FORM 8-K/A
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
-------------------------------------------
AMENDMENT NO. 1 ON FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report
(Date of earliest event reported):
May 6, 1997
________________________________________
THERMO BIOANALYSIS CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 1-14262 85-0429899
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification Number)
incorporation or
organization)
504 Airport Road
Santa Fe, New Mexico 87504-2108
(Address of principal executive offices) (Zip Code)
(617) 622-1000
(Registrant's telephone number
including area code)
PAGE
<PAGE>
FORM 8-K/A
Item 2. Acquisition or Disposition of Assets
On May 6, 1997, Thermo BioAnalysis Corporation (the "Company")
entered into a binding agreement to acquire the Biosystems Group of the
Life Sciences International PLC subsidiary ("LSI") of Thermo Instrument
Systems Inc. ("Thermo Instrument"). In March 1997, Thermo Instrument had
acquired approximately 95% of the outstanding shares of LSI, a London
Stock Exchange-listed company, in completion of Thermo Instrument's offer
to acquire all of the outstanding shares of LSI. The Biosystems Group is
principally comprised of LSI Labsystems and Hybaid. LSI Labsystems, based
in Finland, manufactures microplate-based immunoassay instruments and
liquid-handling equipment. Hybaid, based in the U.K., manufactures
thermal cyclers and consumables for DNA amplification.
The aggregate purchase price for the Biosystems Group is
approximately $102.5 million, and consists of: (a) approximately $91.5
million for the net operating assets of the acquired businesses; plus (b)
$11.0 million for an equivalent amount of cash held by the acquired
businesses. The purchase price for the net operating assets represents
the sum of an estimate of the net tangible book value, exclusive of cash,
of the businesses, plus a percentage of Thermo Instrument's total
goodwill associated with its acquisition of LSI, based on the aggregate
1996 revenues of the Biosystems Group relative to LSI's 1996 consolidated
revenues. The purchase price is subject to a post-closing adjustment
based on final determination of the net tangible book value, exclusive of
cash, of the acquired businesses and a final calculation of Thermo
Instrument's total goodwill associated with the acquisition of LSI.
The acquisition will be made pursuant to a Share Purchase Agreement
dated as of May 6, 1997 (the "Agreement"), among the Company, Thermo
Instrument, and LSI. The aggregate purchase price of $102.5 million will
be paid through the issuance of 1,300,000 shares of the Company's common
stock valued at $16.9 million and an advance from Thermo Instrument
totaling $85.6 million, of which $35.6 million was repaid during the
second quarter of 1997. The closing of the transaction will take place as
soon as the shares of common stock to be issued in connection with the
acquisition are listed for trading upon the American Stock Exchange, Inc.
(the "Exchange"). The Exchange requires that the listing be approved by
the holders of a majority of the Company's outstanding shares present and
voting at a shareholders' meeting. The meeting is expected to be held
before the end of 1997. Thermo Instrument has agreed to vote all of the
shares of the Company's common stock held by it as of the record date of
the meeting in favor of the listing of the Company's shares and all
matters related thereto. As of June 28, 1997, before giving effect to the
issuance of the shares to be issued pursuant to the Agreement, Thermo
Instrument owned approximately 66.5% of the outstanding common stock of
the Company. Giving effect to the issuance of such shares, Thermo
Instrument would own approximately 70.4% of such outstanding common stock
as of such date.
Because the Company and the Biosystems Group were deemed for
accounting purposes to be under control of their common majority owner,
Thermo Instrument, the transaction has been accounted for in a manner
similar to a pooling-of-interests. Accordingly, the Company's financial
statements (including the financial statements included as part of the
Page 2PAGE
<PAGE>
FORM 8-K/A
Company's Quarterly Report on Form 10-Q for the quarter ended March 29,
1997), include the results of the Biosystems Group from March 12, 1997,
the date these businesses were acquired by Thermo Instrument, and the
shares issuable subject to listing on the Exchange have been deemed
outstanding from that date.
In connection with the acquisition of the Biosystems Group, the
Company is in the process of restructuring the acquired businesses. This
restructuring is expected to include reductions in staffing levels,
abandonment of excess facilities, and possible other costs associated
with exiting certain activities of the acquired businesses. Except as set
forth above, the Company has no present intention to use the assets of
LSI Labsystems and Hybaid for purposes materially different from the
purposes for which such assets were used prior to the acquisition.
However, the Company will continue to review such businesses' assets,
corporate structures, capitalizations, operations, properties, policies,
managements, and personnel and, upon completion of this review, may
develop additional or alternative plans or proposals, including mergers,
transfers of a material amount of assets or other additional transactions
or changes relating to such businesses.
Page 3PAGE
<PAGE>
FORM 8-K/A
Item 7. Financial Statements, Pro Forma Combined Condensed Financial
Information and Exhibits
(a) Financial Statements of Business Acquired
Attached hereto.
Page 4PAGE
<PAGE>
BIOSYSTEMS GROUP OF LIFE SCIENCES INTERNATIONAL PLC
REPORT AND ACCOUNTS
for the three years ended 31 December 1996
PAGE
<PAGE>
The Board of Directors and Shareholders
Life Sciences International PLC:
We have audited the accompanying combined balance sheets of the
Biosystems Group of Life Sciences International PLC as of 31 December
1996 and 1995, and the related combined profit and loss accounts,
statements of total recognized gains and losses, and cash flow statements
for each of the years in the three-year period ended 31 December 1996.
These combined financial statements are the responsibility of the
management of Life Sciences International PLC. Our responsibility is to
express an opinion on these combined financial statements based on our
audits.
