SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
------------------------------------------
FORM 10-K
(mark one)
[ X ] Annual Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the fiscal year ended December 28, 1996
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Commission file number 1-9567
THERMEDICS INC.
(Exact name of Registrant as specified in its charter)
Massachusetts 04-2788806
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
470 Wildwood Street, P.O. Box 2999
Woburn, Massachusetts 01888-1799
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (617) 622-1000
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
---------------------------- -----------------------------------------
Common Stock, $.10 par value American Stock Exchange
Securities registered pursuant to Section 12 (g) of the Act:
None
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, and (2) has been subject to the
filing requirements for at least the past 90 days. Yes [ X ] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained,
to the best of the Registrant's knowledge, in definitive proxy or
information statements incorporated by reference into Part III of this Form
10-K or any amendment to this Form 10-K. [ ]
The aggregate market value of the voting stock held by nonaffiliates of the
Registrant as of January 24, 1997, was approximately $295,395,000.
As of January 24, 1997, the Registrant had 36,677,656 shares of common
stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant's 1996 Annual Report to Shareholders for the
year ended December 28, 1996, are incorporated by reference into Parts I
and II.
Portions of the Registrant's definitive Proxy Statement for the Annual
Meeting of Shareholders to be held on June 2, 1997, are incorporated by
reference into Part III.
PAGE
PART I
Item 1. Business
(a) General Development of Business
The businesses of Thermedics Inc. (the Company or the Registrant) are
divided into two segments: Instruments and Other Equipment, and
Biomedical Products. The Company's Instruments and Other Equipment
segment includes Thermo Sentron Inc. (Thermo Sentron), which designs,
develops, manufactures, and sells high-speed precision-weighing and
inspection equipment for industrial production and packaging lines. On
January 2, 1996, the Company transferred to Thermo Sentron the assets,
liabilities, and business of Ramsey Technology, Inc., acquired in March
1994, for 7,000,000 shares of Thermo Sentron common stock. In April 1996,
Thermo Sentron completed the sale of shares of common stock in its
initial public offering for net proceeds of approximately $42.3 million.
Also part of the Instruments and Other Equipment segment is the Company's
Orion laboratory products division (Orion), acquired in December 1995.
Orion is a manufacturer of electrode-based chemical measurement and other
instruments used to analyze the composition of foods, beverages,
pharmaceuticals, and other products and detect contaminants in
high-purity water. Through the Company's Thermedics Detection Inc.
(Thermedics Detection) subsidiary, the Instruments and Other Equipment
segment also develops, manufactures, and markets high-speed, on-line
detection instruments used in a variety of industrial process
applications, explosives detection, and laboratory analysis. In January
1996, Thermedics Detection acquired the assets and certain liabilities of
Moisture Systems Corporation and certain affiliated companies
(collectively, Moisture Systems) and the stock of Rutter & Co. B.V.
(Rutter) for a total of $21.7 million in cash, which included the
repayment of $0.7 million of debt. Moisture Systems and Rutter design,
manufacture, and sell instruments that use near-infrared spectroscopy to
measure moisture and other product components. In March and November
1996, Thermedics Detection issued shares of its common stock in private
placements for net proceeds of $7.0 million. In February 1997, a
registration statement, under the Securities Act of 1933, covering shares
of common stock to be sold in Thermedics Detection's initial public
offering was declared effective by the Securities and Exchange
Commission. The Instruments and Other Equipment segment, through the
Company's Thermo Voltek Corp. (Thermo Voltek) subsidiary, also
manufactures a line of electromagnetic compatibility testing instruments,
high-voltage power conversion systems, and programmable power amplifiers.
As part of its Biomedical Products segment, the Company's Thermo
Cardiosystems Inc. (Thermo Cardiosystems) subsidiary has developed two
implantable left ventricular-assist systems (LVAS): a pneumatic, or
air-driven, system and an electric version. The Company also develops,
manufactures, and markets enteral nutrition-delivery systems and a line
of medical-grade polymers used in medical disposables and nonmedical,
industrial applications, including safety glass and automotive coatings.
2PAGE
The Company was incorporated in 1983 under the laws of Massachusetts
as a wholly owned subsidiary of Thermo Electron Corporation (Thermo
Electron). Prior to that time, the business of the Company was conducted
by the R & D/New Business Center of Thermo Electron. As of December 28,
1996, Thermo Electron owned 20,293,310 shares of the Company's common
stock, representing 55% of such stock outstanding. Thermo Electron is a
world leader in environmental monitoring and analysis instruments,
biomedical products such as heart-assist devices and mammography systems,
papermaking and recycling equipment, biomass electric power generation,
and other specialized products and technologies. Thermo Electron also
provides a range of services related to environmental quality.
Thermo Electron intends, for the foreseeable future, to maintain at
least 50% ownership of the Company. This may require Thermo Electron to
purchase additional shares of the Company's common stock (or debentures
convertible into common stock) from time to time, as the number of the
Company's outstanding shares increases. These or any other purchases may
be made either in the open market or directly from the Company. See Notes
4 and 7 to Consolidated Financial Statements in the Company's 1996*
Annual Report to Shareholders for a description of the Company's
outstanding stock options and convertible debentures. In January and
April 1996, the Company issued an aggregate of 1,987,273 shares of its
common stock to Thermo Electron in exchange for 634,049 shares of Thermo
Voltek common stock and 929,947 shares of Thermo Cardiosystems common
stock. The shares of common stock were exchanged at their respective fair
market values on the dates of the transactions. Share information for
Thermo Cardiosystems and Thermo Voltek has been restated to reflect
three-for-two stock splits effected in the form of 50% stock dividends,
distributed in May 1996 and August 1996, respectively. During 1996,
Thermo Electron purchased 995,800 shares of the Company's common stock in
the open market for $19,489,000. Additionally, during 1996, Thermo
Electron purchased in the open market 51,700 shares and 250,000 shares of
the common stock of Thermo Voltek and Thermo Sentron, respectively, for
$569,000 and $4,006,000, respectively.
