and Unicam
divisions of ATI from Thermo Instrument. For accounting purposes, the
Company's acquisition of Mattson and Unicam is deemed to have occurred on
December 1, 1995 (Note 2). Mattson is a manufacturer of FT-IR
spectroscopy instruments, and Unicam is a manufacturer of AA and
ultraviolet/visible spectroscopy instruments. In February 1996, the
Company acquired Oriel Corporation (Oriel), a manufacturer and
distributor of electro-optical instruments and components and Corion
Corporation (Corion), a manufacturer of commercial optical filters.
On March 29, 1996, Thermo Instrument acquired a substantial portion
of the businesses comprising the Scientific Instruments Division of
Fisons plc (Fisons). On November 4, 1996, the Company acquired two
businesses formerly part of Fisons, Applied Research Laboratories (ARL)
and VG Elemental, from Thermo Instrument for an aggregate $55.2 million
in cash and the assumption of $16.6 million in debt, subject to a
post-closing adjustment. For accounting purposes, the Company's
acquisition of ARL and VG Elemental is deemed to have occurred on March
29, 1996 (Note 2). ARL is a manufacturer of wavelength-dispersive X-ray
fluorescence instruments and arc/spark atomic emission spectrometers and
VG Elemental is a manufacturer of inductively coupled plasma/mass
spectrometers. ARL and VG Elemental had revenues of $55.7 million and
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THERMO OPTEK CORPORATION
Overview (continued)
$16.2 million in 1995, respectively. In addition to ARL and VG Elemental,
the Company also acquired four sales and service organizations of these
two businesses located in South Africa, Austria, Sweden, and Canada. The
Company anticipates distributing ARL's and VG Elemental's products
elsewhere through the Company's existing distribution companies.
Results of Operations
Third Quarter 1996 Compared With Third Quarter 1995
Revenues increased $44.8 million, or 97%, to $90.7 million in the
third quarter of 1996 from $45.9 million in the third quarter of 1995
primarily due to the acquisitions of ARL and VG Elemental, effective
March 29, 1996, Mattson and Unicam, effective December 1, 1995, and Oriel
and Corion in February 1996. Acquisitions added revenues of $40 million
in the third quarter of 1996. To a lesser extent, revenues increased due
to greater product demand. In addition, revenues in the third quarter of
1995 were low as a result of a disruption caused by the relocation of
certain TJA operations into a new facility. These increases were offset
in part by a decrease of $1.4 million in revenues due to the unfavorable
effects of currency translation as a result of the strengthening of the
U.S. dollar relative to foreign currencies in countries where the Company
operates.
The gross profit margin decreased to 47% in the third quarter of
1996 from 54% in the third quarter of 1995 primarily due to the inclusion
of lower-margin revenues from ARL and VG Elemental. In addition, the
gross profit margin was unusually high in the third quarter of 1995 as a
result of a decrease in lower-margin revenues from TJA due to the plant
relocation discussed above.
Selling, general and administrative expenses as a percentage of
revenues decreased to 28% in the third quarter of 1996 from 32% in the
third quarter of 1995 primarily due to an increase in total revenues.
Research and development expenses as a percentage of revenues decreased
to 6.1% in 1996 from 7.3% in 1995 primarily due to decreased spending at
TJA and lower research and development expenses as a percentage of
revenues at acquired businesses.
Prior to their acquisition by the Company, ARL and VG Elemental sold
products to other business units of the Scientific Instruments Division
of Fisons for marketing and ultimate resale to the customer. The Company
plans to distribute the products of ARL and VG Elemental primarily
through its existing distribution channels. As a result of this strategy,
the Company expects to increase selling, general and administrative
expenses as a percentage of revenues at these businesses while improving
the gross profit margin to cover these additional costs. The Company's
goal is to improve the gross profit margin at ARL and VG Elemental
through this change in distribution channels as well as through improving
product mix and manufacturing efficiencies, although there can be no
assurance that the Company will be successful in these efforts.
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THERMO OPTEK CORPORATION
Third Quarter 1996 Compared With Third Quarter 1995 (continued)
Interest income increased to $1.6 million in the third quarter of
1996 from $36,000 in the third quarter of 1995 primarily as a result of
interest income earned on invested proceeds from the Company's October
1995 issuance of $96.3 million principal amount of 5% subordinated
convertible debentures. Interest expense increased to $1.7 million in
1996 from $0.3 million in 1995 primarily due to interest on the Company's
5% subordinated convertible debentures.
The effective tax rate was 43.6% in the third quarter of 1996,
compared with 41.5% in the third quarter of 1995. The effective tax rates
exceeded the statutory federal income tax rate primarily due to
nondeductible amortization of cost in excess of net assets of acquired
companies and the impact of state income taxes. The effective tax rate
increased in 1996 from 1995 primarily due to higher nondeductible
amortization of cost in excess of net assets of acquired companies in
1996.
First Nine Months 1996 Compared With First Nine Months 1995
Revenues increased $105.1 million, or 71%, to $253.7 million in the
first nine months of 1996 from $148.6 million in the first nine months of
1995 primarily due to the acquisitions discussed in the results of
operations for the third quarter and, to a lesser extent, greater product
demand, primarily at Nicolet as a result of two recently introduced
products. Acquisitions added revenues of $97.1 million in the first nine
months of 1996. In addition, revenues in the third quarter of 1995 were
low as a result of a relocation at TJA as discussed in the results of
operations for the third quarter. These increases were offset in part by
a decrease of $5.0 million in revenues due to the unfavorable effects of
currency translation as a result of the strengthening of the U.S. dollar
relative to foreign currencies in countries where the Company operates.
The gross profit margin decreased to 47% in the first nine months of
1996 from 51% in the first nine months of 1995 primarily due to the
reasons discussed in the results of operations for the third quarter.
Selling, general and administrative expenses as a percentage of
revenues were unchanged at 29% in the first nine months of 1996 and 1995.
Research and development expenses as a percentage of revenues remained
relatively unchanged at 6.6% in 1996, compared with 6.7% in 1995.
Interest income increased to $4.3 million in the first nine months
of 1996 from $72,000 in the first nine months of 1995. Interest expense
increased to $5.0 million in 1996 from $1.0 million in 1995. These
increases are due to the reasons discussed in the results of operations
for the third quarter.
The effective tax rate was 42.7% in the first nine months of 1996,
compared with 41.5% in the first nine months of 1995. The effective tax
rates exceeded the statutory federal income tax rate primarily due to
nondeductible amortization of cost in excess of net assets of acquired
companies and the impact of state income taxes.
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THERMO OPTEK CORPORATION
Liquidity and Capital Resources
Consolidated working capital was $95.8 million at September 28,
1996, compared with $144.5 million at December 30, 1995. Included in
working capital are cash and cash equivalents of $114.2 million at
September 28, 1996, compared with $116.9 million at December 30, 1995.
Cash provided by operating activities was $21.0 million for the first
nine months of 1996. Accounts receivable decreased by $5.7 million
primarily as a result of a reduction in receivables at ARL and VG
Elemental from the date of their acquisition. Accounts payable decreased
$10.2 million due to a payment for inventories received in the fourth
quarter of 1995 and a reduction in payables at ARL and VG Elemental from
the date of their acquisition. Other current liabilities decreased $2.9
million primarily due to restructuring expenditures at Mattson, Unicam,
ARL, and VG Elemental.
