Exhibit 13
Thermo Instrument Systems Inc.
1993 Financial Statements
PAGE
Thermo Instrument Systems Inc.
Consolidated Statement of Income
(In thousands except
per share amounts) 1993 1992 1991
- ------------------------------------------------------------------------------
Revenues:
Instruments $529,014 $368,289 $282,911
Services 55,162 54,910 55,836
-------- -------- --------
584,176 423,199 338,747
-------- -------- --------
Costs and Expenses:
Cost of instrument revenues 269,318 187,543 148,419
Cost of service revenues 42,714 44,136 47,101
Selling, general and
administrative expenses (Note 7) 148,150 106,147 79,539
Research and development expenses 34,510 26,138 16,318
-------- -------- --------
494,692 363,964 291,377
-------- -------- --------
Operating Income 89,484 59,235 47,370
Interest Income 3,644 6,994 4,918
Interest Expense (includes $4,327,
$1,415, and $807 related to notes
to parent company) (14,384) (11,389) (7,590)
Gain on Sale of Investments - 2,072 -
Other Income (Expense), Net 129 253 (1,125)
-------- -------- --------
Income Before Provision
for Income Taxes 78,873 57,165 43,573
Provision for Income Taxes (Note 5) 34,109 24,035 18,736
-------- -------- --------
Net Income $ 44,764 $ 33,130 $ 24,837
======== ======== ========
Earnings per Share:
Primary $ 1.00 $ 0.77 $ 0.61
======== ======== ========
Fully diluted $ 0.94 $ 0.74 $ 0.58
======== ======== ========
Weighted Average Shares:
Primary 44,910 43,261 40,630
======== ======== ========
Fully diluted 51,865 50,202 44,808
======== ======== ========
The accompanying notes are an integral part of these consolidated financial
statements.
2PAGE
Thermo Instrument Systems Inc.
Consolidated Balance Sheet
(In thousands) 1993 1992
- ------------------------------------------------------------------------------
Assets
Current Assets:
Cash and cash equivalents $177,442 $ 25,939
Short-term investments, at cost (quoted market
value of $9,138 and $6,483) (Note 7) 6,145 6,085
Accounts receivable, less allowances
of $8,456 and $7,276 129,184 100,693
Unbilled contract costs and fees 6,907 4,774
Inventories 97,552 97,957
Prepaid expenses 5,131 4,436
Prepaid income taxes (Note 5) 24,212 34,574
-------- --------
446,573 274,458
-------- --------
Property, Plant and Equipment, at Cost, Net 121,287 119,113
-------- --------
Patents and Other Assets 27,820 31,593
-------- --------
Cost in Excess of Net Assets of Acquired
Companies (Note 2) 295,461 261,261
-------- --------
$891,141 $686,425
======== ========
The accompanying notes are an integral part of these consolidated financial
statements.
3PAGE
Thermo Instrument Systems Inc.
Consolidated Balance Sheet (continued)
(In thousands except share amounts) 1993 1992
- ------------------------------------------------------------------------------
Liabilities and Shareholders' Investment
Current Liabilities:
Notes payable $ 37,516 $ 14,037
Accounts payable 29,658 25,575
Accrued payroll and employee benefits 22,737 21,187
Accrued income taxes (Note 5) 18,653 4,091
Customer deposits 9,699 9,319
Accrued installation and warranty expenses 14,111 10,932
Other accrued expenses (Note 2) 70,079 86,913
Due to parent company (Note 7) 6,067 33,992
-------- --------
208,520 206,046
-------- --------
Deferred Income Taxes (Note 5) 19,542 22,566
-------- --------
Other Deferred Items 18,863 14,998
-------- --------
Long-term Obligations (Note 8):
Senior obligations, including
$140,000 due to parent company in 1993 210,000 -
Subordinated obligations, including $2,734
and $3,434 due to parent company 52,303 89,674
Other, including $48,000 due to
parent company in 1992 23,858 80,418
-------- --------
286,161 170,092
-------- --------
Commitments and Contingencies (Note 6)
Shareholders' Investment (Notes 3 and 9):
Common stock, $.10 par value, 125,000,000 shares
authorized; 47,078,660 and
29,743,721 shares issued 4,708 2,974
Capital in excess of par value 219,703 182,588
Retained earnings 152,364 106,357
-------- --------
376,775 291,919
Treasury stock at cost, 867,087
and 646,998 shares (15,850) (17,127)
Cumulative translation adjustment (2,870) (2,069)
-------- --------
358,055 272,723
-------- --------
$891,141 $686,425
======== ========
The accompanying notes are an integral part of these consolidated financial
statements.
4PAGE
Thermo Instrument Systems Inc.
Consolidated Statement of Cash Flows
(In thousands) 1993 1992 1991
- ------------------------------------------------------------------------------
Operating Activities:
Net income $ 44,764 $ 33,130 $ 24,837
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation and amortization 20,719 13,680 10,030
Gain on sale of investments - (2,072) -
Provision for losses on
accounts receivable 970 666 1,156
Increase (decrease) in
deferred income taxes (497) 7,485 387
Other noncash expenses 3,507 2,258 1,448
Changes in current accounts,
excluding the effects of
acquisitions:
Accounts receivable (27,716) 2,814 (7,071)
Inventories 6,916 (5,219) 3,865
Other current assets 7,482 2,343 2,303
Accounts payable (11,143) (9,429) 2,893
Other current liabilities 7,530 (7,304) (6,348)
Other 132 (397) 228
--------- --------- ---------
Net cash provided by
operating activities 52,664 37,955 33,728
Investing Activities: --------- --------- ---------
Acquisitions, net of cash
acquired (Note 2) (102,048) (205,488) -
Sale of Nicolet Biomedical
(Note 2) 67,900 - -
(Increase) decrease in
short-term investments (60) 64,289 (68,302)
Purchases of property, plant
and equipment (9,063) (6,538) (6,273)
Other 4,990 (2,513) 1,754
--------- --------- ---------
Net cash used in
investing activities (38,281) (150,250) (72,821)
Financing Activities: --------- --------- ---------
Proceeds from issuance of
long-term obligations 68,727 - 86,624
Proceeds from issuance of
obligations to parent
company (Notes 7 and 8) 229,000 94,913 15,000
Repayment and repurchase
of long-term obligations (4,482) (11,189) (2,798)
Repayment of obligations
to parent company (157,485) (18,786) -
Proceeds from issuance
of Company common stock 2,678 4,432 2,017
Purchases of Company common stock (836) (16,898) (191)
--------- --------- ---------
Net cash provided by
financing activities $ 137,602 $ 52,472 $ 100,652
--------- --------- ---------
5PAGE
Thermo Instrument Systems Inc.
