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 June 28, 1997.
[ ] Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934.
Commission File Number 1-11406
THERMO FIBERTEK INC.
(Exact name of Registrant as specified in its charter)
Delaware 52-1762325
(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 July 25, 1997
---------------------------- ----------------------------
Common Stock, $.01 par value 60,748,419
PAGE
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
THERMO FIBERTEK INC.
Consolidated Balance Sheet
(Unaudited)
Assets
June 28, December 28,
(In thousands) 1997 1996
-------------------------------------------------------------------------
Current Assets:
Cash and cash equivalents $ 96,405 $109,805
Available-for-sale investments, at quoted
market value (amortized cost of $10,009) 10,009 -
Accounts receivable, less allowances of
$2,819 and $1,948 57,577 38,115
Unbilled contract costs and fees 3,872 1,236
Inventories:
Raw materials and supplies 13,357 13,778
Work in process 8,702 4,180
Finished goods 12,240 6,509
Prepaid income taxes and other current
assets 7,726 8,802
-------- --------
209,888 182,425
-------- --------
Property, Plant, and Equipment, at Cost 60,288 57,869
Less: Accumulated depreciation and
amortization 31,589 31,329
-------- --------
28,699 26,540
-------- --------
Other Assets (Notes 2 and 3) 15,876 8,720
-------- --------
Cost in Excess of Net Assets of Acquired
Companies (Note 2) 128,648 39,547
-------- --------
$383,111 $257,232
======== ========
2PAGE
THERMO FIBERTEK INC.
Consolidated Balance Sheet (continued)
(Unaudited)
Liabilities and Shareholders' Investment
June 28, December 28,
(In thousands except share amounts) 1997 1996
------------------------------------------------------------------------
Current Liabilities:
Accounts payable $ 24,466 $ 16,805
Accrued payroll and employee benefits 9,192 10,989
Billings in excess of contract costs and fees 7,115 2,540
Accrued warranty costs 8,308 7,752
Other accrued expenses (includes $1,100 and
$1,340 due to related party) 15,440 11,121
Due to parent company 16,260 17,609
-------- --------
80,781 66,816
-------- --------
Deferred Income Taxes and Other Deferred Items 2,932 3,202
-------- --------
Long-term Debt, Related Party (Notes 2 and 4) 110,000 -
-------- --------
Minority Interest 422 277
-------- --------
Common Stock of Subsidiary Subject to
Redemption ($60,116 redemption value) 56,632 56,087
-------- --------
Shareholders' Investment:
Common stock, $.01 par value, 150,000,000
shares authorized; 61,343,115 and
61,154,930 shares issued 613 612
Capital in excess of par value 64,435 65,951
Retained earnings 73,400 66,181
Treasury stock at cost, 9,546 and 23,550
shares (141) (360)
Cumulative translation adjustment (5,963) (1,534)
-------- --------
132,344 130,850
-------- --------
$383,111 $257,232
======== ========
The accompanying notes are an integral part of these consolidated
financial statements.
3PAGE
THERMO FIBERTEK INC.
Consolidated Statement of Income
(Unaudited)
Three Months Ended
------------------------
June 28, June 29,
(In thousands except per share amounts) 1997 1996
-----------------------------------------------------------------------
Revenues $54,511 $48,595
------- -------
Costs and Operating Expenses:
Cost of revenues 32,650 28,104
Selling, general, and administrative expenses 14,506 11,399
Research and development expenses 1,587 1,552
------- -------
48,743 41,055
------- -------
Operating Income 5,768 7,540
Interest Income 1,665 637
Interest Expense (includes $771 and $131 to
related party in 1997 and 1996) (785) (158)
------- -------
Income Before Provision for Income Taxes
and Minority Interest 6,648 8,019
Provision for Income Taxes 2,613 3,120
Minority Interest Expense 276 23
------- -------
Net Income $ 3,759 $ 4,876
======= =======
Earnings per Share:
Primary $ .06 $ .08
======= =======
Fully diluted $ .06 $ .08
======= =======
Weighted Average Shares:
Primary 61,244 61,026
======= =======
Fully diluted 64,230 64,460
======= =======
The accompanying notes are an integral part of these consolidated
financial statements.
4PAGE
THERMO FIBERTEK INC.