We conducted our audits in accordance with generally accepted
auditing standards in the United Kingdom and the United States of
America. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the combined financial statements referred to above
present fairly, in all material respects, the financial position of the
Biosystems Group of Life Sciences International PLC as of 31 December
1996 and 1995, and the results of their operations and their cash flows
for each of the years in the three-year period ended 31 December 1996 in
conformity with generally accepted accounting principles in the United
Kingdom.
Accounting principles generally accepted in the United Kingdom vary
in certain respects from accounting principles generally accepted in the
United States of America. Application of accounting principles generally
accepted in the United States of America would have affected the net
profit for the years ended 31 December 1996 and 1995, and equity
shareholders' funds as of 31 December 1996 and 1995 to the extent
summarised in note 24 to the combined financial statements.
KPMG Audit plc
London, England
10 February 1997, except with
respect to Note 23 which is
of 6 May 1997
Page 2PAGE
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Biosystems Group of Life Sciences International PLC
COMBINED PROFIT AND LOSS ACCOUNTS
for the three years ended 31 December 1996
(In thousands of British pounds sterling)
Note 1996 1995 1994
-----------------------------------------------------------------------
Sales - continuing operations 2 41,384 42,001 32,239
Cost of sales - continuing
operations (24,261) (26,205) (17,097)
------- ------- -------
Gross profit 17,123 15,796 15,142
Distribution costs (7,580) (8,034) (5,465)
Administrative expenses (7,148) (3,373) (2,681)
------- ------- -------
Operating profit - continuing
operations 3 2,395 4,389 6,996
Net interest receivable/(payable) 5 1,599 (1,541) (2,042)
------- ------- -------
Profit on ordinary activities
before taxation 3,994 2,848 4,954
Taxation 6 (1,783) (834) (1,100)
------- ------- -------
Profit on ordinary activities
after taxation 2,211 2,014 3,854
Dividends 7 - - (1,450)
------- ------- -------
Retained profit for the year 14 2,211 2,014 2,404
======= ======= =======
There were no material acquisitions nor discontinued operations within
the meaning of the Financial Reporting Standards during the three years
ended 31 December 1996.
Page 3PAGE
<PAGE>
Biosystems Group of Life Sciences International PLC
COMBINED STATEMENTS OF TOTAL RECOGNISED GAINS AND LOSSES
for the three years ended 31 December 1996
(In thousands of British pounds sterling)
1996 1995 1994
---------------------------------------------------------------------
Profit on ordinary activities after
taxation 2,211 2,014 3,854
Unrealised currency retranslation (3,668) 1,571 1,475
------ ------ ------
Total gains and losses recognised in the
year (1,457) 3,585 5,329
====== ====== ======
There is no material difference between the results reported and on an
unmodified historical cost basis. Accordingly, no note of historical cost
profits and losses has been prepared.
Page 4PAGE
<PAGE>
Biosystems Group of Life Sciences International PLC
COMBINED BALANCE SHEETS
at 31 December 1995-96
(In thousands of British pounds sterling)
Note 1996 1995
-----------------------------------------------------------------------
Fixed assets
Tangible assets 8 6,133 7,390
Investments 9 410 410
------- -------
6,543 7,800
------- -------
Current assets
Stock 10 7,883 9,250
Debtors 11 24,206 24,125
Cash at bank and at hand 17 6,571 3,275
------- -------
38,660 36,650
------- -------
Current liabilities
Creditors: amounts falling due
within one year 12 (42,951) (42,313)
------- -------
Net current liabilities (4,291) (5,663)
------- -------
Total assets less current
liabilities 2,252 2,137
Creditors: amounts falling due
after more than one year 13 (218) (132)
Provisions for liabilities and
charges
Deferred tax (868) (757)
Restructuring costs (1,221) -
------- -------
Net (liabilities)/assets (55) 1,248
======= =======
Capital and reserves
Called-up share capital
(aggregated) 19 (2,948) (2,948)
Share premium account
(aggregated) 19 (1,642) (1,642)
Other reserves 19 16,032 12,518
Profit and loss account 19 (11,387) (9,176)
------- -------
Equity shareholders' funds 55 (1,248)
======= =======
Page 5PAGE
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Biosystems Group of Life Sciences International PLC
COMBINED CASH FLOW STATEMENTS
for the years ended 31 December 1994-96
(In thousands of British pounds sterling)
Note 1996 1995 1994
-----------------------------------------------------------------------
Net cash inflow from operating
activities 15 4,514 5,630 6,254
Returns on investments and
servicing of finance
Interest received 76 555 73
Interest paid (2,170) (2,085) (2,114)
Proceeds on liquidation of
foreign exchange contracts 3,693 - -
------- ------- -------
Net cash inflow/(outflow) from
returns on investments and
servicing of finance 1,599 (1,530) (2,041)
Taxation
UK corporation tax paid (96) (138) (628)
Overseas tax paid (631) (560) (261)
------- ------- -------
Tax paid (727) (698) (889)
------- ------- -------
Investing activities
Investment in joint venture - (142) (251)
Purchase of subsidiary
undertakings net of cash
acquired 16 (33) - -
Cash acquired through purchase
of subsidiary undertaking
by other Life Sciences company - 32 672
Purchase of land and buildings (245) (659) (19)
Purchase of other tangible fixed
assets (1,231) (2,300) (1,496)
Receipts from sale of other
tangible fixed assets - 31 35
------- ------- -------
Net cash outflow from investing
activities (1,509) (3,038) (1,059)
Net cash inflow before financing 3,877 364 2,265
------- ------- -------
Financing
Drawdown/(repayment) of long term
loans 136 (12) (7,525)
Capital element of finance lease
rental payment - (6) -
------- ------- -------
Net cash outflow from financing 136 (18) (7,525)
------- ------- -------
Increase/(decrease) in cash and
cash equivalents 17 4,013 346 (5,260)
======= ======= =======
Page 6PAGE
<PAGE>
NOTES TO THE COMBINED FINANCIAL STATEMENTS
for the years ended 31 December 1994-96
1 ACCOUNTING POLICIES
(a) Basis of preparation
The combined accounts of the Biosystems Group of Life Sciences have been
prepared under the historical cost convention and in accordance with
generally accepted accounting principles in the United Kingdom.
