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 1-11757
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.)
8 East Forge Parkway
Franklin, Massachusetts 02038
(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 49,713,464 Actual
51,788,806 Pro Forma
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
THERMO OPTEK CORPORATION
Consolidated Balance Sheet
(Unaudited)
Assets
July 4, January 3,
(In thousands) 1998 1998
- --------------------------------------------------------------------------
Current Assets:
Cash and cash equivalents $105,690 $ 71,245
Accounts receivable, less allowances of $4,669
and $5,709 92,425 99,342
Inventories:
Raw materials and supplies 35,055 35,101
Work in process 14,726 12,369
Finished goods 21,594 22,625
Prepaid expenses 7,586 7,643
Prepaid income taxes 9,643 9,634
Due from parent company and affiliated companies - 5,342
-------- --------
286,719 263,301
-------- --------
Property, Plant, and Equipment, at Cost 94,398 92,711
Less: Accumulated depreciation and amortization 34,249 29,970
-------- --------
60,149 62,741
-------- --------
Patents and Other Assets 7,209 7,707
-------- --------
Due from Thermo Vision Corporation 3,947 3,947
-------- --------
Cost in Excess of Net Assets of Acquired Companies 240,697 242,840
-------- --------
$598,721 $580,536
======== ========
2
<PAGE>
THERMO OPTEK 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 (includes $40,000 due
to Thermo Electron) $ 63,776 $ 67,267
Accounts payable 23,199 22,798
Accrued payroll and employee benefits 11,447 12,825
Accrued income taxes 21,911 18,906
Accrued installation and warranty expenses 17,298 19,266
Deferred revenue 20,756 19,486
Other accrued expenses 35,083 35,161
Due to parent company and affiliated companies 1,572 -
-------- --------
195,042 195,709
-------- --------
Deferred Income Taxes 12,381 12,456
-------- --------
Other Deferred Items 2,421 2,678
-------- --------
Long-term Obligations:
5% Subordinated convertible debentures 78,176 79,956
Other 1,230 1,444
-------- --------
79,406 81,400
-------- --------
Shareholders' Investment:
Common stock, $.01 par value, 100,000,000
shares authorized; 51,787,215 and 51,645,161
pro forma shares issued (Note 4) 518 516
Capital in excess of par value 265,695 263,301
Retained earnings 55,919 35,777
Treasury stock at cost, 1,287 and 594 shares (22) (10)
Accumulated other comprehensive items (Note 3) (12,639) (11,291)
-------- --------
309,471 288,293
-------- --------
$598,721 $580,536
======== ========
The accompanying notes are an integral part of these consolidated financial
statements.
3
<PAGE>
THERMO OPTEK CORPORATION
Consolidated Statement of Income
(Unaudited)
Three Months Ended
---------------------
July 4, June 28,
(In thousands except per share amounts) 1998 1997
- -------------------------------------------------------------------------
Revenues $107,829 $127,976
-------- --------
Costs and Operating Expenses:
Cost of revenues 55,742 69,085
Selling, general, and administrative expenses 27,301 31,836
Research and development expenses 5,972 7,313
-------- --------
89,015 108,234
-------- --------
Operating Income 18,814 19,742
Interest Income (includes $56 from related
party in 1998) 1,200 919
Interest Expense (includes $577 and $569 to
related party) (2,352) (2,467)
-------- --------
Income Before Provision for Income Taxes 17,662 18,194
Provision for Income Taxes 7,330 8,018
-------- --------
Net Income $ 10,332 $ 10,176
======== ========
Earnings per Share (Note 2):
Basic $ .20 $ .20
======== ========
Diluted $ .19 $ .19
======== ========
Weighted Average Shares (Note 2):
Basic 51,674 50,526
======== ========
Diluted 57,864 57,026
======== ========
The accompanying notes are an integral part of these consolidated financial
statements.
4
<PAGE>
THERMO OPTEK CORPORATION
Consolidated Statement of Income
(Unaudited)
Six Months Ended
--------------------
July 4, June 28,
(In thousands except per share amounts) 1998 1997
- --------------------------------------------------------------------------
Revenues $221,628 $245,343
-------- --------
Costs and Operating Expenses:
Cost of revenues 116,701 132,035
Selling, general, and administrative expenses 56,187 62,594
Research and development expenses 12,356 14,446
-------- --------
185,244 209,075
-------- --------
Operating Income 36,384 36,268
Interest Income (includes $243 from related
party in 1998) 2,301 1,818
Interest Expense (includes $1,155 and $569 to
related party) (4,254) (4,558)
-------- --------
Income Before Provision for Income Taxes 34,431 33,528
Provision for Income Taxes 14,289 14,445
-------- --------
Net Income $ 20,142 $ 19,083
======== ========
Earnings per Share (Note 2):
Basic $ .39 $ .38
======== ========
Diluted $ .37 $ .36
======== ========
Weighted Average Shares (Note 2):
Basic 51,661 50,526
======== ========
Diluted 57,830 57,059
======== ========
The accompanying notes are an integral part of these consolidated financial
statements.
5
<PAGE>
THERMO OPTEK CORPORATION
Consolidated Statement of Cash Flows
(Unaudited)
Six Months Ended
---------------------
July 4, June 28,
(In thousands) 1998 1997
- --------------------------------------------------------------------------
Operating Activities:
Net income $ 20,142 $ 19,083
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 7,799 9,051
Other noncash items 763 856
Changes in current accounts, excluding the
effects of acquisitions:
Accounts receivable 6,604 (2,588)
Inventories (1,119) (6,828)
Other current assets (15) (232)
Accounts payable 314 (4,943)
Amounts due to affiliated companies 227 13,996
Other current liabilities 875 (5,009)
Other 334 619
-------- --------
Net cash provided by operating activities 35,924 24,005
-------- --------
Investing Activities:
Acquisitions, net of cash acquired (Note 4) (1,332) (2,148)
Refund from parent company for acquisitions 6,737 -
Purchases of property, plant, and equipment (2,648) (4,362)
Other (193) (136)
-------- --------
Net cash provided by (used in) investing
activities 2,564 (6,646)
-------- --------
Financing Activities:
Net proceeds from issuance of Company common
stock 140 -
Decrease in short-term obligations, net (3,695) (1,900)
Repayment of long-term obligations (230) (210)
-------- --------
Net cash used in financing activities (3,785) (2,110)
-------- --------
Exchange Rate Effect on Cash (258) (89)
-------- --------
Increase in Cash and Cash Equivalents 34,445 15,160
Cash and Cash Equivalents at Beginning of Period 71,245 66,671
-------- --------
Cash and Cash Equivalents at End of Period $105,690 $ 81,831
======== ========
6
<PAGE>
THERMO OPTEK CORPORATION
Consolidated Statement of Cash Flows (continued)
(Unaudited)
Six Months Ended
---------------------
July 4, June 28,
(In thousands) 1998 1997
- --------------------------------------------------------------------------
Noncash Activities:
Conversion of convertible debentures $ 1,780 $ -
======== ========
Fair value of assets of acquired companies $ 2,561 $ 51,033
Cash paid for acquired companies (1,397) (3,017)
Stock issuable to parent company for acquired
companies - (12)
Due to parent company for acquired companies - (38,891)
-------- --------
Liabilities assumed of acquired companies $ 1,164 $ 9,113
======== ========
The accompanying notes are an integral part of these consolidated financial
statements.
7
<PAGE>
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 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.
Historical financial results have been restated to include Gebruder Haake
GmbH (Haake), which was acquired in a transaction accounted for in a manner
similar to a pooling of interests (Note 4). 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 $10,332 $10,176 $20,142 $19,083
------- ------- ------- -------
Weighted averages shares 49,599 48,451 49,586 48,451
Shares issuable in connection
with the acquisition of
Haake (Note 4) 2,075 2,075 2,075 2,075
------- ------- ------- -------
Pro forma weighted average
shares 51,674 50,526 51,661 50,526
------- ------- ------- -------
Basic earnings per share $ .20 $ .20 $ .39 $ .38
======= ======= ======= =======
Diluted
Net income $10,332 $10,176 $20,142 $19,083
Effect of convertible
debentures 598 722 1,197 1,444
------- ------- ------- -------
Income available to common
shareholders, as adjusted $10,930 $10,898 $21,339 $20,527
------- ------- ------- -------
Pro forma weighted average
shares 51,674 50,526 51,661 50,526
Effect of:
Convertible debentures 5,715 6,482 5,723 6,481
Stock options 475 18 446 52
------- ------- ------- -------
Pro forma weighted average
shares, as adjusted 57,864 57,026 57,830 57,059
------- ------- ------- -------
Diluted earnings per share $ .19 $ .19 $ .37 $ .36
======= ======= ======= =======
8
<PAGE>
2. Earnings per Share (continued)
The computation of diluted earnings per share for certain periods 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 229,000 of such
options outstanding, with exercise prices ranging from $16.65 to $16.88 per
share.
