SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
---------------------------------------
FORM 10-Q
(mark one)
[ X ] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the Quarter Ended September 30, 1995.
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934.
Commission File Number 1-9567
THERMEDICS INC.
(Exact name of Registrant as specified in its charter)
Massachusetts 04-2788806
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
470 Wildwood Street, P.O. Box 2999
Woburn, Massachusetts 01888-1799
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (617) 622-1000
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the Registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [ X ] No [ ]
Indicate the number of shares outstanding of each of the
issuer's classes of Common Stock, as of the latest practicable
date.
Class Outstanding at October 27, 1995
---------------------------- -------------------------------
Common Stock, $.10 par value 33,957,479
PAGE
<PAGE>
Form 10-Q
September 30, 1995
THERMEDICS INC.
PART I - Financial Information
Item 1 - Financial Statements
(a)Consolidated Balance Sheet - Assets as of September 30, 1995 and
December 31, 1994 (In thousands) (Unaudited)
September 30, 1995 December 31, 1994
------------------ -----------------
Current Assets:
Cash and cash equivalents $ 34,204 $ 37,043
Short-term available-for-sale
investments, at quoted market
value (amortized cost of $72,358
and $72,731) (includes $2,135 of
related party investments in 1995) 73,426 71,680
Accounts receivable, less allowances
of $3,832 and $3,640 36,234 33,645
Unbilled contract costs and fees 3,690 497
Inventories:
Raw materials and supplies 15,320 13,223
Work in process 9,614 5,429
Finished goods 9,296 8,149
Prepaid income taxes and expenses 4,645 4,676
-------- --------
186,429 174,342
-------- --------
Property, Plant and Equipment, at Cost 27,817 24,367
Less: Accumulated depreciation and
amortization 16,463 13,640
-------- --------
11,354 10,727
-------- --------
Long-term Available-for-sale Investments,
at Quoted Market Value (amortized cost
of $48,178 and $46,863) 48,551 45,426
-------- --------
Other Assets 4,347 5,582
-------- --------
Cost in Excess of Net Assets of Acquired
Companies 57,735 55,490
-------- --------
$308,416 $291,567
======== ========
The accompanying notes are an integral part of these consolidated financial
statements.
2PAGE
<PAGE>
Form 10-Q
September 30, 1995
THERMEDICS INC.
(a)Consolidated Balance Sheet - Liabilities and Shareholders' Investment
as of September 30, 1995 and December 31, 1994 (In thousands except
share amounts) (Unaudited)
September 30, 1995 December 31, 1994
------------------ -----------------
Current Liabilities:
Notes payable and current
maturities of long-term obligations $ 9,097 $ 10,576
Accounts payable 12,515 9,481
Deferred revenue 1,407 2,463
Customer deposits 2,456 2,546
Accrued payroll and employee benefits 6,746 7,369
Accrued income taxes 3,585 582
Accrued warranty costs 3,608 3,380
Other accrued expenses 8,374 7,675
Due to parent company 1,318 1,940
-------- --------
49,106 46,012
-------- --------
Deferred Income Taxes and Other Items 1,660 1,565
-------- --------
Long-term Obligations:
Subordinated convertible obligations 60,665 82,385
Other 151 166
-------- --------
60,816 82,551
-------- --------
Minority Interest 43,241 29,674
-------- --------
Shareholders' Investment:
Common stock, $.10 par value, 50,000,000
shares authorized; 33,783,641 and
33,303,135 shares issued 3,378 3,330
Capital in excess of par value 111,362 102,975
Retained earnings 38,011 27,066
Treasury stock at cost, 4,234 and
14,671 shares (288) (310)
Cumulative translation adjustment 208 326
Net unrealized gain (loss) on available-
for-sale investments 922 (1,622)
-------- --------
153,593 131,765
-------- --------
$308,416 $291,567
======== ========
The accompanying notes are an integral part of these consolidated financial
statements.
3PAGE
<PAGE>
Form 10-Q
September 30, 1995
THERMEDICS INC.
