SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
___________________________________________
FORM 10-K
(mark one)
[ X ] Annual Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the fiscal year ended December 30, 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
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
---------------------------- -----------------------------------------
Common Stock, $.05 par value American Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
None
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, and (2) has been subject to the
filing requirements for at least the past 90 days. Yes [ X ] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained,
to the best of the Registrant's knowledge, in definitive proxy or
information statements incorporated by reference into Part III of this Form
10-K or any amendment to this Form 10-K. [ X ]
The aggregate market value of the voting stock held by nonaffiliates of the
Registrant as of January 26, 1996, was approximately $41,312,000.
As of January 26, 1996, the Registrant had 5,015,534 shares of Common Stock
outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant's Annual Report to Shareholders for the year
ended December 30, 1995, are incorporated by reference into Parts I and II.
Portions of the Registrant's definitive Proxy Statement for the Annual
Meeting of Shareholders to be held on May 20, 1996, are incorporated by
reference into Part III.
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PART I
Item 1. Business
(a) General Development of Business.
Thermo Voltek Corp. (the Company or the Registrant) designs,
manufactures, and markets instruments that test electronic and electrical
systems and components for immunity to pulsed electromagnetic interference
(pulsed EMI); radio frequency (RF) power amplifiers that are used to test
products for immunity to radio frequency interference and for laboratory,
medical, and wireless communications applications; high-voltage power-
conversion systems for use in industrial, medical, and environmental
processes, and defense and scientific research applications; and
specialized power supplies used in telecommunications equipment. The
Company also provides electromagnetic compatibility (EMC) consulting and
systems-integration services and distributes EMC-related products.
The Company comprises three business units: its KeyTek Instrument
division (KeyTek); its Verifier U.K., Comtest Instrumentation B.V., Comtest
Italia, and Comtest Limited subsidiaries (collectively, Comtest); and its
Universal Voltronics division. KeyTek manufactures instruments that
simulate different types of pulsed EMI in order to test electronic and
electrical systems and components for EMC. On March 1, 1995, KeyTek
acquired substantially all of the assets, subject to certain liabilities,
of Kalmus Engineering Incorporated, a manufacturer of RF power amplifiers,
for $3.8 million in cash. Comtest, which is based in the Netherlands,
Italy, and England, provides EMC consulting and systems-integration
services, distributes a range of EMC-related products, and manufactures and
markets specialized power supplies for telecommunications equipment.
Comtest's Verifier division, acquired in 1994, manufactures test equipment
that performs electrical stress tests for semiconductor devices. The
Company's Universal Voltronics division manufactures high-voltage
power-conversion systems, which transform utility-supplied voltage or
current into the current required by the user and allow precise control
over the performance level for each desired application.
The Company was originally incorporated in 1960 under the name
Universal Voltronics Corp. Thermedics Inc. (Thermedics) of Woburn,
Massachusetts, acquired a controlling interest in the Company's common
stock in March 1990. In November 1992, the Company's name was changed to
Thermo Voltek Corp. As of December 30, 1995, Thermedics owned 2,442,850
shares of the Company's common stock, representing 50% of such stock
outstanding. A publicly traded subsidiary of Thermo Electron Corporation
(Thermo Electron), Thermedics develops, manufactures, and markets process
detection and security instruments, implantable heart-assist systems, and
other biomedical products, in addition to the Company's products. As of
December 30, 1995, Thermo Electron owned 422,699 shares of the Company's
common stock, representing 9% of such stock outstanding. In January 1996,
Thermedics acquired 315,199 shares of the Company's common stock from
Thermo Electron. In consideration for such shares, and 529,965 shares of
common stock of Thermo Cardiosystems Inc., another subsidiary of
Thermedics, Thermedics issued 1,688,161 shares of its common stock to
Thermo Electron. Thermo Electron is a world leader in environmental
monitoring and analysis instruments and a manufacturer of biomedical
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products including heart-assist systems and mammography systems,
paper-recycling and papermaking equipment, alternative-energy systems,
industrial process equipment and other specialized products. Thermo
Electron also provides environmental and metallurgical services and
conducts advanced technology research and development.
Thermedics intends, for the foreseeable future, to maintain at least
50% ownership of the Company. This may require the purchase by Thermedics
of additional shares (or convertible debentures that are then converted) of
the Company from time to time as the number of outstanding shares of the
Company increases. These or any other purchases by Thermedics may be made
either on the open market or directly from the Company or Thermo Electron
or pursuant to conversions of the subordinated convertible debentures
issued by the Company to Thermedics. During 19951, Thermedics purchased
21,300 shares of the Company's common stock on the open market at a total
price of $179,000. See Notes 4, 9, and 10 to Consolidated Financial
Statements in the Company's 1995 Annual Report to Shareholders for a
description of outstanding stock options and convertible obligations issued
by the Company.
(b) Information About Industry Segments.
The Company is engaged in one business segment: the design,
manufacture, and marketing of electronic test instruments as well as
related consulting services, and the design, manufacture, and marketing of
high-voltage power-conversion systems.
(c) Description of Business.
(i) Principal Products and Services
Electronic Test Instruments and Services
The Company designs, develops, and manufactures test instruments that
simulate different types of pulsed electromagnetic interference (pulsed
EMI) in order to test electronic and electrical systems and components for
electromagnetic compatibility (EMC). Pulsed EMI, which is caused by natural
and man-made phenomena such as lightning, static electricity, and
electrical power disturbances, can damage or disrupt the operation of any
product that uses digital circuits. Consequently, manufacturers of
electronic systems and integrated circuits must engineer their products for
immunity to pulsed EMI. The Company's products are used by these customers
primarily for product development, design verification, and quality
assurance, enabling them to meet higher levels of product performance,
reliability, and safety, and to meet increasingly stringent regulatory
requirements, including a European Union (EU) directive that took effect on
January 1, 1996.
The market for EMC-testing equipment has developed due to the
proliferation of digital electronics. Digital circuits respond to
electronic pulses and are unable to distinguish between normal data pulses
and pulses caused by EMI. As a result, pulsed EMI can cause a wide range of
1 References to 1995, 1994, and 1993 herein are for the fiscal years ended
December 30, 1995, December 31, 1994, and January 1, 1994, respectively.
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problems in electronic products, including data loss and memory failure in
computer systems, malfunctions in medical and consumer electronics, and
interference among competing electronic media, such as the effects of
onboard personal computer use upon airline navigation systems. The risks
associated with pulsed EMI have increased with the evolution of
increasingly small and densely packed integrated circuits, which operate at
higher speeds and lower power levels. Because these smaller circuits are
more sensitive to electronic pulses, electromagnetic interference that
previously had little effect on electronic circuits now has the potential
to cause major upset and damage.
The Company's instruments that test products for immunity to pulsed
EMI fall into two main categories: (1) equipment to test electronic
products such as computers and (2) equipment to test individual electronic
components such as integrated circuits. The Company's products test for
each different type of pulsed EMI: electrostatic discharge, which is the
abrupt release of an electrical charge that has accumulated on a person or
object (often as a result of friction); electrical fast transients, which
are bursts of fast noise pulses often caused by the opening of a switch
(such as a light switch); and surges, which are high-energy, short-duration
pulses resulting from the effects of lightning on utility, telecommunica-
tions, and other lines. The Company's products also test for immunity to
certain types of power quality failure, which include voltage swells, dips,
and interruptions on power lines. In addition, the Company offers
EMC-consulting and systems-integration services, acts as a distributor of a
broad range of EMC-testing products, including integrated RF power
amplifiers into turnkey systems, and manufactures power-conversion systems
for use in telecommunications equipment.
Product Testing Equipment. In 1992, KeyTek introduced its ECAT (R)
system, which integrates comprehensive pulsed EMI and power quality failure
simulation and testing with built-in diagnostic capabilities. Because it is
structured around a Windows (TM) -based graphical user interface, which
guides the user through all testing functions, from test design and
planning through execution, results analysis, and reporting, the ECAT
system can be operated by personnel with less specialized knowledge.
The ECAT system is modular in design, allowing customers to upgrade
their systems easily and inexpensively to meet more rigorous testing
requirements resulting from technical and regulatory changes. Systems can
currently be configured with up to 50 modules; additional modules with
expanded testing capabilities are currently under development by the
Company.
KeyTek offers a range of lower-cost instruments designed to test
completed products for a particular type of pulsed EMI. KeyTek's lower-
cost electrostatic discharge testing product line ranges from the MiniZap
(R), a hand-held, battery-operated electrostatic discharge simulator, to
instruments with expanded testing capability. KeyTek also offers a series
of simulators that test for immunity to the effects of electrical fast
transients and a line of surge simulators ranging from benchtop laboratory
units to fully automated systems.
In 1994, Comtest introduced its first commercial product. Called the
G-Strip, this product, a radio frequency interference (RFI) immunity
tester, analyzes how effectively electronics resist the effects of radio
frequency emitted by other electronic devices.
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Component Testing Equipment. KeyTek manufactures a range of products
that utilize its electrostatic discharge (ESD) simulation technology for
the testing of electronic components and subassemblies. These products are
used to test integrated circuits and printed circuit boards for pulsed EMI
immunity during product development, design verification, and quality
assurance. The principal component-testing product offered by the Company
is the ZapMaster (R), which is a fully automated, high-speed system that
can test the most basic to the most advanced integrated circuits currently
in commercial use. Adding different software packages to this system allows
testing of printed circuit boards and other subassemblies for immunity to
ESD as well as testing of integrated circuits for immunity to "latchup," a
phenomenon whereby an electrical transient on a power supply can cause
logic failure or chip destruction in certain integrated circuits. ESD and
latchup are two primary electrical stress tests for semiconductor devices.
KeyTek's component and subassembly testing instruments all incorporate
Windows-based software.
In July 1994, Comtest acquired the assets of Verifier Systems Limited
(Verifier), a United Kingdom based manufacturer of component reliability
products that perform ESD and latchup testing. In addition to a small
manual unit for ESD testing and another specialized tester, Verifier
manufactures three large automated systems, two of which are similar to
KeyTek's ZapMaster products. The major difference is the application of
pulses during testing. KeyTek's high-speed method uses electromechanical
relays to apply pulses for rapid testing and throughput while Verifier's
system emphasizes standardized ESD pulses with optimum wave shapes. As a
result, the products fit the needs of customers in both research
laboratories and quality control laboratories.
RF Power Amplifiers. On March 1, 1995, as part of its strategy to
address additional segments of the EMC testing market, the Company acquired
substantially all of the assets, subject to certain liabilities, of Kalmus
Engineering Incorporated (Kalmus), a manufacturer of RF power amplifiers.
RF power amplifiers are used to test products for immunity to conducted and
radiated RFI and are purchased by many of the same customers that purchase
KeyTek's pulsed EMI testing products. In addition, RF power amplifiers are
used in a variety of laboratory and test applications where precise control
over power level and frequency are required; in medical imaging
applications; and in wireless communications applications, such as in
cellular telephone systems, wireless wide area networks (WANs) and local
area networks (LANs), and mobile data communications.
EMC Services. Through Comtest, the Company provides a wide range of
testing, consulting, training, and systems-integration services;
distributes EMC-testing products for pulsed EMI and RFI immunity and
emissions testing; and designs EMC test facilities. Projects undertaken by
Comtest include the design and development of shielded rooms, anechoic (or
open) chambers, and open area test sites. These test areas range in size
from tabletop enclosures that are used to test products as small as
pacemakers to facilities that can test airplanes. These testing areas must
be specially designed to ensure that directed electronic interference hits
its intended target and is not dissipated or absorbed by surrounding
objects. The Company also provides on-site management and service, and
maintains testing and training facilities, at Comtest's Netherlands
headquarters.
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Telecommunications Power Supplies. Comtest manufactures specialized
power supplies that are used in telecommunications equipment to maintain
consistent power quality. These systems are of critical importance in areas
of the world where utility-supplied power cannot be relied upon to maintain
adequate power quality to operate telecommunications equipment.
Revenues from electronic test instruments and services were
$31,580,000, $19,009,000, and $13,206,000, in 1995, 1994, and 1993,
respectively.
High-voltage Systems
Through its Universal Voltronics subsidiary, the Company 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 defense
and scientific research applications. These systems transform
utility-supplied voltage and current into the high voltage or current
required by the user and allow precise control over the performance level
desired for each application. The Company's systems produce power from
1,000 to 1,000,000 volts, and range in size from small modules used in
benchtop instruments to room-sized systems used in scientific research
applications.
Commercial Applications. The Company's systems are being used in the
following commercial applications:
Industrial. Major uses of the Company's products are in
electron-beam applications: for evaporation in the semiconductor
industry, for curing and drying of inks and coatings in the
graphics industry, and for fusing laminate veneers onto particle
board. A recent product development is for electron-beam welding.
In addition, the Company has developed high-voltage power
supplies for microwave-driven light sources used to test
projection televisions during the manufacturing process. The
Company's systems are also being used to power industrial lasers
for use in metal and cloth cutting, product marking, welding, and
heat treating. Another industrial application for the Company's
systems is the electrostatic application of paint, which is used
primarily in the automotive industry. This process involves the
charging of paint particles in a process that results in a more
even application and reduces vulnerability to chipping and
staining.
Medical. The primary medical application for the Company's
high-voltage systems is in powering surgical lasers. The
Company's systems are currently being used to power lasers for
use in dermatological, obstetrical/gynecological, neurological,
and dental applications. As surgical lasers are becoming smaller,
safer, and more efficient, they are being used in an increasing
number of outpatient procedures, as well as more complex
procedures. The Company's products are also used to power X-ray
tubes for medical and other applications. A recent product
development is an X-ray tube power supply for low dosage X-ray
diagnostics.
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Environmental. The Company's high-voltage systems are used in
environmental applications that are in various stages of
development. Products have been developed for use in systems for
plastics recycling. In addition, the Company provides power
supplies for use in the electrostatic separation of waste fly ash
to produce usable materials.
Defense and Scientific Research Applications. The Company's high-voltage
systems are currently being used in a number of defense and scientific
research applications. A contract with the U.S. Navy was completed in early
1996 when the Company shipped the last of four high-voltage modulator
systems to power microwave sources for shipboard radar applications.
Revenues from high-voltage systems were $4,746,000, $4,632,000, and
$4,883,000, in 1995, 1994, and 1993, respectively.
(ii) New Products
The Company's business includes the development and introduction of
new products in the following categories: electronic test instruments and
systems and high-voltage power-conversion systems, modulators, and
fast-response protection systems (see (xi) "Research and Development").