Consolidated Statement of Income
(Unaudited)
Six Months Ended
-----------------------
June 28, June 29,
(In thousands except per share amounts) 1997 1996
-----------------------------------------------------------------------
Revenues $99,178 $97,575
------- -------
Costs and Operating Expenses:
Cost of revenues 58,186 56,296
Selling, general, and administrative expenses 27,481 22,866
Research and development expenses 2,863 2,825
------- -------
88,530 81,987
------- -------
Operating Income 10,648 15,588
Interest Income 3,102 1,372
Interest Expense (includes $902 and $262 to
related party in 1997 and 1996) (941) (330)
------- -------
Income Before Provision for Income Taxes
and Minority Interest 12,809 16,630
Provision for Income Taxes 4,930 6,519
Minority Interest Expense 660 29
------- -------
Net Income $ 7,219 $10,082
======= =======
Earnings per Share:
Primary $ .12 $ .17
======= =======
Fully diluted $ .11 $ .16
======= =======
Weighted Average Shares:
Primary 61,192 60,980
======= =======
Fully diluted 64,210 64,415
======= =======
The accompanying notes are an integral part of these consolidated
financial statements.
5PAGE
THERMO FIBERTEK INC.
Consolidated Statement of Cash Flows
(Unaudited)
Six Months Ended
-----------------------
June 28, June 29,
(In thousands) 1997 1996
-----------------------------------------------------------------------
Operating Activities:
Net income $ 7,219 $ 10,082
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 3,089 2,169
Provision for losses on accounts
receivable (7) (539)
Minority interest expense 660 29
Deferred income tax expense (10) 216
Other noncash items - (318)
Changes in current accounts, excluding
the effects of acquisition:
Accounts receivable (4,813) 8,135
Inventories and unbilled contract
costs and fees (494) (151)
Prepaid income taxes and other
current assets 1,012 209
Accounts payable (4,949) (1,898)
Other current liabilities (559) (8,604)
--------- ---------
Net cash provided by operating activities 1,148 9,330
--------- ---------
Investing Activities:
Acquisition, net of cash acquired (Note 2) (107,738) -
Issuance of note receivable (3,000) -
Repayment of note receivable 3,000 -
Purchases of available-for-sale investments (10,000) -
Proceeds from sale and maturities of
available-for-sale investments - 2,750
Purchases of property, plant, and equipment (1,418) (1,351)
Other (69) (5,317)
--------- ---------
Net cash used in investing activities (119,225) (3,918)
--------- ---------
Financing Activities:
Issuance of long-term obligation to
parent company (Note 2) 110,000 -
Purchases of subsidiary common stock (1,901) -
Net proceeds from issuance of Company
common stock 604 825
Repayment of short-term obligation to
parent company - (10,400)
Other (9) (2)
--------- ---------
Net cash provided by (used in) financing
activities $ 108,694 $ (9,577)
--------- ---------
6PAGE
THERMO FIBERTEK INC.
Consolidated Statement of Cash Flows (continued)
(Unaudited)
Six Months Ended
-------------------------
June 28, June 29,
(In thousands) 1997 1996
------------------------------------------------------------------------
Exchange Rate Effect on Cash $ (4,017) $ (1,161)
-------- --------
Decrease in Cash and Cash Equivalents (13,400) (5,326)
Cash and Cash Equivalents at Beginning of
Period 109,805 57,028
-------- --------
Cash and Cash Equivalents at End of Period $ 96,405 $ 51,702
======== ========
Noncash Activities:
Fair value of assets of acquired company $129,271 $ -
Cash paid for acquired company 107,750 -
-------- --------
Liabilities assumed of acquired company $ 21,521 $ -
======== ========
The accompanying notes are an integral part of these consolidated
financial statements.
7PAGE
THERMO FIBERTEK INC.
Notes to Consolidated Financial Statements
1. General
The interim consolidated financial statements presented have been
prepared by Thermo Fibertek Inc. (the Company) without audit and, in the
opinion of management, reflect all adjustments of a normal recurring
nature necessary for a fair statement of the financial position at June
28, 1997, the results of operations for the three- and six-month periods
ended June 28, 1997, and June 29, 1996, and the cash flows for the
six-month periods ended June 28, 1997, and June 29, 1996. Interim results
are not necessarily indicative of results for a full year.
The consolidated balance sheet presented as of December 28, 1996, 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 28, 1996, filed
with the Securities and Exchange Commission.
2. Acquisition
On May 22, 1997, the Company acquired the assets, subject to certain
liabilities, of the stock-preparation business of the Black Clawson
Company and its affiliates (Black Clawson) for approximately $107.7
million in cash, subject to a post-closing adjustment. The purchase price
includes $3.9 million in cash held in escrow by a third party for the
subsequent acquisition of Black Clawson's French subsidiary, which is
expected to be completed in August 1997. This amount is included in other
assets in the accompanying 1997 balance sheet.