On November 4, 1996, the Company acquired ARL and VG Elemental from
Thermo Instrument (Note 2) for $55.2 million in cash and the assumption
of $16.6 million in debt, subject to a post-closing adjustment to be
negotiated with Fisons by Thermo Instrument in connection with the
negotiations for the settlement of the final purchase price for all of
the businesses of Fisons acquired by Thermo Instrument in March 1996. The
Company has recorded a payable of $55.2 million for the acquisition of
ARL and VG Elemental in the accompanying 1996 balance sheet. The Company
paid the liability described above to Thermo Instrument on November 4,
1996.
The Company's investing activities used $56.3 million of cash in the
first nine months of 1996. The Company expended an aggregate $52.1
million, net of cash acquired, for acquisitions, including the
acquisitions of Mattson and Unicam, and $4.1 million for the purchase of
property, plant and equipment.
The Company's financing activities provided $33.0 million of cash in
the first nine months of 1996. In June and July 1996, the Company sold
3,450,000 shares of its common stock in an initial public offering for
net proceeds of approximately $42.9 million (Note 3). During the first
nine months of 1996, the Company repaid $10.0 million of short- and
long-term borrowings.
During the remainder of 1996, the Company plans to make expenditures
of approximately $1.5 million for property, plant and equipment. Although
the Company expects 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,
additional debt or equity financing from the capital markets, or
short-term borrowings from Thermo Instrument or Thermo Electron
Corporation (Thermo Electron), although there is no agreement with Thermo
Instrument or Thermo Electron under which such parties are obligated to
lend funds to the Company. The Company believes that its existing
resources are sufficient to meet the capital requirements of its existing
businesses for the foreseeable future.
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THERMO OPTEK CORPORATION
PART II - OTHER INFORMATION
Item 5 - Other Information
In connection with the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995, the Company wishes to caution
readers that the following important factors, among others, in some cases
have affected, and in the future could affect, the Company's actual
results and could cause its actual results in 1996 and beyond to differ
materially from those expressed in any forward-looking statements made
by, or on behalf of, the Company.
Risks Associated with Technological Change, Obsolescence and the
Development and Acceptance of New Products. The market for the Company's
products is characterized by rapid and significant technological change
and evolving industry standards. New product introductions responsive to
these factors require significant planning, design, development, and
testing at the technological, product, and manufacturing process levels,
and may render existing products and technologies uncompetitive or
obsolete. There can be no assurance that the Company's products will not
become uncompetitive or obsolete. In addition, industry acceptance of new
technologies developed by the Company may be slow to develop due to,
among other things, existing regulations written specifically for older
technologies and general unfamiliarity of users with new technologies.
Risks Associated with Acquisition Strategy; No Assurance of a
Successful Acquisition Strategy. The Company's growth strategy is to
supplement its internal growth with the acquisition of businesses and
technologies that complement or augment the Company's existing product
lines. The Company has recently acquired certain businesses within the
former analytical instruments division of ATI and the former Scientific
Instruments Division of Fisons plc that were initially acquired by Thermo
Instrument in December 1995 and March 1996, respectively. Certain of
these businesses have low levels of profitability, and businesses that
the Company may seek to acquire in the future may also be marginally
profitable or unprofitable. In order for any acquired businesses to
achieve the level of profitability desired by the Company, the Company
must successfully reduce expenses and improve market penetration. No
assurance can be given that the Company will be successful in this
regard. In addition, promising acquisitions are difficult to identify and
complete for a number of reasons, including competition among prospective
buyers and the need for regulatory approvals, including antitrust
approvals. There can be no assurance that the Company will be able to
complete pending or future acquisitions. In order to finance any such
acquisitions, it may be necessary for the Company to raise additional
funds either through public or private financings. Any equity or debt
financing, if available at all, may be on terms which are not favorable
to the Company.
15PAGE
<PAGE>
THERMO OPTEK CORPORATION
Item 5 - Other Information (continued)
Possible Adverse Effect From Consolidation in the Environmental
Market and Changes in Environmental Regulations. One of the largest
markets for the Company's products is environmental analysis. During the
past three years, there has been a contraction in the market for
analytical instruments used for environmental analysis. This contraction
has caused consolidation in the businesses serving this market. Such
consolidation may have an adverse impact on certain of the Company's
businesses. In addition, most air, water, and soil analysis is conducted
to comply with Federal, state, local, and foreign environmental
regulations. These regulations are frequently specific as to the type of
technology required for a particular analysis and the level of detection
required for that analysis. The Company develops, configures, and markets
its products to meet customer needs created by existing and anticipated
environmental regulations. These regulations may be amended or eliminated
in response to new scientific evidence or political or economic
considerations. Any significant change in environmental regulations could
result in a reduction in demand for the Company's products.
Possible Adverse Impact of Significant International Operations.
Sales outside the United States accounted for approximately 60% of the
Company's revenues in 1995, and the Company expects that international
sales will continue to account for a significant portion of the Company's
revenues in the future. Sales to customers in foreign countries are
subject to a number of risks, including the following: agreements may be
difficult to enforce and receivables difficult to collect through a
foreign country's legal system; foreign customers may have longer payment
cycles; foreign countries could impose withholding taxes or otherwise tax
the Company's foreign income, impose tariffs, or adopt other restrictions
on foreign trade; fluctuations in exchange rates may affect product
demand and adversely affect the profitability in U.S. dollars of products
and services provided by the Company in foreign markets where payment for
the Company's products and services is made in the local currency; U.S.
export licenses may be difficult to obtain and the protection of
intellectual property in foreign countries may be more difficult to
enforce. There can be no assurance that any of these factors will not
have a material adverse effect on the Company's business and results of
operations.
Competition. The Company encounters and expects to continue to
encounter intense competition in the sale of its products. The Company
believes that the principal competitive factors affecting the market for
its products include product performance, price, reliability, and
customer service. The Company's competitors include large multinational
corporations and their operating units, including Perkin-Elmer and
Varian. These companies and certain of the Company's other competitors
have substantially greater financial, marketing, and other resources than
those of the Company. As a result, they may be able to adapt more quickly
to new or emerging technologies and changes in customer requirements, or
to devote greater resources to the promotion and sale of their products
16PAGE
<PAGE>
THERMO OPTEK CORPORATION
Item 5 - Other Information (continued)
than the Company. In addition, competition could increase if new
companies enter the market or if existing competitors expand their
product lines or intensify efforts within existing product lines. There
can be no assurance that the Company's current products, products under
development, or ability to discover new technologies will be sufficient
to enable it to compete effectively with its competitors.
Risks Associated with Protection, Defense and Use of Intellectual
Property. The Company holds many patents relating to various aspects of
its products, and believes that proprietary technical know-how is
critical to many of its products. Proprietary rights relating to the
Company's products are protected from unauthorized use by third parties
only to the extent that they are covered by valid and enforceable patents
or are maintained in confidence as trade secrets. There can be no
assurance that patents will issue from any pending or future patent
applications owned by or licensed to the Company or that the claims
allowed under any issued patents will be sufficiently broad to protect
the Company's technology and, in the absence of patent protection, the
Company may be vulnerable to competitors who attempt to copy the
Company's products or gain access to its trade secrets and know-how.
