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Thermo Fisher Scientific Annual Report (Amendment), Year Ended Dec 30, 1995

Filing Date
Filed September 6, 1996
Period End
December 30, 1995
Security
TMO
In the record · 2016–202610-K1110-Q338-K153

TMO filed 11 annual reports (10-K), 33 quarterly reports (10-Q) and 153 current reports (8-K) between 2016 and 2026.

  1. Material agreement8-K · Aug ’17Aug ’17
  2. Material agreement8-K · Oct ’19Oct ’19
  3. Leadership change8-K · Feb ’22Feb ’22
  4. Leadership change8-K · Jan ’26Jan ’26

01—Abstract

Summary

Summary of the 10-K/A filed September 6, 1996. Cited figures are marked; the original filing is the authoritative source.

This filing is Amendment No. 1 (Form 10-K/A) for Thermo Electron Corporation's fiscal year ended December 30, 1995.

The file header and the request both list the ticker as TMO, which is the same ticker used today by Thermo Fisher Scientific, but the registrant here is Thermo Electron, the predecessor parent company. The amendment restates the 1995 financials to include the June 1996 SensorMedics Corporation acquisition (pooling of interests) and to reflect a three-for-two stock split. Reported 1995 revenue was $2.27 billiona, up 31% from $1.73 billion in 1994, and net income was $139.6 million, up 33%.

Primary EPS was $1.10b and fully diluted EPS was $0.97. Operating income rose 24% to $225.2 million, and segment income excluding restructuring rose 31%. Earnings quality is a key investor consideration.

Gains on the issuance of stock by majority-owned subsidiaries were $80.8 millionc in 1995, roughly 58% of net income, and these gains are nontaxable. Management states that these gains may not recur, since they depend on market conditions for subsidiary stock offerings. The company's model is a federation of majority-owned public subsidiaries (such as Thermo Instrument, Thermedics, Thermo Fibertek, and Thermo Ecotek), and minority interest expense rose to $60.5 million.

The balance sheet shows $1.14 billiond in cash and investments, of which $908 million sits in majority-owned subsidiaries, and $1.12 billion in long-term obligations. Total assets were $3.79 billion and shareholders' investment was $1.31 billion. Subsequent events are significant.

In January 1996 the company issued $585 million of 4 1/4% subordinated convertible debentures due 2003, convertible at $37.80 per share. In March 1996 Thermo Instrument acquired a substantial portion of Fisons' Scientific Instruments Division for about $187 million.

The company has never paid cash dividends. Legal and contingent exposures include the Dade County cogeneration joint venture, a San Diego waste-recycling facility where the company wrote off $11.5 million of its net investment, a $25 million developer suit, and the Napco bankruptcy filing.

02—Key points

Key Highlights

  1. 1995 revenue rose 31% to $2,270.3 million (restated for SensorMedics), with growth across Instruments, Biomedical Products (+77%), and Environmental Services (+49%).
  2. Net income grew 33% to $139.6 million; primary EPS was $1.10 and fully diluted EPS was $0.97, both restated for the three-for-two split.
  3. Nontaxable gains on subsidiary stock issuances of $80.8 million (about 58% of net income) are a major earnings driver and are not assured to recur.
  4. Operating income rose 24% to $225.2 million after $21.9 million of restructuring and nonrecurring charges, including an $11.5 million write-off of the San Diego waste-recycling facility.
  5. Balance sheet is liquid, with $1.14 billion of cash and investments and $1.32 billion of working capital, but long-term obligations were $1.12 billion, and $908 million of cash sits in majority-owned subsidiaries.
  6. Post-year-end financing and acquisitions included a $585 million 4 1/4% convertible debenture issue (January 1996) and the roughly $187 million Fisons Scientific Instruments acquisition (March 1996).
  7. The company has never paid cash dividends and plans to keep reinvesting earnings; it adopted a new shareholder rights plan in January 1996.

03—Questions

Frequently Asked Questions

  1. Why does this filing name Thermo Electron rather than Thermo Fisher Scientific, and what does the TMO ticker refer to?

    The registrant is Thermo Electron Corporation (NYSE: TMO), the predecessor of today's Thermo Fisher Scientific. Thermo Fisher did not exist in 1996, so the ticker in this document relates to the historical Thermo Electron entity, not the current company.

  2. How much of 1995 earnings came from one-time or non-operating gains?

    Gains on issuance of stock by subsidiaries were $80.8 million in 1995, versus $25.3 million in 1994. These nontaxable gains are roughly 58% of reported net income of $139.6 million. Operating income of $225.2 million is the better gauge of core operating performance, and management says these gains may not recur.

  3. What changed in this amended filing compared with the original 10-K?

    The amendment replaces the original Exhibit 13 financials. It restates 1995 results to include the June 1996 SensorMedics acquisition under pooling of interests (adding $62.9 million of revenue and a $0.5 million net loss for the period) and reflects the three-for-two stock split distributed in June 1996. Per-share figures and share counts are restated accordingly.

  4. What are the main balance sheet risks for investors?

    Long-term obligations were $1.12 billion, including $802 million of convertible obligations, many of which are exchangeable into company stock on a change in control. Much of the cash is held by majority-owned subsidiaries, and dividends or loans from those subsidiaries are subject to minority shareholders' fiduciary protections and possible tax costs. Known legal exposures include the Dade County cogeneration dispute, the Napco verdict, and a $25 million developer lawsuit.

04—Continue

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