-----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, CPQIWb29VrF9aNgdXjc13viTpopivkKV2Q5T9KmVjIjBSQqsWjEVpQa1TqeR/6+6 65x+wl+vMz8PJFHJ9sp7OA== 0000813895-96-000003.txt : 19960208 0000813895-96-000003.hdr.sgml : 19960208 ACCESSION NUMBER: 0000813895-96-000003 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19951230 FILED AS OF DATE: 19960207 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: THERMO POWER CORP CENTRAL INDEX KEY: 0000813895 STANDARD INDUSTRIAL CLASSIFICATION: GENERAL INDUSTRIAL MACHINERY & EQUIPMENT, NEC [3569] IRS NUMBER: 042891371 STATE OF INCORPORATION: MA FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-10573 FILM NUMBER: 96511963 BUSINESS ADDRESS: STREET 1: 81 WYMAN ST STREET 2: PO BOX 9046 CITY: WALTHAM STATE: MA ZIP: 02254-9046 BUSINESS PHONE: 6176221000 MAIL ADDRESS: STREET 1: 81 WYMAN STREET CITY: WALTHAM STATE: MA ZIP: 02254 FORMER COMPANY: FORMER CONFORMED NAME: TECOGEN INC 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 December 30, 1995. [ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. Commission File Number 1-10573 THERMO POWER CORPORATION (Exact name of Registrant as specified in its charter) Massachusetts 04-2891371 (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 January 26, 1996 ---------------------------- ------------------------------- Common Stock, $.10 par value 12,453,768 PAGE FORM 10-Q December 30, 1995 THERMO POWER CORPORATION PART I - Financial Information Item 1 - Financial Statements (a) Consolidated Balance Sheet - Assets as of December 30, 1995 and September 30, 1995 (In thousands) (Unaudited) December 30, September 30, 1995 1995 ------------ ------------- Current Assets: Cash and cash equivalents $ 23,277 $ 23,504 Available-for-sale investments, at quoted market value (amortized cost of $10,475 and $10,624) (includes $426 and $429 of related party investments) 10,523 10,666 Accounts receivable, less allowances of $481 and $530 18,234 18,203 Unbilled contract costs and fees 7,266 6,228 Inventories: Raw materials and supplies 16,661 17,453 Work in process and finished goods 2,150 4,796 Prepaid income taxes 3,329 3,213 Other current assets 292 752 -------- -------- 81,732 84,815 -------- -------- Rental Assets, at Cost 10,092 7,391 Less: Accumulated depreciation and amortization 1,228 985 -------- -------- 8,864 6,406 -------- -------- Property, Plant and Equipment, at Cost 16,240 15,232 Less: Accumulated depreciation and amortization 7,687 6,765 -------- -------- 8,553 8,467 -------- -------- Long-term Available-for-sale Investments, at Quoted Market Value (amortized cost of $453 and $471) (includes $339 invested in parent company common stock in fiscal 1995) 184 733 -------- -------- Other Assets 366 223 -------- -------- Cost in Excess of Net Assets of Acquired Companies 7,720 7,773 -------- -------- $107,419 $108,417 ======== ======== The accompanying notes are an integral part of these consolidated financial statements. 2PAGE FORM 10-Q December 30, 1995 THERMO POWER CORPORATION (a) Consolidated Balance Sheet - Liabilities and Shareholders' Investment as of December 30, 1995 and September 30, 1995 (In thousands except share amounts) (Unaudited) December 30, September 30, 1995 1995 ------------ ------------- Current Liabilities: Accounts payable $ 10,466 $ 13,262 Accrued payroll and employee benefits 2,589 2,732 Customer advances 1,181 971 Accrued warranty costs 1,922 2,100 Accrued income taxes 1,416 1,368 Other accrued expenses 4,353 4,242 Due to Thermo Electron Corporation and affiliated companies 1,360 - -------- -------- 23,287 24,675 -------- -------- Deferred Income Taxes 28 118 -------- -------- Long-term Obligations 350 364 -------- -------- Common Stock of Subsidiary Subject to Redemption ($18,450 redemption value) 17,513 17,435 -------- -------- Shareholders' Investment: Common stock, $.10 par value, 30,000,000 shares authorized; 12,478,544 shares issued 1,248 1,248 Capital in excess of par value 53,920 53,898 Retained earnings 11,399 10,822 Treasury stock at cost, 26,187 and 49,758 shares (182) (341) Net unrealized gain (loss) on available-for-sale investments (144) 198 -------- -------- 66,241 65,825 -------- -------- $107,419 $108,417 ======== ======== The accompanying notes are an integral part of these consolidated financial statements. 