SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------------------------------
AMENDMENT NO. 1 ON FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report
(Date of earliest event reported):
May 10, 1995
-------------------------------------------
THERMO PROCESS SYSTEMS INC.
(Exact name of Registrant as specified in its charter)
Delaware 1-9549 04-2925807
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification Number)
incorporation or
organization)
12068 Market Street 48150
Livonia, Michigan (Zip Code)
(Address of principal executive offices)
(617) 622-1000
(Registrant's telephone number
including area code)
PAGE
<PAGE>
FORM 8-K/A
Item 7. Financial Statements, Pro Forma Combined Condensed Financial
------------------------------------------------------------
Information and Exhibits
------------------------
On May 10, 1995, Thermo Process Systems Inc. (the "Company") acquired
substantially all of the assets of Lancaster Laboratories, Inc. and its
affiliate Clewmark Holdings (together, "Lancaster Laboratories"). Lancaster
Laboratories, based in Lancaster, Pennsylvania, is a provider of
high-quality analytical services to the environmental, food and
pharmaceutical industries.
The base purchase price for the assets was $19,174,000 in cash, plus
the assumption by the Company of $5,333,000 in bank indebtedness existing
as of the closing of the acquisition. The purchase price included a
post-closing adjustment of $2,414,000 based on Lancaster Laboratories' net
book value as of the closing of the acquisition. The Company has also
agreed to pay an amount, not to exceed $600,000, equal to the amount by
which the sum of (a) Lancaster Laboratories' division income (earnings
before the corporate services fee payable to Thermo Electron Corporation,
amortization of goodwill, interest and income taxes) for the period
beginning October 1, 1994 and ending on the closing date, and (b) the
division income generated by Lancaster Laboratories' business (excluding
the corporate services fee payable to Thermo Electron Corporation and the
amortization of goodwill acquired by the Company in this acquisition) for
the period beginning on the closing date and ending September 30, 1995, are
in excess of $4,500,000. In no event will the aggregate purchase price,
including bank indebtedness assumed by the Company, exceed $25,000,000,
excluding cash acquired.
(a) Financial Statements of Business Acquired
Attached hereto.
2PAGE
<PAGE>
Lancaster Laboratories, Inc.
and Clewmark Holdings
Combined Financial Statements
Pursuant to the Asset Purchase Agreement
Dated May 10, 1995
Years ended September 30, 1994 and 1993
TABLE of CONTENTS
Page
----
Independent Auditors' Report
Combined Statements of Net Assets Sold
Combined Statements of Revenues and Expenses
Combined Statements of Changes in Net Assets Sold
Combined Statements of Cash Flows
Notes to Combined Financial Statements
PAGE
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Partners
Lancaster Laboratories, Inc.
and Clewmark Holdings
Lancaster, Pennsylvania
We have audited the accompanying combined statements of net
assets sold of Lancaster Laboratories, Inc., a Pennsylvania
corporation, and Clewmark Holdings, a Pennsylvania general
partnership, as of September 30, 1994 and 1993 and the related
combined statements of revenues and expenses, changes in net assets
sold, and cash flows for the years then ended. These combined
financial statements are the responsibility of the Companies'
management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform
the audits to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
The accompanying combined financial statements were prepared to
present the assets sold and the liabilities assumed pursuant to the
Asset Purchase Agreement dated May 10, 1995, between Lancaster
Laboratories, Inc./Clewmark Holdings and Thermo Analytical, Inc., as
described in Note 1, and are not intended to be a complete
presentation of the assets, liabilities, revenues, expenses, and cash
flows of Lancaster Laboratories, Inc. and Clewmark Holdings.
In our opinion, the combined financial statements referred to
above present fairly, in all material respects, the net assets sold of
Lancaster Laboratories, Inc. and Clewmark Holdings, pursuant to the
Asset Purchase Agreement referred to in Note 1, as of September 30,
1994 and 1993, and the revenues, expenses, changes in net assets sold,
and cash flows for the years then ended, in conformity with generally
accepted accounting principles.
October 26, 1994, except for TROUT, EBERSOLE & GROFF
Note 1, as to which the date Certified Public Accountants
is May 10, 1995
Lancaster, Pennsylvania
PAGE
<PAGE>
Lancaster Laboratories, Inc.
and Clewmark Holdings
COMBINED STATEMENTS of NET ASSETS SOLD
September 30, 1994 and 1993
1994 1993
---- ----
ASSETS
------
CURRENT ASSETS
Cash and Cash Equivalents 732,055 391,984
Accounts Receivable:
Billed, Net of Allowance for Doubtful
Accounts of $75,815 and $33,683 at
9/30/94 and 9/30/93, respectfully 4,481,909 4,447,560
Unbilled 1,240,070 937,376
Inventory 11,285 11,285
Prepaid Expenses 25,149 24,807
---------- ----------
Total Current Assets 6,490,468 5,813,012
========== ==========
PROPERTY, PLANT and EQUIPMENT
Land 1,124,286 1,124,286
Land Improvements 608,958 505,592
Buildings and Leasehold Improvements 8,295,357 6,822,094
Laboratory and Office Equipment 19,211,504 16,754,719
Vehicles 285,073 271,874
Construction in Progress 128,409 305,544
---------- ----------
29,653,587 25,784,109
Less: Accumulated Depreciation 15,657,263 13,254,372
---------- ----------
Property, Plant and Equipment - Net 13,996,324 12,529,737
========== ==========
OTHER ASSETS
Financing Costs, net of Amortization 23,002 17,640
Investment in and Advances to
Affiliated Company -0- 90,730
---------- ----------
Total Other Assets 23,002 108,370
========== ==========
TOTAL ASSETS 20,509,794 18,451,119
========== ==========
PAGE
<PAGE>
Lancaster Laboratories, Inc.
and Clewmark Holdings
COMBINED STATEMENTS of NET ASSETS SOLD (Continued)
September 30, 1994 and 1993
1994 1993
---- ----
LIABILITIES and NET ASSETS SOLD
-------------------------------
CURRENT LIABILITIES
Notes Payable - Bank 850,000 -0-
Current Maturities of Long-Term Debt 1,497,000 770,000
Accounts Payable - Trade 586,101 688,678
Accrued Salaries and Vacation Pay 688,620 563,745
Accrued Employee Benefits 313,809 235,083
Accrued Corporate Taxes 758,600 626,747
Other Accrued Expenses 67,050 163,343
---------- ----------
Total Current Liabilities 4,761,180 3,047,596
========== ==========
LONG-TERM DEBT
Notes Payable - Net of Current Maturities 4,887,144 4,972,144
---------- ----------
TOTAL LIABILITIES 9,648,324 8,019,740
========== ==========
NET ASSETS SOLD 10,861,470 10,431,379
========== ==========
See notes to financial statements.