Proceedings initiated by the Company to protect its proprietary rights
could result in substantial costs to the Company. There can be no
assurance that competitors of the Company will not initiate litigation to
challenge the validity of the Company's patents, or that they will not
use their resources to design comparable products that do not infringe
the Company's patents. There may also be pending or issued patents held
by parties not affiliated with the Company that relate to the Company's
products or technologies. The Company may need to acquire licenses to, or
contest the validity of, any such patents. There can be no assurance that
any license required under any such patent would be made available on
acceptable terms or that the Company would prevail in any such contest.
The Company could incur substantial costs in defending itself in suits
brought against it or in suits in which the Company may assert its patent
rights against others. If the outcome of any such litigation is
unfavorable to the Company, the Company's business and results of
operations could be materially adversely affected. In addition, the
Company relies on trade secrets and proprietary know-how which it seeks
to protect, in part, by confidentiality agreements with its
collaborators, employees, and consultants. There can be no assurance that
these agreements will not be breached, that the Company would have
adequate remedies for any breach or that the Company's trade secrets will
not otherwise become known or be independently developed by competitors.
Item 6 - Exhibits
See Exhibit Index on the page immediately preceding exhibits.
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THERMO OPTEK CORPORATION
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 5th day of November
1996.
THERMO OPTEK CORPORATION
Paul F. Kelleher
--------------------
Paul F. Kelleher
Chief Accounting Officer
John N. Hatsopoulos
--------------------
John N. Hatsopoulos
Chief Financial Officer
18PAGE
<PAGE>
THERMO OPTEK CORPORATION
EXHIBIT INDEX
Exhibit
Number Description of Exhibit Page
------------------------------------------------------------------------
2.1 Stock Purchase Agreement dated as of November 4, 1996
among Thermo Instrument Systems Inc., SID Instruments
Inc., and ATI Acquisition Corp.
2.2 Stock Purchase Agreement dated as of November 4, 1996
between Thermo Instrument Systems Inc. and the
Company.
10.1 Indemnification Agreement dated as of November 4, 1996
between Thermo Instrument Systems Inc. and the
Company.
10.2 Stock Holding Assistant Plan and Form of Promissory
Note.
11 Statement re: Computation of earnings per share.
27 Financial Data Schedule.
DATED November 4, 1996
----------------------
(1) SID INSTRUMENTS INC.
(2) ATI ACQUISITION CORP.
(3) THERMO INSTRUMENT SYSTEMS INC.
__________________________________________
AGREEMENT
for the sale and purchase of the whole
of the issued share capital of
Thermo Elemental Limited
____________________________________________
WARNER CRANSTON
Pickfords Wharf
Clink Street
London SE1 9DG
Tel: 0171 403 2900
Fax: 0171 403 4221
Ref: SXC/TE/1686-40-7
PAGE
<PAGE>
THIS AGREEMENT is made the 4th day of November
1996
BETWEEN:
(1) SID INSTRUMENTS INC. (the "Vendor") a Delaware corporation
whose principal office is at 81 Wyman Street, Waltham, MA
02254, USA;
(2) ATI ACQUISITION CORP. (the "Purchaser") a Delaware
corporation whose principal office is at 81 Wyman Street,
Waltham, MA 02254, USA; and
(3) THERMO INSTRUMENT SYSTEMS INC. ("Thermo") a Delaware
corporation whose principal office is at 81 Wyman Street,
Waltham, MA 02254, USA.
WHEREAS:
(A) Thermo Elemental Limited ("the Company") is a private
company incorporated with limited liability in England
further particulars of which are set out in Schedule 2.
(B) The Vendor has agreed to sell and the Purchaser has agreed
to buy the Shares (as defined) on the terms and subject to
the conditions contained in this Agreement.
AGREED as follows:
1. INTERPRETATION
1.1 In this Agreement and the Schedules to it the following
expressions shall, unless the context otherwise requires,
have the following meanings:
"the Effective Date" 4 November 1996;
"the Shares" the shares in the capital of
the Company set out in Column
(2) of Schedule 1;
1.2 The headings in this Agreement are for ease of reference
only and shall not be taken into account in construing this
Agreement.
1.3 References to Clauses and Schedules are to clauses and
schedules of this Agreement.
2. SALE AND PURCHASE
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<PAGE>
2.1 The Vendor agrees to sell with full title guarantee, the
Shares and the Purchaser agrees to purchase the Shares with
effect on and from the Effective Date free from any liens,
claims, charges, encumbrances and equities and together with
all rights of any nature whatsoever now or after the date of
this Agreement attaching or accruing to them.
2.2 The aggregate consideration for the purchase of the Shares
shall be the sum set out in Column (3) of Schedule 1 receipt
of which the Vendor hereby acknowledges. The Purchaser and
Vendor acknowledge and agree that such Consideration
represents the sum of (i) the net tangible assets of the
Company assumed to be $8,418,000) as of the date of Thermo's
acquisition of the Shares as part of the acquisition on
March 29, 1996 by Thermo and its subsidiaries of certain
businesses of Fisons plc (the "Fisons Businesses") pursuant
to the Amended and Restated Asset and Stock Purchase
Agreement dated as of March 29, 1996 among Thermo, Thermo
Electron Corporation and Fisons plc (the "Restated
Agreement"), plus (ii) a percentage of the total goodwill
associated with Thermo's acquisition of the Fisons
Businesses equal to the sales of the Company for the 1994
and 1995 fiscal years relative to the total sales of the
Fisons Businesses for such years (the "Company Percentage"),
plus (iii) the Company Percentage of the total costs
incurred by Thermo in acquiring the Fisons Businesses and in
restructuring the sales and service organization of the
Fisons Businesses (the "Restructuring Costs"). The parties
acknowledge that the purchase price paid by Thermo for the
Fisons Businesses is subject to a post-closing adjustment
based on the difference between the value of the net
tangible assets of the Fisons Businesses as shown on the
closing balance sheet dated as of March 29, 1996 (the
"Closing Balance Sheet") and the target net tangible asset
value provided for in the Restated Agreement. In the event
of any such adjustment, the Consideration shall be
recalculated in accordance with the second sentence of this
paragraph to account for (A) any adjustment in the net
tangible assets (other than cash) of the Company as shown on
the Closing Balance Sheet from $8,418,000 and (B) any
adjustment in the total goodwill associated with Thermo's
acquisition of the Fisons Businesses. In addition, the
Consideration shall be subject to recalculation in
accordance with the second sentence of this paragraph in the
event that the Restructuring Costs incurred are less than
$1,378,000. If the recalculation made pursuant to this
paragraph results in an increase in the Consideration, the
Purchaser shall pay the amount of such increase to the
Vendor, and if any such recalculation results in a decrease
in the Consideration, the Vendor shall pay the amount of
such decrease to the Purchaser. Any payment made pursuant
to the preceding sentence shall be made within ten days
after the Closing Balance Sheet has become final (in the
case of any adjustment related to the Closing Balance Sheet)
PAGE
<PAGE>
and no later than March 29, 1997 (in the case of an
adjustment related to the Restructuring Costs) and shall
also be accompanied by interest from the date hereof
calculated as provided in Section 4.1 of the Restated
Agreement.
3. FURTHER ASSURANCE
The Vendor shall on or at any time after the date of this
Agreement execute and do all such deeds, documents, acts and
things as the Purchaser shall reasonably require to give
effect to this Agreement.
4. WARRANTIES
4.1 The Vendor represents, warrants and undertakes to and with
the Purchaser in the terms contained in Schedule 3.
