SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
---------------------------------------
FORM 10-Q
(mark one)
[X]Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the Quarter Ended March 30, 1996.
[ ]Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934.
Commission File Number 1-8002
THERMO ELECTRON CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 04-2209186
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
81 Wyman Street, P.O. Box 9046
Waltham, Massachusetts 02254-9046
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (617) 622-1000
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the Registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days. Yes [X] No [ ]
Indicate the number of shares outstanding of each of the issuer's
classes of Common Stock, as of the latest practicable date.
Class Outstanding at April 26, 1996
----------------------------- -----------------------------
Common Stock, $1.00 par value 91,918,436
PAGE
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PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
THERMO ELECTRON CORPORATION
Consolidated Balance Sheet
(Unaudited)
Assets
March 30, December 30,
(In thousands) 1996 1995
-------------------------------------------------------------------------
Current Assets:
Cash and cash equivalents $ 774,715 $ 461,983
Short-term available-for-sale
investments, at quoted market value
(amortized cost of $671,161 and $588,471) 675,752 593,802
Accounts receivable, less allowances
of $27,861 and $28,021 587,948 476,479
Unbilled contract costs and fees 69,580 74,941
Inventories:
Raw materials and supplies 219,153 172,742
Work in process 97,591 72,087
Finished goods 106,446 73,353
Prepaid income taxes 87,404 72,993
Prepaid expenses 47,968 22,846
---------- ----------
2,666,557 2,021,226
---------- ----------
Property, Plant and Equipment, at Cost 1,051,915 967,069
Less: Accumulated depreciation and
amortization 268,165 254,224
---------- ----------
783,750 712,845
---------- ----------
Long-term Available-for-sale
Investments, at Quoted Market Value
(amortized cost of $56,932 and $60,780) 59,498 61,845
---------- ----------
Long-term Held-to-maturity Investments
(quoted market value of $24,963 and $24,942) 24,251 23,819
---------- ----------
Other Assets 108,999 98,102
---------- ----------
Cost in Excess of Net Assets of
Acquired Companies (Note 5) 995,358 827,071
---------- ----------
$4,638,413 $3,744,908
========== ==========
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THERMO ELECTRON CORPORATION
Consolidated Balance Sheet (continued)
(Unaudited)
Liabilities and Shareholders' Investment
March 30, December 30,
(In thousands except share amounts) 1996 1995
--------------------------------------------------------------------------
Current Liabilities:
Notes payable and current maturities of
long-term obligations $ 166,803 $ 106,248
Accounts payable 187,014 164,605
Accrued payroll and employee benefits 98,964 91,393
Accrued income taxes 54,169 51,807
Accrued installation and warranty costs 56,297 40,699
Accrued acquisition expenses (Note 5) 94,170 32,557
Other accrued expenses 299,687 227,527
---------- ----------
957,104 714,836
---------- ----------
Deferred Income Taxes and Other Deferred Items 128,228 125,066
---------- ----------
Long-term Obligations:
Senior convertible obligations 383,122 458,925
Subordinated convertible obligations (Note 4) 944,946 343,076
Tax-exempt obligations 127,639 128,567
Nonrecourse tax-exempt obligations 78,700 94,700
Other 81,763 90,743
---------- ----------
1,616,170 1,116,011
---------- ----------
Minority Interest 513,949 471,648
---------- ----------
Common Stock of Subsidiary Subject to
Redemption ($18,450 redemption value) 17,591 17,513
---------- ----------
Shareholders' Investment (Note 6):
Preferred stock, $100 par value,
50,000 shares authorized; none issued
Common stock, $1 par value, 175,000,000
shares authorized; 90,716,061 and
87,863,315 shares issued 90,716 87,863
Capital in excess of par value 666,062 597,678
Retained earnings 652,918 612,476
Treasury stock at cost, 55,861 and
11,574 shares (3,321) (536)
Cumulative translation adjustment (3,326) 561
Deferred compensation (2,185) (2,271)
Net unrealized gain on available-
for-sale investments 4,507 4,063
---------- ----------
1,405,371 1,299,834
