FORM 8-K/A
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
-------------------------------------------
AMENDMENT NO. 1 ON FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report
(Date of earliest event reported):
November 6, 1997
________________________________________
THERMO POWER CORPORATION
(Exact name of Registrant as specified in its charter)
Massachusetts 1-10573 04-2891371
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification Number)
incorporation or
organization)
81 Wyman Street, P.O. Box 9046
Waltham, MA 02254-9046
(Address of principal executive offices) (Zip Code)
(781) 622-1000
(Registrant's telephone number
including area code)
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FORM 8-K/A
Item 2. Acquisition or Disposition of Assets
On November 6, 1997, Thermo Power Corporation ("Thermo Power" or "the
Company") declared unconditional in all respects its cash tender offer
for the outstanding ordinary shares of Peek plc (Peek). The aggregate
cost to acquire all Peek ordinary shares, including related expenses, is
estimated at approximately $166.7 million. As of January 16, 1998, the
Company has paid for all Peek ordinary shares.
The acquisition of the Peek shares was financed with borrowings from
Thermo Electron Corporation ("Thermo Electron"), the Company's parent
corporation. On November 17, 1997, the Company borrowed $160.0 million
from Thermo Electron pursuant to a promissory note due in 1999. Such note
bears interest at a rate equal to the 90-day Commercial Paper Composite
Rate as reported by Merrill Lynch Capital Markets, plus 25 basis points,
and is adjusted quarterly.
Peek develops and installs equipment to monitor and regulate traffic
flow in cities and towns around the globe, including traffic signal
synchronization systems to minimize delays, variable message systems to
advise drivers of accidents or construction, video systems to give
real-time analysis of traffic flows at intersections and on highways, as
well as automatic toll-collection systems. In addition, through its Field
Data business, Peek develops and markets field measurement products.
Subsequent to Peek's acquisition by the Company, the Company reached
an agreement with ONIX Systems Inc. ("ONIX"), a majority-owned subsidiary
of Thermo Instrument Systems Inc. ("Thermo Instrument"), to sell Peek's
Field Data business, effective November 6, 1997, for $19.1 million.
Thermo Instrument is a majority-owned subsidiary of Thermo Electron. The
Company expects to receive payment from ONIX for the sale of the Field
Data business in January 1998. The components of the sales price for the
Field Data business consist of the net tangible book value of the Field
Data business, goodwill, and the estimated tax liability relating to the
sale. The goodwill was determined based upon a percentage of the
Company's total goodwill associated with its acquisition of Peek, based
on the aggregate 1997 revenues of the Field Data business relative to
Peek's 1997 consolidated revenues.
The Company has no present intention to use the plants, equipment, or
other physical property acquired for purposes materially different from
the purposes for which such assets were used prior to the acquisition.
However, the Company will review the remaining businesses of Peek and its
assets, corporate structure, capitalization, operations, properties,
policies, management, and personnel. The Company may develop additional
plans or proposals, including mergers, transfers of a material amount of
assets, or other transactions or changes relating to the remaining
acquired businesses. Any such transaction might involve Thermo Electron
or its subsidiaries.
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FORM 8-K/A
Item 7. Financial Statements, Pro Forma Combined Condensed Financial
Information, and Exhibits
(a)Financial Statements of Business Acquired
Attached hereto.
(b)Pro Forma Combined Condensed Financial Information
Attached hereto.
(c)Exhibits
23 Consent of Ernst & Young
3PAGE
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Peek plc
Report and Accounts
for the three years ended 31 December 1996
PAGE
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REPORT OF THE INDEPENDENT AUDITORS
To The Board of Directors
Peek plc
We have audited the accompanying consolidated balance sheets of Peek plc
as of 31 December 1996 and 1995, and the related consolidated statements
of income, movements in shareholders' equity, cashflows and total
recognised gains and losses for each of the three years in the period
ended 31 December 1996. These financial statements are the responsibility
of the company's management. Our responsibility is to express an opinion
on these financial statements based on our audits.
We conducted our audits in accordance with United Kingdom auditing
standards which do not differ in any significant respect from United
States generally accepted auditing standards. Those standards require
that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the
accounts 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.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial
position of Peek plc at 31 December 1996 and 1995, and the consolidated
results of its operations and its consolidated cashflows for each of the
three years in the period ended 31 December 1996, in conformity with
accounting principles generally accepted in the United Kingdom, which
differ in certain respects from those followed in the United States (see
Note 24 of Notes to the Accounts).
ERNST & YOUNG
Chartered accountants
London, England
11 March 1997, except for
Note 24 - US GAAP
reconciliation, as to which
date is 19 January 1998.
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Peek plc
Consolidated profit and loss account
for the year ended 31 December
1996 1995 1994
(In thousands
Notes of British pounds sterling)
Turnover
Continuing operations 2
Ongoing 159,159 133,485 124,074
Acquisitions 2,916 10,301 4,035
-------- -------- --------
162,075 143,786 128,109
Discontinued operations - - 3,689
-------- -------- --------
162,075 143,786 131,798
Cost of sales (107,494) (91,813) (82,969)
-------- -------- --------
Gross profit 54,581 51,973 48,829
Net operating expenses:
Selling and distribution (18,452) (15,494) (15,643)
Technology (8,752) (8,485) (8,179)
Administration (14,091) (15,524) (14,840)
-------- -------- --------
(41,295) (39,503) (38,662)
Operating profit 3
Continuing operations
Ongoing 13,329 12,338 9,494
Acquisitions (43) 132 278
-------- -------- --------
13,286 12,470 9,772
Discontinued operations - - 395
-------- -------- --------
13,286 12,470 10,167
Exceptional items 7
Continuing activities - 3,915 382
Discontinued operations (6) - (42)
-------- -------- --------
Profit on ordinary activities
before interest 13,280 16,385 10,507
Net interest payable 5 (729) (403) (288)
-------- -------- --------
Profit on ordinary activities
before taxation 12,551 15,982 10,219
Taxation 6 (4,258) (4,099) (3,455)
-------- -------- --------
Profit on ordinary activities
after taxation 8,293 11,883 6,764
Minority interest - - (110)
-------- -------- --------
Profit for the financial year(a) 8,293 11,883 6,654
Dividends 8 (4,114) (4,088) (4,059)
-------- -------- --------
Retained profit 16 4,179 7,795 2,595
-------- -------- --------
Earnings per ordinary share 9 6.9p 9.9p 5.6p
Adjusted earnings per ordinary
share (excluding exceptional
items) 9 6.9p 6.6p 5.3p
Dividend per ordinary share 3.4p 3.4p 3.4p
--------------------
(a) A summary of the significant adjustments to the profit for the
financial year that would be required had United States generally
accepted accounting principles been applied instead of those
generally accepted in the United Kingdom is set out in Note 24 of
Notes to the Accounts.
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Peek plc
Group balance sheet
at 31 December
1996 1995
(In thousands
of British
Notes pounds sterling)
Net assets employed
Fixed assets
Tangible assets 10 14,220 14,701
Investments - -
------- -------
14,220 14,701
Current assets
Stocks 11 20,433 21,874
Debtors due within one year 12 48,173 44,898
Debtors due after more than one year 12 363 1,433
Cash and short term deposits 14,024 15,628
------- -------
82,993 83,833
Creditors: amounts due within one year 13 (48,821) (47,803)
------- -------
Net current assets 34,172 36,030
Total assets less current liabilities 48,392 50,731
Creditors: amounts due after more than
one year 13 (18,173) (16,086)
Provisions for liabilities and charges 14
Deferred taxation (1,128) (2,157)
Other (139) (630)
------- -------
Net assets 28,952 31,858
------- -------
Capital and reserves(a)
Called up equity share capital 15 10,900 10,841
Called up non-equity share capital 15 25 25
Reserves (all equity) 16 18,027 20,992
------- -------
Shareholders' funds 28,952 31,858
------- -------
____________________
(a) A summary of the significant adjustments to capital and reserves that
would be required had United States generally accepted accounting
principles been applied instead of those generally accepted in the
United Kingdom is set out in Note 24 of Notes to the Accounts.
4PAGE
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Peek plc
Consolidated cash flow statement
for the year ended 31 December
1996 1995 1994
(In thousands
Notes of British pounds sterling)
Cash flow from operating
activities 20 11,545 4,061 14,632
Returns on investments and
servicing of finance 20 (550) (379) 128
Taxation (4,173) (4,954) (4,276)
Capital expenditure and
financial investment 20 (3,395) 489 (3,803)
Acquisitions and disposals 20 (4,722) (5,070) (2,786)
Equity dividends paid (3,952) (3,824) (3,789)
------ ------ ------
Cash (outflow)/inflow before
financing (5,247) (9,677) 106
Financing 20 4,431 655 (682)
------ ------ ------
(Decrease)/increase in cash in
the period (816) (9,022) (576)
------ ------ ------
Reconciliation of net cash flow
to movement in net debt
(Decrease)/increase in cash
in the period (816) (9,022) (576)
Cash (outflow)inflow from
increase in debt and
lease financing (4,090) (248) 911
------ ------ ------
Change in net debt resulting
from cash flows (4,906) (9,270) 335
Translation differences 1,213 (302) 570
------ ------ ------
Movement in net (debt)/cash in
the period (3,693) (9,572) 905
Net (debt)/cash at start of
period (697) 8,875 7,970
------ ------ ------
Net (debt)/cash at end of
period(a) 21 (4,390) (697) 8,875
------ ------ ------
____________________
(a) The significant differences between the cashflow statement presented
above and that required under United States generally accepted
accounting principles are described in Note 24 of Notes to the
Accounts.
5PAGE
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Peek plc
Consolidated statement of total recognised gains and losses
for the year ended 31 December
1996 1995 1994
(In thousands
of British pounds sterling)
Profit for the financial year 8,293 11,883 6,654
Currency translation differences
on foreign currency net
investments (2,738) 453 (306)
Unrealised deficit on revaluation
of property (659) - (195)
------ ------ ------
Total recognised gains and losses
relating to the year 4,896 12,336 6,153
------ ------ ------
Reconciliation of movements in consolidated shareholders' funds
for the year ended 31 December
1996 1995 1994
(In thousands
of British pounds sterling)
Total recognised gains and losses
relating to the year 4,896 12,336 6,153
Dividends (4,114) (4,088) (4,059)
------ ------ ------
782 8,248 2,094
New share capital subscribed 493 647 696
Goodwill written off (4,181) (2,037) (2,156)
Release of capital reserves - - (246)
------ ------ ------
Net (decrease)/increase in shareholders'
funds (2,906) 6,858 388
Opening shareholders' funds 31,858 25,000 24,612
------ ------ ------
Closing shareholders' funds 28,952 31,858 25,000
------ ------ ------
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Peek plc
Notes to the Accounts
1 Accounting policies
Basis of accounting
The accounts are prepared under the historical cost convention, modified
to include the revaluation of certain freehold and long leasehold land
and buildings, in accordance with applicable accounting standards.