As of December 28, 1996, the Company owned 54%, 51%, 71%, and 94% of
the outstanding common stock of Thermo Cardiosystems, Thermo Voltek,
Thermo Sentron, and Thermedics Detection, respectively. The Company
intends, for the foreseeable future, to maintain at least 50% ownership
of these subsidiaries. This may require the Company to purchase
additional shares of these companies' common stock or, if applicable,
convertible debentures (which are then converted) from time to time, if
the number of these companies' outstanding shares increase as a result of
conversion of convertible obligations, the exercise of stock options
issued, or otherwise. These or any other purchases by the Company may be
made either in the open market or directly from Thermo Cardiosystems,
Thermo Voltek, Thermo Sentron, Thermedics Detection, or Thermo Electron,
or pursuant to the conversion of all or part of the convertible notes
issued by Thermo Voltek to the Company. During 1996, the Company
purchased in the open market 40,000 shares and 291,450 shares of the
* References to 1996, 1995, and 1994 herein are for the fiscal years
ended December 28, 1996, December 30, 1995, and December 31, 1994,
respectively.
3PAGE
common stock of Thermo Cardiosystems and Thermo Voltek, respectively, for
$1,219,000 and $4,169,000, respectively.
Forward-looking Statements
Forward-looking statements, within the meaning of Section 21E of the
Securities and Exchange Act of 1934, are made throughout this Annual
Report on Form 10-K. 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 the Registrant's 1996 Annual Report to
Shareholders incorporated herein by reference.
(b) Information About Industry Segments
Financial information concerning the Company's industry segments is
summarized in Note 14 to Consolidated Financial Statements in the
Registrant's 1996 Annual Report to Shareholders and is incorporated
herein by reference.
(c) Description of Business
Instruments and Other Equipment
Precision-weighing and Inspection Equipment. Thermo Sentron serves
two principal markets: packaged goods and bulk materials. Thermo
Sentron's products for the packaged-goods market include a wide range of
checkweighing equipment and metal detectors that can be integrated at
various stages in production lines for process control and quality
assurance. These products are sold primarily to customers in the
food-processing, pharmaceutical, mail-order, and other industries.
Products in Thermo Sentron's bulk-material line include conveyor belts,
scales, solids level-measurement and conveyor-monitoring devices, and
sampling systems. These products are sold primarily to customers in the
mining and material-processing industries, as well as electric utilities,
chemical, and other manufacturing companies.
During 1996, 1995, and 1994, the Company derived revenues of $70.0
million, $67.5 million, and $50.1 million, respectively, from its
precision-weighing and inspection equipment.
Laboratory Products. To expand its product quality assurance
offerings, the Company acquired Orion in December 1995. Orion's
laboratory pH/ion-selective products identify chemical substances found
in various types of solutions, including foods, pharmaceuticals, soils,
and water. Pure water monitors, also marketed under the Orion name, use
ion-selective technology to monitor parameters required for the control
of high-purity water systems in power generation and other industrial
applications. Other products include Cahn microweighing and moisture
4PAGE
balances and Lear/Fischer filtration/moisture analysis products, all
marketed under the Orion brand name. Orion also markets consumable
products for its earlier instruments line.
During 1996, the Company derived revenues from laboratory products of
approximately $50.9 million.
Process Detection Instruments. Thermedics Detection's Alexus system,
a high-speed product quality assurance system, based on the Company's
vapor-detection technology, is currently used in bottling lines in the
beverage industry. In 1996, the Company began selling its high-speed
X-ray imaging system, marketed under the brand name InScan(TM), to detect
liquid fill-levels and other parameters for the beverage industry. In
1996, the Company also introduced a high-speed gas chromatography
instrument, marketed under the brand name Flash-GC(TM), to provide ultra-
high-speed, laboratory-quality analysis for near on-line process-control
applications.
Thermedics Detection's Moisture Systems and Rutter divisions
manufacture and sell instruments that use near-infrared spectroscopy to
measure moisture and other product components, including fat, protein,
oil, flavorings, solvents, adhesives, and coatings in the manufacturing
process for the food, pharmaceutical, chemical, wood, pulp, paper,
textile, and other industries.
During 1996, 1995, and 1994, the Company derived revenues from its
process detection instrument business of approximately $34.0 million,
$18.5 million, and $38.0 million, respectively.
Explosives-detection Instruments. Also through Thermedics Detection,
the Company has developed a line of explosives-detection equipment that
uses trace-particle and vapor-detection techniques. EGIS is a highly
sensitive trace-detection instrument used for screening people, baggage,
packages, freight, and electronic equipment, such as personal computers,
for the presence of a wide range of explosives, including the plastic
explosives that have proven difficult to detect using conventional
methods. EGIS detects ultratrace quantities of certain explosives and
indicates the concentration and type of explosive detected. EGIS is used
in 21 countries and operational in 42 international airports. It is also
used in government buildings, embassies, and other locations where there
is a high degree of concern for security. The EGIS system has assisted in
identifying explosives used in terrorist bombings, including those in
Oklahoma City and at the World Trade Center in New York, as well as in
Israel, Buenos Aires, and the United Kingdom. Most recently, the Bureau
of Alcohol, Tobacco, and Firearms and the Federal Bureau of Investigation
used EGIS systems in their attempt to identify the cause of the crash of
TWA Flight 800. Thermedics Detection has also developed Rampart(TM), a
lower-cost product designed for use in conjunction with trace explosives
detectors such as EGIS, and SecurScan(TM), an automated system that can
detect traces of explosives on people.
Electromagnetic Compatibility Testing Instruments. Through its Thermo
Voltek subsidiary, the Company designs, develops, manufactures, and
markets electromagnetic compatibility (EMC) testing instruments. Through
the KeyTek Instrument (KeyTek) division of Thermo Voltek, the Company
5PAGE
manufactures instruments that simulate pulsed electromagnetic
interference (pulsed EMI). Pulsed EMI, caused by natural and man-made
phenomena such as lightning, static electricity, and electrical power
disturbances, can damage or disrupt the operation of any product that
uses digital circuits. Consequently, manufacturers of electronic systems
and integrated circuits must engineer their products for immunity to
pulsed EMI. The Company's products are used by these customers primarily
for product development, design verification, and quality assurance,
enabling them to meet higher levels of product performance, reliability,
and safety, and to meet increasingly stringent regulatory requirements,
including a European Union (EU) directive that took effect on January 1,
1996.