---------- ----------
$4,638,413 $3,744,908
========== ==========
The accompanying notes are an integral part of these consolidated financial
statements. 3PAGE
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THERMO ELECTRON CORPORATION
Consolidated Statement of Income
(Unaudited)
Three Months Ended
----------------------
March 30, April 1,
(In thousands except per share amounts) 1996 1995
--------------------------------------------------------------------------
Revenues:
Product revenues $533,387 $388,025
Service revenues 59,214 43,908
Research and development contract revenues 42,493 46,612
-------- --------
635,094 478,545
-------- --------
Costs and Expenses:
Cost of products 321,933 227,876
Cost of services 42,805 30,571
Expenses for research and development and
new lines of business (a) 67,397 63,143
Selling, general and administrative expenses 147,546 109,583
Write-off of acquired technology (Note 5) 3,500 -
Restructuring and other nonrecurring costs - 1,522
-------- --------
583,181 432,695
-------- --------
Operating Income 51,913 45,850
Gain on Issuance of Stock by Subsidiaries (Note 2) 28,892 12,883
Other Expense, Net (Note 3) (5,472) (3,347)
-------- --------
Income Before Income Taxes and Minority Interest 75,333 55,386
Provision for Income Taxes 22,330 18,434
Minority Interest Expense 12,561 7,404
-------- --------
Net Income $ 40,442 $ 29,548
======== ========
Earnings per Share:
Primary $ .46 $ .37
======== ========
Fully diluted $ .41 $ .32
======== ========
Weighted Average Shares:
Primary 88,328 80,582
======== ========
Fully diluted 116,214 104,436
======== ========
(a) Includes costs of:
Research and development contracts $ 35,858 $ 40,803
Internally funded research and development 31,012 21,532
Other expenses for new lines of business 527 808
-------- --------
$ 67,397 $ 63,143
======== ========
The accompanying notes are an integral part of these consolidated financial
statements.
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THERMO ELECTRON CORPORATION
Consolidated Statement of Cash Flows
(Unaudited)
Three Months Ended
----------------------
March 30, April 1,
(In thousands) 1996 1995
--------------------------------------------------------------------------
Operating Activities:
Net cash provided by operating activities $ 41,853 $ 2,398
--------- ---------
Investing Activities:
Acquisitions, net of cash acquired (Note 5) (265,203) (49,467)
Purchases of available-for-sale investments (278,094) (104,765)
Purchases of long-term held-to-maturity
investments - (22,300)
Proceeds from sale and maturities of
available-for-sale investments 199,963 207,146
Purchases of property, plant and equipment (24,548) (12,724)
Proceeds from sale of property, plant and
equipment 1,183 1,225
Other (999) (1,539)
--------- ---------
Net cash provided by (used in) investing
activities (367,698) 17,576
--------- ---------
Financing Activities:
Net proceeds from issuance of long-term
obligations (Note 4) 609,049 313
Repayment and repurchase of long-term
obligations (3,188) (6,654)
Proceeds from issuance of Company and
subsidiary common stock (Note 2) 44,676 51,272
Purchases of subsidiary common stock (12,789) (44,257)
Other 707 730
--------- ---------
Net cash provided by financing activities 638,455 1,404
--------- ---------
Exchange Rate Effect on Cash 122 1,963
--------- ---------
Increase in Cash and Cash Equivalents 312,732 23,341
Cash and Cash Equivalents at Beginning of Period 461,983 383,005
--------- ---------
Cash and Cash Equivalents at End of Period $ 774,715 $ 406,346
========= =========
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THERMO ELECTRON CORPORATION
Consolidated Statement of Cash Flows (continued)
(Unaudited)
Three Months Ended
----------------------
March 30, April 1,
(In thousands) 1996 1995
--------------------------------------------------------------------------
Supplemental Cash Flow Information:
Provision for losses on accounts receivable $ 249 $ 1,641
Cash paid for:
Interest $ 24,639 $ 22,250
Income taxes $ 14,762 $ 11,108
Noncash activities:
Conversions of Company and subsidiaries'
convertible obligations $ 95,933 $ 41,115
Issuance of long-term obligations for
acquired company $ - $ 22,300
The accompanying notes are an integral part of these consolidated financial
statements.
