-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, EUuKwEpsBlB1crCv+sYi4Vm2pWBj567nQQGGJx4P+yU4K/IUrNnMerpOpTAlhdsR E7SKdfIfjeKY+4Itgnex/w== 0000102138-95-000005.txt : 19951106 0000102138-95-000005.hdr.sgml : 19951106 ACCESSION NUMBER: 0000102138-95-000005 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951103 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: THERMO VOLTEK CORP CENTRAL INDEX KEY: 0000102138 STANDARD INDUSTRIAL CLASSIFICATION: INSTRUMENTS FOR MEAS & TESTING OF ELECTRICITY & ELEC SIGNALS [3825] IRS NUMBER: 131946800 STATE OF INCORPORATION: DE FISCAL YEAR END: 1229 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-10574 FILM NUMBER: 95587287 BUSINESS ADDRESS: STREET 1: 470 WILDWOOD STREET STREET 2: P O BOX 2878 CITY: WODBURN STATE: MA ZIP: 01888-1587 BUSINESS PHONE: 6176221000 FORMER COMPANY: FORMER CONFORMED NAME: UNIVERSAL VOLTRONICS CORP DATE OF NAME CHANGE: 19920703 10-Q 1 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 September 30, 1995. [ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. Commission File Number 1-10574 THERMO VOLTEK CORP. (Exact name of Registrant as specified in its charter) Delaware 13-1946800 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 470 Wildwood Street, P.O. Box 2878 Woburn, Massachusetts 01888-1578 (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 October 27, 1995 ---------------------------- -------------------------------- Common Stock, $.05 par value 4,870,369 PAGE FORM 10-Q September 30, 1995 THERMO VOLTEK CORP. PART I - Financial Information Item 1 - Financial Statements (a) Consolidated Balance Sheet - Assets as of September 30, 1995 and December 31, 1994 (In thousands) (Unaudited) September 30, December 31, 1995 1994 ------------- ------------ Current Assets: Cash and cash equivalents $ 5,998 $ 8,955 Available-for-sale investments, at quoted market value (amortized cost of $27,688 and $28,589) (includes $1,542 and $299 of related party investments) 27,928 28,105 Accounts receivable, less allowances of $445 and $343 7,132 6,161 Unbilled contract costs and fees 754 273 Inventories: Raw materials 3,118 1,996 Work in process 2,869 1,541 Finished goods 2,847 1,939 Prepaid income taxes 118 441 Other current assets 230 331 ------- ------- 50,994 49,742 ------- ------- Property, Plant and Equipment, at Cost 6,834 5,689 Less: Accumulated depreciation and amortization 4,290 3,583 ------- ------- 2,544 2,106 ------- ------- Other Assets 784 980 ------- ------- Cost in Excess of Net Assets of Acquired Companies (Note 2) 12,576 9,396 ------- ------- $66,898 $62,224 ======= ======= The accompanying notes are an integral part of these consolidated financial statements. 2PAGE FORM 10-Q September 30, 1995 THERMO VOLTEK CORP. (a) Consolidated Balance Sheet - Liabilities and Shareholders' Equity as of September 30, 1995 and December 31, 1994 (In thousands except share amounts) (Unaudited) September 30, December 31, 1995 1994 ------------- ------------ Current Liabilities: Notes payable $ 1,272 $ 781 Accounts payable 3,342 2,698 Accrued payroll and employee benefits 934 879 Accrued commissions 392 329 Customer deposits 935 489 Accrued and current deferred income taxes 739 270 Other accrued expenses 1,760 926 Due to parent company and Thermo Electron Corporation 799 1,380 ------- ------- 10,173 7,752 ------- ------- Subordinated Convertible Obligations, Including $11,500 Due to Parent Company 40,205 46,000 ------- ------- Shareholders' Equity: Common stock, $.05 par value, 10,000,000 shares authorized; 4,575,635 and 4,038,445 shares issued 229 202 Capital in excess of par value 16,945 11,237 Accumulated deficit (1,095) (2,857) Treasury stock at cost, 3,779 and 6,000 shares (33) (50) Cumulative translation adjustment 330 260 Net unrealized gain (loss) on available-for-sale investments 144 (320) ------- ------- 16,520 8,472 ------- ------- $66,898 $62,224 ======= ======= The accompanying notes are an integral part of these consolidated financial statements. 