The combined accounts of the Biosystems Group of Life Sciences have been
prepared by aggregating the results of operations, cash flows and balance
sheets of the following companies, which are under common control of Life
Sciences International PLC, a United Kingdom corporation, as if it was a
separate entity for the periods presented:
Entity Country of incorporation
Labsystems Oy Finland
Labsystems Hong Kong Limited Hong Kong
Fastighets AB Skrubba Sweden
Labsystems AB Sweden
Life Sciences International Benelux BV Netherlands
Labsystems Espana SA Spain
Hybaid Limited United Kingdom
Labsystems Inc USA
Denley Instruments Inc USA
Labsystems Lenpipette Russia
Where companies were purchased during the period, their results are
included from the effective date of acquisition.
(b) Sales
Sales are those to third parties, net of trade discounts, VAT and similar
overseas sales taxes.
(c) Stock
Stock is stated at the lower of cost and estimated net realisable value.
Cost comprises purchase price of materials, direct labour costs and an
appropriate proportion of overheads.
(d) Depreciation
No depreciation is provided on freehold land. Leasehold expenditure is
amortised so as to write off such expenditure on a straight-line basis
over the life of the relevant lease or 65 years, whichever is the
shorter. Depreciation of other fixed assets is provided at various rates
on a straight-line basis on cost in order to write off the assets over
their useful lives, estimated to be between 3 and 15 years.
(e) Research and development expenditure
Research and development expenditure is not capitalised but charged
against profit and loss account as it is incurred.
Page 7PAGE
<PAGE>
NOTES TO THE COMBINED FINANCIAL STATEMENTS
for the years ended 31 December 1994-96
(f) Foreign currencies
Assets and liabilities in foreign currencies are translated at the rates
of exchange ruling at each year end. Overseas companies' profit and loss
accounts are translated at average rates for the year. Exchange
differences arising from the retranslation at the closing rate of the
opening net investment in overseas subsidiaries and the profit and loss
account for the year are shown as a movement on reserves.
(g) Taxation
The charge for taxation is based on the income for the year and takes
into account taxation deferred because of timing differences between the
treatment of certain items for taxation and accounting purposes.
Provision is made for taxation deferred in respect of timing differences
where, in the opinion of the directors, such timing differences are
likely to reverse in the foreseeable future.
(h) Leased assets
Assets obtained under hire purchase contracts and finance leases are
capitalised and depreciated over their useful lives. The interest element
of the rentals is charged to profit and loss account over the period of
the contract. Rentals paid under operating leases are charged to income
as incurred.
(i) Pension benefits
The combined group of companies operate a number of pension schemes
throughout the world, both defined benefit and defined contribution
schemes. The assets of these schemes are not included in the combined
accounts (see note 22). Contributions paid to defined benefit schemes
operated by the combined group of companies are based upon the
recommendations of qualified actuaries and have been charged against
profits on a systematic basis over the expected remaining service lives
of participating employees. Independent actuarial valuations of defined
benefit schemes are made at least every three years. Contributions paid
to defined contribution schemes are charged to the profit and loss
account in the period in which they arise.
Page 8PAGE
<PAGE>
NOTES TO THE COMBINED FINANCIAL STATEMENTS
for the years ended 31 December 1994-96
2 SEGMENTAL INFORMATION
All turnover and profit is derived from, and all net assets are
attributable to one business segment, being the manufacture and supply of
BioSystems Products.
(In thousands of British pounds sterling) 1996 1995 1994
-----------------------------------------------------------------------
Geographical analysis of sales by location
of customer
North America 9,048 9,869 6,340
United Kingdom 4,168 3,738 2,904
Other Europe 21,048 24,255 18,634
All other areas 7,120 4,139 4,361
------- ------- -------
41,384 42,001 32,239
======= ======= =======
Geographical analysis of sales by origin
North America 953 820 1,690
United Kingdom 9,198 9,275 6,391
Other Europe 31,233 31,906 24,158
------- ------- -------
41,384 42,001 32,239
======= ======= =======
Profit on ordinary activities before
taxation
North America 122 (127) 431
United Kingdom (789) 317 754
Other Europe 3,115 4,178 5,811
All other areas (53) 21 -
------- ------- -------
Operating profit 2,395 4,389 6,996
Net interest receivable/(payable) 1,599 (1,541) (2,042)
------- ------- -------
Profit on ordinary activities before
taxation 3,994 2,848 4,954
======= ======= =======
Net assets
North America (3,868) (4,349)
United Kingdom 116 1,046
Other Europe 4,103 4,531
All other areas (406) 20
------- -------
Net assets/(liabilities) (55) 1,248
======= =======
Page 9PAGE
<PAGE>
NOTES TO THE COMBINED FINANCIAL STATEMENTS
for the years ended 31 December 1994-96
3 OPERATING PROFIT
(In thousands of British pounds sterling) 1996 1995 1994
---------------------------------------------------------------------
Operating profit is stated after charging/
(crediting):
Depreciation 1,553 1,477 1,096
Research and development 3,126 3,377 2,641
Hire of plant and machinery 111 162 80
Operating lease rentals 348 160 523
Net loss/(profit) on sale of fixed assets 25 36 (13)
Auditors' remuneration - Audit 54 46 38
Auditors' remuneration - Other 10 6 5
Charitable contributions - 2 -
Net rental income - - 125
In 1996, exceptional restructuring costs of 1,221,000 British pounds
sterling were charged to administrative expenses.