6PAGE
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THERMO ELECTRON CORPORATION
Notes to Consolidated Financial Statements
1. General
The interim consolidated financial statements presented have been
prepared by Thermo Electron Corporation (the Company) without audit and, in
the opinion of management, reflect all adjustments of a normal recurring
nature necessary for a fair statement of (a) the results of operations for
the three-month periods ended March 30, 1996 and April 1, 1995, (b) the
financial position at March 30, 1996, and (c) the cash flows for the
three-month periods ended March 30, 1996 and April 1, 1995. Interim results
are not necessarily indicative of results for a full year.
The consolidated balance sheet presented as of December 30, 1995, has
been derived from the consolidated financial statements that have been
audited by the Company's independent public accountants. The consolidated
financial statements and notes are presented as permitted by Form 10-Q and
do not contain certain information included in the annual financial
statements and notes of the Company. The consolidated financial statements
and notes included herein should be read in conjunction with the financial
statements and notes included in the Company's Annual Report on Form 10-K
for the fiscal year ended December 30, 1995, filed with the Securities and
Exchange Commission.
2. Issuance of Stock by Subsidiaries
Gain on issuance of stock by subsidiaries in the accompanying
statement of income for the three-month period ended March 30, 1996,
resulted primarily from the following:
Initial public offering of 3,000,000 shares of ThermoQuest
Corporation common stock in March 1996 at $15.00 per share for
net proceeds of $41.6 million resulted in a gain of $24.4
million that was recorded by the Company's Thermo Instrument
Systems Inc. subsidiary.
Private placement of 300,000 shares of Thermedics Detection
Inc. common stock in March 1996 at $10.00 per share for net
proceeds of $3.0 million resulted in a gain of $2.5 million
that was recorded by the Company's Thermedics Inc. subsidiary.
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THERMO ELECTRON CORPORATION
3. Other Expense, Net
The components of other expense, net, in the accompanying statement of
income are as follows:
Three Months Ended
---------------------
March 30, April 1,
(In thousands) 1996 1995
--------------------------------------------------------------------------
Interest income $ 21,988 $ 14,514
Interest expense (27,398) (18,391)
Equity in income (loss) of unconsolidated
subsidiaries (341) 5
Gain on sale of investments 270 1,187
Other income (expense), net 9 (662)
-------- --------
$ (5,472) $ (3,347)
======== ========
4. Debenture Offering
In January 1996, the Company issued and sold $585 million principal
amount of 4 1/4% subordinated convertible debentures due 2003. The
debentures are convertible into shares of the Company's common stock at a
price of $56.70 per share.
5. Acquisitions
On March 29, 1996, the Company's Thermo Instrument subsidiary
completed the acquisition of a substantial portion of the businesses
comprising the Scientific Instruments Division of Fisons plc (Fisons), a
wholly owned subsidiary of Rhone-Poulenc Rorer Inc., for approximately 123
million British pounds sterling in cash (approximately $187 million) and
the assumption of approximately 24 million British pounds sterling of
indebtedness (approximately $36 million). The purchase price is subject to
post-closing adjustments equal to the amounts by which the net tangible
assets and net debt of the acquired businesses on the closing date are
greater or less than certain target amounts agreed to by the parties. In
the first quarter of 1996, Thermo Instrument wrote-off $3.5 million of
acquired technology in connection with this acquisition. The businesses
acquired are involved in the research, development, manufacture, and sale
of analytical instruments to industrial and research laboratories
worldwide. During the first quarter of 1996, the Company's majority-owned
subsidiaries made several other acquisitions for $88.9 million in cash
subject to post-closing adjustments.
These acquisitions have been accounted for using the purchase method
of accounting and the results of their operations have been included in the
accompanying financial statements from their respective dates of
acquisition. The cost of the acquisitions exceeded the estimated fair value
of the acquired net assets by $179.6 million, which is being amortized
principally over 40 years. Allocation of the purchase price for these
acquisitions was based on estimates of the fair value of the net assets
acquired and is subject to adjustment upon finalization of the purchase
price allocation. Pro forma data is not presented since the acquisitions
were not material to the Company's results of operations.