(b)Consolidated Statement of Income for the three months ended
September 30, 1995 and October 1, 1994 (In thousands except per share
amounts) (Unaudited)
Three Months Ended
-----------------------------------
September 30, 1995 October 1, 1994
------------------ ---------------
Revenues $41,224 $41,578
------- -------
Costs and Operating Expenses:
Cost of revenues 23,629 23,099
Selling, general and administrative expenses 10,963 11,787
Expenses for research and development 2,592 2,598
------- -------
37,184 37,484
------- -------
Operating Income 4,040 4,094
Interest Income 2,240 1,810
Interest Expense (768) (738)
Gain on Issuance of Stock by Subsidiary 1,838 -
Gain on Sale of Investments 37 -
Other Income (includes $24 from
related party in 1994) - 24
------- -------
Income Before Provision for Income Taxes
and Minority Interest 7,387 5,190
Provision for Income Taxes 2,139 2,032
Minority Interest Expense 1,231 272
------- -------
Net Income $ 4,017 $ 2,886
======= =======
Earnings per Share $ .12 $ .09
======= =======
Weighted Average Shares 33,770 33,184
======= =======
The accompanying notes are an integral part of these consolidated financial
statements.
4PAGE
<PAGE>
Form 10-Q
September 30, 1995
THERMEDICS INC.
(b)Consolidated Statement of Income for the nine months ended
September 30, 1995 and October 1, 1994 (In thousands except per share
amounts) (Unaudited)
Nine Months Ended
-----------------------------------
September 30, 1995 October 1, 1994
------------------ ---------------
Revenues $128,350 $111,274
-------- --------
Costs and Operating Expenses:
Cost of revenues 71,630 63,565
Selling, general and administrative expenses 34,680 29,777
Expenses for research and development 7,822 7,655
-------- --------
114,132 100,997
-------- --------
Operating Income 14,218 10,277
Interest Income 6,670 5,411
Interest Expense (2,629) (2,283)
Gain on Issuance of Stock by Subsidiary 2,293 -
Gain on Sale of Investments 37 230
Other Income (includes $74 from
related party in 1994) 14 74
-------- --------
Income Before Provision for Income Taxes
and Minority Interest 20,603 13,709
Provision for Income Taxes 6,720 5,463
Minority Interest Expense 2,938 698
-------- --------
Net Income $ 10,945 $ 7,548
======== ========
Earnings per Share $ .33 $ .23
======== ========
Weighted Average Shares 33,564 32,743
======== ========
The accompanying notes are an integral part of these consolidated financial
statements.
5PAGE
<PAGE>
Form 10-Q
September 30, 1995
THERMEDICS INC.
(c)Consolidated Statement of Cash Flows for the nine months ended
September 30, 1995 and October 1, 1994 (In thousands) (Unaudited)
Nine Months Ended
-----------------------------------
September 30, 1995 October 1, 1994
------------------ ---------------
Operating Activities:
Net income $ 10,945 $ 7,548
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 4,066 3,088
Provision for losses on accounts
receivable 557 879
Gain on issuance of stock by subsidiary (2,293) -
Gain on sale of investments (37) (230)
Minority interest expense 2,938 698
Other noncash expenses 839 859
Increase (decrease) in deferred income
taxes (45) 384
Changes in current accounts, excluding
the effects of acquisitions:
Accounts receivable (1,740) (855)
Inventories and unbilled contract
costs and fees (9,590) 8,330
Prepaid income taxes and expenses (553) (3,070)
Accounts payable 2,630 (5,540)
Other current liabilities (3,299) (5,218)
Other - 5
-------- --------
Net cash provided by operating
activities 4,418 6,878
-------- --------
Investing Activities:
Acquisitions, net of cash acquired (4,155) (44,867)
Purchases of property, plant and equipment (3,339) (2,362)
Proceeds from sale and maturities of
available-for-sale investments 72,121 60,297
Purchases of available-for-sale investments (72,675) (73,651)
Other 25 (127)
-------- --------
Net cash used in investing
activities $ (8,023) $(60,710)
-------- --------
6PAGE
<PAGE>
Form 10-Q
September 30, 1995
THERMEDICS INC.