3PAGE FORM 10-Q September 30, 1995 THERMO VOLTEK CORP. (b) Consolidated Statement of Income for the three months ended September 30, 1995 and October 1, 1994 (In thousands except per share amounts) (Unaudited) Three Months Ended --------------------------- September 30, October 1, 1995 1994 ------------- ---------- Revenues $ 9,442 $ 5,789 ------- ------- Costs and Operating Expenses: Cost of revenues 4,783 2,794 Selling, general and administrative expenses 3,136 2,122 Research and development expenses 626 326 ------- ------- 8,545 5,242 ------- ------- Operating Income 897 547 Interest Income 514 464 Interest Expense (includes $176 for notes to related party in 1995 and 1994) (509) (566) ------- ------- Income Before Provision for Income Taxes 902 445 Provision for Income Taxes 158 120 ------- ------- Net Income $ 744 $ 325 ======= ======= Earnings per Share: Primary $ .16 $ .08 ======= ======= Fully diluted $ .11 $ .07 ======= ======= Weighted Average Shares: Primary 4,574 4,007 ======= ======= Fully diluted 9,036 8,917 ======= ======= The accompanying notes are an integral part of these consolidated financial statements. 4PAGE FORM 10-Q September 30, 1995 THERMO VOLTEK CORP. (b) Consolidated Statement of Income for the nine months ended September 30, 1995 and October 1, 1994 (In thousands except per share amounts) (Unaudited) Nine Months Ended --------------------------- September 30, October 1, 1995 1994 ------------- ---------- Revenues $25,304 $16,193 ------- ------- Costs and Operating Expenses: Cost of revenues 13,115 8,068 Selling, general and administrative expenses 8,226 5,594 Research and development expenses 1,672 1,065 ------- ------- 23,013 14,727 ------- ------- Operating Income 2,291 1,466 Interest Income 1,547 1,207 Interest Expense (includes $530 for notes to related party in 1995 and 1994) (1,643) (1,656) Other Income 14 - ------- ------- Income Before Provision for Income Taxes 2,209 1,017 Provision for Income Taxes 447 226 ------- ------- Net Income $ 1,762 $ 791 ======= ======= Earnings per Share: Primary $ .42 $ .20 ======= ======= Fully diluted $ .29 $ .19 ======= ======= Weighted Average Shares: Primary 4,190 3,986 ======= ======= Fully diluted 9,022 8,907 ======= ======= The accompanying notes are an integral part of these consolidated financial statements. 5PAGE FORM 10-Q September 30, 1995 THERMO VOLTEK CORP. (c) Consolidated Statement of Cash Flows for the nine months ended September 30, 1995 and October 1, 1994 (In thousands) (Unaudited) Nine Months Ended --------------------------- September 30, October 1, 1995 1994 ------------- ---------- Operating Activities: Net income $ 1,762 $ 791 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 1,105 690 Provision for losses on accounts receivable 108 58 Changes in current accounts, excluding the effects of acquisitions: Accounts receivable 101 (151) Inventories and unbilled contract costs and fees (2,914) 57 Other current assets 281 (35) Accounts payable 325 1 Other current liabilities 183 989 Other (9) 16 -------- -------- Net cash provided by operating activities 942 2,416 -------- -------- Investing Activities: Acquisitions, net of cash acquired (Note 2) (4,127) (1,269) Purchases of available-for-sale investments (7,500) (17,300) Proceeds from sale and maturities of available-for-sale investments 8,000 - Purchases of property, plant and equipment (962) (683) Other 495 (232) -------- -------- Net cash used in investing activities (4,094) (19,484) -------- -------- Financing Activities: Issuance of short-term obligations 415 551 Repurchase of long-term obligations (132) - Net proceeds from issuance of Company common stock 247 186 Repayment of note receivable - 48 Other - (145) -------- -------- Net cash provided by financing activities $ 530 $ 640 -------- -------- 6PAGE FORM 10-Q September 30, 1995 THERMO VOLTEK CORP. (c) Consolidated Statement of Cash Flows for the nine months ended September 30, 1995 and October 1, 1994 (In thousands) (Unaudited) (continued) Nine Months Ended --------------------------- September 30, October 1, 1995 1994 ------------- ---------- Exchange Rate Effect on Cash $ (335) $ 72 -------- -------- Decrease in Cash and Cash Equivalents (2,957) (16,356) Cash and Cash Equivalents at Beginning of Period 8,955 21,458 -------- -------- Cash and Cash Equivalents at End of Period $ 5,998 $ 5,102 ======== ======== Cash Paid For: Interest $ 1,210 $ 1,130 Income taxes $ 167 $ 103 Noncash Financing Activities: Conversions of convertible obligations $ 5,646 $ - The accompanying notes are an integral part of these consolidated financial statements. 