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 30, 1996.
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934.
Commission File Number 1-9786
THERMO INSTRUMENT SYSTEMS INC.
(Exact name of Registrant as specified in its charter)
Delaware 04-2925809
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1275 Hammerwood Avenue
Sunnyvale, California 94089
(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 26, 1996
---------------------------- -----------------------------
Common Stock, $.10 par value 94,054,651
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PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
THERMO INSTRUMENT SYSTEMS INC.
Consolidated Balance Sheet
(Unaudited)
Assets
March 30, December 30,
(In thousands) 1996 1995
--------------------------------------------------------------------------
Current Assets:
Cash and cash equivalents $ 342,473 $ 395,233
Accounts receivable, less allowances
of $12,977 and $12,569 322,348 211,906
Unbilled contract costs and fees 4,482 3,800
Inventories:
Raw materials and supplies 125,163 80,959
Work in process 64,087 40,851
Finished goods 63,276 33,104
Prepaid expenses 30,052 9,450
Prepaid income taxes 44,802 31,233
---------- ----------
996,683 806,536
---------- ----------
Property, Plant and Equipment, at Cost 261,335 189,085
Less: Accumulated depreciation and
amortization 57,582 55,408
---------- ----------
203,753 133,677
---------- ----------
Patents and Other Assets 28,309 29,611
---------- ----------
Cost in Excess of Net Assets of Acquired
Companies (Note 2) 554,461 402,989
---------- ----------
$1,783,206 $1,372,813
========== ==========
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THERMO INSTRUMENT SYSTEMS INC.
Consolidated Balance Sheet (continued)
(Unaudited)
Liabilities and Shareholders' Investment
March 30, December 30,
(In thousands except share amounts) 1996 1995
--------------------------------------------------------------------------
Current Liabilities:
Notes payable, including $30,000 due to
parent company in 1996 (Note 2) $ 134,794 $ 55,822
Accounts payable 84,990 55,626
Accrued payroll and employee benefits 43,468 33,025
Accrued income taxes 30,615 25,875
Accrued installation and warranty expenses 32,060 17,962
Deferred revenue 42,236 20,759
Accrued acquisition expenses (Note 2) 82,944 20,687
Other accrued expenses 125,874 73,966
Due to parent company (Note 2) 100,466 12,919
---------- ----------
677,447 316,641
---------- ----------
Deferred Income Taxes 20,129 20,168
---------- ----------
Other Deferred Items 25,170 23,718
---------- ----------
Long-term Obligations:
Senior obligations, including $140,000 due
to parent company 198,507 207,600
Subordinated obligations 209,512 214,775
Other 16,764 18,659
---------- ----------
424,783 441,034
---------- ----------
Minority Interest 46,432 28,547
---------- ----------
Shareholders' Investment:
Common stock, $.10 par value, 125,000,000
shares authorized; 93,664,537 and 92,566,341
shares issued 9,366 9,257
Capital in excess of par value 262,747 248,468
Retained earnings 325,933 291,890
Treasury stock at cost, 868,100 and
917,985 shares (9,292) (9,724)
Cumulative translation adjustment 491 2,814
---------- ----------
589,245 542,705
---------- ----------
$1,783,206 $1,372,813
========== ==========
The accompanying notes are an integral part of these consolidated financial
statements.
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THERMO INSTRUMENT SYSTEMS INC.
Consolidated Statement of Income
(Unaudited)
Three Months Ended
-----------------------
March 30, April 1,
(In thousands except per share amounts) 1996 1995
--------------------------------------------------------------------------
Revenues $225,571 $172,944
-------- --------
Costs and Expenses:
Cost of revenues 118,207 88,030
Selling, general and administrative expenses 65,709 49,598
Research and development expenses 16,549 12,479
Write-off of acquired technology (Note 2) 3,500 -
-------- --------
203,965 150,107
-------- --------
Operating Income 21,606 22,837
Interest Income 5,111 2,302
Interest Expense (includes $1,537 and $1,330
to parent company) (6,290) (3,825)
Gain on Issuance of Stock by Subsidiaries (Note 3) 24,257 4,714
-------- --------
Income from Continuing Operations Before
Provision for Income Taxes and Minority
Interest Expense 44,684 26,028
Provision for Income Taxes 10,073 8,974
Minority Interest Expense 568 140
-------- --------
Income from Continuing Operations 34,043 16,914
Income from Discontinued Operations - 2
-------- --------
Net Income $ 34,043 $ 16,916
======== ========
Earnings per Share from Continuing Operations:
Primary $ .37 $ .19
======== ========
Fully diluted $ .33 $ .17
======== ========
Earnings per Share:
Primary $ .37 $ .19
======== ========
Fully diluted $ .33 $ .17
======== ========
Weighted Average Shares:
Primary 91,875 89,365
======== ========
Fully diluted 107,269 106,407
======== ========
The accompanying notes are an integral part of these consolidated financial
statements.