Basis of consolidation
The consolidated accounts incorporate the accounts of Peek plc and all
its subsidiary undertakings to 31 December. The results of companies
acquired during the year are included from the date control passes, and
the results of companies disposed of during the year are included up to
the date of disposal.
Goodwill, which is the difference between the fair value of net assets
acquired and the fair value of consideration paid, is written off to
reserves in the year in which it arises.
Undertakings, other than subsidiary undertakings, in which the group has
an investment representing not less than 20% of the voting rights and
over which it exerts significant influence, are treated as associated
undertakings. The group accounts include the appropriate share of these
undertakings' results and reserves based on audited accounts to 31
December.
Depreciation
Freehold land is not depreciated.
Other assets are depreciated on a straight line basis to write off the
cost less residual value over their estimated useful lives as follows:
Freehold buildings 30-50 years
Plant and equipment 3-10 years
Leasehold property period of lease
Motor vehicles 3-5 years
Stocks
Stocks are included in the accounts at the lower of cost (including
manufacturing overheads, where appropriate) on a first in first out basis
and net realisable value.
Long-term contracts
Profit on long-term contracts is taken as the work is carried out if the
final outcome can be assessed with reasonable certainty. The profit
included is calculated on a prudent basis to reflect the proportion of
the work carried out at the year end by recording turnover and related
costs (as defined in Stocks above) as contract activity progresses.
Turnover is assessed individually for each contract to ensure it
adequately reflects the value of work done. Revenues derived from
variations on contracts are recognised only when they have been accepted
by the customer. Full provision is made for losses on all contracts in
the year in which they are first foreseen.
7PAGE
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Peek plc
Notes to the Accounts continued
Technology
Expenditure on research and development is written off in the year in
which it is incurred.
Deferred taxation
Provision is made under the liability method for all timing differences
to the extent that they are expected to reverse in the foreseeable future
without being replaced, at the rate at which it is estimated that they
will become payable. No provision is made for the liability to
corporation tax on capital gains which might arise if the freehold land
and buildings were to be realised at their balance sheet values.
Foreign exchange
The accounts of overseas subsidiary undertakings are translated at the
rate of exchange ruling at the balance sheet date. The exchange
difference arising on the retranslation of opening net assets is taken
directly to reserves. All other translation differences are taken to the
profit and loss account with the exception of differences on foreign
currency borrowings to the extent that they are used to finance or
provide a hedge against group equity investments in foreign enterprises,
which are taken directly to reserves together with the exchange
differences on the carrying amount of the related investments.
Pension costs
Pension contributions for defined contribution schemes are charged to the
profit and loss account as they fall due.
Leases
Assets held under finance leases and the related lease obligations are
recorded in the balance sheet at the fair value of the leased assets at
the inception of the lease. The rentals payable are apportioned between
interest, which is charged in the profit and loss account, and capital,
which reduces the outstanding lease obligation. Rental costs under
operating leases are charged in the profit and loss account on a straight
line basis over the lease term.
Turnover
Turnover represents the invoiced amount of goods sold and services
provided during the year, net of value added tax, except in relation to
material contracts where profit is recognised on a stage of completion
basis.
8PAGE
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Peek plc
Notes to the Accounts continued
2 Turnover and segmental analysis
The group has two principal areas of activity, traffic and field data. It
also operates within four main geographical markets, the United States
and Canada, the United Kingdom, Continental Europe and Asia. Turnover,
group profit on ordinary activities before taxation and net assets are
analysed as follows:
1996 1995 1994
(In thousands
of British pounds sterling)
Area of activity
Turnover
Traffic 126,938 111,530 89,661
Field data 35,137 32,256 42,137
------- ------- -------
162,075 143,786 131,798
------- ------- -------
Profit
Segment profit:
Traffic 11,520 10,507 6,185
Field data 1,766 1,963 3,982
------- ------- -------
Operating profit 13,286 12,470 10,167
Non-operating exceptional items (6) 3,915 340
Net interest payable (729) (403) (288)
------- ------- -------
Profit on ordinary activities before
taxation 12,551 15,982 10,219
------- ------- -------
Net assets
Segment net assets:
Traffic 25,854 25,282 18,472
Field data 13,736 12,872 10,779
------- ------- -------
39,590 38,154 29,251
Unallocated net liabilities (10,638) (6,296) (4,251)
------- ------- -------
Net assets 28,952 31,858 25,000
------- ------- -------
Geographical area
Turnover
External sales by destination:
United States and Canada 48,792 49,690 52,435
United Kingdom 34,974 30,837 27,773
Continental Europe 58,700 48,346 45,737
Asia 12,827 9,899 3,393
Other 6,782 5,014 2,460
------- ------- -------
162,075 143,786 131,798
------- ------- -------
External sales by origin:
United States and Canada 49,410 47,161 50,553
United Kingdom 45,143 42,024 37,602
Continental Europe 56,182 45,695 42,577
Asia 11,340 8,906 1,066
------- ------- -------
162,075 143,786 131,798
------- ------- -------
9PAGE
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Peek plc
Notes to the Accounts continued
1996 1995 1994
(In thousands
of British pounds sterling)
Geographical area
Segment profit:
United States and Canada (480) 2,269 2,635
United Kingdom 3,468 1,793 3,302
Continental Europe 11,324 8,215 5,312
Asia (1,026) 193 (1,082)
------- ------- -------
Operating profit 13,286 12,470 10,167
Non-operating exceptional items (6) 3,915 340
Net interest payable (729) (403) (288)
------- ------- -------
Profit on ordinary activities before
taxation 12,551 15,982 10,219
------- ------- -------
Net assets
Segment net assets:
United States and Canada 15,087 16,187 13,605
United Kingdom 8,582 8,600 8,850
Continental Europe 18,317 14,967 8,603
Asia (2,396) (1,600) (1,807)
------- ------- -------
39,590 38,154 29,251
Unallocated net liabilities (10,638) (6,296) (4,251)
------- ------- -------
Net assets 28,952 31,858 25,000
------- ------- -------
Unallocated net liabilities comprise those of non-operating companies
together with all interest bearing assets and liabilities.
3 Operating profit
The following charges are included:
1996 1995 1994
(In thousands
of British pounds sterling)
Depreciation
Owned assets 2,869 2,527 2,175
Assets held under finance leases 311 234 64
Staff costs (see Note 4(d)) 42,856 40,549 37,028
Amounts charged by Ernst & Young:
Audit fees 230 216 183
Other professional services 40 36 49
Hire of plant 650 553 532
Other operating lease rentals 3,321 2,883 2,567
10PAGE
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Peek plc
Notes to the Accounts continued
4 Directors' emoluments and staff costs
a) Directors' remuneration
1996 Perform-
ance
Basic related Long term Taxable Pension
salary bonuses incentive benefits Fees conts Total
(In thousands of British pounds sterling)
K E Maud
(Chairman) 184(a) 3 - 15 - - 202
The Viscount Slim
(Deputy Chairman) - - - 6 21 - 27
G M Edge - - - - 18 - 18
A G Kellett 85 2 - 10 - 9 106
J G Sanger 132 2 24 13 - 15 186
A F Standley 188(a) 3 24 16 - - 231
D Walsh - - - - 18 - 18
--- --- --- --- --- --- ---
589 10 48 60 57 24 788
--- --- --- --- --- --- ---
Of the amounts paid to Ken Maud, 136,000 British pounds sterling (1995
173,000 British pounds sterling) was paid by a subsidiary undertaking.
1995 Perform-
ance
Basic related Taxable Pension
salary bonuses benefits Fees conts Total
(In thousands of British pounds sterling)
K E Maud
(Chairman) 178(a) 63 18 - - 259
The Viscount Slim
(Deputy Chairman) - - 4 20 - 24
G M Edge - - - 17 - 17
A G Kellett 72 28 10 - 10 120
P I Risberg - - - 17 - 17
J G Sanger 122 46 11 - 16 195
A F Standley 161(a) 65 11 - - 237
D Walsh - - - 17 - 17
--- --- --- --- --- ---
533 202 54 71 26 886
--- --- --- --- --- ---
Of the amounts paid to Ken Maud, 173,000 British pounds sterling (1994
187,000 British pounds sterling) was paid by a subsidiary undertaking.
(a) K E Maud and A F Standley have private pension plans to which the
company makes no direct contribution having adjusted the base
salaries of those directors accordingly.
11PAGE
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Peek plc
Notes to the Accounts continued
1994
(In thousands of British pounds sterling)
Fees 66
Salaries 513
Benefits 48
Performance related bonuses 279
Pension contributions 29
-----
935
-----
The emoluments of the Chairman who is also the highest paid director are
as follows:
(In thousands of British pounds sterling)
Salaries 183
Benefits 15
Performance related bonuses 98
Pension contributions 0
-----
296
-----
Of this amount 187,000 British pounds sterling was paid by a subsidiary
undertaking.
The salaries and benefits of the executive directors are decided by the
Remuneration Committee. The performance related bonuses are calculated by
reference to formulae determined by the Compensation Committee. The
formulae reflect improvements in profits and earnings per share in excess
of the retail price index.
Long term incentive plan
As an incentive to focus on the long term performance of the group,
certain directors and senior managers are eligible for a cash bonus based
on the increase in the share price of Peek plc. This bonus is calculated
by reference to the amount by which the mid market price of ordinary
shares exceeds a base price for a given number of deemed shares.
The bonus cannot be received unless the annual rate of earnings per share
growth during the period starting with the financial year in which the
notional grant was made, and ending with the financial year preceding the
bonus date exceeds 15% compound. The bonus will be payable in the period
between three and ten years after entrance to the scheme. In any one year
each participant may only receive a bonus on the greater of 5,000 deemed
shares or 25% of his holding.
Both A F Standley and J G Sanger were granted 150,000 deemed shares at a
value of 62p in 1991. A G Kellett was granted 75,000 deemed shares on 28
July 1994 at a value of 78.5p.
12PAGE
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Peek plc
Notes to the Accounts continued
b) Directors' emoluments (bandings)
The number of directors of the Company, including the Chairman, whose
emoluments, excluding pension contributions, fall within the following
ranges were:
1996 1995 1994
Number Number Number
15,001-20,000 British pounds sterling 2 3 3
20,001-25,000 British pounds sterling - 1 1
25,001-30,000 British pounds sterling 1 - -
95,001-100,000 British pounds sterling 1 - -
105,001-110,000 British pounds sterling - 1 1
170,001-175,000 British pounds sterling 1 - -
175,001-180,000 British pounds sterling - 1 -
185,001-190,000 British pounds sterling - - 1
200,001-205,000 British pounds sterling 1 - -
230,001-235,000 British pounds sterling 1 - -
235,001-240,000 British pounds sterling - 1 1
255,001-260,000 British pounds sterling - 1 -
295,001-300,000 British pounds sterling - - 1
c) Directors' share options
Full details of directors' shareholdings and options are recorded in the
Company's Register of Directors' Interest which is open to inspection.
