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 April 1, 1995.
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934.
Commission File Number 1-10574
THERMO VOLTEK CORP.
(Exact name of Registrant as specified in its charter)
Delaware 13-1946800
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
470 Wildwood Street, P.O. Box 2878
Woburn, Massachusetts 01888-1578
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (617) 622-1000
Indicate by check mark whether the Registrant (1)
has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for
such shorter period that the Registrant was
required to file such reports), and (2) has been
subject to such filing requirements for the past
90 days. Yes [ X ] No [ ]
Indicate the number of shares outstanding of each
of the issuer's classes of Common Stock, as of the
latest practicable date.
Class Outstanding at April 28, 1995
---------------------------- ------------------------------
Common Stock, $.05 par value 4,060,517
PAGE
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FORM 10-Q
April 1, 1995
THERMO VOLTEK CORP.
PART I - Financial Information
Item 1 - Financial Statements
(a) Consolidated Balance Sheet - Assets as of April 1, 1995 and
December 31, 1994 (In thousands)
April 1, December 31,
1995 1994
-------- ------------
Current Assets:
Cash and cash equivalents $ 4,104 $ 8,955
Available-for-sale investments, at quoted market
value (amortized cost of $28,695 and $28,589)
(includes $1,327 and $299 of related
party investments) 28,504 28,105
Accounts receivable, less allowances of $442
and $343 7,937 6,161
Unbilled contract costs and fees 337 273
Inventories:
Raw materials 2,314 1,996
Work in process 2,171 1,541
Finished goods 2,381 1,939
Prepaid income taxes 286 441
Other current assets 309 331
------- -------
48,343 49,742
------- -------
Property, Plant and Equipment, at Cost 6,132 5,689
Less: Accumulated depreciation and amortization 3,832 3,583
------- -------
2,300 2,106
------- -------
Other Assets 1,014 980
------- -------
Cost in Excess of Net Assets of Acquired
Companies (Note 2) 12,653 9,396
------- -------
$64,310 $62,224
======= =======
The accompanying notes are an integral part of these consolidated financial
statements.
2PAGE
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FORM 10-Q
April 1, 1995
THERMO VOLTEK CORP.
(a) Consolidated Balance Sheet - Liabilities and Shareholders' Equity as of
April 1, 1995 and December 31, 1994 (In thousands except share amounts)
April 1, December 31,
1995 1994
-------- ------------
Current Liabilities:
Notes payable $ 1,223 $ 781
Accounts payable 2,885 2,698
Accrued payroll and employee benefits 892 879
Accrued commissions 369 329
Customer deposits 223 489
Accrued income taxes 576 270
Other accrued expenses 2,135 926
Due to parent company and Thermo
Electron Corporation 607 1,380
------- -------
8,910 7,752
------- -------
Subordinated Convertible Obligations, Including
$11,500 Due to Parent Company 45,851 46,000
------- -------
Shareholders' Equity:
Common stock, $.05 par value, 10,000,000 shares
authorized; 4,064,991 and 4,038,445
shares issued 203 202
Capital in excess of par value 11,332 11,237
Accumulated deficit (2,442) (2,857)
Treasury stock at cost, 5,774 and 6,000 shares (49) (50)
Cumulative translation adjustment 619 260
Net unrealized loss on available-for-sale
investments (114) (320)
------- -------
9,549 8,472
------- -------
$64,310 $62,224
======= =======
The accompanying notes are an integral part of these consolidated financial
statements.
3PAGE
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FORM 10-Q
April 1, 1995
THERMO VOLTEK CORP.
(b) Consolidated Statement of Income for the three months ended
April 1, 1995 and April 2, 1994 (In thousands except per share amounts)
Three Months Ended
----------------------
April 1, April 2,
1995 1994
-------- --------
Revenues $ 7,308 $ 4,928
------- -------
Costs and Operating Expenses:
Cost of revenues 3,820 2,509
Selling, general and administrative
expenses 2,442 1,638
Research and development expenses 454 353
------- -------
6,716 4,500
------- -------
Operating Income 592 428
Interest Income 538 354
Interest Expense (includes $177 for notes
to related party in 1995 and 1994) (564) (544)
Other Income 14 -
------- -------
Income Before Provision for Income Taxes 580 238
Provision for Income Taxes 165 40
------- -------
Net Income $ 415 $ 198
======= =======
Earnings per Share:
Primary $ .10 $ .05
======= =======
Fully diluted $ .08 $ .05
======= =======
Weighted Average Shares:
Primary 4,045 4,087
======= =======
Fully diluted 8,967 4,087
======= =======
The accompanying notes are an integral part of these consolidated financial
statements.