(c)Consolidated Statement of Cash Flows for the nine months ended
September 30, 1995 and October 1, 1994 (In thousands) (Unaudited)
(continued)
Nine Months Ended
-----------------------------------
September 30, 1995 October 1, 1994
------------------ ---------------
Financing Activities:
Purchases of subsidiary common stock $ (179) $ (3,231)
Net proceeds from issuance of Company
and subsidiary common stock 1,249 1,785
Net proceeds from issuance of subordinated
convertible debentures - 31,968
Issuance of note payable - 2,237
Repurchase of long-term obligations (132) -
-------- --------
Net cash provided by financing
activities 938 32,759
-------- --------
Exchange Rate Effect on Cash (172) 545
-------- --------
Decrease in Cash and Cash Equivalents (2,839) (20,528)
Cash and Cash Equivalents at Beginning
of Period 37,043 40,179
-------- --------
Cash and Cash Equivalents at End of Period $ 34,204 $ 19,651
======== ========
Cash Paid For:
Interest $ 2,113 $ 2,129
Income taxes $ 5,456 $ 3,281
Noncash Financing Activities:
Conversion of convertible obligations $ 21,571 $ 9,745
The accompanying notes are an integral part of these consolidated financial
statements.
7PAGE
<PAGE>
Form 10-Q
September 30, 1995
THERMEDICS INC.
(d) Notes to Consolidated Financial Statements - September 30, 1995
1. General
The interim consolidated financial statements presented have been
prepared by Thermedics Inc. (the Company) without audit and, in the opinion
of management, reflect all adjustments of a normal recurring nature
necessary for a fair statement of (a) the results of operations for the
three- and nine-month periods ended September 30, 1995 and October 1, 1994,
(b) the financial position at September 30, 1995, and (c) the cash flows
for the nine-month periods ended September 30, 1995 and October 1, 1994.
Interim results are not necessarily indicative of results for a full year.
The consolidated balance sheet presented as of December 31, 1994, has
been derived from the consolidated financial statements that have been
audited by the Company's independent public accountants. The consolidated
financial statements and notes are presented as permitted by Form 10-Q and
do not contain certain information included in the annual financial
statements and notes of the Company. The consolidated financial statements
and notes included herein should be read in conjunction with the financial
statements and notes included in the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 1994, filed with the Securities and
Exchange Commission.
Item 2 - Management's Discussion and Analysis of Financial Condition and
Results of Operations
Overview
The Company's business can be divided into two segments: Instruments
and Other Equipment, and Biomedical Products. Through the Company's
Thermedics Detection Inc. (Thermedics Detection) subsidiary, the
Instruments and Other Equipment segment develops, manufactures, and markets
high-speed detection instruments, including the Alexus (R) system, a
process detection instrument used in product quality assurance
applications, and the EGIS (R) system, a security instrument used to detect
explosives at airports and other locations. The Company's Ramsey Technology
Inc. (Ramsey) subsidiary manufactures sensor equipment that weighs and
inspects bulk materials and packaged goods. Through the Company's Thermo
Voltek Corp. (Thermo Voltek) subsidiary, the Instruments and Other
Equipment segment also includes a line of electronic test instruments and
high-voltage power conversion systems.
8PAGE
<PAGE>
Form 10-Q
September 30, 1995
THERMEDICS INC.
Item 2 - Management's Discussion and Analysis of Financial Condition and
Results of Operations (continued)
Overview (continued)
As part of its Biomedical Products segment, the Company's Thermo
Cardiosystems Inc. (Thermo Cardiosystems) subsidiary has developed two
implantable left ventricular-assist systems (LVAS), a pneumatic, or
air-driven system, and an electric version. In October 1994, the Company
announced that the U.S. Food and Drug Administration (FDA) granted approval
for commercial sales of the air-driven LVAS. With this approval, the
air-driven system is available for sale to cardiac centers throughout the
United States and the Company began earning a profit on the sale of such
systems in the fourth quarter of 1994. A profit cannot be earned from the
sale of an LVAS unless the FDA has approved the device for commercial
sales. In August 1995, the electric LVAS received the European Conformity
Mark (CE Mark), allowing commercial sales in all European Community
countries. The portable driver for the air-driven LVAS was granted the CE
Mark in early 1995. The Company also manufactures enteral feeding products
and a line of medical-grade polymers, which are used in catheters, tubing,
and non-medical products.