Thermo Voltek's Kalmus division manufactures radio frequency (RF)
power amplifiers. RF power amplifiers are used to test products for
immunity to conducted and radiated RF interference, another form of
electromagnetic interference, and are purchased by many of the same
customers that purchase Thermo Voltek's pulsed EMI testing products.
Through Thermo Voltek's Comtest subsidiary, the Company provides
EMC-consulting and systems-integration services, acts as distributor of a
broad range of EMC-testing products, and manufactures specialized power
supplies for use in telecommunications equipment.
In July 1996, Thermo Voltek acquired Pacific Power Source
Corporation, a manufacturer of programmable power amplifiers that can be
incorporated into EMC test equipment to assess how well electronics
tolerate normal variations in the quality and quantity of AC voltage.
These amplifiers are also used in other kinds of test equipment and in
application-specific power supplies.
During 1996, 1995, and 1994, the Company derived revenues of $44.1
million, $31.6 million, and $19.0 million, respectively, from
electromagnetic compatibility testing instruments.
High-voltage Systems. Through Thermo Voltek's Universal Voltronics
division, the Company designs, manufactures, and markets high-voltage
power conversion systems, modulators, and related high-voltage equipment
for industrial, medical, and security processes, as well as for defense
and scientific research applications. These systems transform
utility-supplied AC power into the DC voltages and currents required by
the user and allow precise control over the performance level desired for
each application.
Biomedical Products
Left Ventricular-assist Systems. The Company, through its Thermo
Cardiosystems subsidiary, has developed two versions of its implantable
left ventricular-assist system (LVAS): a pneumatic, or air-driven, system
that can be controlled by an external console and an electric system that
features an internal electric motor powered by an external battery pack
worn by the patient. These devices are designed to perform substantially
all or part of the pumping function of the left ventricle of the natural
heart for patients suffering from cardiovascular disease. Both of the
6PAGE
Company's systems employ the Company's HeartMate(R) blood pump and are
designed for long-term use.
Air-driven LVAS. In October 1994, the air-driven LVAS system was
approved by the FDA for commercial sale in the U.S. for use as a bridge
to transplant for patients awaiting heart transplantation. This approval
allows the Company to sell the air-driven LVAS to any of the nearly 900
cardiac surgery centers in the U.S. In April 1994, the Company received
the European Conformity Mark (CE Mark), which allows commercial sale of
the air-driven LVAS in all European Community countries. Clinical trials
also are under way in the U.S. for the HeartPak portable driver for the
air-driven HeartMate device.
Electric LVAS. The Company has also developed an electric LVAS that
uses the HeartMate blood pump driven by an internal electric motor
mounted in the blood-pump housing. The system is connected to an external
battery pack by wires that exit the body, allowing the patient complete
mobility. The electric LVAS may not be sold commercially in the U.S.
until it receives approval from the FDA. Clinical trials for the electric
LVAS as a bridge to transplant are nearing completion and, in December
1995, the FDA approved the protocol for conducting clinical trials of the
electric LVAS as an alternative to medical therapy. The trial is expected
to compare the results of approved patients using the device to a similar
number using drug therapy. In August 1995, the electric LVAS was awarded
the CE Mark, allowing commercial sale of this system in all European
Community countries. In Europe, the electric system is used as a bridge
to transplant and is also implanted as an alternative to heart
transplant.
During 1996, 1995, and 1994, the Company derived revenues of $30.0
million, $20.6 million, and $10.5 million, respectively, from LVAS.
In December 1996, Thermo Cardiosystems acquired substantially all of
the assets, subject to certain liabilities, of Nimbus Medical, Inc.
(Nimbus), a research and development organization, for $5.0 million in
cash. Nimbus has been involved in artificial heart technology for more
than 20 years and has carried out research in two primary fields:
ventricular-assist devices and total artificial hearts. Nimbus was
instrumental in developing the basic technology for high-speed rotary
blood pumps. Because of their smaller size, rotary blood pumps may
potentially be used to provide cardiac support in smaller adults and in
children.
Medical-grade Polymers and Enteral Nutrition-delivery Systems. The
Company's research relating principally to the development of its LVAS
has resulted in the development of proprietary medical-grade plastics
marketed under the names Tecoflex(R) and Tecothane(R). Tecoflex and
Tecothane are thermoplastic polyurethanes used in medical disposables and
industrial products. The Company sells Tecoflex and Tecothane in bulk
form for fabrication by the customer, and the Company also extrudes
precision tubing to customer specifications.
In 1993, the Company introduced Scent Seal fragrance samplers, which
were developed from the Company's polymer technology. Scent Seal
fragrance samplers are used to hermetically seal a fragrance rendition in
7PAGE
perfume advertisements for magazines, and are an alternative to commonly
used fragrance strips. In June 1995, Thermedics entered into an agreement
granting Arcade, Inc., the leading manufacturer of scent-sampling
products, an exclusive, worldwide license to manufacture and distribute
the Company's fragrance samplers under Thermedics' patents and know-how.
Under the license agreement, Arcade pays royalties to Thermedics on
licensed fragrance samplers sold by Arcade, and Thermedics continues to
provide the polymer gels needed to produce the fragrance samplers.
The Company's Corpak Inc. (Corpak) subsidiary designs, manufactures,
and markets enteral feeding systems that introduce special nutritional
solutions into the stomach or the small intestine through tubes entering
the nose or stomach. Enteral therapy is used for patients who are unable
to feed themselves but who do not require parenteral (intravenous)
feeding. Corpak's products include bags for nutritional fluids, delivery
pumps, associated pump sets that hook up to the pumps, and feeding tubes.
In addition, Corpak markets a range of enteral feeding supplements.
Raw Materials
Certain raw materials used in the manufacture of the Company's LVAS
are available from only one or two suppliers. The Company is making
efforts to minimize the risks associated with sole sources and ensure
long-term availability, including qualifying certain alternative
materials and components or developing alternative sources for the
materials and components supplied by a single source. Although the
Company believes that it has adequate supplies of materials and
components to meet demand for the LVAS for the foreseeable future, no
assurance can be given that the Company will not experience shortages of
certain materials or components in the future that could delay shipments
of the LVAS.
