<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------------------------------
FORM 8-K
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 2, 1997
----------------------------------------
THERMO CARDIOSYSTEMS INC.
(Exact name of Registrant as specified in its charter)
Massachusetts 1-10114 04-3027040
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification Number)
incorporation or
organization)
470 Wildwood Street
P. O. Box 2697
Woburn, Massachusetts 01888-2697
(Address of principal executive offices) (Zip Code)
(617) 622-1000
(Registrant's telephone number
including area code)
<PAGE>
Item 5. Other Events
------------
On May 2, 1997, Thermo Cardiosystems Inc. (the "Company") announced that it
had acquired International Technidyne Corporation ("ITC"), a wholly owned
subsidiary of Thermo Electron Corporation, in exchange for 3,355,705 shares of
the Company's common stock. The issuance of the new shares of the Company's
common stock to Thermo Electron is subject to ratification by the Company's
shareholders. Certain financial information with respect to ITC and the Company
is attached hereto as Exhibits 99.1 and 99.2, respectively. Information meeting
the requirements of Items 2 and 7 of Form 8-K will be filed with the Securities
and Exchange Commission within 15 days of May 2, 1997.
On May 9, 1997, the Company issued a press release, attached hereto as
Exhibit 99.3, to announce that it has entered into an agreement to sell at par
$70 million principal amount of its 4-3/4% subordinated debentures due 2004 (the
"Debentures"). The Debentures will be convertible into shares of the Company's
common stock at an initial conversion price of $31.415.
Item 7. Financial Statements, Pro Forma Combined Condensed Financial
------------------------------------------------------------
Information and Exhibits
------------------------
(a) Financial Statements of Business Acquired: not applicable.
(b) Pro Forma Combined Condensed Financial Information: not
applicable.
(c) Exhibits
23 Consent of Arthur Andersen LLP
99.1 International Technidyne Corporation's Consolidated
Financial Statements for the fiscal year ended December
28, 1996
99.2 Selected Financial Information of the Company
99.3 Press Release of the Company, dated May 9, 1997
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 13th day of May, 1997.
THERMO CARDIOSYSTEMS INC.
By: /s/ Jonathan W. Painter
-----------------------
Jonathan W. Painter
Treasurer
<PAGE>
Exhibit 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our
report (and to all references to our Firm) included in or made a part of the
Thermo Cardiosystems Inc. Current Report on Form 8-K.
Arthur Andersen LLP
Boston, Massachusetts
May 8, 1997
<PAGE>
Exhibit 99.1
INTERNATIONAL TECHNIDYNE CORPORATION
Consolidated Financial Statements
1996
<PAGE>
International Technidyne Corporation 1996 Financial Statements
Report of Independent Public Accountants
To International Technidyne Corporation:
We have audited the accompanying consolidated balance sheet of
International Technidyne Corporation (a Delaware corporation and 100%-owned
subsidiary of Thermo Electron Corporation) and subsidiary as of December 28,
1996 and December 30, 1995, and the related consolidated statements of income,
parent company investment, and cash flows for each of the three years in the
period ended December 28, 1996. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.
We conducted our audits in accordance with 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 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.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of
International Technidyne Corporation and subsidiary as of December 28, 1996 and
December 30, 1995, and the results of their operations and their cash flows for
each of the three years in the period ended December 28, 1996, in conformity
with generally accepted accounting principles.
