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 June 28, 1997. [ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. Commission File Number 1-11406 THERMO FIBERTEK INC. (Exact name of Registrant as specified in its charter) Delaware 52-1762325 (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 July 25, 1997 ---------------------------- ---------------------------- Common Stock, $.01 par value 60,748,419 PAGE
PART I - FINANCIAL INFORMATION Item 1 - Financial Statements THERMO FIBERTEK INC. Consolidated Balance Sheet (Unaudited) Assets June 28, December 28, (In thousands) 1997 1996 ------------------------------------------------------------------------- Current Assets: Cash and cash equivalents $ 96,405 $109,805 Available-for-sale investments, at quoted market value (amortized cost of $10,009) 10,009 - Accounts receivable, less allowances of $2,819 and $1,948 57,577 38,115 Unbilled contract costs and fees 3,872 1,236 Inventories: Raw materials and supplies 13,357 13,778 Work in process 8,702 4,180 Finished goods 12,240 6,509 Prepaid income taxes and other current assets 7,726 8,802 -------- -------- 209,888 182,425 -------- -------- Property, Plant, and Equipment, at Cost 60,288 57,869 Less: Accumulated depreciation and amortization 31,589 31,329 -------- -------- 28,699 26,540 -------- -------- Other Assets (Notes 2 and 3) 15,876 8,720 -------- -------- Cost in Excess of Net Assets of Acquired Companies (Note 2) 128,648 39,547 -------- -------- $383,111 $257,232 ======== ======== 2PAGE
THERMO FIBERTEK INC. Consolidated Balance Sheet (continued) (Unaudited) Liabilities and Shareholders' Investment June 28, December 28, (In thousands except share amounts) 1997 1996 ------------------------------------------------------------------------ Current Liabilities: Accounts payable $ 24,466 $ 16,805 Accrued payroll and employee benefits 9,192 10,989 Billings in excess of contract costs and fees 7,115 2,540 Accrued warranty costs 8,308 7,752 Other accrued expenses (includes $1,100 and $1,340 due to related party) 15,440 11,121 Due to parent company 16,260 17,609 -------- -------- 80,781 66,816 -------- -------- Deferred Income Taxes and Other Deferred Items 2,932 3,202 -------- -------- Long-term Debt, Related Party (Notes 2 and 4) 110,000 - -------- -------- Minority Interest 422 277 -------- -------- Common Stock of Subsidiary Subject to Redemption ($60,116 redemption value) 56,632 56,087 -------- -------- Shareholders' Investment: Common stock, $.01 par value, 150,000,000 shares authorized; 61,343,115 and 61,154,930 shares issued 613 612 Capital in excess of par value 64,435 65,951 Retained earnings 73,400 66,181 Treasury stock at cost, 9,546 and 23,550 shares (141) (360) Cumulative translation adjustment (5,963) (1,534) -------- -------- 132,344 130,850 -------- -------- $383,111 $257,232 ======== ======== The accompanying notes are an integral part of these consolidated financial statements. 3PAGE
THERMO FIBERTEK INC. Consolidated Statement of Income (Unaudited) Three Months Ended ------------------------ June 28, June 29, (In thousands except per share amounts) 1997 1996 ----------------------------------------------------------------------- Revenues $54,511 $48,595 ------- ------- Costs and Operating Expenses: Cost of revenues 32,650 28,104 Selling, general, and administrative expenses 14,506 11,399 Research and development expenses 1,587 1,552 ------- ------- 48,743 41,055 ------- ------- Operating Income 5,768 7,540 Interest Income 1,665 637 Interest Expense (includes $771 and $131 to related party in 1997 and 1996) (785) (158) ------- ------- Income Before Provision for Income Taxes and Minority Interest 6,648 8,019 Provision for Income Taxes 2,613 3,120 Minority Interest Expense 276 23 ------- ------- Net Income $ 3,759 $ 4,876 ======= ======= Earnings per Share: Primary $ .06 $ .08 ======= ======= Fully diluted $ .06 $ .08 ======= ======= Weighted Average Shares: Primary 61,244 61,026 ======= ======= Fully diluted 64,230 64,460 ======= ======= The accompanying notes are an integral part of these consolidated financial statements. 4PAGE
THERMO FIBERTEK INC. Consolidated Statement of Income (Unaudited) Six Months Ended ----------------------- June 28, June 29, (In thousands except per share amounts) 1997 1996 ----------------------------------------------------------------------- Revenues $99,178 $97,575 ------- ------- Costs and Operating Expenses: Cost of revenues 58,186 56,296 Selling, general, and administrative expenses 27,481 22,866 Research and development expenses 2,863 2,825 ------- ------- 88,530 81,987 ------- ------- Operating Income 10,648 15,588 Interest Income 3,102 1,372 Interest Expense (includes $902 and $262 to related party in 1997 and 1996) (941) (330) ------- ------- Income Before Provision for Income Taxes and Minority Interest 12,809 16,630 Provision for Income Taxes 4,930 6,519 Minority Interest Expense 660 29 ------- ------- Net Income $ 7,219 $10,082 ======= ======= Earnings per Share: Primary $ .12 $ .17 ======= ======= Fully diluted $ .11 $ .16 ======= ======= Weighted Average Shares: Primary 61,192 60,980 ======= ======= Fully diluted 64,210 64,415 ======= ======= The accompanying notes are an integral part of these consolidated financial statements. 5PAGE
