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 March 29, 1997.
[ ] 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 April 25, 1997
---------------------------- -----------------------------
Common Stock, $.10 par value 36,698,118
PAGE
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PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
THERMEDICS INC.
Consolidated Balance Sheet
(Unaudited)
Assets
March 29, December 28,
(In thousands) 1997 1996
-----------------------------------------------------------------------
Current Assets:
Cash and cash equivalents $130,252 $ 82,800
Short-term available-for-sale
investments, at quoted market
value (amortized cost of $65,872 and
$64,950; includes $1,817 and $1,937
of related-party investments) 65,272 65,054
Accounts receivable, less allowances
of $4,891 and $4,641 58,545 62,783
Inventories:
Raw materials and supplies 23,570 28,209
Work in process and finished goods 32,535 26,021
Prepaid income taxes and expenses 15,264 14,713
-------- --------
325,438 279,580
-------- --------
Property, Plant, and Equipment, at Cost 50,560 48,892
Less: Accumulated depreciation and
amortization 28,897 27,342
-------- --------
21,663 21,550
-------- --------
Long-term Available-for-sale Investments,
at Quoted Market Value (amortized cost
of $19,594 and $33,929) 19,588 33,920
-------- --------
Other Assets 8,326 7,885
-------- --------
Cost in Excess of Net Assets of Acquired
Companies 113,297 113,764
-------- --------
$488,312 $456,699
======== ========
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THERMEDICS INC.
Consolidated Balance Sheet (continued)
(Unaudited)
Liabilities and Shareholders' Investment
March 29, December 28,
(In thousands except share amounts) 1997 1996
------------------------------------------------------------------------
Current Liabilities:
Notes payable and current maturities
of long-term obligations $ 5,897 $ 9,017
Accounts payable 18,993 19,615
Accrued payroll and employee benefits 9,949 11,951
Deferred revenue 1,640 1,397
Accrued income taxes 7,512 5,438
Accrued warranty costs 3,889 3,971
Other accrued expenses 19,622 18,421
Due to parent company and affiliated companies 2,404 1,600
-------- --------
69,906 71,410
-------- --------
Deferred Income Taxes and Other Deferred Items 1,411 1,382
-------- --------
Long-term Obligations:
Subordinated convertible obligations 73,451 74,345
Other 14 14
-------- --------
73,465 74,359
-------- --------
Minority Interest 116,260 97,966
-------- --------
Shareholders' Investment:
Common stock, $.10 par value, 100,000,000
shares authorized; 36,846,175 and
33,842,500 shares issued 3,685 3,684
Capital in excess of par value 133,458 138,433
Retained earnings 96,508 74,542
Treasury stock at cost, 154,469 and 166,144
shares (4,348) (4,729)
Cumulative translation adjustment (1,645) (409)
Net unrealized gain (loss) on available-for-
sale investments (388) 61
-------- --------
227,270 211,582
-------- --------
$488,312 $456,699
======== ========
The accompanying notes are an integral part of these consolidated
financial statements.
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THERMEDICS INC.
Consolidated Statement of Income
(Unaudited)
Three Months Ended
-----------------------
March 29, March 30,
(In thousands except per share amounts) 1997 1996
------------------------------------------------------------------------
Revenues $72,057 $68,994
------- -------
Costs and Operating Expenses:
Cost of revenues 36,961 35,809
Selling, general, and administrative expenses 21,964 20,964
Research and development expenses 5,584 4,974
------- -------
64,509 61,747
------- -------
Operating Income 7,548 7,247
Interest Income 2,637 2,106
Interest Expense (269) (1,278)
Gain on Issuance of Stock by Subsidiaries (Note 3) 17,075 2,516
Gain on Sale of Investments - 68
------- -------
Income Before Provision for Income Taxes and
Minority Interest 26,991 10,659
Provision for Income Taxes 3,764 3,332
Minority Interest Expense 1,261 2,070
------- -------
Net Income $21,966 $ 5,257
======= =======
Earnings per Share $ .56 $ .15
======= =======
Weighted Average Shares 38,956 35,597
======= =======
The accompanying notes are an integral part of these consolidated
financial statements.
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THERMEDICS INC.