Options granted under the Senior Executive Share Option plan are
exercisable between three and ten years after the date of grant. Options
granted under the Savings-related Share Option plan are exercisable five
or seven years after the date of grant.
13PAGE
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Peek plc
Notes to the Accounts continued
c) Directors' share options (continued)
The interests of directors in options to acquire shares in the Company
are as follows:
Directors' options
At At
1 January 31 December Exercise Date of
1996 Granted Exercised 1996 price grant
A G Kellett 50,000 - - 50,000(a) 77.33p 22.4.93
25,000 - - 25,000(a) 76.00p 11.10.93
10,000 - - 10,000(a) 90.50p 25.4.94
20,000 - - 20,000(a) 81.83p 1.5.95
1,498 - - 1,498(b) 82.90p 16.10.95
------- ---- ---- ------- ------ --------
106,498 - - 106,498
------- ---- ---- -------
J G Sanger 50,000 - - 50,000(a) 68.00p 14.5.90
200,000 - - 200,000(a) 57.00p 16.10.90
8,975 - - 8,975(b) 49.30p 1.10.91
100,000 - - 100,000(a) 59.00p 24.2.92
100,000 - - 100,000(a) 77.33p 22.4.93
18,088 - - 18,088(b) 60.80p 7.10.93
50,000 - - 50,000(a) 76.00p 11.10.93
100,000 - - 100,000(a) 88.50p 10.10.94
1,498 - - 1,498(b) 82.90p 16.10.95
------- ---- ---- ------- ------ --------
628,561 - - 628,561
------- ---- ---- -------
A F Standley 250,000 - - 250,000(a) 57.00p 16.10.90
13,539 - - 13,539(b) 49.30p 1.10.91
100,000 - - 100,000(a) 59.00p 24.2.92
100,000 - - 100,000(a) 77.33p 22.4.93
20,654 - - 20,654(b) 60.80p 7.10.93
50,000 - - 50,000(a) 76.00p 11.10.93
100,000 - - 100,000(a) 88.50p 10.10.94
------- ---- ---- ------- ------ --------
634,193 - - 634,193
------- ---- ---- -------
(a) Senior Executive Share Option Plan
(b) Savings-related Share Option Plan
The middle market price of an ordinary share at the close of business on
31 December 1996 was 94p. In the year to 31 December 1996 the mid market
price fluctuated between 131p and 84.5p.
14PAGE
<PAGE>
Peek plc
Notes to the Accounts continued
c) Directors' share options (continued)
At At
1 January 31 December Exercise Date of
1995 Granted Exercised 1995 price grant
A G Kellett 50,000 - - 50,000(a) 77.33p 22.4.93
25,000 - - 25,000(a) 76.00p 11.10.93
10,000 - - 10,000(a) 90.50p 24.4.94
- 20,000 - 20,000(a) 81.30p 1.5.95
- 1,498 - 1,498(b) 82.90p 16.10.95
------- ------ ------ ------- ------ --------
85,000 21,498 - 106,498
------- ------ ------ -------
J G Sanger 50,000 - - 50,000(a) 68.00p 14.5.90
7,347 - (7,347)(b) - 49.00p 28.6.90
200,000 - - 200,000(a) 57.00p 16.10.90
8,975 - - 8,975(b) 49.30p 1.10.91
100,000 - - 100,000(a) 59.00p 24.4.92
100,000 - - 100,000(a) 77.33p 22.4.93
18,088 - - 18,088(b) 60.80p 7.10.93
50,000 - - 50,000(a) 76.00p 11.10.93
100,000 - - 100,000(a) 88.50p 10.10.94
- 1,498 - 1,498(b) 82.90p 16.10.95
------- ------ ------ ------- ------ --------
634,410 1,498 (7,347) 628,561
------- ------ ------ -------
A F Standley 250,000 - - 250,000(a) 57.00p 16.10.90
13,539 - - 13,539(b) 49.30p 1.10.91
100,000 - - 100,000(a) 59.00p 24.4.92
100,000 - - 100,000(a) 77.33p 22.4.93
20,654 - - 20,654(b) 60.80p 7.10.93
50,000 - - 50,000(a) 76.00p 11.10.93
100,000 - - 100,000(a) 88.50p 10.10.94
------- ------ ------ ------- ------ --------
634,193 - - 634,193
------- ------ ------ -------
(a) Senior Executive Share Option Plan
(b) Savings-related Share Option Plan
The mid market price on the date Mr Sanger exercised his options as above
was 1.08 British pounds sterling.
The middle market price of an ordinary share at the close of business on
31 December 1995 was 99p. In the year to 31 December 1995 the mid market
price fluctuated between 112p and 73p.
15PAGE
<PAGE>
Peek plc
Notes to the Accounts continued
c) Directors' share options (continued)
At At
1 January 31 December Exercise Date of
1994 Granted Exercised 1994 price grant
A G Kellett 50,000 - - 50,000(a) 77.33p 22.4.93
25,000 - - 25,000(a) 76.00p 11.10.93
- 10,000 - 10,000(a) 90.50p 25.4.94
------- ------- --- ------- ------ --------
75,000 10,000 - 85,000
------- ------- --- -------
J G Sanger 50,000 - - 50,000(a) 68.00p 14.5.90
7,347 - - 7,347(b) 49.00p 28.6.90
200,000 - - 200,000(a) 57.00p 16.10.90
8,975 - - 8,975(b) 49.30p 1.10.91
100,000 - - 100,000(a) 59.00p 24.4.92
100,000 - - 100,000(a) 77.33p 22.4.93
18,088 - - 18,088(b) 60.80p 7.10.93
50,000 - - 50,000(a) 76.00p 11.10.93
- 100,000 - 100,000(a) 88.50p 10.10.94
------- ------- --- ------- ------ --------
534,410 100,000 - 634,410
------- ------- --- -------
A F Standley 250,000 - - 250,000(a) 57.00p 16.10.90
13,539 - - 13,539(b) 49.30p 1.10.91
100,000 - - 100,000(a) 59.00p 24.4.92
100,000 - - 100,000(a) 77.33p 22.4.93
20,654 - - 20,654(b) 60.80p 7.10.93
50,000 - - 50,000(a) 76.00p 11.10.93
- 100,000 - 100,000(a) 88.50p 10.10.94
------- ------- --- ------- ------ --------
534,193 100,000 - 634,193
------- ------- --- -------
(a) Senior Executive Share Option Plan
(b) Savings-related Share Option Plan
No options were exercised or lapsed during the period.
The middle market price of an ordinary share at the close of business on
31 December 1994 was 82p.
d) Employees
The average number of people employed by the group was:
1996 1995 1994
Number Number Number
Production 1,007 989 947
Engineering 201 175 156
Sales and administration 529 458 420
------ ------ ------
1,737 1,622 1,523
------ ------ ------
16PAGE
<PAGE>
Peek plc
Notes to the Accounts continued
Their costs amounted to: 1996 1995 1994
(In thousands
of British pounds sterling)
Wages and salaries 37,646 35,537 32,336
Social security costs 3,951 3,826 3,539
Other pension costs 1,259 1,186 1,153
------ ------ ------
42,856 40,549 37,028
------ ------ ------
5 Net interest payable
1996 1995 1994
(In thousands
of British pounds sterling)
Interest receivable 400 712 605
Interest payable on:
Bank overdrafts and loans repayable
wholly within five years (1,046) (1,047) (858)
Finance leases (83) (68) (35)
------ ------ ------
Net interest payable (729) (403) (288)
------ ------ ------
6 Taxation 1996 1995 1994
(In thousands
of British pounds sterling)
United Kingdom taxation:
Corporation tax at 33% 1,547 395 1,698
Adjustment in respect of prior years 324 (106) (672)
Deferred taxation (175) 332 (125)
------- ------ ------
1,696 621 901
Overseas taxation:
Overseas taxes 2,562 3,478 2,554
------- ------ ------
4,258 4,099 3,455
------- ------ ------
17PAGE
<PAGE>
Peek plc
Notes to the Accounts continued
7 Non-operating exceptional items
1996 1995 1994
(In thousands
of British pounds sterling)
Loss on disposal of businesses:
Loss on the sale of Peek Verkehrssysteme
GmbH in Germany (560) - -
Transfer from goodwill reserve 554 - -
Loss on sale of Edac Inc in Canada - - (42)
Profit on disposal of shares of
TrafficMaster plc - 3,915 382
------- ------ ------
(6) 3,915 340
------- ------ ------
In April 1996 the group sold Peek Verkehrssysteme GmbH, a German
subsidiary company. Goodwill written off amounted to 384,000 British
pounds sterling. Other associated disposal costs of 176,000 British
pounds sterling were also incurred. The transfer from goodwill reserve is
in respect of negative goodwill relating to a former subsidiary
undertaking now written back. The exceptional item in 1995 relates to the
group's disposal of its interest in TrafficMaster plc. In November 1994
the group disposed of Edac Inc, based in Scarborough, Ontario, whilst
retaining a 25% interest in the proceeds from any subsequent sale of the
business.
8 Dividends
1996 1995 1994
(In thousands
of British pounds sterling)
Ordinary 4,113 4,087 4,058
Preference 1 1 1
----- ----- -----
4,114 4,088 4,059
----- ----- -----
The preference dividend relates to a non-equity interest.
18PAGE
<PAGE>
Peek plc
Notes to the Accounts continued
9 Earnings per ordinary share
1996 1995 1994
The calculation of earnings per ordinary
share is based upon the profit after
taxation, preference dividends and minority
interests, and on 120,743,220 ordinary shares
(1995 119,901,965 ; 1994 119,166,319) being
the weighted average number of ordinary
shares in issue during the year 6.9p 9.9p 5.6p
In order to improve comparability of the
earnings per ordinary share calculation with
earlier years, the earnings per ordinary
share number is reported both before and
after exceptional items
Earnings per ordinary share (as above) 6.9p 9.9p 5.6p
Non operating exceptional items - (3.3)p (0.3p)
---- ------ ------
Adjusted earnings per ordinary share
(excluding exceptional items) 6.9p 6.6p 5.3p
---- ------ ------
10 Tangible fixed assets
1996 Freehold
land and Short Plant and Motor
buildings leaseholds equipment vehicles Total
(In thousands of British pounds sterling)
Cost or valuation
At 1 January 1996 5,761 1,148 15,365 1,395 23,669
Additions 37 256 2,926 367 3,586
Subsidiaries acquired - - 667 - 667
Disposals (2) (460) (249) (711)
Revaluation adjustment (853) - - - (853)
Exchange adjustment (194) (84) (1,790) (100) (2,168)
----- ----- ------ ------ -----
At 31 December 1996 4,751 1,318 16,708 1,413 24,190
----- ----- ------ ------ -----
Depreciation
At 1 January 1996 1,003 106 7,356 503 8,968
Charge for year 90 140 2,574 376 3,180
Disposals - (2) (425) (189) (616)
Revaluation adjustment (194) - - - (194)
Exchange adjustment (62) (20) (1,218) (68) (1,368)
----- ----- ------ ----- ------
At 31 December 1996 837 224 8,287 622 9,970
----- ----- ------ ----- ------
Net book value
At 31 December 1996 3,914 1,094 8,421 791 14,220
----- ----- ------ ----- ------
At 1 January 1996 4,758 1,042 8,009 892 14,701
----- ----- ------ ----- ------
19PAGE
<PAGE>
Peek plc
Notes to the Accounts continued
Certain freehold properties were valued by external professional valuers,
Chester-Ford, Chartered Surveyors, as at 31 December 1996. Property
occupied by the company has been valued on the basis of existing use
whereas investment property has been valued on the basis of open market
value, (325,000 British pounds sterling). Both bases are in accordance
with the Appraisal and Valuation Manual of the Royal Institution of
Chartered Surveyors.