THERMO FIBERTEK INC. Consolidated Statement of Cash Flows (Unaudited) Six Months Ended ----------------------- June 28, June 29, (In thousands) 1997 1996 ----------------------------------------------------------------------- Operating Activities: Net income $ 7,219 $ 10,082 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 3,089 2,169 Provision for losses on accounts receivable (7) (539) Minority interest expense 660 29 Deferred income tax expense (10) 216 Other noncash items - (318) Changes in current accounts, excluding the effects of acquisition: Accounts receivable (4,813) 8,135 Inventories and unbilled contract costs and fees (494) (151) Prepaid income taxes and other current assets 1,012 209 Accounts payable (4,949) (1,898) Other current liabilities (559) (8,604) --------- --------- Net cash provided by operating activities 1,148 9,330 --------- --------- Investing Activities: Acquisition, net of cash acquired (Note 2) (107,738) - Issuance of note receivable (3,000) - Repayment of note receivable 3,000 - Purchases of available-for-sale investments (10,000) - Proceeds from sale and maturities of available-for-sale investments - 2,750 Purchases of property, plant, and equipment (1,418) (1,351) Other (69) (5,317) --------- --------- Net cash used in investing activities (119,225) (3,918) --------- --------- Financing Activities: Issuance of long-term obligation to parent company (Note 2) 110,000 - Purchases of subsidiary common stock (1,901) - Net proceeds from issuance of Company common stock 604 825 Repayment of short-term obligation to parent company - (10,400) Other (9) (2) --------- --------- Net cash provided by (used in) financing activities $ 108,694 $ (9,577) --------- --------- 6PAGE
THERMO FIBERTEK INC. Consolidated Statement of Cash Flows (continued) (Unaudited) Six Months Ended ------------------------- June 28, June 29, (In thousands) 1997 1996 ------------------------------------------------------------------------ Exchange Rate Effect on Cash $ (4,017) $ (1,161) -------- -------- Decrease in Cash and Cash Equivalents (13,400) (5,326) Cash and Cash Equivalents at Beginning of Period 109,805 57,028 -------- -------- Cash and Cash Equivalents at End of Period $ 96,405 $ 51,702 ======== ======== Noncash Activities: Fair value of assets of acquired company $129,271 $ - Cash paid for acquired company 107,750 - -------- -------- Liabilities assumed of acquired company $ 21,521 $ - ======== ======== The accompanying notes are an integral part of these consolidated financial statements. 7PAGE
THERMO FIBERTEK INC. Notes to Consolidated Financial Statements 1. General The interim consolidated financial statements presented have been prepared by Thermo Fibertek Inc. (the Company) without audit and, in the opinion of management, reflect all adjustments of a normal recurring nature necessary for a fair statement of the financial position at June 28, 1997, the results of operations for the three- and six-month periods ended June 28, 1997, and June 29, 1996, and the cash flows for the six-month periods ended June 28, 1997, and June 29, 1996. Interim results are not necessarily indicative of results for a full year. The consolidated balance sheet presented as of December 28, 1996, 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 28, 1996, filed with the Securities and Exchange Commission. 2. Acquisition On May 22, 1997, the Company acquired the assets, subject to certain liabilities, of the stock-preparation business of the Black Clawson Company and its affiliates (Black Clawson) for approximately $107.7 million in cash, subject to a post-closing adjustment. The purchase price includes $3.9 million in cash held in escrow by a third party for the subsequent acquisition of Black Clawson's French subsidiary, which is expected to be completed in August 1997. This amount is included in other assets in the accompanying 1997 balance sheet. Pursuant to a promissory note, the Company borrowed $110 million from Thermo Electron Corporation (Thermo Electron) to finance the purchase. The promissory note is due January 5, 1999, and bears interest at the 90-day Commercial Paper Composite Rate plus 25 basis points, set at the beginning of each quarter. The note was repaid in July 1997 with the net proceeds from the sale of long-term subordinated convertible debentures (Note 4). Accordingly, the note has been classified as long-term in the accompanying 1997 balance sheet. Black Clawson is a leading supplier of recycling equipment used in processing fiber for the manufacture of "brown paper," such as that used for corrugated boxes. The acquisition has been accounted for using the purchase method of accounting and its results have been included in the accompanying financial statements from the date of acquisition. The cost of the acquisition exceeded the estimated fair value of the acquired net assets by $90.1 million, which is being amortized over 40 years. Allocation of the purchase price was based on estimates of the fair value of the net 8PAGE