Consolidated Statement of Cash Flows (continued)
(In thousands) 1993 1992 1991
- ------------------------------------------------------------------------------
Exchange Rate Effect on Cash $ (482) $ (782) $ (1,423)
--------- --------- ---------
Increase (Decrease) in Cash
and Cash Equivalents 151,503 (60,605) 60,136
Cash and Cash Equivalents
at Beginning of Year 25,939 86,544 26,408
--------- --------- ---------
Cash and Cash Equivalents
at End of Year $ 177,442 $ 25,939 $ 86,544
========= ========= =========
Cash Paid For:
Interest $ 12,493 $ 13,074 $ 4,646
Income taxes $ 7,607 $ 17,413 $ 10,398
Noncash Financing Activities:
Conversions of convertible
obligations $ 37,371 $ 9,635 $ 41,638
The accompanying notes are an integral part of these consolidated financial
statements.
6PAGE
Thermo Instrument Systems Inc.
Consolidated Statement of Shareholders' Investment
Common Cumulative
Stock, Capital in Transla-
$.10 Par Excess of Retained Treasury tion
(In thousands) Value Par Value Earnings Stock Adjustment
- -----------------------------------------------------------------------------
Balance December 29, 1990 $ 2,617 $125,976 $ 52,120 $ (3) $ 3,430
Net income - - 24,837 - -
Purchases of Company
common stock - - - (1,029) -
Issuance of stock under
employees' and directors'
stock plans 21 1,838 - 996 -
Conversions of
convertible obligations 241 40,935 - - -
Cumulative translation
adjustment - - - - (1,025)
------- -------- -------- -------- --------
Balance December 28, 1991 2,879 168,749 76,957 (36) 2,405
Net income - - 33,130 - -
Purchases of Company
common stock - - - (16,898) -
Issuance of stock under
employees' and directors'
stock plans 36 2,958 - (193) -
Tax benefit related to
employees' and directors'
stock plans - 1,631 - - -
Conversions of
convertible obligations 59 9,250 - - -
Effect of purchase of
Nicolet shares from
parent company (Note 2) - - (3,730) - -
Cumulative translation
adjustment - - - - (4,474)
------- -------- -------- -------- --------
Balance January 2, 1993 2,974 182,588 106,357 (17,127) (2,069)
Net income - - 44,764 - -
Purchases of Company
common stock - - - (887) -
Issuance of stock under
employees' and directors'
stock plans 16 498 - 2,164 -
Tax benefit related to
employees' and directors'
stock plans - 1,815 - - -
Conversions of convertible
obligations 189 36,331 - - -
Effect of three-for-two
stock split $ 1,529 $ (1,529) $ - $ - $ -
7PAGE
Thermo Instrument Systems Inc.
Consolidated Statement of Shareholders' Investment (continued)
Common Cumulative
Stock, Capital in Transla-
$.10 Par Excess of Retained Treasury tion
(In thousands) Value Par Value Earnings Stock Adjustment
- -----------------------------------------------------------------------------
Effect of sale of Nicolet
Biomedical (Note 2) $ - $ - $ 1,243 $ - $ -
Cumulative translation
adjustment - - - - (801)
------- -------- -------- -------- -------
Balance January 1, 1994 $ 4,708 $219,703 $152,364 $(15,850) $(2,870)
======= ======== ======== ======== =======
The accompanying notes are an integral part of these consolidated financial
statements.
8PAGE
Thermo Instrument Systems Inc.
Notes to Consolidated Financial Statements
1. Summary of Significant Accounting Policies
Relationship with Thermo Electron Corporation
Thermo Instrument Systems Inc. (the Company) was incorporated on May 28, 1986 as
a wholly owned subsidiary of Thermo Electron Corporation (Thermo Electron). On
January 1, 1994, Thermo Electron owned 37,399,259 shares of the Company's common
stock, representing 81% of such stock outstanding.
Principles of Consolidation
The accompanying financial statements include the accounts of the Company and
its subsidiaries. All material intercompany accounts and transactions have been
eliminated. The Company accounts for investments in businesses in which it owns
between 20% and 50% under the equity method.
Fiscal Year
The Company has adopted a fiscal year ending the Saturday nearest December 31.
References to 1993, 1992, and 1991 are for the fiscal years ended January 1,
1994, January 2, 1993, and December 28, 1991, respectively. Fiscal years 1993
and 1991 each included 52 weeks; 1992 included 53 weeks.
Revenue Recognition
For the majority of its operations, the Company recognizes revenues upon
shipment of its products or upon completion of services it renders. The Company
provides a reserve for its estimate of warranty and installation costs at the
time of shipment. Revenues and profits on substantially all contracts are
recognized using the percentage-of-completion method. Revenues recorded under
the percentage-of-completion method were $23,218,000 in 1993, $27,448,000 in
1992, and $26,298,000 in 1991. The percentage of completion is determined by
relating either actual costs or actual labor incurred to date to management's
estimate of total costs or total labor, respectively, to be incurred on each
contract. If a loss is indicated on any contract in process, a provision is made
currently for the entire loss. The Company's contracts generally provide for
billing of customers upon the attainment of certain milestones specified in each
contract. Revenues earned on contracts in process in excess of billings are
classified as "Unbilled contract costs and fees" in the accompanying balance
sheet. There are no significant amounts included in the accompanying balance
sheet that are not expected to be recovered from existing contracts at current
contract values, or that are not expected to be collected within one year,
including amounts that are billed but not paid under retainage provisions.
Income Taxes
The Company and Thermo Electron have a tax allocation agreement under which the
Company is included in the consolidated federal and 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
years in which the Company incurs a loss, Thermo Electron will reimburse the
Company the amount that the Company would have received if it had filed separate
tax returns. If Thermo Electron's equity ownership of the Company drops below
80%, the Company would be required to file its own tax returns. As of January 1,
1994, the Company owed an estimated $7,750,000 to Thermo Electron for federal
and state taxes. This amount is included in "Accrued income taxes" in the
accompanying 1993 balance sheet.
The Company adopted Statement of Financial Accounting Standards (SFAS) No. 109,
"Accounting for Income Taxes," as of the beginning of 1992. Under SFAS No. 109,
deferred income taxes are recognized based on the expected future tax
9PAGE
Thermo Instrument Systems Inc.
