SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
___________________________________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report
(Date of earliest event reported):
October 6, 1997
________________________________________
THERMO REMEDIATION INC.
(Exact name of Registrant as specified in its charter)
Delaware 1-12636 59-3203761
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation or File Number) Identification Number)
organization)
1964 South Orange Blossom Trail
Apopka, Florida 32703
(Address of principal (Zip Code)
executive offices)
(617) 622-1000
(Registrant's telephone number including area code)
PAGE
FORM 8-K
Item 2. Acquisition or Disposition of Assets
On October 6, 1997 (the "Closing Date"), Thermo Remediation Inc. (the
"Company") sold its 50% limited liability company interest in
RETEC/TETRA, L.C., a Texas limited liability company (the "Joint
Venture"), to TETRA Thermal, Inc. (the "Buyer"). Prior to this sale, the
Buyer held the other 50% limited liability company interest in the Joint
Venture. The Joint Venture, established in August 1992, engages in the
business of installing and operating systems to process hazardous and
nonhazardous wastes at petroleum refineries located primarily in the Gulf
Coast region of the United States.
The selling price for the Company's interest in the Joint Venture
was $8,825,000 in cash. The selling price is subject to post-closing
adjustments in the event of certain further sales of interests in the
Joint Venture or its assets within six months after the Closing Date.
Under the terms of the agreement originally establishing the Joint
Venture, either party to the agreement had the right to propose a value
for a 50% interest in the Joint Venture (the "Proposing Party") and to
cause the other party (the "Electing Party") either to (i) buy the
Proposing Party's interest in the Joint Venture at such price or (ii)
sell the Electing Party's interest in the Joint Venture to the Proposing
Party at such price. The selling price was proposed by the Buyer and the
Company elected to sell the Buyer its interest in the Joint Venture at
such selling price.
The disposition was made pursuant to a Purchase and Sale Agreement
(the "Agreement") executed on October 6, 1997, by and among the Company's
Remediation Technologies, Inc. and RETEC Thermal, Inc. subsidiaries, as
well as the Buyer and its TETRA Technologies, Inc. affiliate. In the
Agreement, the Buyer and its affiliate agreed, subject to certain
exceptions, to indemnify the Company and its subsidiaries against claims
arising out of the operations, debts and liabilities of the Joint Venture
arising both before and after the Closing Date. The terms of the
Agreement were determined by arms' length negotiation among the parties.
2PAGE
FORM 8-K
Item 7. Financial Statements, Pro Forma Condensed Financial Information
and Exhibits
(a) Financial Statements
Not applicable.
(b) Pro Forma Condensed Financial Information
The following unaudited pro forma condensed financial statements set
forth the results of operations for the fiscal year ended March 29, 1997,
and the three months ended June 28, 1997, as if the sale of the Company's
investment in the Joint Venture had occurred at the beginning of fiscal
1997. The unaudited pro forma condensed balance sheet sets forth the
financial position as of June 28, 1997, as if the sale of the Company's
investment in the joint venture had occurred as of that date.
The pro forma results of operations are not necessarily indicative of
future operations or the actual results that would have occurred had the
sale of the Company's investment in the Joint Venture been consummated at
the beginning of fiscal 1997. These statements should be read in
conjunction with the accompanying notes herein and the historical
consolidated financial statements and related notes of the Company
included in its Annual Report on Form 10-K for the fiscal year ended
March 29, 1997, and Quarterly Report on Form 10-Q for the three months
ended June 28, 1997.
3PAGE
FORM 8-K
THERMO REMEDIATION INC.
PRO FORMA CONDENSED STATEMENT OF INCOME (Unaudited)
Year Ended March 29, 1997
Thermo Pro Forma
Remediation Adjustments Pro Forma
----------- ----------- ---------
(In thousands except per share amounts)
Revenues $114,849 $ - $114,849
-------- -------- --------
Costs and Operating Expenses:
Cost of revenues 96,901 - 96,901
Selling, general, and
administrative expenses 12,058 - 12,058
New business development
expenses 1,040 - 1,040
Nonrecurring costs 7,800 - 7,800
-------- -------- --------
117,799 - 117,799
-------- -------- --------
Operating Loss (2,950) - (2,950)
Interest Income 1,896 - 1,896
Interest Expense (2,251) - (2,251)
Gain on Sale of Investments, Net 136 - 136
Equity in Earnings of Unconsolidated
Subsidiary 865 (865) -
-------- -------- --------
Loss Before Provision for Income
Taxes (2,304) (865) (3,169)
Provision for Income Taxes 377 (346) 31
-------- -------- --------
Net Loss $ (2,681) $ (519) $ (3,200)
======== ======== ========
Loss per Share $ (.21) $ (.25)
======== ========
Weighted Average Shares 12,821 12,821
======== ========
4PAGE
FORM 8-K
THERMO REMEDIATION INC.
PRO FORMA CONDENSED STATEMENT OF INCOME (Unaudited)
Three Months Ended June 28, 1997
Thermo Pro Forma
Remediation Adjustments Pro Forma
----------- ----------- ---------
(In thousands except per share amounts)
Revenues $28,204 $ - $28,204
------- ------- -------
Costs and Operating Expenses:
Cost of revenues 23,833 - 23,833
Selling, general, and
administrative expenses 3,120 - 3,120
New business development
expenses 222 - 222
------- ------- -------
27,175 - 27,175
------- ------- -------
Operating Income 1,029 - 1,029
Interest Income 294 - 294
Interest Expense (563) - (563)
Other Income 204 - 204
Equity in Earnings of Unconsolidated
Subsidiary 118 (118) -
------- ------- -------
Income Before Provision for Income
Taxes 1,082 (118) 964
Provision for Income Taxes 506 (47) 459
------- ------- -------
Net Income $ 576 $ (71) $ 505
======= ======= =======
Earnings per Share $ .05 $ .04
======= =======
Weighted Average Shares 12,492 12,492
======= =======
5PAGE
FORM 8-K
THERMO REMEDIATION INC.