(iii) Raw Materials
A number of the components of the Company's EMC-testing products are
supplied by sole-source vendors. While the Company has not experienced
significant difficulty in obtaining adequate supplies from these vendors,
and believes that it would be able to identify alternate suppliers if
necessary, there can be no assurance that the unanticipated loss of a
single vendor would not result in delays in shipments or in the
introduction of new products.
(iv) Patents, Licenses and Trademarks
The Company considers patents to be important in the current operation
of its business. However, the Company does not consider any patent or
related group of patents to be of such importance that its expiration or
termination would materially affect the Company's business. The Company
protects its intellectual property rights in its research and development
work by use of trade secrets, trademarks, and, where appropriate, by
applying for patents in the U.S. and other countries.
(v) Seasonal Influences
There are no significant seasonal influences on the Company's sales of
its products.
(vi) Working Capital Requirements
There are no special inventory requirements or credit terms extended
to customers that would have a material adverse effect on the Company's
working capital.
(vii) Dependency on a Single Customer
No single customer accounted for more than 10% of the Company's total
revenues in any of the past three years.
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(viii) Backlog
The Company's backlog of firm orders is measured by the amount of
unshipped orders and, with respect to long-term contracts, the amount of
the contract reduced by the revenue that has been recognized to date on a
percentage-of-completion basis. The Company's backlog was $13.0 million and
$7.1 million as of December 30, 1995 and December 31, 1994, respectively.
The Company believes that substantially all of the backlog at December 30,
1995, will be shipped or completed during the next twelve months.
(xi) Government Contracts
As of December 30, 1995, the Company did not have any material
contracts or subcontracts with the federal government that were subject to
renegotiation of profits or termination. Revenues derived by the Company
from government contracts have decreased steadily as a percentage of
revenues over the last three years. Although the Company expects that it
will continue to enter into government contracts or subcontracts that could
be subject to such renegotiations or termination, these contracts are not
expected to account for a material portion of the Company's revenues in the
future.
(x) Competition
The Company is a leading supplier of pulsed EMI testing equipment.
The Company estimates that there are approximately 15 companies worldwide
that independently manufacture and market pulsed EMI test equipment for
electronic products and approximately 10 companies that independently
manufacture and market component-reliability test equipment. The Company
competes in this market primarily on the basis of performance, technical
expertise, reputation, and price.
In the market for RF power amplifiers, the Company competes with
approximately five companies worldwide. Competition in this market is based
primarily on technical expertise, reputation, and price.
The Company estimates that there are approximately 20 companies that
independently manufacture and market high-voltage power supply systems of
the general type manufactured and marketed by the Company. The Company
competes for both contract and commercial sales primarily on the basis of
technical expertise, product performance, reputation, and price.
Substantially all of the Company's contract and commercial revenues
are subject to intense competitive bidding. Some of the Company's
competitors have substantially greater financial resources than those of
the Company.
(xi) Research and Development
The Company is focusing its research and development in EMC product
testing on adding diagnostic capabilities to the ECAT system and on
developing low cost systems for the regulatory driven market. The Company
is adapting its component-reliability testing systems to meet the
increasingly stringent needs of manufacturers of higher pin count
semiconductors.
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The Company is focusing research and development on standard
high-voltage power-sources to further address industrial, medical, and
environmental markets, and to develop new markets in which the Company
believes it can compete based on price and/or technical performance.
Research and development expenses for the Company were $2,349,000,
$1,492,000, and $1,240,000 in 1995, 1994, and 1993, respectively.
(xii) Environmental Protection Regulations
The Company believes that compliance by the Company with federal,
state, and local environmental protection regulations will not have a
material adverse effect on its capital expenditures, earnings, or
competitive position.
(xiii) Number of Employees
As of December 30, 1995, the Company employed 245 people. Except for
12 employees at Universal Voltronics, none of the Company's employees is
represented by a union. The Company believes that relations with its
employees are good.
(xiv) Marketing
The Company markets its electronic test instruments through 19 U.S.
sales representatives and 20 distributors in more than 30 foreign
countries. In addition, as of December 30, 1995, the Company had 11
marketing and sales employees located in the U.S., U.K., and Italy who work
closely with sales representatives to provide installation, technical, and
other support to customers. Comtest distributes EMC testing products for
more than 10 manufacturers, primarily in the U.K., Benelux countries, and
Italy.
The Company's high-voltage power-conversion products are sold through
its internal sales force and through nine domestic and five international
sales representatives. The Company also has OEM (original equipment
manufacturer) agreements with certain customers in the automotive, medical
laser, and electron beam industries.
(d) Financial Information About Exports by Domestic Operations and About
Foreign Operations.
Financial information about exports by domestic operations and about
foreign operations is summarized in Note 11 to Consolidated Financial
Statements in the Registrant's 1995 Annual Report to Shareholders and is
incorporated herein by reference.
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(e) Executive Officers of the Registrant.
Present Title
Name Age (Year First Became Executive Officer)
------------------------ --- -------------------------------------
John W. Wood Jr. 52 Chairman of the Board, President
and Chief Executive Officer (1990)
Michael D. Norton 43 Vice President; President, KeyTek
Instrument division (1992)
Dominick R. Congiusti 66 Vice President; President, Universal
Voltronics division (1994)
John N. Hatsopoulos 61 Chief Financial Officer (1990)
Paul F. Kelleher 53 Chief Accounting Officer (1990)
Each executive officer serves until his successor is chosen or
appointed by the Board of Directors and qualified or until his earlier
resignation, death, or removal. All executive officers except Messrs.
Norton and Congiusti have held comparable positions for at least five years
either with the Company, Thermedics, or Thermo Electron. Mr. Wood is a
Senior Vice President of Thermo Electron and the President and Chief
Executive Officer of Thermedics but devotes such portion of his time to the
affairs of the Company as the Company's needs reasonably require. Mr.
Norton has been a Vice President of the Company since December 1992 and is
a full-time employee of the Company. He has been President of KeyTek since
April 1993, was Executive Vice President of KeyTek from 1990 to 1993, and
Vice President of Operations of KeyTek from 1987 to 1990. Mr. Congiusti has
been a Vice President of the Company since December 1994 and is a full-time
employee of the Company. He has been President of Universal Voltronics
since December 1993, was Vice President of Operations of Universal
Voltronics from 1992 to 1993, and Director of Manufacturing of Universal
Voltronics from 1991 to 1992. Prior to joining the Company, Mr. Congiusti
was Production Manager of Ferranti Venus, a manufacturer of high-voltage
power supplies. Messrs. Hatsopoulos and Kelleher are full-time employees of
Thermo Electron but devote such time to the affairs of the Company as the
Company's needs reasonably require.
Item 2. Properties
The Company owns approximately 45,000 square feet of office,
engineering, laboratory, and production space in Mount Kisco, New York, and
leases approximately 78,000 square feet of office, engineering, laboratory,
and production space under leases expiring from 1996 to 2000, principally
in Massachusetts, Washington, the Netherlands, Italy, and the United
Kingdom. The Company's principal executive offices are located in Woburn,
Massachusetts. The Company believes that these facilities are in good
condition and are suitable and adequate for its present operations, and
that suitable space is readily available if any of such leases are not
extended.
Item 3. Legal Proceedings
Not applicable.
Item 4. Submission of Matters to a Vote of the Security Holders
Not applicable.
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PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder
Matters
Information concerning the market and market price for the
Registrant's common stock, $.05 par value, and dividend policy is included
under the sections labeled "Common Stock Market Information" and "Dividend
Policy" in the Registrant's 1995 Annual Report to Shareholders and is
incorporated herein by reference.
Item 6. Selected Financial Data
The information required under this item is included under the
sections "Selected Financial Information" and "Dividend Policy" in the
Registrant's 1995 Annual Report to Shareholders and is incorporated herein
by reference.
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
The information required under this item is included under the heading
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" in the Registrant's 1995 Annual Report to Shareholders and is
incorporated herein by reference.
Item 8. Financial Statements and Supplementary Data
The Registrant's Consolidated Financial Statements as of December 30,
1995, and Supplementary Data are included in the Registrant's 1995 Annual
Report to Shareholders and are incorporated herein by reference.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
Not applicable.
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PART III
Item 10. Directors and Executive Officers of the Registrant
The information concerning directors required under this item is
incorporated herein by reference from the material contained under the
caption "Election of Directors" in the Registrant's definitive proxy
statement to be filed with the Securities and Exchange Commission pursuant
to Regulation 14A, not later than 120 days after the close of the fiscal
year.
Item 11. Executive Compensation
The information required under this item is incorporated herein by
reference from the material contained under the caption "Executive
Compensation" in the Registrant's definitive proxy statement to be filed
with the Securities and Exchange Commission pursuant to Regulation 14A, not
later than 120 days after the close of the fiscal year.
Item 12. Security Ownership of Certain Beneficial Owners and Management
The information required under this item is incorporated herein by
reference from the material contained under the caption "Stock Ownership"
in the Registrant's definitive proxy statement to be filed with the
Securities and Exchange Commission pursuant to Regulation 14A, not later
than 120 days after the close of the fiscal year.
Item 13. Certain Relationships and Related Transactions
The information required under this item is incorporated herein by
reference from the material contained under the caption "Relationship with
Affiliates" in the Registrant's definitive proxy statement to be filed with
the Securities and Exchange Commission pursuant to Regulation 14A, not
later than 120 days after the close of the fiscal year.
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PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(a,d) Financial Statements and Schedules.
(1) The consolidated financial statements set forth in the list
below are filed as part of this Report.
(2) The consolidated financial statement schedule set forth in the
list below is filed as part of this Report.
(3) Exhibits filed herewith or incorporated herein by reference are
set forth in Item 14(c) below.
List of Financial Statements and Schedules Referenced in this Item
14.
Information incorporated by reference from Exhibit 13 filed
herewith:
Consolidated Statement of Income
Consolidated Balance Sheet
Consolidated Statement of Cash Flows
Consolidated Statement of Shareholders' Equity
Notes to Consolidated Financial Statements
Report of Independent Public Accountants
Certain Financial Statement Schedule filed herewith:
Schedule II: Valuation and Qualifying Accounts
All other schedules are omitted because they are not applicable or
not required, or because the required information is shown either in
the financial statements or in the notes thereto.
(b) Reports on Form 8-K.
During the Company's quarter ended December 30, 1995, the Company
was not required to file, and did not file, any Current Report on
Form 8-K.
(c) Exhibits.
See Exhibit Index on the page immediately preceding exhibits.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
Date: March 8, 1996 THERMO VOLTEK CORP.
By: John W. Wood Jr.
---------------------------------
John W. Wood Jr.
President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities indicated below, as of March 8, 1996.
Signature Title
--------- -----
By: John W. Wood Jr. Chairman of the Board, Chief Executive
---------------------
John W. Wood Jr. Officer, President and Director
By: John N. Hatsopoulos Chief Financial Officer
---------------------
John N. Hatsopoulos
By: Paul F. Kelleher Chief Accounting Officer
---------------------
Paul F. Kelleher
By Elias P. Gyftopoulos Director
---------------------
Elias P. Gyftopoulos
By: William W. Hoover Director
---------------------
William W. Hoover
By: Sandra L. Lambert Director
---------------------
Sandra L. Lambert
By: Theo Melas-Kyriazi Director
---------------------
Theo Melas-Kyriazi
By: Peter Richman Director
---------------------
Peter Richman
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Report of Independent Public Accountants
----------------------------------------
To the Shareholders and Board of Directors of Thermo Voltek Corp.:
We have audited, in accordance with generally accepted auditing
standards, the consolidated financial statements included in Thermo Voltek
Corp.'s Annual Report to Shareholders incorporated by reference in this
Form 10-K, and have issued our report thereon dated February 7, 1996. Our
audits were made for the purpose of forming an opinion on those statements
taken as a whole. The schedule listed in Item 14 on page 13 is the
responsibility of the Company's management and is presented for purposes of
complying with the Securities and Exchange Commission's rules and is not
part of the basic consolidated financial statements. This schedule has been
subjected to the auditing procedures applied in the audits of the basic
consolidated financial statements and, in our opinion, fairly states in all
material respects the consolidated financial data required to be set forth
therein in relation to the basic consolidated financial statements taken as
a whole.
Arthur Andersen LLP
Boston, Massachusetts
February 7, 1996
15PAGE
<PAGE>
SCHEDULE II
THERMO VOLTEK CORP.
VALUATION AND QUALIFYING ACCOUNTS
(In thousands)
Additions Deductions
------------------------------- ----------
Balance at Charged to Accounts Balance
Beginning Costs and Bad Debts Written- at End
of Year Expenses Recovered Other(a) off of Year
---------- ---------- --------- -------- --------- --------
Year Ended
December 30, 1995
Allowance for
Doubtful Accounts $343 $135 $ - $ 19 $ (51) $446
Year Ended
December 31, 1994
Allowance for
Doubtful Accounts $354 $101 $ - $ 35 $(147) $343
Year Ended
January 1, 1994
Allowance for
Doubtful Accounts $119 $ 83 $ 25 $141 $ (14) $354
(a) Allowance of business acquired during the year as described in Note 3 to
Consolidated Financial Statements in the Registrant's 1995 Annual Report to
Shareholders.
16PAGE
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description of Exhibit Page
--------------------------------------------------------------------------
2.1 Asset Purchase Agreement dated July 21, 1994, among
Verifier Systems Limited, Lawgil Limited, and Comtest
Limited (filed as Exhibit 2.1 to the Registrant's
Current Report on Form 8-K relating to events occurring
on July 21, 1994 [File No. 1-10574] and incorporated
herein by reference).
2.4 Asset Purchase Agreement dated March 1, 1995, among
KeyTek Instrument Division of Thermo Voltek Corp.,
Kalmus Engineering Incorporated, RF Power Labs,
Incorporated, and Frank Kalmus. 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.
3.1 Restated Certificate of Incorporation of the Registrant,
as amended (filed as Exhibit 3.1 to the Registrant's
Annual Report on Form 10-K for the year ended January 2,
1993 [File No. 1-10574] and incorporated herein by
reference).
3.2 Composite Restatement of By-Laws, as amended (filed as
Exhibit 3.2 to the Registrant's Transition Report on
Form 10-K for the six months ended December 29, 1990
[File No. 1-10574] and incorporated herein by
reference).
4.1 Agreement between the Registrant and Thermedics Inc.
dated June 5, 1992 for Purchase of Note (filed as
Exhibit 4 to the Registrant's Current Report on Form 8-K
dated June 5, 1992 [File No. 1-10574] and incorporated
herein by reference).
4.2 Fiscal Agency Agreement dated as of November 19, 1993
among the Registrant, Thermo Electron Corporation, and
Chemical Bank (filed as Exhibit 4.3 to the Registrant's
Annual Report on Form 10-K for the fiscal year ended
January 1, 1994 [File No. 1-10574] and incorporated
herein by reference).