Arthur Andersen LLP
Boston, Massachusetts
February 5, 1997 (except with
respect to Note 7 as to which
the date is March 29, 1997)
2
<PAGE>
International Technidyne Corporation 1996 Financial Statements
Consolidated Statement of Income
<TABLE>
<CAPTION>
(In thousands)
1996 1995 1994
- ------------------------------------------------------------------------
<S> <C> <C> <C>
Revenues (Note 6) $33,992 $32,287 $28,642
------- ------- -------
Costs and Operating Expenses:
Cost of revenues 14,680 13,645 11,731
Selling, general, and administrative
expenses (Note 4) 8,067 8,018 7,079
Expenses for research and development 3,659 3,787 3,698
------- ------- -------
26,406 25,450 22,508
------- ------- -------
Income Before Provision for Income Taxes 7,586 6,837 6,134
Provision for Income Taxes (Note 3) 2,914 2,627 2,346
------- ------- -------
Net Income $ 4,672 $ 4,210 $ 3,788
======= ======= =======
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
3
<PAGE>
International Technidyne Corporation 1996 Financial Statements
Consolidated Balance Sheet
<TABLE>
<CAPTION>
(In thousands) 1996 1995
- ----------------------------------------------------------------------------------------------------
<S> <C> <C>
Assets
Current Assets:
Cash $ 127 $ 43
Accounts receivable, less allowances of
$262 in 1996 and 1995 4,047 4,612
Inventories 3,626 3,686
Prepaid income taxes (Note 3) 1,872 1,839
Prepaid expenses 43 69
------- -------
9,715 10,249
------- -------
Property, Plant, and Equipment, at Cost 12,072 10,597
Less: Accumulated depreciation and amortization 5,252 4,083
------- -------
6,820 6,514
------- -------
Prepaid Income Taxes 958 1,082
------- -------
Other Assets 364 254
------- -------
$17,857 $18,099
======= =======
Liabilities and Parent Company Investment
Current Liabilities:
Accounts payable $ 1,655 $ 1,374
Accrued payroll and employee benefits 1,963 1,890
Accrued warranty expenses 700 700
Other accrued expenses 2,357 2,058
------- -------
6,675 6,022
------- -------
Commitments and Contingencies (Note 5)
Parent Company Investment 11,182 12,077
------- -------
$17,857 $18,099
======= =======
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
4
<PAGE>
International Technidyne Corporation 1996 Financial Statements
Consolidated Statement of Cash Flows
<TABLE>
<CAPTION>
(In thousands except in text) 1996 1995 1994
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Operating Activities:
Net income $ 4,672 $ 4,210 $ 3,788
Adjustments to reconcile net income to
net cash provided by operating
activities:
Depreciation and amortization 1,307 1,088 872
Provision for losses on accounts
receivable - - 43
(Increase) decrease in prepaid
income taxes 91 (338) 195
Other noncash expenses (income) 60 36 (20)
Changes in current accounts:
Accounts receivable 565 (168) (169)
Inventories 60 (1,371) 178
Other current assets 26 43 (98)
Accounts payable 281 175 (274)
Other current liabilities 372 748 522
------- -------- -------
Net cash provided by operating activities 7,434 4,423 5,037
------- -------- -------
Investing Activities:
Purchases of property, plant, and
equipment (1,649) (2,284) (1,737)
Increase in other assets (134) (69) (81)
Other - 41 31
------- -------- -------
Net cash used in investing activities (1,783) (2,312) (1,787)
------- -------- -------
Financing Activities:
Transfers to parent company (5,567) (2,158) (3,299)
------- -------- -------
Increase (Decrease) in Cash 84 (47) (49)
Cash at Beginning of Year 43 90 139
------- -------- -------
Cash at End of Year $ 127 $ 43 $ 90
======= ======== =======
</TABLE>
Noncash Activities:
In 1994, a note receivable of $633,000 was cancelled and applied to the
purchase price of a building and land acquired by the Company.
5
<PAGE>
International Technician Corporation 1996 Financial Statements
Consolidated Statement of Parent Company Investment
<TABLE>
<CAPTION>
Parent
Company
(In thousands) Investment
- -----------------------------------------------------------------------
<S> <C>
Balance January 1, 1994 $ 9,536
Net income 3,788
Net transfers to parent company (3,299)
-------
Balance December 31, 1994 10,025
Net income 4,210
Net transfers to parent company (2,158)
-------
Balance December 30, 1995 12,077
Net income 4,672
Net transfers to parent company (5,567)
-------
Balance December 28, 1996 $11,182
=======
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statments.
6
<PAGE>
International Technidyne Corporation 1996 Financial Statements
Notes to Consolidated Financial Statements
1. Nature of Operations and Summary of Significant Accounting Policies
Nature of Operations
International Technidyne Corporation (the Company) is a leading
manufacturer of near-patient, whole-blood, coagulation-testing equipment and
related disposables and also manufactures single-use, premium-priced,
skin-incision devices.
Relationship with Thermo Electron Corporation
The Company was incorporated in 1969. In September 1991, the Company
was acquired, through a pooling-of-interests transaction, and became a wholly
owned subsidiary of Thermo Electron Corporation (Thermo Electron). As of
December 28, 1996, Thermo Electron owned 153,700 shares of the Company's common
stock, representing 100% of such stock outstanding.