7PAGE FORM 10-Q September 30, 1995 THERMO VOLTEK CORP. (d) Notes to Consolidated Financial Statements - September 30, 1995 1. General The interim consolidated financial statements presented have been prepared by Thermo Voltek Corp. (the Company) without audit and, in the opinion of management, reflect all adjustments of a normal recurring nature necessary for a fair statement of (a) the results of operations for the three- and nine-month periods ended September 30, 1995 and October 1, 1994, (b) the financial position at September 30, 1995, and (c) the cash flows for the nine-month periods ended September 30, 1995 and October 1, 1994. Interim results are not necessarily indicative of results for a full year. The consolidated balance sheet presented as of December 31, 1994, 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 31, 1994, filed with the Securities and Exchange Commission. 2. Acquisition On March 1, 1995, the Company acquired substantially all of the assets, subject to certain liabilities, of Kalmus Engineering Incorporated and R. F. Power Labs, Incorporated (collectively, Kalmus) for $3.8 million in cash. Kalmus is a manufacturer of radio frequency power amplifiers and systems used to test products for immunity to radiated or conducted radio frequency interference and for medical imaging and telecommunications applications. The acquisition has been accounted for using the purchase method of accounting, and Kalmus' results of operations have been included in the accompanying financial statements from the date of acquisition. The cost of this acquisition exceeded the estimated fair value of the acquired net assets by $3.1 million, which is being amortized over 40 years. Allocation of the purchase price for this acquisition was based on an estimate of the fair value of the net assets acquired and is subject to adjustment. 8PAGE FORM 10-Q September 30, 1995 THERMO VOLTEK CORP. (d) Notes to Consolidated Financial Statements - September 30, 1995 (continued) 2. Acquisition (continued) Based on unaudited data, the following table presents selected financial information for the Company and Kalmus on a pro forma basis, assuming the companies had been combined since the beginning of 1994. Three Months Ended Nine Months Ended ------------------ --------------------------- (In thousands except October 1, September 30, October 1, per share amounts) 1994 1995 1994 -------------------------------------------------------------------------- Revenues $ 6,831 $26,029 $19,093 Net income 222 1,964 894 Earnings per share: Primary .06 .47 .22 Fully diluted .06 .31 .20 The pro forma results are not necessarily indicative of future operations or the actual results that would have occurred had the acquisition of Kalmus been made at the beginning of 1994. Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations Description of Business The Company designs, manufactures, and markets instruments that test electronic and electrical systems and components for immunity to pulsed electromagnetic interference (pulsed EMI) through its KeyTek Instrument division (KeyTek), and designs, manufactures, and markets high-voltage power-conversion systems, modulators, fast-response protection systems, and related high-voltage equipment for industrial, medical, and environmental processes, and for defense and scientific research applications, through its Universal Voltronics division. Through its Comtest Instrumentation B.V. and Comtest Limited subsidiaries (collectively, Comtest), the Company provides electromagnetic compatibility (EMC) consulting and systems-integration services, distributes a range of EMC-related products, and manufactures and markets specialized power supplies for telecommunications equipment. In July 1994, Comtest acquired Verifier Systems Limited (Verifier), which manufactures a line of electrostatic discharge test equipment that performs electrical stress tests for semiconductor devices. In March 1995, the Company acquired Kalmus Engineering Incorporated and R. F. Power Labs, Incorporated (collectively, Kalmus), which manufacture radio frequency power amplifiers and systems used to test products for immunity to radiated or conducted radio frequency interference and for medical imaging and telecommunications applications. 9PAGE FORM 10-Q September 30, 1995 THERMO VOLTEK CORP. Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations (continued) Results of Operations Third Quarter 1995 Compared With Third Quarter 1994 --------------------------------------------------- Revenues increased 63% to $9,442,000 in the third quarter of 1995 from $5,789,000 in the third quarter of 1994, due primarily to an increase of $1,741,000 in revenues from Comtest and, to a lesser extent, the inclusion of $1,407,000 in revenues from Kalmus, which was acquired on March 1, 1995. The increase in revenues at Comtest resulted primarily from the introduction in 1995 of a new radio frequency interference immunity tester product line and, to a lesser extent, the favorable effects of currency translation due to a weaker U.S. dollar in 1995. The balance of the increase in sales resulted from greater demand at KeyTek and, to a lesser extent, Universal Voltronics. The gross profit margin decreased to 49% in the third quarter of 1995 from 52% in the third quarter of 1994, due primarily to higher European sales in one of KeyTek's product lines in 1995, which have lower margins due to competitive pricing pressure. This decrease was offset in part by improved margins on Verifier revenues. Selling, general and administrative expenses as a percentage of revenues decreased to 33% in the third quarter of 1995 from 37% in the third quarter of 1994. The decrease is due primarily to lower costs as a percentage of revenues at KeyTek and Universal Voltronics as a result of higher sales volume in 1995, and lower selling, general and administrative expenditures as a percentage of revenues at Kalmus. Research and development expenses as a percentage of revenues increased to 6.6% in 1995 from 5.6% in 1994 due to higher research and development expenditures as a percentage of revenues at Kalmus and Verifier. Interest income increased to $514,000 in the third quarter of 1995 from $464,000 in the third quarter of 1994, due primarily to higher prevailing interest rates in 1995. Interest expense decreased to $509,000 in 1995 from $566,000 in 1994 due to the conversion of $5,646,000 principal amount of the Company's subordinated convertible obligations during 1995. The effective tax rates in the third quarter of 1995 and 1994 were below the statutory federal income tax rate due to the utilization of tax net operating loss carryforwards. 10PAGE FORM 10-Q September 30, 1995 THERMO VOLTEK CORP. Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations (continued) First Nine Months 1995 Compared With First Nine Months 1994 ----------------------------------------------------------- Revenues increased 56% to $25,304,000 in the first nine months of 1995 from $16,193,000 in the first nine months of 1994. The increase in revenues is primarily the result of the inclusion of $3,051,000 in revenues from Kalmus, an increase of $2,819,000 in revenues from Comtest, and an increase of $1,408,000 in revenues due to the inclusion of revenues for the full nine months of 1995 from Verifier, which was acquired in July 1994. The increase in revenues from Comtest is due to the reasons discussed in the results of operations for the third quarter. The balance of the increase in sales resulted from greater demand at KeyTek and, to a lesser extent, Universal Voltronics. The gross profit margin decreased to 48% in the first nine months of 1995 from 50% in the first nine months of 1994, due primarily to higher European sales in one of KeyTek's product lines in 1995, which have lower margins due to competitive pricing pressure and, to a lesser extent, higher costs associated with an upgraded product at KeyTek. These decreases were offset in part by the inclusion of higher-margin Verifier revenues for the full nine months of 1995. Selling, general and administrative expenses as a percentage of revenues decreased to 33% in the first nine months of 1995 from 35% in the first nine months of 1994, due primarily to lower costs as a percentage of revenues at KeyTek and Universal Voltronics as a result of higher sales volume in 1995, and lower selling, general and administrative expenditures as a percentage of revenues at Kalmus. Research and development expenses as a percentage of revenues remained unchanged at 6.6% in 1995 and 1994. Interest income increased to $1,547,000 in the first nine months of 1995 from $1,207,000 in the first nine months of 1994, due primarily to higher prevailing interest rates in 1995. Interest expense was $1,643,000 in 1995, compared with $1,656,000 in 1994. The decrease in interest expense as a result of the conversion of $5,646,000 principal amount of the Company's subordinated convertible obligations during 1995 was substantially offset by the inclusion interest expense associated with increased borrowings under Comtest's outstanding line of credit. The effective tax rates in 1995 and 1994 were below the statutory federal income tax rate due to the utilization of tax net operating loss carryforwards. 