PAGE
<PAGE>
Lancaster Laboratories, Inc.
and Clewmark Holdings
COMBINED STATEMENTS of REVENUES AND EXPENSES
Years ended September 30, 1994 and 1993
1994 1993
---- ----
REVENUES
Service Revenues - Net 28,676,853 26,750,745
========== ==========
COSTS and OPERATING EXPENSES
Cost of Service Revenues 17,387,183 15,819,263
Selling, General, and Administrative 9,836,444 9,361,322
---------- ----------
Total Costs and Operating Expenses 27,223,627 25,180,585
========== ==========
Excess Revenues over Costs
and Expenses from Operations 1,453,226 1,570,160
=========== ==========
OTHER REVENUES/(EXPENSES)
Lease and Other Income 74,750 97,432
Interest Income 2,578 11,443
Interest Expense (415,575) (382,879)
Gain on Sale of Affiliated Company 264,486 -0-
Earnings from Affiliated Company -0- (94,341)
---------- ----------
Total Other Revenues/(Expenses) (73,761) (368,345)
========== ==========
EXCESS REVENUES over EXPENSES 1,379,465 1,201,815
========== ==========
See notes to financial statements.
PAGE
<PAGE>
Lancaster Laboratories, Inc.
and Clewmark Holdings
COMBINED STATEMENTS of CHANGES in NET ASSETS SOLD
Years ended September 30, 1994 and 1993
1994 1993
---- ----
Balance - Beginning of Year 10,431,379 9,050,312
Excess Revenues over Expenses 1,379,465 1,201,815
Cash Contributions -0- 24,109
Distributions (335,000) (190,000)
Net Change in Assets not Sold (614,374) 337,896
Sale of Treasury Stock -0- 7,247
---------- ----------
Balance - End of Year 10,861,470 10,431,379
========== ==========
See notes to financial statements.
PAGE
<PAGE>
Lancaster Laboratories, Inc.
and Clewmark Holdings
COMBINED STATEMENTS of CASH FLOWS
Years ended September 30, 1994 and 1993
1994 1993
---- ----
CASH FLOWS from OPERATING ACTIVITIES
Excess of Revenues over Expenses 1,379,465 1,201,815
Adjustments to Reconcile Excess of Revenues
over Expenses to Net Cash Provided by/
(Used in) Operating Activities:
Depreciation 2,557,145 2,763,625
Amortization of Financing Costs 2,138 2,138
Earnings from Affiliated Company -0- 94,341
Provision for Doubtful Accounts 42,132 (37,696)
Gain from Sale of Affiliated Company (264,486) -0-
(Gain)/Loss from Sale of Property (1,133) 2,337
Changes in Assets and Liabilities:
(Increase) in Accounts Receivable (379,175) (1,164,957)
(Increase)/Decrease in Prepaid
Expenses (342) 13,601
Increase/(Decrease) in Accounts
Payable (102,577) 224,434
Increase in Accrued Expenses 239,161 1,025,025
---------- ----------
Net Cash Provided by Operating
Activities 3,472,328 4,124,663
========== ==========
CASH FLOWS from INVESTING ACTIVITIES
Property and Equipment Acquisitions (4,029,024) (2,824,600)
Proceeds from Sale of Property 6,425 12,834
Principal Payments Received from Affiliated
Company 105,226 -0-
Proceeds from Sale of Affiliated Company 249,990 -0-
---------- ----------
Net Cash (Used in) Investing
Activities (3,667,383) (2,811,766)
========== ==========
CASH FLOWS from FINANCING ACTIVITIES
Net Borrowings/(Payments) on Line-of-Credit
Agreement 850,000 (500,000)
Principal Payments on Long-Term Notes (858,000) (800,000)
Payment of Stockholders' Distributions (335,000) (190,000)
Proceeds from Long-Term Borrowings 1,500,000 -0-
Payment of Refinancing Costs (7,500) -0-
Net (Increase)/Decrease in Assets not Sold (614,374) 337,896
Capital Contributions from Partners -0- 24,109
Sale of Treasury Stock -0- 7,247
---------- ----------
Net Cash Provided by/(Used in)
Financing Activities 535,126 (1,120,748)
========== ==========
PAGE
<PAGE>
Lancaster Laboratories, Inc.
and Clewmark Holdings
COMBINED STATEMENTS of CASH FLOWS (Continued)
Years ended September 30, 1994 and 1993
1994 1993
---- ----
INCREASE in CASH and CASH EQUIVALENTS 340,071 192,149
CASH and CASH EQUIVALENTS
Beginning 391,984 199,835
---------- ----------
Ending 732,055 391,984
========== ==========
SUPPLEMENTAL DISCLOSURE of CASH FLOW DISTRIBUTIONS
--------------------------------------------------
Cash Paid during the Year for:
Interest, net of Capitalized Interest 410,279 382,879
See notes to financial statements.
PAGE
<PAGE>
Lancaster Laboratories, Inc.
and Clewmark Holdings
NOTES to COMBINED FINANCIAL STATEMENTS
NOTE 1 - Basis of Presentation
Effective May 1, 1995, Lancaster Laboratories, Inc. and
Clewmark Holdings (the Sellers) entered into an Asset
Purchase Agreement dated May 10, 1995 with Thermo
Analytical, Inc., a Delaware Corporation (the Buyer) whereby
certain assets were sold to the Buyer and certain
liabilities were assumed by the Buyer.
The accompanying combined financial statements represent the
net assets sold as of September 30, 1994 and 1993, and the
revenues, expenses, changes in net assets sold, and cash
flows for the years then ended pursuant to the Asset
Purchase Agreement referred to above. Accordingly, the
accompanying statements are not intended to be a complete
presentation of the Sellers' assets, liabilities, revenues,
and expenses for the above periods.
NOTE 2 - Significant Accounting Policies
Principles of Combination
The accompanying financial statements include the accounts of
Lancaster Laboratories, Inc., a Pennsylvania Corporation,
and Clewmark Holdings, a Pennsylvania general partnership.
The Companies are affiliated through common ownership and
management. All significant intercompany balances and
transactions have been eliminated.
Nature of Business
Lancaster Laboratories, Inc.
Lancaster Laboratories, Inc. is a provider of analytical,
research and development, and consulting services to those
with interests in the environmental, foods, and
pharmaceuticals fields. Its clients are worldwide with the
majority located in the northeast portion of the United
States.
Clewmark Holdings
Clewmark Holdings is a Pennsylvania general partnership
whose exclusive activities relate to leasing of equipment
and real estate. Substantially, all of the leasing
activities of the Partnership are transacted with Lancaster
Laboratories, Inc.
PAGE
<PAGE>
Lancaster Laboratories, Inc.
and Clewmark Holdings
NOTES to COMBINED FINANCIAL STATEMENTS
(Continued)
NOTE 2 - Significant Accounting Policies (Continued)
Cash Equivalents
For purposes of reporting cash flows, cash and cash
equivalents include money market accounts and any highly
liquid debt instruments purchased with a maturity of three
months or less.