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THERMO INSTRUMENT SYSTEMS INC.
Consolidated Statement of Cash Flows
(Unaudited)
Three Months Ended
----------------------
March 30, April 1,
(In thousands) 1996 1995
--------------------------------------------------------------------------
Operating Activities:
Net income $ 34,043 $ 16,916
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization 9,036 6,139
Provision for losses on accounts receivable 413 655
Gain on issuance of stock by
subsidiaries (Note 3) (24,257) (4,714)
Minority interest expense 568 140
Decrease in deferred income taxes (40) (3,217)
Other noncash expenses 4,638 755
Changes in current accounts, excluding
the effects of acquisitions:
Accounts receivable 8,814 (607)
Inventories (6,998) (1,468)
Other current assets 1,168 918
Accounts payable (1,861) (2,184)
Other current liabilities 5,012 (15,078)
Other 198 -
--------- ---------
Net cash provided by (used in)
operating activities 30,734 (1,745)
--------- ---------
Investing Activities:
Acquisitions, net of cash acquired (Note 2) (239,406) (10,730)
Purchases of property, plant and equipment (5,370) (2,598)
Other 1,527 473
--------- ---------
Net cash used in
investing activities (243,249) (12,855)
--------- ---------
Financing Activities:
Net proceeds from issuance of Company and
subsidiaries' common stock (Note 3) 42,010 6,783
Short-term borrowings from parent company (Note 2) 89,012 -
Issuance of note payable to parent
company (Note 2) 30,000 -
Repayment of long-term obligations (1,139) (205)
--------- ---------
Net cash provided by
financing activities $ 159,883 $ 6,578
--------- ---------
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THERMO INSTRUMENT SYSTEMS INC.
Consolidated Statement of Cash Flows (continued)
(Unaudited)
Three Months Ended
----------------------
March 30, April 1,
(In thousands) 1996 1995
--------------------------------------------------------------------------
Exchange Rate Effect on Cash $ (128) $ 999
--------- ---------
Decrease in Cash and Cash Equivalents (52,760) (7,023)
Cash and Cash Equivalents at Beginning of Period 395,233 152,933
--------- ---------
Cash and Cash Equivalents at End of Period $ 342,473 $ 145,910
========= =========
Cash Paid For:
Interest $ 6,923 $ 4,825
Income taxes $ 4,092 $ 12,664
Noncash Financing Activities:
Conversions of convertible obligations $ 14,356 $ 6,428
The accompanying notes are an integral part of these consolidated financial
statements.
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THERMO INSTRUMENT SYSTEMS INC.
Notes to Consolidated Financial Statements
1. General
The interim consolidated financial statements presented have been
prepared by Thermo Instrument Systems 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-month periods ended March 30, 1996 and April 1, 1995, (b) the
financial position at March 30, 1996, and (c) the cash flows for the
three-month periods ended March 30, 1996 and April 1, 1995. Interim results
are not necessarily indicative of results for a full year.
The consolidated balance sheet presented as of December 30, 1995, 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 30, 1995, filed with the Securities and
Exchange Commission.