11PAGE FORM 10-Q September 30, 1995 THERMO VOLTEK CORP. Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations (continued) Financial Condition Liquidity and Capital Resources ------------------------------- Working capital was $40,821,000 at September 30, 1995, compared with $41,990,000 at December 31, 1994. Included in working capital are cash, cash equivalents, and available-for-sale investments of $33,926,000 at September 30, 1995, compared with $37,060,000 at December 31, 1994. During the first nine months of 1995, $942,000 of cash was provided by operating activities. In March 1995, the Company acquired substantially all of the assets, subject to certain liabilities, of Kalmus for $3.8 million in cash (Note 2). During the first nine months of 1995, the Company expended $962,000 for purchases of property, plant and equipment. The Company expects to expend approximately $200,000 during the remainder of 1995 on purchases of property, plant and equipment. PART II - Other Information Item 6 - Exhibits (a) Exhibits See Exhibit Index on the page immediately preceding exhibits. 12PAGE FORM 10-Q September 30, 1995 THERMO VOLTEK CORP. 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 3rd day of November 1995. THERMO VOLTEK CORP. Paul F. Kelleher ------------------------ Paul F. Kelleher Chief Accounting Officer John N. Hatsopoulos ------------------------ John N. Hatsopoulos Chief Financial Officer 13PAGE FORM 10-Q September 30, 1995 THERMO VOLTEK CORP. EXHIBIT INDEX Exhibit Number Description of Exhibit Page ------- ----------------------------------------------------- ---- 11 Statement re: Computation of earnings per share. 27 Financial Data Schedule. EX-11 2 Exhibit 11 THERMO VOLTEK CORP. Computation of Earnings per Share Three Months Ended Nine Months Ended ------------------------- ------------------------- September 30, October 1, September 30, October 1, 1995 1994 1995 1994 ------------- ---------- ------------- ---------- Computation of Primary Earnings per Share: Net income (a) $ 744,000 $ 325,000 $ 1,762,000 $ 791,000 ----------- ----------- ----------- ----------- Shares: Weighted average shares outstanding 4,416,175 4,007,054 4,189,766 3,986,123 Add: Shares issuable from assumed exercise of options (as determined by the application of the treasury stock method) 157,682 - - - ----------- ----------- ----------- ----------- Weighted average shares outstanding, as adjusted (b) 4,573,857 4,007,054 4,189,766 3,986,123 ----------- ----------- ----------- ----------- Primary Earnings per Share (a) / (b) $ .16 $ .08 $ .42 $ .20 =========== =========== =========== =========== PAGE Exhibit 11 THERMO VOLTEK CORP. Computation of Earnings per Share (continued) Three Months Ended Nine Months Ended ------------------------- ------------------------- September 30, October 1, September 30, October 1, 1995 1994 1995 1994 ------------- ---------- ------------- ---------- Computation of Fully Diluted Earnings per Share: Income: Net income $ 744,000 $ 325,000 $ 1,762,000 $ 791,000 Add: Convertible debt interest, net of tax 277,000 300,000 872,000 900,000 ----------- ----------- ----------- ----------- Income applicable to common stock assuming full dilution (a) $ 1,021,000 $ 625,000 $ 2,634,000 $ 1,691,000 ----------- ----------- ----------- ----------- Shares: Weighted average shares outstanding 4,416,175 4,007,054 4,189,766 3,986,123 Add: Shares issuable from assumed conversion of subordinated convertible obligations 4,462,350 4,813,513 4,674,355 4,813,513 Shares issuable from assumed exercise of options (as determined by the application of the treasury stock method) 157,772 96,439 157,772 107,300 ----------- ----------- ----------- ----------- Weighted average shares outstanding, as adjusted (b) 9,036,297 8,917,006 9,021,893 8,906,936 ----------- ----------- ----------- ----------- Fully Diluted Earnings per Share (a) / (b) $ .11 $ .07 $ .29 $ .19 =========== =========== =========== =========== PAGE EX-27 3
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THERMO VOLTEK CORP.'S QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 9-MOS DEC-30-1995 SEP-30-1995 5,998 27,928 7,132 445 8,834 50,994 6,834 4,290 66,898 10,173 28,705 229 0 0 16,291 66,898 25,304 25,304 13,115 13,115 1,672 108 1,643 2,209 447 1,762 0 0 0 1,762 0.42 0.29
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