Consolidated Statement of Cash Flows
(Unaudited)
Three Months Ended
-----------------------
March 29, March 30,
(In thousands) 1997 1996
------------------------------------------------------------------------
Operating Activities:
Net income $ 21,966 $ 5,257
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 2,563 2,882
Provision for losses on accounts receivable 202 254
Gain on issuance of stock by subsidiaries (17,075) (2,516)
Gain on sale of investments - (68)
Minority interest expense 1,261 2,070
Other noncash expenses 16 37
Changes in current accounts, excluding
the effects of acquisitions:
Accounts receivable 2,906 (5,064)
Inventories (2,389) (1,522)
Prepaid income taxes and expenses (443) 182
Accounts payable (225) 1,312
Other current liabilities 2,142 5,612
-------- --------
Net cash provided by operating activities 10,924 8,436
-------- --------
Investing Activities:
Acquisitions, net of cash acquired (1,059) (25,797)
Proceeds from sale and maturities of
available-for-sale investments 32,008 38,914
Purchases of available-for-sale investments (18,596) (26,247)
Purchases of property, plant, and equipment (2,163) (2,187)
Other 147 (2,657)
-------- --------
Net cash provided by (used in) investing
activities $ 10,337 $(17,974)
-------- --------
5PAGE
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THERMEDICS INC.
Consolidated Statement of Cash Flows (continued)
(Unaudited)
Three Months Ended
-----------------------
March 29, March 30,
(In thousands) 1997 1996
------------------------------------------------------------------------
Financing Activities:
Net proceeds from issuance of Company and
subsidiary common stock (Note 3) $ 28,446 $ 3,898
Purchases of Company and subsidiaries
common stock (3,911) -
International Technidyne transfer (to) from
parent company 384 (2,338)
Proceeds from issuance of note payable to
parent company - 15,000
Repayment and repurchase of long-term
obligations - (257)
Net decrease in short-term borrowings 773 4,668
-------- --------
Net cash provided by financing activities 25,692 20,971
-------- --------
Exchange Rate Effect on Cash 499 (101)
-------- --------
Increase in Cash and Cash Equivalents 47,452 11,332
Cash and Cash Equivalents at Beginning of Period 82,800 37,413
-------- --------
Cash and Cash Equivalents at End of Period $130,252 $ 48,745
======== ========
Noncash Activities:
Fair value of assets of acquired companies $ 1,433 $ 30,792
Cash paid for acquired companies (1,059) (26,826)
-------- --------
Liabilities assumed of acquired companies $ 374 $ 3,966
======== ========
Conversions of the Company's and subsidiaries'
subordinated convertible obligations $ 4,650 $ 12,290
======== ========
The accompanying notes are an integral part of these consolidated
financial statements.
6PAGE
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THERMEDICS INC.
Notes to Consolidated Financial Statements
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 the financial position at March
29, 1997, the results of operations for the three-month periods ended
March 29, 1997, and March 30, 1996, and the cash flows for the
three-month periods ended March 29, 1997, and March 30, 1996. Interim
results are not necessarily indicative of results for a full year.
Historical financial results have been restated to include
International Technidyne Corporation (International Technidyne), which
was acquired by the Company's majority-owned subsidiary, Thermo
Cardiosystems Inc. (Thermo Cardiosystems), in a transaction accounted for
in a manner similar to a pooling-of-interests (Note 2). 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 28, 1996, filed
with the Securities and Exchange Commission.
2. Acquisition
In March 1997, Thermo Cardiosystems announced its intention to
acquire International Technidyne from Thermo Electron Corporation (Thermo
Electron), the Company's parent company, in a merger in which
approximately 3,356,000 shares of Thermo Cardiosystems' common stock
would be issued in exchange for all of the outstanding shares of
International Technidyne. On May 2, 1997, the transaction was completed,
subject to Thermo Cardiosystems' shareholder approval of the issuance of
the 3,355,705 Thermo Cardiosystems' shares issued to Thermo Electron in
the merger. International Technidyne is a leading manufacturer of
near-patient, whole-blood, coagulation-testing equipment and related
disposables and also manufactures single-use, premium-priced,
skin-incision devices. In 1996, International Technidyne's revenues and
net income were $34.0 million and $4.7 million, respectively.
Because Thermo Cardiosystems and International Technidyne were deemed
for accounting purposes to be under control of their common majority
owner, Thermo Electron, the transaction has been accounted for at
historical cost in a manner similar to a pooling-of-interests.
