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):
August 3, 2000
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THERMO ELECTRON CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 1-8002 04-2209186
(State or other (Commission File (I.R.S. Employer
jurisdiction of incorporation Number) Identification Number)
or organization)
81 Wyman Street, P.O. Box 9046
Waltham, Massachusetts 02454-9046
(Address of principal executive offices) (Zip Code)
(781) 622-1000
(Registrant's telephone number
including area code)
<PAGE>
This Current Report on Form 8-K contains forward-looking statements that
involve a number of risks and uncertainties. Important factors that could cause
actual results to differ materially from those indicated by such forward-looking
statements are set forth under the heading "Risk Factors" in the Registrant's
Amendment No. 2 to Registration Statement on Form S-4 [Reg. No. 333-35478] filed
with the Securities and Exchange Commission on June 27, 2000. These include
risks and uncertainties relating to: the Registrant's ability to complete its
corporate reorganization, the need for a favorable Internal Revenue Service
ruling regarding planned spin-offs of certain subsidiaries, divestitures planned
as part of the reorganization, integration of the instrument businesses,
issuance of significant amounts of additional shares as part of the
reorganization, liquidity and prospective performance of the subsidiaries to be
spun off, guarantees of obligations of the subsidiaries to be spun off, stock
price volatility, goodwill acquired by the Registrant, internal growth, the
effect of exchange rate fluctuations on the Registrant's significant
international operations, the need to develop new products and adapt to
significant technological change, changes in governmental regulations, and
dependence of demand on capital spending and government funding policies.
Item 5. Other Events
On August 3, 2000, the Registrant issued a press release, attached hereto
as Exhibit 99, regarding its financial results for the quarter ended July 1,
2000.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) Financial Statements of Business Acquired: Not applicable.
(b) Pro Forma Financial Information: Not applicable.
(c) Exhibits
99 Press Release dated August 3, 2000.
<PAGE>
SIGNATURE
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 3rd day of August, 2000.
THERMO ELECTRON CORPORATION
By: /s/ Theo Melas-Kyriazi
------------------------------
Theo Melas-Kyriazi
Vice President and Chief
Financial Officer
<PAGE>
Exhibit 99
Thermo Electron Reports Second Quarter Earnings
WALTHAM, Mass., August 3, 2000 - Thermo Electron Corporation (NYSE-TMO) today
reported its financial results for the second quarter of 2000, ended July 1.
Earnings per diluted share from continuing operations were $.16, compared with a
loss of $.55 a year ago. * Excluding restructuring and unusual income or charges
in both periods, earnings per diluted share from continuing operations were
$.15, compared with $.13 in 1999. Cash operating earnings per share from
continuing operations (earnings excluding goodwill amortization and
restructuring and unusual charges or income) were $.19, versus $.17 in 1999. As
a result of declines that were expected in the Power Generation segment,
quarterly revenues were $609.5 million, compared with $632.2 million a year ago.
"We continue to make progress in improving our financial performance," said
Richard F. Syron, chairman and chief executive officer of Thermo Electron. "The
instrument businesses of the 'new Thermo' reported increased earnings, internal
bookings improvement of 8 percent, and internal revenue growth of 4 percent,
excluding foreign currency effects.
"As the reorganization nears completion, our efforts are focused on
strengthening the instrument operations. It is timely that Marijn Dekkers, a
highly respected manager of multi-line businesses at Allied Signal, has joined
us as chief operating officer. His charge is to accelerate internal revenue
growth, and improve earnings and productivity. I believe that Marijn's
experience and leadership will allow Thermo to capitalize on its leading market
positions, empower our talented workforce, and further develop breakthrough
technologies that will launch us into new avenues for growth, such as proteomics
and telecommunications."
Life Sciences
Revenues for the Life Sciences segment were $187.0 million, a slight increase
excluding foreign currency effects and acquisitions. The gain was primarily a
result of higher demand for products in the biosciences group, such as
immunoassay-testing and DNA-amplification systems, offset in part by lower sales
of laboratory information management systems (LIMS) following ramp-ups in 1999
for year-2000 compliance. Internal bookings grew 7 percent, excluding currency
effects, driven in part by strong orders for mass spectrometry systems.