These properties have been included in the balance sheet at their
revalued amounts and the net deficit recognised in the year of 659,000
British pounds sterling has been deducted from the revaluation reserve
established on the same properties following the previous valuation in
December 1990.
The historical cost of such properties is 2,158,000 British pounds
sterling (1995 2,124,000 British pounds sterling).
Included in the above amounts are assets with a net book value of 759,000
British pounds sterling (1995 884,000 British pounds sterling) held under
finance leases.
1995 Freehold
land and Short Plant and Motor
buildings leaseholds equipment vehicles Total
(In thousands of British pounds sterling)
Cost or valuation
At 1 January 1995 5,712 102 12,465 989 19,268
Reclassifications (246) 246 - - -
Additions 270 785 3,487 380 4,922
Subsidiaries acquired - - 298 592 890
Disposals - (6) (1,560) (615) (2,181)
Exchange adjustment 25 21 675 49 770
----- ----- ------ ----- ------
At 31 December 1995 5,761 1,148 15,365 1,395 23,669
----- ----- ------ ----- ------
Depreciation
At 1 January 1995 928 15 6,180 338 7,461
Reclassifications (8) 8 - - -
Charge for year 77 88 2,172 424 2,761
Disposals - (6) (1,462) (273) (1,741)
Exchange adjustment 6 1 466 14 487
----- ----- ------ ----- ------
At 31 December 1995 1,003 106 7,356 503 8,968
----- ----- ------ ----- ------
Net book value
At 31 December 1995 4,758 1,042 8,009 892 14,701
----- ----- ------ ----- ------
At 1 January 1995 4,784 87 6,285 651 11,807
----- ----- ------ ----- ------
20PAGE
<PAGE>
Peek plc
Notes to the Accounts continued
Certain of the group's properties were valued at 31 December 1990 on an
open market for existing use basis by an external professional valuer.
These properties have been included in the balance sheet at their
revalued amounts and the net surplus of 794,000 British pounds sterling
has been added to reserves. The historical cost of such properties is
2,124,000 British pounds sterling (1994 2,124,000 British pounds
sterling).
Included in the above amounts are assets with a net book value of 884,000
British pounds sterling (1994 711,000 British pounds sterling) held under
finance leases.
1994
Freehold
land and Short Plant and Motor
buildings leaseholds equipment vehicles Total
(In thousands of British pounds sterling)
Cost or valuation
At 1 January 1994 5,667 362 15,418 641 22,088
Additions 390 16 3,046 385 3,837
Subsidiaries acquired - - 66 - 66
Disposals - (258) (5,768) (167) (6,193)
Adjustment arising on
revaluation (195) - - - (195)
Exchange adjustment (150) (18) (297) 130 (335)
----- ----- ------ ---- ------
At 31 December 1994 5,712 102 12,465 989 19,268
----- ----- ------ ---- ------
Depreciation
At 1 January 1994 890 95 9,688 250 10,923
Charge for year 74 16 1,902 247 2,239
Disposals - (90) (5,268) (153) (5,511)
Exchange adjustment (36) (6) (142) (6) (190)
----- ----- ------ ---- ------
At 31 December 1994 928 15 6,180 338 7,461
----- ----- ------ ---- ------
Net book value
At 31 December 1994 4,784 87 6,285 651 11,807
----- ----- ------ ---- ------
At 1 January 1994 4,777 267 5,730 391 11,165
----- ----- ------ ---- ------
Certain of the group's properties were valued at 31 December 1990 on an
open market for existing use basis by an external professional valuer.
These properties have been included in the balance sheet at their
revalued amounts and the net surplus of 794,000 British pounds sterling
has been added to reserves. The historical cost of such properties is
2,124,000 British pounds sterling (1993 2,124,000 British pounds
sterling).
Included in the above amounts are assets with a net book value of 711,000
British pounds sterling (1993 226,000 British pounds sterling) held under
finance leases.
21PAGE
<PAGE>
Peek plc
Notes to the Accounts continued
11 Stocks
1996 1995
(In thousands of British pounds sterling)
Raw materials and consumables 10,068 13,076
Work in progress 6,086 4,826
Finished goods and goods for resale 4,279 3,972
------ ------
20,433 21,874
------ ------
Balances on long term contracts included within
work in progress shown above:
Net cost less foreseeable losses 4,207 2,793
Less: applicable payments on account (1,341) (472)
------ ------
2,866 2,321
------ ------
12 Debtors
1996 1995
(In thousands of British pounds sterling)
Amounts due within one year:
Trade debtors 42,148 38,905
Amounts recoverable on contracts 1,732 1,586
Other debtors 1,709 1,051
Prepayments and accrued income 1,232 1,657
Notes receivable 720 670
Advance corporation tax recoverable 632 1,029
------ ------
48,173 44,898
------ ------
Amounts due after more than one year:
Amounts recoverable on contracts - 204
Other debtors 45 1
Notes receivable 318 1,228
------ ------
363 1,433
------ ------
Total debtors 48,536 46,331
------ ------
The notes receivable after more than one year relate to deferred
consideration arising on the disposal of the health and fitness division
of Computer Instruments Corporation and of the shares of Edac Inc, all of
which are due to be received within the next five years.
22PAGE
<PAGE>
Peek plc
Notes to the Accounts continued
13 Creditors
1996 1995
(In thousands of British pounds sterling)
Amounts due within one year:
Trade creditors 20,906 19,088
Overdrafts 393 384
Corporation tax 4,157 3,889
Other taxes and social security costs 4,460 3,466
Other creditors 1,799 1,854
Finance leases 231 239
Accruals 12,788 14,806
Proposed dividend 4,087 4,077
------ ------
48,821 47,803
------ ------
Amounts due after more than one year:
Bank loans 17,290 15,129
Other creditors 383 384
Finance leases 500 573
------ ------
18,173 16,086
------ ------
All bank loans are repayable between two and five years. The rate of
interest payable varies and is based on the London interbank market rate.
Obligations under finance leases
1996 1995
(In thousands of British pounds sterling)
Amounts payable:
Within one year 264 318
Within two to five years 572 646
After more than five years - 27
------ ------
836 991
Less finance charges allocated to future periods (105) (179)
------ ------
731 812
------ ------
14 Provisions for liabilities and charges
a) Deferred taxation
Provided for Unprovided for
1996 1995 1996 1995
(In thousands of British pounds sterling)
Excess capital allowances 268 133 46 269
Short term timing
differences 860 2,024 - -
----- ----- -- ---
1,128 2,157 46 269
----- ----- -- ---
23PAGE
<PAGE>
Peek plc
Notes to the Accounts continued
No provision has been made for deferred tax on the surplus on revaluation
of land and buildings due to the existence of capital losses within the
group. Furthermore, deferred tax on timing differences not expected to
reverse is not provided.
b) Other
Movement on other provisions during the year ended 31 December is as
follows:
Arising from acquisitions
1996 1995 1994
(In thousands of
British pounds sterling)
Opening balance 630 1,487 2,045
Arising in year 99 - 614
Utilised in year (519) (526) (691)
Released (60) (327) (425)
Exchange adjustment (11) (4) (56)
----- ----- -----
Closing balance 139 630 1,487
----- ----- -----
15 Share capital
a) Authorised
1996
1996 1995
No of No of
1996(1) shares 1995(1) shares
Equity
Ordinary shares of 9p each 13,500 150,000,000 13,500 150,000,000
Non-equity
2.8% net cumulative
preference shares of
1 British pound sterling
each 25 25,000 25 25,000
10% net redeemable
cumulative preference
shares of 1 British pound
sterling each 100 100,000 100 100,000
Convertible redeemable
preference shares of 9p
each 135 1,500,000 135 1,500,000
------ ------
13,760 13,760
------ ------
(1) Amounts in thousands of British pounds sterling.
24PAGE
<PAGE>
Peek plc
Notes to the Accounts continued
a) Authorised (continued)
1995
1995 1994
No of No of
1995(1) shares 1994(1) shares
Equity
Ordinary shares of 9p each 13,500 150,000,000 13,500 150,000,000
Non-equity
2.8% net cumulative
preference shares of
1 British pound sterling
each 25 25,000 25 25,000
10% net redeemable
cumulative preference
shares of 1 British pound
sterling each 100 100,000 100 100,000
Convertible redeemable
preference shares of 9p
each 135 1,500,000 135 1,500,000
------ ------
13,760 13,760
------ ------
(1) Amounts in thousands of British pounds sterling.
b) Issued, called up and fully paid
1996
1996 1995
No of No of
1996(1) shares 1995(1) shares
Equity
Ordinary shares of 9p each 10,900 121,116,068 10,841 120,450,979
Non-equity
2.8% net cumulative
preference shares of
1 British pound sterling
each 25 25,000 25 25,000
10% net redeemable
cumulative preference
shares of 1 British pound
sterling each - - - -
Convertible redeemable
preference shares of 9p
each - - - -
------ ------
10,925 10,866
------ ------
(1) Amounts in thousands of British pounds sterling.
25PAGE
<PAGE>
Peek plc
Notes to the Accounts continued
b) Issued, called up and fully paid (continued)
1995
1995 1994
No of No of
1995(1) shares 1994(1) shares
Equity
Ordinary shares of 9p each 10,841 120,450,979 10,752 119,468,569
Non-equity
2.8% net cumulative
preference shares of
1 British pound sterling
each 25 25,000 25 25,000
10% net redeemable
cumulative preference
shares of 1 British pound
sterling each - - - -
Convertible redeemable
preference shares of 9p
each - - - -
------ ------
10,866 10,777
------ ------
(1) Amounts in thousands of British pounds sterling.
c) Analysis of share capital
The 2.8% net cumulative preference shares are non-redeemable and have a
preferential right to return of capital on a winding up. The shares do
not carry voting rights except where dividends due fall six months in
arrears, in which instance there is one vote for each share held.
The 10% net redeemable cumulative preference shares carry no voting
rights other than those specified by the Board of directors at the time
of grant.
The convertible redeemable preference shares are redeemable at the option
of the Company.