Bad Debts
The Company uses the allowance method to account for
uncollectible accounts receivable.
Property, Plant and Equipment
Property, plant and equipment are carried at cost.
Depreciation is computed using straight-line and accelerated
methods over the estimated useful lives. When assets are
retired or otherwise disposed of, the cost and related
accumulated depreciation are removed from the accounts and
any resulting gain or loss is recognized in earnings for the
period. The cost of maintenance and repairs is charged to
earnings as incurred; significant renewals and betterments
are capitalized.
Borrowing and Financing Costs
Financing costs and fees paid to obtain loans are capitalized
and are being amortized over the lives of the loans.
Amortization expense for each of the years ended September
30, 1994 and 1993 is $2,138.
Income Taxes
The stockholders of Lancaster Laboratories, Inc. have elected
under Section 1362(a) of the Internal Revenue Code and under
similar provisions of Pennsylvania Corporate Income Tax Law,
to be taxed as an "S" Corporation beginning October 1, 1986.
As a result of this election, the Company does not pay
Federal or State corporate income taxes on its income.
However, each stockholder reports his or her share of the
Company's current year's income and tax credits on his or
her respective federal and state individual income tax
return.
NOTE 3 - Concentration of Credit Risk
Other financial instruments that potentially subject the
Companies to concentration of credit risk consist of cash
deposits with financial institutions.
PAGE
<PAGE>
Lancaster Laboratories, Inc.
and Clewmark Holdings
NOTES to COMBINED FINANCIAL STATEMENTS
(Continued)
NOTE 3 - Concentration of Credit Risk (Continued)
Aggregate bank balances and related federal depository
insurance coverage at September 30, 1994 and 1993 for each
company are as follows:
Federal
9/30/94 9/30/93 Depository
Bank Balance Insurance
----------------- -----------
Lancaster Laboratories, Inc. 673,691 469,293 100,000
Clewmark Holdings 306,008 222,993 100,000
NOTE 4 - Property, Plant and Equipment
Summaries, by category, of the cost, accumulated
depreciation, net book value and the estimated useful lives
of property, plant and equipment, at September 30, 1994 and
1993, are as follows:
September 30, 1994
--------------------------------------------
Accumu-
lated Useful
Deprec- Net Lives
Category Cost iation Book Value (Years)
-------- ---- ---------- ---------- --------
Land 1,124,286 -0- 1,124,286
Land Improvements 608,958 135,798 473,160 15
Buildings and Building
Improvements 8,295,357 875,135 7,420,222 25 - 39
Laboratory and Office
Equipment 19,211,504 14,475,817 4,735,687 5 - 7
Vehicles 285,073 170,513 114,560 5
Construction in Progress 128,409 -0- 128,409 -
---------- ---------- ----------
29,653,587 15,657,263 13,996,324
========== ========== ==========
PAGE
<PAGE>
Lancaster Laboratories, Inc.
and Clewmark Holdings
NOTES to COMBINED FINANCIAL STATEMENTS
(Continued)
NOTE 4 - Property, Plant and Equipment (Continued)
September 30, 1993
--------------------------------------------
Accumu-
lated Useful
Deprec- Net Lives
Category Cost iation Book Value (Years)
-------- ---- ---------- ---------- ---------
Land 1,124,286 -0- 1,124,286
Land Improvements 505,592 92,150 413,442 15
Buildings and Building
Improvements 6,822,094 640,844 6,181,250 25 - 31.5
Laboratory and Office
Equipment 16,754,719 12,353,375 4,401,344 5 - 7
Vehicles 271,874 168,003 103,871 3 - 5
Construction in Progress 305,544 -0- 305,544 -
---------- ---------- ----------
25,784,109 13,254,372 12,529,737
========== ========== ==========
Construction in Progress
During July 1993, Clewmark Holdings entered into a
construction agreement with a local contractor to construct
a laboratory addition to its existing building at 2425 New
Holland Pike, Lancaster, PA. Total construction cost was
$2,118,759 which included capitalized interest costs of
$22,500. The addition was placed in service during July
1994. At September 30, 1993, $188,852 had been expended on
this project and is reflected on the statement of net
assets sold as construction in progress.
Also included in construction in progress at September 30,
1994 and 1993 is $128,409 and $116,692, respectively, for
site development costs relating to possible future
expansion of Lancaster Laboratories, Inc.
NOTE 5 - Investment in and Advances to Affiliated Company
Investment in Gulf States Analytical, Inc. (GSAI)
At September 30, 1993, Lancaster Laboratories, Inc. owns
3,000 shares of the outstanding stock of Gulf States
Analytical, Inc., in Houston, Texas, which represents 30.93%
ownership. The investment is accounted for using the equity
method, which accounts for the original investment at cost
plus its equity in net earnings (loss) since the date of
acquisition. Lancaster Laboratories, Inc. has agreed to make
working capital loans up to a maximum of $627,000. Interest
PAGE
<PAGE>
Lancaster Laboratories, Inc.
and Clewmark Holdings
NOTES to COMBINED FINANCIAL STATEMENTS
(Continued)
NOTE 5 - Investment in and Advances to Affiliated Company (Continued)
Investment in Gulf States Analytical, Inc. (GSAI) (Continued)
is payable monthly on the outstanding principal balance at a
rate equal from time to time, to the New York prime rate.
All principal and unpaid accrued interest is payable on or
before December 31, 1994. GSAI has granted a security
interest in its equipment, fixtures, and accounts receivable
as collateral for such loans.
A summary of the investment in GSAI during the year ended
September 30, 1993 is as follows:
Original Investment 30,000
Share of Income/(Losses) to Date (44,496)
---------
Net Investment (14,496)
Cash Advances Receivable 103,637
Accrued Interest Receivable* 1,589
---------
Total Investment 90,730
=========
A summary of the audited financial information of GSAI at
March 31, 1993 (*adjusted for intercompany transactions
through September 30, 1993), is as follows:
Total Assets 1,225,999
Total Liabilities 1,272,866
---------
Total Stockholders' Equity/(Deficit) (46,867)
=========
Revenues 3,711,042
Total Expenses 3,996,465
---------
Income/(Loss) for the Year (285,423)
=========
See Note 9 regarding sale of Lancaster Laboratories, Inc.'s
entire interest in GSAI.
NOTE 6 - Notes Payable - Currently Due
Working Capital Lines-of-Credit
Lancaster Laboratories, Inc. has established a working
capital line-of-credit with a local bank whereby it may
borrow up to $1,500,000. Interest at the Bank's National
PAGE
<PAGE>
Lancaster Laboratories, Inc.
and Clewmark Holdings
NOTES to COMBINED FINANCIAL STATEMENTS
(Continued)
NOTE 6 - Notes Payable - Currently Due (Continued)
Working Capital Lines-of-Credit (Continued)
Commercial Rate is payable monthly. Collateral for this
commitment is a first-lien security interest in accounts
receivable. Borrowings outstanding against the line as of
September 30, 1994 and 1993 were $850,000 and $-0-,
respectively.