8PAGE
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THERMO ELECTRON CORPORATION
5. Acquisitions (continued)
In connection with the acquisition of certain businesses within the
Scientific Instruments Division of Fisons, Thermo Instrument established
reserves totaling $61 million for estimated severance, excess facilities,
and other exit costs associated with the acquisition, none of which was
expended during the first quarter of 1996. Thermo Instrument expects to
substantially complete its review and restructuring of these businesses
over the one-year period following the acquisition. Any changes in
estimates of these costs will be recorded as adjustments to cost in excess
of net assets of acquired companies.
6. Subsequent Event
In March 1996, the Company declared a three-for-two stock split in the
form of a 50% stock dividend, payable on June 5, 1996, to shareholders of
record as of May 22, 1996. Distribution of the stock dividend is subject to
shareholder approval of an increase in the Company's authorized stock to
350 million shares, to be voted on at the Company's annual meeting to be
held on May 21, 1996. Common shares outstanding as of March 30, 1996, on a
pro forma basis to reflect the stock split, would have been 135,990,300.
Financial results for prior periods will be restated to reflect the
stock dividend, if approved.
The following table presents selected financial data on a pro forma
basis to reflect the stock split.
Three Months Ended
-----------------------
March 30, April 1,
(In thousands except per share amounts) 1996 1995
--------------------------------------------------------------------------
Earnings per share:
Primary $ .31 $ .24
Fully diluted .27 .22
Weighted average shares:
Primary 132,492 120,873
Fully diluted 174,321 156,654
9PAGE
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THERMO ELECTRON CORPORATION
Item 2 - Management's Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations
First Quarter 1996 Compared With First Quarter 1995
Sales for the first quarter of 1996 were a record $635.1 million, an
increase of $156.5 million, or 33%, over the first quarter of 1995. Segment
income was $59.0 million, compared with $52.7 million in 1995, an increase
of 12%. (Segment income is income before corporate general and
administrative expenses, other income and expense, minority interest
expense, and income taxes.) Operating income was $51.9 million, compared
with $45.9 million in 1995, an increase of 13%.
Sales from the Instruments segment were $225.6 million in 1996, an
increase of $52.6 million, or 30%, over 1995. Sales increased primarily due
to acquisitions made by Thermo Instrument Systems Inc., which added $40
million to sales in 1996. The remaining increase resulted from higher
revenues from existing businesses, primarily due to greater demand for the
Company's analytical instruments, offset in part by the unfavorable effects
of currency translation due to the strengthening of the U.S. dollar in
1996. Segment income margin (segment income margin is segment income as a
percentage of sales) was 10.6% in 1996, compared with 14.4% in 1995.
Segment income margin declined due in part to a $3.5 million purchase
accounting write-off of acquired technology resulting from the March 1996
acquisition of a substantial portion of the businesses comprising the
Scientific Instruments Division of Fisons plc, which was acquired at the
end of the first quarter of 1996, and due to lower margins at acquired
businesses. The acquisition of the businesses from Fisons is expected to
negatively impact segment income margins at Thermo Instrument due to lower
margins at these businesses.
Sales from the Alternative-energy Systems segment were $81.5 million
in 1996, an increase of $7.4 million, or 10%, over 1995. Within this
segment, revenues from Thermo Ecotek Corporation, which consist of revenues
from biomass power plant operations, were $33.5 million in 1996, compared
with $31.0 million in 1995. This increase results from higher contractual
energy rates at all of the Company's facilities, except the Hemphill plant,
as well as fewer days of scheduled and unscheduled outages at the Delano
plants in California, offset in part by higher curtailment of power output
at the Mendota and Woodland plants, also in California. Continued
curtailment of power output at these plants is expected during the
remainder of 1996. Revenues from the Company's waste-recycling facility in
southern California were $4.9 million in 1996, compared with $6.7 million
in 1995. Although this facility ceased processing waste and the Company
wrote off its net investment in the facility in 1995, the customer is
continuing to pay a portion of its obligation under the service agreement.
The customer remains in default on the service agreement and continues to
pursue the purchase of the facility from the Company. Sales at Peter
Brotherhood Ltd. increased to $13.4 million in 1996 from $11.5 million in
1995 as a result of increased demand for steam turbines and, to a lesser
extent, increased demand for special-purpose machinery. Sales from Thermo
Power Corporation were $29.8 million in 1996, compared with $24.9 million
in 1995. This increase resulted primarily from greater demand for
gas-fueled cooling systems and gasoline and natural gas TecoDrive engines
and the inclusion of revenues from lift-truck engines.