Results of Operations
Third Quarter 1995 Compared With Third Quarter 1994
---------------------------------------------------
Total revenues in the third quarter of 1995 were $41.2 million,
compared with $41.6 million in the third quarter of 1994. Instruments and
Other Equipment segment revenues decreased to $32.9 million in 1995 from
$33.3 million in 1994. Revenues at Thermedics Detection declined to $6.0
million in 1995 from $12.7 million in 1994. Thermedics Detection process
detection instrument sales declined to $3.9 million in 1995 from $8.1
million in 1994. This decline is due to a decrease in demand from
Thermedics Detection's principal customer, which has substantially
completed its deployment of Alexus product quality assurance systems. While
the Company has expanded its customer base, and continues to develop Alexus
upgrades and new applications for its process detection technology in the
food and beverage market, no assurance can be given that the Company will
be able to significantly broaden the market for its process detection
systems.
Thermedics Detection EGIS system sales declined to $877,000 in the
third quarter of 1995, from $4.2 million in 1994. The Company's sales of
the EGIS system have been made primarily to government entities outside of
the U.S. During 1993 and 1994, large orders from the U.K. and German
governments accounted for a significant portion of EGIS sales. These orders
have now been filled. Demand for this highly specialized product will vary
widely over time in a particular country, and among different countries,
due to many factors beyond the control of the Company, such as budgetary
constraints and social and political concerns about security. Due to the
nature of the demand for the EGIS system, future sales levels will depend,
9PAGE
<PAGE>
Form 10-Q
September 30, 1995
THERMEDICS INC.
Item 2 - Management's Discussion and Analysis of Financial Condition and
Results of Operations (continued)
Third Quarter 1995 Compared With Third Quarter 1994 (continued)
---------------------------------------------------
to a significant extent, upon the Company's ability to obtain large orders
from one or more government entities. These declines in revenues were
offset in part by higher revenue from research and development contracts to
develop new detection instruments.
Revenues from Thermo Voltek increased $3.7 million due to an increase
of $1.7 million in revenues at Comtest, due primarily to the introduction
of a new product line in 1995, and due to the inclusion of $1.4 million in
revenues from Kalmus Engineering Incorporated (Kalmus), which was acquired
in March 1995. In addition, revenues from Ramsey increased by $2.6 million
from the third quarter of 1994 due to an increase in demand.
Biomedical Products segment revenues remained unchanged at $8.3
million in the third quarter of 1995 and 1994. Revenues at Thermo
Cardiosystems increased by $2.5 million to $5.1 million in 1995 from 1994
due to an increase in the price of the LVAS that was phased in during the
fourth quarter of 1994 and the first two quarters of 1995, and an increase
in the number of air-driven and electric LVAS implants. The number of LVAS
units shipped during the third quarter of 1995 increased by 37% compared
with the third quarter of 1994. The increase in revenues at Thermo
Cardiosystems was offset by a decline of $2.4 million in revenues from
Scent Seal fragrance samplers. In June 1995, the Company entered into an
agreement granting an exclusive license to all of its patents and know-how
relating to the Scent Seal fragrance samplers to a third party in
consideration for royalty payments on future sales by the licensee.
In July 1995, Thermo Cardiosystems instituted a voluntary recall of an
inflow valve conduit used in its LVAS. The recall was instituted after
Thermo Cardiosystems determined that, on several occasions, one of the
valve components may have abraded the valve conduit material, causing a
blood leak. While the recall did not result in the suspension of sales of
the LVAS, the Company believes that the recall temporarily impacted orders
and total sales for the third quarter. Sales for the months of July and
August were low, with July having the lowest monthly sales since
commercialization, while sales in September were the highest ever attained.
Although the Company believes that Thermo Cardiosystems has corrected this
problem with the inflow valve conduit, no assurance can be given that
similar problems will not arise in the future.