4.3 Guarantee Reimbursement Agreement dated February 7, 1994
among the Registrant, Thermedics Inc., Thermo
Cardiosystems Inc. and Thermo Electron Corporation
(filed as Exhibit 4.4 to Thermedics' Annual Report on
Form 10-K for the fiscal year ended January 1, 1994
[File No. 1-9567] and incorporated herein by reference).
10.1 Amended and Restated Corporate Services Agreement dated
January 3, 1993, between Thermo Electron Corporation and
the Registrant (filed as Exhibit 10.3 to the
Registrant's Annual Report on Form 10-K for the year
ended January 2, 1993 [File No. 1-10574] and
incorporated herein by reference).
17PAGE
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description of Exhibit Page
--------------------------------------------------------------------------
10.2 Form of Indemnification Agreement for Directors and
Officers of the Registrant (filed as Exhibit 10.13 to
the Registrant's Transition Report on Form 10-K for the
six months ended December 29, 1990 [File No. 1-10574]
and incorporated herein by reference).
10.3 Thermo Electron Corporate Charter as amended and
restated effective January 3, 1993 (filed as Exhibit
10.5 to the Registrant's Annual Report on Form 10-K for
the year ended January 2, 1993 [File No. 1-10574] and
incorporated herein by reference).
10.4 Consulting Agreement between the Registrant and Peter
Richman, as of August 5, 1993 (filed as Exhibit 10.25 to
the Registrant's Quarterly Report on Form 10-Q for the
quarter ended July 3, 1993 [File No. 1-10574] and
incorporated herein by reference).
10.5 Lease Agreement dated August 2, 1993 between Comtest
Invest B.V. and Comtest Instrumentation B.V. (filed as
Exhibit 10.6 to the Registrant's Annual Report on Form
10-K for the fiscal year ended January 1, 1994 [File No.
1-10574] and incorporated herein by reference).
10.6 Note dated July 2, 1993 from the Registrant to Thermo
Electron Corporation (filed as Exhibit 10.7 to the
Registrant's Annual Report on Form 10-K for the fiscal
year ended January 1, 1994 [File No. 1-10574] and
incorporated herein by reference).
10.7 Master Repurchase Agreement dated as of January 1, 1994
between the Registrant and Thermo Electron Corporation
(filed as Exhibit 10.8 to the Registrant's Annual Report
on Form 10-K for the fiscal year ended January 1, 1994
[File No. 1-10574] and incorporated herein by
reference).
10.8 - 10.18 Reserved.
10.19 1985 Stock Option Plan of the Registrant (filed as
Exhibit 10.14 to the Registrant's Annual Report on Form
10-K for the fiscal year ended June 30, 1985 [File No.
0-8245] and incorporated herein by reference). (Maximum
number of shares issuable is 200,000 shares, after
adjustment to reflect 1-for-3 reverse stock split
effected in November 1992 and 3-for-2 stock split
effected in November 1993).
18PAGE
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description of Exhibit Page
--------------------------------------------------------------------------
10.20 1990 Stock Option Plan, as amended, of the Registrant
(filed as Exhibit 10.2 to the Registrant's Quarterly
Report on Form 10-Q for the quarter ended July 2, 1994
[File No. 1-10574] and incorporated herein by
reference). (Maximum number of shares issuable is
400,000 shares, after adjustment to reflect share
increases in 1993 and 1994, 1-for-3 reverse stock split
effected in November 1992, and 3-for-2 stock split
effected in November 1993).
10.21 Equity Incentive Plan of the Registrant (filed as
Exhibit 10.49 to the Registrant's Annual Report on Form
10-K for the year ended December 31, 1994 [File No.
1-11406] and incorporated herein by reference).
10.22 Deferred Compensation Plan for Directors of the
Registrant (filed as Exhibit 10.23 to the Registrant's
Quarterly Report on Form 10-Q for the quarter ended July
3, 1993 [File No. 1-10574] and incorporated herein by
reference).
10.23 Directors' Stock Option Plan of the Registrant (filed as
Exhibit 10.23 to the Registrant's Annual Report on Form
10-K for the year ended December 31, 1994 [File No.
1-11406] and incorporated herein by reference).
In addition to the stock-based compensation plans of the
Registrant, the executive officers of the Registrant may
be granted awards under stock-based compensation plans
of the Registrant's parent corporations, Thermedics Inc.
and Thermo Electron Corporation, and their subsidiaries,
for services rendered to the Registrant or to such
affiliated corporations. Such plans are listed under
Exhibits 10.24 - 10.91.
10.24 Thermo Electron Corporation Incentive Stock Option Plan
(filed as Exhibit 4(d) to Thermo Electron's Registration
Statement on Form S-8 [Reg. No. 33-8993] and
incorporated herein by reference). (Maximum number of
shares issuable in the aggregate under this plan and the
Thermo Electron Nonqualified Stock Option Plan is
9,035,156 shares, after adjustment to reflect share
increases approved in 1984 and 1986, share decrease
approved in 1989, and 3-for-2 stock splits effected in
October 1986, October 1993, and May 1995.)
10.25 Thermo Electron Corporation Nonqualified Stock Option
Plan (filed as Exhibit 4(e) to Thermo Electron's
Registration Statement on Form S-8 [Reg. No. 33-8993]
and incorporated herein by reference). (Plan amended in
1984 to extend expiration date to December 14, 1994;
maximum number of shares issuable in the aggregate under
this plan and the Thermo Electron Incentive Stock Option
Plan is 9,035,156 shares, after adjustment to reflect
share increases approved in 1984 and 1986, share
decrease approved in 1989, and 3-for-2 stock splits
effected in October 1986, October 1993, and May 1995.)
19PAGE
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description of Exhibit Page
--------------------------------------------------------------------------
10.26 Thermo Electron Corporation Equity Incentive Plan (filed
as Exhibit 10.1 to Thermo Electron's Quarterly Report on
Form 10-Q for the quarter ended July 2, 1994 [File No.
1-8002] and incorporated herein by reference). (Plan
amended in 1989 to restrict exercise price for SEC
reporting persons to not less than 50% of fair market
value or par value; maximum number of shares issuable is
7,050,000 shares, after adjustment to reflect 3-for-2
stock splits effected in October 1993 and May 1995 and
share increase approved in 1994.)
10.27 Thermo Electron Corporation - Thermedics Inc.
Nonqualified Stock Option Plan (filed as Exhibit 4 to
Registration Statement on Form S-8 of Thermedics [Reg.
No. 2-93747] and incorporated herein by reference).
(Maximum number of shares issuable is 450,000 shares,
after adjustment to reflect share increase approved in
1988, 5-for-4 stock split effected in January 1985,
4-for-3 stock split effected in September 1985, and
3-for-2 stock splits effected in October 1986 and
November 1993.)
10.28 Thermo Electron Corporation - Thermo Instrument Systems
Inc. (formerly Thermo Environmental Corporation)
Nonqualified Stock Option Plan (filed as Exhibit 4(c) to
a Registration Statement on Form S-8 of Thermo
Instrument Systems Inc. [Reg. No.33-8034] and
incorporated herein by reference). (Maximum number of
shares issuable is 421,875 shares, after adjustment to
reflect 3-for-2 stock splits effected in July 1993 and
April 1995, and 5-for-4 stock split effected in December
1995.)
10.29 Thermo Electron Corporation - Thermo Instrument Systems
Inc. Nonqualified Stock Option Plan (filed as Exhibit
10.12 to Thermo Electron's Annual Report on Form 10-K
for the fiscal year ended January 3, 1987 [File No.
1-8002] and incorporated herein by reference). (Maximum
number of shares issuable is 600,285 shares, after
adjustment to reflect share increase approved in 1988,
3-for-2 stock splits effected in January 1988, July
1993, and April 1995 and 5-for-4 stock split effective
in December 1995.)
10.30 Thermo Electron Corporation - Thermo TerraTech Inc.
(formerly Thermo Process Systems Inc.) Nonqualified
Stock Option Plan (filed as Exhibit 10.13 to Thermo
Electron's Annual Report on Form 10-K for the fiscal
year ended January 3, 1987 [File No. 1-8002] and
incorporated herein by reference). (Maximum number of
shares issuable is 108,000 shares, after adjustment to
reflect 6-for-5 stock splits effected in July 1988 and
March 1989 and 3-for-2 stock split effected in September
1989.)
20PAGE
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description of Exhibit Page
--------------------------------------------------------------------------
10.31 Thermo Electron Corporation - Thermo Power Corporation
(formerly Tecogen Inc.) Nonqualified Stock Option Plan
(filed as Exhibit 10.14 to Thermo Electron's Annual
Report on Form 10-K for the fiscal year ended January 3,
1987 [File No. 1-8002] and incorporated herein by
reference). (Amended in September 1995 to extend the
plan expiration date to December 31, 1995.)
10.32 Thermo Electron Corporation - Thermo Cardiosystems Inc.
Nonqualified Stock Option Plan (filed as Exhibit 10.11
to Thermo Electron's Annual Report on Form 10-K for the
fiscal year ended December 29, 1990 [File No. 1-8002]
and incorporated herein by reference). (Maximum number
of shares issuable is 130,500 shares, after adjustment
to reflect share increases approved in 1990 and 1992,
3-for-2 stock split effected in January 1990, 5-for-4
stock split effected in May 1990, and 2-for-1 stock
split effected in November 1993.)
10.33 Thermo Electron Corporation - Thermo Ecotek Corporation
(formerly Thermo Energy Systems Corporation)
Nonqualified Stock Option Plan (filed as Exhibit 10.12
to Thermo Electron's Annual Report on Form 10-K for the
fiscal year ended December 29, 1990 [File No. 1-8002]
and incorporated herein by reference.)
10.34 Thermo Electron Corporation - ThermoTrex Corporation
(formerly Thermo Electron Technologies Corporation)
Nonqualified Stock Option Plan (filed as Exhibit 10.13
to Thermo Electron's Annual Report on Form 10-K for the
fiscal year ended December 29, 1990 [File No. 1-8002]
and incorporated herein by reference). (Maximum number
of shares issuable is 180,000 shares, after adjustment
to reflect 3-for-2 stock split effected in October
1993.)
10.35 Thermo Electron Corporation - Thermo Fibertek Inc.
Nonqualified Stock Option Plan (filed as Exhibit 10.14
to Thermo Electron's Annual Report on Form 10-K for the
fiscal year ended December 28, 1991 [File No. 1-8002]
and incorporated herein by reference). (Maximum number
of shares issuable is 600,000 shares, after adjustment
to reflect 2-for-1 stock split effected in September
1992 and 3-for-2 stock split effected in September
1995.)
10.36 Thermo Electron Corporation - Thermo Voltek Corp. (formerly
Universal Voltronics Corp.) Nonqualified Stock Option Plan
(filed as Exhibit 10.17 to Thermo Electron's Annual Report on
Form 10-K for the fiscal year ended January 2, 1993 [File No.
1-8002] and incorporated herein by reference). (Maximum
number of shares issuable is 57,500 shares, after adjustment
to reflect 3-for-2 stock split effected in November 1993 and
share increase approved in September 1995.)
21PAGE
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description of Exhibit Page
--------------------------------------------------------------------------
10.37 Thermo Electron Corporation - Thermo BioAnalysis
Corporation Nonqualified Stock Option Plan (filed as
Exhibit 10.65 to Thermo Ecotek's Transition Report on
Form 10-K for the nine months ended September 30, 1995
[File No. 1-13572] and incorporated herein by
reference).
10.38 Thermo Electron Corporation - ThermoLyte Corporation
Nonqualified Stock Option Plan (filed as Exhibit 10.66
to Thermo Ecotek's Transition Report on Form 10-K for
the nine months ended September 30, 1995 [File No.
1-13572] and incorporated herein by reference).
10.39 Thermo Electron Corporation - Thermo Remediation Inc.
Nonqualified Stock Option Plan (filed as Exhibit 10.67
to Thermo Ecotek's Transition Report on Form 10-K for
the nine months ended September 30, 1995 [File No.
1-13572] and incorporated herein by reference).
10.40 Thermo Electron Corporation - ThermoSpectra Corporation
Nonqualified Stock Option Plan (filed as Exhibit 10.68
to Thermo Ecotek's Transition Report on Form 10-K for
the nine months ended September 30, 1995 [File No.
1-13572] and incorporated herein by reference).
10.41 Thermo Electron Corporation - ThermoLase Corporation
Nonqualified Stock Option Plan (filed as Exhibit 10.69
to Thermo Ecotek's Transition Report on Form 10-K for
the nine months ended September 30, 1995 [File No.
1-13572] and incorporated herein by reference).
10.42 Thermo Electron Corporation - ThermoQuest Corporation
Nonqualified Stock Option Plan (filed as Exhibit 10.41
to Thermo Cardiosystems' Annual Report on Form 10-K for
the fiscal year ended December 30, 1995 [File No.
1-10114] and incorporated herein by reference).
10.43 Thermo Electron Corporation - Thermo Optek Corporation
Nonqualified Stock Option Plan (filed as Exhibit 10.42
to Thermo Cardiosystems' Annual Report on Form 10-K for
the fiscal year ended December 30, 1995 [File No.
1-10114] and incorporated herein by reference).
10.44 Thermo Electron Corporation - Thermo Sentron Inc.
Nonqualified Stock Option Plan (filed as Exhibit 10.43
to Thermo Cardiosystems' Annual Report on Form 10-K for
the fiscal year ended December 30, 1995 [File No.
1-10114] and incorporated herein by reference).
10.45 Thermo Electron Corporation - Trex Medical Corporation
Nonqualified Stock Option Plan (filed as Exhibit 10.44
to Thermo Cardiosystems' Annual Report on Form 10-K for
the fiscal year ended December 30, 1995 [File No.
1-10114] and incorporated herein by reference).
22PAGE
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description of Exhibit Page
--------------------------------------------------------------------------
10.46 Thermo Ecotek Corporation (formerly Thermo Energy
Systems Corporation) Incentive Stock Option Plan (filed
as Exhibit 10.18 to Thermo Electron's Annual Report on
Form 10-K for the fiscal year ended January 2, 1993
[File No. 1-8002] and incorporated herein by reference).
(Maximum number of shares issuable in the aggregate
under this plan and the Thermo Ecotek Nonqualified Stock
Option Plan is 900,000 shares, after adjustment to
reflect share increase approved in December 1993.)
10.47 Thermo Ecotek Corporation (formerly Thermo Energy
Systems Corporation) Nonqualified Stock Option Plan
(filed as Exhibit 10.19 to Thermo Electron's Annual
Report on Form 10-K for the fiscal year ended January 2,
1993 [File No. 1-8002] and incorporated herein by
reference). (Maximum number of shares issuable in the
aggregate under this plan and the Thermo Ecotek
Incentive Stock Option Plan is 900,000 shares, after
adjustment to reflect to share increase approved in
December 1993.)