THERMO FIBERTEK INC. 2. Acquisition (continued) assets acquired and is subject to adjustment upon finalization of the purchase price allocation. Based on unaudited data, the following table presents selected financial information for the Company and Black Clawson on a pro forma basis, assuming the companies had been combined since the beginning of 1996. Three Months Ended Six Months Ended -------------------- ------------------- (In thousands except June 28, June 29, June 28, June 29, per share amounts) 1997 1996 1997 1996 -------------------------------------------------------------------- Revenues $ 69,970 $ 74,236 $138,249 $143,553 Net income 3,265 4,345 6,248 7,742 Earnings per share: Primary .05 .07 .10 .13 Fully diluted .05 .07 .10 .12 The pro forma results are not necessarily indicative of future operations or the actual results that would have occurred had the acquisition of Black Clawson been made at the beginning of 1996. 3. Note Receivable During 1996, the Company loaned $6.0 million to Tree-Free Fiber Company, LLC (Tree-Free) in connection with a proposed engineering, procurement, and construction project. This project has been indefinitely delayed due to the current weakness in pulp prices and, therefore, the Company expects the project will not proceed in the near future. Tree-Free was unable to repay the note upon its original maturity and the Company consented to several payment extensions. On July 28, 1997, the Company restructured the note from Tree-Free into two promissory notes aggregating $6.5 million, which represent the original principal amount due to the Company plus interest accrued through the date of the restructuring. One such promissory note, for $3.0 million, is secured by a first priority security interest, pari passu with a security interest held by another lender, on certain real estate and equipment, and a second priority security interest, pari passu with a security interest held by another lender, on inventories and accounts receivable. The second promissory note, for $3.5 million, is secured by a first priority security interest in the membership (equity) interests of the equity owners of Tree-Free and certain other assets and is subordinate to other borrowings. In the event of default, the Company intends to exercise its rights under its security agreement to cause all of such membership interests to be transferred to the Company. In such event, the Company expects that it will operate the existing tissue mill owned by Tree-Free, with the intent of selling either the mill or membership interests at one or more public or private sales as soon as practicable thereafter. Although no assurance can be given as to either the timing of any such sale or the amount of the proceeds that may be received therefrom, the Company believes that the fair value of its security exceeds the sum of the carrying amount of the notes from Tree-Free and Tree-Free's indebtedness to its third party lender. 9PAGE
THERMO FIBERTEK INC. 4. Subsequent Event In July 1997, the Company issued and sold $153 million principal amount of 4 1/2% subordinated convertible debentures due 2004 for net proceeds of approximately $149.8 million. The debentures are convertible into shares of the Company's common stock at a conversion price of $12.10 per share and are guaranteed on a subordinated basis by Thermo Electron. In July 1997, the Company repaid a $110 million promissory note due to Thermo Electron with a portion of the net proceeds from this offering. Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations Forward-looking statements, within the meaning of Section 21E of the Securities Exchange Act of 1934, are made throughout this Management's Discussion and Analysis of Financial Condition and Results of Operations. For this purpose, any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, the words "believes," "anticipates," "plans," "expects," "seeks," "estimates," and similar expressions are intended to identify forward-looking statements. There are a number of important factors that could cause the results of the Company to differ materially from those indicated by such forward-looking statements, including those detailed under the caption "Forward-looking Statements" in Exhibit 13 to the Company's Annual Report on Form 10-K for the fiscal year ended December 28, 1996, filed with the Securities and Exchange Commission. Overview The