The gross profit margin was 43% in the third quarter of 1995, compared
with 44% in the third quarter of 1994. The gross profit margin for the
Instruments and Other Equipment segment decreased to 40% in 1995 from 46%
in 1994. This decline was due primarily to lower gross profit margins at
Thermedics Detection due primarily to the lower sales volume and, to a
10PAGE
<PAGE>
Form 10-Q
September 30, 1995
THERMEDICS INC.
Item 2 - Management's Discussion and Analysis of Financial Condition and
Results of Operations (continued)
Third Quarter 1995 Compared With Third Quarter 1994 (continued)
---------------------------------------------------
lesser extent, the inclusion of greater revenues from lower-margin research
and development contracts. In addition, Thermo Voltek had lower gross
profit margins due primarily to higher European sales in one product line,
which has lower margins due to competitive pricing pressure.
The gross profit margin for the Biomedical Products segment increased
to 52% in 1995 from 39% in 1994, reflecting higher margins at Thermo
Cardiosystems resulting from the LVAS price increase, the increase in sales
volume, and improvements in manufacturing efficiencies. In addition, the
third quarter of 1994 included lower-margin revenues from Scent Seal
fragrance samplers.
Selling, general and administrative expenses as a percentage of
revenues decreased to 27% in the third quarter of 1995 from 28% in the
third quarter of 1994. The decrease was due primarily to lower costs as a
percentage of revenues at Thermo Cardiosystems as a result of the higher
sales volume in 1995. Research and development expenses as a percentage of
revenues remained relatively unchanged at 6.3% in 1995 and 6.2% in 1994.
Interest income increased to $2.2 million in the third quarter of 1995
from $1.8 million in the third quarter of 1994 due to higher prevailing
interest rates in 1995. Interest expense increased to $768,000 in 1995 from
$738,000 in 1994 as a result of borrowings by Ramsey's and Thermo Voltek's
foreign subsidiaries, offset in part by a decrease in interest expense due
to conversions of subordinated convertible obligations.
The gain on the issuance of stock by subsidiary of $1.8 million in the
third quarter of 1995 resulted from the conversion of $4.6 million
principal amount of Thermo Voltek's 3 3/4% subordinated convertible
debentures.
The effective tax rate in the third quarter of 1995 was below the
statutory federal income tax rate due primarily to the nontaxable gain on
the issuance of stock by subsidiary.
Minority interest expense increased to $1.2 million in the third
quarter of 1995 from $272,000 in the third quarter of 1994 due to higher
profits at the Company's 53%-owned Thermo Cardiosystems subsidiary and, to
a lesser extent, the Company's 53%-owned Thermo Voltek subsidiary.
11PAGE
<PAGE>
Form 10-Q
September 30, 1995
THERMEDICS INC.
Item 2 - Management's Discussion and Analysis of Financial Condition and
Results of Operations (continued)
First Nine Months 1995 Compared With First Nine Months 1994
-----------------------------------------------------------
Total revenues in the first nine months of 1995 were $128.4 million,
compared with $111.3 million in the first nine months of 1994. Instruments
and Other Equipment segment revenues increased 11% to $98.5 million in 1995
from $88.7 million in 1994. Revenues increased $16.8 million due to the
inclusion of sales for a full nine months from Ramsey, which was acquired
March 16, 1994; and due to an increase in revenues from Thermo Voltek of
$9.1 million, including $4.5 million due to the inclusion of revenues from
businesses acquired in 1994 and 1995, and an increase of $2.8 million in
revenues from Comtest due primarily to the introduction of a new product
line in 1995. Revenues at Thermedics Detection were $22.2 million in 1995,
compared with $38.2 million in 1994. Revenues from Thermedics Detection's
process detection instruments declined to $14.6 million in 1995 from $28.5
million in 1994, and EGIS system revenues declined to $3.6 million in 1995
from $8.3 million in 1994. These declines in revenues were offset in part
by higher revenue from research and development contracts to develop new
detection instruments. The reasons for the decreases in revenues are the
same as those discussed in the results of operations for the third quarter.