Accordingly, all historical financial information presented has been
restated to reflect the acquisition of International Technidyne. The
3,355,705 shares of Thermo Cardiosystems' common stock issuable in
exchange for International Technidyne will not be issued until the
listing of such shares for trading upon American Stock Exchange has been
approved by Thermo Cardiosystems' shareholders. Because the Company is
the majority shareholder and intends to vote its shares in favor of such
listing, the approval is assured and, therefore, the acquisition is
considered to be complete as of January 1, 1996. Revenues and net
7PAGE
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THERMEDICS INC.
2. Acquisition (continued)
income as previously reported for the separate entities prior to the
acquisition and as restated for the combined company are as follows:
Three Months Ended
(In thousands) March 30, 1996
-----------------------------------------------------------------------
Revenues:
Historical $60,282
International Technidyne 8,712
-------
$68,994
=======
Net Income:
Historical $ 4,753
International Technidyne 1,020
Minority interest expense (516)
-------
$ 5,257
=======
3. Issuance of Stock by Subsidiary
In March 1997, the Company's Thermedics Detection Inc. (Thermedics
Detection) subsidiary issued 2,671,292 shares of its common stock in an
initial public offering at $11.50 per share, for net proceeds of
approximately $28.1 million, resulting in a gain of $17.1 million.
Following the initial public offering, the Company owned 75% of
Thermedics Detection's outstanding common stock.
Item 2 - Management's Discussion and Analysis of Financial Condition and
Results of Operations
Forward-looking statements, within the meaning of Section 21E of the
Securities Exchange Act of 1934, are made throughout this Management's
Discussion and Analysis of Financial Condition and Results of Operations.
For this purpose, any statements contained herein that are not statements
of historical fact may be deemed to be forward-looking statements.
Without limiting the foregoing, the words "believes," "anticipates,"
"plans," "expects," "seeks," "estimates," and similar expressions are
intended to identify forward-looking statements. There are a number of
important factors that could cause the results of the Company to differ
materially from those indicated by such forward-looking statements,
including those detailed under the caption "Forward-looking Statements"
in Exhibit 13 to the Company's Annual Report on form 10-K, as amended,
for the fiscal year ended December 28, 1996, filed with the Securities
and Exchange Commission.
8PAGE
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THERMEDICS INC.
Overview
The Company's business can be divided into two segments: Instruments
and Other Equipment, and Biomedical Products. The Instruments and Other
Equipment segment includes the Company's Thermo Sentron Inc. (Thermo
Sentron) subsidiary, which designs, develops, manufactures, and sells
high-speed precision-weighing and inspection equipment for industrial
production and packaging lines; its Orion laboratory products division
(Orion), which manufactures electrochemistry, microweighing, process, and
other instruments used to analyze the chemical compositions of foods,
beverages, and pharmaceuticals, and to detect contaminants in high-purity
water; its Thermedics Detection Inc. (Thermedics Detection) subsidiary,
which develops, manufactures, and markets high-speed detection
instruments used in on-line industrial process applications, explosives
detection, and laboratory analysis; and its Thermo Voltek Corp. (Thermo
Voltek) subsidiary, which manufactures electromagnetic compatibility
(EMC) testing instruments, high-voltage power-conversion systems,
programmable power amplifiers, and radio frequency power amplifiers.
As part of its Biomedical Products segment, the Company's Thermo
Cardiosystems Inc. (Thermo Cardiosystems) subsidiary manufactures
implantable left ventricular-assist systems (LVAS). Thermo Cardiosystems'
electric LVAS is being used in Europe as a bridge to transplant and as an
alternative to medical therapy. According to terms set by the U.S. Food
and Drug Administration (FDA), no profit can be earned from the sale of
an LVAS in the U.S. until the FDA has approved the device for commercial
sale. With the FDA's approval, the Company began earning a profit on the
sale of its air-driven LVAS in the fourth quarter of 1994. Until FDA
approval has been obtained, the Company may not earn a profit on the sale
in the U.S. of other products, such as the electric LVAS, currently used
in clinical studies. Thermo Cardiosystems' International Technidyne
Corporation (International Technidyne) subsidiary (Note 2) is a leading
manufacturer of near-patient, whole-blood, coagulation-testing equipment
and related disposables and also manufactures single-use, premium-priced,
skin-incision devices. The Company also develops and manufactures enteral
nutrition-delivery systems and a line of medical-grade polymers used in
medical disposables and nonmedical, industrial applications, including
safety glass and automotive coatings.