4.2 The representations, warranties and undertakings contained
in Schedule 3 shall continue in full force and effect after
the date of this Agreement.
5. COMPLETION
Completion of the sale and purchase of the Shares shall take
place on the date of this Agreement at such time and place
as the parties shall agree when:
(a) the Vendor shall hand to the Purchaser duly executed
transfers in favor of the Purchaser and the share
certificates in respect of the Shares;
(b) the Vendor shall, if required, hand to the Purchaser
the certificate of incorporation, statutory books and
common seal of the Company;
(c) the Purchaser shall pay the consideration in accordance
with Clause 2.2.
6. INDEMNITY
6.1 The Vendor agrees to indemnify and hold harmless the
Purchaser from any and all damages, losses, liabilities,
costs and expenses (including, without limitation,
settlement costs and any reasonable legal, accounting or
other expenses for investigating or defending any actions or
threatened actions) incurred by the Purchaser as a result of
(i) the inaccuracy of any representation or warranty
contained in Schedule 3 hereof; (ii) the breach by the
Vendor of any provision hereof; or (iii) any third party
claim arising due to the act of omission of the Vendor or
the Company from March 29, 1996 and prior to the date
hereof.
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<PAGE>
6.2 The Purchaser agrees to indemnify and hold harmless the
Vendor from any and all damages, losses, liabilities, costs
and expenses (including, without limitation, settlement
costs and any reasonable legal, accounting or other expenses
for investigating or defending any actions or threatened
actions) incurred by the Vendor as a result of the breach by
the Purchaser of any provision hereof.
6.3 Whenever any claim shall arise or indemnification under this
Agreement, the party seeking indemnification (the
"Indemnified Party"), shall promptly notify the other party
(the "Indemnifying Party"), of the claim and, when known,
the facts constituting the basis for such claim. In the
event of any such claim for indemnification hereunder
resulting from or in connection with any claim or legal
proceedings by a third party, the notice to the Indemnifying
Party shall specify, if known, the amount or an estimate of
the amount of the liability arising therefrom. The
Indemnified Party shall not settle or compromise any claim
by a third party for which the indemnified Party is entitled
to indemnification hereunder without the prior consent of
the Indemnifying Party, unless proceedings have been
commenced against the Indemnified Party and the Indemnifying
Party shall not have taken control of such proceedings after
notification thereof as provided in Clause 6.4 of this
Agreement.
6.4 In connection with any claim giving rise to indemnity
hereunder resulting from or arising out of a claim or legal
proceedings by a person who is not a party to this
Agreement, the Indemnifying Party at its sole cost and
expense may, on notice to the Indemnified party, assume the
defense of any such claim or legal proceedings if it
acknowledges to the Indemnified Party its obligations to
indemnify the Indemnified Party with respect to all elements
of such claim. The Indemnified Party shall be entitled to
participate in (but not control), the defense of any such
action, with Solicitors of its own choice and its own
expense. If the Indemnifying party does not assume the
defense of any such claim or litigation resulting therefrom
within 30 days after the date the Indemnifying Party is
notified of such claim pursuant to Clause 8.1 hereof, (i)
the Indemnified Party may defend against such claim or
litigation, after giving notice of the same to the
Indemnifying Party, on such terms as are appropriate in the
Indemnified Party's reasonable judgment, and (ii) the
Indemnifying Party shall be entitled to participate in (but
not control) the defense of such action, with Solicitors of
its own choice and at its own expense.
PAGE
<PAGE>
7. GENERAL
7.1 The provisions of this Agreement shall enure to the benefit
of the successors and assigns of the Vendor and the
Purchaser.
8. NOTICES
8.1 A notice or other communication under or in connection with
this Agreement shall be in writing and shall be delivered
personally or sent by first class pre-paid recorded delivery
post or by fax to the party due to receive the notice or
communication at its address set out in this Agreement or
such other address as either party may specify by notice in
writing to the other.
8.2 In the absence of evidence of earlier receipt, a notice or
communication is deemed given:
8.2.1 if delivered personally, when left at the address
referred to in the introduction hereto;
8.2.2 if sent by post, the second business day after its
posting;
8.2.3 if sent by fax, on completion of its transmission.
9. GUARANTEE
Thermo hereby unconditionally guarantees the obligations of
the Vendor arising under this Agreement.
PAGE
<PAGE>
10. GOVERNING LAW
This Agreement shall be governed by and construed in all
respects in accordance with English Law and the parties
agree to submit to the exclusive jurisdiction of the English
Courts as regards any claim or matter arising in relation to
this Agreement.
PAGE
<PAGE>
SCHEDULE 1
Particulars of Shares and Consideration
(1) (2) (3)
Name of the Company Particulars of Shares Consideration
------------------- --------------------- -------------
Thermo Elemental 2 Ordinary Shares $18,897,000
Limited of 1 British Pounds
Sterling each
PAGE
<PAGE>
SCHEDULE 2
Particulars of the Company
Date of Incorporation: 31/01/96
Registered Office: Pickfords Wharf
Clink Street
London SE1 9DG
Number of registration: 3153084
Authorised Share Capital: 1,000
Issued Share Capital: 2
PAGE
<PAGE>
SCHEDULE 3
1. The Vendor has full power and authority to enter into and
perform its obligations under this Agreement and the signing
of this Agreement does not violate any provision of the
Vendor's Certificate of Incorporation.
2. The Vendor is a company duly incorporated under the laws of
the State of Delaware, USA.
3. The execution of this Agreement, nor the consummation of the
transaction herein contemplated, nor the fulfillment of or
compliance with the terms and provisions hereof will breach
any current provisions of English law nor conflict with or
result in a breach of any of the terms, conditions or
provisions of or constitute default under any material
agreement or instrument to which the Vendor is a party or by
which it is bound.
PAGE
<PAGE>
SID INSTRUMENTS INC.
By: Earl R. Lewis
-------------------
Earl R. Lewis
President
ATI ACQUISITION CORP.
By: Robert J. Rosenthal
------------------------
Robert J. Rosenthal
Vice President
THERMO INSTRUMENT SYSTEMS INC.
By: Earl R. Lewis
-----------------
Earl R. Lewis
Executive Vice President
STOCK PURCHASE AGREEMENT
This AGREEMENT is dated as of November 4, 1996 by and among
Thermo Instrument Systems Inc., a Delaware corporation
("Seller"), and Thermo Optek Corporation, a Delaware corporation
("Buyer").