Biomedical Products segment revenues increased 32% to $29.8 million in
the first nine months of 1995 from $22.6 million in the first nine months
of 1994. Revenues from Thermo Cardiosystems increased by $8.2 million to
$15.0 million due to an increase in the price of the LVAS discussed in the
results of operations for the third quarter and an increase in the number
of air-driven and electric LVAS implants. The number of LVAS units shipped
during the first nine months of 1995 increased by 59% compared with the
first nine months of 1994. The increase in revenues from Thermo
Cardiosystems was partially offset by a decline of $1.4 million in revenues
from Scent Seal fragrance samplers due to the reason discussed in the
results of operations for the third quarter.
The gross profit margin was 44% in the first nine months of 1995,
compared with 43% in the first nine months of 1994. The gross profit margin
for the Instruments and Other Equipment segment was 43% in 1995 and 44% in
1994. Thermedics Detection's gross profit margin decreased in 1995 from
1994 as a result of lower sales volume and, to a lesser extent, the
inclusion of lower-margin research and development contract revenue. In
addition, Thermo Voltek's gross profit margin decreased in 1995 from 1994
due primarily to higher European sales in one product line, which has lower
margins due to competitive pricing pressure. These decreases were offset in
part by improved gross profit margins at Ramsey due to a reduction in
operating expenses. The gross profit margin for the Biomedical Products
segment was 49% in 1995, compared with 39% in 1994, reflecting higher
margins at Thermo Cardiosystems resulting from the LVAS price increase, the
increase in sales volume, and improvements in manufacturing efficiencies.
12PAGE
<PAGE>
Form 10-Q
September 30, 1995
THERMEDICS INC.
Item 2 - Management's Discussion and Analysis of Financial Condition and
Results of Operations (continued)
First Nine Months 1995 Compared With First Nine Months 1994 (continued)
-----------------------------------------------------------
Selling, general and administrative expenses as a percentage of
revenues remained unchanged at 27% in the first nine months of 1995 and
1994. Research and development expenses as a percentage of revenues
decreased to 6.1% in 1995 from 6.9% in 1994 due primarily to lower costs as
a percentage of revenues at Thermo Cardiosystems as a result of a higher
sales volume in 1995.
Interest income increased to $6.7 million in the first nine months of
1995 from $5.4 million in the first nine months of 1994 due to higher
prevailing interest rates in 1995. Interest expense increased to $2.6
million in 1995 from $2.3 million in 1994 as a result of borrowings by
Ramsey's and Thermo Voltek's foreign subsidiaries, offset in part by a
decrease in interest expense due to conversions of subordinated convertible
obligations.
The gain on the issuance of stock by subsidiary of $2.3 million in
1995 resulted from the conversion of $5.6 million principal amount of
Thermo Voltek's 3 3/4% subordinated convertible debentures.
The effective tax rate in the first nine months of 1995 was below the
statutory federal income tax rate due primarily to the nontaxable gains on
the issuance of stock by subsidiary.
Minority interest expense increased to $2.9 million in the first nine
months of 1995 from $698,000 in the first nine months of 1994 due to higher
profits at the Company's 53%-owned Thermo Cardiosystems subsidiary and, to
a lesser extent, the Company's 53%-owned Thermo Voltek subsidiary.
Financial Condition
Liquidity and Capital Resources
-------------------------------
Working capital, including cash, cash equivalents, and short-term
available-for-sale investments, was $137.3 million at September 30, 1995,
compared with $128.3 million at December 31, 1994. Cash, cash equivalents,
and short- and long-term available-for-sale investments were $156.2 million
at September 30, 1995, compared with $154.1 million at December 31, 1994.
Of the $156.2 million balance at September 30, 1995, $88.8 million was held
by Thermo Cardiosystems, $33.9 million by Thermo Voltek, and the remainder
by the Company and its wholly owned subsidiaries. In March 1995, Thermo
Voltek acquired substantially all of the assets, subject to certain
liabilities, of Kalmus for $3.8 million in cash.
The Company intends, for the foreseeable future, to maintain at least
50% ownership of Thermo Cardiosystems and Thermo Voltek. This may require
the purchase by the Company of additional shares of common stock or
convertible debentures (which are then converted) of these two companies
13PAGE
<PAGE>
Form 10-Q
September 30, 1995
THERMEDICS INC.