The cost to the Company to evaluate and test alternative materials
and components and the time necessary to obtain FDA approval for these
materials and components are inherently difficult to determine because
both time and cost are dependent on at least two factors: the similarity
of the alternative material or component to the original material or
component, and the amount of third-party testing that may have already
been completed on alternative materials or components. There can be no
assurance that the substitution of alternative materials or components
will not cause delays in the Company's LVAS development program or
adversely affect the Company's ability to manufacture and ship LVAS to
meet demand.
Proprietary Rights
The Company considers its intellectual property important in the
operation and growth of its business, and its policy is to protect this
property through patents, license and confidentiality agreements,
trademarks, and trade secret protection. The Company applies for and
maintains patents in the U.S. and in foreign countries, particularly in
the areas of biomedical materials, medical products, and analytical
instruments. Although some of these patent rights may provide the Company
with a competitive advantage, the Company primarily relies on its
know-how and trade secrets. In addition, there can be no assurance that
8PAGE
third parties will not assert claims against the Company that the Company
infringes the intellectual property rights of such parties. The Company
could incur substantial costs and diversion of management resources with
respect to the defense of any such claims, which could have a material
adverse effect on the Company's business, financial condition, and
results of operations. Furthermore, parties making such claims could
secure a judgment awarding substantial damages, as well as injunctive or
other equitable relief, which could effectively block the Company's
ability to make, use, sell, distribute, or market its products and
services in the U.S. or abroad. In the event that a claim relating to
intellectual property is asserted against the Company, the Company may
seek licenses to such intellectual property. There can be no assurance,
however, that such licenses could be obtained on commercially reasonable
terms, if at all. The failure to obtain the necessary licenses or other
rights could preclude the sale, manufacture, or distribution of the
Company's products and, therefore, could have a material adverse effect
on the Company's business, financial condition, and results of
operations. Thermo Cardiosystems has received correspondence from a third
party alleging that the textured surface of the LVAS housing infringes
certain patent rights of such third party. The third party has offered
Thermo Cardiosystems a license, which Thermo Cardiosystems has elected
not to accept. Although Thermo Cardiosystems believes that it has
meritorious defenses to the claims of the third party, due to the
inherent uncertainty of litigation, no assurance can be made that Thermo
Cardiosystems would be successful if any litigation were to begin.
The Company also has certain licenses to the technology resulting
from its customer-sponsored development of the Alexus system. The
Company's patents and agreements have varying lives ranging from one year
to approximately twenty years, and the Company does not believe that the
expiration or termination of any one of these patents or agreements would
materially affect the Company's business.
Dependency on a Single Customer
No customer represented 10% or more of the Company's total revenues
in 1996 and 1995. In 1994, the Company derived 21% of its total revenues
from The Coca-Cola Company and its affiliates. The Company derived 5% of
its total revenues in 1994 from Scent Seal Inc., which represented 23% of
the Biomedical Products segment revenues.
Backlog
The Company's backlog of firm orders at year-end 1996 and 1995 was as
follows:
(In thousands) 1996 1995
------------------------------------------------------------------------
Instruments and Other Equipment $39,000 $31,800
Biomedical Products 2,600 2,200
------- -------
$41,600 $34,000
======= =======
9PAGE
The Company anticipates that substantially all of the backlog at the
end of 1996 will be shipped or completed during 1997.
Competition
Instruments and Other Equipment
Precision-weighing and Inspection Equipment. The Company's Thermo
Sentron subsidiary competes with several international and regional
companies in the markets for its products. Thermo Sentron's competitors
in the packaged-goods market differ from those in the bulk-materials
market. The principal competitive factors in both markets are customer
service and support, quality, reliability, and price.
Laboratory Products. The Company's Orion division competes with
several international companies. The Company competes on the basis of
performance, service, technology, and price.
Process Detection Instruments. The Company's process detection
instruments compete with systems manufactured by numerous companies. The
Company believes that these companies are generally focused on particular
niches in the process detection systems market, only in some of which
does the Company compete. Competition in the markets for all of the
Company's detection products is based primarily on performance, service,
and price.
Explosives-detection Instruments. In the explosives-detection market,
the Company competes with a small number of companies, including other
markets of chemical trace-detection instruments, and, to a lesser degree,
makers of enhanced X-ray detectors. Competition in this market is based
primarily on performance, including speed, accuracy, and the range of
explosives that can be detected; ease of use; service; and price. The
Company's principal competitor in the trace detection market is Barringer
Technologies Inc., a Canadian firm that has placed several trace
detectors in airport applications. To date, no other manufacturers have
placed trace detection systems in airports, but the Company expects that
the Federal Aviation Administration (FAA) will purchase trace systems
from Barringer and such other manufacturers as part of the initial
deployment of explosives-detection systems in the U.S. The Company
believes that the companies, if any, whose devices are ultimately
required by the FAA will have a substantial competitive advantage in the
United States.
Electromagnetic Compatibility Testing Instruments. There are numerous
companies worldwide that independently manufacture and market pulsed EMI
test equipment for electronic products and several more that
independently manufacture and market component-reliability test
equipment. The Company competes in this market primarily on the basis of
performance, technical expertise, reputation, and price. In the market
for RF power amplifiers, competition is based primarily on the basis of
technical expertise, reputation, and price.
High-voltage Systems. In the market for high-voltage power supply
systems of the general type manufactured and marketed by Thermo Voltek,
the Company competes for both contract and commercial sales primarily on
10PAGE
the basis of technical expertise, product performance, reputation, and
price. Substantially all of the Company's contract and commercial
revenues are subject to intense competitive bidding. Some of the
Company's competitors have substantially greater financial resources than
those of the Company.
Biomedical Products
Left Ventricular-assist Systems. The Company is aware of one other
company that has submitted a PMA application with the FDA for an
implantable LVAS. The Company is unaware whether this PMA application has
been accepted for filing by the FDA. Also, the Company is aware of one
other company that has received approval by the FDA Advisory Panel on
Circulatory System Devices and subsequent commercial approval for its
cardiac-assist device. This is a device positioned on the outside of the
patient's chest and intended for short-term use in the hospital
environment. In addition, the Company is aware that a total artificial
heart is currently undergoing clinical trials. The requirement of
obtaining FDA approval for commercial sale of an LVAS is a significant
barrier to entry into the U.S. market for these devices. There can be no
assurance, however, that FDA regulations will not change in the future,
reducing the time and testing required for others to obtain FDA approval
for commercial sale. In addition, other research groups and companies,
some of which have significantly greater resources than those of the
Company, are developing cardiac systems using alternative technologies or
concepts, one or more of which might prove functionally equivalent to or
more suitable than the Company's systems. Among products that have been
approved for commercial sale, the Company competes primarily on the basis
of performance, service capability, and price. Competition in the market
for medical devices is also significantly affected by the reimbursement
policies of government and private insurers. Any product for which
reimbursement is not available from third-party payors will be at a
significant competitive disadvantage.