Equipment Line of Credit
Clewmark Holdings has established an equipment line of credit
with a local bank. Borrowings up to $1,500,000 may be made
to finance equipment purchases. Interest is payable monthly
at a floating rate determined by the Bank's National
Commercial rate. Collateral for this line is: a collateral
mortgage covering certain parcels of real estate and all
equipment now owned or hereafter acquired, an assignment of
all lease payments made by Lancaster Laboratories, Inc.
There were no borrowings outstanding against the line as of
September 30, 1994 and 1993.
NOTE 7 - Long-Term Debt
Clewmark Holdings has incurred the following long-term debt:
1994 1993
---- ----
TERM LOAN AGREEMENTS
A local Bank approved a 10-year term
loan (Term Loan No. 1) not to exceed
$7,700,000 in order to assist the
Partnership in refinancing certain
existing indebtedness, in funding
certain costs relating to an expansion
of an existing facility, in acquiring
the partnership interest of a retiring
partner and in acquiring certain real
estate. On January 2, 1992, the Bank
disbursed $6,600,000 to the Partnership
for the purposes set forth above. The
$1,100,000 portion of the loan, reserved
for the acquisition of certain real estate,
was not exercised.
As amended on July 1, 1993, the unpaid
principal balance of this term loan bears
different interest rates. A rate of 6.3%
per annum will apply to $4,000,000 portion
of the unpaid principal balance from
PAGE
<PAGE>
Lancaster laboratories, Inc.
and Clewmark Holdings
NOTES to COMBINED FINANCIAL STATEMENTS
(Continued)
NOTE 7 - Long-Term Debt (Continued)
1994 1993
---- ----
TERM LOAN AGREEMENTS (Continued)
July 1, 1993 through June 30, 1996.
The remaining unpaid principal balance
bears a floating rate of interest
equal to the bank's National Commercial
Rate.
From July 1, 1996 and thereafter, the
entire unpaid principal balance will
bear a floating rate of interest equal
to the bank's National Commercial Rate.
Principal payments of $64,167 are due
each month commencing February 1, 1992
and continuing each month thereafter
until paid in full. 4,482,144 5,252,144
On August 23, 1994, the Partnership and
a local bank entered into Amendment No.
1 to the above Loan Agreement dated
January 2, 1992. The Bank agreed to
make additional loans to the Partnership,
not to exceed $1,500,000 (Term Loan
No. 2) in order to assist the Partnership's
working capital requirements by reimbursing
it for certain capital expenditures.
As of September 30, 1994, total borrowings
under this agreement amounted to $1,500,000.
The loan is payable over a five-year
period at an annual fixed interest rate
of 8.05%. Interest is payable monthly on
the unpaid principal balance. Monthly
principal payments of $25,000 are due each
month commencing October 1, 1994 and ending
September 1, 1999. A prepayment penalty
exists for early retirement of principal.
Collateral, as modified on August 23, 1994,
for the above Term Loans No. 1 and No. 2
is a first mortgage covering certain
parcels of real estate, all equipment
now owned or hereafter acquired, an
assignment of all lease payments made
by Lancaster Laboratories, Inc., and
the Corporate surety of Lancaster
Laboratories, Inc. In addition, the loan
agreement requires that certain financial
ratios be maintained and limits the
PAGE
<PAGE>
Lancaster Laboratories, Inc.
and Clewmark Holdings
NOTES to COMBINED FINANCIAL STATEMENTS
(Continued)
NOTE 7 - Long-Term Debt (Continued)
1994 1993
---- ----
TERM LOAN AGREEMENTS (Continued)
amount of capitalized leases. 1,475,000 -0-
Unsecured, demand notes payable to a
stockholder's family member. Interest
is payable monthly at prime minus
.5%. While no specific repayment
schedule has been established, the
entire amount has been classified
as due within twelve months. 427,000 490,000
---------- ----------
6,384,144 5,742,144
Less: Current Maturities 1,497,000 770,000
---------- ----------
Long-Term Portion 4,887,144 4,972,144
========== ==========
Aggregate maturities required on long-term debt at September
30, 1994 and 1993 are as follows:
September 30, 1994 September 30, 1993
Year Ending Amount Year Ending Amount
----------- ------ ----------- ------
9/30/95 1,497,000 9/30/94 770,000
9/30/96 1,070,000 9/30/95 770,000
9/30/97 1,070,000 9/30/96 770,000
9/30/98 1,070,000 9/30/97 770,000
9/30/99 1,045,000 9/30/98 770,000
Later Years 632,144 Later Years 1,892,144
--------- ---------
Total 6,384,144 5,742,144
========= =========
NOTE 8 - Employee Benefits
Core Benefits
Lancaster Laboratories, Inc. provides qualified employees
with core benefits of life insurance, health insurance,
short-term disability and long-term disability. Each
full-time employee who regularly works at least 35 hours per
week is eligible to participate upon completion of 30 days
of service with the Company.
PAGE
<PAGE>
Lancaster Laboratories, Inc.
and Clewmark Holdings
NOTES to COMBINED FINANCIAL STATEMENTS
(Continued)
NOTE 8 - Employee Benefits (Continued)
Core Benefits (Continued)
Lancaster Laboratories, Inc. has an unfunded self-insured,
short-term disability plan. Under this plan, the Company
will pay 60% of wages for the first three months for a
qualified disabled employee.
Lancaster Laboratories, Inc. is directly responsible for
payment of a portion of the claims under the health
insurance plan. In connection therewith, as of September 30,
1994 and 1993, the Company has outstanding a letter of
credit, in the amount of $273,901, issued by a local bank
directly to the third-party administrator.
Flexible Benefits
Lancaster Laboratories, Inc. has in effect a cafeteria
benefits plan. This plan allows qualified employees to apply
credits provided by the Company and salary reduction
elections toward the purchase of additional health
insurance, dependent health insurance, dental insurance,
vision insurance and additions to reimbursement accounts to
be used for medical reimbursement and dependent care
assistance. A participant may also elect to buy or sell
vacation time. The Company provides credits to each
participant ($20.00/$22.00 per pay in 1994 and 1993) to be
used toward the purchase of the described benefits or to be
taken as cash compensation.
The costs to the Company of the core and flexible benefits
described above amounted to $970,330 and $811,988 for the
years ended September 30, 1994 and 1993, respectively.
Deferred Profit Sharing Plan and Trust
Effective January 1, 1988, Lancaster Laboratories, Inc.
established a 401(k) Incentive Savings Plan and Trust. All
employees who have been employed for one year, providing
they have worked at least 1,000 hours during that twelve
month period, and who have attained age 21 are eligible for
participation. Any eligible employee may authorize the
employer to withhold up to 10% of his or her compensation,
not to exceed $8,994 and $8,728 for the years ended
September 30, 1994 and 1993, respectively, and deposit such
amounts in the Plan fund. The employer will contribute an
amount equal to 100% of the employee's first 2% of salary
savings and 50% of the next 4% of his/her salary savings.