2. Acquisitions
On March 29, 1996, the Company completed the acquisition of a
substantial portion of the businesses comprising the Scientific Instruments
Division of Fisons plc (Fisons), a wholly owned subsidiary of Rhone-Poulenc
Rorer Inc., for approximately 123 million British pounds sterling in cash
(approximately $187 million) and the assumption of approximately 24 million
British pounds sterling of indebtedness (approximately $36 million). The
purchase price is subject to post-closing adjustments equal to the amounts
by which the net tangible assets and net debt of the acquired businesses on
the closing date are greater or less than certain target amounts agreed to
by the parties. To finance the acquisition, the Company used available cash
in addition to borrowings of $89 million from Thermo Electron Corporation
(Thermo Electron). Subsequent to the end of the quarter, the Company repaid
a portion of the borrowings from Thermo Electron and issued a $65 million
promissory note for the remaining indebtedness. The promissory note is due
April 1997 and bears interest at the 90-day Commercial Paper Composite Rate
plus 25 basis points, set at the beginning of each quarter. In the first
quarter of 1996, the Company wrote off $3.5 million of acquired technology
in connection with this acquisition. The businesses acquired are involved
in the research, development, manufacture, and sale of analytical
instruments to industrial and research laboratories worldwide.
During the first quarter of 1996, the Company made several other
acquisitions for approximately $62 million in cash, subject to post-closing
adjustments. To partially finance one such acquisition, the Company's
Thermo BioAnalysis Corporation subsidiary borrowed $30 million from Thermo
Electron pursuant to a promissory note due February 1997 and bearing
interest at the 90-day Commercial Paper Composite Rate plus 25 basis
points, set at the beginning of each quarter.
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THERMO INSTRUMENT SYSTEMS INC.
2. Acquisitions (continued)
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 cost of the acquisitions exceeded the estimated fair value
of the acquired net assets by $159 million, which is being amortized over
40 years. Allocation of the purchase price for these acquisitions was based
on estimates of the fair value of the net assets acquired and is subject to
adjustment upon finalization of the purchase price allocation.
In connection with the acquisition of certain businesses within the
Scientific Instruments Division of Fisons, the Company established reserves
totaling $61 million for estimated severance, excess facilities, and other
exit costs associated with the acquisition, none of which was expended
during the first quarter of 1996. The Company expects to substantially
complete its review and restructuring of these businesses over the one-year
period following the acquisition. Any changes in estimates of these costs
will be recorded as adjustments to cost in excess of net assets of acquired
companies.
3. Issuance of Stock by Subsidiary
In March 1996, the Company's wholly owned ThermoQuest Corporation
(ThermoQuest) subsidiary sold 3,000,000 shares of its common stock in an
initial public offering at $15.00 per share for net proceeds of
approximately $42 million, resulting in a gain of approximately $24
million. Subsequent to the end of the quarter, the underwriters of
ThermoQuest's initial public offering exercised their over-allotment option
to purchase an additional 450,000 shares of ThermoQuest's common stock for
net proceeds of approximately $6 million. Following the initial public
offering and the exercise of the over-allotment option, the Company owned
93% of ThermoQuest's outstanding common stock.
4. Subsequent Event
In April 1996, the Company called for redemption on May 9, 1996 all of
the outstanding principal amount of its 6 5/8% subordinated convertible
debentures due 2001. The value of the securities into which the debentures
are convertible exceeded the redemption amount as of the notice date of the
redemption.
Item 2 - Management's Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations
First Quarter 1996 Compared With First Quarter 1995
Revenues increased $52.6 million, or 30%, to $225.6 million in the
first quarter of 1996 from $172.9 million in the first quarter of 1995
primarily due to acquisitions, which included the analytical instrument
division of Analytical Technology, Inc. (ATI) in December 1995, Gould
Instrument Systems, Inc. (GIS) in May 1995, and Dynatech Laboratories
8PAGE
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THERMO INSTRUMENT SYSTEMS INC.
First Quarter 1996 Compared With First Quarter 1995 (continued)
Worldwide (DLW) in February 1996. Acquisitions added revenues of $40
million in the first quarter of 1996. The remainder of the increase in
revenues resulted from greater demand experienced by the Company's existing
businesses, primarily for ThermoQuest Corporation's (ThermoQuest) mass
spectrometry products and Thermo Optek Corporation's (Thermo Optek) Fourier
transform infrared products. These increases were offset in part by the
unfavorable effects of currency translation due to the strengthening of the
U.S. dollar relative to foreign currencies in countries where the Company
operates.