A significant amount of the Company's revenues are derived from sales
of products outside of the U.S., through export sales and sales by the
Company's foreign subsidiaries. The Company expects an increase in the
percentage of revenues derived from international operations. Although
the Company seeks to charge its customers in the same currency as its
operating costs, the Company's financial performance and competitive
position can be affected by currency exchange rate fluctuations between
the U.S. dollar and foreign currencies. Where appropriate, the Company
uses forward contracts to reduce its exposure to currency fluctuations.
9PAGE
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THERMEDICS INC.
Results of Operations
First Quarter 1997 Compared With First Quarter 1996
Total revenues in the first quarter of 1997 were $72.1 million,
compared with $69.0 million in the first quarter of 1996. Instruments and
Other Equipment segment revenues increased to $53.2 million in 1997 from
$49.8 million in 1996, primarily due to an increase in revenues of $3.1
million and $1.3 million at Thermedics Detection and Thermo Sentron,
respectively, offset in part by a $0.9 million decline in revenues at
Thermo Voltek. Revenues at Thermedics Detection increased to $12.4
million in 1997 from $9.3 million in 1996. Revenue from Thermedics
Detection's process detection instruments increased to $4.7 million in
1997 from $1.3 million in 1996, primarily as a result of the continued
fulfillment of a mandated product-line upgrade from The Coca-Cola Company
to its existing installed base and, to a lesser extent, increased
shipments of its InScan systems, introduced in early 1996. Revenues from
the mandated product-line upgrade are expected to continue through the
third quarter of 1997. Revenues from Thermedics Detection's EGIS
explosives-detection systems and related services decreased to $1.0
million in 1997 from $2.9 million in 1996, primarily due to reduced
demand in 1997 when compared with the sale in 1996 of eight EGIS systems
to the U.S. government to provide counter-terrorism support in Israel. In
May 1997, Thermedics Detection was awarded a $6.2 million contract for
its EGIS systems from the Federal Aviation Administration. Revenues from
Thermedics Detection's Moisture Systems subsidiary, acquired in the first
quarter of 1996, increased $1.1 million, primarily due to the inclusion
of revenues for the full quarter in 1997. Revenues from Thermo Sentron
increased to $18.0 million in 1997 from $16.7 million in 1996, primarily
due to the inclusion of revenues from the Endress + Hauser, Inc.
solids-flow measurement product line, purchased in April 1996, and RCC
Industrial Pty. Limited, acquired in February 1997. Revenues from Thermo
Voltek decreased to $9.7 million in 1997 from $10.6 million in 1996,
primarily due to a decline in revenues at Comtest and Keytek, offset in
part by the inclusion of $1.7 million in revenues from Pacific Power
Source Corporation, acquired in July 1996. The decline in revenues
resulted primarily from lower demand for EMC test products and, to a
lesser extent, a decline in the component-reliability market for
electrostatic discharge test equipment caused by a slowdown in capital
expenditures by the semiconductor industry.
Biomedical Products segment revenues declined slightly to $18.8
million in the first quarter of 1997 from $19.2 million in the first
quarter of 1996. Revenues from Thermo Cardiosystems decreased to $14.9
million in 1997 from $15.4 million in 1996, primarily due to a $1.7
million decrease in revenues from its air-driven LVAS, offset in part by
a $0.7 million increase in revenues from its electric LVAS. The Company
expects that revenues from Thermo Cardiosystems' LVAS will stabilize at
current levels until the electric system is approved in the U.S. for
commercial sale and for use outside the hospital. The Company believes
that this approval could occur during 1997, however, there can be no
assurance that Thermo Cardiosystems will receive this approval within the
expected time period, or at all. Revenues from Thermo Cardiosystems' LVAS
were also adversely affected by a slowdown in orders in response to a
modification initiated by Thermo Cardiosystems of certain of its systems
10PAGE
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THERMEDICS INC.
First Quarter 1997 Compared With First Quarter 1996 (continued)
in the field. The modification was completed in the first quarter of
1997. The decrease in revenues in 1997 was also offset in part by the
inclusion of $0.6 million in revenues from Nimbus Medical Inc. (Nimbus),
acquired in December 1996, and, to a lesser extent, an increase in
revenues from International Technidyne.
