SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
----------------------------------------------------
AMENDMENT NO. 1 ON FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report
(Date of earliest event reported):
July 16, 1999
----------------------------------------------------
THERMO VISION CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 1-13391 04-3296594
(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification Number)
8 East Forge Parkway 02038
Franklin, Massachusetts (Zip Code)
(Address of principal executive offices)
(781) 622-1000
(Registrant's telephone number including area code)
<PAGE>
FORM 8-K/A
This Form 8-K/A contains forward-looking statements that involve a number
of risks and uncertainties. Important factors that could cause actual results to
differ materially from those indicated by such forward-looking statements are
set forth under the heading "Forward-looking Statements" in Exhibit 13 to Thermo
Vision Corporation's annual report on Form 10-K for the year ended January 2,
1999. These include risks and uncertainties relating to: technological change,
acquisition strategy, intense competition, potential adverse effect of
significant international sales, supplier and vendor relationships, intellectual
property rights, semiconductor industry volatility, and the potential impact of
the year 2000 on processing date-sensitive information.
Item 2. Acquisition or Disposition of Assets
On July 16, 1999, Thermo Vision Corporation (the "Company") acquired the
non-telecommunications thin-film optical filter business (the "Business") of
Corning OCA Corporation from Corning OCA Corporation (the "Seller"). The
Business manufactures optical filters and assemblies in the ultra-violet,
visible, near infrared, and infrared portions of the electromagnetic spectrum.
Common applications for the manufactured filters are clinical chemistry,
scientific instruments, bar code scanners, color measurement, intrusion
detection, laser protection, and process control equipment.
The acquisition was made pursuant to a Purchase and Sale Agreement dated
May 12, 1999 (as amended, the "Agreement"), between the Seller and the Company.
The purchase price for the Business was $4,000,000, of which $1,000,000 was paid
on May 12, 1999, the date of execution of the Agreement, with the $3,000,000
balance paid on the July 16 closing date. The purchase price paid was based on
the Company's determination of the fair market value of the Business, and the
terms and conditions of the Agreement were determined by arms-length negotiation
among the parties. The source of the purchase price was internal cash.
The Company has no present intention to use the assets of the Business for
purposes materially different from the purposes for which the assets were used
prior to the sale transaction. However, the Company does plan to move the assets
from their current location to the Company's principal place of business. In
addition, the Company will continue to review the Business, including the assets
acquired, operations, properties, policies, management and personnel and, upon
completion of this review, may develop additional or alternative plans or
proposals.
2
<PAGE>
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) Financial Statements of Business Acquired
Attached hereto.
3
<PAGE>
Non-telecommunications Optical Filter Business of Corning OCA Corporation
Statement of Revenues and Direct Costs and Expenses,
Statement of Assets Acquired, Liabilities Assumed and Parent Company
Investment, and Independent Auditors' Report
<PAGE>
Non-telecommunications Optical Filter Business of
Corning OCA Corporation
Table of Contents
<TABLE>
<CAPTION>
<S> <C>
Page Number
Independent Auditors' Report 3
Statement of Revenues and Direct Costs and Expenses 4
Statement of Assets Acquired, Liabilities Assumed and Parent Company Investment 5
Notes to Financial Statements 6
</TABLE>
2
<PAGE>
Report of Independent Public Accountants
To Corning OCA Corporation:
We have audited the accompanying Statement of Revenues and Direct Costs
and Expenses of the Non-telecommunications Optical Filter Business of Corning
OCA Corporation for the eight-month period ended December 31, 1997, the
twelve-month period ended December 31, 1998, and the month ended January 30,
1999, and the Statement of Assets Acquired, Liabilities Assumed and Parent
Company Investment as of July 16, 1999. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these 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.