10.48 Thermo Ecotek Corporation (formerly Thermo Energy
Systems Corporation) Equity Incentive Plan (filed as
Exhibit 10.46 to Thermo Process' Annual Report on Form
10-K for the fiscal year ended April 2, 1994 [File No.
1-9549] and incorporated herein by reference).
10.49 Thermedics Inc. Incentive Stock Option Plan (filed as
Exhibit 10(d) to Thermedics' Registration Statement on
Form S-1 [Reg. No. 33-84380] and incorporated herein by
reference). (Maximum number of shares issuable in the
aggregate under this plan and the Thermedics
Nonqualified Stock Option Plan is 1,931,923 shares,
after adjustment to reflect share increases approved in
1986 and 1992, 5-for-4 stock split effected in January
1985, 4-for-3 stock split effected in September 1985,
and 3-for-2 stock splits effected in October 1986 and
November 1993.)
10.50 Thermedics Inc. Nonqualified Stock Option Plan (filed as
Exhibit 10(e) to Thermedics' Registration Statement on
Form S-1 [Reg. No. 33-84380] and incorporated herein by
reference). (Maximum number of shares issuable in the
aggregate under this plan and the Thermedics Incentive
Stock Option Plan is 1,931,923 shares, after adjustment
to reflect share increases approved in 1986 and 1992,
5-for-4 stock split effected in January 1985, 4-for-3
stock split effected in September 1985, and 3-for-2
stock splits effected in October 1986 and November
1993.)
23PAGE
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description of Exhibit Page
--------------------------------------------------------------------------
10.51 Thermedics Inc. Equity Incentive Plan (filed as Appendix
A to the Proxy Statement dated May 10, 1993 of
Thermedics [File No. 1-9567] and incorporated herein by
reference). (Maximum number of shares issuable is
1,500,000, after adjustment to reflect 3-for-2 stock
split effected in November 1993.)
10.52 Thermedics Inc. - Thermedics Detection Inc. Nonqualified
Stock Option Plan (filed as Exhibit 10.20 to Thermo
Electron's Annual Report on Form 10-K for the fiscal
year ended January 2, 1993 [File No. 1-8002] and
incorporated herein by reference).
10.53 Thermedics Inc. - Thermo Sentron Inc. Nonqualified Stock
Option Plan (filed as Exhibit 10.51 to Thermo
Cardiosystems' Annual Report on Form 10-K for the fiscal
year ended December 30, 1995 [File No. 1-10114] and
incorporated herein by reference).
10.54 Thermedics Detection Inc. Equity Incentive Plan (filed
as Exhibit 10.69 to Thermedics' Annual Report on Form
10-K for the fiscal year ended December 31, 1994 [File
No. 1-9567] and incorporated herein by reference).
10.55 Thermo Cardiosystems Inc. Incentive Stock Option Plan
(filed as Exhibit 10(f) to Thermo Cardiosystems'
Registration Statement on Form S-1 [Reg. No. 33-25144]
and incorporated herein by reference). (Maximum number
of shares issuable in the aggregate under this plan and
the Thermo Cardiosystems Nonqualified Stock Option Plan
is 1,143,750 shares, after adjustment to reflect share
increase approved in 1992, 3-for-2 stock split effected
in January 1990, 5-for-4 stock split effected in May
1990, and 2-for-1 stock split effected in November
1993.)
10.56 Thermo Cardiosystems Inc. Nonqualified Stock Option Plan
(filed as Exhibit 10(g) to Thermo Cardiosystems'
Registration Statement on Form S-1 [Reg. No. 33-25144]
and incorporated herein by reference). (Maximum number
of shares issuable in the aggregate under this plan and
the Thermo Cardiosystems Incentive Stock Option Plan is
1,143,750 shares, after adjustment to reflect share
increase approved in 1992, 3-for-2 stock split effected
in January 1990, 5-for-4 stock split effected in May
1990, and 2-for-1 stock split effected in November
1993.)
10.57 Thermo Cardiosystems Inc. Equity Incentive Plan (filed
as Attachment A to the Proxy Statement dated May 5, 1994
of Thermo Cardiosystems [File No. 1-10114] and
incorporated herein by reference).
24PAGE
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description of Exhibit Page
--------------------------------------------------------------------------
10.58 Thermo Sentron Inc. Equity Incentive Plan (filed as
Exhibit 10.57 to Thermo Cardiosystems' Annual Report on
Form 10-K for the fiscal year ended December 30, 1995
[File No. 1-10114] and incorporated herein by
reference).
10.59 Thermo Instrument Systems Inc. Incentive Stock Option
Plan (filed as Exhibit 10(c) to Thermo Instrument's
Registration Statement on Form S-1 [Reg. No. 33-6762]
and incorporated herein by reference). (Maximum number
of shares issuable in the aggregate under this plan and
the Thermo Instrument Nonqualified Stock Option Plan is
2,812,500 shares, after adjustment to reflect share
increase approved in 1990, 3-for-2 stock splits effected
in January 1988, July 1993, and April 1995, and 5-for-4
stock split effected in December 1995.)
10.60 Thermo Instrument Systems Inc. Nonqualified Stock Option
Plan (filed as Exhibit 10(d) to Thermo Instrument's
Registration Statement on Form S-1 [Reg. No. 33-6762]
and incorporated herein by reference). (Maximum number
of shares issuable in the aggregate under this plan and
the Thermo Instrument Incentive Stock Option Plan is
2,812,500 shares, after adjustment to reflect share
increase approved in 1990, 3-for-2 stock splits effected
in January 1988, July 1993, and April 1995, and 5-for-4
stock split effected in December 1995.)
10.61 Thermo Instrument Systems Inc. Equity Incentive Plan
(filed as Appendix A to the Proxy Statement dated April
27, 1993 of Thermo Instrument Systems [File No. 1-9786]
and incorporated herein by reference). (Maximum number
of shares issuable is 4,031,250 shares, after adjustment
to reflect share increase approved in December 1993,
3-for-2 stock splits effected in July 1993 and April
1995, and 5-for-4 stock split effected in December
1995.)
10.62 Thermo Instrument Systems Inc. (formerly Thermo
Environmental Corporation) Incentive Stock Option Plan
(filed as Exhibit 10(d) to Thermo Environmental's
Registration Statement on Form S-1 [Reg. No. 33-329] and
incorporated herein by reference). (Maximum number of
shares issuable in the aggregate under this plan and the
Thermo Instrument (formerly Thermo Environmental)
Nonqualified Stock Option Plan is 1,160,156 shares,
after adjustment to reflect share increase approved in
1987, adjustment to reflect 3-for-2 stock splits
effected in July 1993 and April 1995, and 5-for-4 stock
split effected in December 1995.)
25PAGE
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description of Exhibit Page
--------------------------------------------------------------------------
10.63 Thermo Instrument Systems Inc. (formerly Thermo
Environmental Corporation) Nonqualified Stock Option
Plan (filed as Exhibit 10(e) to Thermo Environmental's
Registration Statement on Form S-1 [Reg. No. 33-329] and
incorporated herein by reference). (Maximum number of
shares issuable in the aggregate under this plan and the
Thermo Instrument (formerly Thermo Environmental)
Incentive Stock Option Plan is 1,160,156 shares, after
adjustment to reflect share increase approved in 1987,
3-for-2 stock splits effected in July 1993 and April
1995, and 5-for-4 stock split effected in December
1995.)
10.64 Thermo Instrument Systems Inc. - ThermoSpectra
Corporation Nonqualified Stock Option Plan (filed as
Exhibit 10.45 to Thermo Power's Annual Report on Form
10-K for the fiscal year ended October 1, 1994 [File No.
1-10573] and incorporated herein by reference).
10.65 Thermo Instrument Systems Inc. - Thermo BioAnalysis
Corporation Nonqualified Stock Option Plan (filed as
Exhibit 10.64 to Thermo Cardiosystems' Annual Report on
Form 10-K for the fiscal year ended December 30, 1995
[File No. 1-10114] and incorporated herein by
reference).
10.66 Thermo Instrument Systems Inc. - ThermoQuest Corporation
Nonqualified Stock Option Plan (filed as Exhibit 10.65
to Thermo Cardiosystems' Annual Report on Form 10-K for
the fiscal year ended December 30, 1995 [File No.
1-10114] and incorporated herein by reference).
10.67 ThermoSpectra Corporation Equity Incentive Plan (filed
as Exhibit 10.59 to Thermo Power's Annual Report on Form
10-K for the fiscal year ended October 1, 1994 [File No.
1-10573] and incorporated herein by reference).
10.68 Thermo BioAnalysis Corporation Equity Incentive Plan
(filed as Exhibit 10.67 to Thermo Cardiosystems' Annual
Report on Form 10-K for the fiscal year ended December
30, 1995 [File No. 1-10114] and incorporated herein by
reference).
10.69 Thermo Optek Corporation Equity Incentive Plan (filed as
Exhibit 10.68 to Thermo Cardiosystems' Annual Report on
Form 10-K for the fiscal year ended December 30, 1995
[File No. 1-10114] and incorporated herein by
reference).
10.70 ThermoQuest Corporation Equity Incentive Plan (filed as
Exhibit 10.69 to Thermo Cardiosystems' Annual Report on
Form 10-K for the fiscal year ended December 30, 1995
[File No. 1-10114] and incorporated herein by
reference).
26PAGE
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description of Exhibit Page
--------------------------------------------------------------------------
10.71 ThermoTrex Corporation (formerly Thermo Electron
Technologies Corporation) Incentive Stock Option Plan
(filed as Exhibit 10(h) to ThermoTrex's Registration
Statement on Form S-1 [Reg. No. 33-40972] and
incorporated herein by reference). (Maximum number of
shares issuable in the aggregate under this plan and the
ThermoTrex Nonqualified Stock Option Plan is 1,945,000
shares, after adjustment to reflect share increases
approved in 1992 and 1993 and 3-for-2 stock split
effected in October 1993.)
10.72 ThermoTrex Corporation (formerly Thermo Electron
Technologies Corporation) Nonqualified Stock Option Plan
(filed as Exhibit 10(i) to ThermoTrex's Registration
Statement on Form S-1 [Reg. No. 33-40972] and
incorporated herein by reference). (Maximum number of
shares issuable in the aggregate under this plan and the
ThermoTrex Incentive Stock Option Plan is 1,945,000
shares, after adjustment to reflect share increases
approved in 1992 and 1993 and 3-for-2 stock split
effected in October 1993.)
10.73 ThermoTrex Corporation - ThermoLase Corporation
(formerly ThermoLase Inc.) Nonqualified Stock Option
Plan (filed as Exhibit 10.53 to Thermedics' Annual
Report on Form 10-K for the fiscal year ended January 1,
1994 [File No. 1-9567] and incorporated herein by
reference).
10.74 ThermoTrex Corporation - Trex Medical Corporation
Nonqualified Stock Option Plan (filed as Exhibit 10.73
to Thermo Cardiosystems' Annual Report on Form 10-K for
the fiscal year ended December 30, 1995 [File No.
1-10114] and incorporated herein by reference).
10.75 ThermoLase Corporation (formerly ThermoLase Inc.)
Incentive Stock Option Plan (filed as Exhibit 10.55 to
Thermedics' Annual Report on Form 10-K for the fiscal
year ended January 1, 1994 [File No. 1-9567] and
incorporated herein by reference). (Maximum number of
shares issuable in the aggregate under this plan and the
ThermoLase Nonqualified Stock Option Plan is 2,800,000
shares, after adjustment to reflect share decrease
approved in 1993 and 2-for-1 stock splits effected in
March 1994 and June 1995.)
10.76 ThermoLase Corporation (formerly ThermoLase Inc.)
Nonqualified Stock Option Plan (filed as Exhibit 10.54
to Thermedics' Annual Report on Form 10-K for the fiscal
year ended January 1, 1994 [File No. 1-9567] and
incorporated herein by reference). (Maximum number of
shares issuable in the aggregate under this plan and the
ThermoLase Incentive Stock Option Plan is 2,800,000
shares, after adjustment to reflect share increase
approved in 1993 and 2-for-1 stock splits effected in
March 1994 and June 1995.)
27PAGE
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description of Exhibit Page
--------------------------------------------------------------------------
10.77 ThermoLase Corporation Equity Incentive Plan (filed as
Exhibit 10.81 to Thermo Process' Annual Report on Form
10-K for the fiscal year ended April 1, 1995 [File No.
1-9549] and incorporated herein by reference).
10.78 Trex Medical Corporation Equity Incentive Plan (filed as
Exhibit 10.77 to Thermo Cardiosystems' Annual Report on
Form 10-K for the fiscal year ended December 30, 1995
[File No. 1-10114] and incorporated herein by
reference).
10.79 Thermo Fibertek Inc. Incentive Stock Option Plan (filed
as Exhibit 10(k) to Thermo Fibertek's Registration
Statement on Form S-1 [Reg. No. 33-51172] and
incorporated herein by reference).
10.80 Thermo Fibertek Inc. Nonqualified Stock Option Plan
(filed as Exhibit 10(l) to Thermo Fibertek's
Registration Statement on Form S-1 [Reg. No. 33-51172]
and incorporated herein by reference).
10.81 Thermo Fibertek Inc. Equity Incentive Plan (filed as
Attachment A to the Proxy Statement of Thermo Fibertek
dated May 3, 1994 [File No. 1-11406] and incorporated
herein by reference).
10.82 Thermo Power Corporation (formerly Tecogen Inc.)
Incentive Stock Option Plan, as amended (filed as
Exhibit 10(h) to Thermo Power's Quarterly Report on Form
10-Q for the quarter ended April 3, 1993 [File No.
1-10573] and incorporated herein by reference).
(Maximum number of shares issuable in the aggregate
under this plan and the Thermo Power Nonqualified Stock
Option Plan is 950,000 shares, after adjustment to
reflect share increases approved in 1990, 1992, and
1993.)
10.83 Thermo Power Corporation (formerly Tecogen Inc.)
Nonqualified Stock Option Plan (filed as Exhibit 10(i)
to Thermo Power's Quarterly Report on Form 10-Q for the
quarter ended April 3, 1993 [File No. 1-10573] and
incorporated herein by reference). (Maximum number of
shares issuable in the aggregate under this plan and the
Thermo Power Incentive Stock Option Plan is 950,000
shares, after adjustment to reflect share increases
approved in 1990, 1992, and 1993.)