Under the terms of the conversion, one ordinary share is receivable for
each convertible redeemable preference share.
d) Movement in share capital
On 5 January 1996, 50,221 ordinary shares of 9p each were issued in
connection with the scrip dividend offer made in respect of the interim
dividend for the year ended 31 December 1995, the effective consideration
being 52,330 British pounds sterling.
On 5 July 1996, 77,277 ordinary shares of 9p each were issued in
connection with the scrip dividend offer made in respect of the final
dividend for the year ended 31 December 1995, the effective consideration
being 98,915 British pounds sterling.
On various dates during 1996, 439,403 and 98,188 ordinary shares of 9p
each were issued in accordance with the terms of the Senior Executive
Share Option Scheme and the Savings-related Share Option Scheme
respectively, the consideration received being 341,367 British pounds
sterling.
26PAGE
<PAGE>
Peek plc
Notes to the Accounts continued
d) Movement in share capital (continued)
On 5 January 1995, 61,337 ordinary shares of 9p each were issued in
connection with the scrip dividend offer made in respect of the interim
dividend for the year ended 31 December 1994, the effective consideration
being 50,358 British pounds sterling.
On 5 July 1995, 233,291 ordinary shares of 9p each were issued in
connection with the scrip dividend offer made in respect of the final
dividend for the year ended 31 December 1994, the effective consideration
being 191,065 British pounds sterling.
On various dates during 1995, 609,412 and 78,370 ordinary shares of 9p
each were issued in accordance with the terms of the Senior Executive
Share Option Scheme and the Savings-related Share Option Scheme
respectively,the consideration received being 405,327 British pounds
sterling.
e) Options granted at 31 December were:
(i) Under the group's Senior Executive Share Option Scheme
1996 1996 1995 1995
No of Earliest No of Earliest
ordinary date ordinary date
Price shares exercisable shares exercisable
342.00p 3,332 1990 4,998 1990
68.00p 226,243 1993 370,323 1993
57.00p 450,000 1993 450,000 1993
65.00p 66,000 1994 76,000 1994
62.00p 10,000 1994 25,000 1994
59.00p 255,000 1995 340,000 1995
43.00p 132,000 1995 193,000 1995
77.33p 665,000 1996 805,000 1996
76.00p 475,000 1996 505,000 1996
90.50p 195,000 1997 205,000 1997
88.50p 445,000 1997 455,000 1997
81.83p 400,000 1998 430,000 1998
108.00p 365,000 1999
--------- ---------
3,687,575 3,859,321
--------- ---------
(ii) Under the group's Savings-related Share Option Scheme
1996 1996 1995 1995
No of Earliest No of Earliest
ordinary date ordinary date
Price shares exercisable shares exercisable
49.00p 19,714 1995 19,714 1995
49.30p 161,084 1996 232,785 1996
60.80p 201,868 1998 222,862 1998
82.90p 234,849 2000 240,342 2000
--------- ---------
617,515 715,703
--------- ---------
Options granted under the Senior Executive Share Option Plan are
exercisable between the third and tenth anniversary of the date of grant.
Options granted under the Savings-related Share Option Plan are
exercisable five or seven years after the date of grant.
27PAGE
<PAGE>
Peek plc
Notes to the Accounts continued
16 Reserves
Capital
Good- Redemp- Reval-
Share will Capital tion uation Profit Total
premium reserve reserve reserve reserve & loss reserves
(In thousands of British pounds sterling)
Balance at
1 January
1994 6,061 (16,842) 246 214 1,687 22,564 13,930
Exchange
adjustment - - - - - (306) (306)
Scrip
dividend - - - - - 197 197
Premium on
shares
issued 404 - - - - - 404
Deferred
considera-
tion - - (246) - - - (246)
Transfer
to profit
and loss
reserve - - - - (698) 698 -
Permanent
diminution
in value of - - - - (195) - (195)
land and
buildings
Acquisition
of TCT - (1,834) - - - - (1,834)
Acquisitions -
others - (322) - - - - (322)
Retained
profit for
the year - - - - - 2,595 2,595
----- ------- ---- --- ---- ------ ------
Balance at
31 December
1994 6,465 (18,998) - 214 794 25,748 14,223
28PAGE
<PAGE>
Peek plc
Notes to the Accounts continued
16 Reserves (continued)
Capital
Good- Redemp- Reval-
Share will Capital tion uation Profit Total
premium reserve reserve reserve reserve & loss reserves
(In thousands of British pounds sterling)
Exchange
adjustment - - - - - 453 453
Scrip
dividend - - - - - 215 215
Premium on
shares
issued 343 - - - - - 343
Acquisition
of GMTS - (2,037) - - - - (2,037)
Retained
profit for
the year - - - - - 7,795 7,795
----- ------- ---- --- ---- ------ ------
Balance at
31 December
1995 6,808 (21,035) - 214 794 34,211 20,992
Exchange
adjustment - - - - - (2,738) (2,738)
Scrip
dividend - - - - - 140 140
Premium on
shares
issued 294 - - - - - 294
Goodwill
arising on
acquisitions - (4,011) - - - - (4,011)
Transfer to
profit and
loss account - (170) - - - - (170)
Freehold
properties
revaluation - - - - (659) - (659)
Retained
profit for
the year - - - - - 4,179 4,179
----- ------- ---- --- ----- ------ ------
Balance at
31 December
1996 7,102 (25,216) - 214 135 35,792 18,027
----- ------- ---- --- ----- ------ ------
The goodwill written off to reserves net of that relating to disposals
since 1 January 1987 amounts to: 1996 41,367,000 British pounds sterling;
1995 37,185,000 British pounds sterling; 1994 35,148,000 British pounds
sterling.
29PAGE
<PAGE>
Peek plc
Notes to the Accounts continued
17 Commitments
a) Capital expenditure
1996 1995
(In thousands of British pounds sterling)
Contracted for but not provided in the
accounts 94 167
Authorised but not contracted for 37 9
----- -----
131 176
----- -----
b) Operating leases
Annual commitments under non-cancellable operating leases are as follows:
1996 1995
(In thousands of British pounds sterling)
Operating leases expiring:
Within one year 731 728
Within two to five years 1,624 1,870
Over five years 1,166 632
----- -----
3,521 3,230
----- -----
18 Pension commitments
The group operates a defined contribution scheme in the UK. Total
outstanding contributions at 31 December 1996 were 84,039 British pounds
sterling (1995 60,005 British pounds sterling; 1994 21,000 British pounds
sterling). The pension costs charged for the year ended 31 December 1996
were 503,000 British pounds sterling (1995 355,000 British pounds
sterling; 1994 301,000 British pounds sterling).
Pension arrangements in other countries in which Peek operate are in
accordance with local requirements and practice. The total pension costs
charged for 1996 for countries other than the UK were 756,000 British
pounds sterling (1995 831,000 British pounds sterling; 1994 852,000
British pounds sterling) and the outstanding contributions at 31 December
1996 amounted to 161,663 British pounds sterling (1995 292,247 British
pounds sterling; 1994 275,000 British pounds sterling).
19 Contingent liabilities
The Company has given guarantees in respect of borrowings entered into by
certain subsidiaries to the extent of 10,848,000 British pounds sterling
(1995 10,692,000 British pounds sterling).
30PAGE
<PAGE>
Peek plc
Notes to the Accounts continued
20 Cash flow statement
a) Reconciliation of operating profit to operating cash flows:
1996 1995 1994
(In thousands
of British pounds sterling)
Operating profit 13,286 12,470 10,167
Profit on sale of fixed assets (96) (141) (7)
Utilisation in year of provisions
made on acquisitions (519) (526) (691)
Release of unutilised provisions
made on acquisitions (60) (327) (425)
Write off of investment in
associated undertaking - 141 -
Depreciation 3,180 2,761 2,239
Increase in debtors (4,780) (11,752) (5,784)
(Decrease)/Increase in creditors (1,199) 3,223 11,125
Decrease/(Increase) in stock 1,733 (1,788) (1,992)
------ ------- ------
Net cash inflow from operating
activities 11,545 4,061 14,632
------ ------- ------
b) Analysis of cash flows for headings shown net in the cashflow
statement
(i) Returns on investments and servicing of finance
1996 1995 1994
(In thousands
of British pounds sterling)
Interest received 349 682 938
Interest paid (801) (992) (791)
Preference dividend paid (1) (1) (1)
Interest element of finance lease rental
payments (97) (68) (18)
------ ------- ------
Net cash (outflow)/inflow from returns on
investment and servicing of finance (550) (379) 128
------ ------- ------
(ii) Capital expenditure and financial investment
1996 1995 1994
(In thousands
of British pounds sterling)
Purchase of tangible fixed assets (3,586) (4,923) (3,837)
Sale of fixed asset investments - 4,845 -
Sale of plant and machinery 191 567 34
------ ------- ------
Net cash (outflow)/inflow from capital
expenditure and financial investment (3,395) 489 (3,803)
------ ------- ------
31PAGE
<PAGE>
Peek plc
Notes to the Accounts continued
(iii) Acquisitions and disposals
1996 1995 1994
(In thousands
of British pounds sterling)
Purchase of subsidiary undertakings (4,979) (5,528) (3,710)
Deferred consideration paid (331) (320) (637)
Deferred consideration received 588 790 -
Proceeds from sale of businesses - - 1,646
Purchase of investment - associated
undertakings - (12) (85)
------ ------- ------
Net cash outflow from acquisitions and
disposals (4,722) (5,070) (2,786)
------ ------- ------
(iv) Financing
1996 1995 1994
(In thousands
of British pounds sterling)
Issue of ordinary share capital 341 406 228
Debt due in more than one year
New loan notes repayable in 2001 4,144 - (1,339)
Net movement in finance lease obligations (54) 249 429
------ ------- ------
Net cash inflow/(outflow) from financing 4,431 655 (682)
------ ------- ------
c) Purchase and sale of businesses:
1996
On 15 April 1996 the group acquired the trade and assets of Fleetlogic
BV, based in the Netherlands. On 10 July 1996 the group acquired the
trade and assets of Kemp & Lauritzen A/S, based in Denmark. The net
assets of the businesses acquired were as follows:
Fair value
Book value Adjustments to group
(In thousands of British pounds sterling)
Net assets acquired:
Fixed assets 667 - 667
Goodwill 4,011 - 4,011
Stocks 1,131 (150) 981
Creditors (299) (381) (680)
------ ------- ------
5,510 (531) 4,979
------ ------- ------
Satisfied by:
Cash 4,979
The businesses acquired during 1996 generated an operating cash outflow
of 98,000 British pounds sterling. Adjustments have been made to the book
values of assets acquired in order to reflect Peek group accounting
policies and to reflect their estimated realisable values. On 15 April
1996 the group disposed of Peek Verkehrssyteme GmbH, its traffic
32PAGE
<PAGE>
Peek plc
Notes to the Accounts continued
operation in Berlin. The company had net liabilities of 25,000 British
pounds sterling on disposal satisfied by a payment made to the acquirers.