The gross profit margin decreased to 48% in the first quarter of 1996
from 49% in the first quarter of 1995 primarily due to lower margins at
acquired businesses. As a result of the acquisition of a substantial
portion of the businesses comprising the Scientific Instruments Division of
Fisons plc (Fisons) (Note 2), the Company expects that the gross profit
margin will continue to decline due to lower margins at these businesses.
Selling, general and administrative expenses as a percentage of
revenues was 29% in the first quarter of 1996 and 1995. Research and
development expenses as a percentage of revenues remained relatively
unchanged at 7.3% in 1996, compared with 7.2% in 1995.
In the first quarter of 1996, the Company wrote off $3.5 million of
acquired technology in connection with the acquisition of the businesses
from Fisons (Note 2).
Interest income increased to $5.1 million in the first quarter of 1996
from $2.3 million in the first quarter of 1995 primarily due to interest
income earned on invested proceeds from the issuance of $192.5 million
aggregate principal amount of 5% subordinated convertible debentures by
ThermoQuest and Thermo Optek in August 1995 and October 1995, respectively.
Interest income also increased, to a lesser extent, as a result of interest
income earned on invested proceeds from the issuance of common stock by the
Company's Thermo BioAnalysis Corporation (Thermo BioAnalysis) subsidiary in
the first and second quarters of 1995 and the Company's ThermoSpectra
Corporation (ThermoSpectra) subsidiary in the third quarter of 1995. The
increase in interest income was offset in part by a reduction in cash as a
result of the acquisitions of GIS in May 1995 and DLW in February 1996.
Interest expense increased to $6.3 million in 1996 from $3.8 million in
1995 primarily due to the issuance of the 5% subordinated convertible
debentures by ThermoQuest and Thermo Optek and, to a lesser extent, the
issuance by Thermo BioAnalysis of a $30 million promissory note to Thermo
Electron Corporation (Thermo Electron) to partially finance the acquisition
of DLW. These increases were offset in part by the conversion of a portion
of the Company's 6 5/8% subordinated convertible debentures and 3 3/4%
senior convertible debentures into common stock of the Company.
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 $24 million in the first quarter of 1996
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THERMO INSTRUMENT SYSTEMS INC.
First Quarter 1996 Compared With First Quarter 1995 (continued)
and $4.7 million in the first quarter of 1995 (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 rate decreased to 23% in the first quarter of 1996
from 34% in the first quarter of 1995 primarily due to a higher nontaxable
gain on the issuance of stock by subsidiary in 1996 compared with 1995.
Excluding the impact of gain on issuance of stock by subsidiaries in 1996
and 1995, the effective tax rates in 1996 and 1995 exceeded the statutory
federal income tax rate due to nondeductible amortization of cost in excess
of net assets of acquired companies, the inability to provide a tax benefit
on losses incurred at certain foreign subsidiaries, and the impact of state
income taxes.
Liquidity and Capital Resources
Consolidated working capital was $319.2 million at March 30, 1996,
compared with $489.9 million at December 30, 1995, a decrease of $170.7
million. Included in working capital are cash and cash equivalents of
$342.5 million at March 30, 1996, and $395.2 million at December 30, 1995.
Of the $342.5 million balance at March 30, 1996, $176.7 million was held by
ThermoQuest, $21.5 million by ThermoSpectra, $10.0 million by Thermo
BioAnalysis, and $134.3 million by the Company and its wholly owned
subsidiaries, including Thermo Optek. The Company's operating activities
provided $30.7 million of cash in the first three months of 1996. A
decrease in accounts receivable of $8.8 million and an increase in other
current liabilities of $5.0 million, which provided cash from operations,
was offset in part by an increase of $7.0 million in inventories and a
decrease of $1.9 million in accounts payable.
The Company's investing activities used $243.2 million of cash in the
first three months of 1996. The Company expended $239.4 million for
acquisitions, including the acquisition of a substantial portion of the
businesses comprising the Scientific Instruments Division of Fisons, and
$5.4 million for the purchase of property, plant and equipment.