3PAGE FORM 10-Q December 30, 1995 THERMO POWER CORPORATION (b) Consolidated Statement of Income for the three months ended December 30, 1995 and December 31, 1994 (In thousands except per share amounts) (Unaudited) Three Months Ended --------------------------- December 30, December 31, 1995 1994 ------------ ------------ Revenues $27,452 $22,314 ------- ------- Costs and Operating Expenses: Cost of revenues 22,665 17,048 Selling, general and administrative expenses 3,737 3,721 Research and development expenses 738 530 ------- ------- 27,140 21,299 ------- ------- Operating Income 312 1,015 Interest Income 437 300 Interest Expense (11) (5) Gain (Loss) on Sale of Investments, Net (includes $344 from sale of related party investments in fiscal 1996) (Note 2) 326 (38) ------- ------- Income Before Provision for Income Taxes and Minority Interest 1,064 1,272 Provision for Income Taxes 409 485 Minority Interest Expense 78 - ------- ------- Net Income $ 577 $ 787 ======= ======= Earnings per Share $ .05 $ .06 ======= ======= Weighted Average Shares 12,444 12,327 ======= ======= The accompanying notes are an integral part of these consolidated financial statements. 4PAGE FORM 10-Q December 30, 1995 THERMO POWER CORPORATION (c) Consolidated Statement of Cash Flows for the three months ended December 30, 1995 and December 31, 1994 (In thousands) (Unaudited) Three Months Ended --------------------------- December 30, December 31, 1995 1994 ------------ ------------ Operating Activities: Net income $ 577 $ 787 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization 636 432 Provision for losses on accounts receivable (55) 20 (Gain) loss on sale of investments, net (Note 2) (326) 38 Minority interest expense 78 - Changes in current accounts, excluding the effects of acquisition: Accounts receivable 447 2,472 Inventories and unbilled contract costs and fees 607 (270) Other current assets 455 38 Accounts payable (2,796) (874) Other current liabilities 334 (778) ------- ------- Net cash provided by (used in) operating activities (43) 1,865 ------- ------- Investing Activities: Proceeds from sale and maturities of available-for-sale investments - 1,387 (Increase) decrease in rental assets (315) 78 Purchases of property, plant and equipment (385) (361) Proceeds from sale of parent company common stock (Note 2) 362 - Issuance of notes receivable (165) - Other 152 317 ------- ------- Net cash provided by (used in) investing activities (351) 1,421 ------- ------- Financing Activities: Net proceeds from issuance of Company common stock 181 255 Repayment of long-term obligations (14) (10) ------- ------- Net cash provided by financing activities $ 167 $ 245 ------- ------- 5PAGE FORM 10-Q December 30, 1995 THERMO POWER CORPORATION (c) Consolidated Statement of Cash Flows for the three months ended December 30, 1995 and December 31, 1994 (In thousands) (Unaudited) (continued) Three Months Ended -------------------------- December 30, December 31, 1995 1994 ------------ ------------ Increase (Decrease) in Cash and Cash Equivalents $ (227) $ 3,531 Cash and Cash Equivalents at Beginning of Period 23,504 7,474 ------- ------- Cash and Cash Equivalents at End of Period $23,277 $11,005 ======= ======= Cash Paid For: Interest $ 11 $ 5 Income taxes $ 384 $ 609 The accompanying notes are an integral part of these consolidated financial statements. 6PAGE FORM 10-Q December 30, 1995 THERMO POWER CORPORATION (d) Notes to Consolidated Financial Statements - December 30, 1995 1. General The interim consolidated financial statements have been prepared by Thermo Power Corporation (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-month periods ended December 30, 1995 and December 31, 1994, (b) the financial position at December 30, 1995, and (c) the cash flows for the three-month periods ended December 30, 1995 and December 31, 1994. Interim results are not necessarily indicative of results for a full year. The consolidated balance sheet presented as of September 30, 1995, 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 September 30, 1995, filed with the Securities and Exchange Commission. 2. Sale of Parent Company Common Stock In December 1995, the Company sold 7,313 shares of Thermo Electron Corporation common stock for net proceeds of $362,000, which resulted in a gain of $344,000. Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations Description of Business Industrial Refrigeration Systems -------------------------------- The Company's FES division supplies standard and custom-designed refrigeration systems used primarily by the food-processing, petrochemical, and pharmaceutical industries. NuTemp, Inc. (NuTemp) is a supplier of both remanufactured and new industrial refrigeration and commercial cooling equipment for sale or rental. NuTemp's industrial refrigeration equipment is used primarily in the food-processing, petrochemical, and pharmaceutical industries, and its commercial cooling equipment is used primarily in institutions and commercial buildings, as well as by service contractors. The demand for NuTemp's equipment is typically highest in the summer period. 