3. Comprehensive Income
During the first quarter of 1998, the Company adopted Statement of Financial
Accounting Standards 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 $10,524,000
and $11,494,000, respectively. During the first six months of 1998 and 1997, the
Company's comprehensive income totaled $18,794,000 and $12,955,000,
respectively.
4. Acquisitions
On March 29, 1996, Thermo Instrument Systems Inc. acquired a substantial
portion of the businesses constituting the Scientific Instruments Division of
Fisons plc (Fisons), a wholly owned subsidiary of Rhone-Poulenc Rorer Inc. In
July 1998, the Company agreed to acquire Haake, a business formerly part of
Fisons, from Thermo Instrument for 2,075,342 shares of the Company's common
stock, valued at $23,815,000 at the time of the transaction, and the assumption
of $10,353,000 of debt. The purchase price for this acquisition was determined
based on the net tangible book value of Haake at March 29, 1996, and a pro rata
allocation of Thermo Instrument's total cost in excess of net assets acquired
associated with its acquisition of the Fisons businesses. The purchase price for
Haake included $4,781,000 for the increase in the net book value from the date
the business was acquired by Thermo Instrument to July 4, 1998. This amount was
recorded as a deemed distribution from retained earnings, reflecting payment by
the Company to Thermo Instrument for the earnings of Haake from the date of the
acquisition by Thermo Instrument until the date of transfer to the Company.
Haake is a supplier of viscometry and rheometry systems used by a wide variety
of manufacturers to measure the properties of liquid substances. Haake also
manufactures mixers, extruders, post-extrusion equipment, circulators, baths,
cryostats, water recirculators, and PVT analyzers.
Because the Company and Haake were deemed for accounting purposes to be
under control of their common majority owner, Thermo Instrument, the transaction
has been accounted for in a manner similar to a pooling of interests.
Accordingly, the Company's historical financial information has been restated to
include the results of Haake from March 29, 1996, the date the business was
acquired by Thermo Instrument.
9
<PAGE>
4. Acquisitions (continued)
In addition, during the first six months of 1998, the Company acquired two
businesses for an aggregate purchase price of $1,397,000 in cash. These
acquisitions were accounted for under the purchase method of accounting.
Allocation of the purchase price for these acquisitions was based on estimates
of the fair value of net assets acquired. Pro forma results of operations are
not presented as the acquired businesses were not material to the Company's
results of operations.
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
fiscal year ended January 3, 1998, filed with the Securities and Exchange
Commission.
Overview
The Company is a worldwide leader in instrumentation based upon energy and
light measurements (molecular and elemental analysis), systems for materials
analysis, characterization, and preparation (materials science). Now, with the
acquisition of Gebruder Haake GmbH (Haake) (Note 4), the Company has expanded
its presence in the systems for the measurement of physical properties market.
The Company provides industry, government, and academia with complete solutions
to specific analytical problems, moving sophisticated analytical technology
outside the laboratory. The Company's instruments are used in virtually every
industry for research and development, manufacturing, and quality control.
For molecular and elemental analysis, the Company has three principal
operating units: Madison, Wisconsin-based Nicolet Instrument Corporation, a
manufacturer and distributor of Fourier transform infrared (FT-IR) and FT-Raman
spectrometry products; Franklin, Massachusetts-based Thermo Jarrell Ash
Corporation, a manufacturer and distributor of atomic absorption (AA) and atomic
emission (AE) spectrometry products; and Ecublens, Switzerland-based A.R.L.
Applied Research Laboratories S.A., a manufacturer and distributor of
wavelength-dispersive X-ray fluorescence and AE instruments.
For materials science, the Company has one principal operating unit, VG
Systems Limited, located in the United Kingdom. VG Systems primarily includes VG
Semicon, a manufacturer and distributor of equipment for the production of
molecular-beam epitaxy products, and VG Scientific, a manufacturer and
distributor of instrumentation for surface and chemical analysis.
10
<PAGE>
Overview (continued)
Effective March 12, 1997, the Company acquired Spectronic Instruments Inc.,
a supplier of ultraviolet/visible (UV/Vis) spectrophotometers and accessories,
fluorescence instruments, and diffraction gratings based in Rochester, New York,
from Thermo Instrument.
In December 1997, the Company distributed 100 percent of its Thermo Vision
Corporation subsidiary's capital stock in the form of a dividend to the
Company's shareholders. Thermo Vision designs, manufactures, and markets a
diverse array of photonic products, including optical components, imaging
sensors and systems, lasers, optically based instruments, optoelectronics, and
fiber optics. As a result of the distribution, Thermo Vision is a publicly
traded, majority-owned subsidiary of Thermo Instrument. The consolidated
financial statements of the Company include the results of Thermo Vision through
December 15, 1997.
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.
During 1997, the Company's U.S. and foreign operations had revenues to
customers in Asia of approximately 22% of total revenues. Certain countries in
Asia are experiencing a severe economic crisis, which has been characterized by
sharply reduced economic activity and liquidity, highly volatile
foreign-currency-exchange and interest rates, and unstable stock markets. The
Company's sales to Asia have been adversely affected by the unstable economic
conditions there.
At July 4, 1998, the Company's backlog was $81.7 million, compared with
$101.0 million at January 3, 1998, a decrease of $19.3 million. The Company
generally does not believe that its backlog is necessarily indicative of the
intermediate or long-term trends in its business. However, as described below,
the Company is currently experiencing a decrease in sales to the semiconductor
industry and to certain countries. If this trend continues, the Company would
expect to continue to report lower revenues in 1998 compared with 1997,
excluding the effect of the spinout of Thermo Vision, which would adversely
impact its operating results.
Results of Operations
Second Quarter 1998 Compared With Second Quarter 1997
Revenues decreased to $107.8 million in the second quarter of 1998 from
$128.0 million in the second quarter of 1997. The decrease was the result of the
distribution of Thermo Vision in December 1997, which had revenues of $8.5
million in the second quarter of 1997; a decrease of $7.6 million primarily due
to lower sales to the semiconductor industry; lower sales to Asia and, to a
lesser extent, South Africa; and a decrease of $2.4 million due to the
unfavorable effects of currency translation as
11
<PAGE>
Second Quarter 1998 Compared With Second Quarter 1997 (continued)
a result of the strengthening in the value of the U.S dollar relative to foreign
currencies in countries in which the Company operates. In addition, revenues
decreased $2.0 million due to a change in distribution channels of an affiliated
party, which began selling its products directly and no longer uses the
Company's sales offices. Acquisitions increased revenues by $0.3 million in the
second quarter of 1998.
The gross profit margin increased to 48.3% in the second quarter of 1998
from 46.0% in the second quarter of 1997. The increase was primarily due to
higher-margin sales from the materials science group due to a change in product
mix, improved margins from the Company's inductively coupled plasma (ICP)/mass
spectroscopy instrument products, and the reduction of low-margin distribution
sales from an affiliated party as described above.
Selling, general, and administrative expenses as a percentage of revenues
remained relatively unchanged at 25.3% and 24.9% in the second quarter of 1998
and 1997, respectively.
Research and development expenses decreased to $6.0 million in the second
quarter of 1998 from $7.3 million in the second quarter of 1997, primarily as a
result of the distribution of Thermo Vision.
Interest income increased to $1.2 million in the second quarter of 1998 from
$0.9 million in the second quarter of 1997, due to higher average invested cash
balances. Interest expense remained relatively unchanged at $2.4 million in 1998
and $2.5 million in 1997.
The effective tax rate was 41.5% in the second quarter of 1998 and 44.1% in
the second quarter of 1997. The effective tax rates exceeded the statutory
federal income tax rate primarily due to the effect of state income taxes, the
nondeductible amortization of cost in excess of net assets of acquired
companies, and the inability to provide a tax benefit on foreign losses, offset
in part by the tax benefit associated with a foreign sales corporation. The
effective tax rate decreased in 1998 primarily as a result of the absence of
foreign losses.
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.
12
<PAGE>
First Six Months 1998 Compared With First Six Months 1997
Revenues decreased to $221.6 million in the first six months of 1998 from
$245.3 million in the first six months of 1997. The decrease was the result of
the distribution of Thermo Vision, which had revenues of $16.2 million during
the first six months of 1997; a $7.7 million decrease primarily due to lower
sales to the semiconductor industry, as well as sales into certain territories;
a $5.1 million decrease due to the unfavorable effects of currency translation;
and a $2.0 million decrease due to a change in distribution channels of an
affiliated party, all of which are more fully described in the results of
operations for the second quarter. This decrease was offset in part by the
inclusion of $7.3 million of revenues from acquisitions in the first six months
of 1998.
The gross profit margin increased to 47.3% in the first six months of 1998
from 46.2% in the first six months of 1997, due to the reasons discussed in the
results of operations for the second quarter.