10.84 Thermo Power Corporation Equity Incentive Plan (filed as
Attachment A to the Proxy Statement dated February 18,
1994 of Thermo Power [File No. 1-10573] and incorporated
herein by reference).
28PAGE
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description of Exhibit Page
--------------------------------------------------------------------------
10.85 Thermo Power - ThermoLyte Corporation Nonqualified Stock
Option Plan (filed as Exhibit 10.84 to Thermo
Cardiosystems' Annual Report on Form 10-K for the fiscal
year ended December 30, 1995 [File No. 1-10114] and
incorporated herein by reference).
10.86 ThermoLyte Corporation Equity Incentive Plan (filed as
Exhibit 10.104 to Thermo Ecotek's Transition Report on
Form 10-K for the nine months ended September 30, 1995
[File. No. 1-13572] and incorporated herein by
reference).
10.87 Thermo TerraTech Inc. (formerly Thermo Process Systems
Inc.) Incentive Stock Option Plan (filed as Exhibit
10(h) to Thermo TerraTech's Registration Statement on
Form S-1 [Reg. No. 33-6763] and incorporated herein by
reference). (Maximum number of shares issuable in the
aggregate under this plan and the Thermo TerraTech
Nonqualified Stock Option Plan is 1,850,000 shares,
after adjustment to reflect share increases approved in
1987, 1989 and 1992, 6-for-5 stock splits effected in
July 1988 and March 1989, and 3-for-2 stock split
effected in September 1989.)
10.88 Thermo TerraTech Inc. (formerly Thermo Process Systems
Inc.) Nonqualified Stock Option Plan (filed as Exhibit
10(i) to Thermo TerraTech's Registration Statement on
Form S-1 [Reg. No. 33-6763] and incorporated herein by
reference). (Maximum number of shares issuable in the
aggregate under this plan and the Thermo TerraTech
Incentive Stock Option Plan is 1,850,000 shares, after
adjustment to reflect share increases approved in 1987,
1989, and 1992, 6-for-5 stock splits effected in July
1988 and March 1989, and 3-for-2 stock split effected in
September 1989.)
10.89 Thermo TerraTech Inc. (formerly Thermo Process Systems
Inc.) Equity Incentive Plan (filed as Exhibit 10.63 to
Thermedics' Annual Report on Form 10-K for the fiscal
year ended January 1, 1994 [File No. 1-9567] and
incorporated herein by reference). (Maximum number of
shares issuable is 1,750,000 shares, after adjustment to
reflect share increase approved in 1994.)
10.90 Thermo TerraTech Inc. (formerly Thermo Process Systems
Inc.) - Thermo Remediation Inc. Nonqualified Stock
Option Plan (filed as Exhibit 10(l) to Thermo
TerraTech's Quarterly Report on Form 10-Q for the fiscal
quarter ended January 1, 1994 [File No. 1-9549] and
incorporated herein by reference).
10.91 Thermo Remediation Inc. Equity Incentive Plan (filed as
Exhibit 10.7 to Thermo Remediation's Registration
Statement on Form S-1 [Reg. No. 33-70544] and
incorporated herein by reference).
29PAGE
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description of Exhibit Page
--------------------------------------------------------------------------
11 Statement re: Computation of Earnings per Share.
13 Annual Report to Shareholders for the year ended
December 30, 1995 (only those portions incorporated
herein by reference).
21 Subsidiaries of the Registrant.
23 Consent of Arthur Andersen LLP.
27 Financial Data Schedule.
Exhibit 11
THERMO VOLTEK CORP.
COMPUTATION OF EARNINGS PER SHARE
Year Ended
-------------------------------------
December 30, December 31, January 31,
1995 1994 1994
------------ ------------ -----------
Computation of Primary Earnings
per Share:
Net Income (a) $2,672,000 $1,118,000 $ 480,000
---------- ---------- ----------
Shares:
Weighted average shares outstanding 4,352,111 3,996,920 3,930,925
Add: Shares issuable from assumed
exercise of options (as
determined by the application
of the treasury stock method) 135,152 - -
---------- ---------- ----------
Weighted average shares outstanding,
as adjusted (b) 4,487,263 3,996,920 3,930,925
---------- ---------- ----------
Primary Earnings per Share
(a) / (b) $ .60 $ .28 $ .12
========= ========= =========
Computation of Fully Diluted
Earnings per Share:
Income:
Net income $2,672,000 $1,118,000 $ 480,000
Add: Convertible debt interest,
net of tax 1,123,000 1,200,000 -
---------- ---------- ----------
Income applicable to common stock
assuming dilution (c) $3,795,000 $2,318,000 $ 480,000
---------- ---------- ----------
Shares:
Weighted average shares outstanding 4,352,111 3,996,920 3,930,925
Add: Shares issuable from assumed
conversion of subordinated
convertible obligations 4,521,067 4,813,513 -
Shares issuable from assumed
exercise of options (as
determined by the application
of the treasury stock method) 154,079 101,463 -
---------- ---------- ----------
Weighted average shares outstanding,
as adjusted (d) 9,027,257 8,911,896 3,930,925
---------- ---------- ----------
Fully Diluted Earnings per Share
(c) / (d) $ .42 $ .26 $ .12
========= ========= =========
Exhibit 13
THERMO VOLTEK CORP.
Consolidated Financial Statements as of December 30, 1995
PAGE
<PAGE>
Thermo Voltek Corp.
Consolidated Statement of Income
(In thousands except per share amounts) 1995 1994 1993
------------------------------------------------------------------------
Revenues (Note 12) $36,326 $23,641 $18,089
------- ------- -------
Costs and Operating Expenses:
Cost of revenues 18,790 12,120 9,687
Selling, general and administrative
expenses (Note 10) 11,766 8,027 6,008
Research and development expenses 2,349 1,492 1,240
------- ------- -------
32,905 21,639 16,935
------- ------- -------
Operating Income 3,421 2,002 1,154
Interest Income 2,059 1,697 179
Interest Expense (includes $706,
$706, and $607 for notes to
related parties) (Notes 9 and 10) (2,130) (2,216) (807)
Other Income (Note 6) 14 - 225
------- ------- -------
Income Before Provision for Income Taxes 3,364 1,483 751
Provision for Income Taxes (Note 7) 692 365 271
------- ------- -------
Net Income $ 2,672 $ 1,118 $ 480
======= ======= =======
Earnings per Share:
Primary $ .60 $ .28 $ .12
======= ======= =======
Fully diluted $ .42 $ .26 $ .12
======= ======= =======
Weighted Average Shares:
Primary 4,487 3,997 3,931
======= ======= =======
Fully diluted 9,027 8,912 3,931
======= ======= =======
The accompanying notes are an integral part of these consolidated financial
statements.
2PAGE
<PAGE>
Thermo Voltek Corp.
Consolidated Balance Sheet
(In thousands except share amounts) 1995 1994
------------------------------------------------------------------------
Assets
Current Assets:
Cash and cash equivalents $ 8,651 $ 8,955
Available-for-sale investments, at
quoted market value (amortized cost
of $25,795 and $28,589) (includes
$1,482 and $299 of related party
investments) (Notes 2 and 10) 26,038 28,105
Accounts receivable, less allowances
of $447 and $343 8,680 6,161
Inventories 8,581 5,749
Prepaid income taxes and other current
assets (Note 7) 1,022 772
------- -------
52,972 49,742
------- -------
Property, Plant and Equipment,
at Cost, Net 3,144 2,106
------- -------
Other Assets 648 980
------- -------
Cost in Excess of Net Assets of
Acquired Companies (Note 3) 12,081 9,396
------- -------
$68,845 $62,224
======= =======
3PAGE
<PAGE>
Thermo Voltek Corp.
Consolidated Balance Sheet (continued)
(In thousands except share amounts) 1995 1994
------------------------------------------------------------------------
Liabilities and Shareholders' Investment
Current Liabilities:
Notes payable (Note 9) $ 1,276 $ 781
Accounts payable 3,966 2,698
Accrued payroll and employee benefits 1,128 879
Accrued income taxes 1,103 270
Customer deposits 223 489
Other accrued expenses (Note 3) 2,611 1,255
Due to parent company and Thermo
Electron Corporation 839 1,380
------- -------
11,146 7,752
------- -------
Subordinated Convertible Obligations
(includes $11,500 of related party
debt in 1995 and 1994) (Notes 9 and 10) 36,740 46,000
------- -------
Commitments (Note 8)
Shareholders' Investment (Notes 4 and 5):
Common stock, $.05 par value, 10,000,000
shares authorized; 4,881,099 and
4,038,445 shares issued 244 202
Capital in excess of par value 20,545 11,237
Accumulated deficit (185) (2,857)
Treasury stock at cost, 1,958 and 6,000 shares (20) (50)
Cumulative translation adjustment 229 260
Net unrealized gain (loss) on
available-for-sale investments (Note 2) 146 (320)
------- -------
20,959 8,472
------- -------
$68,845 $62,224
======= =======
The accompanying notes are an integral part of these consolidated financial
statements.
4PAGE
<PAGE>
Thermo Voltek Corp.
Consolidated Statement of Cash Flows
(In thousands) 1995 1994 1993
-------------------------------------------------------------------------
Operating Activities:
Net income $ 2,672 $ 1,118 $ 480
Adjustments to reconcile net income to
net cash provided by (used in)
operating activities:
Depreciation and amortization 1,529 948 591
Provision for losses on accounts
receivable 135 101 83
Gain on curtailment of pension
plan (Note 6) - - (225)
Changes in current accounts, excluding
the effects of acquisitions:
Accounts receivable (1,525) (1,161) (1,102)
Inventories (2,527) 6 792
Other current assets (44) (42) 50
Accounts payable 968 532 (224)
Other current liabilities 720 976 (617)
Other (17) 44 75
--------- -------- --------
Net cash provided by (used in)
operating activities 1,911 2,522 (97)
-------- -------- --------
Investing Activities:
Acquisitions, net of cash acquired (Note 3) (4,127) (1,269) (1,069)
Purchases of available-for-sale
investments (7,500) (17,300) -
Proceeds from sale and maturities
of available-for-sale investments 10,000 3,500 -
Increase in short-term investments - - (14,500)
Purchases of property, plant
and equipment (1,364) (734) (333)
Other 526 (289) -
-------- --------- --------
Net cash used in investing
activities $ (2,465) $(16,092) $(15,902)
-------- -------- --------
5PAGE
<PAGE>
Thermo Voltek Corp.
Consolidated Statement of Cash Flows (continued)
(In thousands) 1995 1994 1993
-------------------------------------------------------------------------
Financing Activities:
Net proceeds from issuance of
subordinated convertible obligations
(Notes 9 and 10) $ - $ - $ 37,483
Purchase of subordinated convertible
obligations (Note 9) (132) - -
Issuance (repayment) of short-term
obligations 435 747 (441)
Net proceeds from issuance of Company
common stock 324 268 29
Other - (99) -
-------- -------- --------
Net cash provided by financing
activities 627 916 37,071
-------- -------- --------
Exchange Rate Effect on Cash (377) 151 (2)
-------- -------- --------
Increase (Decrease) in Cash and
Cash Equivalents (304) (12,503) 21,070
Cash and Cash Equivalents at
Beginning of Year 8,955 21,458 388
-------- -------- --------
Cash and Cash Equivalents at
End of Year $ 8,651 $ 8,955 $ 21,458
======== ======== ========
Cash Paid For:
Interest $ 2,034 $ 2,048 $ 545
Income taxes $ 236 $ 150 $ 196
Noncash Activities:
Conversions of subordinated
convertible obligations (Note 9) $ 9,111 $ - $ -
======== ======== ========
Fair value of assets of acquired
companies $ 5,228 $ 1,955 $ 4,725
Cash paid for acquired companies (4,157) (1,330) (1,085)
-------- -------- --------
Liabilities assumed of acquired
companies $ 1,071 $ 625 $ 3,640
======== ======== ========
The accompanying notes are an integral part of these consolidated financial
statements.
6PAGE
<PAGE>
Thermo Voltek Corp.
Consolidated Statement of Shareholders' Investment
Common Stock,
$.05 Par Value Capital
------------------ in Excess Accumu-
(In thousands Number of Par lated
except share amount) of Shares Amount Value Deficit
-------------------------------------------------------------------------
Balance January 2, 1993 2,620,253 $ 131 $10,922 $(4,455)
Net income - - - 480
Effect of three-for-two
stock split 1,310,068 65 (65) -
Issuance of stock under
employees' and directors'
stock plans 19,496 1 50 -
Translation adjustment - - - -
--------- ------- ------- -------
Balance January 1, 1994 3,949,817 197 10,907 (3,975)
Net income - - - 1,118
Issuance of stock under
employees' and directors'
stock plans 88,628 5 291 -
Tax benefit related to
employees' and directors'
stock plans - - 39 -
Effect of change in accounting
principle (Note 2) - - - -
Change in net unrealized gain
(loss) on available-for-sale
investments (Note 2) - - - -
Translation adjustment - - - -
--------- ------- ------- -------
Balance December 31, 1994 4,038,445 202 11,237 (2,857)
Net income - - - 2,672
Conversions of subordinated
convertible obligations
(Note 9) 775,399 39 8,851 -
Issuance of stock under
employees' and directors'
stock plans 67,255 3 291 -
Tax benefit related to
employees' and directors'
stock plans - - 166 -
Change in net unrealized gain
(loss) on available-for-sale
investments (Note 2) - - - -
Translation adjustment - - - -
--------- ------- ------- -------
Balance December 30, 1995 4,881,099 $ 244 $20,545 $ (185)
========= ======= ======= =======
7PAGE
<PAGE>
Thermo Voltek Corp.
Consolidated Statement of Shareholders' Investment (continued)
Net
Unrealized
Treasury Stock Gain (Loss)
-------------------- Cumulative on Available-
(In thousands Number Translation for-sale
except share amounts) of Shares Amount Adjustment Investments
--------------------------------------------------------------------------
Balance January 2, 1993 626 $ - $ - $ -
Net income - - - -
Effect of three-for-two
stock split 313 - - -
Issuance of stock under
employees' and directors'
stock plans 2,202 (22) - -
Translation adjustment - - (10) -
------- ------- ------- -------
Balance January 1, 1994 3,141 (22) (10) -
Net income - - - -
Issuance of stock under
employees' and directors'
stock plans 2,859 (28) - -
Tax benefit related to
employees' and directors'
stock plans - - - -
Effect of change in accounting
principle (Note 2) - - - 10
Change in net unrealized gain
(loss) on available-for-sale
investments (Note 2) - - - (330)
Translation adjustment - - 270 -
------- ------- ------- -------
Balance December 31, 1994 6,000 (50) 260 (320)
Net income - - - -
Conversions of subordinated
convertible obligations
(Note 9) - - - -
Issuance of stock under
employees' and directors'
stock plans (4,042) 30 - -
Tax benefit related to
employees' and directors'
stock plans - - - -
Change in net unrealized gain
(loss) on available-for-sale
investments (Note 2) - - - 466
Translation adjustment - - (31) -
------- ------- ------- -------
Balance December 30, 1995 1,958 $ (20) $ 229 $ 146
======= ======= ======= =======
The accompanying notes are an integral part of these consolidated financial
statements.