The employer may also make a qualified non-elective
contribution or a discretionary contribution to the
Plan, both of which the amount is determined by the sole
PAGE
<PAGE>
Lancaster laboratories, Inc.
and Clewmark Holdings
NOTES to COMBINED FINANCIAL STATEMENTS
(Continued)
NOTE 8 - Employee Benefits (Continued)
Deferred Profit Sharing Plan and Trust (Continued)
judgment of the employer. The employer's matching
contributions were $392,872 and $354,046 for the years ended
September 30, 1994 and 1993, respectively. The employer
did not make any qualified non-elective contributions for
the years ended September 30, 1994 and 1993.
NOTE 9 - Sale of 30.93% - Owned Subsidiary
During the fiscal year ended September 30, 1994, Lancaster
Laboratories, Inc. sold its entire ownership interest in
Gulf States Analytical, Inc. This investment was previously
reported on the equity method of accounting. The total
selling price was $249,900. This sale resulted in gain of
$264,486 which is reported as other revenue on the statement
of revenues and expenses. At the time of settlement, all
intercompany account balances were collected or paid.
NOTE 10 - Lease Commitments and Total Rental Expense
September 30, 1994
Lancaster Laboratories, Inc. rents storage space from an
unrelated party. The term of this lease is from April 1,
1992 through March 31, 1995. The rent charged on this lease
is $765 per month.
The Company also rents certain land and storage space from
its president, based on month-to-month usage. The
approximate monthly rent is $1,000.
Future minimum rental commitments under these operating
leases for the year ending September 30, 1995 is $4,590.
The total rental expense included in the statement of
revenues and expenses for the year ended September 30, 1994
is $21,265.
NOTE 11 - Related Party Transactions
September 30, 1994
Lancaster Laboratories, Inc. leases certain facilities from
a related party. See Note 10 for details of these leasing
agreements. The following is a summary of related party
PAGE
<PAGE>
Lancaster Laboratories, Inc.
and Clewmark Holdings
NOTES to COMBINED FINANCIAL STATEMENTS
(Continued)
NOTE 11 - Related Party Transactions (Continued)
September 30, 1994
leases for the year ended September 30, 1994.
Real Estate from Company President 12,085
Other related party transactions pertaining to Clewmark
Holdings:
Note Payable - Stockholder's Family Member 427,000
Interest Expense 27,759
September 30, 1993
Lancaster Laboratories, Inc. leases certain facilities from
a related party. See Note 10 for details of these leasing
agreements. The following is a summary of related party
leases for the year ended September 30, 1993:
Real Estate from Company President 12,085
A summary of other related party transactions for the year
ended September 30, 1993 is as follows:
30.93% Owned Affiliated Company
Accounts Receivable 4,345
Investment - Net 90,730
Sales 189,657
Interest Income 6,407
Subcontracting Expense 2,184
Income from Equipment Leases 61,640
Lease Income Receivable 15,297
Stockholder/Stockholder's Family
Notes Payable 490,000
Interest Expense 30,577
NOTE 12 - Commitments and Contingencies
Covenant Not to Compete
On January 2, 1992, Lancaster Laboratories, Inc. and Clewmark
Holdings acquired a former stockholder's/partner's entire
ownership interests in these companies. In addition to a
purchase price of $1,415,287, the Companies entered into a
non-competition agreement with its former stockholder/
partner whereby the stockholder/partner agreed not to
PAGE
<PAGE>
Lancaster Laboratories, Inc.
and Clewmark Holdings
NOTES to COMBINED FINANCIAL STATEMENTS
(Continued)
NOTE 12 - Commitments and Contingencies (Continued)
Covenant Not to Compete (Continued)
compete with the Companies in any prohibited business as
defined in the agreement for a period from November 27, 1991
through December 31, 1995. In consideration for the
stockholder's/partner's covenant not to compete, Lancaster
Laboratories, Inc. has agreed to pay $200,000 per year
during the term of the non-compete period. During the
calendar years 1992, 1993, and 1994, the $200,000 per year
will be paid in equal monthly installments of $16,666 per
month. The non-compete payment of $200,000 payable for the
calendar year 1995 will be paid in one lump sum on
January 2, 1995.
Settlement of Litigation
Lancaster Laboratories, Inc. was contesting an assessment
issued by the Pennsylvania Department of Revenue. The
assessment, in the amount of $107,530 was in connection with
a sales and use audit covering the period from January 1,
1982 through April 30, 1985. By an order dated November 10,
1993, the Pennsylvania Supreme Court affirmed the decision
of the Commonwealth Court that the use tax assessment on
equipment and supplies employed by the Company in its
nutritional labeling activities would be taxable and all
other equipment in its testing and inspection activities
would be exempt from sales and use tax. Accordingly, when
the final recomputation of tax and interest is completed by
the Department of Revenue, a reduction of the assessment
will approximate 90%.
In conjunction with the above settlement on sales and use
tax, Lancaster Laboratories, Inc. reached a settlement with
the office of the Attorney General on its petitions
requesting relief from additional PA capital stock tax
assessments for the years ended September 30, 1985 through
1993 under the manufacturing, research and development
exemption of the PA code. Both parties agreed to a one-time
credit of $70,000 and Lancaster Laboratories will pay the
additional capital stock tax as assessed and not be entitled
to a manufacturing, research and development exemption for
those years in question or future years. All liabilities and
associated expenses have been recorded as of and for the
year ended September 30, 1994.
PAGE
<PAGE>
Lancaster Laboratories, Inc.
and Clewmark Holdings
Combined Financial Statements
Pursuant to the Asset Purchase Agreement
Dated May 10, 1995
Six months ended March 31, 1995 and 1994
TABLE of CONTENTS
Page
----
Independent Accountants' Compilation Report
Combined Statements of Net Assets Sold
Combined Statements of Revenues and Expenses
Combined Statements of Changes in Net Assets Sold
Combined Statements of Cash Flows
Selected Financial Information
PAGE
<PAGE>
INDEPENDENT ACCOUNTANTS' COMPILATION REPORT
To the Board of Directors and Partners
Lancaster Laboratories, Inc.
and Clewmark Holdings
Lancaster, Pennsylvania
We have compiled the accompanying combined statements of net
assets sold of Lancaster Laboratories, Inc., a Pennsylvania
corporation, and Clewmark Holdings, a Pennsylvania general
partnership, as of March 31, 1995 and 1994 and the related combined
statements of revenues and expenses, changes in net assets sold, and
cash flows for the six months then ended, in accordance with
Statements on Standards for Accounting and Review Services issued by
the American Institute of Certified Public Accountants.
