SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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, 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 (I.R.S. Employer
jurisdiction of File Number) Identification Number)
incorporation 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)
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 "Forward-looking Statements" in
Exhibit 13 to Thermo Electron Corporation's Annual Report on Form 10-K for the
year ended January 1, 2000. These include risks and uncertainties relating to:
the Registrant's corporate reorganization, acquisition strategy, growth
strategy, international operations, product development and technological
change, possible changes in governmental regulations, changes in both capital
spending by commercial customers and government funding policies, and dependence
on intellectual property rights.
Item 5. Other Events
On May 2, 2000, the Registrant issued a press release, attached hereto as
Exhibit 99, regarding its financial results for the quarter ended April 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 May 2, 2000.
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 2nd day of May, 2000.
THERMO ELECTRON CORPORATION
By: /s/ Theo Melas-Kyriazi
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Theo Melas-Kyriazi
Vice President and Chief
Financial Officer
Exhibit 99
Investor Contact: 781-622-1111
Media Contact: 781-622-1252
Thermo Electron Reports First Quarter Earnings
WALTHAM, Mass., May 2, 2000 - Thermo Electron Corporation (NYSE-TMO) today
reported its financial results for the first quarter of 2000, ended April 1.
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.
For the first quarter of 2000, revenues were $598.9 million, compared with
$555.8 million in 1999. Earnings per share from continuing operations were $.09
per diluted share in 2000, versus $.11 per diluted share a year ago. Excluding
restructuring and unusual income or charges in both periods, earnings per share
from continuing operations in 2000 were $.12 per diluted share, compared with
$.13 per diluted share in 1999. Cash operating earnings per share from
continuing operations (earnings excluding goodwill amortization and
restructuring and unusual charges or income) were $.16 in 2000 versus $.17 last
year.
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. Including the results of those businesses, diluted
earnings per share for the first quarter of 2000 would be $.20, compared with
$.19 for the 1999 quarter, excluding restructuring and unusual charges or
income.
"While our first quarter results show modest revenue improvement, more
importantly, they are beginning to reflect our fundamental shift in direction,"
said Richard F. Syron, chairman and chief executive officer of Thermo Electron.
"For the first time in many quarters, our instrument businesses showed organic
growth. The Life Sciences and Optical Technologies segments achieved combined
internal revenue growth of 6 percent, excluding currency effects. First-quarter
instrument bookings increased 14 percent overall, and 7 percent without
acquisitions, dispositions, and currency effects. While reported diluted EPS
declined by $.02, excluding unusual items and our late February 1999 acquisition
of Spectra-Physics AB from both periods, our earnings per share for the 2000
quarter improved by $.02, from $.11 in the first quarter of 1999, to $.13 this
year.
"Regarding the two businesses that we plan to spin off as dividends to
Thermo Electron shareholders, we are pleased to report strong quarterly results.
Within the medical products business, revenues increased 14 percent due in
significant measure to the expansion of the respiratory line through the
acquisition of Jaeger, and operating income was 10 percent higher as a result of
increased sales of respiratory products and strong demand for neurodiagnostic
systems.
-more-
At Thermo Fibertek, net income rose 22 percent and operating income increased 14
percent, excluding a business sold in 1999 and unusual charges. Using the same
comparison, quarterly bookings were at record levels and backlog at quarter-end
was 40 percent higher than a year ago - signs of marked resurgence in the paper
recycling industry.
"We are enthused about our prospects, both for the focused instrument
company that Thermo Electron will become and the added value created by the two
spinoffs. Most importantly, we have leading technologies and highly talented
employees. This, together with our ability to direct our resources and attention
toward the instrument business going forward and our new approach to managing
those businesses - according to markets served in life sciences, optical
technologies, and measurement and control - is bringing renewed strength and
vigor to Thermo Electron. I am confident we will attain our aggressive growth
goals."
Life Sciences
In the Life Sciences segment, revenues increased 5 percent to $191 million and
segment income increased 7 percent to $29 million as a result of new products
for clinical chemistry laboratories gained through acquisitions and higher
demand for pharmaceutical and biochemical research instruments, including those
used for immunoassay testing and the newly introduced Multiblock system for DNA
amplification. Segment income margin improved slightly to 15.3 percent.