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. Prior to 1992, the Company recorded income taxes on timing differences
between financial statement and tax treatment of income and expenses under
Accounting Principles Board Opinion No. 11. The implementation of SFAS No. 109
and the effect of adoption were not material to the Company's financial
statements.
Earnings per Share
Primary earnings per share have been computed based on the weighted average
number of shares outstanding during the year. Because the effect of the exercise
of the Company's stock options would be immaterial, they have been excluded from
the primary earnings per share calculation. Fully diluted earnings per share
assumes the effect of the conversion of the Company's dilutive convertible
obligations and elimination of the related interest expense, the exercise of
stock options and their related income tax effects.
Stock Split
All share and per share information has been restated to reflect a three-for-two
stock split, effected in the form of a 50% stock dividend, which was distributed
in July 1993.
Cash and Cash Equivalents
As of January 1, 1994, $148,975,000 of the Company's cash equivalents were
invested in a repurchase agreement with Thermo Electron. Under this agreement,
the Company in effect lends excess cash to Thermo Electron, which Thermo
Electron collateralizes with investments principally consisting of corporate
notes, government agency securities, money market funds, commercial paper, and
other marketable securities, in the amount of at least 103% of such obligation.
The Company's funds subject to the repurchase agreement are readily convertible
into cash by the Company and have an original maturity of three months or less.
The repurchase agreement earns a rate based on the Commercial Paper Composite
Rate plus 25 basis points, set at the beginning of each quarter. Cash
equivalents also include short-term certificates of deposit of the Company's
foreign subsidiaries, which have an original maturity of three months or less.
Cash and cash equivalents are carried at cost, which equals fair market value at
year-end 1993 and 1992.
Short-term Investments
Short-term investments represent investments in subordinated convertible
debentures issued by Thermedics Inc. (Note 7). Securities with original
maturities of greater than three months, which the Company intends to hold for
less than one year, are classified as short-term. These investments are carried
at the lower of cost or market value.
In May 1993, the Financial Accounting Standards Board issued SFAS No. 115,
"Accounting for Certain Investments in Debt and Equity Securities." SFAS No. 115
requires that marketable equity and debt securities considered trading
securities be accounted for at market value, with the difference between cost
and market value recorded currently in the statement of income; that securities
considered available-for-sale be accounted for at market value, with the
difference between cost and market value, net of related tax effects, recorded
currently as a component of shareholders' investment; and that debt securities
considered held-to-maturity be recorded at amortized cost. The Company is
required to adopt SFAS No. 115 at the beginning of fiscal 1994. Management
believes that the marketable equity and debt securities in the accompanying
balance sheet will be considered available-for-sale and that the adoption of
SFAS No. 115 will result in a total increase to shareholders' investment of
10PAGE
Thermo Instrument Systems Inc.
approximately $1,800,000, which results from unrealized gains on the
subordinated convertible debentures issued by Thermedics Inc.
Inventories
Inventories are stated at the lower of cost (on a first-in, first-out or
weighted average basis) or market value and include materials, labor, and
manufacturing overhead. The components of inventories are as follows:
(In thousands) 1993 1992
- -----------------------------------------------------------------
Raw materials and supplies $53,322 $64,237
Work in process and finished goods 44,230 33,720
------- -------
$97,552 $97,957
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, 20 to 40 years, machinery
and equipment, 3 to 10 years, and leasehold improvements, the shorter of the
term of the lease or the life of the asset. Property, plant and equipment
consist of the following:
(In thousands) 1993 1992
- -----------------------------------------------------------------
Land $ 22,015 $ 20,335
Buildings 69,302 57,549
Machinery, equipment and
leasehold improvements 69,155 71,848
-------- --------
160,472 149,732
Less: Accumulated depreciation
and amortization 39,185 30,619
-------- --------
$121,287 $119,113
======== ========
Patents and Other Assets
"Patents and other assets" in the accompanying balance sheet include the cost of
acquired trademarks, patents, and other specifically identifiable intangible
assets. These assets are amortized using the straight-line method over their
estimated useful lives, which range from 4 to 15 years. These assets were
$18,056,000 and $23,630,000, net of accumulated amortization of $7,937,000 and
$5,075,000, at year-end 1993 and 1992, respectively.
Cost in Excess of Net Assets of Acquired Companies
The excess of cost over the fair value of net assets of acquired businesses is
amortized using the straight-line method over 40 years. Accumulated amortization
was $19,780,000 and $12,026,000 at year-end 1993 and 1992, respectively. The
Company continually assesses whether a change in circumstances has occurred
subsequent to an acquisition that would indicate the future useful life of the
asset should be revised. The Company considers the future earnings potential of
the acquired business in assessing the recoverability of this asset.
Foreign Currency
All assets and liabilities of the Company's foreign subsidiaries 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." Resulting translation adjustments are reflected as a separate
11PAGE
Thermo Instrument Systems Inc.
component of shareholders' investment titled "Cumulative translation
adjustment." Foreign currency transaction gains and losses are included in the
accompanying statement of income and are not material for the three years
presented.
Presentation
Certain amounts in 1992 and 1991 have been reclassified to conform to the 1993
financial statement presentation.
2. Acquisitions and Disposition
In February 1993, the Company acquired Spectra-Physics Analytical, a
manufacturer of liquid chromatography and capillary electrophoresis analytical
instruments, for $67.3 million in cash. The Company funded the acquisition of
Spectra-Physics Analytical through the issuance of a $69 million promissory note
to Thermo Electron, that was repaid in May 1993.
In 1993, the Company made several other acquisitions for an aggregate $35.6
million in cash. The Company funded these acquisitions through a $20.0 million
promissory note to Thermo Electron, that was repaid in 1993, and through
short-term borrowings.
In May 1992, the Company acquired Gas Tech Inc. (Gas Tech), a leading
manufacturer of worker safety instruments and systems for detecting and
monitoring toxic and combustible gases, for $22.5 million in cash. In addition,
the Company acquired the building Gas Tech occupies for $5.6 million in cash in
a post-acquisition transaction.
In August 1992, the Company acquired Nicolet Instrument Corporation (Nicolet).
The total purchase price to the Company was approximately $179 million. To help
finance the acquisition, the Company borrowed $48 million from Thermo Electron
pursuant to a promissory note that was repaid in September 1993 (Note 8).