7PAGE FORM 10-Q December 30, 1995 THERMO POWER CORPORATION Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations (continued) Description of Business (continued) Engines ------- The Company's Crusader Engines (Crusader) division manufactures gasoline engines for recreational boats; natural gas engines for vehicular, cooling, pumping, refrigeration, and other industrial applications; and LPG (liquefied petroleum gas) and gasoline engines for lift trucks. Cooling and Cogeneration Systems -------------------------------- The Company's Tecogen division designs, develops, markets, and services packaged cooling and cogeneration systems fueled principally by natural gas for sale to a wide range of commercial, institutional, industrial, and multi-unit residential users. Certain large-capacity cooling systems are manufactured by FES, and the cogeneration systems are manufactured by Crusader. Tecogen also conducts research and development on applications of thermal energy. The Company's ThermoLyte Corporation (ThermoLyte) subsidiary is developing a family of propane-powered flashlights, emergency lights, area lights, and other lighting products. The Company's revenues by industry segment for the three-month periods ended December 30, 1995 and December 31, 1994, are shown in the following table. Three Months Ended -------------------------- December 30, December 31, (In thousands) 1995 1994 -------------------------------------------------------------------------- Industrial Refrigeration Systems $17,071 $14,178 Engines 7,253 5,155 Cooling and Cogeneration Systems 3,610 3,380 Intersegment sales elimination (482) (399) ------- ------- $27,452 $22,314 ======= ======= 8PAGE FORM 10-Q December 30, 1995 THERMO POWER CORPORATION Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations (continued) Results of Operations First Quarter Fiscal 1996 Compared With First Quarter Fiscal 1995 ----------------------------------------------------------------- Total revenues increased 23% to $27,452,000 in the first quarter of fiscal 1996 from $22,314,000 in the first quarter of fiscal 1995. Industrial Refrigeration Systems segment revenues increased 20% to $17,071,000 in 1996 from $14,178,000 in 1995. Revenues at FES increased in 1996 primarily due to greater demand for custom-designed refrigeration packages, offset in part by lower prices for refrigeration packages due to increased competition in the refrigeration industry and lower demand for screw compressor packages. Revenues at NuTemp decreased by $405,000 due to generally lower temperatures in fiscal 1996 compared with fiscal 1995, which resulted in lower demand for rental equipment and remanufactured equipment. Engines segment revenues increased 41% to $7,253,000 in 1996 from $5,155,000 in 1995 primarily due to increased demand for gasoline and natural gas TecoDrive engines and the inclusion of revenues from lift-truck engines, offset in part by a decrease of $908,000 in revenues from marine-engine related products. Cooling and Cogeneration Systems segment revenues increased 7% to $3,610,000 in 1996 from $3,380,000 in 1995 primarily due to an increase in revenues from gas-fueled cooling systems and, to a lesser extent, packaged cogeneration systems. Results for the Cooling and Cogeneration Systems segment in 1995 include an $875,000 fee received from one of the Company's distributors of packaged cogeneration systems to satisfy the financial obligations under a minimum purchase contract. The gross profit margin decreased to 17% in the first quarter of fiscal 1996 from 24% in the first quarter of fiscal 1995. The gross profit margin for the Industrial Refrigeration Systems segment decreased to 21% in 1996 from 25% in 1994. The decrease is primarily due to lower prices at FES resulting from increased competition in the refrigeration industry, higher warranty expenses at FES in 1996 compared with unusually low warranty expenses in 1995 and, to a lesser extent, lower revenues at NuTemp. In the second quarter of fiscal 1996, a cost increase in one of the major components of the Company's industrial refrigeration packages will take effect. The gross profit margin for the Engines segment decreased to 5% in 1996 from 12% in 1995 primarily due to higher warranty expenses in 1996 compared with 1995 and, to a lesser extent, startup costs associated with the introduction of lift-truck engines. This higher level of warranty expense is expected to continue into the second quarter of fiscal 1996. The gross profit margin for the Cooling and Cogeneration Systems segment decreased to 24% in 1996 from 32% in 1995 primarily due to the inclusion in 1995 of a fee received from one of the Company's distributors of packaged cogeneration systems discussed above. 