Company designs and manufactures processing machinery, accessories, and water-management systems for the paper and paper recycling industries. The Company's principal products include custom-engineered systems and equipment for the preparation of wastepaper for conversion into recycled paper; accessory equipment and related consumables important to the efficient operation of papermaking machines; and water-management systems essential for draining, purifying, and recycling process water. The Company's Thermo Black Clawson (Black Clawson) subsidiary, acquired May 1997, is a leading supplier of recycling equipment used in processing fiber for the manufacture of "brown paper," such as that used for corrugated boxes. The Company's Thermo Fibergen Inc. (Thermo Fibergen) subsidiary is developing and commercializing equipment and systems to recover valuable materials from papermaking sludge generated by plants that produce virgin and recycled pulp and paper. Through its GranTek Inc. (GranTek) subsidiary, acquired in July 1996, Thermo Fibergen employs patented technology to produce absorbing granules from papermaking sludge. The Company's manufacturing facilities are principally in the U.S. and France. The manufacturing facility in France is located at the Company's E&M Lamort, S.A. (Lamort) subsidiary, which primarily manufactures recycling equipment and accessories. 10PAGE
THERMO FIBERTEK INC. Overview (continued) The Company's products are primarily sold to the paper industry. Generally, the financial condition of the paper industry corresponds both to changes in the general economy and to a number of other factors, including paper and pulp production capacity. The paper industry entered a severe down cycle in early 1996 and has not recovered. This cyclical downturn adversely affected the Company's business during the second half of 1996 and the first half of 1997. The timing of the recovery of the financial condition of the paper industry cannot be predicted. The Company has significant foreign operations, particularly in Europe. Although the Company seeks to charge its customers in the same currency as its operating costs, the Company's financial performance and competitive position can be affected by currency exchange rate fluctuations affecting the relationship between the U.S. dollar and foreign currencies. The Company reduces its exposure to currency fluctuations through the use of forward contracts. The Company enters into forward contracts to hedge certain firm purchase and sale commitments denominated in currencies other than its subsidiaries' local currencies, principally U.S. dollars, British pounds sterling, French francs, and Japanese yen. The purpose of the Company's foreign currency hedging activities is to protect the Company's local currency cash flows related to these commitments from fluctuations in foreign exchange rates. Because the Company's forward contracts are entered into as hedges against existing foreign currency exposures, there generally is no effect on the income statement since gains or losses on the customer contract offset gains or losses on the forward contract. Results of Operations Second Quarter 1997 Compared With Second Quarter 1996 Revenues increased to $54.5 million in the second quarter of 1997 from $48.6 million in the second quarter of 1996. Revenues increased $8.3 million due to the acquisitions of Black Clawson in May 1997 and GranTek in July 1996. Revenues from the Company's accessories business increased $2.6 million, primarily due to an increase in demand. These improvements were offset in part by a $4.4 million decrease in revenues from the Company's recycling business, primarily due to a decrease in demand resulting from the severe drop in de-inked pulp prices in the summer of 1996 and, to a lesser extent, a decrease in revenues from the Company's water-management business. The unfavorable effects of currency translation due to a stronger U.S. dollar decreased revenues by $1.2 million. The gross profit margin decreased to 40% in the second quarter of 1997 from 42% in the second quarter of 1996, primarily due to lower- margin revenues at Black Clawson and a decrease in gross profit margin at the Company's Lamort subsidiary due to a decrease in revenues and lower margins from Lamort's recycling business due to competitive pricing pressures. 11PAGE