WHEREAS, Seller desires to sell, or to cause its
subsidiaries to sell, all of the shares of capital stock of ARL
Applied Research Laboratories S.A. ("ARL") owned by the Seller
(the "Shares") and the Buyer wishes to buy the Shares;
NOW, THEREFORE, in consideration of the premises and mutual
promises and agreements set forth herein, the parties hereto
hereby agree as follows:
1. Purchase and Sale of Shares. The Seller hereby sells,
assigns, transfers, conveys, and delivers all of the Seller's
right, title and interest in and to the Shares to the Buyer. In
consideration for the Shares, the Buyer shall pay to the Seller
the sum of $34,004,000 in cash (the "Purchase Price"). The
Buyer and Seller acknowledge and agree that such Purchase Price
represents the sum of (i) the net tangible assets of ARL (assumed
to be $12,486,000) as of the date of the Seller's acquisition of
the Shares as part of the acquisition on March 29, 1996 by the
Seller and its subsidiaries of certain businesses of Fisons plc
(the "Fisons Businesses") pursuant to the Amended and Restated
Asset and Stock Purchase Agreement dated as of March 29, 1996
among the Seller, Thermo Electron Corporation and Fisons plc (the
"Restated Agreement"), plus (ii) a percentage of the total
goodwill associated with the Seller's acquisition of the Fisons
Businesses equal to the sales of ARL for the 1994 and 1995 fiscal
years relative to the total sales of the Fisons Businesses for
such years (the "ARL Percentage"), plus (iii) the ARL Percentage
of the total costs incurred by the Seller in acquiring the Fisons
Businesses and in restructuring the sales and service
organization of the Fisons Businesses (the "Restructuring
Costs"). The parties acknowledge that the purchase price paid by
the Seller for the Fisons Businesses is subject to a post-closing
adjustment based on the difference between the value of the net
tangible assets of the Fisons Businesses as shown on the closing
balance sheet dated as of March 29, 1996 (the "Closing Balance
Sheet") and the target net tangible asset value provided for in
the Restated Agreement. In the event of any such adjustment, the
Purchase Price shall be recalculated in accordance with the third
sentence of this paragraph to account for (A) any adjustment in
the net tangible assets (other than cash) of ARL as shown on the
Closing Balance Sheet from $12,486,000), and (B) any adjustment
in the total goodwill associated with Thermo's acquisition of the
Fisons Businesses. In addition, the purchase price shall be
subject to recalculation in accordance with the third sentence of
this paragraph in the event that the Restructuring Costs incurred
are less than $2,453,000. If any recalculation made pursuant to
this paragraph results in an increase in the Purchase Price, the
PAGE
<PAGE>
Buyer shall pay the amount of such increase to the Seller, and if
any such recalculation results in a decrease in the Purchase
Price, the Seller shall pay the amount of such decrease to the
Buyer. Any payment made pursuant to the preceding sentence shall
be made within ten days after the Closing Balance Sheet has
become final (in the case of an adjustment related to the Closing
Balance Sheet) and no later than March 29, 1997 (in the case of
an adjustment related to the Restructuring Costs) and shall also
be accompanied by interest from the date hereof calculated as
provided in Section 4.1 of the Restated Agreement.
2. Further Assurances. At the request of the Buyer at any
time on or after the date hereof, the Seller will execute and
deliver such further instruments of transfer and conveyance and
take such other action as the Buyer reasonably may request
effectively to assign and transfer to the Buyer the Shares.
3. The Seller's Representations and Warranties. The
Seller represents and warrants that:
(a) Organization and Standing. The Seller is a
corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware.
(b) Approval of Transactions. The Seller has obtained
all necessary corporate authorizations and approvals, and
has taken all actions required for the execution and
delivery of this Agreement and the consummation of the
transactions contemplated hereby.
(c) No Conflict. Neither the execution nor delivery
of this Agreement, nor the consummation of the transactions
herein contemplated, nor the fulfillment of or compliance
with the terms and provisions hereof will (1) conflict with
the Certificate of Incorporation or By-laws of the Seller or
the organizational documents of ARL, (2) violate any current
provisions of law, administrative regulation, or court
decree applicable to the Seller or ARL, (3) require the
consent or approval of any governmental authority except for
Swiss Lex Friederich approval, or (4) conflict with or
result in a breach of any of the terms, conditions or
provisions of or constitute default under any material
agreement or instrument to which the Seller or ARL is a
party or by which either is bound.
(d) Capitalization of ARL. The Shares constitute all
of the issued and outstanding share capital of ARL. The
Shares have been duly authorized, validly issued and are
fully paid and non-assessable. The Seller holds good and
marketable title to the Shares and will transfer the Shares
to the Buyer pursuant to this Agreement free and clear of
any liens, claims or encumbrances whatsoever. No share
capital of ARL is reserved for issuance, and there are no
options, warrants, convertible securities or other rights,
2PAGE
<PAGE>
agreements or commitments obligating ARL to issue any share
capital.
4. The Buyer's Representations and Warranties.
(a) Organization and Standing. The Buyer is a
corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware.
(b) Approval of Transactions. The Buyer has obtained
all necessary corporate authorizations and approvals, and
has taken all actions required for the execution and
delivery of this Agreement and the consummation of the
transactions contemplated hereby.
(c) No Conflict. Neither the execution nor delivery
of this Agreement, nor the consummation of the
transactions herein contemplated, nor the fulfillment of or
compliance with the terms and provisions hereof will
(1) conflict with the Certificate of
Incorporation or By-laws of the Buyer, (2) violate any current
provisions of law, administrative regulation, or court
decree applicable to the Buyer, (3) require the
consent or approval of any governmental authority or (4) conflict
with or result in a breach of any of the terms, conditions or
provisions of or constitute default under any material
agreement or instrument to which the Buyer is a party or by which
it is bound.
5. Indemnification.
(a) The Seller agrees to indemnify and hold harmless
the Buyer from any and all damages, losses, liabilities, costs
and expenses (including, without limitation, settlement costs and
any reasonable legal, accounting or other expenses for
investigating or defending any actions or threatened actions)
incurred by the Buyer as a result of (i) any liability,
commitment or obligation of ARL or any of its subsidiaries that
result from any third party claim based upon the acts or
omissions of ARL or such subsidiaries on or after March 29, 1996
and prior to the effective date hereof, (ii) the inaccuracy of
any representation or warranty contained in Section 3 hereof or
(iii) the breach by the Seller of any provision hereof.
(b) The Buyer agrees to indemnify and hold harmless
the Seller from any and all damages, losses, liabilities, costs
and expenses (including, without limitation, settlement costs and
any reasonable legal, accounting or other expenses for
investigating or defending any actions or threatened actions)
incurred by the Seller as a result of (i) the inaccuracy of any
representation or warranty contained in Section 4 hereof, or (ii)
the breach by the Buyer of any provision hereof.
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(c) Whenever any claim shall arise for indemnification
hereunder, the party seeking indemnification (the "Indemnified
Party") shall promptly notify the other party (the "Indemnifying
Party") of the claim and, when known, the facts constituting the
basis for such claim. In the event of any such claim for
indemnification hereunder resulting from or in connection with
any claim or legal proceedings by a third party, the notice to
the Indemnifying Party shall specify, if known, the amount or an
estimate of the amount of the liability arising therefrom. The
Indemnified Party shall not settle or compromise any claim by a
third party for which the Indemnified Party is entitled to
indemnification hereunder without the prior consent of the
Indemnifying Party, unless suit shall have been instituted
against the Indemnified Party and the Indemnifying Party shall
not have taken control of such suit after notification thereof as
provided in Section 5(d) of this Agreement.
(d) In connection with any claim giving rise to
indemnity hereunder resulting from or arising out of any claim or
legal proceeding by a person who is not a party to this
Agreement, the Indemnifying Party at its sole cost and expense
may, upon notice to the Indemnified Party, assume the defense of
any such claim or legal proceeding if it acknowledges to the
Indemnified Party its obligations to indemnify the Indemnified
Party with respect to all elements of such claim. The
Indemnified Party shall be entitled to participate in (but not
control) the defense of any such action, with its counsel and at
its own expense. If the Indemnifying Party does not assume the
defense of any such claim or litigation resulting therefrom
within 30 days after the date the Indemnifying Party is notified
of such claim pursuant to Paragraph 5(c) hereof, (i) the
Indemnified Party may defend against such claim or litigation,
after giving notice of the same to the Indemnifying Party, on
such terms as are appropriate in the Indemnified Party's
reasonable judgment, and (ii) the Indemnifying Party shall be
entitled to participate in (but not control) the defense of such
action, with its counsel and at its own expense.