The Company's financing activities provided $159.9 million of cash in
the first three months of 1996. In March 1996, ThermoQuest sold shares of
its common stock in an initial public offering for net proceeds of
approximately $42 million. In February 1996, to partially finance the
acquisition of DLW, Thermo BioAnalysis borrowed $30 million from Thermo
Electron pursuant to a promissory note due February 1997 (Note 2). In March
1996, to partially finance the acquisition of certain businesses within the
Scientific Instruments Division of Fisons, the Company borrowed $89 million
from Thermo Electron. Subsequent to the end of the quarter, the Company
repaid a portion of the borrowings from Thermo Electron and issued a $65
million promissory note due April 1997 for the remaining indebtedness
(Note 2).
In April 1996, the underwriters of ThermoQuest's initial public
offering exercised their over-allotment option to purchase additional
shares of ThermoQuest's common stock for net proceeds of approximately $6
million (Note 3).
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THERMO INSTRUMENT SYSTEMS INC.
Liquidity and Capital Resources (continued)
In April 1996, Thermo Optek filed a registration statement under the
Securities Act of 1933 with the Securities and Exchange Commission covering
shares of common stock to be offered in its initial public offering.
During the remainder of 1996, the Company plans to make expenditures
of approximately $15 million for property, plant and equipment. The Company
believes that its existing resources are sufficient to meet the capital
requirements of its existing operations for the foreseeable future. The
Company has historically complemented internal development with
acquisitions of businesses or technologies that extend the Company's
presence in current markets or provide opportunities to enter and compete
effectively in new markets. The Company will consider making acquisitions
of such businesses or technologies that are consistent with its plans for
strategic growth.
PART II - OTHER INFORMATION
Item 6 - Exhibits and Reports on Form 8-K
(a) Exhibits
See Exhibit Index on the page immediately preceding exhibits.
(b) Reports on Form 8-K
No reports on Form 8-K were filed by the Company during the quarter
covered by this report. The Company filed a Current Report on Form 8-K on
April 12, 1996, pertaining to its acquisition of certain businesses within
the Scientific Instruments Division of Fisons plc on March 29, 1996. The
required financial statements of the businesses acquired and pro forma
combined condensed financial statements will be filed by June 12, 1996, as
part of an amendment to the Form 8-K.
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THERMO INSTRUMENT SYSTEMS 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 8th day of May 1996.
THERMO INSTRUMENT SYSTEMS INC.
Paul F. Kelleher
--------------------------------
Paul F. Kelleher
Chief Accounting Officer
John N. Hatsopoulos
--------------------------------
John N. Hatsopoulos
Chief Financial Officer
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THERMO INSTRUMENT SYSTEMS INC.
Exhibit Index
Exhibit
Number Description of Exhibit Page
------- ------------------------------------------------ ----
10.1 $30,000,000 Promissory Note dated as of
February 13, 1996 issued by Thermo BioAnalysis
Corporation to Thermo Electron Corporation.
10.2 $65,000,000 Promissory Note dated as of
April 12, 1996 issued by the Company to Thermo
Electron Corporation.
11 Statement re: Computation of earnings per share.
27 Financial Data Schedule
EXHIBIT 10.1
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). THESE SECURITIES HAVE BEEN
ACQUIRED FOR INVESTMENT, AND NOT WITH A VIEW TO DISTRIBUTION OR RESALE, AND
MAY NOT BE SOLD, PLEDGED, MORTGAGED, HYPOTHECATED OR OTHERWISE TRANSFERRED
(1) WITHOUT AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT COVERING
THESE SECURITIES OR (2) UNLESS AN EXEMPTION FROM REGISTRATION IS AVAILABLE.