PRO FORMA CONDENSED BALANCE SHEET (Unaudited)
June 28, 1997
Thermo Pro Forma
Remediation Adjustments Pro Forma
----------- ----------- ---------
(In thousands)
ASSETS
Current Assets:
Cash and cash equivalents $ 8,702 $ 8,825 $ 17,527
Short-term available-for-sale
investments 4,060 - 4,060
Accounts receivable, net 22,953 - 22,953
Unbilled contract costs and fees 10,141 - 10,141
Prepaid income taxes 3,387 - 3,387
Prepaid expenses 2,404 - 2,404
Due from parent company and
Thermo Electron 501 - 501
-------- -------- --------
52,148 8,825 60,973
-------- -------- --------
Property, Plant, and Equipment, Net 34,500 - 34,500
-------- -------- --------
Other Assets 15,540 (5,768) 9,772
-------- -------- --------
Cost in Excess of Net Assets of
Acquired Companies 30,157 - 30,157
-------- -------- --------
$132,345 $ 3,057 $135,402
======== ======== ========
LIABILITIES AND SHAREHOLDERS' INVESTMENT
Current Liabilities:
Accounts payable $ 6,095 $ - $ 6,095
Accrued payroll and employee benefits 3,659 - 3,659
Deferred revenue 1,167 - 1,167
Billings in excess of revenue earned 800 - 800
Accrued interest 321 - 321
Accrued income taxes 255 1,223 1,478
Other accrued expenses 2,708 - 2,708
-------- -------- --------
15,005 1,223 16,228
-------- -------- --------
Deferred Income Taxes 3,035 - 3,035
-------- -------- --------
Long-term Obligations, Including
$2,650 Due to Parent Company 40,600 - 40,600
-------- -------- --------
Shareholders' Investment:
Common stock 134 - 134
Capital in excess of par value 85,384 - 85,384
Retained earnings (2,752) 1,834 (918)
Treasury stock, at cost (9,064) - (9,064)
Net unrealized gain on
available-for-sale investments 3 - 3
-------- -------- --------
73,705 1,834 75,539
-------- -------- --------
$132,345 $ 3,057 $135,402
======== ======== ========
6PAGE
FORM 8-K
THERMO REMEDIATION INC.
NOTES TO PRO FORMA CONDENSED FINANCIAL STATEMENTS (Unaudited)
Note 1 - Basis of Presentation
As described in Item 2 of this Form 8-K, the selling price is based
on an estimate of the fair market value of the net assets sold and is
subject to adjustment. To date, no information has been gathered that
would cause the Company to believe that the final selling price will be
materially different than the preliminary estimate.
Note 2 - Pro Forma Adjustments to Pro Forma Condensed Statements of
Income
Equity in Earnings of Unconsolidated Subsidiary
Represents the reversal of the Company's proportionate share of
income from its investment in the Joint Venture.
Provision for Income Taxes
Represents a decrease in income taxes associated with the adjustment
above, calculated at the Company's statutory income tax rate of 40%.
Note 3 - Pro Forma Adjustments to Pro Forma Condensed Balance Sheet
Cash and Cash Equivalents
Represents the proceeds from the sale of the Company's investment in
the Joint Venture.
Other Assets
Represents the Company's sale of its investment in the Joint Venture.
Accrued Income Taxes
Represents the tax effect related to the excess of the proceeds
received by the Company from the sale of its investment in the Joint
Venture over the carrying value of the investment, calculated at the
Company's statutory income tax rate of 40%.
Retained Earnings
Represents the excess of the proceeds received by the Company from
the sale of its investment in the Joint Venture over the carrying value
of the investment.
7PAGE
FORM 8-K
THERMO REMEDIATION INC.
Item 7. Financial Statements, Pro Forma Condensed Financial Information
and Exhibits (continued)
(c) Exhibits
2.1 Purchase and Sale Agreement executed October 6, 1997,
by and among Remediation Technologies, Inc., RETEC
Thermal, Inc., TETRA Thermal, Inc. and TETRA
Technologies, Inc. (schedules and exhibits to the
agreement are omitted in reliance on Rule 601(b)(2) of
Regulation S-K. The Registrant hereby undertakes to
furnish such schedules and exhibits to the Commission
supplementally upon request).
2.2 Assignment and Assumption Agreement executed October
6, 1997, by and among Remediation Technologies, Inc.,
RETEC Thermal, Inc., TETRA Thermal, Inc. and TETRA
Technologies, Inc. (schedules and exhibits to the
agreement are omitted in reliance on Rule 601(b)(2) of
Regulation S-K. The Registrant hereby undertakes to
furnish such schedules and exhibits to the Commission
supplementally upon request).
8PAGE
FORM 8-K
THERMO REMEDIATION 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, on this 21st day of October
1997.
THERMO REMEDIATION INC.
By: Paul F. Kelleher
------------------------
Paul F. Kelleher
Chief Accounting Officer