SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report
(Date of earliest event reported):
April 27, 2001
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THERMO ELECTRON CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 1-8002 04-2209186
(State or other jurisdiction of (Commission File (I.R.S. Employer
incorporation or organization) Number) Identification
Number)
81 Wyman Street, P.O. Box 9046
Waltham, Massachusetts 02454-9046
(Address of principal executive offices) (Zip Code)
(781) 622-1000
(Registrant's telephone number
including area code)
This Current Report on Form 8-K contains forward-looking statements that
involve a number of risks and uncertainties. Important factors that could cause
actual results to differ materially from those indicated by such forward-looking
statements are set forth under the heading "Risk Factors" in the Registrant's
Annual Report on Form 10-K for the fiscal year ended December 30, 2000. These
include risks and uncertainties relating to: integration of the company's
instrument businesses, the ability to improve internal growth, liquidity and
prospective performance of the subsidiaries to be spun off, the company's
guarantee of obligations of the subsidiaries to be spun off, the effect of
exchange rate fluctuations on international operations, potential impairment of
goodwill, the need to develop new products and adapt to significant
technological change, dependence on customers that operate in cyclical
industries, the effect of changes in governmental regulations, and dependence on
customers' capital spending policies and government funding policies.
Item 5. Other Events
On April 26, 2001, the Registrant issued a press release, attached hereto
as Exhibit 99, regarding its financial results for the quarter ended March 31,
2001.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) Financial Statements of Business Acquired: Not applicable.
(b) Pro Forma Financial Information: Not applicable.
(c) Exhibits
99 Press Release dated April 26, 2001.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized, on this 15th day of May, 2001.
THERMO ELECTRON CORPORATION
By: /s/ Theo Melas-Kyriazi
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Theo Melas-Kyriazi
Vice President and Chief Financial
Officer
Thermo Electron Reports Cash EPS of $.21 and
Internal Revenue Growth of 14 Percent
WALTHAM, Mass., April 26, 2001 - Thermo Electron Corporation (NYSE:TMO) today
reported that diluted cash operating EPS rose 31 percent to $.21 for the first
quarter of 2001, up from $.16 in the year-ago period. Internal revenue growth
was 14 percent, excluding unfavorable foreign currency effects of 4 percent.
First quarter cash operating margins rose to 10.9 percent from 10.5 percent.*
"Once again, we have delivered strong organic revenue and earnings growth,
even as market conditions have become more challenging," said Richard F. Syron,
chairman and chief executive officer of Thermo Electron. "We have a lot of
momentum coming out of last month's successful Pittcon tradeshow, where we
received significant attention from customers and competitors alike for our
unified branding strategy and new-product introductions. And we are focused
squarely on serving our customers better by continuing to integrate the
businesses. For example, we have embarked upon an intensive review of our real
estate holdings around the world to combine locations. One benefit is to reduce
costs and improve our operating margins. Another is to make it easier for our
employees to collaborate, which, in turn, will enable us to be ever more
responsive to our customers' needs."
Commenting on economic and market conditions and prospects, Mr. Syron said,
"We had another solid quarter. While there are uncertainties in the global
economy, we are maintaining our targets of 8 percent top-line growth and $1.00
cash operating EPS for the year. We believe our spectrum of instrument
technologies, products, and service offerings is a natural hedge against a
slowdown in any particular industry. However, we are keeping a watchful eye on
developments in the markets we serve and are taking swift action to adjust our
spending plans in those businesses that are adversely affected. That said, we
are not sacrificing our investments in opportunities that will lead to future
growth."
The company's revenues for the quarter were $573 million, compared with
$577 million in 2000. Comparative results were affected by the inclusion in 2000
of businesses subsequently sold, and, to a lesser extent, foreign currency
effects. These decreases were substantially offset by internal sales growth. In
its discontinued operations, the company recorded a $66 million aftertax charge,
representing a decline in the market value of the Thoratec Corporation shares
that Thermo Electron received from the sale of Thermo Cardiosystems. This
resulted in a net loss of $45 million for the quarter.