Selling, general, and administrative expenses as a percentage of revenues
remained relatively unchanged at 25.4% and 25.5% in the first six months of 1998
and 1997, respectively
Research and development expenses decreased to $12.4 million in the first
six months of 1998 from $14.4 million in the first six months of 1997, primarily
as a result of the distribution of Thermo Vision.
Interest income increased to $2.3 million in the first six months of 1998
from $1.8 million in the first six months of 1997, due to higher average
invested cash balances. Interest expense decreased to $4.3 million in 1998 from
$4.6 million in 1997, due to the conversion of a portion of the Company's 5%
subordinated convertible debentures into common stock of the Company.
The effective tax rate was 41.5% and 43.1% in the first six months of 1998
and 1997, respectively. The effective tax rates exceeded the statutory federal
income tax rate and decreased in 1998, primarily due to the reason discussed in
the results of operations for the second quarter.
Liquidity and Capital Resources
Consolidated working capital was $91.7 million at July 4, 1998, compared
with $67.6 million at January 3, 1998. Included in working capital are cash and
cash equivalents of $105.7 million at July 4, 1998, compared with $71.2 million
at January 3, 1998. Cash provided by operating activities was $35.9 million in
the first six months of 1998. Cash provided by the Company's operating results
benefited from a $6.6 million decrease in accounts receivable as a result of
management efforts to reduce the Company's investment in these assets and, to a
lesser extent, a decrease in revenues during the second quarter of 1998.
The Company's investing activities provided $2.6 million of cash in the
first six months of 1998. The Company received a refund of $6.7 million from
Thermo Instrument relating to the 1997 and 1996 purchases of certain former
Fisons businesses. The Company expended $2.6 million for the purchase of
property, plant, and equipment during the first six months of 1998 and plans to
expend an additional $2.6 million for such purchases during the remainder of
1998.
13
<PAGE>
Liquidity and Capital Resources (continued)
The Company's financing activities used $3.8 million of cash in the first
six months of 1998. The Company used $3.7 million for the repayment of
short-term borrowings. In August 1998, upon maturity, the Company repaid a $40.0
million note payable to Thermo Electron Corporation out of available cash. Also,
in August 1998, the Company purchased Scintag Inc. for $4.0 million in cash and
the assumption of approximately $0.8 million of debt. Scintag is a leading
supplier of powder X-ray diffractometers used primarily in R&D laboratories for
applications in metallurgy, materials science, ceramics, electronics,
mineralogy, and chemistry. For its latest fiscal year, Scintag had revenues of
approximately $5.0 million.
Although the Company expects to have positive cash flow from its existing
operations, the Company may require significant amounts of cash for any
acquisition of complementary businesses. The Company expects that it will
finance any such acquisitions through a combination of internal funds and/or
short-term borrowings from Thermo Instrument or Thermo Electron, although it has
no agreement with these companies to ensure that funds will be available on
acceptable terms or at all. The Company believes its existing resources are
sufficient to meet the capital requirements of its existing operations for the
foreseeable future.
PART II - OTHER INFORMATION
Item 4 - Submission of Matters to a Vote of Security Holders
On June 1, 1998, at the Annual Meeting of Shareholders, the
shareholders elected six incumbent directors to a one-year term expiring
in 1999. The Directors elected at the meeting were: Dr. George N.
Hatsopoulos, Mr. Stephen R. Levy, Mr. Earl R. Lewis, Mr. Robert A. McCabe,
Dr. Robert J. Rosenthal, and Mr. Arvin H. Smith. Each director received
48,928,826 shares voted in favor of his election and 27,663 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 15, 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 15, 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 13th day of August 1998.
THERMO OPTEK 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
- --------------------------------------------------------------------------------
2 Share Purchase Agreement dated as of August 10, 1998, between the
Company and Thermo Instrument Systems Inc. Pursuant to Item
601(b)(2) of Regulation S-K, schedules to this Agreement have been
omitted. The Company hereby undertakes to furnish supplementally a
copy of such schedules to the Commission upon request.
27.1 Financial Data Schedule for the quarter ended July 4, 1998.
27.2 Financial Data Schedule for the quarter ended June 28, 1997
(restated for the acquisition of Haake).
16
SHARE PURCHASE AGREEMENT
BETWEEN
THERMO OPTEK CORPORATION
AND
THERMO INSTRUMENT SYSTEMS INC.
-----------------------------
August 10, 1998
-----------------------------
<PAGE>
SHARE PURCHASE AGREEMENT
THIS SHARE PURCHASE AGREEMENT (this "Agreement") dated as of August 10,
1998 is between Thermo Optek Corporation ("TOC"), a Delaware corporation, and
Thermo Instrument Systems Inc. ("THI"), a Delaware corporation.
Preliminary Statement
1. THI beneficially owns (a) all of the equity capital of and rights of
ownership in (the "Equity Capital") Gebruder Haake GmbH ("Haake") and (b) all of
the issued and outstanding shares (the "Capital Stock") of HB Instruments Inc.
("HB"). Haake and HB are sometimes referred to herein individually as a
"Company" and collectively as the "Companies." The Equity Capital and the
Capital Stock are referred to herein collectively as the "Shares."
2. TOC desires to purchase, or cause its wholly-owned subsidiaries to
purchase, and THI desires to sell, or cause its subsidiaries to sell, all of the
Equity Capital of Haake and the Capital Stock of HB, for the consideration set
forth below, subject to the terms and conditions of this Agreement.
NOW THEREFORE, in consideration of the mutual promises hereinafter set
forth and other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereby agree as follows:
SECTION 1 - PURCHASE AND SALE OF THE SHARES
1.1 Purchase of the Shares from THI. Subject to and upon the terms and
conditions of this Agreement, at the closing of the transactions contemplated by
this Agreement (the "Closing"), THI shall sell, transfer, convey, assign and
deliver to TOC, or its wholly-owned subsidiaries, and TOC or its wholly-owned
subsidiaries shall purchase, acquire and accept the Shares.
1.2 Further Assurances. At any time and from time to time prior to and
after the Closing, at TOC's request and without further consideration, THI shall
promptly execute and deliver such instruments of sale, transfer, conveyance,
assignment and confirmation, and take all such other action as TOC may
reasonably request, more effectively to transfer, convey and assign to TOC, and
to confirm TOC's title to, all of the Shares owned by THI, to put TOC in actual
possession and operating control of the assets, properties and business of the
Companies, to assist in exercising all rights with respect thereto and to carry
out the purpose and intent of this Agreement.
1.3 Consideration for the Shares. The consideration to be paid by TOC for
the Shares (the "Purchase Price") shall be 2,075,342 shares (the "Purchase Price
Shares") of TOC's common stock, par value $.01 per share (the "TOC Common
Stock").
1.4 Closing. The Closing shall take place at the offices of THI at 81
Wyman Street, Waltham, Massachusetts. At the Closing, THI shall deliver, or
cause its subsidiaries to deliver, the instruments or certificates evidencing
the Shares duly endorsed in blank or with stock powers duly executed. At the
Closing, TOC shall deliver one or more certificates representing the Purchase
Price Shares registered in the name of THI and/or such of its subsidiaries as
THI shall designate.
SECTION 2 - REPRESENTATIONS AND WARRANTIES OF THI
Except as set forth on the disclosure schedule delivered to TOC on the
date hereof (the "Disclosure Schedule"), THI represents and warrants to TOC as
follows. The term "knowledge," when used in this Agreement, shall mean actual
knowledge after reasonable investigation.
2.1 Organization and Qualification. Each of THI, Haake and HB is a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation and has full corporate power and authority
to own, lease and operate its assets and to carry on its business as now being
and as heretofore conducted. Each of THI, Haake and HB is qualified or otherwise
authorized to transact business as a foreign corporation in all jurisdictions in
which such qualification or authorization is required by law, except for
jurisdictions in which the failure to be so qualified or authorized would not
have a material adverse effect on the assets, properties, business, results of
operations, condition (financial or otherwise) or prospects of the Companies
taken as a whole.
2.2 Authority. THI has full right, power, capacity and authority to
execute, deliver and perform this Agreement and to consummate the transactions
contemplated hereby. The execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated hereby have been duly and
validly authorized by all necessary corporate action on the part of THI. This
Agreement has been duly and validly executed and delivered by THI and
constitutes the valid and binding obligation of THI, enforceable against it in
accordance with the terms hereof. Neither the execution, delivery and
performance of this Agreement, nor the consummation of the transactions
contemplated hereby will (i) conflict with or result in a violation, breach,
termination or acceleration of, or default under (or would result in a
violation, breach, termination, acceleration or default with the giving of
notice or passage of time, or both) any of the terms, conditions or provisions
of the organizational documents of THI or the Companies, or of any note, bond,
mortgage, indenture, license, agreement or other instrument or obligation to
which THI or the Companies are a party or by which THI or the Companies or any
of their respective properties or assets may be bound or affected; (ii) result
in the violation of any order, writ, injunction, decree, statute, rule or
regulation applicable to THI or the Companies or any of their respective
properties or assets; (iii) result in the imposition of any lien, encumbrance,
charge or claim upon any assets of the Companies; or (iv) entitle any employee
of the Companies to severance or other payments or create any other obligation
to an employee. No consent or approval by, or notification to or filing with,
any court, governmental authority or third party is required in connection with
the execution, delivery and performance of this Agreement by THI or the
consummation of the transactions contemplated hereby.