Pursuant to a promissory note, the Company borrowed $110 million from
Thermo Electron Corporation (Thermo Electron) to finance the purchase.
The promissory note is due January 5, 1999, and bears interest at the
90-day Commercial Paper Composite Rate plus 25 basis points, set at the
beginning of each quarter. The note was repaid in July 1997 with the net
proceeds from the sale of long-term subordinated convertible debentures
(Note 4). Accordingly, the note has been classified as long-term in the
accompanying 1997 balance sheet.
Black Clawson is a leading supplier of recycling equipment used in
processing fiber for the manufacture of "brown paper," such as that used
for corrugated boxes.
The acquisition has been accounted for using the purchase method of
accounting and its results have been included in the accompanying
financial statements from the date of acquisition. The cost of the
acquisition exceeded the estimated fair value of the acquired net assets
by $90.1 million, which is being amortized over 40 years. Allocation of
the purchase price was based on estimates of the fair value of the net
8PAGE
THERMO FIBERTEK INC.
2. Acquisition (continued)
assets acquired and is subject to adjustment upon finalization of the
purchase price allocation.
Based on unaudited data, the following table presents selected
financial information for the Company and Black Clawson on a pro forma
basis, assuming the companies had been combined since the beginning of
1996.
Three Months Ended Six Months Ended
-------------------- -------------------
(In thousands except June 28, June 29, June 28, June 29,
per share amounts) 1997 1996 1997 1996
--------------------------------------------------------------------
Revenues $ 69,970 $ 74,236 $138,249 $143,553
Net income 3,265 4,345 6,248 7,742
Earnings per share:
Primary .05 .07 .10 .13
Fully diluted .05 .07 .10 .12
The pro forma results are not necessarily indicative of future
operations or the actual results that would have occurred had the
acquisition of Black Clawson been made at the beginning of 1996.
3. Note Receivable
During 1996, the Company loaned $6.0 million to Tree-Free Fiber
Company, LLC (Tree-Free) in connection with a proposed engineering,
procurement, and construction project. This project has been indefinitely
delayed due to the current weakness in pulp prices and, therefore, the
Company expects the project will not proceed in the near future.
Tree-Free was unable to repay the note upon its original maturity and the
Company consented to several payment extensions. On July 28, 1997, the
Company restructured the note from Tree-Free into two promissory notes
aggregating $6.5 million, which represent the original principal amount
due to the Company plus interest accrued through the date of the
restructuring. One such promissory note, for $3.0 million, is secured by
a first priority security interest, pari passu with a security interest
held by another lender, on certain real estate and equipment, and a
second priority security interest, pari passu with a security interest
held by another lender, on inventories and accounts receivable. The
second promissory note, for $3.5 million, is secured by a first priority
security interest in the membership (equity) interests of the equity
owners of Tree-Free and certain other assets and is subordinate to other
borrowings. In the event of default, the Company intends to exercise its
rights under its security agreement to cause all of such membership
interests to be transferred to the Company. In such event, the Company
expects that it will operate the existing tissue mill owned by Tree-Free,
with the intent of selling either the mill or membership interests at one
or more public or private sales as soon as practicable thereafter.
Although no assurance can be given as to either the timing of any such
sale or the amount of the proceeds that may be received therefrom, the
Company believes that the fair value of its security exceeds the sum of
the carrying amount of the notes from Tree-Free and Tree-Free's
indebtedness to its third party lender.
9PAGE
THERMO FIBERTEK INC.
4. Subsequent Event
In July 1997, the Company issued and sold $153 million principal
amount of 4 1/2% subordinated convertible debentures due 2004 for net
proceeds of approximately $149.8 million. The debentures are convertible
into shares of the Company's common stock at a conversion price of $12.10
per share and are guaranteed on a subordinated basis by Thermo Electron.
In July 1997, the Company repaid a $110 million promissory note due to
Thermo Electron with a portion of the net proceeds from this offering.
Item 2 - Management's Discussion and Analysis of Financial Condition and
Results of Operations
Forward-looking statements, within the meaning of Section 21E of the
Securities Exchange Act of 1934, are made throughout this Management's
Discussion and Analysis of Financial Condition and Results of Operations.
For this purpose, any statements contained herein that are not statements
of historical fact may be deemed to be forward-looking statements.