Life Sciences
Internal revenue growth for the Life Sciences sector was 12 percent for the
first quarter, with revenues of $209 million. Growth was driven by strong sales
of drug discovery tools, including our ion trap mass spectrometers, which
increased 26 percent, as well as double-digit sales growth in sample-preparation
equipment. Also contributing to sector growth were higher sales of our rapid
diagnostic tests, which increased 21 percent. Cash operating income margin for
the sector was 16.1 percent for the 2001 quarter, compared with 16.9 percent in
2000. Improved margins in sample-preparation equipment, biosciences, and
clinical diagnostics were offset by substantial new investments in proteomics.
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* Cash operating EPS and cash operating margin, except where otherwise noted,
exclude amortization of goodwill and intangibles, restructuring and unusual
items, the results of discontinued operations, the cumulative effect of change
in accounting principle, and in 2000, extraordinary item. Internal revenue
growth excludes the effects of foreign currency.
Optical Technologies
Internal revenue growth for the Optical Technologies sector was 36 percent for
the first quarter, with revenues of $140 million. Revenues at Spectra-Physics
rose 44 percent, with growth in the balance of the sector up 31 percent. Growth
drivers included strong demand for solid-state lasers used in industrial, R&D,
and life sciences applications; increased sales of photonics products,
particularly diffraction gratings for photolithography and fiber-optic systems;
as well as increased sales of molecular beam epitaxy systems. Cash operating
income margin for Optical Technologies was 9.8 percent for the 2001 quarter,
compared with 9.3 percent in 2000. Margins improved significantly in our
Photonics and Semiconductor divisions, offset in part by lower margins at
Spectra-Physics due to heavy investments in new-product introductions.
Measurement and Control
Internal revenue growth in the Measurement and Control sector was 6 percent for
the quarter, with revenues of $228 million. Growth was driven by strong sales of
environmental-monitoring instruments used in emissions-trading programs and
utility plant upgrades, and increased demand for natural gas flow-monitoring
instruments to the energy industry. This was offset by weakness in sales of
process instruments to the U.S. steel industry and the food processing market.
Cash operating income margin increased substantially to 11.3 percent for the
quarter, up from 9.4 percent in 2000, due to sales growth and cost-reduction
measures initiated in the fall of 2000, as well as a favorable comparison
resulting from the divestiture of lower-margin businesses.
-more-
Thermo Electron will hold its earnings conference call on Friday, April 27,
2001, at 11 a.m. EDT. To listen, dial 888-872-9028 within the U.S., or
973-633-6740 outside the U.S. A recording of this call will be available until
Monday, May 7, 2001. Please call 877-519-4471 within the U.S., or 973-341-3080
outside the U.S., and enter code 2528847. At the close of business today, an
audio archive will also be available on www.thermo.com under "Investors."
Thermo Electron Corporation is a global leader in providing
technology-based instruments, components, and systems that offer total solutions
for markets ranging from life sciences to telecommunications to food, drug, and
beverage production. The company's powerful technologies help researchers sift
through data to make discoveries that will fight disease or prolong life. They
allow manufacturers to fabricate ever-smaller components required to increase
the speed and quality of communications. And they automatically monitor and
control online production to ensure that critical quality standards are met
safely and efficiently. Thermo Electron, based in Waltham, Massachusetts,
reported $2.3 billion in revenues in 2000 and employed approximately 13,000
people worldwide. For more information on Thermo Electron, visit
http://www.thermo.com.
The following constitutes a "Safe Harbor" statement under the Private Securities
Litigation Reform Act of 1995: This press release contains forward-looking
statements that involve a number of risks and uncertainties. Important factors
that could cause actual results to differ materially from those indicated by
such forward-looking statements are set forth under the heading "Risk Factors"
in the company's Annual Report on Form 10-K for the fiscal year ended December
30, 2000. These include risks and uncertainties relating to: integration of the
company's instrument businesses, the ability to improve internal growth,
liquidity and prospective performance of the subsidiaries to be spun off, the
company's guarantee of obligations of the subsidiaries to be spun off, the
effect of exchange rate fluctuations on international operations, potential
impairment of goodwill, the need to develop new products and adapt to
significant technological change, dependence on customers that operate in
cyclical industries, the effect of changes in governmental regulations, and
dependence on customers' capital spending policies and government funding
policies.