The accompanying financial statements include the assets, liabilities,
income, and expenses of the Company as included in Thermo Electron's
consolidated financial statements. The accompanying financial statements do not
include Thermo Electron's general corporate debt, which is used to finance
operations of all of its respective business segments, or an allocation of
Thermo Electron's interest expense. The Company has had positive cash flows from
operations for all periods presented.
Principles of Consolidation
The accompanying 1996 financial statements include the accounts of the
Company and its wholly owned subsidiary, International Technidyne Corporation,
Ltd. All material intercompany accounts and transactions have been eliminated.
Fiscal Year
The Company has adopted a fiscal year ending the Saturday nearest
December 31. References to 1996, 1995, and 1994 are for the fiscal years ended
December 28, 1996, December 30, 1995, and December 31, 1994, respectively.
Cash and Cash Equivalents
The cash receipts and disbursements of the Company's domestic
operations are combined with other Thermo Electron corporate cash transactions
and balances. Therefore, cash of the Company's domestic operations is not
included in the accompanying balance sheet.
7
<PAGE>
International Technidyne Corporation 1996 Financial Statements
Notes to Consolidated Financial Statements
1. Nature of Operations and Summary of Significant Accounting Policies
(continued)
Inventories
Inventories are stated at the lower of cost (on a first-in, first-out
basis) or market value and include materials, labor, and manufacturing overhead.
The components of inventories are as follows:
<TABLE>
<CAPTION>
(In thousands) 1996 1995
- -----------------------------------------------------------------------
<S> <C> <C>
Raw materials $ 1,762 $ 1,958
Work in process and finished goods 1,864 1,728
------- --------
$ 3,626 $ 3,686
======= ========
</TABLE>
Property, Plant, and Equipment
The costs of additions and improvements are capitalized, while
maintenance and repairs are charged to expense as incurred. The Company provides
for depreciation and amortization using the straight-line method over the
estimated useful lives of the property, as follows: buildings, 15 and 31.5
years; machinery and equipment, 5 to 10 years; and leasehold improvements, the
shorter of the term of the lease or the life of the asset. Property, plant, and
equipment consists of the following:
<TABLE>
<CAPTION>
(In thousands) 1996 1995
- -----------------------------------------------------------------------
<S> <C> <C>
Land and buildings $ 2,786 $ 2,786
Machinery, equipment, and leasehold improvements 9,286 7,811
------- --------
12,072 10,597
Less: Accumulated depreciation and amortization 5,252 4,083
------- --------
$ 6,820 $ 6,514
======= ========
</TABLE>
Other Assets
Other assets in the accompanying consolidated balance sheet include
the cost of acquired patents and trademarks. These assets are being amortized
using the straight-line method over their estimated useful lives, which range
from 17 to 40 years. These assets were $461,000 and $360,000, net of accumulated
amortization of $130,000 and $106,000 at year-end 1996 and 1995, respectively.
Revenue Recognition
The Company recognizes revenues upon shipment of its products. The
Company provides a reserve for its estimate of warranty costs at the time of
shipment.
8
<PAGE>
International Technidyne Corporation 1996 Financial Statements
Notes to Consolidated Financial Statements
1. Nature of Operations and Summary of Significant Accounting Policies
(continued)
Income Taxes
The Company and Thermo Electron have a tax allocation agreement under
which the Company is included in the consolidated federal and certain state
income tax returns filed by Thermo Electron. The agreement provides that in
years in which the Company has taxable income, it will pay to Thermo Electron
amounts comparable to the taxes the Company would have paid if it had filed
separate tax returns.
In accordance with Statement of Financial Accounting Standards (SFAS)
No. 109, "Accounting for Income Taxes," the Company recognizes deferred income
taxes based on the expected future tax consequences of differences between the
financial statement basis and the tax basis of assets and liabilities calculated
using enacted tax rates in effect for the year in which the differences are
expected to be reflected in the tax return.
Concentration of Credit Risk
The Company sells its products to customers in the healthcare
industry. The Company does not normally require collateral or other security to
support its accounts receivable. Management does not believe that this
concentration of credit risk has, or will have, a significant negative impact on
the Company.