2.3 Capitalization and Title to Shares.
(a) The authorized equity or share capital of each of the Companies
is set forth on Exhibit A hereto. THI is the record and beneficial owner of the
Equity Capital and the Capital Stock of Haake and HB, respectively. All of the
Shares are duly authorized and are validly issued, fully paid, nonassessable and
free of preemptive rights.
(b) There are no other rights of ownership or shares of capital stock
of the Companies authorized or outstanding or any subscriptions, options,
conversion or exchange rights, warrants, repurchase or redemption agreements, or
other agreements or commitments obligating either of the Companies to issue,
transfer, sell, repurchase or redeem any shares of its equity capital, capital
stock or other securities. There are no written shareholder agreements, voting
trusts, proxies or other agreements, instruments or understandings with respect
to the voting of the equity capital or capital stock of either of the Companies.
The books and records of the Companies, including without limitation the books
of account, minute books, stock certificate books and stock ledgers, are
complete and correct and accurately reflect the conduct of the business and
affairs of the Companies.
2.4 Subsidiaries and Other Affiliates.
(a) The Disclosure Schedule sets forth all Subsidiaries of the
Companies and the jurisdiction in which each is incorporated. All of the equity
capital or the shares of capital stock of each such Subsidiary owned by the
Companies are owned free and clear of any charges, liens, encumbrances, security
interests or adverse claims. As used in this Agreement, "Subsidiary" means any
corporation or other legal entity of which a party to this Agreement owns,
directly or indirectly, fifty percent (50%) or more of the stock or other equity
interest entitled to vote for the election of directors and representations,
warranties and covenants referring to Haake or HB or the Companies contained
herein shall be deemed to mean Haake and HB, and each of its respective
Subsidiaries, both separately and together as a consolidated whole, unless and
except to the extent expressly indicated otherwise.
(b) There are no other rights of ownership or shares of capital stock
of any Subsidiary of the Companies authorized or outstanding or any
subscriptions, options, conversion or exchange rights, warrants, repurchase or
redemption agreements, or other agreements or commitments obligating any
Subsidiary of the Companies to issue, transfer, sell, repurchase or redeem any
shares of its capital stock or other securities. There are no shareholder
agreements, voting trusts, proxies or other agreements, instruments or
understandings with respect to the voting of the capital stock of any Subsidiary
of the Companies.
(c) Except for its Subsidiaries, the Companies do not, directly or
indirectly, own any material equity interest in any corporation, partnership,
joint venture or other entity.
2.5 Financial Statements. THI has delivered to TOC prior to the execution
of this Agreement true and complete copies of: the unaudited consolidating
balance sheets of the Companies as of January 3, 1998 and December 29, 1996, and
the unaudited consolidating statements of operations for the years then ended.
In addition, THI has delivered to TOC prior to the execution of this Agreement,
true and complete copies of the unaudited consolidating balance sheets of the
Companies as of July 4, 1998 and the unaudited consolidating statements of
operations for the six-month period then ended. Collectively, the financial
statements referred to in the preceding two sentences are sometimes referred to
herein as the "Financial Statements" and the unaudited consolidated balance
sheet of the Companies as of July 4, 1998 is referred to herein as the "Balance
Sheet." The Financial Statements have been prepared from, and are in accordance
with, the books and records of THI and fairly present the financial condition
and results of operations of the Companies as at the dates and for the periods
indicated, in each case in accordance with generally accepted accounting
principles applied on a basis consistent with previous years subject to normal
year-end adjustments, which in the aggregate are not material.
2.6 Absence of Undisclosed Liabilities; No Dealings with Affiliates. As of
the date of the Balance Sheet, the Companies had no liabilities or obligations
of any nature, whether accrued, absolute, contingent or otherwise and whether
due or to become due (including without limitation, liabilities as guarantor or
otherwise with respect to obligations of others or liabilities for taxes due or
then accrued or to become due), required to be reflected or disclosed on the
Balance Sheet that were not adequately reflected or reserved against on the
Balance Sheet. The Companies have no liabilities of the type required to be
reflected or disclosed on a balance sheet in accordance with generally accepted
accounting principles, other than liabilities (i) adequately reflected or
reserved against on the Balance Sheet, (ii) incurred since the date of the
Balance Sheet in the ordinary course of business and consistent with past
practice, (iii) that would not, in the aggregate, have a material adverse effect
on the Companies taken as a whole, or (iv) disclosed in this Agreement. The
Companies have no contractual arrangement with or commitment to or from any of
its stockholders, officers, management, directors or employees (or their family
members) other than such as may have been entered into in the normal course of
employment, including, without limiting the generality of the foregoing, being
directly or indirectly a joint investor or coventurer with respect to, or owner,
lessor, lessee, licenser or licensee of, any real or personal property, tangible
or intangible, owned or used by, or a lender to or debtor of, the Companies.
2.7 Taxes. The Companies have accurately prepared and duly and timely
filed all federal, state, local, provincial or foreign tax and other returns and
reports which were required to be filed, in respect of all income, franchise,
excise, sales, use, property (real and personal), VAT, payroll and other taxes,
levies, imports, duties, license and registration fees, charges or withholdings
of any nature whatsoever (collectively "Taxes"), and to the extent the
liabilities of the Companies, as of the date of the Balance Sheet, for Taxes
have not been fully discharged, adequate reserves have been established on the
Balance Sheet. None of the federal, state, local, provincial or foreign Tax
returns of the Companies has been audited or examined by the governmental
authority having jurisdiction. No waivers of any statutes of limitation are in
effect in respect of any Taxes. The Companies are not in default in the payment
of any Taxes due and payable or on any assessments received in respect thereof,
and there are no claims pending or, to the best knowledge of the Companies and
THI, threatened, against the Companies for past due Taxes. All Taxes incurred
but not yet due have been fully accrued on the books of the Companies or full
reserves have been established therefor; the reserves indicated on the Balance
Sheet are also adequate to cover all Taxes that may become payable by the
Companies in future periods in respect of any transactions or sales occurring on
or prior to the date of the Balance Sheet. Without limiting the generality of
the foregoing, the Companies have withheld or collected from each payment made
to each of their employees, consultants or non-U.S. payees, the amount of all
Taxes required to be withheld or collected therefrom, and has paid the same to
the proper tax receiving officers or authorized depositories.
2.8 Properties. Each of the Companies owns and has good title to all of
the assets and properties reflected as owned by it on the Balance Sheet or
acquired by it since the date of the Balance Sheet (except personal property
sold or otherwise disposed of in the ordinary course of business since the date
of the Balance Sheet), free and clear of any lien, claim or other encumbrance,
except for (i) the liens, claims or other encumbrances reflected on the Balance
Sheet, (ii) assets and properties disposed of, or subject to purchase or sales
orders, in the ordinary course of business since the date of the Balance Sheet,
(iii) liens, claims or other encumbrances securing the liens of materialmen,
carriers, landlords and like persons, all of which are not yet due and payable,
(iv) liens for taxes not yet delinquent and (v) liens, claims, other
encumbrances or defects in title that, in the aggregate, are not material to the
Companies taken as a whole. Each of the Companies owns or has a valid leasehold
interest in all of the buildings, structures, leasehold improvements, equipment
and other tangible property material to the Companies taken as a whole, all of
which are in good and sufficient operating condition and repair, ordinary wear
and tear excepted and the Companies have not received any notice that any such
property is in violation in any material respect of any existing law or any
building, zoning, health, safety or other ordinance, code or regulation.
2.9 Hazardous Materials.
(a) There has been no generation, use, handling, storage or disposal
of any Hazardous Materials in violation of common law or any applicable
environmental law at any site owned or premises leased by the Companies during
the period of the Companies' ownership or lease. To the best knowledge of the
Companies, there has not been and there is not threatened any release of any
Hazardous Materials on or at any such site or premises during such period in
violation of common law or any applicable environmental law or which created or
will create an obligation to report or remediate such release. For purposes of
this Agreement, "Hazardous Material" means any medical waste, flammable,
explosive or radioactive material, or any hazardous or toxic waste, substance or
material, including substances defined as "hazardous substances," "hazardous
materials," "solid waste" or "toxic substances" under any applicable laws or
ordinances relating to hazardous or toxic materials and substances, air
pollution (including noise and odors), water pollution, liquid and solid waste,
pesticides, drinking water, community and employee health, environmental land
use management, stormwater, sediment control, nuisances, radiation, wetlands,
endangered species, environmental permitting, petroleum products, and all rules
and regulations promulgated pursuant to any such laws and ordinances.