Nicolet designs, manufactures, and markets instrumentation for a broad range of
analytical chemistry, neurodiagnostic, and electronic engineering
problem-solving applications in science and industry.
These acquisitions have been accounted for using the purchase method of
accounting and their results of operations have been included in the
accompanying financial statements from their respective dates of acquisition.
The aggregate cost of these acquisitions exceeded the estimated fair value of
the acquired net assets by approximately $198.0 million, which is being
amortized over 40 years. Allocation of the purchase price for these acquisitions
was based on an estimate of the fair value of the net assets acquired and, for
acquisitions completed in fiscal 1993, is subject to adjustment.
Effective April 5, 1993, the Company sold the biomedical instruments products
business of its Nicolet Instrument Corporation subsidiary (Nicolet Biomedical)
to Thermo Electron for approximately $67.9 million in cash. The results of
operations for Nicolet Biomedical have been excluded from the accompanying
financial statements as of April 5, 1993.
"Effect of purchase of Nicolet shares from parent company" in the accompanying
statement of shareholders' investment represents the difference between the
purchase price of Nicolet shares that were acquired by Thermo Electron in the
open market prior to the Company's tender offer and the cash tender offer price.
Due to the related party nature of this purchase from Thermo Electron, the
excess of the purchase price paid by the Company over the original purchase
price paid by Thermo Electron was reflected as a reduction in retained earnings.
"Effect of sale of Nicolet Biomedical" in the accompanying statement of
12PAGE
Thermo Instrument Systems Inc.
shareholders' investment represents the portion that relates to Nicolet
Biomedical.
Based on unaudited data, the following table presents selected financial
information for the Company, Spectra-Physics Analytical, and Nicolet, excluding
Nicolet Biomedical, on a pro forma basis, assuming the companies had been
combined since the beginning of 1992. Net income and earnings per share are
shown before Nicolet's discontinued operations, which occurred in 1992. The
effect on the Company's financial statements of the acquisitions not included in
the pro forma data was not significant.
(In thousands except per share
amounts) 1993 1992
- ------------------------------------------------------------------
Revenues $579,414 $535,233
Net income 43,565 20,437
Earnings per share:
Primary 0.97 0.47
Fully diluted 0.94 0.47
The pro forma results for 1992 include a $7.2 million reorganization charge
recorded by Nicolet prior to its acquisition by the Company and a one-time $2.2
million charge for certain acquisition-related expenses incurred by Nicolet
prior to its acquisition by the Company. The pro forma results are not
necessarily indicative of future operations or the actual results that would
have occurred had the acquisitions been made at the beginning of 1992.
"Other accrued expenses" in the accompanying balance sheet includes
approximately $25 million and $43 million at year-end 1993 and 1992,
respectively, for estimated severance, relocation, and other restructuring
reserves associated with acquisitions.
3. Stock-based Compensation Plans
The Company has stock-based compensation plans for its key employees, directors,
and others. Two plans were adopted in 1986 and permit the grant of nonqualified
and incentive stock options. A third plan adopted in 1993 permits the grant of a
variety of stock and stock-based awards as determined by the human resources
committee of the Company's Board of Directors (the Board Committee), including
restricted stock, stock options, stock bonus shares, or performance-based
shares. To date, only nonqualified stock options have been awarded under these
plans. The option recipients and the terms of options granted under these plans
are determined by the Board Committee. Generally, options granted to date are
exercisable immediately, but are subject to certain transfer restrictions and
the right of the Company to repurchase shares issued upon exercise of the
options at the exercise price upon certain events. The restrictions and
repurchase rights generally lapse ratably over periods ranging from four to ten
years after the first anniversary of the grant date, depending on the term of
the option, which may range from five to twelve years. Nonqualified options may
be granted at any price determined by the Board Committee, although incentive
stock options must be granted at not less than fair market value on the date of
grant. Generally, stock options have been granted at fair market value. The
Company also has a directors' stock option plan, adopted in 1991, that provides
for the grant of stock options to nonemployee directors pursuant to a formula
approved by the Company's shareholders. Options awarded under this plan are
exercisable six months after the date of grant and expire seven years after
grant.
13PAGE
Thermo Instrument Systems Inc.
In connection with the acquisition of Finnigan Corporation (Finnigan) in 1990,
the Company assumed certain outstanding options granted under Finnigan's 1979
and 1989 long-term incentive plans. The assumed options are exercisable ratably
over a four-year period commencing one year from the date of grant and expire
seven years from the date of grant. All such options constitute nonqualified
stock options.
In addition to the Company's stock-based compensation plans, certain officers
and key employees may also participate in stock-based compensation plans of
Thermo Electron and its other majority-owned subsidiaries.
No accounting recognition is given to options granted at fair market value until
they are exercised. Upon exercise, net proceeds, including tax benefits
realized, are credited to equity.
A summary of the Company's stock option information is as follows:
1993 1992 1991
Number Total Number Total Number Total
of Option of Option of Option
(In thousands) Shares Price Shares Price Shares Price
- ------------------------------------------------------------------------------
Options outstanding,
beginning of year 1,067 $11,188 1,498 $11,796 1,761 $12,125
Granted 1,185 36,397 216 3,897 218 2,830
Exercised (295) (1,758) (591) (3,842) (305) (1,606)
Lapsed or canceled (63) (1,029) (56) (663) (176) (1,553)
----- ------- ----- ------- ----- -------
Options outstanding,
end of year 1,894 $44,798 1,067 $11,188 1,498 $11,796
===== ======= ===== ======= ===== =======
Options exercisable 1,889 $44,636 1,020 $10,800 1,323 $10,239
===== ======= ===== ======= ===== =======
Options available for grant 1,155 135 318
===== ===== =====
4. Employee Benefit Plans
Employee Stock Purchase Plan
Substantially all of the Company's full-time U.S. employees are eligible to
participate in an employee stock purchase plan. Under this plan, shares of the
Company's and Thermo Electron's common stock may be purchased at the end of a
12-month plan year at 85% of the fair market value at the beginning of the plan
year, and the shares purchased are subject to a one-year resale restriction.
Prior to November 1993, the exercise price for the applicable shares was based
on 85% of the lower of the fair market value at the beginning or end of the plan
year. Shares are purchased through payroll deductions of up to 10% of each
participating employee's gross wages. During 1993, 1992, and 1991, the Company
issued 101,273 shares, 66,426 shares, and 80,733 shares of its common stock,
respectively, under this plan.