8PAGE
<PAGE>
Thermo Voltek Corp.
Notes to Consolidated Financial Statements
1. Nature of Operations and Summary of Significant Accounting Policies
Nature of Operations
Thermo Voltek Corp. (the Company) designs, manufactures, and markets
instruments that test electronic and electrical systems and components for
immunity to pulsed electromagnetic interference; radio frequency power
amplifiers that are used to test products for immunity to radio frequency
interference and for laboratory, medical, and wireless communications
applications; high-voltage power-conversion systems for use in industrial,
medical, and environmental processes, and defense and scientific research
applications; and specialized power supplies used in telecommunications
equipment. The Company also provides electromagnetic compatibility (EMC)
consulting and systems-integration services and distributes EMC-related
products.
Relationship with Thermedics Inc. and Thermo Electron Corporation
As of December 30, 1995, Thermedics Inc. (Thermedics) owned 2,442,850
shares of the common stock of the Company, representing 50% of such stock
outstanding. Thermedics is a 51%-owned subsidiary of Thermo Electron
Corporation (Thermo Electron). As of December 30, 1995, Thermo Electron
owned 422,699 shares of the Company's common stock, representing 9% of such
stock outstanding.
Principles of Consolidation
The accompanying financial statements include the accounts of the Company
and its wholly owned subsidiaries. All material intercompany accounts and
transactions have been eliminated.
Fiscal Year
The Company has adopted a fiscal year ending the Saturday nearest December
31. References to 1995, 1994, and 1993 are for the fiscal years ended
December 30, 1995, December 31, 1994, and January 1, 1994, respectively.
Revenue Recognition
The Company recognizes product revenues upon shipment of its products. The
Company provides a reserve for its estimate of warranty costs at the time
of shipment. Revenues and profits on substantially all contracts are
recognized using the percentage-of-completion method. Revenues recorded
under the percentage-of-completion method were $2,884,000 in 1995, $330,000
in 1994, and $2,243,000 in 1993. The percentage of completion is determined
by relating either the actual costs or actual labor incurred to date to
management's estimate of total costs or total labor, respectively, to be
incurred on each contract. If a loss is indicated on any contract in
process, a provision is made currently for the entire loss. The Company's
contracts generally provide for billing of customers upon the attainment of
certain milestones specified in each contract. Revenues earned on contracts
in process in excess of billings are included in inventories in the
accompanying balance sheet and were not material at year-end 1995 and 1994.
There are no significant amounts included in the accompanying balance sheet
that are not expected to be recovered from existing contracts at current
contract values, or that are not expected to be collected within one year,
including amounts billed but not paid under retainage provisions.
9PAGE
<PAGE>
Thermo Voltek Corp.
Notes to Consolidated Financial Statements
1. Nature of Operations and Summary of Significant Accounting Policies
(Continued)
Income Taxes
In accordance with Statement of Financial Accounting Standards (SFAS) No.
109, "Accounting for Income Taxes," the Company recognizes deferred income
taxes based on the expected future tax consequences of differences between
the financial statement basis and the tax basis of assets and liabilities
calculated using enacted tax rates in effect for the year in which the
differences are expected to be reflected in the tax return.
Earnings per Share
Primary earnings per share have been computed based on the weighted average
number of shares outstanding and, in 1995, included common stock
equivalents (stock options) computed using the treasury stock method. In
1994 and 1993, the effect of common stock equivalents was immaterial. Fully
diluted earnings per share assumes the effect of the conversion of the
Company's dilutive convertible obligations and elimination of the related
interest expense, the exercise of stock options, and their related income
tax effects.
Cash and Cash Equivalents
As of December 30, 1995, $7,152,000 of the Company's cash equivalents were
invested in a repurchase agreement with Thermo Electron. Under this
agreement, the Company in effect lends excess cash to Thermo Electron,
which Thermo Electron collateralizes with investments principally
consisting of U.S. government agency securities, corporate notes,
commercial paper, money market funds, and other marketable securities, in
the amount of at least 103% of such obligation. The Company's funds subject
to the repurchase agreement are readily convertible into cash by the
Company and have an original maturity of three months or less. The
repurchase agreement earns a rate based on the Commercial Paper Composite
Rate plus 25 basis points, set at the beginning of each quarter. As of
December 30, 1995, the Company's cash equivalents also include U.S.
government agency discount notes, which have an original maturity of three
months or less. Cash equivalents are carried at cost, which approximates
market value.
Available-for-sale Investments
Pursuant to SFAS No. 115, "Accounting for Certain Investments in Debt and
Equity Securities," effective January 2, 1994, the Company's debt and
marketable equity securities are accounted for at market value (Note 2).
Prior to 1994, these investments were carried at the lower of cost or
market value.
Inventories
Inventories are stated at the lower of cost (on a first-in, first-out
basis) or market value and include materials, labor, and manufacturing
overhead. Included in inventory is approximately $1,278,000 and $1,259,000
of demo equipment in 1995 and 1994, respectively. It is the Company's
policy to include demo equipment in inventory for one year. After one year,
10PAGE
<PAGE>
Thermo Voltek Corp.
Notes to Consolidated Financial Statements
1. Nature of Operations and Summary of Significant Accounting Policies
(continued)
the equipment is transferred to fixed assets and depreciated over a
five-year period. The components of inventories are as follows:
(In thousands) 1995 1994
-----------------------------------------------------------------------
Raw materials $3,598 $1,996
Work in process 3,059 1,814
Finished goods 1,924 1,939
------ ------
$8,581 $5,749
====== ======
Property, Plant and Equipment
The costs of additions and improvements are capitalized, while maintenance
and repairs are charged to expense as incurred. The Company provides for
depreciation and amortization using the straight-line method over the
estimated useful lives of the property as follows: buildings and
improvements -- 5 to 25 years, machinery and equipment -- 3 to 10 years,
and capitalized leases -- the shorter of the term of the lease or the life
of the asset. Property, plant and equipment consist of the following:
(In thousands) 1995 1994
-----------------------------------------------------------------------
Land and building $1,788 $1,773
Machinery, equipment and leasehold improvements 5,889 3,916
------ ------
7,677 5,689
Less: Accumulated depreciation and amortization 4,533 3,583
------ ------
$3,144 $2,106
====== ======
Cost in Excess of Net Assets of Acquired Companies
The excess of cost over the fair value of net assets of acquired businesses
is amortized using the straight-line method over periods not exceeding 40
years. Accumulated amortization was $943,000 and $576,000 at year-end 1995
and 1994, respectively. The Company assesses the future useful life of this
asset whenever events or changes in circumstances indicate that the current
useful life has diminished. The Company considers the future undiscounted
cash flows of the acquired businesses in assessing the recoverability of
this asset.
Foreign Currency
All assets and liabilities of the Company's foreign subsidiaries are
translated at year-end exchange rates, and revenues and expenses are
translated at average exchange rates for the year in accordance with SFAS
No. 52, "Foreign Currency Translation." Resulting translation adjustments
are reflected as a separate component of shareholders' investment titled
"Cumulative translation adjustment." Foreign currency transaction gains and
losses are included in the accompanying statement of income and are not
material for the three years presented.
11PAGE
<PAGE>
Thermo Voltek Corp.
Notes to Consolidated Financial Statements
1. Nature of Operations and Summary of Significant Accounting Policies
(continued)
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
Presentation
Certain amounts in 1994 and 1993 have been reclassified to conform to the
presentation in the 1995 financial statements.
2. Available-for-sale Investments
Effective January 2, 1994, the Company adopted SFAS No. 115, "Accounting
for Certain Investments in Debt and Equity Securities." In accordance with
SFAS No. 115, the Company's debt and marketable equity securities are
considered available-for-sale investments in the accompanying balance sheet
and are carried at market value, with the difference between cost and
market value, net of related tax effects, recorded currently as a component
of shareholders' investment titled "Net unrealized gain (loss) on
available-for-sale investments." Effect of change in accounting principle
in the accompanying 1994 statement of shareholders' investment represents
the unrealized gain, net of related tax effects, pertaining to
available-for-sale investments held by the Company on January 2, 1994.
The aggregate market value, cost basis, and gross unrealized gains and
losses of available-for-sale investments by major security type, as of
December 30, 1995 and December 31, 1994, are as follows:
1995 Gross Gross
Market Cost Unrealized Unrealized
(In thousands) Value Basis Gains Losses
--------------------------------------------------------------------------
Corporate bonds $ 7,533 $ 7,362 $ 182 $ (11)
Government agency securities 13,464 13,396 71 (3)
Money market preferred stock 2,660 2,655 24 (19)
Other 2,381 2,382 - (1)
------- ------- ------- -------
$26,038 $25,795 $ 277 $ (34)
======= ======= ======= =======
1994 Gross Gross
Market Cost Unrealized Unrealized
(In thousands) Value Basis Gains Losses
--------------------------------------------------------------------------
Corporate bonds $ 9,133 $ 9,469 $ - $ (336)
Government agency securities 13,958 14,006 - (48)
Money market preferred stock 2,595 2,691 - (96)
Other 2,419 2,423 - (4)
------- ------- ------- -------
$28,105 $28,589 $ - $ (484)
======= ======= ======= =======
12PAGE
<PAGE>
Thermo Voltek Corp.
Notes to Consolidated Financial Statements
2. Available-for-sale Investments (continued)
Available-for-sale investments in the accompanying 1995 balance sheet
include $17,565,000 with contractual maturities of one year or less and
$8,473,000 with contractual maturities of more than one year through five
years. Actual maturities may differ from contractual maturities as a result
of the Company's intent to sell these securities prior to maturity and as a
result of put and call options that enable either the Company and/or the
issuer to redeem these securities at an earlier date.
3. Acquisitions
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 $3,755,000 in
cash. Kalmus is a manufacturer of radio frequency power amplifiers and
systems used to test products for immunity to radio frequency interference
and for medical imaging and telecommunications applications.
Additionally, the Company acquired a component reliability product
line in 1995 for approximately $402,000 in cash.
On July 21, 1994, the Company's Comtest Limited subsidiary acquired
Verifier Systems Limited (Verifier) for approximately $1,330,000 in cash.
Verifier is a United Kingdom-based manufacturer of test equipment that
performs electrical stress tests for semiconductor devices.
On August 2, 1993, the Company acquired Comtest Instrumentation B.V.,
a Netherlands-based company, and Comtest Limited, a U.K. operation
(collectively, Comtest), for $831,000 in cash and the repayment of $238,000
of Comtest's debt. Comtest distributes products used to test electronic
equipment for electromagnetic compatibility (EMC), provides EMC-related
consulting services, and manufactures specialized power supplies for
telecommunications equipment. In connection with the financing of the
acquisition of Comtest, the Company issued to Thermedics a $4.0 million
principal amount 5% subordinated convertible note due 2003 (Note 10).
These acquisitions have been accounted for using the purchase method
of accounting, and their results of operations have been included in the
accompanying financial statements from their respective dates of
acquisition. The aggregate cost of the 1995, 1994, and 1993 acquisitions
exceeded the estimated fair value of the acquired net assets by $6,410,000,
which is being amortized over periods not exceeding 40 years. Allocation of
the purchase price for these acquisitions was based on estimates of the
fair value of the net assets acquired.
13PAGE
<PAGE>
Thermo Voltek Corp.
Notes to Consolidated Financial Statements
3. Acquisitions (continued)
Based on unaudited data, the following table presents selected
financial information for the Company, Kalmus, and Comtest on a pro forma
basis, assuming that the Company and Kalmus had been combined since the
beginning of 1994 and that the Company and Comtest had been combined since
the beginning of 1993. The acquisition of Verifier was not material to the
Company's results of operations and financial position.
(In thousands except per share amounts) 1995 1994 1993
------------------------------------------------------------------------
Revenues $37,051 $27,513 $21,535
Net income 2,874 1,358 287
Earnings per share:
Primary .64 .34 .07
Fully diluted .44 .29 .07
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 or the acquisition
of Comtest been made at the beginning of 1993.
Other accrued expenses in the accompanying balance sheet includes
approximately $260,000 and $329,000 at year-end 1995 and 1994,
respectively, for estimated reserves associated with acquisitions.
4. Stock-based Compensation Plans
The Company has stock-based compensation plans for its key employees,
directors, and others. Two of the plans, adopted in 1985 and 1990, permit
the grant of nonqualified and incentive stock options. A third plan,
adopted in 1994, permits the grant of a variety of stock and stock-based
awards as determined by the human resources committee of the Company's
Board of Directors (the Board Committee), including restricted stock, stock
options, stock bonus shares, or performance-based shares. To date, only
nonqualified stock options have been awarded under this plan. The option
recipients and the terms of options granted under these plans are
determined by the Board Committee. Generally, options granted to date are
exercisable immediately, but are subject to certain transfer restrictions
and the right of the Company to repurchase shares issued upon exercise of
the options at the exercise price, upon certain events. The restrictions
and repurchase rights generally lapse ratably over periods ranging from
four to ten years after the first anniversary of the grant date, depending
on the term of the option, which may range from five to twelve years.
Nonqualified stock options may be granted at any price determined by the
Board Committee, although incentive stock options must be granted at not
less than the fair market value of the Company's stock on the date of
grant. To date, all options have been granted at fair market value. The
Company also has a directors' stock option plan, adopted in 1993, that
provides for the grant of stock options to outside directors pursuant to a
formula approved by the Company's shareholders. Options awarded under this
14PAGE
<PAGE>
Thermo Voltek Corp.
Notes to Consolidated Financial Statements
4. Stock-based Compensation Plans (continued)
plan are exercisable six months after the date of grant and expire three or
seven years after the date of grant. In addition to the Company's
stock-based compensation plans, certain officers and key employees may also
participate in the stock-based compensation plans of Thermo Electron or its
majority-owned subsidiaries.
No accounting recognition is given to options granted at fair market
value until they are exercised. Upon exercise, net proceeds, including tax
benefits realized, are credited to equity.