These statements have been prepared for purposes of complying with the
rules and regulations of the Securities and Exchange Commission for inclusion in
Amendment No. 1 on Form 8-K/A of Thermo Vision Corporation as described in Note
3, and are not intended to be a complete presentation of the income statement
and assets and liabilities of the Non-telecommunications Optical Filter Business
of Corning OCA Corporation.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the revenues and direct costs and expenses of the
Non-telecommunications Optical Filter Business of Corning OCA Corporation for
the eight-month period ended December 31, 1997, the twelve-month period ended
December 31, 1998, and the month ended January 30, 1999, and the assets
acquired, liabilities assumed and parent company investment as of July 16, 1999,
in conformity with generally accepted accounting principles.
Arthur Andersen LLP
Boston, Massachusetts
August 27, 1999
3
<PAGE>
<TABLE>
<CAPTION>
Non-telecommunications Optical Filter Business of
Corning OCA Corporation
Statement of Revenues and Direct Costs and Expenses
(In thousands)
<S> <C> <C> <C> <C> <C>
Month Twelve Months Eight Months
Six Months Ended Ended Ended Ended
June 30, June 30, January 31, December 31, December 31,
1999 1998 1999 1998 1997
- -------------------------------------------------------------------------------------------------------
(Unaudited)
Revenues $2,469 $3,583 $ 417 $7,309 $4,727
Direct Costs and Expenses:
Direct materials 534 426 74 869 922
Direct labor 477 451 85 1,072 846
------ ------ ------ ------ ------
1,011 877 159 1,941 1,768
------ ------ ------ ------ ------
Excess of Revenues Over
Direct Costs and Expenses $1,458 $2,706 $ 258 $5,368 $2,959
====== ====== ====== ====== ======
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
Non-telecommunications Optical Filter Business of
Corning OCA Corporation
Statement of Assets Acquired, Liabilities Assumed and Parent Company Investment
As of July 16, 1999
(In thousands)
Assets Acquired
Inventories:
Raw materials and supplies $ 175
Work in process 378
Finished goods 487
-------
1,040
-------
Plant and Equipment 645
-------
Intangible Asset 315
-------
Cost in Excess of Net Assets of Acquired Company 2,150
-------
$ 4,150
=======
Liabilities Assumed and Parent Company Investment
Accrued Expenses $ 150
-------
Parent Company Investment 4,000
-------
$ 4,150
=======
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
Non-telecommunications Optical Filter Business of
Corning OCA Corporation
Notes to Financial Statements
1. Description of the Business
The non-telecommunications optical filter business of Corning OCA
Corporation is engaged in the development, manufacturing, and marketing of
optical filters and assemblies in the ultra violet, visible, near infrared, and
infrared portions of the electromagnetic spectrum. Common applications for these
filters are clinical chemistry, scientific instruments, bar code scanners, color
measurement, intrusion detection, laser protection, and process control
equipment. Prior to its acquisition by Thermo Vision Corporation (the Company),
the business operated as a fully integrated unit of Corning OCA Corporation.
2. Description of the Transaction
Pursuant to a Purchase Agreement dated July 16, 1999, the Company acquired
certain assets of the non-telecommunications optical filter business of Corning
OCA Corporation (OCA) for $4,000,000 in cash. This acquisition has been
accounted for using the purchase method of accounting. The cost of this
acquisition exceeded the estimated fair value of the acquired net assets by
$2,150,000, which will be amortized over 40 years. Allocation of the purchase
price was based on an estimate of the fair value of the net assets acquired.
3. Basis of Presentation
The non-telecommunications business was operated and managed by Corning
OCA Corporation with other similar businesses utilizing shared resources and,
accordingly, it was not possible to prepare separate full financial statements,
including a statement of cash flows, for the acquired business. Additionally,
any attempt to prepare financial statements for the business would require
numerous subjective allocations, which may not accurately reflect the actual
historical results of the business acquired. As a result, the accompanying
statement of revenue and direct costs and expenses and statement of assets
acquired, liabilities assumed and parent company investment have been prepared
in lieu of full financial statements to satisfy the requirements of Securities
and Exchange Commission Rule 3-05 of Regulation S-X.
For the purpose of these financial statements, direct costs include direct
material and direct labor. These statements exclude costs normally incurred in a
business, including overhead, general and administrative expenses, research and
development expenses, and provisions for taxes. The financial information in
these statements is not necessarily indicative of the prospective financial
condition or results of the business due to expected changes within the business
as a result of the merger of its operations with those of the Company. These
changes include relocation of the acquired business to facilities currently
leased by the Company and integration of its operations with those of another of
the Company's business units.