Page 10PAGE
<PAGE>
NOTES TO THE COMBINED FINANCIAL STATEMENTS
for the years ended 31 December 1994-96
4 EMPLOYEE INFORMATION
(In thousands of British pounds sterling) 1996 1995 1994
----------------------------------------------------------------------
Staff costs during the year:
Wages and salaries 9,589 9,626 8,154
Social security costs 1,090 1,094 1,103
Other pension costs 1,130 1,134 991
------ ------ ------
11,809 11,854 10,248
====== ====== ======
1996 1995 1994
Weighted average weekly number of employees:
Manufacturing 281 279 271
Selling 98 100 86
Administration 67 68 55
------ ------ ------
446 447 412
====== ====== ======
5 INTEREST
(In thousands of British pounds sterling) 1996 1995 1994
----------------------------------------------------------------------
External interest payable
On loans from other Life Sciences'
companies 2,118 2,046 2,049
On bank loans and overdrafts - - 5
On other loans repayable in 5 years 53 50 61
On other loans repayable after 5 years - - -
------ ------ ------
External interest payable 2,171 2,096 2,115
External interest receivable (77) (555) (73)
------ ------ ------
Net interest payable 2,094 1,541 2,042
Profit on liquidation of foreign exchange
contracts relating to future periods (3,693) - -
------ ------ ------
Net interest (receivable)/payable (1,599) 1,541 2,042
====== ====== ======
Page 11PAGE
<PAGE>
NOTES TO THE COMBINED FINANCIAL STATEMENTS
for the years ended 31 December 1994-96
6 TAXATION
(In thousands of British pounds sterling) 1996 1995 1994
---------------------------------------------------------------------
UK Corporation tax at 33% 107 156 259
Overseas tax 1,600 423 395
Deferred tax 111 311 446
Adjustment for prior years (35) (56) -
----- ----- -----
1,783 834 1,100
===== ===== =====
7 DIVIDEND
In 1995 Hybaid Limited paid a dividend totaling 1,450,000 British pounds
sterling (18.05 British pounds sterling per 10 pence ordinary share) to
its parent company, Life Sciences International PLC.
Page 12PAGE
<PAGE>
NOTES TO THE COMBINED FINANCIAL STATEMENTS
for the years ended 31 December 1994-96
8 TANGIBLE FIXED ASSETS
Land Plant Fixtures
(In thousands of British and and and
pounds sterling) buildings machinery fittings Total
----------------------------------------------------------------------
Cost
At 1 January 1995 1,366 5,501 452 7,319
Additions arising from
acquisitions - 10 71 81
Other additions 659 2,177 134 2,970
Disposals - (114) (26) (140)
Currency retranslation 182 532 32 746
------ ------- ------ ------
At 31 December 1995 and
1 January 1996 2,207 8,106 663 10,976
Additions arising from
acquisitions - 32 47 79
Other additions 244 1,093 133 1,470
Disposals - (53) (28) (81)
Currency retranslation (306) (1,167) (88) (1,561)
------ ------ ------ ------
At 31 December 1996 2,145 8,011 727 10,883
====== ====== ====== ======
Accumulated depreciation
At 1 January 1995 (261) (1,510) (168) (1,939)
Charged in year (128) (1,157) (192) (1,477)
Disposals - 51 22 73
Currency retranslation (39) (192) (12) (243)
------ ------ ------ ------
At 31 December 1995 and
1 January 1996 (428) (2,808) (350) (3,586)
Charged in year (160) (1,260) (133) (1,553)
Disposals - 40 16 56
Currency retranslation 70 436 44 550
Asset write down (217) - - (217)
------ ------ ------ ------
At 31 December 1996 (735) (3,592) (423) (4,750)
====== ====== ====== ======
Net book value
At 31 December 1996 1,410 4,419 304 6,133
At 31 December 1995 1,779 5,298 313 7,390
Page 13PAGE
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NOTES TO THE COMBINED FINANCIAL STATEMENTS
for the years ended 31 December 1994-96
9 INVESTMENTS
Investments in joint ventures:
(In thousands of
British pounds Place of
sterling, except incorporation Equity
percentages) and operation Interest 1996 1995
----------------------------------------------------------------------
JVC Feilong China 32.5% 201 201
Labsystems Pakistan Pakistan 33.3% 66 66
Labsystems Shanghai China 32.5% 143 143
---- ----
410 410
==== ====
The joint ventures have been shown as investments in the balance sheet at
cost. The differences between accounting for these investments at cost
and under the equity accounting method are, in the opinion of the
directors, not material.