The gross profit margin was 49% in the first quarter of 1997,
compared with 48% in the first quarter of 1996. The gross profit margin
for the Instruments and Other Equipment segment increased to 47% in 1997
from 46% in 1996, as a result of a change in product mix and field
service efficiencies at Thermedics Detection and the inclusion of
higher-margin revenues at Orion. To a lesser extent, gross profit margin
increased due to the inclusion of higher-margin revenues at Moisture
Systems for the full quarter in 1997. These increases were offset in part
by a decrease in the gross profit margin at Thermo Voltek, primarily due
to the sale of lower-margin products and the effect of a decrease in
revenues.
The gross profit margin for the Biomedical Products segment decreased
to 53% in the first quarter of 1997 from 54% in the first quarter of
1996. This decrease was primarily due to a decline in the gross profit
margin at Thermo Cardiosystems as a result of increased warranty costs
associated with the LVAS modification and, to a lesser extent, the
inclusion of low-margin revenues from Nimbus. These decreases were offset
in part by an increase in gross profit margin at International Technidyne
and in the Company's polymer products business as a result of
manufacturing efficiencies.
Selling, general, and administrative expenses as a percentage of
revenues remained unchanged at 30% in the first quarters of 1997 and
1996. Higher marketing expenses as a result of an increase in sales force
at Thermo Cardiosystems and Thermedics Detection and, to a lesser extent,
increased expenses as a percentage of revenues at Thermo Voltek due to a
decrease in revenues, were offset by lower general and administrative
expenses at Thermedics Detection as a result of an increase in revenues
in 1997 and nonrecurring costs in 1996. The nonrecurring costs in 1996
related to a reduction in personnel and other adjustments. Research and
development expenses as a percentage of revenues increased to 7.7% in the
first quarter of 1997 from 7.2% in the first quarter of 1996, primarily
due to increased research and development expenses at Thermo
Cardiosystems and, to a lesser extent, a decrease in revenues at Thermo
Voltek.
Interest income increased to $2.6 million in the first quarter of
1997 from $2.1 million in the first quarter of 1996, primarily due to
higher average invested balances, primarily at Thermo Sentron as a result
of its second quarter 1996 initial public offering. Interest expense
decreased to $0.3 million in the first quarter of 1997 from $1.3 million
in the first quarter of 1996, as a result of conversions of subordinated
convertible obligations and a reduction in short-term borrowings at
Thermo Sentron.
11PAGE
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THERMEDICS INC.
First Quarter 1997 Compared With First Quarter 1996 (continued)
The Company has adopted a strategy of spinning out certain of its
businesses into separate subsidiaries and having these subsidiaries sell
a minority interest to outside investors. The Company believes that this
strategy provides additional motivation and incentives for the management
of the subsidiaries through the establishment of subsidiary-level stock
option incentive programs, as well as capital to support the
subsidiaries' growth. As a result of the sale of stock by subsidiaries,
the Company recorded gains of approximately $17.1 million in the first
quarter of 1997 and $2.5 million in the first quarter of 1996 (Note 3).
The size and timing of these transactions are dependent on market and
other conditions that are beyond the Company's control. Accordingly,
there can be no assurance that the Company will be able to realize gains
from such transactions in the future.
The effective tax rates in the first quarters of 1997 and 1996 were
below the federal income tax rate primarily due to nontaxable gains on
issuance of stock by subsidiaries, offset in part by the impact of state
income taxes and the nondeductible amortization of cost in excess of net
assets of acquired companies.
Minority interest expense in the first quarter of 1997 decreased to
$1.3 million from $2.1 million in the first quarter of 1996 due to lower
profits at Thermo Cardiosystems and a net loss at Thermo Voltek, offset
in part by the minority interest associated with Thermo Sentron.
Liquidity and Capital Resources
Consolidated working capital was $255.5 million at March 29, 1997,
compared with $208.2 million at December 28, 1996. Cash, cash
equivalents, and short- and long-term available-for-sale investments were
$215.1 million at March 29, 1997, compared with $181.8 million at
December 28, 1996. Of the $215.1 million balance at March 29, 1997, $82.5
million was held by Thermo Cardiosystems, $47.3 million by Thermedics
Detection, $34.2 million by Thermo Sentron, $28.5 million by Thermo
Voltek, and the remainder by the Company and its wholly owned
subsidiaries.