Without limiting the foregoing, the words "believes," "anticipates,"
"plans," "expects," "seeks," "estimates," and similar expressions are
intended to identify forward-looking statements. There are a number of
important factors that could cause the results of the Company to differ
materially from those indicated by such forward-looking statements,
including those detailed under the caption "Forward-looking Statements"
in Exhibit 13 to the Company's Annual Report on Form 10-K for the fiscal
year ended December 28, 1996, filed with the Securities and Exchange
Commission.
Overview
The Company designs and manufactures processing machinery,
accessories, and water-management systems for the paper and paper
recycling industries. The Company's principal products include
custom-engineered systems and equipment for the preparation of wastepaper
for conversion into recycled paper; accessory equipment and related
consumables important to the efficient operation of papermaking machines;
and water-management systems essential for draining, purifying, and
recycling process water. The Company's Thermo Black Clawson (Black
Clawson) subsidiary, acquired May 1997, is a leading supplier of
recycling equipment used in processing fiber for the manufacture of
"brown paper," such as that used for corrugated boxes. The Company's
Thermo Fibergen Inc. (Thermo Fibergen) subsidiary is developing and
commercializing equipment and systems to recover valuable materials from
papermaking sludge generated by plants that produce virgin and recycled
pulp and paper. Through its GranTek Inc. (GranTek) subsidiary, acquired
in July 1996, Thermo Fibergen employs patented technology to produce
absorbing granules from papermaking sludge.
The Company's manufacturing facilities are principally in the U.S.
and France. The manufacturing facility in France is located at the
Company's E&M Lamort, S.A. (Lamort) subsidiary, which primarily
manufactures recycling equipment and accessories.
10PAGE
THERMO FIBERTEK INC.
Overview (continued)
The Company's products are primarily sold to the paper industry.
Generally, the financial condition of the paper industry corresponds both
to changes in the general economy and to a number of other factors,
including paper and pulp production capacity. The paper industry entered
a severe down cycle in early 1996 and has not recovered. This cyclical
downturn adversely affected the Company's business during the second half
of 1996 and the first half of 1997. The timing of the recovery of the
financial condition of the paper industry cannot be predicted.
The Company has significant foreign operations, particularly in
Europe. Although the Company seeks to charge its customers in the same
currency as its operating costs, the Company's financial performance and
competitive position can be affected by currency exchange rate
fluctuations affecting the relationship between the U.S. dollar and
foreign currencies. The Company reduces its exposure to currency
fluctuations through the use of forward contracts. The Company enters
into forward contracts to hedge certain firm purchase and sale
commitments denominated in currencies other than its subsidiaries' local
currencies, principally U.S. dollars, British pounds sterling, French
francs, and Japanese yen. The purpose of the Company's foreign currency
hedging activities is to protect the Company's local currency cash flows
related to these commitments from fluctuations in foreign exchange rates.
Because the Company's forward contracts are entered into as hedges
against existing foreign currency exposures, there generally is no effect
on the income statement since gains or losses on the customer contract
offset gains or losses on the forward contract.
Results of Operations
Second Quarter 1997 Compared With Second Quarter 1996
Revenues increased to $54.5 million in the second quarter of 1997
from $48.6 million in the second quarter of 1996. Revenues increased $8.3
million due to the acquisitions of Black Clawson in May 1997 and GranTek
in July 1996. Revenues from the Company's accessories business increased
$2.6 million, primarily due to an increase in demand. These improvements
were offset in part by a $4.4 million decrease in revenues from the
Company's recycling business, primarily due to a decrease in demand
resulting from the severe drop in de-inked pulp prices in the summer of
1996 and, to a lesser extent, a decrease in revenues from the Company's
water-management business. The unfavorable effects of currency
translation due to a stronger U.S. dollar decreased revenues by $1.2
million.
The gross profit margin decreased to 40% in the second quarter of
1997 from 42% in the second quarter of 1996, primarily due to lower-
margin revenues at Black Clawson and a decrease in gross profit margin at
the Company's Lamort subsidiary due to a decrease in revenues and lower
margins from Lamort's recycling business due to competitive pricing
pressures.
11PAGE
THERMO FIBERTEK INC.
Second Quarter 1997 Compared With Second Quarter 1996 (continued)
Selling, general, and administrative expenses as a percentage of
revenues increased to 27% in the second quarter of 1997 from 24% in the
second quarter of 1996, primarily as a result of a decrease in revenues
in the recycling business. Additionally, general and administrative
expenses as a percentage of revenues increased at Thermo Fibergen,
primarily due to hiring additional sales, marketing, and administrative
staff.