10 STOCK
(In thousands of British pounds sterling) 1996 1995
----------------------------------------------------------------------
Raw materials 1,563 2,099
Work in progress 1,067 1,284
Finished goods 5,253 5,867
------ ------
7,883 9,250
====== ======
11 DEBTORS
(In thousands of British pounds sterling) 1996 1995
----------------------------------------------------------------------
Amounts falling due within one year:
Trade debtors 7,223 6,636
Amounts owed by other Life Sciences companies 15,312 15,876
Other debtors 875 664
Prepayments and accrued income 761 902
Overseas taxes recoverable - 16
------ ------
24,171 24,094
Amounts falling due after more than one year:
Other debtors 35 31
------ ------
24,206 24,125
====== ======
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<PAGE>
NOTES TO THE COMBINED FINANCIAL STATEMENTS
for the years ended 31 December 1994-96
12 CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
(In thousands of British pounds sterling) 1996 1995
-------------------------------------------------------------
Bank loans and overdrafts (10) (12)
Trade creditors (1,677) (2,842)
Amounts owed to other Life Sciences
companies (17,200) (14,231)
Loans from other Life Sciences companies (19,611) (21,602)
UK Corporation tax (148) (138)
Overseas taxes (1,558) (264)
Other creditors and social security (378) (786)
Accruals (2,369) (2,435)
Obligations under finance leases - (3)
------- -------
(42,951) (42,313)
======= =======
13 CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR
(In thousands of British pounds sterling) 1996 1995
-------------------------------------------------------------
Loans (126) (25)
Obligations under finance leases - (1)
Other creditors & accruals (92) (106)
------- -------
(218) (132)
======= =======
14 RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
(In thousands of British pounds sterling) 1996 1995 1994
-----------------------------------------------------------------------
Retained profit for the year 2,211 2,014 2,404
Other gains and losses recognised during
the year* (3,667) 1,570 1,474
Acquired net assets/(liabilities) - (407) 1,792
Discount on acquisition of Labsystems
Lenpipette 153 -
------- ------- -------
Net (reduction)/addition to shareholders'
funds (1,303) 3,177 5,670
Opening shareholders' funds 1,248 (1,929) (7,599)
------- ------- -------
Closing shareholders' funds (55) 1,248 (1,929)
======= ======= =======
*This movement represents the retranslation of opening net assets and
profits for the year denominated in foreign currencies to year end
exchange rates from opening and average rates respectively.
Page 15PAGE
<PAGE>
NOTES TO THE COMBINED FINANCIAL STATEMENTS
for the years ended 31 December 1994-96
15 RECONCILIATION OF OPERATING PROFIT TO NET CASH INFLOW FROM
OPERATING ACTIVITIES
(In thousands of British pounds sterling) 1996 1995 1994
-----------------------------------------------------------------------
Operating profit 2,395 4,389 6,996
Add back non cash items:
Write down of fixed assets 217 - -
Depreciation charges 1,553 1,477 1,096
(Profit)/loss on sale of fixed assets 25 36 (13)
(Increase)/decrease in stocks 464 (957) (2,304)
(Increase)/decrease in debtors (1,630) 3,382 (852)
Increase/(decrease) in creditors
and provisions 569 (477) (140)
Movement in balances with other Life
Sciences companies 921 (2,220) 1,471
------- ------- -------
Net cash flow from operating activities 4,514 5,630 6,254
======= ======= =======
16 PURCHASE OF SUBSIDIARY UNDERTAKINGS
(In thousands of British pounds sterling) 1996 1995 1994
-----------------------------------------------------------------------
Net assets acquired
Discount on acquisition (153) - -
Tangible fixed assets 70 - -
Stock 211 - -
Debtors 8 - -
Creditors (103) - -
Cash 16 - -
------- ------- ------
49 - -
======= ======= ======
Satisfied by
Cash 49 - -
Cash of acquired subsidiary undertaking (16) - -
------- ------ -------
Net outflow of cash in respect of the
purchase of subsidiary undertaking 33 - -
======= ======= =======
Page 16PAGE
<PAGE>
NOTES TO THE COMBINED FINANCIAL STATEMENTS
for the years ended 31 December 1994-96
17 CASH AND CASH EQUIVALENTS
(In thousands of British pounds sterling) 1996 1995 1994
----------------------------------------------------------------------
Changes during the year:
At 1 January 3,263 2,671 7,666
Net cash inflow before adjustments for
the effects of foreign exchange rates 4,013 346 (5,260)
Effect of foreign exchange rates (715) 246 265
------ ------ ------
At 31 December 6,561 3,263 2,671
====== ====== ======
(In thousands of British pounds sterling) 1996 1995 1994
Analysis of balances
Cash at bank and in hand 6,571 3,275 2,682
Bank overdrafts (10) (12) (11)
------ ------ ------
6,561 3,263 2,671
====== ====== ======
18 ANALYSIS OF CHANGE IN FINANCING
Loans
due
after
more
Share Share than
capital premium 3 months
----------------------------------------------------------------------
Balance at 31 December 1994 1,996 1,366 33
Cash inflow/(outflow) from financing - - (12)
Effect of foreign exchange rates - - 4
Acquisition of Denley 952 276 -
------ ------ ------
Balance at 31 December 1995 2,948 1,642 25
Cash inflow/(outflow) from financing - - 136
Effect of foreign exchange rates - - (35)
------ ------ ------
Balance at 31 December 1996 2,948 1,642 126
====== ====== ======
Page 17PAGE
<PAGE>
NOTES TO THE COMBINED FINANCIAL STATEMENTS
for the years ended 31 December 1994-96
19 SHARE CAPITAL AND RESERVES
Profit
Share and
(In thousands of British Share premium Other loss
pounds sterling) capital account reserves account
-----------------------------------------------------------------------
At 1 January 1994 (1,988) (980) 14,294 (3,727)
Acquisition of Hybaid Limited (8) (386) 5 (1,403)
Retained profit - - - (2,404)
Exchange difference on
retranslation of closing
balance sheet on consolidation - - (1,474) -
------- ------- ------- --------
At 31 December 1994 (1,996) (1,366) 12,825 (7,534)
Acquisition of Denley
Instruments Inc (952) (276) 1,263 372
Retained profit - - - (2,014)
Exchange difference on
retranslation of closing
balance sheet on consolidation - - (1,570) -
------- ------- ------- -------
At 31 December 1995 (2,948) (1,642) 12,518 (9,176)
Discount on acquisition of
Labsystems Lenpipette - - (153) -
Retained profit - - - (2,211)
Exchange difference on
retranslation of closing
balance sheet on consolidation - - 3,667 -
------- ------- ------- -------
At 31 December 1996 (2,948) (1,642) 16,032 (11,387)
======= ======= ======= =======
(In thousands of British pounds sterling)
-----------------------------------------
Acquisition of Labsystems Lenpipette - 1996
Fair value of assets acquired 202
Cash consideration paid (49)
-------
Discount on acquisition 153
=======
Impact on cash flows
In 1996 Lenpipette contributed 4,000 British pounds sterling to the
group's net operating cash flows and received 1,000 British pounds
sterling in respect of net returns on investments and servicing of
finance.