Foreign Currency
All assets and liabilities of the Company's wholly owned subsidiary
are translated at year-end exchange rates, and revenues and expenses are
translated at average exchange rates for the year in accordance with SFAS No.
52, "Foreign Currency Translation." Foreign currency transaction gains and
losses are included in the accompanying statement of income and are not material
for each of the three years presented.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities,
disclosure of contingent assets and liabilities at the date of the financial
statements, and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
9
<PAGE>
International Technidyne Corporation 1996 Financial Statements
Notes to Consolidated Financial Statements
1. Nature of Operations and Summary of Significant Accounting Policies
(continued)
Fair Value of Financial Instruments
The Company's financial instruments consist mainly of accounts
receivable and accounts payable, which approximate fair value due to their
short-term nature.
2. Employee Benefit Plans
Employee Stock Purchase Program
Substantially all of the Company's full-time U.S. employees are
eligible to participate in an employee stock purchase program sponsored by
Thermo Electron. Under this program, shares of Thermo Electron common stock can
be purchased at the end of a 12-month period at 95% of the fair market value at
the beginning of the period, and the shares purchased are subject to a six-month
resale restriction. Prior to November 1, 1995, shares of Thermo Electron's
common stock could be purchased at the end of a 12-month period at 85% of the
fair market value at the beginning of the period, and the shares purchased were
subject to a one-year resale restriction. Shares are purchased through payroll
deductions of up to 10% of each participating employee's gross wages.
401(k) Savings Plan
Substantially all of the Company's full-time U.S. employees are
eligible to participate in Thermo Electron's 401(k) savings plan. Contributions
to the plan are made by both the employee and the Company. Company contributions
are based upon the level of employee contributions. For this plan, the Company
contributed and charged to expense $267,000, $278,000, and $169,000 in 1996,
1995, and 1994, respectively.
3. Income Taxes
The components of income before provision for income taxes ARE AS
FOLLOWS:
<TABLE>
<CAPTION>
(In thousands) 1996 1995 1994
- ------------------------------------------------------------------------
<S> <C> <C> <C>
Domestic $7,311 $6,837 $6,134
Foreign 275 - -
------ ------ ------
$7,586 $6,837 $6,134
====== ====== ======
</TABLE>
10
<PAGE>
International Technidyne Corporation 1996 Financial Statements
Notes to Consolidated Financial Statements
3. Income Taxes (continued)
The components of the provision for income taxes are as follows:
<TABLE>
<CAPTION>
(In thousands) 1996 1995 1994
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Currently payable:
Federal $2,221 $2,309 $1,677
State 602 656 474
------ ------ ------
2,823 2,965 2,151
------ ------ ------
(Prepaid) Deferred:
Federal 70 (260) 150
State 21 (78) 45
------ ------ ------
91 (338) 195
------ ------ ------
$2,914 $2,627 $2,346
====== ====== ======
</TABLE>
The provision for income taxes in the accompanying statement of income
differs from the provision calculated by applying the statutory federal income
tax rate of 34% to income before provision for income taxes due to the
following:
<TABLE>
<CAPTION>
(In thousands) 1996 1995 1994
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Provision for income taxes at statutory rate $2,579 $2,325 $2,086
Increases (decreases) resulting from:
State income taxes, net of federal tax 411 381 343
Foreign sales corporation benefit (111) (103) (87)
Nondeductible expenses and other 35 24 4
------ ------ ------
$2,914 $2,627 $2,346
====== ====== ======
</TABLE>
Short- and long-term prepaid income taxes in the accompanying balance sheet
consist of the following:
<TABLE>
<CAPTION>
(In thousands) 1996 1995
- -------------------------------------------------------------------------------------
<S> <C> <C>
Prepaid income taxes:
Depreciation and amortization $ 958 $1,082
Reserves and other accruals 1,022 934
Inventory basis difference 831 774
Other, net 19 131
------ ------
$2,830 $2,921
====== ======
</TABLE>
11
<PAGE>
International Technidyne Corporation 1996 Financial Statements
Notes to Consolidated Financial Statements
3. Income Taxes (continued)
A provision has not been made for U.S. or additional foreign taxes on
$181,000 of undistributed earnings of the Company's U.K. subsidiary that could
be subject to taxation if remitted to the U.S. because the Company currently
plans to keep this amount permanently reinvested overseas. The Company believes
that any additional U.S. tax liability due upon remittance of such earnings
would be immaterial due to available U.S. foreign tax credits.