401(k) Savings Plan and Employee Stock Ownership Plan
The majority of the Company's U.S. employees are eligible to participate in
Thermo Electron's 401(k) savings plan and employee stock ownership plan.
Contributions to the 401(k) savings plan are made by both the employee and the
Company. Company contributions are based upon the level of employee
contributions. For these plans, the Company contributed and charged to expense
$2,239,000, $1,728,000, and $1,689,000 in 1993, 1992, and 1991, respectively.
14PAGE
Thermo Instrument Systems Inc.
Post-retirement Benefits
The Company does not provide post-retirement benefits to current or former
employees.
Post-employment Benefits
The Company provides certain post-employment benefits to former or inactive
employees. The Company is required to adopt SFAS No. 112, "Employers' Accounting
for Post-employment Benefits," at the beginning of fiscal 1994. SFAS No. 112
requires the recognition of the cost of post-employment benefits at the time the
event prompting payment occurs and a reasonable estimate can be made. Management
believes that the adoption of this statement will not have a material impact on
the Company's financial statements.
5. Income Taxes
As discussed in Note 1, the Company adopted SFAS No. 109 in 1992.
The components of income before provision for income taxes are as follows:
(In thousands) 1993 1992 1991
- -----------------------------------------------------------------
Domestic $61,254 $49,225 $36,111
Foreign 17,619 7,940 7,462
------- ------- -------
$78,873 $57,165 $43,573
======= ======= =======
The components of the provision for income taxes are as follows:
(In thousands) 1993 1992 1991
- -----------------------------------------------------------------
Currently payable:
Federal $14,196 $10,625 $10,183
State 4,008 3,028 2,814
Foreign 6,909 3,791 1,171
------- ------- -------
25,113 17,444 14,168
------- ------- -------
Net deferred (prepaid):
Federal 6,691 5,694 3,019
State 1,147 (292) 387
Foreign 1,158 1,189 1,162
------- ------- -------
8,996 6,591 4,568
------- ------- -------
$34,109 $24,035 $18,736
======= ======= =======
The provision for income taxes that is currently payable does not reflect
$1,813,000 and $1,631,000 of tax benefits allocated to "Capital in excess of par
value" or $1,150,000 and $3,060,000 of tax benefits used to reduce "Cost in
excess of net assets of acquired companies" for 1993 and 1992, respectively.
15PAGE
Thermo Instrument Systems Inc.
The provision for income taxes differs from the amounts calculated by applying
the statutory federal income tax rate of 35% in 1993 and 34% in 1992 and 1991 to
income before provision for income taxes due to the following:
(In thousands) 1993 1992 1991
- -----------------------------------------------------------------
Provision for income
taxes at statutory
rate $27,606 $19,436 $14,815
Increases (decreases)
resulting from:
State income taxes,
net of federal tax 3,351 1,806 2,113
Net foreign losses
not benefited and
tax rate
differential 1,330 2,223 326
Tax benefit of
foreign sales
corporation (1,134) (988) -
Amortization of cost
in excess of net
assets of acquired
companies 2,338 1,139 847
Nondeductible
expenses 585 159 588
Other, net 33 260 47
------- ------- -------
$34,109 $24,035 $18,736
======= ======= =======
Deferred income taxes and prepaid income taxes at year-end 1993 and 1992 consist
of the following:
(In thousands) 1993 1992
- -----------------------------------------------------------------
Deferred income taxes:
Depreciation $14,116 $14,157
Intangible assets 4,402 7,612
Other 1,024 797
------- -------
$19,542 $22,566
======= =======
Prepaid income taxes:
Reserves and other accruals $12,497 $21,872
Inventory basis difference 6,462 8,386
Allowance for doubtful accounts 2,660 2,174
Accrued compensation 3,956 3,466
Net operating loss and
tax credit carryforwards 2,262 552
Other, net 41 401
------- -------
27,878 36,851
Less: Valuation allowance 3,666 2,277
------- -------
$24,212 $34,574
======= =======
The year-end 1993 valuation allowance reserves for the uncertainty surrounding
the realization of $1,406,000 of certain state tax deferred assets and
16PAGE
Thermo Instrument Systems Inc.
$2,260,000 for federal net operating loss and tax credit carryforwards, the
realization of which is limited to the future income of certain subsidiaries.
The net operating loss and tax credit carryforwards expire in the years 2002
through 2005, and the resulting benefit will be used to reduce "Cost in excess
of net assets of acquired companies." The increase in the valuation allowance is
primarily attributable to acquisitions.
A provision has not been made for U.S. or additional foreign taxes on $31
million of undistributed earnings of foreign subsidiaries that could be subject
to taxation if remitted to the U.S. The Company plans to keep these amounts
permanently reinvested overseas. The Company believes that any additional U.S.
tax liability due upon remittance of such earnings would not be material due to
available U.S. foreign tax credits.
6. Commitments and Contingencies
Operating Leases
The Company leases portions of its office and operating facilities under various
noncancelable operating lease arrangements. The accompanying statement of income
includes expenses from operating leases of $8,172,000, $5,893,000, and
$5,464,000 in 1993, 1992, and 1991, respectively. Future minimum payments due
under noncancelable operating leases at January 1, 1994 are $8,161,000 in 1994;
$6,742,000 in 1995; $4,811,000 in 1996; $3,855,000 in 1997; $2,574,000 in 1998;
and $5,414,000 in 1999 and thereafter. Total future minimum lease payments are
$31,557,000.
Litigation
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.
7. 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
pays Thermo Electron annually an amount equal to 1.25% of the Company's
revenues. Prior to 1993, the Company paid an annual fee equal to 1% of the
Company's revenues. For these services, the Company was charged $7,302,000,
$4,232,000, and $3,387,000 in 1993, 1992, and 1991, respectively. Management
believes that the service fee charged by Thermo Electron is reasonable and that
such fees are representative of the expenses the Company would have incurred on
a stand-alone basis. 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 relationships among Thermo Electron and
its majority-owned subsidiaries). For additional items such as employee benefit
plans, insurance coverage, and other identifiable costs, Thermo Electron charges
the Company based upon costs directly attributable to the Company.
Repurchase Agreement
The Company invests excess cash in a repurchase agreement with Thermo Electron
as discussed in Note 1.
17PAGE
Thermo Instrument Systems Inc.
Short-term Investments
At January 1, 1994, the Company's short-term investments represented 6 1/2%
subordinated convertible debentures due 1998, which were purchased on the open
market for $5,805,000. The debentures have a par value of $6,323,000 and were
issued by Thermedics Inc., which is a majority-owned subsidiary of Thermo
Electron, and are guaranteed on a subordinated basis by Thermo Electron.