With a renewed focus on internal growth, partnerships continue to play an
integral role by combining industry-leading technologies that create new market
opportunities. One such collaboration, with Beckman Coulter, Inc., resulted in
an award-winning system that fully integrates Beckman's capillary
electrophoresis system with the company's ion-trap mass spectrometers for the
analysis of drugs and proteins in biological samples. Another example is an
agreement with Abbott Laboratories to grant it a non-exclusive license to
develop test kits that detect a bacterium thought to be linked to heart disease.
Optical Technologies
Revenues increased 10 percent to $198 million in the Optical Technologies
segment as a result of the acquisition of Spectra-Physics Lasers, Inc. (SPLI)
and increased demand for products sold to the semiconductor and
telecommunications industries. Bookings grew 16 percent during the quarter,
without acquisitions and currency effects. Segment income and margins, excluding
restructuring charges, declined because of the February 1999 SPLI acquisition,
which had very high shipments and profitability during the six weeks of the 1999
quarter it was included in the company's results. Without SPLI, segment income
margins improved from 9.7 percent to 10.7 percent.
Strong order growth continues to be fueled by capacity demands in the
telecommunications industry, underscored by multiple orders for molecular beam
epitaxy (MBE) systems used in high-volume production of wafers for cellular
phones. In addition to efforts to broaden the applications for MBE technology,
the company has begun construction of a high-volume production line to meet
increased demand for its telecommunications-grade diffraction gratings used in
fiber-optic networks, which also contributed to increased bookings.
Measurement and Control
The acquisition of Spectra-Physics increased revenues 18 percent in the
Measurement and Control segment to $187 million; however, the inclusion of
Spectra-Physics for the full quarter
-more-
adversely affected margins. While internal revenues were essentially flat for
the quarter, internal bookings for the segment were up 8 percent, signaling a
pick-up in the markets we address. The company is working to create new
opportunities within this sector by regrouping businesses according to common
markets to allow the transfer of technologies and a broader line of products to
be offered to customers.
The company will hold its earnings conference call today at 10 a.m. EST. To
listen, dial 888-872-9028 within the U.S., or 973-633-6740 outside the U.S. A
pre-recorded company update will be available from 5 p.m. EST today until May
16, 2000. Please call 888-715-0404 within the U.S., or 402-220-1440 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
water-clarification and fiber-recovery products and services. 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 measurement and
detection 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 "Forward-Looking
Statements" in Exhibit 13 to the company's annual report on Form 10-K, for the
year ended January 1, 2000. These include risks and uncertainties relating to:
the company's corporate reorganization, acquisition strategy, growth strategy,
international operations, product development and technological change, possible
changes in governmental regulations, changes in both capital spending by
commercial customers and government funding policies, and dependence on
intellectual property rights.
# # #
Consolidated Statement of Income (unaudited)
Three Months Ended
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(In thousands except per share amounts) April 1, 2000 April 3, 1999
- -------------------------------------------------------------------------------------
Revenues $ 598,929 $ 555,750
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Costs and Operating Expenses:
Cost of revenues 325,183 312,112
Selling, general, and administrative
expenses 173,682 154,192
Research and development expenses 48,446 38,032
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547,311 504,336
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Operating Income Before Restructuring and
Other Unusual (Costs) Income, Net 51,618 51,414
Restructuring and Other Unusual (Costs) Income,
Net 7,700 (1,538)
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Operating Income 59,318 49,876
Interest Income 10,175 14,173
Interest Expense (23,040) (24,457)
Other Income (Expense), Net (8,307) 2,228
--------- ---------
Income from Continuing Operations Before
Income Taxes, Minority Interest,
and Extraordinary Item 38,146 41,820
Provision for Income Taxes 16,728 17,435
Minority Interest Expense 6,127 6,316
--------- ---------
Income from Continuing Operations Before
Extraordinary Item 15,291 18,069
Income from Discontinued Operations (net of
income taxes and minority interest
of $11,268) - 10,230
--------- ---------
Income Before Extraordinary Item 15,291 28,299
Extraordinary Item (net of provision for income
taxes of $333) 532 -
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Net Income $ 15,823 $ 28,299
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Earnings per Share from Continuing Operations
Before Extraordinary Item:
Basic $ .10 $ .11
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Diluted $ .09 $ .11
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Earnings per Share:
Basic $ .10 $ .18
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Diluted $ .09 $ .17
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Weighted Average Shares:
Basic 156,813 158,045
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Diluted 157,464 158,270
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