(b) THI has previously made available to TOC copies of all documents
in its possession concerning any environmental or health and safety matter,
copies of any environmental audits or risk assessments, site assessments,
documentation regarding off-site disposal of Hazardous Materials, spill control
plans and material correspondence with any governmental authority regarding the
foregoing.
2.10 Accounts Receivable. All accounts and notes receivable of the
Companies shown on the Balance Sheet and all accounts and notes receivable
acquired by the Companies subsequent to the date of the Balance Sheet have
arisen in the ordinary course of business and have been collected, or are in the
process of collection and are collectible in the ordinary course of business and
in any event within nine months from the Closing, in the aggregate recorded
amounts thereof, less the applicable allowances reflected on the Balance Sheet
with respect to the accounts and notes receivable shown thereon, or set up
consistent with past practice on the books of the Companies with respect to the
accounts and notes receivable acquired subsequent to the date of the Balance
Sheet.
2.11 Inventories. All Inventories (as defined below) of the Companies are
of a quality and quantity usable and saleable in the ordinary course of
business, except for obsolete items and items of below-standard quality, all of
which are in the aggregate immaterial to the Companies taken as a whole. Items
included in such Inventories are carried on the books of the Companies, and are
valued on the Balance Sheet, at the lower of cost or market. The value of
obsolete materials and materials of below-standard quality or quantity has been
written down on the books of account of the Companies to realizable market
value. The term "Inventories" includes all stock of raw materials,
work-in-process and finished goods, including but not limited to finished goods
purchased for resale, held by the Companies for manufacturing, assembly,
processing, finishing, sale or resale to others, from time to time in the
ordinary course of business of the Companies in the form in which such
inventories then are held or after manufacturing, assembling, finishing,
processing, incorporating with other goods or items, refining or the like.
2.12 Purchase and Sale Commitments. No outstanding purchase commitments by
the Companies are in excess of the normal, ordinary and usual requirements of
the Companies, and the aggregate of the contract prices to which the Companies
have agreed in any outstanding purchase commitments is not so excessive when
compared with current market prices for the relevant commodities or services
that a material loss is likely to result. No outstanding sales commitment by
either Company obligates the Companies to sell any product or service at a price
which, because of currently prevailing and projected costs of materials or
labor, is likely to result, when all such sales commitments are taken in the
aggregate, in a material loss to the Companies taken as a whole. There are no
material suppliers to the Companies of significant goods or services with
respect to which practical alternative sources of supply, or comparable
products, are not available on comparable terms and conditions.
2.13 Governmental Authorizations. The Companies have all governmental
permits, licenses, franchises, concessions, zoning variances and other
approvals, authorizations and orders (collectively "Permits") material to the
Companies taken as a whole. All such Permits are presently in full force and
effect, the Companies are in compliance with the requirements thereof, no
suspension or cancellation of any of them is threatened so far as is known to
THI or the Companies, and the sale of the Shares as contemplated hereby will not
adversely affect the validity or effectiveness of, and will not require, for
retention thereof after such sale, the consent or approval of any party to, or
any other person or governmental authority having jurisdiction of, any such
Permit. Neither the Companies nor THI has any knowledge of any fact or
circumstance which would prevent, limit or restrict it from continuing to
operate its business in the present manner, and no new requirements pertaining
to the manner of operating its business have been issued or announced by any
governmental authority during the past year nor are there any disputes pending
between the Companies and any governmental authority relating to the Companies'
operations as presently being conducted or actively considered.
2.14 Intellectual Property. The Companies own, or are licensed to use, or
otherwise have the right to use all patents, trademarks, service marks, trade
names, trade secrets, franchises, and copyrights, and all applications for any
of the foregoing, and all technology, know-how and processes necessary for the
conduct of their respective businesses as now conducted (collectively, the
"Proprietary Rights"). A list of all such copyrights, trademarks, tradenames and
patents, and all applications therefor, has been furnished or made available to
TOC. Neither the Companies nor THI is aware of any claim by any third party that
the business of the Companies as currently conducted or proposed to be conducted
infringes upon the unlicensed Proprietary Rights of others, nor has the
Companies or THI received any notice or claim from any third party of such
infringement by the Companies. Neither the Companies nor THI is aware of any
infringement by any third party on, or any competing claim of right to use or
own any of, the Proprietary Rights of the Companies. The Companies have the
right to use, free and clear of claims or rights of others, all customer lists
and computer software material to its business as currently conducted. To the
best knowledge of the Companies and THI, none of the activities of the employees
of the Companies, on behalf of the Companies, violates any agreements or
arrangements that any such employees have with former employers in a way that is
materially adverse to the business of the Companies taken as a whole.
2.15 Insurance. The Companies are not in default with respect to any
provisions of any policy of general liability, fire, title or other form of
insurance held by them, the Companies are current in the payment of all premiums
due on such insurance and the Companies have not failed to give any notice or
present any claim thereunder in due and timely fashion, except for claims that
are immaterial in both the nature of the claim and in the amount of such claim.
Each of the Companies maintains insurance on all of its assets and business
(including products liability insurance) from insurers that are financially
sound and reputable, in amounts and coverages and against the kinds of risks and
losses reasonably prudent to be insured against by corporations engaged in the
same or similar businesses. No basis exists which would jeopardize the coverage
under any such insurance. No such insurance will be terminated or canceled by
reason of the execution, delivery and performance of this Agreement or the
consummation of the transactions contemplated hereby. THI has previously
furnished or made available to TOC all policies of general liability, fire,
title or other forms of insurance applicable to the Companies and a description
of all claims pending thereunder other than health or dental insurance claims.
2.16 Employee Benefit Plans.
(a) THI has made available or furnished to TOC true and complete
copies of each pension, profit-sharing, deferred compensation, incentive
compensation, severance pay, retirement, welfare benefit or other plan or
arrangement providing benefits to employees or retirees, including both those
that do and do not constitute employee benefit plans within the meaning of
Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
(the "ERISA"), currently maintained or contributed to by THI or any of its
affiliates for the benefit of the employees of each of the Companies (each, a
"Plan").
(b) Except as set forth on the Disclosure Schedule, (i) each such
Plan that is an "employee pension benefit plan" within the meaning of Section
3(2) of ERISA is being operated and administered in compliance with Section
401(a) of the Code, a favorable determination letter has been obtained from the
Internal Revenue Service (the "IRS") for such Plan, and there is no accumulated
funding deficiency, as defined in Section 302(a)(2) of ERISA or Section 412 of
the Code, with respect to such Plan; (ii) there has been no non-exempt
"prohibited transaction" within the meaning of Section 406 of ERISA or Section
4975 of the Code involving the assets of any Plan nor any "reportable event"
within the meaning of Section 4043 of ERISA with respect to any Plan; (iii) all
required employer contributions to such Plan have been made (or, in the case of
contributions not yet due, have been accrued on the Balance Sheet); (iv) THI has
made available to TOC as to each such Plan a true and correct copy of (w) the
annual report (Form 5500) filed with the IRS for each of the three most recent
plan years, (x) each plan, trust agreement, group annuity contract and insurance
contract, if any, relating to such Plan, (y) each actuarial report prepared for
each of the last three years for each Plan and (z) each summary plan description
distributed to participants in each Plan and each summary of material
modifications to each Plan (as defined in ERISA); and (v) each such Plan is, and
at all relevant times has been, in compliance with ERISA, the Code and the terms
of such Plan. Neither THI nor the Companies or their respective affiliates has
ever participated in a "multiemployer pension plan" as defined in Section 3(37)
of ERISA.
(c) Each Plan applicable to employees of the Companies outside of the
United States is fully funded, has been administered, in all material respects,
in compliance with its terms and the requirements of all applicable laws and
regulations and all required contributions have been made. All reports, forms
and other documents required to be filed or advisable to be filed with any
governmental entity with respect to each such Plan have been timely filed and
are complete and accurate in all material respects.
(d) Except as set forth on the Disclosure Schedule, the Companies
have no obligation to provide any welfare benefits to retired or former
employees other than continuation of welfare benefits as required by applicable
law.
(e) The Companies have no liability under or with respect to any
employee benefit plans or arrangements that it no longer maintains or in which
it no longer participates.