Medical-grade Polymers and Enteral Nutrition-delivery Systems. In the
market for medical-grade polymers and enteral nutrition-delivery systems,
the Company competes primarily with large pharmaceutical, medical-device,
and chemical companies, many of which have substantially greater
financial, technical, and human resources than those of the Company.
Competition within these markets is intense, and is based primarily on
price, efficacy, and technological advances.
Research and Development
During 1996, 1995, and 1994, the Company expended $17,704,000,
$11,087,000, and $10,445,000, respectively, on internally sponsored
research and development programs, and $1,410,000, $3,125,000, and
$1,702,000, respectively, on research and development programs sponsored
by others. As of December 28, 1996, 167 professional employees were
engaged full-time in research and development activities.
Environmental Protection Regulations
The Company believes that compliance by the Company with federal,
state, and local environmental protection regulations will not have a
11PAGE
material adverse effect on its capital expenditures, earnings, or
competitive position.
Number of Employees
As of December 28, 1996, the Company's Instruments and Other
Equipment and Biomedical Products segments employed 1,259 and 305 people,
respectively.
(d) Financial Information about Exports by Domestic Operations and about
Foreign Operations
Financial information about exports by domestic operations and about
foreign operations is summarized in Note 14 to Consolidated Financial
Statements in the Registrant's 1996 Annual Report to Shareholders and is
incorporated herein by reference.
(e) Executive Officers of the Registrant
Present Title (Year First Became Executive
Name Age Officer)
-------------------- --- ------------------------------------------
John W. Wood Jr. 53 President and Chief Executive
Officer (1984)
Victor L. Poirier 55 Senior Vice President (1983)
John T. Keiser 61 Senior Vice President (1994)
John N. Hatsopoulos* 62 Vice President and Chief Financial
Officer (1983)
David H. Fine 54 Vice President (1993)
Jeffrey J. Langan 51 Vice President (1996)
Paul F. Kelleher 54 Chief Accounting Officer (1985)
* John N. Hatsopoulos and George N. Hatsopoulos, a director of the
Company, are brothers.
Each executive officer serves until his successor is chosen or
appointed and qualified, or until earlier resignation, death, or removal.
All executive officers, except Mr. Langan, have held comparable positions
for at least five years, either with the Company or with its parent
company, Thermo Electron. Mr. Keiser was appointed senior vice president
of the Company in 1994, at the same time he was named president of Thermo
Biomedical, a newly created subsidiary of Thermo Electron. From 1985
until 1994, Mr. Keiser was president of the Eberline Instrument division
of Thermo Instrument Systems Inc., a majority-owned public subsidiary of
Thermo Electron. Mr. Langan was appointed vice president of the Company
in September 1996, and has been president of Thermedics Detection since
April 1996 and chief executive officer of Thermedics Detection since
December 1996. Prior to joining the Company, Mr. Langan held a number of
positions at the Hewlett-Packard Co., including general manager of the
Healthcare Information Management Division and Clinical Systems Business
Division. Messrs. Wood and Fine are full-time employees of the Company.
Messrs. Hatsopoulos and Kelleher are full-time employees of Thermo
Electron, and Mr. Poirier is a full-time employee of Thermo
Cardiosystems, but they devote such time to the affairs of the Company as
the Company's needs reasonably require.
12PAGE
Item 2. Properties
The location and general character of the Company's properties by
industry segment as of December 28, 1996, are as follows:
Instruments and Other Equipment
The Company owns approximately 45,000, 9,500, and 14,300 square feet
of office, engineering, laboratory, and production space in New York,
Canada, and Scotland, respectively, and leases approximately 601,000
square feet of office, engineering, laboratory, and production space
principally in Minnesota, Massachusetts, California, Washington, Florida,
Puerto Rico, Mexico, Italy, The Netherlands, Australia, Germany, Spain,
South Africa, and the United Kingdom, under leases expiring from 1997
through 2001.
Biomedical Products
The Company leases approximately 165,000 square feet of office,
engineering, laboratory, and production space in Illinois and
Massachusetts under leases expiring in 1997 through 2013.
The Company believes that its facilities are in good condition and
are adequate to meet its current needs and that other suitable space is
readily available if any of such leases are not extended.
Item 3. Legal Proceedings
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders
Not applicable.
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder
Matters
Information concerning the market and market price for the
Registrant's Common Stock, $.10 par value, and dividend policy are
included under the sections labeled "Common Stock Market Information" and
"Dividend Policy" in the Registrant's 1996 Annual Report to Shareholders
and is incorporated herein by reference.
13PAGE
Item 6. Selected Financial Data
Information concerning the Registrant's selected financial data is
included under the sections labeled "Selected Financial Information" and
"Dividend Policy" in the Registrant's 1996 Annual Report to Shareholders
and is incorporated herein by reference.
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
The information required under this item is included under the
heading "Management's Discussion and Analysis of Financial Condition and
Results of Operations" in the Registrant's 1996 Annual Report to
Shareholders and is incorporated herein by reference.
Item 8. Financial Statements and Supplementary Data
The Registrant's Consolidated Financial Statements as of December 28,
1996, are included in the Registrant's 1996 Annual Report to Shareholders
and are incorporated herein by reference.
Item 9. Changes in and Disagreements with Public Accountants on
Accounting and Financial Disclosure
Not applicable.