4PAGE
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FORM 10-Q
April 1, 1995
THERMO VOLTEK CORP.
(c) Consolidated Statement of Cash Flows for the three months ended
April 1, 1995 and April 2, 1994 (In thousands)
Three Months Ended
----------------------
April 1, April 2,
1995 1994
-------- --------
Operating Activities:
Net income $ 415 $ 198
Adjustments to reconcile net income to
net cash provided by (used in)
operating activities:
Depreciation and amortization 373 210
Provision for losses on accounts receivable 15 12
Changes in current accounts, excluding
the effects of acquisitions:
Accounts receivable (585) (17)
Inventories and unbilled contract
costs and fees (515) (190)
Other current assets 114 (173)
Accounts payable (129) (276)
Other current liabilities (487) 622
Other (10) 41
------- -------
Net cash provided by (used in)
operating activities (809) 427
------- -------
Investing Activities:
Acquisitions, net of cash acquired (Note 2) (4,000) -
Purchases of available-for-sale investments (7,500) (3,633)
Proceeds from sale and maturities of
available-for-sale investments 7,000 -
Purchases of property, plant and equipment (156) (214)
Other 391 -
------- -------
Net cash used in investing
activities (4,265) (3,847)
------- -------
Financing Activities:
Issuance of short-term obligations 347 -
Repurchase of long-term obligations (132) -
Net proceeds from issuance of Company
common stock 96 89
------- -------
Net cash provided by financing
activities $ 311 $ 89
------- -------
5PAGE
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FORM 10-Q
April 1, 1995
THERMO VOLTEK CORP.
(c) Consolidated Statement of Cash Flows for the three months ended
April 1, 1995 and April 2, 1994 (In thousands) (continued)
Three Months Ended
----------------------
April 1, April 2,
1995 1994
-------- --------
Exchange Rate Effect on Cash $ (88) $ (3)
------- -------
Decrease in Cash and Cash Equivalents (4,851) (3,334)
Cash and Cash Equivalents at Beginning of Period 8,955 21,458
------- -------
Cash and Cash Equivalents at End of Period $ 4,104 $18,124
======= =======
Cash Paid For:
Interest $ 122 $ 100
Income taxes $ 55 $ 59
The accompanying notes are an integral part of these consolidated financial
statements.
6PAGE
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FORM 10-Q
April 1, 1995
THERMO VOLTEK CORP.
(d) Notes to Consolidated Financial Statements - April 1, 1995
1. General
The interim consolidated financial statements presented have been
prepared by Thermo Voltek Corp. (the Company) without audit and, in the
opinion of management, reflect all adjustments of a normal recurring nature
necessary for a fair statement of (a) the results of operations for the
three-month periods ended April 1, 1995 and April 2, 1994, (b) the
financial position at April 1, 1995, and (c) the cash flows for the
three-month periods ended April 1, 1995 and April 2, 1994. Interim results
are not necessarily indicative of results for a full year.
The consolidated balance sheet presented as of December 31, 1994, has
been derived from the consolidated financial statements that have been
audited by the Company's independent public accountants. The consolidated
financial statements and notes are presented as permitted by Form 10-Q and
do not contain certain information included in the annual financial
statements and notes of the Company. The consolidated financial statements
and notes included herein should be read in conjunction with the financial
statements and notes included in the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 1994, filed with the Securities and
Exchange Commission.