A summary of the Company's stock option information is as follows:
1995 1994 1993
--------------- --------------- ---------------
Range Range Range
of of of
Option Option Option
Number Prices Number Prices Number Prices
(In thousands except of per of per of per
per share amounts) Shares Share Shares Share Shares Share
-------------------------------------------------------------------------
Options outstanding, $ 1.62- $ 1.62- $ 1.62-
beginning of year 493 $ 9.65 522 $ 9.65 294 $ 5.90
8.75- 7.65- 4.83-
Granted 111 16.40 78 8.83 260 9.65
2.38- 1.62- 1.62-
Exercised (65) 8.00 (87) 5.90 (19) 5.90
3.94- 2.00- 1.62-
Lapsed or cancelled (28) 9.65 (20) 8.83 (13) 5.90
--- ------ --- ------ --- ------
Options outstanding, $ 1.62- $ 1.62 $ 1.62
end of year 511 $16.40 493 $ 9.65 522 $ 9.65
=== === ===
$ 1.62- $ 1.62- $ 1.62-
Options exercisable 511 $16.40 492 $ 9.65 519 $ 9.65
=== === ===
Options availabe for
grant 104 220 78
=== === ===
5. Common Stock
At December 30, 1995, the Company had reserved 3,975,457 unissued shares of
its common stock for possible issuance under stock-based compensation plans
and for issuance upon possible conversion of the Company's subordinated
convertible obligations.
15PAGE
<PAGE>
Thermo Voltek Corp.
Notes to Consolidated Financial Statements
6. Employee Benefit Plans
Employee Stock Purchase Plan
Effective November 1993, substantially all of the Company's full-time U.S.
employees are eligible to participate in an employee stock purchase plan
sponsored by the Company. Prior to the November 1995 plan year, shares of
the Company's and Thermo Electron's common stock could be purchased at the
end of a 12-month plan year at 85% of the fair market value at the
beginning of the plan year, and the shares purchased were subject to a
one-year resale restriction. Effective November 1, 1995, the applicable
shares of common stock may be purchased at 95% of the fair market value at
the beginning of the plan year, and the shares purchased will be subject to
a six-month resale restriction. Shares are purchased through payroll
deductions of up to 10% of each participating employee's gross wages.
During 1995 and 1994, the Company issued 6,872 shares and 3,213 shares,
respectively, of its common stock under this plan. Prior to November 1993,
the Company's eligible employees participated in an employee stock purchase
plan sponsored by Thermedics.
401(k) Savings Plan
Effective October 1993, substantially all full-time employees at the
Company's domestic divisions are eligible to participate in Thermo
Electron's 401(k) savings plan. Contributions to the plan are made by both
the employee and the Company. Company contributions are based upon the
level of employee contributions. For this plan, the Company contributed and
charged to expense $184,000, $196,000, and $35,000 in 1995, 1994, and 1993,
respectively.
Pension Plan
As a result of a reduction in the number of employees at the Company's
Universal Voltronics division, effective December 31, 1993, the Company
curtailed the Universal Voltronics defined benefit pension plan.
Participants of the plan will not earn additional defined benefits for
future services. Effective January 1, 1994, the participants in this plan
are eligible to participate in Thermo Electron's 401(k) savings plan. As a
result of the curtailment to the pension plan, the Company recorded a gain
of $225,000 in 1993, which is included in other income in the accompanying
statement of income. Other disclosure requirements for defined benefit
pension plans as prescribed by SFAS No. 87, "Employers' Accounting for
Pensions," are not material to the Company's financial statements and,
therefore, are not presented.
7. Income Taxes
The components of income before provision for income taxes are as follows:
(In thousands) 1995 1994 1993
-----------------------------------------------------------------------
Domestic $2,616 $1,118 $ 434
Foreign 748 365 317
------ ------ ------
$3,364 $1,483 $ 751
====== ====== ======
16PAGE
<PAGE>
Thermo Voltek Corp.
Notes to Consolidated Financial Statements
7. Income Taxes (continued)
The components of the provision for income taxes are as follows:
(In thousands) 1995 1994 1993
-----------------------------------------------------------------------
Currently payable:
Federal $ 608 $ 36 $ 31
Foreign 323 154 136
State 276 108 103
------ ------ ------
1,207 298 270
------ ------ ------
Deferred (prepaid), net:
Federal (412) 57 3
State (103) 10 (2)
------ ------ ------
(515) 67 1
------ ------ ------
$ 692 $ 365 $ 271
====== ====== ======
The provision for income taxes that is currently payable does not
reflect $166,000 of tax benefits allocated to capital in excess of par
value in 1995.
The provision for income taxes in the accompanying statement of income
differs from the provision calculated by applying the statutory federal
income tax rate of 34% to income before provision for income taxes due to
the following:
(In thousands) 1995 1994 1993
-----------------------------------------------------------------------
Provision for income taxes at
statutory rate $1,144 $ 504 $ 255
Increases (decreases) resulting from:
Decrease in valuation allowance (630) (290) (135)
State income taxes, net of federal tax 114 77 67
Nondeductible expenses 86 101 73
Foreign tax rate and tax regulation
differential 68 10 11
Foreign sales corporation (87) (55) -
Alternative minimum tax (3) 18 -
------ ------ ------
$ 692 $ 365 $ 271
====== ====== ======
17PAGE
<PAGE>
Thermo Voltek Corp.
Notes to Consolidated Financial Statements
7. Income Taxes (continued)
Prepaid income taxes in the accompanying balance sheet consist of the
following:
(In thousands) 1995 1994
-------------------------------------------------------------
Prepaid income taxes:
Federal tax net operating loss
carryforwards $1,016 $ 964
Accruals and reserves 702 732
State tax loss carryforwards 89 113
Federal tax credit carryforwards 132 132
Available-for-sale investments (97) 164
Accrued compensation 88 139
Allowance for doubtful accounts 78 36
------ ------
2,008 2,280
Less: Valuation allowance 1,209 1,839
------ ------
$ 799 $ 441
====== ======
The valuation allowance primarily relates to the uncertainty
surrounding the realization of tax loss and credit carryforwards and
certain other tax assets of the Company. The decrease in the valuation
allowance relates to changes in the amount of estimated tax attributes and
the utilization of a portion of the federal tax loss and credit
carryforwards, which resulted in a decrease in the provision for income
taxes of approximately $630,000, $290,000, and $135,000 in 1995, 1994, and
1993, respectively.
As of December 30, 1995, the Company has federal tax net operating
loss carryforwards of approximately $3.0 million, subject to the
limitations described below. These net operating loss carryforwards will
begin to expire in 1998. In addition, the Company has investment tax credit
carryforwards of approximately $53,000 and research credit carryforwards of
approximately $79,000, which are also subject to the limitations described
below. These tax credit carryforwards will begin to expire in 1996.
Pursuant to U.S. Internal Revenue Code Sections 382 and 383, the
utilization of the net operating loss and tax credit carryforwards is
limited to the tax benefit of a deduction of approximately $240,000 per
year with any unused portion of this annual limitation carried forward to
future years.
A provision has not been made for U.S. or additional foreign taxes on
$1.0 million of undistributed earnings of foreign subsidiaries that could
be subject to tax if remitted to the U.S. because the Company currently
plans to keep these amounts permanently reinvested overseas. The Company
believes that any additional U.S. tax liability due upon remittance of such
earnings would be immaterial due to available U.S. foreign tax credits.
18PAGE
<PAGE>
Thermo Voltek Corp.
Notes to Consolidated Financial Statements
8. Commitments
The Company occupies office and operating facilities under operating leases
expiring at various dates through 2000. The accompanying statement of
income includes expenses from operating leases of $381,000, $363,000, and
$268,000 in 1995, 1994, and 1993, respectively. The future minimum payments
due under noncancellable operating leases as of December 30, 1995, are
$382,000 in 1996; $320,000 in 1997; $326,000 in 1998; $330,000 in 1999; and
$330,000 in 2000. Total future minimum lease payments are $1,688,000.
9. Short- and Long-term Obligations
Short-term Obligations
The Company's Comtest subsidiary has a line of credit, denominated in
Netherlands guilders, under which approximately $932,000 may be borrowed at
the Netherlands discount rate plus 125 basis points; a line of credit,
denominated in British pounds sterling, under which approximately
$1,163,000 may be borrowed at the British discount rate plus 100 basis
points; and a line of credit, denominated in Italian lira, under which
approximately $315,000 may be borrowed at the Italian discount rate plus
200 basis points. Amounts borrowed under these arrangements are classified
as notes payable in the accompanying balance sheet. The weighted average
interest rate for these borrowings at year-end 1995 and 1994 was 7.6% and
7.0%, respectively.
Long-term Obligations
In November 1993, the Company issued and sold in Europe $34,500,000
principal amount of 3 3/4% subordinated convertible debentures due 2000.
The debentures are convertible into shares of the Company's common stock at
a conversion price of $11.75 per share. In lieu of issuing shares of the
Company's common stock upon conversion, the Company has the option to pay
holders of the debentures cash equal to the weighted average market price
of the Company's common stock on the trading date prior to conversion.
During 1995, $9,111,000 principal amount of these debentures was converted
into 775,399 shares of the Company's common stock and the Company
repurchased $149,000 principal amount of these debentures.
Short- and long-term obligations in the accompanying balance sheet are
guaranteed on a subordinated basis by Thermo Electron. Thermedics has
agreed to reimburse Thermo Electron in the event Thermo Electron is
required to make a payment under the guarantees.
See Note 10 for long-term obligations of the Company held by
Thermedics and Note 11 for fair value information pertaining to long-term
obligations.
19PAGE
<PAGE>
Thermo Voltek Corp.
Notes to Consolidated Financial Statements
10. Related Party Transactions
Corporate Services Agreement
The Company and Thermo Electron have a corporate services agreement under
which Thermo Electron's corporate staff provides certain administrative
services, including certain legal advice and services, risk management,
certain employee benefit administration, tax advice and preparation of tax
returns, centralized cash management, and certain financial and other
services, for which the Company paid Thermo Electron annually an amount
equal to 1.20% of the Company's revenues in fiscal 1995 and 1.25% of the
Company's revenues in fiscal 1994 and 1993. For these services, the Company
was charged $436,000, $296,000, and $226,000 in 1995, 1994, and 1993,
respectively. Beginning in fiscal 1996, the Company will pay an annual fee
equal to 1.0% of the Company's revenues. The annual fee is reviewed and
adjusted annually by mutual agreement of the parties. Management believes
that the service fee charged by Thermo Electron is reasonable and that such
fees are representative of the expenses the Company would have incurred on
a stand-alone basis. The corporate services agreement is renewed annually
but can be terminated upon 30 days' prior notice by the Company or upon the
Company's withdrawal from the Thermo Electron Corporate Charter (the Thermo
Electron Corporate Charter defines the relationship among Thermo Electron
and its majority-owned subsidiaries). For additional items such as employee
benefit plans, insurance coverage, and other identifiable costs, Thermo
Electron charges the Company based upon costs attributable to the Company.
Repurchase Agreement
The Company invests excess cash in a repurchase agreement with Thermo
Electron as discussed in Note 1.
Short-term Investments
At December 30, 1995, the Company's available-for-sale investments included
$1,482,000 (amortized cost of $1,305,000) of 6 1/2% subordinated
convertible debentures due 1997, which were purchased on the open market
for $1,311,000. These debentures have a par value of $1,300,000 and were
issued by Thermo TerraTech Inc., which is a majority-owned subsidiary of
Thermo Electron.
Subordinated Convertible Notes
In connection with the financing of the acquisition of Comtest in August
1993, the Company issued to Thermedics a $4.0 million principal amount of
5% subordinated convertible note due 2003. The note is convertible into
shares of the Company's common stock at a conversion price of $5.67 per
share. The Company also repaid $1.5 million of amounts borrowed from Thermo
Electron in 1993 with proceeds from this note.
To help finance the Company's acquisition of KeyTek Instrument
(KeyTek) in June 1992, the Company issued to Thermedics a $7.5 million
principal amount 6 3/4% subordinated convertible note due 2002. The note is
convertible into shares of the Company's common stock at a conversion price
of $6.40 per share.
20PAGE
<PAGE>
Thermo Voltek Corp.
Notes to Consolidated Financial Statements
11. Fair Value of Financial Instruments
The Company's financial instruments consist mainly of cash and cash
equivalents, available-for-sale investments, accounts receivable, notes
payable, accounts payable, due to parent company, and subordinated
convertible obligations. The carrying amounts of these financial
instruments, with the exception of available-for-sale investments and
subordinated convertible obligations, approximates fair value due to their
short-term nature.
Available-for-sale investments are carried at fair value in the
accompanying balance sheet. The fair values were determined based on quoted
market prices. See Note 2 for fair value information pertaining to these
financial instruments.
The carrying amount and fair value of the Company's subordinated
convertible obligations were $36,740,000 and $61,449,000, respectively, as
of December 30, 1995, and $46,000,000 and $47,001,000, respectively, as of
December 31, 1994. The fair value exceeds the carrying value primarily due
to the market price of the Company's common stock at year-end 1995
exceeding the conversion price.
The fair value of subordinated convertible obligations was determined
based on quoted market prices and on borrowing rates available to the
Company at the respective year-ends.
12. Geographical Information
The Company, which operates in one business segment, designs, manufactures,
and markets instruments that test electronic and electrical systems and
components for immunity to pulsed electromagnetic interference (EMI),
provides related consulting services, and designs, manufactures, and
markets high-voltage power-conversion systems. Revenues from electronic
test instruments and services were $31,580,000, $19,009,000, and
$13,206,000 in 1995, 1994, and 1993, respectively. Revenues from
high-voltage power systems were $4,746,000, $4,632,000, and $4,883,000 in
1995, 1994, and 1993, respectively.
21PAGE
<PAGE>
Thermo Voltek Corp.
Notes to Consolidated Financial Statements
12. Geographical Information (continued)
The following table shows data for the Company by geographic area.
(In thousands) 1995 1994 1993
------------------------------------------------------------------------
Revenues:
United States $23,375 $16,262 $15,306
The Netherlands 6,977 5,156 2,655
United Kingdom 6,967 2,865 633
Italy 2,143 - -
Transfers between geographic areas (a) (3,136) (642) (505)
------- ------- -------
$36,326 $23,641 $18,089
======= ======= =======
Income before provision for income taxes:
United States $ 3,343 $ 2,296 $ 1,302
The Netherlands 405 170 345
United Kingdom 388 244 (10)
Italy 123 - -
Corporate and eliminations (b) (838) (708) (483)
------- ------- -------
Total operating income 3,421 2,002 1,154
Interest expense, net (71) (519) (628)
Other income 14 - 225
------- ------- -------
$ 3,364 $ 1,483 $ 751
======= ======= =======
Identifiable assets:
United States $21,816 $15,749 $15,810
The Netherlands 5,238 5,076 3,439
United Kingdom 5,015 3,273 1,032
Italy 1,914 - -
Corporate (c) 34,862 38,126 37,190
------- ------- -------
$68,845 $62,224 $57,471
======= ======= =======
Export revenues included in United States
revenues above (d):
Europe $ 4,598 $ 1,661 $ 2,278
Asia 4,994 3,704 1,747
Other 330 422 588
------- ------- -------
$ 9,922 $ 5,787 $ 4,613
======= ======= =======
(a)Transfers between geographic areas are accounted for at prices that are
representative of transactions with unaffiliated parties.