THERMO FIBERTEK INC. Second Quarter 1997 Compared With Second Quarter 1996 (continued) Selling, general, and administrative expenses as a percentage of revenues increased to 27% in the second quarter of 1997 from 24% in the second quarter of 1996, primarily as a result of a decrease in revenues in the recycling business. Additionally, general and administrative expenses as a percentage of revenues increased at Thermo Fibergen, primarily due to hiring additional sales, marketing, and administrative staff. Research and development expenses were unchanged at $1.6 million in the second quarter of 1997 and 1996. Interest income increased to $1.7 million in the second quarter of 1997 from $637,000 in the second quarter of 1996, primarily due to an increase in average invested balances resulting from the proceeds from Thermo Fibergen's initial public offering in September 1996. Interest expense increased to $785,000 in the second quarter of 1997 from $158,000 in the second quarter of 1996 as a result of additional borrowings related to the May 1997 acquisition of Black Clawson. The effective tax rate was 39% in the second quarter of 1997 and 1996. The effective tax rate exceeds the statutory federal income tax rate primarily due to state income taxes, offset in part by the effect of lower foreign tax rates. Minority interest expense primarily represents accretion of common stock of subsidiary subject to redemption. First Six Months 1997 Compared With First Six Months 1996 Revenues increased to $99.2 million in the first six months of 1997 from $97.6 million in the first six months of 1996. Revenues increased $9.8 million due to the acquisitions of Black Clawson in May 1997 and GranTek in July 1996. Revenues from the Company's accessories business increased $1.8 million, primarily due to an increase in demand. These improvements were offset in part by an $8.3 million decrease in revenues from the Company's recycling business, primarily due to a decrease in demand resulting from a severe drop in de-inked pulp prices in the summer of 1996 and, to a lesser extent, a decrease in revenues from the Company's water-management business. The unfavorable effects of currency translation due to a stronger U.S. dollar decreased revenues by $2.1 million. The gross profit margin decreased to 41% in the first six months of 1997 from 42% in the first six months of 1996, primarily due to lower- margin revenues at Black Clawson and a decrease in gross profit at the Company's Lamort subsidiary due to the reasons discussed in the results of operations for the second quarter. Selling, general, and administrative expenses as a percentage of revenues increased to 28% in the first six months of 1997 from 23% in the first six months of 1996, primarily due to the reasons discussed in the results of operations for the second quarter. 12PAGE
THERMO FIBERTEK INC. First Six Months 1997 Compared With First Six Months 1996 (continued) Research and development expenses were relatively unchanged at $2.9 million in the first six months of 1997 and $2.8 million in the first six months of 1996. Interest income increased to $3.1 million in the first six months of 1997 from $1.4 million in the first six months of 1996, primarily due to an increase in average invested balances resulting from the proceeds from Thermo Fibergen's initial public offering in September 1996. Interest expense increased to $941,000 in the first six months of 1997 from $330,000 in the first six months of 1996, for the reason discussed in the results of operations for the second quarter. The effective tax rate was 38% in the first six months of 1997 and 39% in the first six months of 1996. The effective tax rates exceed the statutory federal income tax rate primarily due to state income taxes, offset in part by the effect of lower foreign tax rates. Liquidity and Capital Resources Consolidated working capital was $129.1 million at June 28, 1997, compared with $115.6 million at December 28, 1996. Included in working capital are cash, cash equivalents, and available-for-sale investments of $106.4 million at June 28, 1997, compared with $109.8 million at December 28, 1996. Of the $106.4 million balance at June 28, 1997, $57.8 million was held by Thermo Fibergen and $3.5 million was held by Fiberprep, with the remainder being held by the Company and its wholly owned subsidiaries. At June 28, 1997, $19.8 million of the Company's cash and cash equivalents was held by its Lamort subsidiary. Repatriation of this cash into the U.S. is subject to a 5% withholding tax in France and could also be subject to a United States tax. During the first six months of 1997, $1.1 million of cash was provided by operating activities. Cash provided by the Company's operating results was reduced by a decrease in accounts payable of $4.9 million, which resulted from payment of a substantial portion of acquired accounts payable at Black Clawson, and an increase in accounts receivable of $4.8 million, primarily due to timing of cash collections. During the first six months of 1997, $119.2 million of cash was used in investing activities. The Company acquired the assets, subject to certain liabilities, of the stock-preparation business of Black Clawson for $107.7 million in cash (Note 2). The purchase price is subject to a post-closing adjustment. The Company invested $10.0 million in available-for-sale investments and expended $1.4 million for purchases of property, plant, and equipment during the first six months of 1997. During the first six months of 1997, the Company's financing activities provided $108.7 million in cash. The Company borrowed $110 million from Thermo Electron to finance the acquisition of Black Clawson (Note 2) and repurchased $1.9 million of Thermo Fibergen common stock in the first six months of 1997. 13PAGE