2. Acquisition
On March 1, 1995, the Company acquired substantially all of the
assets, subject to certain liabilities, of Kalmus Engineering Incorporated
and R. F. Power Labs, Incorporated (collectively, Kalmus) for approximately
$3.6 million in cash, subject to a post-closing adjustment. Kalmus is a
manufacturer of radio frequency power amplifiers and systems used to test
products for immunity to radiated or conducted radio frequency interference
and for medical imaging and telecommunications applications. The
acquisition has been accounted for using the purchase method of accounting,
and Kalmus' results of operations have been included in the accompanying
financial statements from the date of acquisition. The cost of this
acquisition exceeded the estimated fair value of the acquired net assets by
$3.0 million, which is being amortized over 40 years. Allocation of the
purchase price for this acquisition was based on an estimate of the fair
value of the net assets acquired and is subject to adjustment.
7PAGE
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FORM 10-Q
April 1, 1995
THERMO VOLTEK CORP.
(d) Notes to Consolidated Financial Statements - April 1, 1995 (continued)
2. Acquisition (continued)
Based on unaudited data, the following table presents selected
financial information for the Company and Kalmus on a pro forma basis,
assuming the companies had been combined since the beginning of 1994.
Three Months Ended
---------------------
April 1, April 2,
(In thousands except per share amounts) 1995 1994
--------------------------------------------------------------------------
Revenues $8,033 $6,035
Net income 617 360
Earnings per share:
Primary .15 .09
Fully diluted .10 .09
The pro forma results are not necessarily indicative of future
operations or the actual results that would have occurred had the
acquisition of Kalmus been made at the beginning of 1994.
Item 2 - Management's Discussion and Analysis of Financial Condition and
Results of Operations
Description of Business
The Company designs, manufactures, and markets instruments that test
electronic and electrical systems and components for immunity to pulsed
electromagnetic interference (pulsed EMI) through its KeyTek Instrument
division (KeyTek), and designs, manufactures, and markets high-voltage
power conversion systems, modulators, fast-response protection systems, and
related high-voltage equipment for industrial, medical, and environmental
processes, and for defense and scientific research applications, through
its Universal Voltronics division. Through its Comtest Instrumentation B.V.
and Comtest Limited subsidiaries (collectively, Comtest), the Company
provides electromagnetic compatibility (EMC) consulting and
systems-integration services, distributes a range of EMC-related products,
and manufactures and markets specialized power supplies for
telecommunications equipment. In July 1994, Comtest acquired Verifier
Systems Limited (Verifier), which manufactures a line of electrostatic
discharge test equipment that performs electrical stress tests for
semiconductor devices. In March 1995, the Company acquired Kalmus
Engineering Incorporated and R. F. Power Labs, Incorporated (collectively,
Kalmus), which manufacture radio frequency power amplifiers and systems
used to test products for immunity to radiated or conducted radio frequency
interference and for medical imaging and telecommunications applications.
8PAGE
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FORM 10-Q
April 1, 1995
THERMO VOLTEK CORP.
Item 2 - Management's Discussion and Analysis of Financial Condition and
Results of Operations (continued)
Results of Operations
First Quarter 1995 Compared With First Quarter 1994
Revenues increased 48% to $7,308,000 in the first quarter of 1995 from
$4,928,000 in the first quarter of 1994, due to the inclusion of $750,000
in revenues from Verifier, which was acquired in July 1994, an increase of
$633,000 in revenues from Comtest, an increase of $515,000 in revenues from
KeyTek due to greater demand, the inclusion of $294,000 in revenues from
Kalmus, which was acquired on March 1, 1995, and an increase of $188,000 in
revenues from Universal Voltronics due to greater demand. The increase in
revenues at Comtest resulted from greater demand and the favorable effects
of currency translation due to a weaker U.S. dollar in 1995.
The gross profit margin was 48% in the first quarter of 1995, compared
with 49% in the first quarter of 1994. The decrease was due primarily to
higher costs associated with an upgraded product at KeyTek, offset in part
by the inclusion of higher-margin Verifier revenues.
Selling, general and administrative expenses as a percentage of
revenues were 33% in the first quarters of both 1995 and 1994. Research and
development expenses decreased to 6.2% of revenues in the first quarter of
1995 from 7.2% in the first quarter of 1994, due primarily to an increase
in total revenues.