The accompanying combined financial statements were prepared to
present the assets sold and the liabilities assumed pursuant to the
Asset Purchase Agreement dated May 10, 1995, between Lancaster
Laboratories, Inc./Clewmark Holdings and Thermo Analytical, Inc., as
described in the accompanying selected information, and are not
intended to be a complete presentation of the assets, liabilities,
revenues, expenses, and cash flows of Lancaster Laboratories, Inc. and
Clewmark Holdings.
A compilation is limited to presenting in the form of financial
statements information that is the representation of management. We
have not audited or reviewed the accompanying combined financial
statements and, accordingly, we do not express an opinion or any other
form of assurance on them.
Management has elected to omit substantially all of the
disclosures required by generally accepted accounting principles. If
the omitted disclosures were included in the combined financial
statements, they might influence the user's conclusions about the
Companies' net assets sold, revenues, expenses, and cash flows.
Accordingly, these combined financial statements are not designed for
those who are not informed about such matters.
July 14, 1995 TROUT, EBERSOLE & GROFF, LLP
Lancaster, Pennsylvania Certified Public Accountants
PAGE
<PAGE>
Lancaster Laboratories, Inc.
and Clewmark Holdings
COMBINED STATEMENTS of NET ASSETS SOLD
March 31, 1995 and 1994
1995 1994
---- ----
ASSETS
------
CURRENT ASSETS
Cash and Cash Equivalents 758,617 323,247
Accounts Receivable:
Billed, Net of Allowance for Doubtful
Accounts of $75,815 and $40,000 at
3/31/95 and 3/31/94, respectively 4,526,963 4,919,860
Unbilled 915,809 715,420
Inventory 11,285 11,285
Prepaid Expenses 88,263 68,289
---------- ----------
Total Current Assets 6,300,937 6,038,101
========== ==========
PROPERTY, PLANT, and EQUIPMENT
Land 1,124,286 1,124,286
Land Improvements 608,958 508,295
Buildings and Leasehold Improvements 8,295,357 6,822,093
Laboratory and Office Equipment 20,136,081 17,512,250
Vehicles 312,837 246,800
Construction in Progress 131,271 1,729,374
---------- ----------
30,608,790 27,943,098
Less: Accumulated Depreciation 16,955,600 14,470,988
---------- ----------
Property, Plant, and Equipment - Net 13,653,190 13,472,110
========== ==========
OTHER ASSETS
Financing Costs, net of Amortization 21,370 17,105
========== ==========
TOTAL ASSETS 19,975,497 19,527,316
========== ==========
PAGE
<PAGE>
Lancaster Laboratories, Inc.
and Clewmark Holdings
COMBINED STATEMENTS of NET ASSETS SOLD (Continued)
March 31, 1995 and 1994
1995 1994
---- ----
LIABILITIES and NET ASSETS SOLD
-------------------------------
CURRENT LIABILITIES
Notes Payable - Bank -0- 700,000
Current Maturities of Long-Term Debt 1,070,000 1,210,000
Accounts Payable - Trade 623,730 922,933
Accrued Salaries and Vacation Pay 647,762 743,789
Accrued Employee Benefits 9,629 5,466
Accrued Corporate Taxes 1,347 664,069
Other Accrued Expenses 299,560 108,532
---------- ----------
Total Current Liabilities 2,652,028 4,354,789
========== ==========
LONG-TERM DEBT
Notes Payable - Net of Current Maturities 4,352,144 4,872,144
---------- ----------
TOTAL LIABILITIES 7,004,172 9,226,933
========== ==========
NET ASSETS SOLD 12,971,325 10,300,383
========== ==========
See accountants' compilation report and selected information.
PAGE
<PAGE>
Lancaster Laboratories, Inc.
and Clewmark Holdings
COMBINED STATEMENTS of REVENUES and EXPENSES
Six months ended March 31, 1995 and 1994
1995 1994
---- ----
REVENUES
Service Revenues - Net 16,456,458 13,668,597
========== ==========
COSTS and OPERATING EXPENSES
Cost of Service Revenues 9,376,619 8,600,669
Selling, General, and Administrative 4,533,530 4,709,040
---------- ----------
Total Costs and Operating Expenses 13,910,149 13,309,709
========== ==========
Excess Revenues over Costs
and Expenses from Operations 2,546,309 358,888
========== ==========
OTHER REVENUES/(EXPENSES)
Lease Income 26,925 39,635
Interest Expense (231,349) (177,891)
Gain on Sale of Affiliated Company -0- 264,486
---------- ----------
Total Other Revenues/(Expenses) (204,424) 126,230
========== ==========
EXCESS REVENUES over EXPENSES 2,341,885 485,118
========== ==========
See accountants' compilation report and selected information.
PAGE
<PAGE>
Lancaster Laboratories, Inc.
and Clewmark Holdings
COMBINED STATEMENTS of CHANGES in NET ASSETS SOLD
Six months ended March 31, 1995 and 1994
1995 1994
---- ----
Balance - Beginning of Period 10,861,470 10,431,379
Excess Revenues over Expenses 2,341,885 485,118
Distributions (446,050) (175,000)
Net Change in Assets not Sold 214,020 (441,114)
---------- ----------
Balance - End of Period 12,971,325 10,300,383
========== ==========
See accountants' compilation report and selected information.
PAGE
<PAGE>
Lancaster Laboratories, Inc.
and Clewmark Holdings
COMBINED STATEMENTS of CASH FLOWS
Six months ended March 31, 1995 and 1994
1995 1994
---- ----
CASH FLOWS from OPERATING ACTIVITIES
Excess of Revenues over Expenses 2,341,885 485,118
Adjustments to Reconcile Excess of Revenues
over Expenses to Net Cash Provided by/
(Used in) Operating Activities:
Depreciation 1,338,296 1,241,691
Amortization of Financing Costs 1,631 535
Provision for Doubtful Accounts -0- 6,317
Gain from Sale of Affiliated Company -0- (264,486)
Changes in Assets and Liabilities:
(Increase)/Decrease in Accounts
Receivable 279,208 (256,661)
(Increase)/Decrease in Prepaid Expenses (63,114) (43,482)
Increase/(Decrease) in Accounts Payable 37,629 234,255
Increase/(Decrease) in Accrued
Expenses (869,781) (67,062)
---------- ----------
Net Cash Provided by Operating
Activities 3,065,754 1,336,225
========== ==========
CASH FLOWS from INVESTING ACTIVITIES
Property and Equipment Acquisitions (995,162) (2,184,064)
Principal Payments Received from Affiliated
Company -0- 105,226
Proceeds from Sale of Affiliated Company -0- 249,990
---------- ----------
Net Cash (Used in) Investing Activities (995,162) (1,828,848)
========== ==========
CASH FLOWS from FINANCING ACTIVITIES
Net Borrowings/(Payments) on Line-of-Credit
Agreement (850,000) 700,000
Principal Payments on Long-Term Notes (962,000) (435,000)
Partner Withdrawals (366,050) -0-
Payment of Stockholders' Distributions (80,000) (175,000)
Proceeds from Long-Term Borrowings -0- 775,000
Net (Increase)/Decrease in Assets not Sold 214,020 (441,114)
---------- ----------
Net Cash Provided by/(Used in)
Financing Activities (2,044,030) 423,886
========== ==========
PAGE
<PAGE>
Lancaster Laboratories, Inc.
and Clewmark Holdings
COMBINED STATEMENTS of CASH FLOWS (Continued)
Six months ended March 31, 1995 and 1994
1995 1994
---- ----
INCREASE/(DECREASE) in CASH and
CASH EQUIVALENTS 26,562 (68,737)
CASH and CASH EQUIVALENTS
Beginning 732,055 391,984
---------- ----------
Ending 758,617 323,247
========== ==========
SUPPLEMENTAL DISCLOSURE of CASH FLOW DISTRIBUTIONS
Cash Paid during the Period for Interest 231,349 177,891
See accountants' compilation report and selected information.