PART III
Item 10. Directors and Executive Officers of the Registrant
The information concerning directors required under this item is
incorporated herein by reference from the material contained under the
caption "Election of Directors" in the Registrant's definitive proxy
statement to be filed with the Securities and Exchange Commission
pursuant to Regulation 14A, not later than 120 days after the close of
the fiscal year. The information concerning delinquent filers pursuant to
Item 405 of Regulation S-K is incorporated herein by reference from the
material contained under the heading "Section 16(a) Beneficial Ownership
Reporting Compliance" under the caption "Stock Ownership" in the
Registrant's definitive proxy statement to be filed with the Securities
and Exchange Commission pursuant to Regulation 14A, not later than 120
days after the close of the fiscal year.
Item 11. Executive Compensation
The information required under this item is incorporated herein by
reference from the material contained under the caption "Executive
Compensation" in the Registrant's definitive proxy statement to be filed
with the Securities and Exchange Commission pursuant to Regulation 14A,
not later than 120 days after the close of the fiscal year.
14PAGE
Item 12. Security Ownership of Certain Beneficial Owners and Management
The information required under this item is incorporated herein by
reference from the material contained under the caption "Stock Ownership"
in the Registrant's definitive proxy statement to be filed with the
Securities and Exchange Commission pursuant to Regulation 14A, not later
than 120 days after the close of the fiscal year.
Item 13. Certain Relationships and Related Transactions
The information required under this item is incorporated herein by
reference from the material contained under the caption "Relationship
with Affiliates" in the Registrant's definitive proxy statement to be
filed with the Securities and Exchange Commission pursuant to Regulation
14A, not later than 120 days after the close of the fiscal year.
PART IV
Item 14.Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(a,d) Financial Statements and Schedules.
(1) The consolidated financial statements set forth in the list
below are filed as part of this Report.
(2) The consolidated financial statement schedule set forth in
the list below is filed as part of this Report.
(3) Exhibits filed herewith or incorporated herein by reference
are set forth in Item 14(c) below.
List of Financial Statements and Schedules Referenced in this
Item 14.
Information incorporated by reference from Exhibit 13 filed
herewith:
Consolidated Statement of Income
Consolidated Balance Sheet
Consolidated Statement of Cash Flows
Consolidated Statement of Shareholders' Investment
Notes to Consolidated Financial Statements
Report of Independent Public Accountants
Financial Statement Schedules filed herewith:
Schedule II: Valuation and Qualifying Accounts
All other schedules are omitted because they are not applicable
or not required, or because the required information is shown
either in the financial statements or in the notes thereto.
15PAGE
(b) Reports on Form 8-K.
None.
(c) Exhibits.
See Exhibit Index on the page immediately preceding exhibits.
16PAGE
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be
signed by the undersigned, thereunto duly authorized.
Date: March 14, 1997 THERMEDICS INC.
By: John W. Wood Jr.
----------------
John W. Wood Jr.
President and Chief Executive
Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of
the Registrant and in the capacities indicated, as of March 14, 1997.
Signature Title
--------- -----
By: John W. Wood Jr. President, Chief Executive Officer,
---------------------
John W. Wood Jr. and Director
By: John N. Hatsopoulos Chairman of the Board, Vice President,
---------------------
John N. Hatsopoulos Chief Financial Officer, and Director
By: Paul F. Kelleher Chief Accounting Officer
---------------------
Paul F. Kelleher
By: Peter O. Crisp Director
---------------------
Peter O. Crisp
By: Paul F. Ferrari Director
---------------------
Paul F. Ferrari
By: George N. Hatsopoulos Director
---------------------
George N. Hatsopoulos
By: Robert C. Howard Director
---------------------
Robert C. Howard
By: Arvin H. Smith Director
---------------------
Arvin H. Smith
By: Nicholas T. Zervas Director
---------------------
Nicholas T. Zervas
17PAGE
Report of Independent Public Accountants
----------------------------------------
To the Shareholders and Board of Directors of Thermedics Inc.:
We have audited, in accordance with generally accepted auditing
standards, the consolidated financial statements included in Thermedics
Inc.'s Annual Report to Shareholders incorporated by reference in this
Form 10-K, and have issued our report thereon dated February 6, 1997. Our
audits were made for the purpose of forming an opinion on those
statements taken as a whole. The schedule listed in Item 14 on page 15 is
the responsibility of the Company's management and is presented for
purposes of complying with the Securities and Exchange Commission's rules
and is not part of the basic consolidated financial statements. The
schedule has been subjected to the auditing procedures applied in the
audits of the basic consolidated financial statements and, in our
opinion, fairly states in all material respects the consolidated
financial data required to be set forth therein in relation to the basic
consolidated financial statements taken as a whole.
Arthur Andersen LLP
Boston, Massachusetts
February 6, 1997
18PAGE
SCHEDULE II
THERMEDICS INC.
Valuation and Qualifying Accounts
(In thousands)
Balance at Provision Accounts Balance
Beginning Charged Accounts Written at End
Description of Year to Expense Recovered Off Other (a) of Year
- ------------------- ---------- ---------- --------- -------- -------- --------
Year Ended
December 28, 1996
Allowance for
Doubtful Accounts $ 3,982 $ 1,352 $ 206 $(1,048) $ 149 $ 4,641
Year Ended
December 30, 1995
Allowance for
Doubtful Accounts $ 3,640 $ 689 $ 2 $ (714) $ 365 $ 3,982
Year Ended
December 31, 1994
Allowance for
Doubtful Accounts $ 944 $ 1,190 $ 60 $(1,271) $ 2,717 $ 3,640
(a) Includes allowance of businesses acquired during the year as described in
Note 3 to Consolidated Financial Statements in the Registrant's 1996 Annual
Report to Shareholders and the effect of foreign currency translation.
19PAGE
EXHIBIT INDEX
Exhibit
Number Description of Exhibit
-----------------------------------------------------------------------
2.1 Asset and Stock Purchase Agreement dated as of January 28,
1994, between Thermo Electron and Baker Hughes
Incorporated (filed as Exhibit 2.1 to the Registrant's
Current Report on Form 8-K relating to events occurring on
March 16, 1994 [File No. 1-9567] and incorporated herein
by reference).
2.2 Assignment and Assumption Agreement dated March 16, 1994,
among Thermo Electron, the Registrant, and Thermo
Instrument Systems Inc. (filed as Exhibit 2.2 to the
Registrant's Current Report on Form 8-K relating to events
occurring on March 16, 1994 [File No. 1-9567] and
incorporated herein by reference).
