Thermo Electron Reports Cash EPS of $.21 and Internal Revenue Growth of 14 Percent

Apr 26, 2001, 01:00 ET from Thermo Electron Corporation

    WALTHAM, Mass., April 26 /PRNewswire/ -- 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.
     (Photo:        http://www.newscom.com/cgi-bin/prnh/20001030/TMOLOGO)
     "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.
 
     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.
     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.
 
     Consolidated Statement of Operations (Unaudited)
 
                                                Three Months Ended
                                         March 31, 2001       April 1, 2000
     (In thousands except per share
     amounts)                         Reported Adjusted(a) Reported Adjusted(a)
 
     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 provision 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
 
     NOTE(a):  Excludes restructuring and unusual items, the cumulative effect
 of change in accounting principle, results of discontinued operations, and in
 2000, extraordinary item.
     NOTE(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,   April 1,
                                                             2001        2000
 
     Life Sciences
       Revenues                                             $209,147  $190,839
       Operating Income                                       28,016    28,206
       Operating Income Margin                                 13.4%     14.8%
 
       Cash Operating Income Margin                            16.1%     16.9%
 
     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%
 
     Note (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.
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X47078233
 
 

SOURCE Thermo Electron Corporation
    WALTHAM, Mass., April 26 /PRNewswire/ -- 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.
     (Photo:        http://www.newscom.com/cgi-bin/prnh/20001030/TMOLOGO)
     "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.
 
     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.
     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.
 
     Consolidated Statement of Operations (Unaudited)
 
                                                Three Months Ended
                                         March 31, 2001       April 1, 2000
     (In thousands except per share
     amounts)                         Reported Adjusted(a) Reported Adjusted(a)
 
     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 provision 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
 
     NOTE(a):  Excludes restructuring and unusual items, the cumulative effect
 of change in accounting principle, results of discontinued operations, and in
 2000, extraordinary item.
     NOTE(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,   April 1,
                                                             2001        2000
 
     Life Sciences
       Revenues                                             $209,147  $190,839
       Operating Income                                       28,016    28,206
       Operating Income Margin                                 13.4%     14.8%
 
       Cash Operating Income Margin                            16.1%     16.9%
 
     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%
 
     Note (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.
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X47078233
 
 SOURCE  Thermo Electron Corporation

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