Interest income increased to $538,000 in the first quarter of 1995
from $354,000 in the first quarter of 1994, due primarily to higher
prevailing interest rates in 1995. Interest expense increased to $564,000
in the first quarter of 1995 from $544,000 in the first quarter of 1994,
due primarily to the inclusion of interest expense associated with
borrowings under Comtest's outstanding line of credit.
Financial Condition
Liquidity and Capital Resources
Working capital was $39,433,000 at April 1, 1995, compared with
$41,990,000 at December 31, 1994. Included in working capital are cash,
cash equivalents, and available-for-sale investments of $32,608,000 at
April 1, 1995, compared with $37,060,000 at December 31, 1994. In March
1995, the Company acquired substantially all of the assets, subject to
certain liabilities, of Kalmus for approximately $3.6 million in cash,
subject to a post-closing adjustment (see Note 2 to Consolidated Financial
Statements).
9PAGE
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FORM 10-Q
April 1, 1995
THERMO VOLTEK CORP.
PART II - Other Information
Item 6 - Exhibits and Reports on Form 8-K
(a) Exhibits
See Exhibit Index on the page immediately preceding exhibits.
(b) Reports on Form 8-K
On March 16, 1995, the Company filed a Current Report on Form 8-K
pertaining to its acquisition of Kalmus Engineering Incorporated and R. F.
Power Labs, Incorporated (collectively, Kalmus) on March 1, 1995. On April
27, 1995, the Company filed certain historical financial statements of
Kalmus and pro forma combined condensed financial statements as part of an
amendment to the Form 8-K.
10PAGE
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FORM 10-Q
April 1, 1995
THERMO VOLTEK CORP.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized as of the 5th day of May 1995.
THERMO VOLTEK CORP.
Paul F. Kelleher
------------------------
Paul F. Kelleher
Chief Accounting Officer
John N. Hatsopoulos
------------------------
John N. Hatsopoulos
Chief Financial Officer
11PAGE
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FORM 10-Q
April 1, 1995
THERMO VOLTEK CORP.
EXHIBIT INDEX
Exhibit
Number Description of Exhibit Page
------- ----------------------------------------------------- ----
11 Statement re: Computation of earnings per share.
27 Financial Data Schedule.
Exhibit 11
THERMO VOLTEK CORP.
Computation of Earnings per Share
Three Months Ended
--------------------------
April 1, April 2,
1995 1994
---------- ----------
Computation of Fully Diluted Earnings
per Share:
Income:
Net income $ 415,000 $ 198,000
Add: Convertible debt interest,
net of tax 299,000 -
---------- ----------
Income applicable to common stock
assuming full dilution (a) $ 714,000 $ 198,000
---------- ----------
Shares:
Weighted average shares outstanding 4,044,918 4,087,307
Add: Shares issuable from assumed
conversion of subordinated
convertible obligations 4,805,708 -
Shares issuable from assumed
exercise of options (as
determined by the application
of the treasury stock method) 116,044 -
---------- ----------
Weighted average shares outstanding,
as adjusted (b) 8,966,670 4,087,307
---------- ----------
Fully Diluted Earnings per Share (a) / (b) $ .08 $ .05
========== ==========
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THERMO
VOLTEK CORP.'S QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED APRIL 1, 1995
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-30-1995
<PERIOD-END> APR-01-1995
<CASH> 4,104
<SECURITIES> 28,504
<RECEIVABLES> 7,937
<ALLOWANCES> 442
<INVENTORY> 6,866
<CURRENT-ASSETS> 48,343
<PP&E> 6,132
<DEPRECIATION> 3,832
<TOTAL-ASSETS> 64,310
<CURRENT-LIABILITIES> 8,910
<BONDS> 34,351
<COMMON> 203
0
0
<OTHER-SE> 9,346
<TOTAL-LIABILITY-AND-EQUITY> 64,310
<SALES> 7,308
<TOTAL-REVENUES> 7,308
<CGS> 3,820
<TOTAL-COSTS> 3,820
<OTHER-EXPENSES> 454
<LOSS-PROVISION> 15
<INTEREST-EXPENSE> 564
<INCOME-PRETAX> 580
<INCOME-TAX> 165
<INCOME-CONTINUING> 415
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 415
<EPS-PRIMARY> .10
<EPS-DILUTED> .08
</TABLE>