Item 2 - Management's Discussion and Analysis of Financial Condition and
Results of Operations (continued)
Liquidity and Capital Resources (continued)
-------------------------------
from time to time, if the number of the companies' outstanding shares
increases, whether as a result of conversion of convertible notes or
exercise of stock options issued by them, or otherwise. These or any other
purchases may be made either in the open market or directly from Thermo
Cardiosystems, Thermo Voltek or Thermo Electron Corporation (Thermo
Electron), or pursuant to the conversion of all or part of the
subsidiaries' subordinated convertible notes held by Thermedics. The
Company's Board of Directors has authorized the purchase, during calendar
year 1995, of up to $5.0 million of its own securities and those of Thermo
Cardiosystems and Thermo Voltek. Any such purchases would be funded from
working capital. Through September 30, 1995, the Company had expended
$311,000 under this authorization.
On July 20, 1995, Thermo Electron announced that it had signed a
letter of intent to acquire Analytical Technology, Inc. (ATI), a
Boston-based manufacturer and marketer of analytical instruments used
primarily for testing and analysis, both in laboratories and in
manufacturing. ATI operates through two divisions: laboratories and
analytical instruments. Upon completion of the acquisition, it is
anticipated that the Company would acquire the laboratory products
division, which had revenues of approximately $46 million in 1994. This
division sells electrochemistry, micro-weighing, and other instruments to
detect the chemical composition of foods, beverages, and pharmaceuticals.
The Company expects that it will finance this acquisition through a
combination of internal funds and short-term borrowings from Thermo
Electron. The completion of the acquisition is subject to several
conditions, including execution of a mutually satisfactory acquisition
agreement, obtaining applicable regulatory approvals and other customary
conditions to closing.
During the remainder of 1995, the Company expects to make capital
expenditures of approximately $2.0 million. The Company expects to continue
to pursue its strategy of expanding its business both through the continued
development, manufacture, and sale of new products, and through the
possible acquisition of companies that will provide additional marketing or
manufacturing capabilities and new products. The Company believes its
existing resources are sufficient to meet the capital requirements of its
existing operations for the foreseeable future.
PART II - Other Information
Item 6 - Exhibits
See Exhibit Index on the page immediately preceding exhibits.
14PAGE
<PAGE>
Form 10-Q
September 30, 1995
THERMEDICS INC.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized as of the 3rd day of November
1995.
THERMEDICS INC.
Paul F. Kelleher
------------------------
Paul F. Kelleher
Chief Accounting Officer
John N. Hatsopoulos
------------------------
John N. Hatsopoulos
Vice President and
Chief Financial Officer
15PAGE
<PAGE>
Form 10-Q
September 30, 1995
THERMEDICS INC.
EXHIBIT INDEX
Exhibit
Number Document Page
------- ----------------------------------------------------- ----
27 Financial Data Schedule.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THERMEDICS
INC.'S QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 1995
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-30-1995
<PERIOD-END> SEP-30-1995
<CASH> 34,204
<SECURITIES> 73,426
<RECEIVABLES> 36,234
<ALLOWANCES> 3,832
<INVENTORY> 34,230
<CURRENT-ASSETS> 186,429
<PP&E> 27,817
<DEPRECIATION> 16,463
<TOTAL-ASSETS> 308,416
<CURRENT-LIABILITIES> 49,106
<BONDS> 60,816
<COMMON> 3,378
0
0
<OTHER-SE> 150,215
<TOTAL-LIABILITY-AND-EQUITY> 308,416
<SALES> 41,224
<TOTAL-REVENUES> 41,224
<CGS> 23,629
<TOTAL-COSTS> 23,629
<OTHER-EXPENSES> 37,184
<LOSS-PROVISION> 557
<INTEREST-EXPENSE> 768
<INCOME-PRETAX> 7,387
<INCOME-TAX> 2,319
<INCOME-CONTINUING> 4,017
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,017
<EPS-PRIMARY> .12
<EPS-DILUTED> 0
</TABLE>