4. Summary of Significant Accounting Policies
Revenue Recognition
OCA recognizes revenue upon shipment of its products.
Inventories
Finished goods are recorded at estimated selling prices less costs to sell
and a reasonable profit allowance for the selling effort of the Company.
Work-in-process inventories are valued at the selling price of the finished
goods less costs to complete, costs to sell, and a reasonable profit allowance
for the manufacturing and selling efforts of the Company. Raw materials are
recorded at current replacement cost.
6
<PAGE>
4. Summary of Significant Accounting Policies (continued)
Plant and Equipment
Plant and equipment is recorded at estimated current replacement cost for
similar equipment based on a third- party appraisal obtained by the Company.
Intangible Asset
Intangible asset in the accompanying statement of assets acquired and
liabilities assumed represents a license agreement with OCA under which the
Company will receive a royalty-free non-exclusive license to certain technology
used by the acquired business. The asset is recorded at its estimated current
value, which was determined based on the present value of the future costs that
would have been expended by the Company to obtain such a license. This
intangible asset is being amortized over 10 years, the life of the agreement.
Cost in Excess of Net Assets of Acquired Company
The excess of the purchase price over the fair value of the acquired net
assets is recorded as cost in excess of net assets of acquired company in the
accompanying statement of assets acquired and liabilities assumed and is being
amortized over 40 years.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that effect 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.
5. Acquisition
In April 1997, Corning Corporation purchased the telecommunications and
non-telecommunications optical filter business of Optical Corporation of America
as part of a larger acquisition, which included the acquisition of three
businesses. Books and records of these businesses prior to this acquisition are
not available and, therefore, the accompanying statement of revenues and direct
costs and expenses has been presented from the date of the acquisition.
7
<PAGE>
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(b) Pro Forma Financial Information
The following unaudited pro forma combined condensed statements of income
set forth the results of operations for the six months ended July 3, 1999, and
the year ended January 2, 1999, as if the acquisition of OCA had occurred at the
beginning of 1998. OCA's historical results included in the accompanying pro
forma combined condensed statements of income represent its revenues and direct
costs and expenses for the first six months of 1999 and the full year 1998, and
exclude certain operating expenses of OCA. As a result, the pro forma results of
operations are not necessarily indicative of future operations or the actual
results that would have occurred had the acquisition of OCA been made at the
beginning of 1998. The following unaudited pro forma combined condensed balance
sheet sets forth the financial position as of July 3, 1999, as if the purchase
of OCA had occurred on July 3, 1999. OCA's balance sheet represents the assets
acquired, liabilities assumed and parent company investment by the Company as of
July 16, 1999. The financial statements of OCA filed under part (a) of this item
should be read in conjunction with the accompanying notes and the respective
historical financial statements and related notes of the Company and OCA.
4
<PAGE>
</TABLE>
<TABLE>
<CAPTION>
Thermo Vision Corporation
Pro Forma Combined Condensed Statement of Income
Six Months Ended July 3, 1999
(Unaudited)
<S> <C> <C> <C> <C>
Historical Pro Forma
---------------------- -------------------------
Thermo
Vision OCA Adjustments Combined
-------- -------- ----------- --------
(In thousands except per share amounts)
Revenues $19,115 $ 2,469 $ - $21,584
------- ------- ------- -------
Costs and Operating Expenses:
Cost of revenues 11,628 1,011 716 13,355
Selling, general, and administrative expenses 5,184 - 172 5,356
Research and development expenses 2,106 - 95 2,201
------- ------- ------- -------
18,918 1,011 983 20,912
------- ------- ------- -------
Operating Income 197 1,458 (983) 672
Interest Income 189 - (102) 87
Interest Expense (227) - - (227)
------- ------- ------- -------
Income Before Provision for Income Taxes 159 1,458 (1,085) 532
Provision for Income Taxes 67 - 149 216
------- ------- ------- -------
Net Income $ 92 $ 1,458 $(1,234) $ 316
======= ======= ======= =======
Basic and Diluted Earnings per Share $ .01 $ .04
======= =======
Weighted Average Shares:
Basic 8,051 8,051
======= =======
Diluted 8,111 8,111
======= =======
See notes to pro forma combined condensed financial statements.