On disposal the company had fixed assets of 20,000 British pounds
sterling, inventory of 185,000 British pounds sterling and receivables of
45,000 British pounds sterling, with creditors of 275,000 British pounds
sterling.
1995
On 17 February 1995 the group acquired the customer services division,
the Bus Tracker operation and the products and systems business of
GEC-Marconi Transport Systems Limited. On 2 February 1996 the group
acquired the alarm monitor business and assets of Fisher-Rosemount
Limited.
The net assets of the business acquired were as follows:
Fair value
Book value Adjustments to group
(In thousands of British pounds sterling)
Fixed assets 890 - 890
Goodwill 2,037 - 2,037
Stocks 2,302 (698) 1,604
Debtors 3,122 (345) 2,777
Creditors (1,700) (80) (1,780)
------ ------ ------
Net assets 6,651 (1,123) 5,528
------ ------ ------
Satisfied by:
Cash 5,528
The businesses acquired during 1995 contributed 191,000 British pounds
sterling to the group's net operating cashflows.
1994
Net assets of companies acquired during the year were comprised as
follows:
Fair value
Book value Adjustments to group
(In thousands of British pounds sterling)
Fixed assets 66 - 66
Goodwill 2,156 - 2,156
Stocks 1,603 (123) 1,480
Debtors 1,231 - 1,231
Creditors (312) (248) (560)
----- ----- -----
4,744 (371) 4,373
----- ----- -----
The businesses acquired during the year utilised 419,000 British pounds
sterling of the group's net operating cash flows and utilised 44,000
British pounds sterling for the group's investing activities. Businesses
disposed of during the year contributed 541,000 British pounds sterling
to the group's operating cashflows and utilised 58,000 British pounds
sterling for investing activities.
33PAGE
<PAGE>
Peek plc
Notes to the Accounts continued
Sale of businesses
(In thousands of British pounds sterling)
1994
Net assets disposed of
Fixed assets 682
Stocks 841
Debtors 722
Creditors (716)
Loss on disposal of Edac Inc (42)
-----
1,487
-----
Satisfied by
Loan note payable within one year 80
Loan note payable after more than one year 710
Cash 697
-----
1,487
-----
21 Reconciliation of Net Debt
At Exchange At
start of year Cash flow movement end of year
1994 (In thousands of British pounds sterling)
Cash at bank 23,996 (850) 1,140 24,286
Overdrafts (294) 274 - (20)
Debt due after 1 year (15,597) 1,339 (569) (14,827)
Finance leases (135) (428) (1) (564)
------- ------ ----- -------
7,970 335 570 8,875
------- ------ ----- -------
1995
Cash at bank 24,286 (8,655) 26 15,628
Overdrafts (20) (364) - (384)
Debt due after 1 year (14,827) - (331) (15,129)
Finance leases (564) (248) - (812)
------- ------ ----- -------
8,875 (9,267) (305) (697)
------- ------ ----- -------
1996
Cash at bank 15,628 (807) (797) 14,024
Overdrafts (384) (9) - (393)
Debt due after 1 year (15,129) (4,144) 1,983 (17,290)
Finance leases (812) 54 27 (731)
------- ------ ----- -------
(697) (4,906) 1,213 (4,390)
------- ------ ----- -------
34PAGE
<PAGE>
Peek plc
Notes to the Accounts continued
22 List of principal participating interests
Country of
Holding of registration
Participating ordinary (or incorporation)
Interests share capital and operation
Sichuan Modern Control System Peoples Republic
Engineering Company Limited 41% of China
23 Companies Act 1985
These financial statements do not comprise the Company's statutory
accounts within the meaning of the Companies Act. Statutory accounts for
the years ended 31 December 1996, 1995 and 1994 have been delivered to
the Registrar of Companies for England and Wales. The auditors' reports
on such accounts were unqualified.
24 US GAAP Reconciliation
Basis of operation
The above accounts have been prepared in accordance with accounting
principles generally accepted in the United Kingdom (UK GAAP) which
differ in certain material respects from those generally accepted in the
United States (US GAAP). The significant differences are described below.
a) Goodwill
Under UK GAAP, goodwill arising on acquisitions is eliminated directly
against reserves. Amounts are transferred from reserves and charged
through the profit and loss account when the related investments are sold
or written down as a result of a permanent diminution in value. Under US
GAAP, goodwill is capitalised and amortised by charges against income
over a period not exceeding 40 years. The group periodically assesses the
recoverability of unamortised goodwill based on anticipated future
earnings.
b) Deferred taxation
Under UK GAAP, deferred taxes are accounted for to the extent that it is
considered probable that a liability or asset will crystallise in the
foreseeable future. Under US GAAP deferred taxes are accounted for on all
temporary differences on a full provision basis, and a valuation
allowance is established in respect of those deferred tax assets where it
is more likely than not that some portion will remain unrealised.
35PAGE
<PAGE>
Peek plc
Notes to the Accounts continued
c) Revaluation of land and buildings
UK GAAP allows the periodic revaluation of land and buildings.
Professional valuations of some of the group's properties were carried
out at December 1996 and previously at December 1990. The group
calculates depreciation on the revalued basis from the date of the
revaluation. Under US GAAP such revaluations would not be reflected in
the accounts and depreciation would be based on historical cost.
d) Foreign currency
Under both UK GAAP and US GAAP, cumulative exchange differences arising
on the retranslation of foreign enterprises are taken to reserves. On
disposal these differences are not transferred to the profit and loss
account under UK GAAP. Under US GAAP, when an investment in a foreign
enterprise is sold, the cumulative exchange differences previously taken
to reserves are included in the net profit for the period as part of the
gain or loss on sale.
e) Dividends
Under UK GAAP, dividends and the related advance corporation tax (ACT)
are recorded in the accounts for the financial year to which they relate.
Under US GAAP, dividends are recorded in the period in which they are
declared.
f) Non-operating exceptional items
Under US GAAP, the profit/(losses) arising on the disposal of businesses
would have been included in the determination of operating profit.
g) Earnings per share
Earnings per share computed under US GAAP methodology do not differ
significantly from those computed using UK GAAP methodology. However
under US GAAP it is not permitted to report earnings per share excluding
exceptional items.
36PAGE
<PAGE>
Peek plc
Notes to the Accounts continued
The following is a summary of the adjustments to net income for the years
ended 31 December 1994, 1995 and 1996, and shareholders' equity as at 31
December 1995 and 1996, which would have been required if the accounts
had been prepared in accordance with US GAAP:
1996 1995 1994
(In thousands
of British pounds sterling)
Profit for the financial year as
reported in the consolidated
profit and loss account 8,293 11,883 6,654
Adjustments
Amortisation of goodwill (967) (921) (856)
Deferred taxation methodology
differences (46) (269) (231)
Depreciation on revalued assets 16 16 20
Foreign currency cumulative
movements (265) - 258
------ ------ -----
Net income in accordance with
US GAAP 7,031 10,709 5,845
------ ------ -----
Earnings per share 5.8p 8.9p 4.9p
1996 1995
(In thousands of
British pounds sterling)
Capital and reserves as reported
in the consolidated balance sheet 28,952 31,858
Adjustments
Goodwill cost 40,812 37,185
amortisation (5,833) (4,904)
Deferred taxation methodology
differences (46) (269)
Fixed assets cost (135) (794)
amortisation 153 137
Dividends 2,820 2,820
ACT receivable 632 705
payable (705) (705)
Corporation tax payable 73 -
------ ------
Shareholders' equity under US GAAP 66,723 66,033
------ ------
37PAGE
<PAGE>
Peek plc
Notes to the Accounts continued
h) Consolidated statement of cash flows
The cashflow statements prepared under UK GAAP present substantially the
same information as those prepared under US GAAP. There are differences,
however, with regard to classification of items within the statements and
as regards the definition of cash.
Under UK GAAP, cashflows are presented separately for operating
activities, returns on investments and servicing of finance, taxation,
capital expenditure and financial investment, acquisitions and disposals,
equity dividends paid, management of liquid resources and financing
activities. US GAAP, however, requires only three categories of cash flow
activity to be reported: operating, investing and financing. Cashflows
from taxation and returns on investments and servicing of finance shown
under UK GAAP would be included as operating activities under US GAAP.
Cashflows from capital expenditure and financial investment, acquisitions
and disposals shown separately under UK GAAP would be included as part of
the investing activities under US GAAP. The payment of dividends would be
included as a financing activity under US GAAP.
Under US GAAP, cash includes cash equivalents with initial maturities of
less than three months and excludes bank overdrafts.
The categories of cash flow activity under US GAAP can be summarised as
follows:
1996 1995 1994
(In thousands
of British pounds sterling)
Cash inflow/(outflow) from operating
activities 6,822 (1,272) 10,484
Cash outflow from investing activities (8,117) (4,581) (6,589)
Cash inflow/(outflow) from financing
activities (3,611) (3,417) (3,560)
------ ------ ------
Movement in cash and cash equivalents (4,906) (9,270) 335
Effects of foreign exchange rate changes 1,213 (302) 570
Cash and cash equivalents at 1 January (697) 8,875 7,970
------ ------ ------
Cash and cash equivalents at 31 December (4,390) (697) 8,875
------ ------ ------
38PAGE
<PAGE>
Peek plc
Unaudited Accounts
for the nine months ended 30 September 1997
PAGE
<PAGE>
Interim accounts
Peek plc
Unaudited consolidated profit and loss account
for the nine months ended 30 September
(In thousands of British pounds sterling)
1997 1996
Turnover
Continuing operations
Ongoing 79,572 101,673
Acquisitions - 1,591
------- -------
79,572 103,264
Discontinued operations 7,987 -
------- -------
87,559 103,264
Cost of sales (66,950) (70,048)
------- -------
Gross profit 20,609 33,216
Net operating expenses:
Selling and distribution (12,900) (13,920)
Technology (6,320) (6,705)
Administration (20,728) (11,275)
------- -------
(39,948) (31,900)
Operating (loss)/profit
Continuing operations
Ongoing (18,845) 1,315
Acquisitions - 1
------- -------
(18,845) 1,316
Discontinued operations (494) -
------- -------
(19,339) 1,316
Exceptional items
Continuing activities - -
Discontinued operations 781 (560)
------- -------
(Loss)/profit on ordinary activities
before interest (18,558) 756
Net interest payable (557) (489)
------- -------
(Loss)/profit on ordinary activities
before taxation (19,115) 267
Taxation (182) (281)
------- -------
Loss on ordinary activities after taxation (19,297) (14)
Minority interest - -
Dividends (402) (2,687)
------- -------
Retained loss (19,699) (2,701)
------- -------
Loss per ordinary share (15.9)p (0.0)p
2PAGE
<PAGE>
Peek plc
Unaudited group consolidated balance sheet at 30 September
(In thousands of British pounds sterling)
1997
Net assets employed
Fixed assets
Tangible assets 11,867
Current assets
Stocks 18,612
Debtors due within one year 27,041
Debtors due after more than one year 400
Cash and short term deposits 10,766
-------
56,819
Creditors: amounts due within one year (36,142)
-------
Net current assets 20,677
Total assets less current liabilities 32,544
Creditors: amounts due after more than one year (17,600)
Provisions for liabilities and charges
Deferred taxation (769)
Other (92)
-------
Net assets 14,083
-------
Capital and reserves
Called up equity share capital 11,013
Called up non-equity share capital 25
Reserves (all equity) 3,045
-------
Shareholders' funds 14,083
-------
3PAGE
<PAGE>
Peek plc
Unaudited consolidated cashflow statement
for the nine months ended 30 September
(In thousands of British pounds sterling)
1997 1996
Cash outflow from operating activities (6,999) (582)
Returns on investments and servicing of
finance (638) (427)
Taxation (2,788) (3,303)
Capital expenditure and financial investment (2,033) (2,780)
Acquisitions and disposals 13,377 (4,450)
Equity dividends paid (3,668) (3,952)
------- -------
Cash outflow before financing (2,749) (15,494)
Financing (106) 163
------- -------
Decrease in cash in the period (2,855) (15,331)
Reconciliation of net cash flow to movement
in net debt
Decrease in cash in the period (2,855) (15,331)
Cash inflow from increase in debt and lease
financing 399 270
------- -------
Change in net debt resulting from cash flows (2,456) (15,061)
Translation differences (308) 280
------- -------
Movement in net debt in the period (2,764) (14,781)
Net debt at start of period (4,390) (697)
------- -------
Net debt at end of period (7,154) (15,478)
------- -------
Divested businesses
In March 1997, the group disposed of Peek STM-Verkehrssysteme GmbH. In
June 1997, Husky Computers Limited and Husky Computers Inc were sold. The
results of these operations are included in the above interim accounts
for the period within which they were a part of the group.