Research and development expenses were unchanged at $1.6 million in
the second quarter of 1997 and 1996.
Interest income increased to $1.7 million in the second quarter of
1997 from $637,000 in the second quarter of 1996, primarily due to an
increase in average invested balances resulting from the proceeds from
Thermo Fibergen's initial public offering in September 1996.
Interest expense increased to $785,000 in the second quarter of 1997
from $158,000 in the second quarter of 1996 as a result of additional
borrowings related to the May 1997 acquisition of Black Clawson.
The effective tax rate was 39% in the second quarter of 1997 and
1996. The effective tax rate exceeds the statutory federal income tax
rate primarily due to state income taxes, offset in part by the effect of
lower foreign tax rates.
Minority interest expense primarily represents accretion of common
stock of subsidiary subject to redemption.
First Six Months 1997 Compared With First Six Months 1996
Revenues increased to $99.2 million in the first six months of 1997
from $97.6 million in the first six months of 1996. Revenues increased
$9.8 million due to the acquisitions of Black Clawson in May 1997 and
GranTek in July 1996. Revenues from the Company's accessories business
increased $1.8 million, primarily due to an increase in demand. These
improvements were offset in part by an $8.3 million decrease in revenues
from the Company's recycling business, primarily due to a decrease in
demand resulting from a severe drop in de-inked pulp prices in the summer
of 1996 and, to a lesser extent, a decrease in revenues from the
Company's water-management business. The unfavorable effects of currency
translation due to a stronger U.S. dollar decreased revenues by $2.1
million.
The gross profit margin decreased to 41% in the first six months of
1997 from 42% in the first six months of 1996, primarily due to lower-
margin revenues at Black Clawson and a decrease in gross profit at the
Company's Lamort subsidiary due to the reasons discussed in the results
of operations for the second quarter.
Selling, general, and administrative expenses as a percentage of
revenues increased to 28% in the first six months of 1997 from 23% in the
first six months of 1996, primarily due to the reasons discussed in the
results of operations for the second quarter.
12PAGE
THERMO FIBERTEK INC.
First Six Months 1997 Compared With First Six Months 1996 (continued)
Research and development expenses were relatively unchanged at $2.9
million in the first six months of 1997 and $2.8 million in the first six
months of 1996.
Interest income increased to $3.1 million in the first six months of
1997 from $1.4 million in the first six months of 1996, primarily due to
an increase in average invested balances resulting from the proceeds from
Thermo Fibergen's initial public offering in September 1996.
Interest expense increased to $941,000 in the first six months of
1997 from $330,000 in the first six months of 1996, for the reason
discussed in the results of operations for the second quarter.
The effective tax rate was 38% in the first six months of 1997 and
39% in the first six months of 1996. The effective tax rates exceed the
statutory federal income tax rate primarily due to state income taxes,
offset in part by the effect of lower foreign tax rates.
Liquidity and Capital Resources
Consolidated working capital was $129.1 million at June 28, 1997,
compared with $115.6 million at December 28, 1996. Included in working
capital are cash, cash equivalents, and available-for-sale investments of
$106.4 million at June 28, 1997, compared with $109.8 million at December
28, 1996. Of the $106.4 million balance at June 28, 1997, $57.8 million
was held by Thermo Fibergen and $3.5 million was held by Fiberprep, with
the remainder being held by the Company and its wholly owned
subsidiaries. At June 28, 1997, $19.8 million of the Company's cash and
cash equivalents was held by its Lamort subsidiary. Repatriation of this
cash into the U.S. is subject to a 5% withholding tax in France and could
also be subject to a United States tax.
During the first six months of 1997, $1.1 million of cash was
provided by operating activities. Cash provided by the Company's
operating results was reduced by a decrease in accounts payable of $4.9
million, which resulted from payment of a substantial portion of acquired
accounts payable at Black Clawson, and an increase in accounts receivable
of $4.8 million, primarily due to timing of cash collections.
During the first six months of 1997, $119.2 million of cash was used
in investing activities. The Company acquired the assets, subject to
certain liabilities, of the stock-preparation business of Black Clawson
for $107.7 million in cash (Note 2). The purchase price is subject to a
post-closing adjustment. The Company invested $10.0 million in
available-for-sale investments and expended $1.4 million for purchases of
property, plant, and equipment during the first six months of 1997.
During the first six months of 1997, the Company's financing
activities provided $108.7 million in cash. The Company borrowed $110
million from Thermo Electron to finance the acquisition of Black Clawson
(Note 2) and repurchased $1.9 million of Thermo Fibergen common stock in
the first six months of 1997.