In 1995 Denley Inc contributed 42,000 British pounds sterling to the
group's net operating cash flows, paid 13,000 British pounds sterling in
respect of taxation and utilised 3,000 British pounds sterling for
investing activities.
Page 18PAGE
<PAGE>
NOTES TO THE COMBINED FINANCIAL STATEMENTS
for the years ended 31 December 1994-96
In 1994 Hybaid Ltd contributed 65,000 British pounds sterling to the
Group's net operating cash flows, received 8,000 British pounds sterling
in respect of net returns on investments and servicing of finance, paid
628,000 British pounds sterling in respect of taxation, and utilised
204,000 British pounds sterling for investing activities.
20 FINANCIAL COMMITMENTS
As at 31 December the companies had aggregate annual commitments under
non-cancellable operating leases as follows:
(In thousands of British pounds sterling) 1996 1995 1994
---------------------------------------------------------------------
Land and buildings
Expiring within one year 209 - -
Expiring between two and five years
inclusive 30 239 239
Expiring in over five years 679 679 679
----- ----- -----
918 918 918
----- ----- -----
Other operating leases
Expiring within one year 113 98 86
Expiring between two and five years
inclusive 218 204 163
Expiring in over five years - - -
----- ----- -----
331 302 249
----- ----- -----
Total 1,249 1,220 1,167
===== ===== =====
Page 19PAGE
<PAGE>
NOTES TO THE COMBINED FINANCIAL STATEMENTS
for the years ended 31 December 1994-96
21 COMPANIES INCLUDED IN COMBINED ACCOUNTS
The financial statements presented above have been produced by
aggregating the results and assets of the following companies:
Name of entity Country of incorporation
Labsystems Oy Finland
Labsystems Hong Kong Limited Hong Kong
Fastighets AB Skrubba Sweden
Labsystems Sweden AB Sweden
Life Sciences International Benelux BV Netherlands
Labsystems Espana SA Spain
Hybaid Limited UK
Labsystems Inc USA
Denley Instruments Inc USA
Labsystems Lenpipette Russia
All companies listed above were either directly or indirectly owned by
Life Sciences International PLC between 1 January 1994 and 31 December
1996 with the exception of Hybaid Limited which was acquired on 31 May
1994 and Denley Instruments Inc which was acquired on 31 March 1995.
Labsystems Lenpipette was acquired on 30 November 1996. Prior to this,
Labsystems Oy held a 50% stake in this company. The results and assets of
Labsystems Lenpipette have been consolidated into those of Labsystems Oy.
All the above companies operate principally in their country of
incorporation with the exception of Life Sciences International Benelux
BV which is based in Belgium and operates in Belgium, The Netherlands,
and Luxembourg.
22 PENSION SCHEME AND OTHER POST RETIREMENT BENEFIT SCHEMES
Hybaid Limited is a participant in the Life Sciences International PLC
Pension Plan, which is a separate trust. This plan provides retirement
benefits for the majority of the Company's permanent UK employees. It is
funded by contributions both from participating companies and their
employees and is contracted out of the earnings related part of the State
Pension arrangements.
The pension scheme is a defined benefits scheme whereby retirement
benefits are based on the employees' final remuneration and length of
service. Contributions to the scheme are based on pension costs for all
members of the scheme across the Life Sciences International PLC Group
and are made in accordance with the recommendation of an independent
actuary who values the scheme at regular triennial intervals, the last
valuation being as at 1 April 1995. Full details relating to the pension
scheme are disclosed in the financial statements of Life Sciences
International PLC. Due to a surplus in that plan's assets over its
projected liabilities, no charge to the profit and loss account was made
for the three years ended 31 December 1996.
In Finland the Group does not operate a pension plan, but made
contributions amounting to 1,079,000 British pounds sterling in 1996
(1995 - 1,251,000 British pounds sterling; 1994 - 933,000 British pounds
sterling) to the state pension scheme in accordance with Finnish
legislation.
Page 20PAGE
<PAGE>
NOTES TO THE COMBINED FINANCIAL STATEMENTS
for the years ended 31 December 1994-96
23 POST BALANCE SHEET EVENT
Following discussions between Life Sciences International PLC (Life
Sciences) and Thermo Instrument Systems Inc. (Thermo Instrument), a U.S.
based manufacturer of scientific instruments, Life Sciences received a
proposal from Thermo Instrument to combine their businesses, offering to
acquire all of the issued share capital of Life Sciences at 1.35 British
pounds sterling per 10 pence ordinary share. This offer was recommended
to shareholders by the Board of the Company on 21 January 1997. The offer
was accepted by the majority of shareholders by 12 March 1997. On May 6,
1997, Thermo Instrument agreed to sell the businesses comprising the
Biosystems Group of Life Sciences to its majority-owned subsidiary,
Thermo BioAnalysis Corporation.