Segment income declined by $5.8 million to $23.3 million, and segment
income margin decreased to 12.4 percent from 15.1 percent last year.
Profitability was affected by the lower LIMS sales; realignment of the
biosciences group for better market penetration, including the opening of a new
production facility in Shanghai; and startup costs incurred to launch an
automated clinical sample transport system.
-----------------
* Results for the 1999 quarter have been restated to exclude a number of
businesses that Thermo Electron intends to sell or spin off according to its
reorganization plan announced in January. The plan will allow the company to
focus on its measurement and detection instrument businesses, which constitute
substantially all of its continuing operations.
<PAGE>
Two key managers joined the Life Sciences segment to lead the company's
major effort in proteomics - the next phase of research emanating from the human
genome project. Also recently announced was a U.S. patent covering a new method
for studying the interaction of nucleic acids, critical to genomic research.
Optical Technologies
In the Optical Technologies segment, revenues were $204.6 million, an 8 percent
increase excluding currency translation and businesses sold or acquired, with
strong demand for semiconductor-based lasers and products in the physical
properties and photonics groups.
Segment income excluding unusual charges or income was flat compared with
1999, affected by lower profitability in the spectroscopy group, which is taking
steps to reduce operating costs, but offset by higher profits from physical
properties and photonics products, particularly diffraction gratings.
Bookings for the segment increased 12 percent on a same-store basis and
excluding currency effects, driven by strong demand for gratings and other
optical components used by semiconductor manufacturers and in
telecommunications. The new high-volume gratings manufacturing facility in
Rochester, New York, has opened, and the company has begun shipment of the first
production order for telecom gratings components.
Measurement and Control
In the Measurement and Control segment, revenues were $194.6 million, relatively
flat excluding the effects of foreign currency and businesses sold or acquired.
A decrease in capital spending by the global packaged-foods industry lowered
sales of weighing and inspection equipment, balanced by increased sales of
environmental monitoring and compliance products. Internal bookings were up
slightly for the quarter, excluding currency effects.
Segment income increased by $5.8 million to $18.8 million, excluding
unusual charges or income, and segment income margin was 9.7 percent, resulting
in part from cost savings through restructuring actions taken in 1999. In July,
the company completed the sale of Spectra Precision, a manufacturer of GPS-based
surveying equipment, for $294 million.
Spin-off Companies
Thermo Electron's reorganization plan calls for the spin-off of two
businesses - Thermo Fibertek and a medical products company - as a dividend to
Thermo Electron shareholders. If results for those businesses are combined
with the continuing operations, diluted earnings per share for the
second quarter of 2000 would be $.21, compared with $.20 for the 1999 period,
excluding restructuring and unusual charges or income.
In the medical products company, revenues increased 3 percent to $85.5
million with the addition of Jaeger, but operating income declined by $2.9
million to $10.0 million due to reduced hospital spending and competitive
pricing pressures in Europe resulting from the strong dollar. Thermo Fibertek
reported solid performance, with strong contributions from its major paper
making and recycling equipment products as that industry rebounds from last
year. Revenues increased 15 percent to $61.6 million, and operating income,
excluding gains and unusual items, rose 21 percent.
<PAGE>
The company will hold its earnings conference call today at 11 a.m. EST. To
listen, dial 888-872-9028 within the U.S., or 973-633-6740 outside the U.S. A
recording of this call will be available from 5 p.m. EST today until August 18,
2000. Please call 888-463-6628 within the U.S., or 402-220-9948 outside the U.S.
Thermo Electron Corporation is a leading provider of analytical and
monitoring instruments used in a broad range of applications, from life sciences
research to telecommunications to food and beverage production. In addition,
Thermo Electron serves the healthcare market through a family of medical
companies, and is a major producer of paper recycling systems and provides
fiber-recovery products. As announced on January 31, 2000, the company has
initiated a major reorganization that would transform it into one publicly
traded entity focused on its core instruments business. The company's medical
products and paper recycling businesses will be spun off as dividends to Thermo
Electron shareholders. More information is available on the Internet at
http://www.thermo.com.
The following constitutes a "Safe Harbor" statement under the Private
Securities Litigation Reform Act of 1995: This press release contains
forward-looking statements that involve a number of risks and uncertainties.