-more-
Consolidated Statement of Operations (Unaudited)
Three Months Ended
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March 31, 2001 April 1, 2000
----------------------- -----------------------
(In thousands except per share amounts) Reported Adjusted (a) Reported Adjusted (a)
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Revenues $573,089 $573,089 $576,604 $576,604
Costs and Operating Expenses:
Cost of revenues 317,835 317,835 308,009 308,009
Selling, general, and administrative expenses 160,167 160,167 169,683 169,683
Research and development expenses 44,365 44,365 48,444 48,444
Restructuring and other unusual costs (income), net 10,882 - (7,388) -
-------- -------- -------- --------
533,249 522,367 518,748 526,136
-------- -------- -------- --------
Operating Income 39,840 50,722 57,856 50,468
Interest Income 18,461 18,461 9,678 9,678
Interest Expense (20,230) (20,230) (22,924) (22,924)
Other Income (Expense), Net (1,977) 6 (8,307) 3,374
-------- -------- -------- --------
Income from Continuing Operations Before Provision for
Income Taxes, Minority Interest, Extraordinary Item, and
Cumulative Effect of Change in Accounting Principle 36,094 48,959 36,303 40,596
Provision for Income Taxes 14,257 19,339 16,085 16,159
Minority Interest Expense 18 74 5,739 5,982
-------- -------- -------- --------
Income from Continuing Operations Before Extraordinary Item and
Cumulative Effect of Change in Accounting Principle 21,819 29,546 14,479 18,455
Income from Discontinued Operations (net of income tax provision
and minority interest of $1,446) - - 1,461 -
Provision for Loss on Disposal of Discontinued Operations (net of
income tax benefit of $40,000) (66,000) - - -
-------- -------- -------- --------
Income (Loss) Before Extraordinary Item and Cumulative Effect of
Change in Accounting Principle (44,181) 29,546 15,940 18,455
Extraordinary Item (net of income tax proviision of $333) - - 532 -
-------- -------- -------- --------
Income (Loss) Before Cumulative Effect of Change in Accounting
Principle (44,181) 29,546 16,472 18,455
Cumulative Effect of Change in Accounting Principle (net of income
tax benefit and minority interest of $663 and $8,986) (994) - (12,918) -
-------- -------- -------- --------
Net Income (Loss) $(45,175) $ 29,546 $ 3,554 $ 18,455
======== ======== ======== ========
Earnings per Share from Continuing Operations Before Extraordinary Item
and Cumulative Effect of Change in Accounting Principle:
Basic $ .12 $ .16 $ .09 $ .12
======== ======== ======== ========
Diluted $ .12 $ .16 $ .09 $ .11
======== ======== ======== ========
Earnings (Loss) per Share:
Basic $ (.25) $ .16 $ .02 $ .12
======== ======== ======== ========
Diluted $ (.24) $ .16 $ .02 $ .11
======== ======== ======== ========
Diluted Cash Operating Earnings per Share (b) $ .21 $ .16
======== ========
Weighted Average Shares:
Basic 182,856 182,856 156,813 156,813
======== ======== ======== ========
Diluted 187,177 187,655 157,464 157,464
======== ======== ======== ========
(a) Excludes restructuring and unusual items, the cumulative effect of change
in accounting principle, results of discontinued operations, and in 2000,
extraordinary item.
(b) Excludes items from (a) and amortization of goodwill and other intangibles.
Segment Data (Unaudited) (c)
Three Months Ended
-----------------------------------
(In thousands except percentage amounts) March 31, 2001 April 1, 2000
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Life Sciences
Revenues $209,147 $190,839
Operating Income 28,016 28,206
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Operating Income Margin 13.4% 14.8%
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Cash Operating Income Margin 16.1% 16.9%
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Optical Technologies
Revenues $139,964 $106,178
Operating Income 11,778 8,593
-------- --------
Operating Income Margin 8.4% 8.1%
-------- --------
Cash Operating Income Margin 9.8% 9.3%
-------- --------
Measurement and Control
Revenues $228,260 $284,175
Operating Income 21,659 22,123
-------- --------
Operating Income Margin 9.5% 7.8%
-------- --------
Cash Operating Income Margin 11.3% 9.4%
-------- --------
(c) Operating income and operating income margins as stated exclude
restructuring and unusual items. Cash operating income margins as stated
exclude restructuring and unusual items, and amortization of goodwill and
other intangibles.