Thermo BioAnalysis Corporation
Promissory Note Due February 11, 1997
Waltham, Massachusetts
February 13, 1996
For value received, Thermo BioAnalysis Corporation, a Delaware
corporation (the "Company"), hereby promises to pay to Thermo Electron
Corporation (hereinafter referred to as the "Payee"), or registered
assigns, on February 11, 1997, as described below, the principal sum of
thirty million dollars ($30,000,000) or such part thereof as then remains
unpaid, to pay interest from the date hereof on the whole amount of said
principal sum remaining from time to time unpaid at a rate per annum equal
to the rate of the Commercial Paper Composite Rate as reported by Merrill
Lynch Capital Markets, as an average of the last five business days of the
fiscal quarter, plus twenty-five (25) basis points, such interest to be
payable in arrears on the first day of each fiscal quarter of the Company
during the term set forth herein, until the whole amount of the principal
hereof remaining unpaid shall become due and payable, and to pay interest
on all overdue principal and interest at a rate per annum equal to the rate
of interest announced from time to time by The First National Bank of
Boston at its head office in Boston, Massachusetts as its "base rate" plus
one percent (1%). Principal and all accrued but unpaid interest shall be
repaid on February 11, 1997. Principal and interest shall be payable in
lawful money of the United States of America, in immediately available
funds, at the principal office of the Payee or at such other place as the
legal holder may designate from time to time in writing to the Company.
Interest shall be computed on an actual 360-day basis.
This Note may be prepaid at any time or from time to time, in whole or
in part, without any premium or penalty. All prepayments shall be applied
first to accrued interest and then to principal.
The then unpaid principal amount of, and interest outstanding on, this
Note shall be and become immediately due and payable without notice or
demand, at the option of the holder hereof, upon the occurrence of any of
the following events:
(a) the failure of the Company to pay any amount due hereunder within
ten (10) days of the date when due;
(b) any representation, warranty or statement made or furnished to
the Payee by the Company in connection with this Note or the
transaction from which it arises shall prove to have been false
or misleading in any material respect as of the date when made or
furnished;
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(c) the failure of the Company to pay its debts as they become due,
the insolvency of the Company, the filing by or against the
Company of any petition under the U.S. Bankruptcy Code (or the
filing of any similar petition under the insolvency law of any
jurisdiction), or the making by the Company of an assignment or
trust mortgage for the benefit of creditors or the appointment of
a receiver, custodian or similar agent with respect to, or the
taking by any such person of possession of, any property of the
Company;
(d) the sale by the Company of all or substantially all of its
assets;
(e) the merger or consolidation of the Company with or into any other
corporation in a transaction in which the Company is not the
surviving entity;
(f) the issuance of any writ of attachment, by trustee process or
otherwise, or any restraining order or injunction not removed,
repealed or dismissed within thirty (30) days of issuance,
against or affecting the person or property of the Company or any
liability or obligation of the Company to the holder hereof; and
(g) the suspension of the transaction of the usual business of the
Company.
Upon surrender of this Note for transfer or exchange, a new Note or
new Notes of the same tenor dated the date to which interest has been paid
on the surrendered Note and in an aggregate principal amount equal to the
unpaid principal amount of the Note so surrendered will be issued to, and
registered in the name of, the transferee or transferees. The Company may
treat the person in whose name this Note is registered as the owner hereof
for the purpose of receiving payment and for all other purposes.
In case any payment herein provided for shall not be paid when due,
the Company further promises to pay all cost of collection, including all
reasonable attorneys' fees.
No delay or omission on the part of the Payee in exercising any right
hereunder shall operate as a waiver of such right or of any other right of
the Payee, nor shall any delay, omission or waiver on any one occasion be
deemed a bar to or waiver of the same or any other right on any future
occasion. The Company hereby waives presentment, demand, notice of
prepayment, protest and all other demands and notices in connection with
the delivery, acceptance, performance, default or enforcement of this
Note. The undersigned hereby assents to any indulgence and any extension
of time for payment of any indebtedness evidenced hereby granted or
permitted by the Payee.
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This Note shall be governed by and construed in accordance with, the
laws of the Commonwealth of Massachusetts and shall have the effect of a
sealed instrument.
THERMO BIOANALYSIS CORPORATION
By: Barry S. Howe
--------------------------
Barry S. Howe
President
[Corporate Seal]
Attest:
Sandra L. Lambert
---------------------
Sandra L. Lambert
Secretary
cc: Ron Burman
Seth Hoogasian
Maureen Jacobs
Sandra Lambert
Karen Levin
Chuck Valenti
Chris Vinchesi
EXHIBIT 10.2
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). THESE SECURITIES HAVE BEEN
ACQUIRED FOR INVESTMENT, AND NOT WITH A VIEW TO DISTRIBUTION OR RESALE, AND
MAY NOT BE SOLD, PLEDGED, MORTGAGED, HYPOTHECATED OR OTHERWISE TRANSFERRED
(1) WITHOUT AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT COVERING
THESE SECURITIES OR (2) UNLESS AN EXEMPTION FROM REGISTRATION IS AVAILABLE.