Important factors that could cause actual results to differ materially from
those indicated by such forward-looking statements are set forth under the
heading "Risk Factors" in the company's Amendment No. 2 to Registration
Statement on Form S-4 [Reg. No. 333-35478] filed with the Securities and
Exchange Commission on June 27, 2000. These include risks and uncertainties
relating to: the company's ability to complete its corporate reorganization, the
need for a favorable Internal Revenue Service ruling regarding planned spin-offs
of certain subsidiaries, divestitures planned as part of the reorganization,
integration of the instrument businesses, issuance of significant amounts of
additional shares as part of the reorganization, liquidity and prospective
performance of the subsidiaries to be spun off, guarantees of obligations of the
subsidiaries to be spun off, stock price volatility, goodwill acquired by the
company, internal growth, the effect of exchange rate fluctuations on the
company's significant international operations, the need to develop new products
and adapt to significant technological change, changes in governmental
regulations, and dependence of demand on capital spending and government funding
policies.
-more-
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<CAPTION>
<S> <C> <C> <C> <C>
Consolidated Statement of Income
(unaudited)
Three Months Ended Six Months Ended
--------------------------- ---------------------------
(In thousands except per share amounts) July 1, 2000 July 3, 1999 July 1, 2000 July 3, 1999
--------------------------------------------------------------------------------------------------------
Revenues $ 609,482 $ 632,166 $1,208,411 $ 1,187,916
----------- ---------- ---------- ------------
Costs and Operating Expenses:
Cost of revenues 333,763 350,983 658,946 663,095
Selling, general, and administrative
expenses 172,016 176,401 345,698 330,593
Research and development expenses 46,105 44,445 94,551 82,477
----------- ---------- ---------- ------------
551,884 571,829 1,099,195 1,076,165
----------- ---------- ---------- ------------
Operating Income Before Restructuring and
Other Unusual (Costs) Income, Net 57,598 60,337 109,216 111,751
Restructuring and Other Unusual (Costs)
Income, Net 3,685 (154,942) 11,385 (156,480)
----------- ---------- ---------- ------------
Operating Income (Loss) 61,283 (94,605) 120,601 (44,729)
Interest Income 8,280 10,048 18,455 24,221
Interest Expense (21,638) (24,655) (44,678) (49,112)
Other Income (Expense), Net 3,052 (14,589) (5,255) (12,361)
----------- ---------- ---------- ------------
Income (Loss) from Continuing Operations
Before Income Taxes, Minority Interest,
and Extraordinary Item 50,977 (123,801) 89,123 (81,981)
Income Tax (Provision) Benefit (20,612) 35,460 (37,340) 18,025
Minority Interest Income (Expense) (5,104) 1,990 (11,231) (4,326)
----------- ---------- ---------- ------------
Income (Loss) from Continuing Operations
Before Extraordinary Item 25,261 (86,351) 40,552 (68,282)
Loss from Discontinued Operations (net of
income taxes and minority interest
of $97,700 and $86,432) - (148,837) - (138,607)
----------- ---------- ---------- ------------
Income (Loss) Before Extraordinary Item 25,261 (235,188) 40,552 (206,889)
Extraordinary Item (net of provision for - - 532 -
income taxes of $333) ----------- ---------- ---------- ------------
Net Income (Loss) $ 25,261 $ (235,188) $ 41,084 $ (206,889)
=========== ========== ========== ============
Earnings (Loss) per Share from Continuing
Operations Before
Extraordinary Item:
Basic $ .16 $ (.55) $ .26 $ (.43)
=========== ========== ========== ============
Diluted $ .16 $ (.55) $ .25 $ (.44)
=========== ========== ========== ============
Earnings (Loss) per Share:
Basic $ .16 $ (1.49) $ .26 $ (1.31)
=========== ========== ========== ============
Diluted $ .16 $ (1.49) $ .25 $ (1.32)
=========== ========== ========== ============
Weighted Average Shares:
Basic $ 156,018 $ 158,010 $ 156,416 $ 158,028
=========== ========== ========== ============
Diluted $ 157,767 $ 158,010 $ 157,616 $ 158,028
=========== ========== ========== ============
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