10PAGE
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THERMO ELECTRON CORPORATION
First Quarter 1996 Compared With First Quarter 1995 (continued)
Segment income from the Alternative-energy Systems segment was $6.3
million in 1996, compared with $6.1 million in 1995. Thermo Ecotek had
segment income of $4.5 million in 1996, compared with $3.4 million in 1995.
This improvement results from higher revenues and lower fuel and other
operating costs at two of Thermo Ecotek's California plants, offset in part
by higher expenses for new business development. Segment income from the
Company's waste-recycling facility was $2.3 million in 1996, compared with
$1.2 million in 1995. This change results from lower depreciation expense
as a result of the write-down of the Company's net investment in 1995.
Results for this facility, net of related interest expense, were at a
breakeven level for the first quarter of 1996. Peter Brotherhood incurred a
segment loss of $0.5 million in 1996, compared with income of $0.2 million
in 1995. This decline results from increased costs to complete jobs in
process and competitive pricing pressures. Segment income at Thermo Power
declined by $1.3 million due to lower prices for industrial refrigeration
products resulting from competitive pricing pressures, lower manufacturing
efficiencies, including lost production time during severe winter storms
and, to a lesser extent, higher warranty expenses. Thermo Power expects
that a cost increase in one of the major components of its industrial
refrigeration packages will adversely affect the gross profit margin
contributed from this product starting in the second quarter of 1996.
Sales in the Process Equipment segment were $93.3 million in 1996,
compared with $57.5 million in 1995. Sales from Thermo Fibertek Inc.
increased $5.2 million to $49.0 million in 1995. This increase results
primarily from an increase in demand for papermaking accessory products.
Sales of $35.0 million in 1996 and $4.5 million in 1995 were recorded by a
wholly owned subsidiary of the Company for construction of an office
wastepaper de-inking facility in Menominee, Michigan. This facility is
expected to be completed by the end of 1996. Sales of Thermo TerraTech
Inc.'s thermal-processing equipment increased $2.5 million from depressed
1995 levels, while sales from Napco's automated electroplating equipment
business declined $2.4 million. Segment income margin was 10.3% in 1996,
compared with 10.8% in 1995. This decline results primarily from lower
margins on sales recorded by the Company on the Michigan project due to a
higher proportion of pass-through costs.
Sales in the Biomedical Products segment were $87.6 million in 1996,
an increase of $33.4 million, or 62%, over 1995, primarily due to the
inclusion of $26.1 million in sales from Bird Medical Technologies, Inc.
and Bennett X-Ray Corporation, which were acquired in the third quarter of
1995, and increased demand for a number of the Company's biomedical
products. Sales of ThermoTrex Corporation's mammography and needle-biopsy
systems increased 17% to $22.4 million; sales of Thermo Cardiosystems
Inc.'s implantable left ventricular-assist system (LVAS) increased 52% to
$6.7 million; neurodiagnostic monitoring equipment sold by the Company's
wholly owned Nicolet Biomedical Inc. subsidiary increased 8% to $14.2
million; and sales of blood coagulation-monitoring products and
skin-incision devices sold by the Company's wholly owned International
Technidyne Corporation subsidiary increased 11% to $8.7 million. Segment
income margin improved to 13.9% in 1996 from 12.0% in 1995 as a result of
increased sales and, to a lesser extent, price increases for Thermo
Cardiosystems' air-driven LVAS.
11PAGE
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THERMO ELECTRON CORPORATION
First Quarter 1996 Compared With First Quarter 1995 (continued)
Sales in the Environmental Services segment were $59.2 million in
1996, an increase of $15.3 million, or 35%, over 1995, due to sales from
acquired businesses. Within this segment, sales from Thermo Remediation
Inc. were $23.0 million in 1996, compared with $13.5 million in 1995.
Thermo Remediation's revenues increased due to the inclusion of revenues
from acquired businesses, offset in part by lower revenues from
soil-remediation and fluids-recycling services resulting from competitive
pricing pressures and a decline in the volume of soil processed as a result
of ongoing regulatory uncertainties at two sites. Thermo Remediation's
nuclear service sales also declined primarily due to a decline in
radiochemistry laboratory work, reflecting reduced spending at the U.S.