THERMO FIBERTEK INC. Liquidity and Capital Resources (continued) The Company's Board of Directors has authorized the repurchase, through March 19, 1998, of up to $5.0 million of Thermo Fibergen's common stock. Any such purchases would be funded from working capital. Through June 28, 1997, the Company had expended $1.9 million under this authorization. In July 1997, the Company's Board of Directors authorized the repurchase, through July 18, 1998, of up to $20 million of Company common stock in open market or negotiated transactions. Any such purchases would be funded from working capital. In July 1997, the Company issued and sold $153 million principal amount of 4 1/2% subordinated convertible debentures due 2004 for net proceeds of approximately $149.8 million. A portion of the proceeds was used to repay the $110 million note due to Thermo Electron (Note 4). At June 28, 1997, the Company had $53.7 million of undistributed foreign earnings. The Company does not intend to repatriate undistributed foreign earnings into the U.S., and does not expect that this will have a material adverse effect on the Company's current liquidity. In the remainder of 1997, the Company plans to make expenditures for property, plant, and equipment of approximately $2.5 million. In addition, Thermo Fibergen may make additional capital expenditures for the construction of one or more fiber-recovery plants. Construction of fiber-recovery plants is dependent upon Thermo Fibergen entering into long-term contracts with paper mills, under which Thermo Fibergen will charge fees to accept the mills' papermaking sludge. Thermo Fibergen does not currently have such agreements in place nor is there any assurance that Thermo Fibergen will be able to obtain such contracts. The Company believes that its existing resources are sufficient to meet the capital requirements of its existing operations for the foreseeable future. PART II - OTHER INFORMATION Item 4 - Submission of Matters to a Vote of Security Holders On June 2, 1997, at the Annual Meeting of Shareholders, the shareholders reelected five incumbent directors to a one-year term expiring in 1998. The directors reelected at the meeting were: Dr. Walter J. Bornhorst, Dr. George N. Hatsopoulos, John N. Hatsopoulos, Donald E. Noble, and William A. Rainville. Dr. Bornhorst received 58,635,004 shares voted in favor of his election and 30,044 shares voted against; Dr. G. Hatsopoulos received 58,636,546 shares voted in favor of his election and 28,502 shares voted against; Mr. Noble received 58,635,871 shares voted in favor of his election and 29,177 shares voted against; and Mr. J. Hatsopoulos and Mr. Rainville each received 58,636,771 shares voted in favor of his election and 28,277 shares voted against. No abstentions or broker non-votes were recorded on the election of directors. The shareholders also approved a proposal to amend the Company's Restated Certificate of Incorporation to increase the Company's 14PAGE
THERMO FIBERTEK INC. Item 4 - Submission of Matters to a Vote of Security Holders (continued) authorized common stock, $.01 par value per share, from 75 million shares to 150 million shares as follows: 58,558,743 shares voted in favor, 71,141 shares voted against, and 35,164 shares abstained. No broker non-votes were recorded on the proposal. Item 6 - Exhibits and Reports on Form 8-K (a) Exhibits See Exhibit Index on the page immediately preceding exhibits. (b) Reports on Form 8-K On June 4, 1997, and June 20, 1997, the Company filed a Current Report on Form 8-K and 8-K/A, respectively, pertaining to the acquisition by the Company of the Stock-preparation Business of the Black Clawson Company and its affiliates. 15PAGE
THERMO FIBERTEK INC. 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 31st day of July 1997. THERMO FIBERTEK INC. Paul F. Kelleher -------------------- Paul F. Kelleher Chief Accounting Officer John N. Hatsopoulos -------------------- John N. Hatsopoulos Vice President and Chief Financial Officer 16PAGE
THERMO FIBERTEK INC. EXHIBIT INDEX Exhibit Number Description of Exhibit ----------------------------------------------------------------------- 3 Certificate of Incorporation of the Registrant, as amended. 4 Fiscal Agency Agreement dated as of July 16, 1997, among the Registrant, Thermo Electron Corporation and Bankers Trust Company as fiscal agent, relating to $153 million principal amount of 4 1/2% Convertible Subordinated Debentures due 2004. 11 Statement re: Computation of Earnings per Share. 27 Financial Data Schedule.