13PAGE
THERMO FIBERTEK INC.
Liquidity and Capital Resources (continued)
The Company's Board of Directors has authorized the repurchase,
through March 19, 1998, of up to $5.0 million of Thermo Fibergen's common
stock. Any such purchases would be funded from working capital. Through
June 28, 1997, the Company had expended $1.9 million under this
authorization.
In July 1997, the Company's Board of Directors authorized the
repurchase, through July 18, 1998, of up to $20 million of Company common
stock in open market or negotiated transactions. Any such purchases would
be funded from working capital.
In July 1997, the Company issued and sold $153 million principal
amount of 4 1/2% subordinated convertible debentures due 2004 for net
proceeds of approximately $149.8 million. A portion of the proceeds was
used to repay the $110 million note due to Thermo Electron (Note 4).
At June 28, 1997, the Company had $53.7 million of undistributed
foreign earnings. The Company does not intend to repatriate undistributed
foreign earnings into the U.S., and does not expect that this will have a
material adverse effect on the Company's current liquidity.
In the remainder of 1997, the Company plans to make expenditures for
property, plant, and equipment of approximately $2.5 million. In
addition, Thermo Fibergen may make additional capital expenditures for
the construction of one or more fiber-recovery plants. Construction of
fiber-recovery plants is dependent upon Thermo Fibergen entering into
long-term contracts with paper mills, under which Thermo Fibergen will
charge fees to accept the mills' papermaking sludge. Thermo Fibergen does
not currently have such agreements in place nor is there any assurance
that Thermo Fibergen will be able to obtain such contracts. The Company
believes that its existing resources are sufficient to meet the capital
requirements of its existing operations for the foreseeable future.
PART II - OTHER INFORMATION
Item 4 - Submission of Matters to a Vote of Security Holders
On June 2, 1997, at the Annual Meeting of Shareholders, the
shareholders reelected five incumbent directors to a one-year term
expiring in 1998. The directors reelected at the meeting were: Dr. Walter
J. Bornhorst, Dr. George N. Hatsopoulos, John N. Hatsopoulos, Donald E.
Noble, and William A. Rainville. Dr. Bornhorst received 58,635,004 shares
voted in favor of his election and 30,044 shares voted against; Dr. G.
Hatsopoulos received 58,636,546 shares voted in favor of his election and
28,502 shares voted against; Mr. Noble received 58,635,871 shares voted
in favor of his election and 29,177 shares voted against; and Mr. J.
Hatsopoulos and Mr. Rainville each received 58,636,771 shares voted in
favor of his election and 28,277 shares voted against. No abstentions or
broker non-votes were recorded on the election of directors.
The shareholders also approved a proposal to amend the Company's
Restated Certificate of Incorporation to increase the Company's
14PAGE
THERMO FIBERTEK INC.
Item 4 - Submission of Matters to a Vote of Security Holders (continued)
authorized common stock, $.01 par value per share, from 75 million shares
to 150 million shares as follows: 58,558,743 shares voted in favor,
71,141 shares voted against, and 35,164 shares abstained. No broker
non-votes were recorded on the proposal.
Item 6 - Exhibits and Reports on Form 8-K
(a) Exhibits
See Exhibit Index on the page immediately preceding exhibits.
(b) Reports on Form 8-K
On June 4, 1997, and June 20, 1997, the Company filed a Current
Report on Form 8-K and 8-K/A, respectively, pertaining to the acquisition
by the Company of the Stock-preparation Business of the Black Clawson
Company and its affiliates.
15PAGE
THERMO FIBERTEK INC.
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 31st day of July
1997.
THERMO FIBERTEK INC.
Paul F. Kelleher
--------------------
Paul F. Kelleher
Chief Accounting Officer
John N. Hatsopoulos
--------------------
John N. Hatsopoulos
Vice President and Chief
Financial Officer
16PAGE
THERMO FIBERTEK INC.
EXHIBIT INDEX
Exhibit
Number Description of Exhibit
-----------------------------------------------------------------------
3 Certificate of Incorporation of the Registrant, as
amended.
4 Fiscal Agency Agreement dated as of July 16, 1997, among
the Registrant, Thermo Electron Corporation and Bankers
Trust Company as fiscal agent, relating to $153 million
principal amount of 4 1/2% Convertible Subordinated
Debentures due 2004.
11 Statement re: Computation of Earnings per Share.
27 Financial Data Schedule.