PAGE
<PAGE>
Lancaster Laboratories, Inc.
and Clewmark Holdings
SELECTED INFORMATION - Substantially all Disclosures Required by
Generally Accepted Accounting Principles are not Included
Subsequent Event and Basis of Presentation
Effective May 1, 1995, Lancaster Laboratories, Inc. and Clewmark
Holdings (the Sellers) entered into an Asset Purchase Agreement
dated May 10, 1995 with Thermo Analytical, Inc., a Delaware
Corporation (the Buyer) whereby certain assets were sold to the
Buyer and certain liabilities were assumed by the Buyer.
The accompanying combined financial statements represent the net
assets sold as of March 31, 1995 and 1994, and the revenues,
expenses, changes in net assets sold, and cash flows for the six
months then ended pursuant to the Asset Purchase Agreement referred
to above. Accordingly, the accompanying statements are not intended
to be a complete presentation of the Sellers' assets, liabilities,
revenues, and expenses for the above periods.
Interim results are not necessarily indicative of results for the full
year.
See accountants' compilation report.
PAGE
<PAGE>
FORM 8-K/A
Item 7. Financial Statements, Pro Forma Combined Condensed Financial
------------------------------------------------------------
Information and Exhibits (continued)
------------------------
(b) Pro Forma Combined Condensed Financial Information
The following unaudited pro forma combined condensed
statement of income sets forth the results of operations for the
year ended April 1, 1995, as if the acquisition of Lancaster
Laboratories, Inc. and its affiliate Clewmark Holdings (referred
to as "Lancaster Laboratories" in the following pro forma
combined condensed financial information) by the Company had
occurred at the beginning of fiscal 1995. The unaudited pro forma
combined condensed balance sheet sets forth the financial
position as of April 1, 1995, as if the acquisition had occurred
as of that date and assuming there is no additional post-closing
purchase price adjustment. The pro forma combined condensed
statement of income for the year ended April 1, 1995 includes the
results of operations of the Company for the year ended April 1,
1995 and Lancaster Laboratories for the twelve months ended March
31, 1995, derived by subtracting the first two quarters of fiscal
1994 from its results of operations for the twelve months ended
September 30, 1994, and adding the first two quarters of fiscal
1995 to its results of operations for the twelve months ended
September 30, 1994.
The acquisition has been accounted for using the purchase
method of accounting. The pro forma results of operations are not
necessarily indicative of future operations or the actual results
that would have occurred had the acquisition of Lancaster
Laboratories been consummated at the beginning of fiscal 1995.
The financial statements filed under part (a) of this item should
be read in conjunction with these pro forma combined condensed
financial statements.
3PAGE
<PAGE>
FORM 8-K/A
THERMO PROCESS SYSTEMS INC.
and
LANCASTER LABORATORIES
PRO FORMA COMBINED CONDENSED STATEMENT OF INCOME
Year Ended April 1, 1995
(Unaudited)
Historical Pro Forma
--------------------- ---------------------
Thermo Lancaster
Process Laboratories Adjustments Combined
------- ------------ ----------- --------
(In thousands except per share amounts)
Revenues $133,803 $ 31,464 $ - $165,267
-------- -------- -------- --------
Costs and Operating Expenses:
Cost of revenues 98,552 18,163 - 116,715
Selling, general and
administrative expenses 26,257 9,661 569 36,487
Product and new business
development expenses 883 - - 883
-------- -------- -------- --------
125,692 27,824 569 154,085
-------- -------- -------- --------
Operating Income 8,111 3,640 (569) 11,182
Gain on Issuance of Stock
by Subsidiaries 1,343 - - 1,343
Interest Income 3,322 3 (1,173) 2,152
Interest Expense (includes
$1,071 for notes to parent
company) (2,855) (469) - (3,324)
Other Income 1,092 62 - 1,154
-------- -------- -------- --------
Income Before Income Taxes
and Minority Interest 11,013 3,236 (1,742) 12,507
Income Tax Provision 2,630 - 608 3,238
Minority Interest Expense,
Net 4,268 - - 4,268
-------- -------- -------- --------
Net Income $ 4,115 $ 3,236 $ (2,350) $ 5,001
======== ======== ======== ========
Earnings per Share $ .24 $ .29
======== ========
Weighted Average Shares 17,143 17,143
======== ========
See notes to pro forma combined condensed financial statements.
4PAGE
<PAGE>
FORM 8-K/A
THERMO PROCESS SYSTEMS INC.
and
LANCASTER LABORATORIES
PRO FORMA COMBINED CONDENSED BALANCE SHEET
April 1, 1995
(Unaudited)
Historical Pro Forma
--------------------- ---------------------
Thermo Lancaster
Process Laboratories Adjustments Combined
------- ------------ ----------- --------
(In thousands)
ASSETS
Current Assets:
Cash and cash equivalents $ 35,808 $ 759 $(24,696) $ 11,871
Short-term available-
for-sale investments,
at quoted market value 5,155 - - 5,155
Accounts receivable, net 27,949 4,527 - 32,476
Unbilled contract costs
and fees 16,481 916 - 17,397
Inventories 2,732 11 - 2,743
Prepaid expenses 3,788 88 - 3,876
Prepaid and refundable
income taxes 8,228 - 397 8,625
-------- -------- -------- --------
100,141 6,301 (24,299) 82,143
-------- -------- -------- --------
Property, Plant and
Equipment, at Cost 92,795 30,609 (17,394) 106,010
Less: Accumulated
depreciation and
amortization 33,058 16,956 (16,956) 33,058
-------- -------- -------- --------
59,737 13,653 (438) 72,952
-------- -------- -------- --------
Long-term Available-for-sale
Investments, at Quoted
Market Value 10,564 - - 10,564
-------- -------- -------- --------
Long-term Held-to-maturity
Investments, at Amortized
Cost 22,569 - - 22,569
-------- -------- -------- --------
Other Assets 12,146 21 - 12,167
-------- -------- -------- --------
Cost in Excess of Net Assets
of Acquired Companies 66,516 - 7,103 73,619
-------- -------- -------- --------
$271,673 $ 19,975 $(17,634) $274,014
======== ======== ======== ========
See notes to pro forma combined condensed financial statements.