4PAGE
<PAGE>
Peek plc
Unaudited notes to the Accounts
1 These interim accounts are unaudited, but in the opinion of
management all adjustments needed to give a fair presentation
(consisting of normal accruals) have been made.
2 Taxation for the nine months ended 30 September 1997 is based on the
effective rate it is estimated will apply in the year ended 31
December 1997. No tax assets in respect of current year trading
accounts have been recognised as recoverability is uncertain in the
foreseeable future.
3 Accounting policies are as stated in the last annual accounts.
4 The results of the Husky group of companies are included up to 20
June 1997, the date control passed.
5 Exceptional items in 1997 are analysed as follows:
(In thousands
of British
pounds
sterling)
Operating
Termination costs in relation to the group's
former Chairman, K E Maud (400)
-----
Non-operating
Gain on sale of Husky group of companies of
6,120,000 British pounds sterling offset by
goodwill previously written off to reserves
of 4,927,000 British pounds sterling. 1,193
Loss on sale of Peek-STM Verkehrssysteme GmbH
including 400,000 British pounds sterling of
goodwill previously written off (412)
-----
781
-----
6 The interim dividend will be payable on 3 January 1998 to ordinary
shareholders on the register on 12 November 1997.
5PAGE
<PAGE>
Peek plc
Unaudited notes to the Accounts
7 Segmental analysis
Unaudited Unaudited Audited
9 months 9 months 12 months
to 30.09.97 to 30.09.96 to 31.12.96
Operating Operating Operating
Turnover profit Turnover profit Turnover profit
(In thousands of British pounds sterling)
By activity
Traffic 70,081 (18,855) 78,018 1,054 126,938 11,520
Field data 17,478 (84) 25,246 262 35,137 1,766
------ ------- ------- ----- ------- ------
87,559 (18,939) 103,264 1,316 162,075 13,286
Operating
exceptional
items (400) - -
------- ----- ------
(19,339) 1,316 13,286
Net interest
payable (557) (489) (729)
Non-operating
exceptional
items 781 (560) (6)
------- ----- ------
(Loss)/profit
before
taxation (19,115) 267 12,551
------- ----- ------
6PAGE
<PAGE>
Peek plc
Unaudited notes to the Accounts continued
8 Unaudited US GAAP reconciliation
(In thousands of British pounds sterling)
1997 1996
Loss for the nine months ended
30 September under UK GAAP (19,297) (14)
Adjustments
Amortization of goodwill (730) (717)
Deferred taxation methodology differences - (202)
Depreciation on revalued assets 2 12
Foreign currency cumulative movement 388 43
------- -------
Net loss in accordance with US GAAP (19,637) (878)
------- -------
Loss per share (16.1)p (0.7)p
1997
Capital and reserves under UK GAAP 14,083
Adjustments
Goodwill cost 35,485
amortisation (5,410)
Deferred taxation methodology differences -
Fixed assets cost (135)
depreciation 117
Dividends and ACT -
--------
Shareholders' equity under US GAAP 44,140
--------
Cashflow
The categories of cash flow activity under US GAAP can be summarised as
follows:
1997 1996
Cash outflow from operating activities (10,425) (4,312)
Cash inflow/(outflow) from investing
activities 11,344 (7,230)
Cash outflow from financing activities (3,375) (3,519)
------- -------
Movement in cash and cash equivalents (2,456) (15,061)
Effects of foreign exchange rate changes (308) 280
Cash and cash equivalents at 1 January (4,390) (697)
------- -------
Cash and cash equivalents at 30 September (7,154) (15,478)
------- -------
7PAGE
<PAGE>
FORM 8-K/A
Item 7. Financial Statements, Pro Forma Combined Condensed Financial
Information, and Exhibits
(b) Pro Forma Combined Condensed Financial Information
The following unaudited pro forma combined condensed financial
statements set forth the results of operations for the year ended
September 27, 1997, as if the acquisition of Peek by the Company had
occurred at the beginning of fiscal 1997, and the financial position as
of September 27, 1997, as if the acquisition of Peek by the Company had
occurred at September 27, 1997. Peek has a fiscal year which differs from
the Company's fiscal year-end. The historical results of operations of
Peek have been adjusted to conform to the Company's fiscal year-end for
purposes of the pro forma combined condensed statement of operations. The
historical results of operations and financial position of Peek have also
been adjusted to exclude businesses divested and to conform with U.S.
GAAP. Divested businesses include Peek STM-Verkehrssysteme GmbH, Husky
Computers Limited, and Husky Computers Inc., sold by Peek prior to its
acquisition by the Company, and Peek's Field Data business. Subsequent to
the Company's acquisition of Peek, the Company reached an agreement with
ONIX to sell Peek's Field Data business, effective November 6, 1997, for
$19.1 million. The Company expects to receive payment from ONIX for the
sale of the Field Data business in January 1998. In addition, the
unaudited pro forma combined condensed financial statements set forth the
results of operations and financial position as if the issuance of a $160.0
million promissory note to Thermo Electron and the sale of the Field Data
business to ONIX had occurred at the beginning of fiscal 1997 for the pro
forma combined condensed statement of operations and at September 27,
1997 for the pro forma combined condensed balance sheet.
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 Peek been consummated at the beginning of
fiscal 1997. The consolidated financial statements of Peek filed under
part (a) of this item should be read in conjunction with the pro forma
combined condensed financial information.
4PAGE
<PAGE>
<TABLE>
THERMO POWER CORPORATION
PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS
Year Ended September 27, 1997
(Unaudited)
<CAPTION>
Historical Pro Forma
----------------------------------------------------- ------------------
Peek
-------------------------------------------
Adjustments U.S. GAAP
-------------------- Excluding
Thermo U.K. Divested U.S. Divested Adjust-
Power GAAP Businesses GAAP Businesses ments Combined
-------- -------- ---------- -------- ----------- -------- --------
(In thousands except per share amounts)
<S> <C> <C> <C> <C> <C> <C> <C>
Revenues $121,046 $240,047 $(45,395) $ - $194,652 $ - $315,698
-------- -------- -------- -------- -------- -------- --------
Costs and Operating
Expenses:
Cost of revenues 99,154 171,211 (25,873) - 145,338 882 245,374
Selling, general, and
administrative expenses 16,926 66,543 (14,372) 1,262 53,433 4,444 74,803
Research and development
expenses 2,296 13,722 (3,601) - 10,121 - 12,417
Other nonrecurring
income - (2,189) - (637) (2,826) - (2,826)
-------- -------- -------- -------- -------- -------- --------
118,376 249,287 (43,846) 625 206,066 5,326 329,768
-------- -------- -------- -------- -------- -------- --------
Operating Income (Loss) 2,670 (9,240) (1,549) (625) (11,414) (5,326) (14,070)
Interest and Other
Income (Expense), Net 1,864 (1,963) 22 - (1,941) (8,637) (8,714)
-------- -------- -------- -------- -------- -------- --------
Income (Loss) Before
Income Taxes and
Minority Interest 4,534 (11,203) (1,527) (625) (13,355) (13,963) (22,784)
Income Tax Provision
(Benefit) 2,118 6,821 64 - 6,885 (11,471) (2,468)
Minority Interest Expense 312 - - - - - 312
-------- -------- -------- -------- -------- -------- --------
Net Income (Loss) $ 2,104 $(18,024) $ (1,591) $ (625) $(20,240)$ (2,492)$(20,628)
======== ======== ======== ======== ======== ======== ========
Earnings (Loss) per Share $ .17 $ (1.69)
======== ========
12,212
Weighted Average Shares 12,212 ========
========
See notes to pro forma combined condensed financial information.