Department of Energy and increased competition. Sales of metallurgical
services declined $1.8 million due to the impact of closing a small plant
in 1995 and, to a lesser extent, competitive pricing pressures. Segment
income was $3.3 million in 1996, compared with $3.8 million in 1995. This
decline primarily results from a loss of $2.0 million incurred at Thermo
TerraTech's EuroTech operation. The loss at EuroTech resulted from the
settlement of several contract disputes, as well as severe winter weather,
which impacted all phases of EuroTech's business.
Sales from the Advanced Technologies segment were $89.4 million in
1996, compared with $77.3 million in 1995. Sales increased $16.1 million
due to the inclusion of revenues from the former Orion laboratory products
division of Analytical Technology, Inc., which was acquired in December
1995, and Moisture Systems Corporation and Rutter & Co., which were
acquired in January 1996. Sales at Thermo Voltek Corp. increased $3.3
million due to an increase of $1.7 million in revenues at Comtest,
primarily due to increased demand and the introduction of new products.
Thermo Voltek's revenues also increased $1.1 million due to the acquisition
in March 1995 of Kalmus Engineering Inc. Sales of Thermedics Detection
Corporation's process-detection instruments to the beverage industry
declined $3.5 million to $2.9 million in 1996, primarily due to lower
demand from its principal customer, which has substantially completed its
deployment of these systems. Sales of Thermedics Inc.'s EGIS
explosives-detection systems increased $1.4 million to $2.9 million as a
result of an order received from the U.S. government to provide Israel with
counterterrorism support. Sales at Coleman Research Corporation declined
10% to $35.9 million as a result of lower U.S. government contract funding.
Segment income margin declined to 4.2% in 1996 from 6.8% in 1995, primarily
resulting from lower sales of Thermedics Detection process-detection
instruments to the beverage industry and, to a lesser extent, increased
expenses incurred by ThermoLase to develop and commercialize its
laser-based hair-removal process.
The Company has adopted a strategy of spinning out certain of its
businesses into separate subsidiaries and having these subsidiaries sell a
minority interest to outside investors. The Company believes that this
strategy provides additional motivation and incentives for the management
of the subsidiary through the establishment of subsidiary-level stock
option incentive programs, as well as capital to support the subsidiary's
growth. As a result of the sale of stock by subsidiaries, the issuance of
12PAGE
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THERMO ELECTRON CORPORATION
First Quarter 1996 Compared With First Quarter 1995 (continued)
stock by subsidiaries upon conversion of convertible debentures, and
similar transactions, the Company recorded gains of $28.9 million in 1996
and $12.9 million in 1995 (Note 2). Minority interest expense increased to
$12.6 million in 1996 from $7.4 million in 1995. Minority interest expense
includes $5.6 million in 1996 and $0.7 million in 1995 relating to gains
recorded by the Company's majority-owned subsidiaries as a result of the
sale of stock and the issuance of stock upon converison of indebtedness by
their subsidiaries.
Liquidity and Capital Resources
Consolidated working capital was $1,709.5 million at March 30, 1996,
compared with $1,306.4 million at December 30, 1995. Included in working
capital were cash, cash equivalents, and short-term available-for-sale
investments of $1,450.5 million at March 30, 1996, compared with $1,055.8
million at December 30, 1995. In addition, at March 30, 1996, the Company
had $59.5 million of long-term available-for-sale investments and $24.3
million of long-term held-to-maturity investments, compared with $61.8
million of long-term available-for-sale investments and $23.8 million of
long-term held-to-maturity investments at December 30, 1995. Proceeds from
the issuance of Company and subsidiary common stock totaled $44.7 million
in the first three months of 1996. In January 1996, the Company issued and
sold $585 million principal amount of 4 1/4% subordinated convertible
debentures due 2003 (Note 4).
During the first three months of 1996, the Company expended $265.2
million for acquisitions and $24.5 million for purchases of property, plant
and equipment. The Company has agreements or letters of intent to expend
approximately $101 million on the acquisition of new businesses. These
transactions are subject to various conditions to closing, and there can be
no assurance that all of the transactions will be consummated. The Company
has no material commitments for purchases of property, plant and equipment
and expects that, for 1996, such expenditures will approximate the 1995
level.