4. Related Party Transactions
Corporate Services Agreement
The Company and Thermo Electron have a corporate services agreement under
which Thermo Electron's corporate staff provides certain administrative
services, including certain legal advice and services, risk management, certain
employee benefit administration, tax advice and preparation of tax returns,
centralized cash management, and certain financial and other services, for which
the Company paid Thermo Electron annually an amount equal to 1.0%, 1.20%, and
1.25% of the Company's revenues in fiscal 1996, 1995, and 1994, respectively.
The annual fee is reviewed and adjusted annually by mutual agreement of the
parties. The corporate services agreement is renewed annually but can be
terminated upon 30 days' prior notice by the Company or upon the Company's
withdrawal from the Thermo Electron Corporate Charter (the Thermo Electron
Corporate Charter defines the relationship among Thermo Electron and its
majority-owned subsidiaries). For these services, the Company was charged
$340,000, $387,000, and $358,000 in 1996, 1995, and 1994, respectively.
Management believes that the service fees charged by Thermo Electron are
reasonable and that such fees are representative of the expenses the Company
would have incurred on a stand-alone basis. For additional items such as
employee benefit plans, insurance coverage, and other identifiable costs, Thermo
Electron charges the Company based upon costs attributable to the Company.
Rent Expense
The Company's wholly owned subsidiary rents office space on a month-to-month
basis from an affiliate which is controlled by Thermo Electron. The total rent
expense paid to this affiliate was $8,000, $17,000, and $18,000 in 1996, 1995,
and 1994, respectively.
5. Commitments and Contingencies
Commitments
Beginning in 1995, the Company has leased manufacturing and office
facilities under a lease expiring in 1999. The accompanying statement of income
includes expenses from this lease of $188,000 and $13,000 in 1996
12
<PAGE>
International Technidyne Corporation 1996 Financial Statements
Notes to Consolidated Financial Statements
5. Commitments and Contingencies (continued)
and 1995, respectively. Future minimum payments due under this noncancelable
operating lease as of December 28, 1996 are $194,000 in 1997; $199,000 in 1998;
and $103,000 in 1999. Total future minimum lease payments are $496,000.
Contingencies
The Company is contingently liable with respect to lawsuits and other
matters that arose in the ordinary course of business. In the opinion of
management, these contingencies will not have a material effect upon the
financial position of the Company or its results of operations.
6. Significant Customers and Export Sales
Sales to one customer accounted for 43%, 41%, and 40% of the Company's total
revenues in 1996, 1995, and 1994, respectively. Export sales to Europe accounted
for 12%, 11%, and 12% of the Company's total revenues in 1996, 1995, and 1994,
respectively. All other export sales accounted for 11%, 10%, and 11% of the
Company's total revenues in 1996, 1995, and 1994, respectively.
7. Subsequent Event
In March 1997, Thermo Electron announced its intent to sell the Company to
Thermo Cardiosystems Inc., one of its publicly held, majority-owned
subsidiaries.
13
<PAGE>
Exhibit 99.2
------------
SELECTED FINANCIAL INFORMATION
The selected financial information included below for Thermo Cardiosystems
Inc. (the "Company") as of and for the fiscal years ended December 31, 1994,
December 30, 1995 and December 28, 1996 has been derived from the Company's
Consolidated Financial Statements, which have been audited by Arthur Andersen
LLP, independent public accountants. The selected financial information included
below for International Technidyne Corporation ("ITC") as of and for the fiscal
year ended December 28, 1996 has been derived from ITC's Consolidated Financial
Statements, which have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their report included as part of Exhibit 99.1 to
this Current Report on Form 8-K. The selected financial information for the
combined Company as of and for the year ended December 28, 1996 and as of and
for the three months ended March 30, 1996 and March 29, 1997 has not been
audited but, in the opinion of the Company, includes all adjustments (consisting
only of normal, recurring adjustments) necessary to present fairly such
information in accordance with generally accepted accounting principles applied
on a consistent basis. The results of operations for the three months ended
March 27, 1997 are not necessarily indicative of results for the entire year.