Long-term Obligations
See Note 8 for long-term obligations of the Company held by Thermo Electron.
Due to Parent Company
"Due to parent company" in the accompanying 1992 balance sheet includes
short-term borrowings from Thermo Electron of $28,127,000. These borrowings bore
interest at the Commercial Paper Composite Rate, plus 25 basis points, and were
repaid in 1993.
8. Long-term Obligations
Long-term obligations of the Company are as follows:
(In thousands) 1993 1992
- -----------------------------------------------------------------
3 3/4% Senior convertible note,
due 2000, convertible at $31.75
per share (a) $140,000 $ -
3 3/4% Senior convertible debentures,
due 2000, convertible at $31.75
per share (b) 70,000 -
7% Subordinated convertible note,
due 1996, convertible at $4.44
per share (a) 2,734 3,434
6 5/8% Subordinated convertible
debentures, due 2001, convertible
at $17.58 per share (c) 49,569 86,240
Promissory note, due 1995, bearing
interest at the Commercial Paper
Composite Rate, plus 25 basis
points (weighted average interest
rate of 3.53% and 3.65% in 1993
and 1992) (a) - 48,000
10.23% Mortgage loan secured by
property with a net book value of
$16,826, payable in monthly
installments with final payment
in 2004 11,536 12,150
8 5/8% Note, payable in semiannual
installments with final payment
in 1999 8,000 9,000
Other 11,176 14,140
-------- --------
293,015 172,964
Less: Current maturities of
long-term obligations 6,854 2,872
-------- --------
$286,161 $170,092
======== ========
(a) Represents an obligation to Thermo Electron.
(b) Guaranteed on a senior basis by Thermo Electron.
(c) Guaranteed on a subordinated basis by Thermo Electron.
18PAGE
Thermo Instrument Systems Inc.
In lieu of issuing shares of Company's common stock upon conversion of the
3 3/4% senior convertible debentures due 2000, the Company has the option to pay
the holder of the debentures cash equal to the weighted average market price of
the Company's common stock on the trading date prior to conversion.
During 1993, 1992, and 1991, convertible obligations of $37,371,000, $9,635,000,
and $41,638,000, respectively, were converted into common stock of the Company.
In 1992 and 1991, the Company repurchased $650,000 and $1,000,000 of convertible
obligations for $673,000 and $930,000 in cash, respectively. These transactions
did not have a material effect on the Company's results of operations. The
annual requirements for long-term obligations are as follows:
(In thousands)
- -----------------------------------------------------------------
1994 $ 6,854
1995 2,339
1996 4,964
1997 2,366
1998 2,650
1999 and thereafter 273,842
--------
$293,015
========
Based upon quoted market prices and based upon borrowing rates currently
available to the Company for debt of the same remaining maturities, the fair
market value of the Company's long-term obligations at January 1, 1994 and
January 2, 1993 was approximately $389 million and $225 million, respectively.
9. Common Stock
At January 1, 1994, the Company had reserved 14,114,522 unissued shares of its
voting common stock for possible issuance under employees' and directors' stock
plans and possible conversion of the Company's convertible obligations.
10. Industry Segment and Geographical Data
The Company's principal businesses consist of developing, manufacturing, and
marketing analytical and environmental monitoring instruments; and providing
environmental services including laboratory-based testing, nuclear health
physics, and environmental science and engineering services. Financial
information pertaining to these segments is set forth in the following table:
(In thousands) 1993 1992 1991
- ----------------------------------------------------------------
Revenues:
Instruments $529,279 $368,533 $283,612
Services 55,162 54,910 55,836
Intersegment sales
elimination (a) (265) (244) (701)
-------- -------- --------
$584,176 $423,199 $338,747
Income before ======== ======== ========
provision for income
taxes:
Instruments $ 93,699 $ 61,591 $ 50,420
Services 4,321 3,284 1,047
Corporate (b) (19,147) (7,710) (7,894)
-------- -------- --------
$ 78,873 $ 57,165 $ 43,573
======== ======== ========
19PAGE
Thermo Instrument Systems Inc.
(In thousands) 1993 1992 1991
- ----------------------------------------------------------------
Identifiable assets:
Instruments $679,151 $619,865 $301,140
Services 40,444 40,013 42,432
Corporate (c) 171,546 26,547 154,387
-------- -------- --------
$891,141 $686,425 $497,959
Depreciation and ======== ======== ========
amortization:
Instruments $ 18,741 $ 11,588 $ 8,153
Services 1,978 2,092 1,877
-------- -------- --------
$ 20,719 $ 13,680 $ 10,030
Capital expenditures: ======== ======== ========
Instruments $ 6,747 $ 4,901 $ 4,174
Services 2,316 1,637 2,099
-------- -------- --------
$ 9,063 $ 6,538 $ 6,273
Export revenues ======== ======== ========
included above (d):
Europe $ 72,161 $ 47,585 $ 44,389
Other 63,327 40,466 29,195
-------- -------- --------
$135,488 $ 88,051 $ 73,584
Foreign operations ======== ======== ========
included above:
Revenues:
Germany $ 54,600 $ 49,109 $ 39,843
Other Europe 62,017 41,891 30,759
Other 29,391 17,723 14,834
-------- -------- --------
$146,008 $108,723 $ 85,436
Income before ======== ======== ========
provision for
income taxes
Germany $ 2,841 $ 1,947 $ (375)
Other Europe 9,039 6,069 6,120
Other 5,739 (76) 1,717
-------- -------- --------
$ 17,619 $ 7,940 $ 7,462
Identifiable ======== ======== ========
assets:
Germany $ 87,979 $ 73,665 $ 64,814
Other Europe 92,002 58,772 51,168
Other 32,807 30,334 23,880
-------- -------- --------
$212,788 $162,771 $139,862
======== ======== ========
(a) Intersegment sales are accounted for at prices that are
representative of transactions with unaffiliated parties.
(b) Primarily interest income and expense, and corporate general
and administrative expenses.
(c) Primarily cash, cash equivalents, and short-term
investments.
(d) In general, export sales are denominated in U.S. dollars.
20PAGE
Thermo Instrument Systems Inc.