6. Restated Agreement. The Seller hereby assigns to the
Buyer, and the Buyer hereby accepts and asssumes, the Seller's
rights and obligations under the Restated Agreement, and any
agreements or instruments excuted by the Seller in connection
therewith, but only to the extent such rights and obligations
relate primarily ARL. In furtherance of the foregoing, the Buyer
may enforce, in its own name and in the name and on behalf of the
Seller, any of the rights of the Seller under Section 11 of the
Restated Agreement, and, if requested by the Buyer, the Seller
shall take such actions, at its own expense, as the Buyer shall
reasonably request in order that the Buyer shall have the full
rights and benefits granted to it under this Section 6.
.
7. Transfer and Sales Tax. Notwithstanding any provisions
of law to the contrary, the Seller shall be responsible for and
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shall pay all sales, transfer or stamp taxes, if any, upon the
sale or transfer of the Shares hereunder.
8. Effective Date. The transfer of the Shares shall be
deemed to be effective as of the date hereof.
9. Captions. The captions and headings to the various
sections, paragraphs and exhibits of this Agreement are for
convenience of reference only and shall not affect or control the
meaning or interpretation of any of the provisions of this
Agreement.
10. Integration. This Agreement contains the entire
understanding of the parties hereto with respect to the subject
matter contained herein.
11. Notice of Communication. Any notice or other
communication shall be in writing and shall be personally
delivered, or sent by overnight or second day courier or by first
class mail, return receipt requested, to the party to whom such
notice or other communication is to be given or made at such
party's address set forth below, or to such other address as such
party shall designate by written notice to the other party as
follows:
If to the Seller:
Thermo Instrument Systems Inc.
c/o Thermo Electron Corporation
81 Wyman Street
P.O. Box 9046
Waltham, MA 02445-9046
Attn: General Counsel
If to the Buyer:
c/o Thermo Optek Corporation
81 Wyman Street
P.O. Box 9046
Waltham, MA 02445-9046
Attn: General Counsel
provided that any notice of change of address, and any notice or
other communication given otherwise than as specified above shall
be effective only upon receipt; and further that any presumption
of receipt by the addressee shall be inoperable during the period
of any interruption in Postal Service.
12. Survival of Representations and Warranties. All
representations and warranties made by the Seller or the Buyer in
this Agreement shall survive the execution and delivery of this
Agreement.
5PAGE
<PAGE>
13. Governing Law; Assignment. This Agreement is to be
construed, interpreted, applied and governed in all respects in
accordance with the laws of the Commonwealth of Massachusetts,
without regard to its conflict of laws provisions, is to take
effect as a sealed instrument, is binding upon and inures to the
benefit of the parties hereto and their respect successors and
assigns and may be canceled, modified or amended only by a
written instrument executed by the Seller and the Buyer. No
party hereto may assign its rights hereunder without prior
written consent of the other party.
6PAGE
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the date and year first above written.
THERMO OPTEK CORPORATION
By: Robert J. Rosenthal
------------------------------------
Robert J. Rosenthal
Senior Vice President
THERMO INSTRUMENT SYSTEMS INC.
By: Earl R. Lewis
------------------------------------
Earl R. Lewis
Executive Vice President and Chief
Operating Officer
INDEMNIFICATION AGREEMENT
This Agreement is made as of November 4, 1996 between Thermo
Instrument Systems Inc., a Delaware corporation ("THI"), and
Thermo Optek Corporation, a Delaware corporation ("TOC").
WHEREAS, on March 29, 1996 THI, directly and through its
subsidiaries, purchased certain businesses of Fisons plc (the
"Fisons Businesses") pursuant to an Amended and Restated Asset
and Stock Purchase Agreement dated as of such date (the "Restated
Agreement"); and
WHEREAS, THI and TOC have agreed that the ARL and Elemental
Fisons Businesses (the "TOC Businesses") shall be sold by THI to
TOC; and
WHEREAS, the sale by THI, and the purchase by TOC, of the
TOC Businesses shall be made pursuant to a number of purchase and
sale agreements among subsidiaries of TOC, THI and subsidiaries
of THI (the "Transfer Agreements"); and
WHEREAS, THI and TOC desire to make certain provisions for
(i) THI's indemnification of TOC and its subsidiaries for certain
liabilities of the TOC Businesses and (ii) TOC's indemnification
of THI and its subsidiaries for certain liabilities of the TOC
Businesses.
NOW, THEREFORE, THI and TOC hereby agree as follows:
1. Indemnification.
---------------
(a) THI shall indemnify and hold harmless TOC and its
subsidiaries from any and all damages, losses, liabilities, costs
and expenses (including, without limitation, settlement costs and
any reasonable legal, accounting or other expenses for
investigating or defending any actions or threatened actions)
incurred by TOC or any of its subsidiaries as a result of:
(i) any third party claims based on the acts or
omissions of THI or any of its subsidiaries (including any
subsidiaries subsequently sold to TOC) on or after March 29, 1996
and prior to the date hereof; or
(ii) the breach by THI or any of its subsidiaries
of any representation, warranty, covenant or agreement contained
in any of the Transfer Agreements.
(b) TOC shall indemnify and hold harmless THI and its
subsidiaries form any and all damages, losses, liabilities, costs
and expenses (including, without limitation, settlement costs and
any reasonable legal, accounting or other expenses for
PAGE
<PAGE>
investigating or defending any actions or threatened actions)
incurred by THI or any of its subsidiaries (other than
subsidiaries acquired by TOC) as a result of any liability of the
TOC Businesses other than a liability (i) as to which TOC and its
subsidiaries are entitled to indemnification by THI hereunder or
(ii) that is expressly retained by THI or any of its subsidiaries
pursuant to any Transfer Agreement.
(c) Whenever any claim shall arise for indemnification
hereunder, the party seeking indemnification (the "Indemnified
Party") shall promptly notify the other party (the "Indemnifying
Party") of the claim and, when known, the facts constituting the
basis for such claim. In the event of any such claim for
indemnification hereunder resulting from or in connection with
any claim or legal proceedings by a third party, the notice to
the Indemnifying Party shall specify, if known, the amount or an
estimate of the amount of the liability arising therefrom. The
Indemnified Party shall not settle or compromise any claim by a
third party for which the Indemnified Party is entitled to
indemnification hereunder without the prior consent of the
Indemnifying Party, unless suit shall have been instituted
against the Indemnified Party and the Indemnifying Party shall
not have taken control of such suit after notification thereof as
provided in Section 2(d) of this Agreement.
(d) In connection with any claim giving rise to
indemnity hereunder resulting from or arising out of any claim or
legal proceeding by a person who is not a party to this
Agreement, the Indemnifying Party at its sole cost and expense
may, upon notice to the Indemnified Party, assume the defense of
any such claim or legal proceeding if it acknowledges to the
Indemnified Party its obligations to indemnify the Indemnified
Party with respect to all elements of such claim. The
Indemnified Party shall be entitled to participate in (but not
control) the defense of any such action, with its counsel and at
its own expense. If the Indemnifying Party does not assume the
defense of any such claim or litigation resulting therefrom
within 30 days after the date the Indemnifying Party is notified
of such claim pursuant to Paragraph 2(c) hereof, (i) the
Indemnified Party may defend against such claim or litigation,
after giving notice of the same to the Indemnifying Party, on
such terms as are appropriate in the Indemnified Party's
reasonable judgment, and (ii) the Indemnifying Party shall be
entitled to participate in (but not control) the defense of such
action, with its counsel and at its own expense.