24 US GAAP RECONCILIATION
Basis of operation
The above accounts have been prepared in accordance with generally
accepted accounting principles (GAAP) in the United Kingdom which differ
in certain material respects from US GAAP. The significant differences
relate principally to the following items and the adjustments necessary
to restate net income and shareholders' equity in accordance with US GAAP
are shown below.
a) Goodwill
Under UK GAAP goodwill arising on acquisition is eliminated directly
against reserves. Amounts are transferred from reserves and charged
through the profit and loss account when the related investments are sold
or written down as a result of permanent diminutions in value. Under US
GAAP goodwill is capitalised and amortised by charges against income over
the period, not to exceed 40 years, over which the benefit arises. For US
GAAP goodwill has been amortised by the Group over 40 years.
b) Restructuring costs
Under UK GAAP restructuring costs shown as exceptional items are charged
to the profit and loss account in full irrespective of whether they have
been agreed or incurred. Under US GAAP certain of these costs are only
charged to the profit and loss account when certain specific criteria
have been met.
c) Forward exchange contracts
Certain outstanding foreign currency forward exchange contracts which
hedge anticipated future transactions and qualify as hedge contracts
under UK GAAP would not qualify as hedges under US GAAP. Such contracts
should be recorded at fair value at each balance sheet date based on the
forward rates of exchange existing at that date and the corresponding
unrealized gain or loss would be included in the determination of net
income.
d) Acquisition accounting
Under UK GAAP, the fair value balance sheet of an acquired company can
not include a provision for restructuring costs set up by the acquiring
company. Under US GAAP, certain restructuring and reorganisation costs
Page 21PAGE
<PAGE>
NOTES TO THE COMBINED FINANCIAL STATEMENTS
for the years ended 31 December 1994-96
may be considered liabilities assumed and included in the allocation of
the acquisition cost.
(e) Deferred taxes
Under UK GAAP, deferred taxes are accounted for to the extent that it is
considered probable that a liability or asset will crystallise in the
foreseeable future. Under US GAAP, deferred taxes are accounted for on
all timing differences and a valuation allowance is established in
respect of those deferred tax assets where it is more likely than not
that some portion will remain unrealised. No US GAAP adjustment arises as
there are no unrecognised UK GAAP deferred tax liabilities or assets.
Deferred tax also arises in relation to the tax effect of other US GAAP
adjustments.
The following is a summary of the significant adjustments to net income
for the years ended 31 December 1996 and 1995 and to parent company
investment as of 31 December 1996 and 1995, which would have been
required if the combined financial statements had been reported in
accordance with US GAAP instead of UK GAAP.
(In thousands of British pounds sterling) 1996 1995
---------------------------------------------------------------------
Net income according to the consolidated
financial statements prepared under UK
GAAP 2,211 2,014
US GAAP adjustments:
Decrease due to effects of goodwill
previously written off (663) (782)
Restructuring charges related to
acquisition which should have been
included in goodwill - 235
Restructuring costs 1,186 -
Mark to market of foreign exchange
contracts (6,726) 5,407
Deferred taxation on above adjustments 1,659 (1,288)
------ ------
Net income in accordance with US GAAP (2,333) 5,586
====== ======
Page 22PAGE
<PAGE>
NOTES TO THE COMBINED FINANCIAL STATEMENTS
for the years ended 31 December 1994-96
(In thousands of British pounds sterling) 1996 1995
---------------------------------------------------------------------
Equity shareholders' funds under UK GAAP (55) 1,248
US GAAP adjustments:
Increase due to effects of goodwill
previously written off against reserves 24,364 25,026
Restructuring charges related to
acquisition which should have
been included in goodwill 235 235
Restructuring costs 1,186 -
Mark to market of foreign exchange
contracts (1) 6,725
Deferred taxation on above adjustments 138 (1,521)
------ ------
Equity shareholders' funds under US GAAP 25,867 31,713
====== ======
Cash Flows
The above combined financial statements comply with Financial Reporting
Standard No. 1 -- "Cash flow statements" (FRS 1). Its objective and
principles are similar to those set out in SFAS No. 95 "Statement of Cash
Flows." The principal difference between the standards is in respect of
classification. Under FRS 1, cash flows are presented for (a) operating
activities; (b) returns on investments and servicing of finance; (c)
taxation; (d) investing activities; and (c) financing activities. SFAS
No. 95 requires only three categories of cash flow activity (a)
operating; (b) investing; and (c) financing.
Cash flows arising from taxation and returns on investments and servicing
of finance under FRS 1 would, with the exception of dividends paid, be
included as operating activities under SFAS No. 95; dividend payments
would be included as a financing activity under SFAS No. 95.
A summaried consolidated cash flow under US GAAP is as follows:
(In thousands of British pounds sterling) 1996 1995 1994
-----------------------------------------------------------------------
Cash inflow from operating activities 5,386 3,402 3,324
Cash outflow on investing activities (1,509) (3,038) (1,059)
Cash (outflow)/inflow from financing activities 136 (18) (7,525)
------ ------ ------
Increase/(Decrease) in cash and cash equivalents 4,013 346 (5,260)
Exchange adjustments (715) 246 265
Cash and cash equivalents at beginning of year 3,263 2,671 7,666
------ ------ ------
Cash and cash equivalents at end of year 6,561 3,263 2,671
====== ====== ======
Page 23PAGE
<PAGE>
FORM 8-K/A
Item 7. Financial Statements, Pro Forma Combined Condensed Financial
Information and Exhibits
(b) Pro Forma Combined Condensed Financial Information
The following unaudited pro forma combined condensed financial
statement sets forth the results of operations for the year ended
December 28, 1996, as if the acquisition of the Biosystems Group by the
Company had occurred at the beginning of 1996.