2.3 Agreement and Plan of Merger dated as of November 29,
1995, by and among the Registrant, ATI Merger Corp.,
Analytical Technology, Inc., and, for certain limited
purposes, Thermo Instrument Systems Inc. (filed as Exhibit
2 to the Registrant's Current Report on Form 8-K relating
to events occurring on November 29, 1995 [File No. 1-9567]
and incorporated herein by reference).
2.4 Asset and Share Purchase Agreement dated as of November
29, 1995, by and among Thermo Instrument Systems Inc., ATI
Acquisition Corp., Analytical Technology, Inc., and, for
certain limited purposes, the Registrant (filed as Exhibit
10(a) to the Registrant's Current Report on Form 8-K
relating to events occurring on November 29, 1995 [File
No. 1-9567] and incorporated herein by reference).
2.5 Asset Purchase Agreement dated as of January 25, 1996,
among Thermedics Detection Limited, Moisture Systems
Corporation, Moisture Systems Limited, and Anacon
Corporation (filed as Exhibit 2.5 to the Registrant's
Annual Report on Form 10-K for the fiscal year ended
December 30, 1995 [File No. 1-9567] and incorporated
herein by reference). Schedules to this Agreement have
been omitted pursuant to Rule 601(b)(2) of Regulation S-K.
The Registrant hereby undertakes to furnish supplementally
a copy of any omitted schedule to the Commission upon
request.
3.1 Articles of Organization (filed as Exhibit 3(a) to the
Registrant's Annual Report on Form 10-K for the fiscal
year ended December 31, 1988 [File No. 1-9567] and
incorporated herein by reference).
3.2 Amendment to Articles of Organization dated October 25,
1993 (filed as Exhibit 3(c) to the Registrant's Quarterly
Report on Form 10-Q for the fiscal quarter ended October
2, 1993 [File No. 1-9567] and incorporated herein by
reference).
20PAGE
EXHIBIT INDEX
Exhibit
Number Description of Exhibit
-----------------------------------------------------------------------
3.3 Amended and Restated Articles of Incorporation of the
Registrant (filed as Exhibit 3(i) to the Registrant's
Quarterly Report on Form 10-Q for the fiscal quarter ended
June 29, 1996 [File No. 1-9567] and incorporated herein by
reference).
3.4 Amended and Restated By-laws of the Registrant (filed as
Exhibit 3(c) to the Registrant's Quarterly Report on Form
10-Q for the fiscal quarter ended March 28, 1992 [File No.
1-9567] and incorporated herein by reference).
4.1 Fiscal Agency Agreement dated January 5, 1994, among
Thermo Cardiosystems, Thermo Electron, and Chemical Bank
(filed as Exhibit 4.11 to Thermo Cardiosystems' Annual
Report on Form 10-K for the fiscal year ended January 1,
1994 [File No. 1-10114] and incorporated herein by
reference).
4.2 Fiscal Agency Agreement dated November 19, 1993, among
Thermo Voltek, Thermo Electron, and Chemical Bank (filed
as Exhibit 4.3 to Thermo Voltek's Annual Report on Form
10-K for the fiscal year ended January 1, 1994 [File No.
1-10574] and incorporated herein by reference).
4.3 Fiscal Agency Agreement dated as of June 3, 1996, among
Thermedics, Thermo Electron, and Chemical Bank, as fiscal
agent (filed as Exhibit 4 to the Registrant's Quarterly
Report on Form 10-Q for the fiscal quarter ended June 29,
1996 [File No. 1-9567] and incorporated herein by
reference).
4.4 Guarantee Reimbursement Agreement dated February 7, 1994,
among Thermo Cardiosystems, Thermo Voltek, the Registrant,
and Thermo Electron (filed as Exhibit 4.4 to the
Registrant's Annual Report on Form 10-K for the fiscal
year ended January 1, 1994 [File No. 1-9567] and
incorporated herein by reference).
The Registrant hereby agrees, pursuant to Item
601(b)(4)(iii)(A) of Regulation S-K, to furnish to the
Commission upon request, a copy of each other instrument
with respect to other long-term debt of the Company or its
subsidiaries.
10.1 Amended and Restated Corporate Services Agreement between
Thermo Electron and the Registrant dated as of January 3,
1993 (filed as Exhibit 10(a) to the Registrant's Annual
Report on Form 10-K for the fiscal year ended January 2,
1993 [File No. 1-9567] and incorporated herein by
reference).
21PAGE
EXHIBIT INDEX
Exhibit
Number Description of Exhibit
-----------------------------------------------------------------------
10.2 Lease dated November 1983 between WGO Limited Partnership,
as Lessor and the Registrant, as Lessee (filed as Exhibit
10(l) to the Registrant's Registration Statement on Form
S-1 [Reg. No. 2-96962] and incorporated herein by
reference; amendments thereto filed as Exhibit 10(l) to
the Registrant's Annual Report on Form 10-K for the fiscal
year ended December 31, 1988 [File No. 1-9567] and
incorporated herein by reference).
10.3 Thermo Electron Corporate Charter as amended and restated
effective January 3, 1993 (filed as Exhibit 10(h) to the
Registrant's Annual Report on Form 10-K for the fiscal
year ended January 2, 1993 [File No. 1-9567] and
incorporated herein by reference).
10.4 Lease dated August 25, 1978, between National Boulevard
Bank of Chicago and Walpak Company (filed as Exhibit 10(p)
to the Registrant's Annual Report on Form 10-K for the
fiscal year ended December 31, 1988 [File No. 1-9567] and
incorporated herein by reference).
10.5 Exclusive Base Technology License Agreement between Thermo
Electron and the Registrant dated January 8, 1988 (filed
as Exhibit 10(q) to the Registrant's Quarterly Report on
Form 10-Q for the fiscal quarter ended April 2, 1988 [File
No. 1-9567] and incorporated herein by reference).
10.6 Research and Development Contract between Thermo Electron
and the Registrant dated January 8, 1988 (filed as Exhibit
10(r) to the Registrant's Quarterly Report on Form 10-Q
for the fiscal quarter ended April 2, 1988 [File No.
1-9567] and incorporated herein by reference).