<TABLE>
<CAPTION>
COMBINED
-------------------------------------
THERMO CARDIOSYSTEMS 1996 THREE MONTHS ENDED (1)
-------------------- ---------------------------------- ------------------------
FISCAL YEAR
---------------------
THERMO CONSOLIDATED MARCH 30, MARCH 29,
1994 1995 CARDIOSYSTEMS ITC (1) 1996 1997
---------- ---------- ------------- ------- ------------ ----------- -----------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF INCOME DATA:
Revenues................ $ 10,409 $ 20,593 $ 29,970 $33,992 $ 63,962 $ 15,405 $ 14,902
--------- ---------- -------- ------- -------- ----------- -----------
Costs and Operating
Expenses:
Cost of revenues....... 5,127 8,810 11,891 14,680 26,571 6,509 6,929
Selling, general and
administrative
expenses.............. 2,789 4,146 6,697 8,067 14,764 3,263 4,005
Research and
development expenses.. 3,437 3,324 3,839 3,659 7,498 1,813 2,070
Write-off of acquired
technology............ -- -- 4,909 -- 4,909 -- --
--------- ---------- -------- ------- -------- ----------- -----------
11,353 16,280 27,336 26,406 53,742 11,585 13,004
--------- ---------- -------- ------- -------- ----------- -----------
Operating Income (Loss). (944) 4,313 2,634 7,586 10,220 3,820 1,898
Interest and Other In-
come, Net.............. 3,869 5,264 6,136 -- 6,136 1,402 1,175
--------- ---------- -------- ------- -------- ----------- -----------
Income Before Provision
for Income Taxes....... 2,925 9,577 8,770 7,586 16,356 5,222 3,073
Provision for Income
Taxes.................. 1,026 2,652 3,412 2,914 6,326 1,791 1,198
--------- ---------- -------- ------- -------- ----------- -----------
Net Income.............. $ 1,899 $ 6,925 $ 5,358 $ 4,672 $ 10,030 $ 3,431 $ 1,875
========= ========== ======== ======= ======== =========== ===========
Earnings per Share...... $ .05 $ .19 $ .15 $ .25 $ .08 $ .05
========= ========== ======== ======== =========== ===========
Weighted Average Shares. 36,930 37,273 36,569 39,925 40,905 40,256
========= ========== ======== ======== =========== ===========
BALANCE SHEET DATA
(AT END OF PERIOD):
Working Capital......... $ 44,121 $ 60,383 $ 62,288 $ 3,040 $ 65,328 $ 74,965 $ 85,738
Total Assets............ 94,864 106,186 107,121 17,857 124,978 126,083 127,089
Subordinated Convertible
Obligations............ 33,450 11,642 -- -- -- 11,367 --
Shareholders' Investment 58,357 91,339 99,907 11,182 111,089 103,608 117,156
</TABLE>
- --------
(1) In May 1997, the Company acquired all of the outstanding common stock of ITC
from Thermo Electron Corporation in exchange for the right to receive shares
of the Company's common stock. The Company's results of operations as of and
for the three months ended March 30, 1996 and March 29, 1997, and fiscal
1996 include the results of operations of ITC shown on a consolidated basis
to reflect the combined Company, accounted for in a manner similar to a
pooling-of-interests.
<PAGE>
Exhibit 99.3
[LETTERHEAD OF TCI APPEARS HERE]
THERMO CARDIOSYSTEMS ANNOUNCES CONVERTIBLE SUBORDINATED
DEBENTURE OFFERING
WOBURN, Mass., May 9, 1997 -- Thermo Cardiosystems Inc. (ASE-TCA) today
announced that it has entered into an agreement to sell at par $70 million of
4 3/4 percent subordinated debentures due 2004. The debentures will be
convertible into shares of common stock at a price of $31.415. The debentures
are guaranteed on a subordinated basis by Thermo Electron Corporation (NYSE-
TMO). The company intends to use the net proceeds of the offering, estimated to
be approximately $68 million, to repurchase its own common stock in the open
market or in negotiated transactions, and for working capital and other general
corporate purposes. The company expects to close the offering on May 14, 1997.
The debentures will not be registered under the Securities Act of 1933 and may
not be offered or sold in the United States absent registration or an applicable
exemption from the registration requirements of the Act.
# # #