5PAGE
<PAGE>
FORM 8-K/A
THERMO PROCESS SYSTEMS INC.
and
LANCASTER LABORATORIES
PRO FORMA COMBINED CONDENSED BALANCE SHEET (continued)
April 1, 1995
(Unaudited)
Historical Pro Forma
--------------------- ---------------------
Thermo Lancaster
Process Laboratories Adjustments Combined
------- ------------ ----------- --------
(In thousands)
LIABILITIES AND SHAREHOLDERS'
INVESTMENT
Current Liabilities:
Accounts payable $ 9,612 $ 624 $ - $ 10,236
Notes payable and current
maturities of long-term
obligations 4,652 1,070 (1,070) 4,652
Other accrued liabilities 18,065 958 759 19,782
Due to parent company 3,116 - - 3,116
-------- -------- -------- --------
35,445 2,652 (311) 37,786
-------- -------- -------- --------
Deferred Income Taxes
and Other Liabilities 5,173 - - 5,173
-------- -------- -------- --------
Long-term Obligations 96,851 4,352 (4,352) 96,851
-------- -------- -------- --------
Minority Interest 56,603 - - 56,603
-------- -------- -------- --------
Shareholders' Investment:
Common stock 1,741 - - 1,741
Capital in excess of
par value 53,559 - - 53,559
Retained earnings 21,727 - - 21,727
Treasury stock (864) - - (864)
Cumulative translation
adjustment 1,526 - - 1,526
Net unrealized loss on
available-for-sale
investments (88) - - (88)
Net assets sold - 12,971 (12,971) -
-------- -------- -------- --------
77,601 12,971 (12,971) 77,601
-------- -------- -------- --------
$271,673 $ 19,975 $(17,634) $274,014
======== ======== ======== ========
See notes to pro forma combined condensed financial statements.
6PAGE
<PAGE>
FORM 8-K/A
THERMO PROCESS SYSTEMS INC.
and
LANCASTER LABORATORIES
NOTES TO PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
Note A - Basis of Presentation
The allocation of the purchase price is based on an estimate of
the fair value of the net assets acquired and is subject to
adjustment. To date, no information has been gathered that would
cause the Company to believe that the final allocation of the
purchase price will be materially different than the preliminary
estimate.
Note B - Pro Forma Adjustments to Pro Forma Combined Condensed Statement of
Income (In thousands, except in text)
Year Ended
April 1, 1995
-------------
Debit (Credit)
Selling, General and Administrative
Expenses
Service fee of 1.25% and 1.20% of
Lancaster Laboratories' revenues for
the nine-month period ended December 31,
1994 and the three-month period ended April 1,
1995, respectively, for services provided
under a services agreement between the
Company and Thermo Electron Corporation $ 391
Amortization over 40 years of
"Cost in excess of net assets of
acquired companies" of $7,103,000
created by the acquisition of
Lancaster Laboratories 178
--------
569
--------
Interest Income
Decrease in interest income attributable
to the lower cash position as a result
of the total cash payment of $24,696,000
to acquire Lancaster Laboratories,
calculated using an average interest
rate of 4.75% 1,173
--------
7PAGE
<PAGE>
FORM 8-K/A
THERMO PROCESS SYSTEMS INC.
and
LANCASTER LABORATORIES
NOTES TO PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
Note B - Pro Forma Adjustments to Pro Forma Combined Condensed Statement of
Income (In thousands) (continued)
Year Ended
April 1, 1995
-------------
Debit (Credit)
Income Tax Provision
Reduction in income taxes associated
with adjustments above, excluding the
portion of amortization of "Cost
in excess of net assets of acquired
companies" that is nondeductible,
calculated at the Company's
statutory income tax rate of 40% $ (686)
Income tax provision associated with
Lancaster Laboratories' earnings,
calculated at the Company's statutory
income tax rate of 40% 1,294
--------
608
--------
8PAGE
<PAGE>
FORM 8-K/A
THERMO PROCESS SYSTEMS INC.
and
LANCASTER LABORATORIES
NOTES TO PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS (continued)
(Unaudited)
Note C - Pro Forma Adjustments to Pro Forma Combined Condensed Balance
Sheet (In thousands)
April 1, 1995
-------------
Debit (Credit)
Cash and Cash Equivalents
Cash payment to acquire Lancaster Laboratories $(19,174)
Cash payment to repay Lancaster Laboratories'
debt (5,333)
Cash payment to pay acquisition closing costs (189)
--------
(24,696)
--------
Prepaid and Refundable Income Taxes
Record prepaid taxes associated with acquisition
and other reserves recorded at the time of acquisition 397
--------
Property, Plant and Equipment, at Cost
Record Lancaster Laboratories' property and equipment
at fair market value (438)
--------
Cost in Excess of Net Assets of Acquired Companies
Excess of cost over the fair value of net assets
acquired of Lancaster Laboratories 7,103
--------
Notes Payable and Current Maturities of Long-term Obligations
Payment of Lancaster Laboratories' bank debt at the time
of acquisition 1,070
--------
Other Accrued Liabilities
Estimated acquisition and other reserves (759)
--------
Long-term Obligations
Payment of Lancaster Laboratories' bank debt at the time
of acquisition 4,352
--------
Shareholders' Investment
Elimination of Lancaster Laboratories' equity account 12,971
--------
9PAGE
<PAGE>
FORM 8-K/A
Item 7. Financial Statements, Pro Forma Combined Condensed Financial
------------------------------------------------------------
Information and Exhibits (continued)
------------------------
(c) Exhibits
1 Asset Purchase Agreement by and among Thermo Analytical
Inc. (as Buyer); Lancaster Laboratories, Inc. and
Clewmark Holdings (as Sellers); and Earl H. Hess, Anita
F. Hess, Kenneth E. Hess, J. Wilson Hershey and Carol D.
Hess (as the principal owners of Sellers) (previously
filed).
23 Consent of Trout, Ebersole & Groff.
10PAGE
<PAGE>
FORM 8-K/A
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized, on this 24th day of July
1995.
THERMO PROCESS SYSTEMS INC.
Paul F. Kelleher
---------------------------
Paul F. Kelleher
Chief Accounting Officer
11PAGE
<PAGE>
EXHIBIT 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Thermo Process Systems Inc.:
As independent public accountants, we hereby consent to the use of our
report dated October 26, 1994, included in Thermo Process System Inc.'s
Amendment No. 1 on Form 8-K/A relating to events occurring on May 10, 1995,
and to other references to our Firm included in or made a part of this Form
8-K/A.
Trout, Ebersole & Groff