11. Subsequent Event
On January 31, 1994, the Company announced its intention to acquire several
businesses of the EnviroTech Measurements & Controls group of Baker Hughes
Incorporated (Baker Hughes), for a cash purchase price of approximately $93
million. Thermo Electron intends to acquire the EnviroTech Controls, Noran
Instruments, TN Technologies, and Tremetrics businesses, which collectively
design, manufacture, and market a variety of process control, process
measurement, and laboratory analytical products for use in a wide range of
industrial, energy, environmental, and research applications.
Thermo Electron has entered into an acquisition agreement with Baker Hughes with
respect to this transaction, and Thermo Electron expects to assign its rights to
acquire these businesses to the Company. Consummation of the acquisition is
subject to regulatory approval and other closing conditions. The businesses to
be acquired by the Company have combined sales of approximately $129 million for
the fiscal year ended September 30, 1993.
21PAGE
Report of Independent Public Accountants
To the Shareholders and Board of Directors
of Thermo Instrument Systems Inc.:
We have audited the accompanying consolidated balance sheet of Thermo Instrument
Systems Inc. (a Delaware corporation and 81%-owned subsidiary of Thermo Electron
Corporation) and subsidiaries as of January 1, 1994 and January 2, 1993, and the
related consolidated statements of income, shareholders' investment, and cash
flows for each of the three years in the period ended January 1, 1994. 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 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 financial statements referred to above present fairly, in
all material respects, the financial position of Thermo Instrument Systems Inc.
and subsidiaries as of January 1, 1994 and January 2, 1993, and the results of
their operations and their cash flows for each of the three years in the period
ended January 1, 1994, in conformity with generally accepted accounting
principles.
ARTHUR ANDERSEN & CO.
Boston, Massachusetts
February 17, 1994
22PAGE
Thermo Instrument Systems Inc.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Results of Operations
The Company's revenues grew 38% to $584.2 million in 1993, up from the 25%
increase reported in 1992. Net income increased 35% in 1993 to a record $44.8
million, following a 33% increase in 1992. Primary earnings per share grew 30%
to $1.00 in 1993, compared with a 26% increase in 1992.
Revenues from the Instruments segment increased 44% to $529.3 million in 1993,
up from the 30% increase reported in 1992. Revenues increased principally due to
acquisitions that added revenues of approximately $147 million in 1993 and $74
million in 1992. These acquisitions include GasTech Inc. in May 1992, Nicolet
Instrument Corporation in August 1992, Gamma-Metrics in January 1993,
Spectra-Physics Analytical in February 1993, and the radiation safety
measurement products and radiometry process control divisions of FAG
Kugelfischer Georg Shafer AG in October 1993. Instruments segment revenues for
1993 included $12.6 million of revenues from Nicolet Biomedical, which was sold
by the Company to Thermo Electron effective April 5, 1993. The remainder of the
increase was due to increased demand for products from existing businesses.
Revenues from the Services segment were relatively unchanged in 1993 compared
with 1992, which was 2% less than 1991.
The Company's gross profit margin increased to 47% in 1993 from 45% in 1992 and
42% in 1991. Gross profit margin for the Instruments segment was 49% in both
1993 and 1992 and 48% in 1991. The improvement in 1992 resulted principally from
a reduction in manufacturing costs and a more favorable product mix. Gross
profit margin for the Services segment improved 3 percentage points in 1993 to
23% and 4 percentage points in 1992 as a result of cost reductions in the
Company's engineering services business and greater revenues contributed by the
higher margin environmental laboratory and infrastructure businesses.
Selling, general and administrative expenses as a percentage of revenues was 25%
in 1993 and 1992 and 23% in 1991. The 1992 increase resulted from greater
selling and administrative expenses related to the expansion of the Company's
sales and service offices and higher selling, general and administrative
expenses as a percentage of revenues for acquired businesses.
Research and development expenses decreased to 6.5% of Instruments segment
revenues in 1993, compared with 7.1% in 1992 and 5.8% in 1991. Research and
development spending as a percentage of revenues declined in 1993 as the Company
completed development of its new Magna-IR (tm) and Quantum (tm) products which
were introduced by the Company's Nicolet and Finnigan subsidiaries,
respectively. The increase in 1992 resulted principally from higher spending as
a percentage of revenues by Nicolet.
Interest income was $3.6 million in 1993, $7.0 million in 1992, and $4.9 million
in 1991. The decrease in 1993 was primarily a result of lower average balances
of short-term investments due to the cash expended for the acquisition of
Nicolet, offset in part by interest income earned on the net proceeds from the
issuance of the 3 3/4% senior convertible obligations in September 1993. The
increase in interest income in 1992 was principally the result of higher average
balances of short-term investments following the issuance in August 1991 of the
6 5/8% subordinated convertible obligations. Interest expense increased to $14.4
million in 1993 from $11.4 million in 1992 and $7.6 million in 1991 due to debt
incurred in connection with acquisitions and the issuance of the senior
convertible obligations in September 1993. This increase in interest expense was
offset in part by a reduction in interest expense as a result of the
23PAGE
Thermo Instrument Systems Inc.
conversion of approximately $37.4 million of the Company's convertible
debentures into common stock during 1993. "Gain on sale of investments" in 1992
resulted from partial liquidation of the Company's short-term investments. The
proceeds from the sale of the short-term investments were used to reduce
borrowings from Thermo Electron.
The effective tax rate was 43% in 1993, 42% in 1992, and 43% in 1991. These
rates exceeded the statutory federal income tax rate primarily due to
nondeductible amortization of costs in excess of net assets of acquired
companies, the inability to provide a tax benefit on losses incurred at certain
foreign subsidiaries and the impact of state income taxes.
Liquidity and Capital Resources
Consolidated working capital at January 1, 1994 was $238.1 million, compared
with $68.4 million at January 2, 1993, an increase of $166.7 million. Included
in working capital are cash, cash equivalents, and short-term investments of
$183.6 million at January 1, 1994 and $32.0 million at January 2, 1993. In 1993,
the Company expended $102.3 million, net of cash acquired, for acquisitions and
the Company sold Nicolet Biomedical to Thermo Electron for approximately $67.9
million (see Note 2 to Consolidated Financial Statements). In September 1993,
the Company issued and sold $210.0 million principal amount 3 3/4% senior
convertible obligations due 2000. The Company repaid $157.5 million of long- and
short-term obligations to Thermo Electron with the proceeds from the sale of
Nicolet Biomedical and the issuance of the senior convertible obligations.
In 1994, the Company plans to make expenditures for property, plant and
equipment of approximately $11 million. The Company plans to make these
expenditures from working capital.