9PAGE FORM 10-Q December 30, 1995 THERMO POWER CORPORATION Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations (continued) First Quarter Fiscal 1996 Compared With First Quarter Fiscal 1995 ----------------------------------------------------------------- Selling, general and administrative expenses as a percentage of revenues decreased to 14% in the first quarter of fiscal 1996 from 17% in the first quarter of fiscal 1995 primarily due to an increase in total revenues. Research and development expenses increased to $738,000 in 1996 from $530,000 in 1995 primarily due to development costs associated with gas-fueled lighting products and, to a lesser extent, natural gas-engine products. Interest income increased to $437,000 in the first quarter of fiscal 1996 from $300,000 in the first quarter of fiscal 1995, reflecting interest income earned on the proceeds from ThermoLyte's March 1995 private placement. The Company holds certain investments in companies affiliated with Thermo Electron Corporation (Thermo Electron) and has sold, from time to time, a portion of these investments for a gain to the Company. Gain on sale of investments, net, in 1996 primarily represents a gain of $344,000 relating to the sale of the Company's remaining investment in Thermo Electron common stock (Note 2). As of December 30, 1995, the Company owned $426,000 of 6.5% subordinated convertible debentures due 1997 issued by Thermo TerraTech Inc. (formerly Thermo Process Systems Inc.) that were purchased for $365,000. Thermo TerraTech Inc. is a majority-owned subsidiary of Thermo Electron. The Company may sell these investments from time to time in the future. The effective tax rate was 38% in the first quarters of fiscal 1996 and 1995. This rate exceeded the statutory federal income tax rate primarily due to the impact of state income taxes. Financial Condition Liquidity and Capital Resources ------------------------------- Working capital was $58,445,000 at December 30, 1995, compared with $60,140,000 at September 30, 1995. Included in working capital are cash, cash equivalents, and available-for-sale investments of $33,800,000 at December 30, 1995, compared with $34,170,000 at September 30, 1995. Of the $33,800,000 balance at December 30, 1995, $17,337,000 was held by ThermoLyte and the remainder was held by the Company and its wholly owned subsidiaries. During the first three months of fiscal 1996, $43,000 of cash was used in operating activities primarily due to a decrease in accounts payable. During the first quarter of fiscal 1996, the Company acquired the thermoelectrics cooling module business of ThermoTrex Corporation, a majority-owned subsidiary of Thermo Electron. The purchase price has not 10PAGE FORM 10-Q December 30, 1995 THERMO POWER CORPORATION Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations (continued) Liquidity and Capital Resources (continued) ------------------------------- yet been finalized, but will be equal to the net book value of the assets transferred, currently estimated to be approximately $800,000. During the remainder of fiscal 1996, the Company expects to make capital expenditures of approximately $4,100,000, of which approximately $1,700,000 is expected to be used to expand and upgrade the manufacturing facilities at FES. The Company believes its current resources are sufficient to meet the capital requirements of its existing operations for the foreseeable future. PART II - Other Information Item 6 - Exhibits See Exhibit Index on the page immediately preceding exhibits. 11PAGE FORM 10-Q December 30, 1995 THERMO POWER CORPORATION 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 6th day of February 1996. THERMO POWER CORPORATION Paul F. Kelleher -------------------------- Paul F. Kelleher Chief Accounting Officer John N. Hatsopoulos -------------------------- John N. Hatsopoulos Chief Financial Officer 12PAGE FORM 10-Q December 30, 1995 THERMO POWER CORPORATION EXHIBIT INDEX ------------- Exhibit Number Description of Exhibit Page ------- ---------------------------------------------------- ---- 27 Financial Data Schedule. EX-27 2
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THERMO POWER CORP.'S QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED DECEMBER 30, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 3-MOS SEP-30-1996 DEC-30-1995 23,277 10,523 18,715 481 18,811 81,732 16,240 7,687 107,419 23,287 350 1,248 0 0 64,993 107,419 27,452 27,452 22,665 22,665 738 (55) 11 1,064 409 0 0 0 0 577 .05 0
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