10.7 Exclusive License and Marketing Agreement between Thermo
Electron and the Registrant dated January 8, 1988 (filed
as Exhibit 10(s) to the Registrant's Quarterly Report on
Form 10-Q for the fiscal quarter ended April 2, 1988 [File
No. 1-9567] and incorporated herein by reference).
10.8 Intellectual Property Cross-license Agreement between the
Registrant and Thermo Cardiosystems (filed as Exhibit
10(i) to Thermo Cardiosystems' Registration Statement on
Form S-1 [Reg. No. 33-25144] and incorporated herein by
reference).
10.9 Amendment No. 1 dated March 29, 1991, to Exclusive License
and Marketing Agreement between the Registrant and Thermo
Electron (filed as Exhibit 10(r) to the Registrant's
Quarterly Report on Form 10-Q for the fiscal quarter ended
March 30, 1991 [File No. 1-9567] and incorporated herein
by reference).
22PAGE
EXHIBIT INDEX
Exhibit
Number Description of Exhibit
-----------------------------------------------------------------------
10.10 Management Agreement by and between Thermo Electron and
the Registrant dated November 15, 1991 (filed as Exhibit
10(t) to the Registrant's Annual Report on Form 10-K for
the fiscal year ended December 28, 1991 [File No. 1-9567]
and incorporated herein by reference).
10.11 Agreement dated May 26, 1993, between Thermo Cardiosystems
and The Polymer Technology Group, Incorporated (filed as
Exhibit 10(nn) to the Registrant's Quarterly Report on
Form 10-Q for the fiscal quarter ended July 3, 1993 [File
No. 1-9567] and incorporated herein by reference).
10.12 Amended and Restated Master Repurchase Agreement dated as
of July 2, 1996, between the Registrant and Thermo
Electron.
10.13 $38,000,000 Promissory Note dated as of December 11, 1995,
issued by the Registrant to Thermo Electron (filed as
Exhibit 10(b) to the Registrant's Current Report on Form
8-K relating to events occurring on November 29, 1995
[File No. 1-9567] and incorporated herein by reference).
10.14 $15,000,000 Promissory Note dated as of February 13, 1996,
issued by the Company to Thermo Electron (filed as Exhibit
10 to the Registrant's Quarterly Report on Form 10-Q for
the fiscal quarter ended March 30, 1996 [File No. 1-9567]
and incorporated herein by reference).
10.15-17 Reserved.
10.18 Incentive Stock Option Plan of the Registrant (filed as
Exhibit 10(d) to the Registrant's Registration Statement
on Form S-1 [Reg. No. 33-84380] and incorporated herein by
reference). (Maximum number of shares issuable in the
aggregate under this plan and the Registrant's
Nonqualified Stock Option Plan is 1,931,923 shares, after
adjustment to reflect share increases approved in 1986 and
1992, 5-for-4 stock split effected in January 1985,
4-for-3 stock split effected in September 1985, and
3-for-2 stock splits effected in October 1986 and November
1993.)
10.19 Nonqualified Stock Option Plan of the Registrant (filed as
Exhibit 10(e) to the Registrant's Registration Statement
on Form S-1 [Reg. No. 33-84380] and incorporated herein by
reference). (Maximum number of shares issuable in the
aggregate under this plan and the Registrant's Incentive
Stock Option Plan is 1,931,923 shares, after adjustment to
reflect share increases approved in 1986 and 1992, 5-for-4
stock split effected in January 1985, 4-for-3 stock split
effected in September 1985, and 3-for-2 stock splits
effected in October 1986 and November 1993.)
23PAGE
EXHIBIT INDEX
Exhibit
Number Description of Exhibit
-----------------------------------------------------------------------
10.20 Equity Incentive Plan of the Registrant (filed as Appendix
A to the Proxy Statement dated May 10, 1993, of the
Registrant [File No. 1-9567] and incorporated herein by
reference). (Maximum number of shares issuable is
1,500,000 shares, after adjustment to reflect 3-for-2
stock split effected in November 1993.)
10.21 Thermedics Inc. - Thermedics Detection Inc. Nonqualified
Stock Option Plan (filed as Exhibit 10.20 to Thermo
Electron's Annual Report on Form 10-K for the fiscal year
ended January 2, 1993 [File No. 1-8002] and incorporated
herein by reference).
10.22 Thermedics Inc. - Thermo Sentron Inc. Nonqualified Stock
Option Plan (filed as Exhibit 10.51 to Thermo
Cardiosystems' Annual Report on Form 10-K for the fiscal
year ended December 30, 1995 [File No. 1-10114] and
incorporated herein by reference).
10.23 Thermedics Inc. - Thermo Cardiosystems Inc. Nonqualified
Stock Option Plan (filed as Exhibit 4(b) to Thermo
Cardiosystems' Registration Statement on Form S-8 [Reg.
No. 33-45282] and incorporated herein by reference).
10.24 Directors Stock Option Plan of the Registrant (filed as
Exhibit 10.20 to the Registrant's Annual Report on Form
10-K for the fiscal year ended December 31, 1994 [File No.
1-9567] and incorporated herein by reference).
10.25 Deferred Compensation Plan for Directors of the Registrant
(filed as Exhibit 10(g) to the Registrant's Registration
Statement on Form S-1 [Reg. No. 33-96962] and incorporated
herein by reference).
In addition to the stock-based compensation plans of the
Registrant, the executive officers of the Registrant may
be granted awards under stock-based compensation plans of
Thermo Electron for services rendered to the Registrant or
to such affiliated corporations. Thermo Electron's plans
were filed as Exhibits 10.21 through 10.44 to the Annual
Report on Form 10-K of Thermo Electron for the year ended
December 30, 1995 [File No. 1-8002] and as Exhibit 10.19
to the Annual Report on Form 10-K of Trex Medical
Corporation for the fiscal year ended September 28, 1996,
[File No. 1-11827] and are incorporated herein by
reference.
10.26 Restated Stock Holdings Assistance Plan and Form of
Promissory Note.
24PAGE
EXHIBIT INDEX
Exhibit
Number Description of Exhibit
-----------------------------------------------------------------------
11 Statement re: Computation of Earnings per Share.
13 Annual Report to Shareholders for the year ended December
28, 1996 (only those portions incorporated herein by
reference).
21 Subsidiaries of the Registrant.
23 Consent of Arthur Andersen LLP.
27 Financial Data Schedule.