(b)Primarily general and administrative expenses.
(c)Primarily cash and cash equivalents and available-for-sale investments.
(d)In general, export sales are denominated in U.S. dollars.
22PAGE
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Shareholders and Board of Directors of Thermo Voltek Corp.:
We have audited the accompanying consolidated balance sheets of Thermo
Voltek Corp. (a Delaware corporation and 50%-owned subsidiary of Thermedics
Inc.) and subsidiaries as of December 30, 1995 and December 31, 1994, and
the related consolidated statements of income, shareholders' investment,
and cash flows for each of the three years in the period ended December 30,
1995. These consolidated financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. 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 consolidated financial statements referred to
above present fairly, in all material respects, the financial position of
Thermo Voltek Corp. and subsidiaries as of December 30, 1995 and December
31, 1994, and the results of their operations and their cash flows for each
of the three years in the period ended December 30, 1995, in conformity
with generally accepted accounting principles.
As discussed in Note 2 to the consolidated financial statements,
effective January 2, 1994, the Company changed its method of accounting for
investments in debt and marketable equity securities.
Arthur Andersen LLP
Boston, Massachusetts
February 7, 1996
23PAGE
<PAGE>
Thermo Voltek Corp.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Overview
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 radio frequency interference and for
medical imaging and telecommunications applications.
The Company's strategy is to expand through a combination of internal
product development and the acquisition of new businesses and technologies.
The Company acquired Comtest to gain additional expertise in EMC
technologies and further access to European markets, and acquired Verifier
to expand the Company's component-testing product line. The acquisition of
Kalmus expanded the Company's EMC-testing line to include radio frequency
interference testing products. The Company's strategy is to make additional
acquisitions to expand the range of EMC products and services it can offer
to its customers.
The Company sells its products primarily in the United States and
Europe. Approximately 36% of the Company's sales in 1995 originated in
Europe. Although the Company seeks to charge its customer in the same
currency as its operating costs, the Company's financial performance and
competitive position can be affected by currency exchange rate fluctuations
affecting the relationship between the U.S. dollar and foreign currencies.
Results of Operations
1995 Compared With 1994
-----------------------
Revenues increased 54% to $36.3 million in 1995 from $23.6 million in 1994.
The increase in revenues is primarily the result of the inclusion of $4.7
million in revenues from Kalmus, which was acquired in March 1995, an
increase of $3.1 million in revenues from Comtest, and an increase of $2.5
million in revenues due to the inclusion of revenues for the full year of
1995 from Verifier, which was acquired in July 1994. The increase in
revenues from Comtest resulted primarily from the introduction in 1995 of a
24PAGE
<PAGE>
Thermo Voltek Corp.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
1995 Compared With 1994 (continued)
-----------------------
new radio frequency interference immunity tester product line and, to a
lesser extent, the favorable effects of currency translation due to a
weaker U.S. dollar in 1995. The balance of the increase in sales resulted
from greater demand at KeyTek and, to a lesser extent, Universal
Voltronics.
The gross profit margin decreased to 48% in 1995 from 49% in 1994, due
primarily to higher European sales in 1995 in one of KeyTek's product
lines, which have lower margins due to competitive pricing pressures and,
to a lesser extent, higher costs associated with an upgraded product at
KeyTek. These decreases were offset in part by the inclusion of
higher-margin Verifier revenues.
Selling, general and administrative expenses as a percentage of
revenues decreased to 32% in 1995 from 34% in 1994, due primarily to lower
costs as a percentage of revenues at KeyTek and Universal Voltronics as a
result of higher sales volume in 1995, and lower selling, general and
administrative expenditures as a percentage of revenues at Kalmus. Research
and development expenses as a percentage of revenues remained unchanged at
6% in 1995 and 1994.
Interest income increased to $2.1 million in 1995 from $1.7 million in
1994, due primarily to higher prevailing interest rates in 1995. Interest
expense was $2.1 million in 1995, compared with $2.2 million in 1994. The
decrease in interest expense resulting from the conversion of $9.1 million
principal amount of the Company's subordinated convertible obligations
during 1995 was substantially offset by the inclusion of interest expense
associated with increased borrowings under Comtest's outstanding line of
credit.
The effective tax rate was 21% in 1995 and 25% in 1994. These rates
are below the statutory federal income tax rate due primarily to the
utilization of tax net operating loss carryforwards, offset in part by the
impact of state income taxes. The decrease in the effective tax rate in
1995 was due to increased utilization of tax net operating loss
carryforwards.
1994 Compared With 1993
-----------------------
Revenues increased 31% to $23.6 million in 1994 from $18.1 million in 1993.
The increase was due primarily to the inclusion of $6.4 million in revenues
from Comtest, which was acquired in August 1993 (compared with $2.8 million
in revenues for the period from August 1993 to year-end 1993), an increase
of $1.2 million in revenues from KeyTek, and the inclusion of $1.0 million
in revenues from Verifier, which was acquired in July 1994. The increase in
revenues at KeyTek was due primarily to greater demand and, to a lesser
extent, a bulk sale of inventory of its older product lines in the second
quarter of 1994. An increase in commercial sales of $1.7 million at
Universal Voltronics, primarily to one customer in the automotive industry,
was more than offset by a decline of $1.9 million in contract revenues. The
decrease in contract revenues at Universal Voltronics was due to the
completion of certain contracts, primarily a contract with the U.S. Navy,
which were not replaced by new contracts.
25PAGE
<PAGE>
Thermo Voltek Corp.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
1994 Compared With 1993 (continued)
-----------------------
The gross profit margin increased to 49% in 1994 from 46% in 1993. The
increase was due primarily to higher gross margins on increased commercial
sales at Universal Voltronics relative to lower-margin government contract
revenues in 1993 and, to a lesser extent, the inclusion of higher-margin
Verifier revenues.
Selling, general and administrative expenses as a percentage of
revenues remained relatively unchanged at 34% in 1994, compared with 33% in
1993. Research and development expenses increased to $1.5 million in 1994
from $1.2 million in 1993, due primarily to higher development expenditures
for new and existing product lines at KeyTek.
Interest income increased to $1.7 million in 1994 from $0.2 million in
1993, and interest expense increased to $2.2 million in 1994 from $0.8
million in 1993, primarily as a result of the Company's issuance of $34.5
million principal amount of 3 3/4% subordinated convertible debentures in
November 1993.
The effective tax rate was 25% in 1994 and 36% in 1993. These rates
are below the statutory federal income tax rate due primarily to the
utilization of tax net operating loss carryforwards, offset in part by the
impact of state income taxes. The decrease in the effective tax rate in
1994 was due to increased utilization of tax net operating loss
carryforwards.
Liquidity and Capital Resources
Working capital was $41.8 million at December 30, 1995, compared with $42.0
million at December 31, 1994. Included in working capital are cash, cash
equivalents, and short-term investments of $34.7 million at
December 30, 1995, compared with $37.1 million at December 31, 1994. During
1995, $1.9 million of cash was provided by operating activities, compared
with $2.5 million of cash during 1994. On March 1, 1995, the Company's
KeyTek division acquired substantially all of the assets, subject to
certain liabilities, of Kalmus for $3.8 million in cash (Note 3). During
1995 the Company expended $1.4 million for property, plant and equipment.
In 1996, the Company expects to make capital expenditures of
approximately $1.5 million. As part of its strategy for growth, the Company
regularly reviews opportunities to acquire businesses and core technologies
that will complement the Company's products and services, although the
Company currently has no agreements or commitments with respect to any such
acquisitions. The Company believes its existing resources are sufficient to
meet the capital requirements of its existing operations for the
foreseeable future.
26PAGE
<PAGE>
Thermo Voltek Corp.
Selected Financial Information
(In thousands except
per share amounts) 1995(a) 1994(b) 1993(c) 1992(d) 1991
--------------------------------------------------------------------------
Statement of Income Data:
Revenues $36,326 $23,641 $18,089 $12,998 $ 6,502
Net income (loss) 2,672 1,118 480 390 (316)
Earnings (loss) per share:
Primary .60 .28 .12 .10 (.08)
Fully diluted .42 .26 .12 .10 (.08)
Balance Sheet Data:
Working capital $41,826 $41,990 $42,023 $ 6,482 $ 5,583
Total assets 68,845 62,224 57,471 16,364 7,266
Long-term obligations 36,740 46,000 46,000 7,500 -
Shareholders' equity 20,959 8,472 7,097 6,598 6,208
Quarterly Information (Unaudited)
(In thousands except per share amounts)
1995 First(a) Second Third Fourth
--------------------------------------------------------------------------
Revenues $ 7,308 $ 8,554 $ 9,442 $11,022
Gross profit 3,488 4,042 4,659 5,347
Net income 415 603 744 910
Earnings per share:
Primary .10 .14 .16 .18
Fully diluted .08 .10 .11 .13
1994 First Second Third(b) Fourth
--------------------------------------------------------------------------
Revenues $ 4,928 $ 5,476 $ 5,789 $ 7,448
Gross profit 2,419 2,711 2,995 3,396
Net income 198 268 325 327
Earnings per share:
Primary .05 .07 .08 .08
Fully diluted .05 .06 .07 .07
(a)Reflects the March 1995 acquisition of Kalmus Engineering Incorporated
and R.F. Power Labs, Incorporated.
(b)Reflects the July 1994 acquisition of Verifier Systems Limited.
(c)Reflects the August 1993 acquisition of Comtest Instrumentation B.V.
and Comtest Limited, the issuance of a $4.0 million principal amount 5%
subordinated convertible note to Thermedics Inc., and the issuance of
$34.5 million principal amount of 3 3/4% subordinated convertible
debentures.
(d)Reflects the June 1992 acquisition of KeyTek Instrument, and the
issuance of a $7.5 million principal amount 6 3/4% subordinated
convertible note to Thermedics Inc.
27PAGE
<PAGE>
Thermo Voltek Corp.
Common Stock Market Information
The following table shows the market range for the Company's common stock
based on reported sale prices on the American Stock Exchange (symbol TVL)
for 1995 and 1994.
1995 1994
----------------- -----------------
Quarter High Low High Low
--------------------------------------------------
First $11 3/4 $ 7 7/8 $10 3/8 $ 8 5/8
Second 15 3/4 10 8 7/8 8 1/8
Third 17 1/8 13 7/8 8 5/8 7
Fourth 16 5/8 14 1/2 8 7/8 7 5/8
As of January 26, 1996, the Company had 444 holders of record of its
common stock. This does not include holdings in street or nominee names.
The closing market price on the American Stock Exchange for the Company's
common stock on January 26, 1996, was $19 3/8 per share.
Stock Transfer Agent
American Stock Transfer & Trust Company is the stock transfer agent and
maintains shareholder activity records. The agent will respond to questions
on issuances of stock certificates, changes of ownership, lost stock
certificates, and changes of address. For these and similar matters, please
direct inquiries to:
American Stock Transfer & Trust Company
Shareholder Services Department
40 Wall Street, 46th Floor
New York, New York 10005
(718) 921-8200
Shareholder Services
Shareholders of Thermo Voltek Corp. who desire information about the
Company are invited to contact John N. Hatsopoulos, Chief Financial
Officer, Thermo Voltek Corp., 81 Wyman Street, P.O. Box 9046, Waltham,
Massachusetts 02254-9046, (617) 622-1111. A mailing list is maintained to
enable shareholders whose stock is held in street name, and other
interested individuals, to receive quarterly reports, annual reports, and
press releases as quickly as possible. Quarterly reports and press releases
are also available through the Internet at Thermo Electron's home page on
the World Wide Web (http://www.thermo.com).
Dividend Policy
The Company has never paid cash dividends and does not expect to pay cash
dividends in the foreseeable future because its policy has been to use
earnings to finance expansion and growth. Payment of dividends will rest
within the discretion of the Board of Directors and will depend upon, among
other factors, earnings, capital requirements, and financial condition.
28PAGE
<PAGE>
Thermo Voltek Corp.
Form 10-K Report
A copy of the Annual Report on Form 10-K for the fiscal year ended December
30, 1995, as filed with the Securities and Exchange Commission, may be
obtained at no charge by writing to John N. Hatsopoulos, Chief Financial
Officer, Thermo Voltek Corp., 81 Wyman Street, P.O. Box 9046, Waltham,
Massachusetts 02254-9046.
Annual Meeting
The annual meeting of shareholders will be held on Monday, May 20, 1996, at
9:15 a.m. at the Turnberry Isle Resort & Club, Aventura, Florida.
29PAGE
<PAGE>
Exhibit 21
THERMO VOLTEK CORP.
SUBSIDIARIES OF THE REGISTRANT
At March 6, 1996, Thermo Voltek Corp. owned the following companies:
State or Jurisdiction Registrant's %
Name of Incorporation of Ownership
-------------------------------------------------------------------------
Comtest Europe B.V. Netherlands 100%
Comtest Instrumentation, B.V. Netherlands 100%
Comtest Limited United Kingdom 100%
KeyTek FSC, Ltd. U.S. Virgin Islands 100%
TVL Securities Corporation Delaware 100%
UVC Realty Corp. New York 100%
Exhibit 23
Consent of Independent Public Accountants
-----------------------------------------
As independent public accountants, we hereby consent to the
incorporation by reference of our reports dated February 7, 1996 included
in or incorporated by reference into Thermo Voltek Corp.'s Annual Report on
Form 10-K for the year ended December 30, 1995, into the Company's
previously filed Registration Statements as follows: Registration
Statement No. 33-74484 on Form S-3, Registration Statement No. 33-52802 on
Form S-8, Registration Statement No. 33-71780 on Form S-8, Registration
Statement No. 33-70646 on Form S-8, Registration Statement No. 33-71782 on
Form S-8, Registration Statement No. 33-71784 on Form S-8, Registration
Statement No. 33-85954 on Form S-8, and Registration Statement No.
033-65277 on Form S-8.
Arthur Andersen LLP
Boston, Massachusetts
March 8, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THERMO
VOLTEK CORP.'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 30,1995
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
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<FISCAL-YEAR-END> DEC-30-1995
<PERIOD-END> DEC-30-1995
<CASH> 8,651
<SECURITIES> 26,038
<RECEIVABLES> 9,127
<ALLOWANCES> 447
<INVENTORY> 8,581
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