2.17 Agreements and Documents. THI has previously furnished or made
available to TOC true, correct and complete copies of each document that is
referred to or otherwise related to any of the following items referred to in
this Section 2.17:
(a) each document related to interests in real property owned, leased
or otherwise used or claimed by the Companies;
(b) (i) each agreement of the Companies made in the ordinary course
of business which involves aggregate future payments by or to the Companies of
more than two hundred fifty thousand dollars ($250,000) or any agreement made in
the ordinary course of business whose term extends beyond one year after the
date hereof; (ii) each agreement containing any covenant restricting the freedom
of the Companies to compete in any line of business or with any person; and
(iii) each agreement of the Companies not made in the ordinary course of
business which is or was to be performed after the date hereof;
(c) all employment or similar compensation agreements of the
Companies which may not be terminated by the Companies without penalty within
thirty days after the Closing;
(d) all bonus, incentive compensation, deferred compensation,
profit-sharing, stock option, retirement, pension, severance, indemnification,
insurance, death benefit or other fringe benefit plans, agreements or
arrangements of the Companies (or applying to the Companies) in effect, or under
which any amounts remain unpaid, on the date hereof or to become effective after
the date hereof;
(e) all labor unions or other organizations representing, purporting
to represent or attempting to represent any employees of the Companies, and all
collective bargaining agreements of the Companies with any labor unions or other
representatives or employees;
(f) each agreement or other instrument or arrangement defining the
terms on which any indebtedness of the Companies (or a guarantee by either
Company of indebtedness) is or may be issued; and
(g) the names and addresses of all banks in which the Companies have
accounts or lines of credit, and with respect to each such account or line of
credit, the names of all persons authorized to draw thereon.
The Companies are not a party to any oral contract or agreement which
would be required to have been furnished or made available to TOC under this
Section 2.17 had such contract or agreement been committed to writing.
2.18 Validity. There is no default or claimed or purported or alleged
default, or basis on which with notice or lapse of time or both (including
notice of this Agreement), a default would exist, in any obligation on the part
of any party (including the Companies) to be performed under any lease,
contract, plan, policy or other instrument or arrangement referred to in Section
2.17 or otherwise in this Agreement.
2.19 No Changes. Since the date of the Balance Sheet there
has not been:
(a) any material adverse change in the business of the
Companies taken as a whole;
(b) any material damage, destruction or loss (whether or not covered
by insurance) adversely affecting the business of the Companies taken as a
whole;
(c) any declaration, setting aside or payment of any dividend, or
other distribution, in respect of any equity capital or capital stock of the
Companies or any direct or indirect redemption, purchase or other acquisition of
such capital or stock;
(d) any option to purchase any capital stock of the Companies granted
to any person, or any employment or deferred compensation agreement entered into
between each of the Companies and any of their stockholders, officers,
directors, employees or consultants;
(e) any issuance or sale by the Companies of any stock, bonds or
other corporate securities, or any partial or complete formation, acquisition,
disposition or liquidation of the Companies;
(f) any labor union activity (including without limitation any
negotiation, or request for negotiation, with respect to any union
representation or any labor contract) respecting the Companies;
(g) any statute, rule or regulation, or, to the best knowledge of the
Companies and THI, any government policy, adopted which may materially and
adversely affect the business of the Companies;
(h) any mortgage, lien, attachment, pledge, encumbrance or security
interest created on any asset, tangible or intangible, of the Companies, or
assumed, either by the Companies or by others, with respect to any such assets,
except for liens permitted under Section 2.8;
(i) any indebtedness or other liability or obligation (whether
absolute, accrued, contingent or otherwise) incurred, or other transaction
(except that is reflected in this Agreement) engaged in, by the Companies,
except those in the ordinary course of business that are individually, or in the
aggregate to one group of related parties, less than one hundred thousand
dollars ($100,000);
(j) any obligation or liability discharged or satisfied by the
Companies, except items included in current liabilities shown on the Balance
Sheet and current liabilities incurred since the date of the Balance Sheet in
the ordinary course of business which are individually, or in the aggregate to
one group of related parties, less than one hundred thousand dollars ($100,000)
in amount;
(k) any sale, assignment, lease, transfer or other disposition of any
tangible asset of the Companies, except in the ordinary course of business, or
any sale, assignment, lease, transfer or other disposition of its patents,
trademarks, trade names, brand names, copyrights, licenses or other intangible
assets;
(l) any amendment, termination or waiver of any material right
belonging to the Companies;
(m) any increase in the compensation or benefits payable or to become
payable by the Companies to any of their officers or employees; and
(n) any other action or omission by the Companies, or the passage of
any resolution, other than in the ordinary course of business.
2.20 Litigation or Proceedings. The Companies are not engaged in, or a
party to, or, to the best of THI's and each Company's knowledge, threatened
with, any claim or legal action or other proceeding before any court, any
arbitrator of any kind or any governmental authority, nor does any basis for any
claim or legal action or other proceeding or governmental investigation exist.
There are no orders, rulings, decrees, judgments or stipulations to which the
Companies are a party by or with any court, arbitrator or governmental authority
affecting the Companies.
2.21 Compliance with Laws. The Companies (i) have not been and are not in
violation of any applicable building, zoning, occupational safety and health,
pension, export control, environmental or other federal, state, local or foreign
law, ordinance, regulation, rule, order or governmental policy applicable to it;
(ii) have not received any complaint from any governmental authority, and to the
best knowledge of THI and each of the Companies, none is threatened, alleging
that the Companies have violated any such law, ordinance, regulation, rule,
order or governmental policy; (iii) have not received any notice from any
governmental authority of any pending proceedings to take all or any part of the
properties of the Companies (whether leased or owned) by condemnation or right
of eminent domain and, to the best knowledge of THI and each of the Companies,
no such proceeding is threatened; and (iv) are not a party to any agreement or
instrument, or subject to any charter or other corporate restriction or
judgment, order, writ, injunction, rule, regulation, code or ordinance, which
materially and adversely affects, or might reasonably be expected materially and
adversely to affect the business of the Companies.
2.22 Labor Matters. There are no labor organizing activities, election
petitions or proceedings, labor strikes, disputes, slowdowns, work stoppages or
unfair labor practice complaints pending or, to the best knowledge of THI and
the Companies, threatened against the Companies or between the Companies and any
of their respective employees.
2.23 Recalls. There is no basis for the recall, withdrawal or suspension
of any approval by any governmental authority with respect to any product sold
or proposed to be sold by the Companies. None of the products of the Companies
is subject to any recall proceedings and to the best knowledge of each of the
Companies, no such proceedings have been threatened.
2.24 Brokers and Finders. Neither THI nor the Companies has employed any
broker, agent or finder or incurred any liability on behalf of THI or the
Companies or for any brokerage fees, agents' commissions or finders' fees in
connection with the transactions contemplated hereby.
2.25 Powers of Attorney. The Companies have no powers of attorney or
similar authorizations outstanding.
2.26 No Termination of Relationship. As of the date hereof, neither THI
nor the Companies has any reason to expect that any relationship between the
Companies and a material distributor, customer, supplier, lender, employee or
other person will be terminated or adversely affected as a result of the
transactions contemplated by this Agreement.
2.27 All Information. TOC has been furnished in writing prior to the
execution of this Agreement all information as to the business of the Companies
material to a reasonable buyer's determination to enter into this Agreement and
to consummate the transactions contemplated hereby.
2.28 Statements True and Correct. The statements contained herein or in
any written documents prepared and delivered by or on behalf of THI pursuant to
the terms hereof are true, complete and correct in all material respects, and
such documents do not omit any material fact required to be stated herein or
therein or necessary to make the statements contained herein or therein not
misleading.
SECTION 3 - REPRESENTATIONS AND WARRANTIES OF TOC
TOC represents and warrants to THI as follows.
3.1 Organization. TOC is a corporation duly organized, validly existing
and in good standing under the laws of the state of Delaware and has full
corporate power and authority to own, lease and operate its assets and to carry
on its business as now being and as heretofore conducted.
3.2 Authority. TOC has full right, power, capacity and authority to
execute, deliver and perform this Agreement and to consummate the transactions
contemplated hereby. The execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated hereby have been duly and
validly authorized by all necessary corporate action on the part of TOC. This
Agreement has been duly and validly executed and delivered by TOC and
constitutes the valid and binding obligation of TOC, enforceable against it in
accordance with the terms hereof. Neither the execution, delivery and
performance of this Agreement nor the consummation of the transactions
contemplated hereby will (i) conflict with or result in a violation, breach,
termination or acceleration of, or default under (or would result in a
violation, breach, termination, acceleration or default with the giving of
notice or passage of time, or both) any of the terms, conditions or provisions
of the Certificate of Incorporation or By-laws of TOC, as amended, or of any
note, bond, mortgage, indenture, license, agreement or other instrument or
obligation to which TOC is a party or by which TOC or any of its properties or
assets may be bound or affected; (ii) result in the violation of any order,
writ, injunction, decree, statute, rule or regulation applicable to TOC or any
of its properties or assets; or (iii) result in the imposition of any lien,
encumbrance, charge or claim upon any of its assets. Except for the listing of
the Purchase Price Shares for trading on the American Stock Exchange (the
"AMEX"), no consent or approval by, or notification to or filing with, any
court, governmental authority or third party is required in connection with the
execution, delivery and performance of this Agreement by TOC or the consummation
of the transactions contemplated hereby. The Purchase Price Shares will be, when
issued in accordance with this Agreement, duly authorized, validly issued, fully
paid, nonassessable and free of pre-emptive rights.