Because the Company and the Biosystems Group were deemed for
accounting purposes to be under control of their common majority owner,
Thermo Instrument, the transaction has been accounted for in a manner
similar to a pooling-of-interests. Accordingly, the Company's financial
statements (including the financial statements included as part of the
Company's Quarterly Report on Form 10-Q for the quarter ended March 29,
1997), include the results of the Biosystems Group from March 12, 1997,
the date these businesses were acquired by Thermo Instrument, and the
shares issuable subject to listing on the Exchange have been deemed
outstanding from that date. As a result, pro forma information has not
been provided as of and for the three months ended March 29, 1997.
The pro forma results of operations presented below are not
necessarily indicative of future operations or the actual results that
would have occurred had the acquisition of the Biosystems Group been
consummated at the beginning of 1996. The financial statements of the
Biosystems Group filed under part (a) of this item should be read in
conjunction with the pro forma combined condensed financial statement
presented below.
Page 5PAGE
<PAGE>
FORM 8-K/A
THERMO BIOANALYSIS CORPORATION
PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS
Year Ended December 28, 1996
(Unaudited)
Historical Pro Forma
----------------------- ----------------------
Thermo Biosystems
BioAnalysis Group Adjustments Combined
----------- ---------- ----------- ---------
(In thousands except per share amounts)
Revenues $ 71,649 $ 64,559 $ - $136,208
-------- -------- -------- --------
Costs and Operating
Expenses:
Cost of revenues 37,807 37,847 647 76,301
Selling, general,
and administrative
expenses 20,987 17,283 2,451 40,721
Research and
development expenses 7,298 4,877 - 12,175
Write-off of acquired
technology 3,500 - - 3,500
-------- -------- -------- --------
69,592 60,007 3,098 132,697
-------- -------- -------- --------
Operating Income 2,057 4,552 (3,098) 3,511
Interest Income 1,280 121 - 1,401
Interest Expense (1,873) (3,387) (1,540) (6,800)
Loss on Foreign Exchange
Contracts - (4,731) - (4,731)
-------- -------- -------- --------
Income (Loss) Before
Income Taxes 1,464 (3,445) (4,638) (6,619)
Income Tax Provision 1,900 194 (850) 1,244
-------- -------- -------- --------
Net Loss $ (436) $ (3,639) $ (3,788) $ (7,863)
======== ======== ======== ========
Loss per Share $ (.05) $ (.79)
======== ========
Weighted Average Shares 8,601 1,300 9,901
======== ======== ========
See notes to pro forma combined condensed statement of operations.
Page 6PAGE
<PAGE>
FORM 8-K/A
THERMO BIOANALYSIS CORPORATION
NOTES TO PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS
(Unaudited)
Note 1 - Basis of Presentation
The results of operations of the Biosystems Group have been
presented in the pro forma combined condensed statement of operations in
accordance with U.S. generally accepted accounting principles (GAAP),
which have been reconciled to U.K. GAAP in note 24 to the combined
financial statements of the Biosystems Group. Such financial statements
are denominated in British pounds sterling, and have been translated at
the average exchange rate of 1.56 U.S. dollars per British pound sterling
for the pro forma combined condensed statement of operations. The
allocation of the purchase price is based on an estimate of the fair
market value of the net assets acquired in March 1997 by Thermo
Instrument and subsequently acquired by the Company and is subject to
adjustment. To date, no information has been gathered that would cause
the Company to believe that the final allocation of the purchase price
will be materially different than the preliminary estimate.
Note 2 - Pro Forma Adjustments to Pro Forma Combined Condensed
Statement of Operations (In thousands, except in text)
Year Ended
December 28,
1996
-------------
Debit (Credit)
Cost of Revenues
Increase in the finished goods inventory
of the Biosystems Group to the
estimated selling price, less the sum
of the costs of disposal and a reasonable
profit allowance for the Company's
selling efforts $ 647
-------
Selling, General, and
Administrative Expenses
Service fee of 1.0% of the revenues
of the Biosystems Group for the
year ended December 31, 1996, for
services provided under a services
agreement between the Company and
Thermo Electron 646
Amortization over 40 years of $72,219,000 of
cost in excess of net assets of acquired
companies created by the acquisition of
the Biosystems Group 1,805
-------
2,451
-------
Page 7PAGE
<PAGE>
FORM 8-K/A
THERMO BIOANALYSIS CORPORATION
NOTES TO PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS (continued)
(Unaudited)
Note 2 - Pro Forma Adjustments to Pro Forma Combined Condensed
Statement of Operations (In thousands, except in text) (continued)
Year Ended
December 28,
1996
-------------
Debit (Credit)
Interest Expense
Increase in interest expense as a result
of an advance from Thermo Instrument of $85.6 million
related to the acquisition of the Biosystems Group,
calculated using the 90-day Commercial Paper
Composite Rate plus 25 basis points, or 5.75%.
The advance from Thermo Instrument replaced existing
indebtedness to Life Sciences International. $ 4,927
Reversal of interest expense on indebtedness to Life
Sciences International included in the historical
profit and loss account of the Biosystems Group for
the year ended December 31, 1996, due to the assumed
repayment of such debt (3,387)
--------
1,540
--------
Income Tax Provision
Income tax benefit associated with the adjustments
above (excluding the amortization of cost in
excess of net assets of acquired companies),
calculated at the Biosystems Group's statutory
rate of 30% (850)
--------
Weighted Average Shares
Increase in weighted average shares outstanding
due to the assumed issuance of 1,300,000 shares
of the Company's common stock related to the
acquisition of the Biosystems Group
Page 8PAGE
<PAGE>
FORM 8-K/A
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized, on this 18th day of July 1997.
THERMO BIOANALYSIS CORPORATION
Paul F. Kelleher
--------------------------
Paul F. Kelleher
Chief Accounting Officer