3. Restated Agreement. THI hereby assigns to TOC, and TOC
hereby accepts and assumes, the rights and obligations of THI
under the Restated Agreement, and any agreements or instruments
executed by THI in connection therewith, but only to the extent
such rights and obligations relate primarily to the TOC
Businesses. In furtherance of the foregoing, TOC may enforce, in
its own name and in the name and on behalf of THI, any of the
rights of THI under Section 11 of the Restated Agreement, and, if
PAGE
<PAGE>
requested by TOC, THI shall take such actions, at its own
expense, as TOC shall reasonably request in order that TOC shall
have the full rights and benefits granted to it under this
Section 3.
4. Captions. The captions and headings to the various
sections, paragraphs and exhibits of this Agreement are for
convenience of reference only and shall not affect or control the
meaning or interpretation of any of the provisions of this
Agreement.
5. Integration. This Agreement contains the entire
understanding of the parties hereto with respect to the subject
matter contained herein.
6. Notice of Communication. Any notice or other
communication shall be in writing and shall be personally
delivered, or sent by overnight or second day courier or by first
class mail, return receipt requested, to the party to whom such
notice or other communication is to be given or made at such
party's address set forth below, or to such other address as such
party shall designate by written notice to the other party as
follows:
If to THI:
Thermo Instrument Systems Inc.
c/o Thermo Electron Corporation
81 Wyman Street
P.O. Box 9046
Waltham, MA 02445-9046
Attn: General Counsel
If to TOC:
Thermo Optek Corporation
81 Wyman Street
P.O. Box 9046
Waltham, MA 02445-9046
Attn: General Counsel
provided that any notice of change of address, and any notice or
other communication given otherwise than as specified above shall
be effective only upon receipt; and further that any presumption
of receipt by the addressee shall be inoperable during the period
of any interruption in Postal Service.
7. Governing Law; Assignment. This Agreement is to be
construed, interpreted, applied and governed in all respects in
accordance with the laws of the Commonwealth of Massachusetts,
without regard to its conflict of laws provisions, is to take
effect as a sealed instrument, is binding upon and inures to the
benefit of the parties hereto and their respect successors and
assigns and may be canceled, modified or amended only by a
PAGE
<PAGE>
written instrument executed by THI and TOC. No party hereto may
assign its rights hereunder without prior written consent of the
other party.
PAGE
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date and year first above written.
THERMO INSTRUMENT SYSTEMS INC.
By: Earl R. Lewis
-------------------------------------
Earl R. Lewis
Executive Vice President and Chief
Operating Officer
THERMO OPTEK CORPORATION
By: Robert J. Rosenthal
-------------------------------------
Robert J. Rosenthal
Senior Vice President
THERMO OPTEK CORPORATION
STOCK HOLDINGS ASSISTANCE PLAN
SECTION 1. Purpose.
The purpose of this Plan is to benefit Thermo Optek
Corporation (the "Company") and its stockholders by encouraging
Key Employees to acquire and maintain share ownership in the
Company, by increasing such employees' proprietary interest in
promoting the growth and performance of the Company and its
subsidiaries and by providing for the implementation of the
Guidelines.
SECTION 2. Definitions.
The following terms, when used in the Plan, shall have the
meanings set forth below:
Committee: The Human Resources Committee of the Board of
Directors of the Company as appointed from time to time.
Common Stock: The common stock of the Company and any
successor thereto.
Company: Thermo Optek Corporation, a Delaware corporation.
Guidelines: The Stock Holdings Guidelines for Key Employees
of the Company, as established by the Committee from time to
time.
Key Employee: Any employee of the Company or any of its
subsidiaries, including any officer or member of the Board of
Directors who is also an employee, as designated by the
Committee, and who, in the judgment of the Committee, will be in
a position to contribute significantly to the attainment of the
Company's strategic goals and long-term growth and prosperity.
Loans: Loans extended to Key Employees by the Company
pursuant to this Plan.
Plan: The Thermo Optek Corporation Stock Holdings
Assistance Plan, as amended from time to time.
SECTION 3. Administration.
The Plan and the Guidelines shall be administered by the
Committee, which shall have authority to interpret the Plan and
the Guidelines and, subject to their provisions, to prescribe,
amend and rescind any rules and regulations and to make all other
determinations necessary or desirable for the administration
thereof. The Committee's interpretations and decisions with
regard to the Plan and the Guidelines and such rules and
regulations as may be established thereunder shall be final and
PAGE
<PAGE>
conclusive. The Committee may correct any defect or supply any
omission or reconcile any inconsistency in the Plan or the
Guidelines, or in any Loan in the manner and to the extent the
Committee deems desirable to carry it into effect. No member of
the Committee shall be liable for any action or omission in
connection with the Plan or the Guidelines that is made in good
faith.
SECTION 4. Loans and Loan Limits.
The Committee has determined that the provision of Loans
from time to time to Key Employees in such amounts as to cause
such Key Employees to comply with the Guidelines is, in the
judgment of the Committee, reasonably expected to benefit the
Company and authorizes the Company to extend Loans from time to
time to Key Employees in such amounts as may be requested by such
Key Employees in order to comply with the Guidelines. Such Loans
may be used solely for the purpose of acquiring Common Stock
(other than upon the exercise of stock options or under employee
stock purchase plans) in open market transactions or from the
Company.
Each Loan shall be full recourse and evidenced by a
non-interest bearing promissory note substantially in the form
attached hereto as Exhibit A (the "Note") and maturing in
accordance with the provisions of Section 6 hereof, and
containing such other terms and conditions, which are not
inconsistent with the provisions of the Plan and the Guidelines,
as the Committee shall determine in its sole and absolute
discretion.
SECTION 5. Federal Income Tax Treatment of Loans.
For federal income tax purposes, interest on Loans shall be
imputed on any interest free Loan extended under the Plan. A Key
Employee shall be deemed to have paid the imputed interest to the
Company and the Company shall be deemed to have paid said imputed
interest back to the Key Employee as additional compensation.
The deemed interest payment shall be taxable to the Company as
income, and may be deductible to the Key Employee to the extent
allowable under the rules relating to investment interest. The
deemed compensation payment to the Key Employee shall be taxable
to the employee and deductible to the Company, but shall also be
subject to employment taxes such as FICA and FUTA.
SECTION 6. Maturity of Loans.
Each Loan to a Key Employee hereunder shall be due and
payable on demand by the Company. If no such demand is made,
then each Loan shall mature and the principal thereof shall
become due and payable in five equal annual installments
commencing on the first anniversary date of the making of such
Loan. Each Loan shall also become immediately due and payable in
full, without demand, upon the occurrence of any of the events
2PAGE
<PAGE>
set forth in the Note; provided that the Committee may, in its
sole and absolute discretion, authorize an extension of the time
for repayment of a Loan upon such terms and conditions as the
Committee may determine.
3PAGE
<PAGE>
SECTION 7. Amendment and Termination of the Plan.