5PAGE
<PAGE>
THERMO POWER CORPORATION
PRO FORMA COMBINED CONDENSED BALANCE SHEET
September 27, 1997
(Unaudited)
Historical Pro Forma
----------------------------------------------------- -----------------
Peek
-------------------------------------------
Adjustments U.S. GAAP
-------------------- Excluding
Thermo U.K. Divested U.S. Divested Adjust-
Power GAAP Businesses GAAP Businesses ments Combined
-------- -------- ---------- -------- ----------- -------- --------
(In thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
Assets
Current Assets:
Cash and short-term
investments $ 28,518 $ 17,290 $ (2,111) $ - $ 15,179 $(4,536) $39,161
Accounts receivable 21,012 35,566 (3,414) - 32,152 - 53,164
Inventories and unbilled
contract costs and fees 24,740 29,891 (3,058) - 26,833 882 52,455
Prepaid income taxes and
other current assets 3,337 8,504 (506) - 7,998 19,100 30,435
-------- -------- -------- -------- -------- -------- --------
77,607 91,251 (9,089) - 82,162 15,446 175,215
-------- -------- -------- -------- -------- -------- --------
Rental Assets, at
Cost, Net 10,276 - - - - - 10,276
-------- -------- -------- -------- -------- -------- --------
Property, Plant, and
Equipment, at Cost, Net 10,591 19,058 (1,134) 32 17,956 (2,605) 25,942
-------- -------- -------- -------- -------- -------- --------
Long-term Available-for-
sale Investments 2,200 - - - - (2,200) -
-------- -------- -------- -------- -------- -------- --------
Other Assets 236 - - - - - 236
-------- -------- -------- -------- -------- -------- --------
Cost in Excess of Net
Assets of Acquired
Companies 7,082 - (5,672) 48,300 42,628 107,725 157,435
-------- -------- -------- -------- -------- -------- --------
$107,992 $110,309 $(15,895) $ 48,332 $142,746 $118,366 $369,104
======== ======== ======== ======== ======== ======== ========
6PAGE
<PAGE>
THERMO POWER CORPORATION
PRO FORMA COMBINED CONDENSED BALANCE SHEET (continued)
September 27, 1997
(Unaudited)
Historical Pro Forma
----------------------------------------------------- -----------------
Peek
-------------------------------------------
Adjustments U.S. GAAP
-------------------- Excluding
Thermo U.K. Divested U.S. Divested Adjust-
Power GAAP Businesses GAAP Businesses ments Combined
-------- -------- ---------- -------- ----------- -------- --------
(In thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
Liabilities and Shareholders'
Investments
Current Liabilities $ 22,899 $ 58,191 $ (3,102) $ - $ 55,089 $ 18,145 $ 96,133
-------- -------- -------- -------- -------- -------- --------
Deferred Income Taxes 114 1,235 - - 1,235 - 1,349
-------- -------- -------- -------- -------- -------- --------
Long-term Obligations 252 28,266 (1,623) - 26,643 160,000 186,895
-------- -------- -------- -------- -------- -------- --------
Common Stock of
Subsidiary Subject
to Redemption 18,059 - - - - - 18,059
-------- -------- -------- -------- -------- -------- --------
Shareholders' Investment 66,668 22,617 (11,170) 48,332 59,779 (59,779) 66,668
-------- -------- -------- -------- -------- -------- --------
$107,992 $110,309 $(15,895) $ 48,332 $142,746 $118,366 $369,104
======== ======== ======== ======== ======== ======== ========
See notes to pro forma combined condensed financial information.
7PAGE
<PAGE>
FORM 8-K/A
THERMO POWER CORPORATION
NOTES TO PRO FORMA COMBINED CONDENSED FINANCIAL INFORMATION
(Unaudited)
Note 1 - Basis of Presentation
The results of operations of Peek have been presented in the pro
forma combined condensed statement of operations in accordance with U.K.
generally accepted accounting principles (GAAP), adjusted to exclude
divested businesses and to conform to U.S. GAAP. Divested businesses
include businesses divested by Peek prior to its acquisition by the
Company and Peek's Field Data business. Subsequent to the Company's
acquisition of Peek, the Company reached an agreement with ONIX to sell
Peek's Field Data business, effective November 6, 1997, for $19.1
million. The historical financial statements of Peek are denominated in
British pounds sterling, and have been translated at the average exchange
rate of 1.640 U.S. dollars per British pound sterling for the pro forma
combined condensed statement of operations and the exchange rate of 1.606
U.S. dollars per British pound sterling for the pro forma combined
condensed balance sheet at September 27, 1997. The allocation of the
purchase price is based on an estimate of the fair market 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 2 - Pro Forma Adjustments to Pro Forma Combined Condensed
Statement of Operations (In thousands, except in text)
Year Ended
September 27,
1997
-------------
Debit (Credit)
Adjustments to Convert U.K. GAAP to U.S. GAAP
---------------------------------------------
Selling, General, and Administrative Expenses
Record amortization of cost in excess of net
assets of acquired companies over 40 years,
recorded to shareholders' investment under
U.K. GAAP $1,262
------
Other Nonrecurring Income
Record gain on foreign businesses sold during the
twelve months ended September 27, 1997, relating
to the cumulative translation adjustment for those
businesses, recorded to shareholders' investment
under U.K. GAAP (637)
------
8PAGE
<PAGE>
FORM 8-K/A
THERMO POWER CORPORATION
NOTES TO PRO FORMA COMBINED CONDENSED FINANCIAL INFORMATION
(Unaudited)
Note 2 - Pro Forma Adjustments to Pro Forma Combined Condensed
Statement of Operations (In thousands, except in text)
(continued)
Year Ended
September 27,
1997
-------------
Debit (Credit)
Pro Forma Adjustments
---------------------
Cost of Revenues
Increase in the work-in-process and finished goods
inventories of Peek to the estimated selling price,
less the sum of the costs of disposal and a reasonable
profit allowance for the Company's selling efforts $ 882
---------
Selling, General, and Administrative Expenses
Service fee of 1.0% of the revenues of Peek for the
twelve months ended September 27, 1997, for services
provided under a services agreement between the Company
and Thermo Electron 1,947
Amortization over 40 years of $150,353,000 of cost in
excess of net assets of acquired companies created by
the acquisition of Peek, net of amortization of cost in
excess of net assets of acquired companies recorded
in Peek's historical results of operations, as adjusted
to conform to U.S. GAAP and for divested businesses 2,497
---------
4,444
---------
Interest and Other Income (Expense), Net
Decrease in interest income as a result of the use of
cash and short-term investments to partially finance
the acquisition of Peek, including $2.2 million of cash
expended for the acquisition of Peek shares prior to
September 27, 1997, calculated using the 90-day
Commercial Paper Composite Rate plus 25 basis points,
or 5.85% 394
Record interest income on the $19.1 million receivable
from ONIX relating to the sale of the Field Data
business, calculated using the 90-day Commercial Paper
Composite Rate plus 25 basis points, or 5.85% (1,117)
Increase in interest expense as a result of borrowing from
Thermo Electron of $160.0 million to partially finance the
acquisition of Peek, calculated using the 90-day
Commercial Paper Composite Rate plus 25 basis points,
or 5.85% 9,360
---------
8,637
---------
9PAGE
<PAGE>
FORM 8-K/A
THERMO POWER CORPORATION
NOTES TO PRO FORMA COMBINED CONDENSED FINANCIAL INFORMATION (continued)
(Unaudited)
Note 2 - Pro Forma Adjustments to Pro Forma Combined Condensed
Statement of Operations (In thousands, except in text)
(continued)
Year Ended
September 27,
1997
-------------
Debit (Credit)
Pro Forma Adjustments (continued)
---------------------
Income Tax Provision (Benefit)
Income tax benefit associated with the adjustments
above (excluding the amortization of cost in
excess of net assets of acquired companies),
calculated at the Company's statutory rate of 40% $ (4,586)
Reverse income tax provision recorded in the historical
results of operations of Peek for the quarter ended
December 31, 1996, in recognition of Peek's pre-tax loss
for the twelve months ended September 27, 1997, for which
no tax benefit has been recorded (6,885)
---------
(11,471)
---------
10PAGE
<PAGE>
FORM 8-K/A
THERMO POWER CORPORATION
NOTES TO PRO FORMA COMBINED CONDENSED FINANCIAL INFORMATION (continued)
(Unaudited)
Note 3 - Pro Forma Adjustments to Pro Forma Combined Condensed Balance
Sheet (In thousands, except in text)
September 27,
1997
--------------
Debit (Credit)
Adjustments to Convert U.K. GAAP to U.S. GAAP
---------------------------------------------
Property, Plant, and Equipment, at Cost, Net
Reverse U.K. GAAP adjustments for periodic
revaluation of land and buildings, net of
related depreciation, to adjust carrying
value to historical cost $ 32
---------
Cost in Excess of Net Assets of Acquired Companies
Reclassify cost in excess of net assets of acquired
companies, net of accumulated amortization,
recorded to shareholders' investment under U.K. GAAP 48,300
---------
Shareholders' Investment
Effect of adjustment to property, plant, and
equipment, net (32)
Effect of adjustment to cost in excess of net
assets of acquired companies (48,300)
---------
(48,332)
---------
Pro Forma Adjustments
---------------------
Cash and Short-term Investments
Cash payments to acquire Peek (164,536)
Proceeds from the issuance of note payable to Thermo
Electron 160,000
---------
(4,536)
---------
Inventories and Unbilled Contract Costs and Fees
Increase in the work-in-process and finished goods
inventories of Peek to the estimated selling price,
less the sum of the costs of disposal and a reasonable
profit allowance for the Company's selling efforts 882
---------
11PAGE
<PAGE>
FORM 8-K/A
THERMO POWER CORPORATION
NOTES TO PRO FORMA COMBINED CONDENSED FINANCIAL INFORMATION (continued)
(Unaudited)
Note 3 - Pro Forma Adjustments to Pro Forma Combined Condensed Balance
Sheet (In thousands, except in text) (continued)
September 27,
1997
--------------
Debit (Credit)
Pro Forma Adjustments (continued)
---------------------
Prepaid Income Taxes and Other Current Assets
Record receivable from ONIX for the sale of the
Field Data business $ 19,100
---------
Property, Plant, and Equipment, at Cost, Net
Write-down of buildings, machinery, and equipment to
fair value (2,605)
---------
Long-term Available-for-sale Investments
Reclassification of the cost associated with the
acquisition of Peek shares prior to
September 27, 1997 to purchase price (2,200)
---------
Cost in Excess of Net Assets of Acquired Companies
Additional cost in excess of net assets of acquired
companies relating to the acquisition of Peek 107,725
---------
Current Liabilities
Estimated accrued acquisition expenses, primarily
severance and abandoned-facility payments (14,062)
Estimated accrued acquisition expenses for costs
relating to the Peek acquisition, primarily
investment banking fees and related transaction costs (3,083)
Accrual for estimated tax liability relating to the
sale of the Field Data business to ONIX (1,000)
---------
(18,145)
---------
Long-term Obligations
Record borrowing from Thermo Electron to partially finance
the acquisition of Peek (160,000)
---------
Shareholders' Investment
Elimination of Peek's equity accounts 59,779
---------
12PAGE
<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 20th day of
January 1998.
THERMO POWER CORPORATION
Paul F. Kelleher
------------------------------
Paul F. Kelleher
Chief Accounting Officer
</TABLE>
Exhibit 23
Consent of Independent Auditors
-------------------------------
We consent to the incorporation by reference in the previously filed
registration statements of Thermo Power Corporation of our report dated 11
March 1997, except for Note 24 - US GAAP reconciliation, as to which date
is 16 January 1998, with respect to the consolidated financial statements
of Peek plc as of 31 December 1996 and 1995, and for the three years ended
31 December 1996, which report appears in the Form 8-K/A of Thermo Power
Corporation dated 19 January 1998, as follows: Registration Statement No.
33-19061 on Form S-8, Registration Statement No. 33-19062 on Form S-8,
Registration Statement No. 33-25051 on Form S-8, Registration Statement No.
33-52814 on Form S-8, Registration Statement No. 33-87674 on Form S-8,
Registration Statement No. 33-87686 on Form S-8, Registration Statement No.
33-87692 on Form S-8, and Registration Statement No. 33-65273 on Form S-8.
ERNST & YOUNG
Chartered accountants
London, England
19 January 1998