Thermo Instrument Systems Inc.
Promissory Note Due April 11, 1997
Waltham, Massachusetts
April 12, 1996
For value received, Thermo Instrument Systems Inc., a Delaware
corporation (the "Company"), hereby promises to pay to Thermo Electron
Corporation (hereinafter referred to as the "Payee"), or registered
assigns, on April 11, 1997, as described below, the principal sum of
sixty-five million dollars ($65,000,000) or such part thereof as then
remains unpaid, to pay interest from the date hereof on the whole amount of
said principal sum remaining from time to time unpaid at a rate per annum
equal to the rate of the Commercial Paper Composite Rate as reported by
Merrill Lynch Capital Markets, as an average of the last five business days
of the fiscal quarter, plus twenty-five (25) basis points, such interest to
be payable in arrears on the first day of each fiscal quarter of the
Company during the term set forth herein, until the whole amount of the
principal hereof remaining unpaid shall become due and payable, and to pay
interest on all overdue principal and interest at a rate per annum equal to
the rate of interest announced from time to time by The First National Bank
of Boston at its head office in Boston, Massachusetts as its "base rate"
plus one percent (1%). Principal and all accrued but unpaid interest shall
be repaid on April 11, 1997. Principal and interest shall be payable in
lawful money of the United States of America, in immediately available
funds, at the principal office of the Payee or at such other place as the
legal holder may designate from time to time in writing to the Company.
Interest shall be computed on an actual 360-day basis.
This Note may be prepaid at any time or from time to time, in whole or
in part, without any premium or penalty. All prepayments shall be applied
first to accrued interest and then to principal.
The then unpaid principal amount of, and interest outstanding on, this
Note shall be and become immediately due and payable without notice or
demand, at the option of the holder hereof, upon the occurrence of any of
the following events:
(a) the failure of the Company to pay any amount due hereunder within
ten (10) days of the date when due;
(b) any representation, warranty or statement made or furnished to
the Payee by the Company in connection with this Note or the
transaction from which it arises shall prove to have been false
or misleading in any material respect as of the date when made or
furnished;
PAGE
<PAGE>
(c) the failure of the Company to pay its debts as they become due,
the insolvency of the Company, the filing by or against the
Company of any petition under the U.S. Bankruptcy Code (or the
filing of any similar petition under the insolvency law of any
jurisdiction), or the making by the Company of an assignment or
trust mortgage for the benefit of creditors or the appointment of
a receiver, custodian or similar agent with respect to, or the
taking by any such person of possession of, any property of the
Company;
(d) the sale by the Company of all or substantially all of its
assets;
(e) the merger or consolidation of the Company with or into any other
corporation in a transaction in which the Company is not the
surviving entity;
(f) the issuance of any writ of attachment, by trustee process or
otherwise, or any restraining order or injunction not removed,
repealed or dismissed within thirty (30) days of issuance,
against or affecting the person or property of the Company or any
liability or obligation of the Company to the holder hereof; and
(g) the suspension of the transaction of the usual business of the
Company.
Upon surrender of this Note for transfer or exchange, a new Note or
new Notes of the same tenor dated the date to which interest has been paid
on the surrendered Note and in an aggregate principal amount equal to the
unpaid principal amount of the Note so surrendered will be issued to, and
registered in the name of, the transferee or transferees. The Company may
treat the person in whose name this Note is registered as the owner hereof
for the purpose of receiving payment and for all other purposes.
In case any payment herein provided for shall not be paid when due,
the Company further promises to pay all cost of collection, including all
reasonable attorneys' fees.
No delay or omission on the part of the Payee in exercising any right
hereunder shall operate as a waiver of such right or of any other right of
the Payee, nor shall any delay, omission or waiver on any one occasion be
deemed a bar to or waiver of the same or any other right on any future
occasion. The Company hereby waives presentment, demand, notice of
prepayment, protest and all other demands and notices in connection with
the delivery, acceptance, performance, default or enforcement of this
Note. The undersigned hereby assents to any indulgence and any extension
of time for payment of any indebtedness evidenced hereby granted or
permitted by the Payee.