The Company has historically complemented internal development with acquisitions
of businesses or technologies that extend the Company's presence in current
markets or provide opportunities to enter and compete effectively in new
markets. The Company will consider making acquisitions of such companies,
product lines, or technologies that are consistent with its plans for strategic
growth. The Company believes that its existing resources are sufficient to meet
the capital requirements of its operations for the foreseeable future.
In January 1994, the Company announced its intention to acquire several of the
businesses of the EnviroTech Measurements & Controls group of Baker Hughes
Incorporated for approximately $93 million in cash (see Note 11 to Consolidated
Financial Statements). The Company intends to fund this acquisition from its
existing cash balances.
Pending Accounting Changes
The Company is required to adopt Statement of Financial Accounting Standards
(SFAS) No. 112, "Employers' Accounting for Post-employment Benefits" and SFAS
No. 115, "Accounting for Certain Investments in Debt and Equity Securities" at
the beginning of fiscal 1994. Management does not expect the adoption of
SFAS No. 112 will have a material adverse effect on the Company's results of
operations. Management believes that the adoption of SFAS No. 115 will result in
a total increase to shareholders' investment of approximately $1.8 million,
which results from unrealized gains on subordinated convertible debentures
issued by Thermedics Inc., a majority-owned subsidiary of Thermo Electron.
24PAGE
Thermo Instrument Systems Inc.
Selected Financial Information
(In thousands except
per share amounts) 1993(a) 1992(b) 1991(c) 1990(d) 1989
- ------------------------------------------------------------------------------
Statement of Income
Data:
Revenues $584,176 $423,199 $338,747 $285,384 $184,662
Income before
provision for
income taxes 78,873 57,165 43,573 32,515 15,719
Net income 44,764 33,130 24,837 18,915 8,272
Earnings per share:
Primary 1.00 0.77 0.61 0.49 0.26
Fully diluted 0.94 0.74 0.58 0.47 0.25
Balance Sheet Data:
Working capital $238,053 $ 68,412 $197,391 $ 63,372 $139,813
Total assets 891,141 686,425 497,959 376,148 248,490
Long-term obligations 286,161 170,092 123,476 64,171 79,098
Shareholders'
investment 358,055 272,723 250,954 184,140 117,171
Quarterly Information (Unaudited)
(In thousands except per share amounts)
1993 First(a) Second(a) Third(a) Fourth
- ------------------------------------------------------------------------------
Revenues $149,748 $140,415 $136,511 $157,502
Gross profit 69,106 65,309 63,153 74,576
Net income 9,849 10,506 11,223 13,186
Earnings per share:
Primary 0.22 0.24 0.25 0.29
Fully diluted 0.22 0.23 0.24 0.27
1992 First Second Third(b) Fourth
- ------------------------------------------------------------------------------
Revenues $ 84,832 $ 88,589 $112,261 $137,517
Gross profit 37,571 38,996 50,101 64,852
Net income 7,409 7,814 8,570 9,337
Earnings per share:
Primary 0.17 0.18 0.20 0.21
Fully diluted 0.17 0.18 0.19 0.21
(a) Reflects the February 1993 acquisition of Spectra-Physics Analytical, the
April 1993 sale of the Company's biomedical instruments products business
of its Nicolet Instrument Corporation subsidiary, and the September 1993
issuance of $210,000,000 aggregate principal amount of 3 3/4% senior
convertible obligations due 2000.
(b) Reflects the August 1992 acquisition of Nicolet Instrument Corporation.
(c) Reflects the issuance of $101,250,000 aggregate principal amount of 6 5/8%
subordinated convertible obligations due 2001.
(d) Reflects the May 1990 acquisition of Finnigan Corporation.
25PAGE
Thermo Instrument Systems Inc.
Common Stock Market Information
The following table shows the market range for the Company's common stock based
on reported sales prices on the American Stock Exchange (symbol THI) for 1993
and 1992. Prices have been restated to reflect the July 1993 three-for-two stock
split.
1993 1992
--------------------- ---------------------
Quarter High Low High Low
- ---------------------------------------------------------------
First $28 2/3 $23 $16 1/8 $14
Second 27 3/8 24 1/3 17 1/8 14 7/8
Third 29 7/8 25 1/2 19 16 1/2
Fourth 34 7/8 28 1/4 23 3/8 18 1/8
As of February 25, 1994, the Company had 2,751 holders of record of its common
stock. This does not include holdings in street or nominee names. The closing
market price on the American Stock Exchange for the Company's common stock on
February 25, 1994 was $32 1/4 per share.
Dividend Policy
The Company has never paid cash dividends because its policy has been to use
earnings to finance expansion and growth. Payment of dividends will rest within
the discretion of the Board of Directors and will depend upon, among other
factors, the Company's earnings, capital requirements, and financial condition.
Shareholder Services
Shareholders who desire information about the Company are invited to contact
John N. Hatsopoulos, Chief Financial Officer, Thermo Instrument Systems Inc., 81
Wyman Street, P.O. Box 9046, Waltham, Massachusetts 02254-9046, by letter or
telephone, (617) 622-1111. A mailing list is maintained to enable shareholders
whose stock is held in street name, and other interested individuals, to receive
quarterly and annual reports as quickly as possible. If you would like your name
added to the mailing list, please notify this office.
Form 10-K
A copy of the Annual Report on Form 10-K for the fiscal year ended January 1,
1994, as filed with the Securities and Exchange Commission, may be obtained
without charge by writing to John N. Hatsopoulos, Chief Financial Officer,
Thermo Instrument Systems Inc., 81 Wyman Street, P.O. Box 9046, Waltham,
Massachusetts 02254-9046.
Corporate Office
Thermo Instrument Systems Inc.
504 Airport Road
Post Office Box 2108
Santa Fe, New Mexico 87504-2108
26PAGE
Thermo Instrument Systems Inc.
Transfer Agent and Common Stock Registrar
American Stock Transfer & Trust Company is the stock transfer agent and
maintains shareholder accounting records. The agent will respond to questions on
issuances of stock certificates, changes of ownership, lost stock certificates,
and changes of address. For these and similar matters, please direct inquires
to:
American Stock Transfer & Trust Company
Shareholder Services Department
40 Wall Street, 46th Floor
New York, New York 10005
(718) 921-8200
Annual Meeting
The annual meeting of shareholders will be held on Monday, May 23, 1994, at 3:00
p.m. at the Hyatt Regency Hotel, Hilton Head, South Carolina.
27