5
<PAGE>
Thermo Vision Corporation
Pro Forma Combined Condensed Statement of Income
Year Ended January 2, 1999
(Unaudited)
Historical Pro Forma
---------------------- -------------------------
Thermo
Vision OCA Adjustments Combined
-------- -------- ----------- --------
(In thousands except per share amounts)
Revenues $37,966 $ 7,309 $ - $45,275
------- ------- ------- -------
Costs and Operating Expenses:
Cost of revenues 23,769 1,941 1,432 27,142
Selling, general, and administrative expenses 9,370 - 361 9,731
Research and development expenses 4,233 - 190 4,423
Restructuring costs 40 - - 40
------- ------- ------- -------
37,412 1,941 1,983 41,336
------- ------- ------- -------
Operating Income 554 5,368 (1,983) 3,939
Interest Income 455 - (225) 230
Interest Expense (521) - - (521)
------- ------- ------- -------
Income Before Provision for Income Taxes 488 5,368 (2,208) 3,648
Provision for Income Taxes 267 - 1,264 1,531
------- ------- ------- -------
Net Income $ 221 $ 5,368 $(3,472) $ 2,117
======= ======= ======= =======
Basic and Diluted Earnings per Share $ .03 $ .26
======= =======
Weighted Average Shares:
Basic 8,048 8,048
======= =======
Diluted 8,049 8,049
======= =======
See notes to pro forma combined condensed financial statements.
6
<PAGE>
Thermo Vision Corporation
Pro Forma Combined Condensed Balance Sheet
As of July 3, 1999
(Unaudited)
Historical Pro Forma
----------------------- -------------------------
Thermo
Vision OCA Adjustments Combined
-------- -------- ----------- --------
(In thousands)
Assets
Current Assets:
Cash and cash equivalents $ 198 $ - $ - $ 198
Advance to affiliate 6,767 - (4,000) 2,767
Accounts receivable, net 5,966 - - 5,966
Inventories 7,898 1,040 - 8,938
Prepaid expenses 319 - - 319
Prepaid and refundable income taxes 2,040 - - 2,040
------- ------- ------- -------
23,188 1,040 (4,000) 20,228
------- ------- ------- -------
Property, Plant, and Equipment, at Cost, Net 5,904 645 - 6,549
------- ------- ------- -------
Other Assets 2,579 315 - 2,894
------- ------- ------- -------
Cost in Excess of Net Assets of Acquired 15,239 2,150 17,389
Companies
------- ------- ------- -------
$46,910 $ 4,150 $(4,000) $47,060
======= ======= ======= =======
Liabilities and Shareholders' Investment
Current Liabilities:
Note payable and capital lease obligation $ 4,875 $ - $ - $ 4,875
Accounts payable 2,805 - - 2,805
Other current liabilities 3,008 150 - 3,158
------- ------- ------- -------
10,688 150 - 10,838
------- ------- ------- -------
Deferred Income Taxes 217 - - 217
------- ------- ------- -------
Long-term Obligations 3,800 - - 3,800
------- ------- ------- -------
Shareholders' Investment:
Common stock 81 - - 81
Capital in excess of par value 28,040 - - 28,040
Retained earnings 4,098 - - 4,098
Deferred compensation (8) - - (8)
Accumulated other comprehensive items (6) - - (6)
Parent company investment - 4,000 (4,000) -
------- ------- ------- -------
32,205 4,000 (4,000) 32,205
------- ------- ------- -------
$46,910 $ 4,150 $(4,000) $47,060
======= ======= ======= =======
See notes to pro forma combined condensed financial statements.