3.3 Statements True and Correct. The statements contained herein or in any
written documents prepared and delivered by or on behalf of TOC pursuant to the
terms hereof are true, complete and correct in all material respects, and such
documents do not omit any material fact required to be stated herein or therein
or necessary to make the statements contained herein or therein not misleading.
SECTION 4 - COVENANTS AND AGREEMENTS
4.1 Conduct of Business. Except with the prior written consent of TOC,
which will not be unreasonably withheld or delayed, and except as otherwise
contemplated herein, during the period from the date hereof to the Closing, THI
shall cause the Companies to observe the following covenants:
(a) Affirmative Covenants Pending Closing. THI and
each of the Companies shall:
(i) Preservation of Personnel. Use all reasonable efforts to
preserve intact the business organization of the Companies and keep available
the services of the present employees of the Companies, in each case in
accordance with past practice, it being understood that the termination of
employees with poor performance ratings shall not constitute a violation of this
covenant;
(ii) Insurance. Use all reasonable efforts to keep in effect
casualty, public liability, worker's compensation and other insurance policies
applicable to the Companies in coverage amounts not less than those in effect at
the date of this Agreement;
(iii)Preservation of the Business; Maintenance of Properties.
Except as set forth in Section 4.1(b)(i), use all reasonable efforts to preserve
the business of the Companies, advertise, promote and market its products and
services in accordance with past practices over the last twelve months, keep
their properties intact, preserve their goodwill, maintain all physical
properties in such operating condition as will permit the conduct of such
business on a basis consistent with past practice;
(iv) Intellectual Property Rights. Use all
reasonable efforts to preserve and protect the Proprietary Rights
of the Companies; and
(v) Ordinary Course of Business. Operate the business of the
Companies solely in the ordinary course.
(b) Negative Covenants Pending Closing. THI shall cause the Companies
not to:
(i) Disposition of Assets. Sell or transfer, or mortgage, pledge
or create or permit to be created any lien on, any of the assets of the
Companies other than:
(A) sales or transfers in the ordinary
course of business; and
(B) the creation of liens under existing
arrangements disclosed hereunder and liens permitted under
Section 2.8;
(ii) Liabilities. Permit the Companies to (A) incur any
obligation or liability other than in the ordinary course of business, (B) incur
any indebtedness for borrowed money in excess of $100,000 or (C) enter into any
contracts or commitments involving payments by the Companies of $100,000 or more
other than purchase orders and commitments for inventory, materials and supplies
in the ordinary course of business;
(iii)Compensation. Except as required by applicable law or any
existing employment or severance agreement, (A) change the compensation or
fringe benefits of any officer, director, employee or agent of the Companies,
except for ordinary merit increases for employees other than officers based on
periodic reviews in accordance with past practices, or (B) enter into or modify
any employment, severance or other agreement with any officer, director or
employee of the Companies or any benefit plan (it being understood that hiring
of at will employees in the ordinary course of business shall not constitute a
violation of this covenant) or (C) enter into or modify any agreement with any
consultant, except for agreements terminable upon not more than one year's
notice that are consistent with past practices with respect to consulting
agreements;
(iv) Equity Capital and Capital Stock. Make any change in the
authorized equity capital or the authorized, issued or outstanding number of
shares of capital stock of the Companies or grant any option, warrant or other
right to purchase, or to convert any obligation into, equity or shares of
capital stock of the Companies, or declare or pay any dividend or other
distribution with respect to any equity or shares of capital stock of the
Companies, or sell or transfer any equity or shares of its capital stock;
(v) Organizational Documents. Amend the
organizational documents of the Companies;
(vi) Acquisitions. Make any material acquisition of property
other than in the ordinary course of the business of the Companies and other
than Haake's acquisition of all of the equity capital of RHEO S.A. ("RHEO") in
accordance with the terms of a share purchase agreement between Haake and RHEO;
(vii)License Agreements. Enter into or modify any
license, technology development or technology transfer agreement
between the Companies and any other person or entity;
4.2 Corporate Examinations and Investigations. Prior to the Closing, TOC
shall be entitled, through its employees and representatives, to have such
access to the assets, properties, business and operations of the Companies, as
is reasonably necessary or appropriate in connection with its investigation of
the Companies with respect to the transaction contemplated hereby. Any such
investigation and examination shall be conducted at reasonable times and under
reasonable circumstances so as to minimize any disruption to or impairment of
the business and each party shall cooperate fully therein. No investigation by
TOC shall diminish or obviate any of the representations, warranties, covenants
or agreements of THI contained in this Agreement. In order that TOC may have
full opportunity to make such investigation, THI shall furnish the
representatives of TOC with all such information and copies of such documents
concerning the affairs of the Companies as TOC may reasonably request and cause
its officers, employees, consultants, agents, accountants and attorneys to
cooperate fully with TOC's representatives in connection with such
investigation.
4.3 Expenses. TOC and THI shall bear their respective expenses incurred in
connection with the preparation, execution and performance of this Agreement and
the transactions contemplated hereby, including without limitation, all fees and
expenses of agents, representatives, counsel and accountants.
4.4 Authorization from Others. Prior to the Closing, the parties shall use
all reasonable efforts to obtain all authorizations, consents and permits of
others required to permit the consummation of the transactions contemplated by
this Agreement.
4.5 Consummation of Agreement. Each party shall use all reasonable efforts
to perform and fulfill all conditions and obligations to be performed and
fulfilled by it under this Agreement and to ensure that to the extent within its
control or capable of influence by it, no breach of any of its respective
representations, warranties and agreements hereunder occurs or exists on or
prior to the Closing, all to the end that the transactions contemplated by this
Agreement shall be fully carried out in a timely fashion.
4.6 Further Assurances. Each of the parties shall execute such documents,
further instruments of transfer and assignment and other papers and take such
further actions as may be reasonably required or desirable to carry out the
provisions hereof and the transactions contemplated hereby.
4.7 Listing of Purchase Price Shares. Promptly after the date hereof, TOC
shall take all action necessary to list the Purchase Price Shares for trading
upon the AMEX.
4.8 Public Announcements and Confidentiality. Any press release or other
information to the press or any third party with respect to this Agreement or
the transactions contemplated hereby shall require the prior approval of TOC and
THI, which approval shall not be unreasonably withheld, provided that a party
shall not be prevented from making such disclosure as it shall be advised by
counsel is required by law.
4.9 No Solicitation. Neither THI nor the Companies will (i) solicit or
initiate discussions with any person, other than TOC, relating to the possible
acquisition of the Companies or all or a material portion of the assets or any
of the equity or capital stock of the Companies or any merger or other business
combination with the Companies (an "Acquisition Transaction") or (ii) except to
the extent reasonably required by fiduciary obligations under applicable law as
advised by legal counsel, participate in any negotiations regarding, or furnish
to any other person information with respect to, any effort or attempt by any
other person to do or to seek any Acquisition Transaction. THI agrees to inform
TOC within one business day of its receipt of any offer, proposal or inquiry
relating to any Acquisition Transaction.
4.10 Indemnification.
(a) Right to Indemnification. TOC and THI (as the case may be, the
"Indemnitee") shall be indemnified on its respective demand made to the other
(the "Indemnitor") for the full amount of all damages (as defined below)
suffered by it as a direct or indirect result of:
(i) the inaccuracy of any representation or
warranty made by the Indemnitor in or pursuant to this Agreement;
and
(ii) any failure by the Indemnitor to perform any obligation or
comply with any covenant or agreement specified in this Agreement.
For the purpose of this Section 4.10, the term "damages" shall be determined and
computed by reference to the effect of the compensable event on the Indemnitee,
and shall be deemed to include (i) all losses, liabilities, expenses or costs
incurred by the Indemnitee, including reasonable attorneys' fees, and (ii)
interest at the 90-Day Commercial Composite Rate plus 25 basis points, set at
the beginning of each quarter, from the date 30 days after notice of any such
claim for indemnification is given to the Indemnitor, or if an unliquidated
claim, from such later date as the claim is liquidated, to the date full
indemnification is made therefor.
(b) Indemnification Procedures. The Indemnitee shall give the
Indemnitor notice of any claim, action or proceeding by a third party which is
reasonably likely to result in a claim for indemnification under this Section
4.10. The Indemnitor shall have the right, at its expense, to defend, contest,
protest, settle and otherwise control the resolution of any such claim, action
or proceeding. The Indemnitee shall have the right to participate in any such
legal proceeding, subject to the Indemnitor's right of control thereof, at the
expense of the Indemnitee and with counsel selected by the Indemnitee.
(c) Limitations on Indemnification. Each of TOC and THI shall be
obligated to indemnify the other pursuant to this Section 4.10 only with respect
to claims as to which it is given written notice by the Indemnitee on or prior
to a date two years after the Closing.
4.11 Tax-Free Qualification. THI and TOC agree that they will take no
actions not contemplated by this Agreement that would cause the transaction not
to qualify as a tax-free reorganization under Section 368 of the Internal
Revenue Code.