During the first quarter of 1997, $10.9 million of cash was provided
by operating activities. Cash of $5.0 million, provided by a decrease in
accounts receivable and an increase in other current liabilities, was
offset in part by cash of $2.4 million used to fund an increase in
inventories.
Excluding purchases, sales, and maturities of available-for-sale
investments, the Company's primary investing activities during the first
quarter of 1997 included $2.2 million for purchases of property, plant,
and equipment and $1.1 million for an acquisition. During the remainder
of 1997, the Company expects to make capital expenditures of
approximately $5.8 million.
During the first quarter of 1997, the Company expended approximately
$25.7 million for financing activities. In March 1997, Thermedics
Detection issued shares of its common stock in an initial public offering
for net proceeds of approximately $28.1 million (Note 3).
12PAGE
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THERMEDICS INC.
Liquidity and Capital Resources (continued)
The Company intends, for the foreseeable future, to maintain at least
50% ownership of Thermo Cardiosystems, Thermo Voltek, Thermo Sentron, and
Thermedics Detection. This may require the Company to purchase additional
shares of common stock or, if applicable, convertible debentures (which
are then converted) of these companies from time to time, as the number
of the companies' outstanding shares increase, 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, directly from Thermo Electron, or the relevant
subsidiary, or, in the case of Thermo Voltek, pursuant to the conversion
of all or part of its subordinated convertible notes held by the Company.
The Company's Board of Directors authorized the repurchase, through June
1, 1997, of up to $10.0 million of its own securities. The Company's
authorization also includes the purchase of securities of Thermo
Cardiosystems, Thermo Voltek, and Thermo Sentron. In addition, the
Company's Board of Directors authorized the purchase, through January 28,
1998, of up to an additional $5.0 million of securities of Thermo Voltek.
Through March 29, 1997, the Company had expended $13.9 million under its
authorizations, including $3.9 million expended in 1997.
Thermo Cardiosystems' Board of Directors has authorized the
repurchase, through August 12, 1997, of up to $10.0 million of its own
securities and, through April 1, 1998, of up to an additional $20.0
million of its own securities. Thermo Voltek's Board of Directors has
authorized the repurchase, through April 17, 1998, of up to $10.0 million
of its own securities. Through March 29, 1997, Thermo Cardiosystems had
expended $5.7 million under its authorizations, none of which was
expended in 1997, and Thermo Voltek had not expended any funds under its
authorizations. Any such purchases would be funded from working capital.
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 expects that it will finance these acquisitions
through a combination of internal funds, additional debt or equity
financing from the capital markets, or short-term borrowings from Thermo
Electron. 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.
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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 5th day of May 1997.
THERMEDICS INC.
Paul F. Kelleher
--------------------
Paul F. Kelleher
Chief Accounting Officer
John N. Hatsopoulos
--------------------
John N. Hatsopoulos
Vice President and Chief
Financial Officer
14PAGE
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THERMEDICS INC.
EXHIBIT INDEX
Exhibit
Number Document
------------------------------------------------------------------------
2.1 Agreement and Plan of Reorganization among Thermo
Cardiosystems Inc., ITC Acquisition Corp., Thermo Electron
Corporation, ITC Holdings Inc., and International Technidyne
Corporation dated as of May 2, 1997 (filed as Exhibit 2.1 to
Thermo Cardiosystems' Quarterly Report on Form 10-Q for the
quarter ended March 29, 1997 [File No. 1-10114] and
incorporated herein by reference).
11 Statement re: Computation of Earnings per Share.
27 Financial Data Schedule.
Exhibit 11
THERMEDICS
Computation of Earnings per Share
Three Months Ended
--------------------------
March 29, March 30,
1997 1996
--------------------------------------------------------------------------
Computation of Primary Earnings per Share:
Net Income (a) $21,966,000 $ 5,257,000
----------- -----------
Shares:
Weighted average shares outstanding 36,683,351 35,597,432
Add: Shares issuable from assumed exercise
of options (as determined by the
application of the treasury stock method) 284,025 -
Shares issuable from assumed conversion
of subordinated convertible debentures 1,988,984 -
----------- -----------
Weighted average shares outstanding,
as adjusted (b) 38,956,360 35,597,432
----------- -----------
Primary Earnings per Share (a) / (b) $ .56 $ .15
=========== ===========
<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 MARCH 29, 1997 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
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0
0
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</TABLE>