7
<PAGE>
</TABLE>
<TABLE>
<CAPTION>
Thermo Vision Corporation
Notes to Pro Forma Combined Condensed Financial Statements
(Unaudited)
Note 1 - Pro Forma Adjustments to Pro Form Combined Condensed Statements of Income
(In thousands except in text)
<S> <C> <C>
Six Months Ended Year Ended
July 3, 1999 January 2, 1999
------------------- --------------------
Debit (Credit)
Cost of Revenues
Salaries for indirect manufacturing employees of acquired business $ 457 $ 914
Depreciation of leasehold improvements and equipment over the 198 397
assets' estimated useful lives of 6 years and 5 years, respectively
Rent, utilities, and real estate tax expense for additional 61 121
facilities leased to acquired business
---------- ----------
716 1,432
---------- ----------
Selling, General, and Administrative Expenses
Salaries for selling, general, and administrative 109 217
employees of acquired business
Service fee of .8% of the revenues of OCA for services 20 58
provided under a services agreement between the Company
and Thermo Electron Corporation
Amortization over 10 years of intangible asset valued at 16 32
$315,000
Amortization over 40 years of $2,150,000 of cost in 27 54
excess of net assets of acquired companies created by
the acquisition of OCA
---------- ----------
172 361
---------- ----------
Research and Development Expenses
Salaries for research and development employees of 95 190
acquired business
---------- ----------
Interest Income
Decrease in interest income as a result of the use of 102 225
$4,000,000 of cash to fund the acquisition of OCA,
calculated using an average interest rate of 5.10% and 5.63% for the
six months ended July 3, 1999, and the year ended January 2, 1999,
respectively
---------- ----------
Provision for Income Taxes
Income tax expense on earnings of OCA calculated at the 583 2,147
Company's incremental income tax rate of 40%
Income tax benefit associated with the adjustments above, (434) (883)
calculated at the Company's incremental income tax rate
of 40%
---------- ----------
149 1,264
---------- ----------
8
<PAGE>
Note 2 - Pro Forma Adjustments to Pro Forma Combined Condensed Balance Sheet as of July 3, 1999
(In thousands except in text)
Debit (Credit)
Advance to Affiliate
Decrease in advance to affiliate as a result of the use of $ (4,000)
$4,000,000 to fund the acquisition of OCA
----------
Parent Company Investment
Eliminate the Company's investment in OCA as a result of 4,000
consolidation
----------
9
<PAGE>
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(c) Exhibits
2.1 Purchase and Sale Agreement dated as of May 12, 1999, by and between
Thermo Vision Corporation and Corning OCA Corporation (filed as Exhibit
2.1 to the Registrant's Current Report on Form 8-K filed with the
Commission on July 28, 1999). Pursuant to Item 601(b)(2) of Regulation
S-K, schedules and exhibits to this Agreement have been omitted. The
Company hereby undertakes to furnish supplementally a copy of such
schedules and exhibits to the Commission upon request.
2.2 Amendment Agreement dated July 15, 1999, between Thermo Vision
Corporation and Corning OCA Corporation (filed as Exhibit 2.2 to the
Registrant's Current Report on Form 8-K filed with the Commission on
July 28, 1999).
23 Consent of Arthur Andersen LLP
10
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized, on this 23rd day of September 1999.
THERMO VISION CORPORATION
/s/ Paul F. Kelleher
Paul F. Kelleher
Chief Accounting Officer
</TABLE>
Exhibit 23
Consent of Independent Public Accountants
We consent to the incorporation by reference in the registration statement
(No. 333-67873) on Form S-8 of Thermo Vision Corporation of our report dated
August 27, 1999, with respect to the Statement of Assets Acquired, Liabilities
Assumed and Parent Company Investment of the Non-telecommunications Optical
Filter Business of Corning OCA Corporation, as of July 16, 1999, and the related
Statement of Revenues and Direct Costs and Expenses for the eight-month period
ended December 31, 1997, the twelve-month period ended December 31, 1998, and
the month ended January 30, 1999, appearing in this Amendment No. 1 on Form
8-K/A of Thermo Vision Corporation.
Arthur Andersen LLP
Boston, Massachusetts
September 22, 1999