During the first three months of 1996, the Company expended $12.8
million to purchase the common stock of certain of its subsidiaries. The
Company expects that these purchases will continue, although the amount of
purchases in a given reporting period may vary significantly.
PART II - OTHER INFORMATION
Item 6 - Exhibits
(a) Exhibits
See Exhibit Index on the page immediately preceding exhibits.
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THERMO ELECTRON CORPORATION
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized as of the 8th day of May 1996.
THERMO ELECTRON CORPORATION
Paul F. Kelleher
-----------------------
Paul F. Kelleher
Vice President, Finance and
Administration
John N. Hatsopoulos
-----------------------
John N. Hatsopoulos
Chief Financial Officer
14PAGE
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THERMO ELECTRON CORPORATION
Exhibit Index
Exhibit Number Document Page
---------------------------------------------------------------------------
2.1 Amended and Restated Asset and Stock Purchase Agreement
dated March 29, 1996 among the Registrant, Thermo
Instrument Systems Inc. and Fisons plc (filed as Exhibit
2.1 to the Form 8-K of Thermo Instrument Systems Inc. with
respect to events occurring March 29, 1996 [File no.
1-9786] and incorporated herein by reference).
11 Statement re: Computation of earnings per share.
27 Financial Data Schedule.
Exhibit 11
THERMO ELECTRON CORPORATION
Computation of Earnings per Share
Three Months Ended
-------------------------
March 30, April 1,
1996 1995
- -------------------------------------------------------------------------------
Computation of Fully Diluted Earnings per Share:
Income:
Net income $ 40,442,000 $ 29,548,000
Add: Convertible debenture
interest, net of tax 6,836,000 4,304,000
------------ ------------
Income applicable to common
stock assuming full dilution (a) $ 47,278,000 $ 33,852,000
------------ ------------
Shares:
Weighted average shares outstanding 88,328,329 80,581,865
Add: Shares issuable from assumed
conversion of convertible
debentures 26,167,521 22,814,514
Shares issuable from assumed
exercise of options (as
determined by the application
of the treasury stock method) 1,718,039 1,039,338
------------ ------------
Weighted average shares outstanding,
as adjusted (b) 116,213,889 104,435,717
------------ ------------
Fully Diluted Earnings per Share (a) / (b) $ .41 $ .32
============ ============
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THERMO
ELECTRON CORP.'S QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED MARCH
30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-28-1996
<PERIOD-END> MAR-30-1996
<CASH> 774,715
<SECURITIES> 675,752
<RECEIVABLES> 615,809
<ALLOWANCES> 27,861
<INVENTORY> 423,190
<CURRENT-ASSETS> 2,666,557
<PP&E> 1,051,915
<DEPRECIATION> 268,165
<TOTAL-ASSETS> 4,638,413
<CURRENT-LIABILITIES> 937,104
<BONDS> 1,616,170
<COMMON> 90,716
0
0
<OTHER-SE> 1,314,655
<TOTAL-LIABILITY-AND-EQUITY> 4,638,413
<SALES> 533,387
<TOTAL-REVENUES> 635,094
<CGS> 320,536
<TOTAL-COSTS> 400,596<F1>
<OTHER-EXPENSES> 35,039<F2>
<LOSS-PROVISION> 249
<INTEREST-EXPENSE> 27,398
<INCOME-PRETAX> 75,333
<INCOME-TAX> 22,330
<INCOME-CONTINUING> 40,442
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 40,442
<EPS-PRIMARY> .46
<EPS-DILUTED> .41
<FN>
<F1>THIS LINE IS MADE UP OF THE FOLLOWING INCOME STATEMENT ACCOUNTS: "COST OF
PRODUCTS", "COST OF SERVICES", AND "RESEARCH AND DEVELOPMENT CONTRACTS".
<F2>THIS LINE IS MADE UP OF THE FOLLOWING INCOME STATEMENT ACCOUNTS: "COSTS
ASSOCIATED WITH DIVISIONAL AND PRODUCT RESTRUCTURING", "INTERNALLY FINANCED
RESEARCH AND DEVELOPMENT" AND "OTHER EXPENSES FOR NEW LINES OF BUSINESS".
</FN>
</TABLE>