2PAGE
<PAGE>
This Note shall be governed by and construed in accordance with, the
laws of the Commonwealth of Massachusetts and shall have the effect of a
sealed instrument.
THERMO INSTRUMENT SYSTEMS INC.
By: Arvin H. Smith
--------------------------
Arvin H. Smith
President and
Chief Executive Officer
[Corporate Seal]
Attest:
Sandra L. Lambert
---------------------
Sandra L. Lambert
Secretary
cc: Terry Dudding
Seth Hoogasian
Maureen Jacobs
Sandra Lambert
Karen Levin
Andy Pilla
Gina Silvestri
Chris Vinchesi
Exhibit 11
THERMO INSTRUMENT SYSTEMS INC.
Computation of Earnings per Share
Three Months Ended
----------------------------
March 30, April 1,
1996 1995
--------------------------------------------------------------------------
Computation of Fully Diluted Earnings
per Share from Continuing Operations:
Income:
Net income $ 34,043,000 $ 16,914,000
Add: Convertible obligation interest,
net of tax 1,348,000 1,517,000
------------ ------------
Income applicable to common stock
assuming full dilution (a) $ 35,391,000 $ 18,431,000
------------ ------------
Shares:
Weighted average shares outstanding 91,874,948 89,365,446
Add: Shares issuable from assumed
conversion of convertible
obligations 14,445,711 16,580,700
Shares issuable from assumed
exercise of options (as determined
by the application of the treasury
stock method) 948,346 460,469
------------ ------------
Weighted average shares outstanding,
as adjusted (b) 107,269,005 106,406,615
------------ ------------
Fully Diluted Earnings per Share from
Continuing Operations (a) / (b) $ .33 $ .17
============ ============
PAGE
<PAGE>
Exhibit 11
THERMO INSTRUMENT SYSTEMS INC.
Computation of Earnings per Share (continued)
Three Months Ended
----------------------------
March 30, April 1,
1996 1995
--------------------------------------------------------------------------
Computation of Fully Diluted Earnings
per Share:
Income:
Net income $ 34,043,000 $ 16,916,000
Add: Convertible obligation interest,
net of tax 1,348,000 1,517,000
------------ ------------
Income applicable to common stock
assuming full dilution (a) $ 35,391,000 $ 18,433,000
------------ ------------
Shares:
Weighted average shares outstanding 91,874,948 89,365,446
Add: Shares issuable from assumed
conversion of convertible
obligations 14,445,711 16,580,700
Shares issuable from assumed
exercise of options (as determined
by the application of the treasury
stock method) 948,346 460,469
------------ ------------
Weighted average shares outstanding,
as adjusted (b) 107,269,005 106,406,615
------------ ------------
Fully Diluted Earnings per Share (a) / (b) $ .33 $ .17
============ ============
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THERMO
INSTRUMENT SYSTEMS INC.'S QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER
ENDED MARCH 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-28-1996
<PERIOD-END> MAR-30-1996
<CASH> 342,473
<SECURITIES> 0
<RECEIVABLES> 335,325
<ALLOWANCES> 12,977
<INVENTORY> 252,526
<CURRENT-ASSETS> 996,683
<PP&E> 261,335
<DEPRECIATION> 57,582
<TOTAL-ASSETS> 1,783,206
<CURRENT-LIABILITIES> 677,447
<BONDS> 284,783
<COMMON> 9,366
0
0
<OTHER-SE> 579,879
<TOTAL-LIABILITY-AND-EQUITY> 1,783,206
<SALES> 225,571
<TOTAL-REVENUES> 225,571
<CGS> 118,207
<TOTAL-COSTS> 118,207
<OTHER-EXPENSES> 20,049
<LOSS-PROVISION> 413
<INTEREST-EXPENSE> 6,290
<INCOME-PRETAX> 44,684
<INCOME-TAX> 10,073
<INCOME-CONTINUING> 34,043
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 34,043
<EPS-PRIMARY> .37
<EPS-DILUTED> .33
</TABLE>