SECTION 5 - CONDITIONS PRECEDENT TO THE OBLIGATIONS OF TOC
The obligation of TOC to acquire the Shares is subject to the satisfaction
or waiver, at or before the Closing, of the following conditions:
5.1 Representations, Warranties and Covenants. The representations and
warranties of THI contained in this Agreement shall be true and correct in all
material respects on and as of the Closing with the same force and effect as
though made on and as of the Closing (with such exceptions as may be permitted
under or contemplated by this Agreement) and there shall not have been any
material adverse change in the business of the Companies taken as a whole since
the date hereof. THI shall have performed and complied in all material respects
with all covenants and agreements required by this Agreement to be performed or
complied with by it on or prior to the Closing and shall have obtained all
required consents and approvals. THI shall have delivered to TOC a certificate,
dated the date of the Closing, to the foregoing effect.
5.2 Certificates. THI shall have furnished TOC with such certificates of
public officials and of THI's or the Companies' officers as may be reasonably
requested by TOC.
SECTION 6 - CONDITIONS PRECEDENT TO THE OBLIGATION OF THI
The obligation of THI to sell the Shares is subject to the satisfaction or
waiver, at or before the Closing, of the following conditions:
6.1 Representations, Warranties and Covenants. The representations and
warranties of TOC contained in this Agreement shall be true and correct in all
material respects on and as of the Closing with the same force and effect as
though made on and as of the Closing (with such exceptions as may be permitted
under or contemplated by this Agreement). TOC shall have performed and complied
in all material respects with all covenants and agreements required by this
Agreement to be performed or complied with by it on or prior to the Closing and
shall have obtained all required consents and approvals. TOC shall have
delivered to THI a certificate, dated the date of the Closing, to the foregoing
effect.
6.2 Certificates. TOC shall have furnished THI with such certificates of
public officials and of TOC's officers as may be reasonably requested by THI.
SECTION 7 - TERMINATION, AMENDMENT AND WAIVER
7.1 Termination. This Agreement may be terminated at any time prior to the
Closing as follows:
(a) by THI upon written notice to TOC if TOC has materially breached
any representation, warranty, covenant or agreement contained herein and has not
cured such breach within ten (10) business days of receipt of written notice
from THI;
(b) by TOC upon written notice to THI if THI has materially breached
any representation, warranty, covenant or agreement contained herein and has not
cured such breach within ten (10) business days of receipt of written notice
from TOC;
(c) by either party if any court of competent jurisdiction or United
States or foreign governmental body shall have issued an order, decree or ruling
or taken any other action restraining, enjoining or otherwise prohibiting the
sale of any of the Shares and such order, decree or ruling shall have become
final and nonappealable; or
(d) at any time with the written consent of TOC and THI.
7.2 Effect of Termination. If this Agreement is terminated as provided in
Section 7.1, this Agreement shall forthwith become void and have no effect,
without liability on the part of any party, its directors, officers or
stockholders, other than the provisions of this Section 7.2, Section 4.3
relating to expenses and Section 4.8 relating to publicity and confidentiality
to the extent provided therein. Nothing contained in this Section 7.2 shall
relieve any party from liability for any breach of this Agreement occurring
before such termination.
7.3 Amendment. This Agreement may not be amended except by an instrument
signed by each of the parties hereto.
7.4 Waiver. At any time, any party hereto may (a) extend the time for the
performance of any of the obligations or other acts of any other party hereto or
(b) waive compliance with any of the agreements of any other party or any
conditions to its own obligations, in each case only to the extent such
obligations, agreements and conditions are intended for its benefit; provided
that any such extension or waiver shall be binding upon a party only if such
extension or waiver is set forth in a writing executed by such party.
SECTION 8 - MISCELLANEOUS
8.1 Notices. All notices, requests, demands, consents and other
communications which are required or permitted hereunder shall be in writing,
and shall be deemed given when actually received or if earlier, one day after
deposit with a nationally recognized air courier or express mail, charges
prepaid or three days after deposit in the U.S. mail by certified mail, return
receipt requested, postage prepaid, addressed as follows:
If to THI:
Thermo Instrument Systems Inc.
860 Airport Freeway
Suite 301
Hurst, Texas 76054
Attention: President
If to TOC:
Thermo Optek Corporation
8 East Forge Parkway
Franklin, MA 02038
Attention: President
or to such other address as any party hereto may designate in writing to the
other parties, specifying a change of address for the purpose of this Agreement.
8.2 Survival and Materiality of Representations. Each of the
representations, warranties and agreements made by the parties hereto shall be
deemed material and shall survive the Closing and the consummation of the
transactions contemplated hereby. All statements contained in any certificates
or other instruments delivered by or on behalf of the parties pursuant hereto or
in connection with the transactions contemplated hereby shall be deemed material
and shall constitute representations and warranties by the person making such
statement.
8.3 Entire Agreement. This Agreement, including the exhibits, the
Disclosure Schedule and the other documents referred to herein, supersedes any
and all oral or written agreements or understandings heretofore made relating to
the subject matter hereof and constitutes the entire agreement of the parties
relating to the subject matter hereof.
8.4 Parties in Interest. All covenants and agreements, representations and
warranties contained in this Agreement made by or on behalf of any of the
parties hereto shall bind and inure to the benefit of the parties hereto, and
their respective successors, assigns, heirs, executors, administrators and
personal representatives, whether so expressed or not.
8.5 No Implied Rights or Remedies. Except as otherwise expressly provided
herein, nothing herein expressed or implied is intended or shall be construed to
confer upon or to give any person, firm or corporation, other than the parties
hereto, any rights or remedies under or by reason of this Agreement.
8.6 Headings. The headings in this Agreement are inserted for convenience
of reference only and shall not be a part of or control or affect the meaning
hereof.
8.7 Severability. If any provision of this Agreement shall be declared
void or unenforceable by any judicial or administrative authority, the validity
of any other provision shall not be affected thereby.
8.8 Counterparts. This Agreement may be executed in several counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
8.9 Further Assurances. THI will execute and furnish to TOC all documents
and will do or cause to be done all other things that TOC may reasonably request
from time to time in order to give full effect to this Agreement and to
effectuate the intent of the parties.
8.10 Governing Law. This Agreement shall be governed by the law of the
State of Delaware applicable to agreements made and to be performed wholly
within such jurisdiction, without regard to the conflicts of laws provisions
thereof.
[Remainder of Page Intentionally Left Blank.]
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
as of the date first written above.
THERMO OPTEK CORPORATION
By: /s/ Robert J. Rosenthal
Name:Robert J. Rosenthal
Title: President
THERMO INSTRUMENT SYSTEMS INC.
By: /s/ Earl R. Lewis
Name:Earl R. Lewis
Title: President
TOC-3509
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THERMO OPTEK
CORPORATION 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> 105,690
<SECURITIES> 0
<RECEIVABLES> 97,094
<ALLOWANCES> 4,669
<INVENTORY> 71,375
<CURRENT-ASSETS> 286,719
<PP&E> 94,398
<DEPRECIATION> 34,249
<TOTAL-ASSETS> 598,721
<CURRENT-LIABILITIES> 195,042
<BONDS> 79,406
0
0
<COMMON> 518
<OTHER-SE> 308,953
<TOTAL-LIABILITY-AND-EQUITY> 598,721
<SALES> 221,628
<TOTAL-REVENUES> 221,628
<CGS> 116,701
<TOTAL-COSTS> 116,701
<OTHER-EXPENSES> 12,356
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,254
<INCOME-PRETAX> 34,431
<INCOME-TAX> 14,289
<INCOME-CONTINUING> 20,142
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 20,142
<EPS-PRIMARY> 0.39
<EPS-DILUTED> 0.37
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS RESTATED SUMMARY FINANCIAL INFORMATION FOR
THERMO OPTEK CORPORATION FOR THE PERIOD ENDED JUNE 28, 1997
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-03-1998
<PERIOD-END> JUN-28-1997
<CASH> 81,831
<SECURITIES> 0
<RECEIVABLES> 111,181
<ALLOWANCES> 6,852
<INVENTORY> 91,432
<CURRENT-ASSETS> 301,379
<PP&E> 100,835
<DEPRECIATION> 29,394
<TOTAL-ASSETS> 662,246
<CURRENT-LIABILITIES> 269,834
<BONDS> 98,042
0
0
<COMMON> 505
<OTHER-SE> 276,826
<TOTAL-LIABILITY-AND-EQUITY> 662,246
<SALES> 245,343
<TOTAL-REVENUES> 245,343
<CGS> 132,035
<TOTAL-COSTS> 132,035
<OTHER-EXPENSES> 14,446
<LOSS-PROVISION> 133
<INTEREST-EXPENSE> 4,558
<INCOME-PRETAX> 33,528
<INCOME-TAX> 14,445
<INCOME-CONTINUING> 19,083
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 19,083
<EPS-PRIMARY> 0.38
<EPS-DILUTED> 0.36
</TABLE>