The Committee may from time to time alter or amend the Plan
or the Guidelines in any respect, or terminate the Plan or the
Guidelines at any time. No such amendment or termination,
however, shall alter or otherwise affect the terms and conditions
of any Loan then outstanding to Key Employee without such Key
Employee's written consent, except as otherwise provided herein
or in the promissory note evidencing such Loan.
SECTION 8. Miscellaneous Provisions.
(a) No employee or other person shall have any claim or
right to receive a Loan under the Plan, and no employee shall
have any right to be retained in the employ of the Company due to
his or her participation in the Plan.
(b) No Loan shall be made hereunder unless counsel for the
Company shall be satisfied that such Loan will be in compliance
with applicable federal, state and local laws.
(c) The expenses of the Plan shall be borne by the Company.
(d) The Plan shall be unfunded, and the Company shall not
be required to establish any special or separate fund or to make
any other segregation of assets to assure the making of any Loan
under the Plan.
(e) Except as otherwise provided in Section 7 hereof, by
accepting any Loan under the Plan, each Key Employee shall be
conclusively deemed to have indicated his acceptance and
ratification of, and consent to, any action taken under the Plan
or the Guidelines by the Company, the Board of Directors of the
Company or the Committee.
(f) The appropriate officers of the Company shall cause to
be filed any reports, returns or other information regarding
Loans hereunder, as may be required by any applicable statute,
rule or regulation.
SECTION 9. Effective Date.
The Plan and the Guidelines shall become effective upon
approval and adoption by the Committee.
4PAGE
<PAGE>
EXHIBIT A
THERMO OPTEK CORPORATION
Promissory Note
$_________
Dated:____________
For value received, ________________, an individual whose
residence is located at _______________________ (the "Employee"),
hereby promises to pay to Thermo Optek Corporation (the
"Company"), or assigns, ON DEMAND, but in any case on or before
[insert date which is the fifth anniversary of date of issuance]
(the "Maturity Date"), the principal sum of [loan amount in
words] ($_______), or such part thereof as then remains unpaid,
without interest. Principal shall be payable in lawful money of
the United States of America, in immediately available funds, at
the principal office of the Company or at such other place as the
Company may designate from time to time in writing to the
Employee.
Unless the Company has already made a demand for payment in
full of this Note, the Employee agrees to repay the Company, on
each of the first four anniversary dates of the date hereof, an
amount equal to 20% of the initial principal amount of the Note.
Payment of the final 20% of the initial principal amount, if no
demand has been made by the Company, shall be due and payable on
the Maturity Date.
This Note may be prepaid at any time or from time to time,
in whole or in part, without any premium or penalty. The
Employee acknowledges and agrees that the Company has advanced to
the Employee the principal amount of this Note pursuant to the
Company's Stock Holdings Assistance Plan, and that all terms and
conditions of such Plan are incorporated herein by reference.
The unpaid principal amount of this Note shall be and become
immediately due and payable without notice or demand, at the
option of the Company, upon the occurrence of any of the
following events:
(a) the termination of the Employee's employment with
the Company, with or without cause, for any reason or for no
reason;
(b) the death or disability of the Employee;
(c) the failure of the Employee to pay his or her
debts as they become due, the insolvency of the Employee,
5PAGE
<PAGE>
the filing by or against the Employee of any petition under
the United States Bankruptcy Code (or the filing of any
similar petition under the insolvency law of any
jurisdiction), or the making by the Employee of an
assignment or trust mortgage for the benefit of creditors or
the appointment of a receiver, custodian or similar agent
with respect to, or the taking by any such person of
possession of, any property of the Employee; or
(d) the issuance of any writ of attachment, by trustee
process or otherwise, or any restraining order or injunction
not removed, repealed or dismissed within thirty (30) days
of issuance, against or affecting the person or property of
the Employee or any liability or obligation of the Employee
to the Company.
In case any payment herein provided for shall not be paid
when due, the Employee further promises to pay all costs of
collection, including all reasonable attorneys' fees.
No delay or omission on the part of the Company in
exercising any right hereunder shall operate as a waiver of such
right or of any other right of the Company, nor shall any delay,
omission or waiver on any one occasion be deemed a bar to or
waiver of the same or any other right on any future occasion.
The Employee hereby waives presentment, demand, notice of
prepayment, protest and all other demands and notices in
connection with the delivery, acceptance, performance, default or
enforcement of this Note. The undersigned hereby assents to any
indulgence and any extension of time for payment of any
indebtedness evidenced hereby granted or permitted by the
Company.
This Note has been made pursuant to the Company's Stock
Holdings Assistance Plan and shall be governed by and construed
in accordance with, such Plan and the laws of the State of
Delaware and shall have the effect of a sealed instrument.
_______________________________
Employee Name: _________________
________________________
Witness
Exhibit 11
THERMO OPTEK CORPORATION
Computation of Earnings per Share
Three Months Ended
----------------------------------
September 28, September 30,
1996 1995
--------------------------------------------------------------------------
Computation of Primary Earnings
per Share:
Net Income (a) $ 6,426,000 $ 3,916,000
----------- -----------
Shares:
Weighted average shares outstanding 48,410,440 45,000,000
Add: Shares issuable from
assumed exercise of options
(as determined by the
application of the treasury
stock method) - 157,040
----------- -----------
Weighted average shares outstanding,
as adjusted (b) 48,410,440 45,157,040
----------- -----------
Primary Earnings per Share (a) / (b) $ .13 $ .09
=========== ===========
PAGE
<PAGE>
THERMO OPTEK CORPORATION
Computation of Earnings per Share (continued)
Nine Months Ended
----------------------------------
September 28, September 30,
1996 1995
--------------------------------------------------------------------------
Computation of Primary Earnings
per Share:
Net Income (a) $16,146,000 $12,445,000
----------- -----------
Shares:
Weighted average shares outstanding 46,389,560 45,000,000
Add: Shares issuable from
assumed exercise of options
(as determined by the
application of the treasury
stock method) 52,347 157,040
----------- -----------
Weighted average shares outstanding,
as adjusted (b) 46,441,907 45,157,040
----------- -----------
Primary Earnings per Share (a) / (b) $ .35 $ .28
=========== ===========
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THERMO OPTEK
CORP.'S QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 28, 1996
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-28-1996
<PERIOD-END> SEP-28-1996
<CASH> 114,166
<SECURITIES> 0
<RECEIVABLES> 78,497
<ALLOWANCES> 5,781
<INVENTORY> 60,794
<CURRENT-ASSETS> 276,907
<PP&E> 73,365
<DEPRECIATION> 20,347
<TOTAL-ASSETS> 537,456
<CURRENT-LIABILITIES> 181,135
<BONDS> 96,819
0
0
<COMMON> 485
<OTHER-SE> 240,883
<TOTAL-LIABILITY-AND-EQUITY> 241,368
<SALES> 253,682
<TOTAL-REVENUES> 253,682
<CGS> 134,987
<TOTAL-COSTS> 134,987
<OTHER-EXPENSES> 16,644
<LOSS-PROVISION> 1,483
<INTEREST-EXPENSE> 4,974
<INCOME-PRETAX> 28,157
<INCOME-TAX> 12,011
<INCOME-CONTINUING> 16,146
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 16,146
<EPS-PRIMARY> .35
<EPS-DILUTED> 0
</TABLE>
