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 January 3, 1998
[ ] 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 30, 1998, was approximately $234,966,000.
As of January 30, 1998, the Registrant had 36,725,953 shares of common stock
outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant's 1997 Annual Report to Shareholders for the year
ended January 3, 1998, 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 1, 1998, 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., which designs, develops,
manufactures, and sells high-speed precision-weighing and inspection
equipment for industrial production and packaging lines. Also part of the
Instruments and Other Equipment segment is the Company's Orion laboratory
products division, which manufactures electrode-based
chemical-measurement products that determine the quality of a wide
variety of substances by measuring components, such as pH, ion, dissolved
oxygen, and conductivity levels and are used in the agricultural,
biomedical research, food-processing, pharmaceutical, and many other
industries. Through the Company's Thermedics Detection Inc. 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, security applications, and laboratory
analysis. In March and November 1996, Thermedics Detection issued shares
of its common stock in private placements for net proceeds of $7.0
million, and in March 1997, Thermedics Detection completed the sale of
shares of common stock in its initial public offering for net proceeds of
$28.1 million. The Instruments and Other Equipment segment, through the
Company's Thermo Voltek Corp. subsidiary, also designs, manufactures, and
markets electronic-test instruments, and a range of products related to
power amplification, conversion, and quality.
As part of its Biomedical Products segment, the Company's Thermo
Cardiosystems Inc. subsidiary has developed two implantable left
ventricular-assist systems (LVAS): a pneumatic, or air-driven, system and
an electric version. Thermo Cardiosystems' Nimbus Medical Inc.
subsidiary, the business of which was acquired in December 1996, 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. On May 2, 1997,
Thermo Cardiosystems acquired International Technidyne Corporation from
Thermo Electron Corporation in exchange for the right to receive
3,355,705 shares of Thermo Cardiosystems' common stock. International
Technidyne is a leading manufacturer of near-patient, whole-blood
coagulation testing equipment and related disposables and also
manufacturers premium-quality, single-use skin-incision devices. The
3,355,705 shares of Thermo Cardiosystems' common stock issuable in the
merger will not be issued until the listing of such shares for trading
upon the American Stock Exchange has been approved by Thermo
Cardiosystems' shareholders. Because the Company is the majority
shareholder and intends to vote its shares in favor of such listing, the
approval is assured. In addition, as part of its Biomedical Products
segment, 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. Prior to that time, the
business of the Company was conducted by the R & D/New Business Center of
Thermo Electron. As of January 3, 1998, Thermo Electron owned 21,141,471
shares of the Company's common stock, representing 58% of such stock
outstanding. Thermo Electron provides analytical and monitoring
instruments; biomedical products including heart-assist devices,
respiratory-care equipment, and mammography systems; paper recycling and
papermaking equipment; alternative-energy systems; industrial process
equipment; and other specialized products. Thermo Electron also provides
industrial outsourcing, particularly in environmental-liability
management, laboratory analysis, and metallurgical processing, and
conducts advanced-technology research and development.
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 1997*
Annual Report to Shareholders for a description of the Company's
outstanding stock options and convertible debentures. During 1997, Thermo
Electron purchased 852,264 shares of the Company's common stock in the
open market for $17.4 million. Additionally, during 1997, Thermo Electron
purchased in the open market 50,400 shares, 186,500 shares, and 426,900
shares of the common stock of Thermo Cardiosystems, Thermo Voltek, and
Thermo Sentron, respectively, for $1.4 million, $1.8 million, and $4.8
million, respectively.
On February 5, 1998, the Company's Board of Directors voted to issue
4,880,533 shares of its common stock to Thermo Electron in exchange for
100% of the stock of TMO TCA Holdings Inc., which is the beneficial owner
of 3,355,705 shares of Thermo Cardiosystems' common stock. The issuance
of the 3,355,705 shares of Thermo Cardiosystems common stock is subject
to the approval by Thermo Cardiosystems' shareholders for the acquisition
of International Technidyne from Thermo Electron. The Company's issuance
of the 4,880,533 shares of its common stock to Thermo Electron is subject
to approval by the Company's shareholders. However, because Thermo
Electron is the majority shareholder and intends to vote its shares in
favor of the transaction, approval is assured. The shares of common stock
will be exchanged at their respective fair market values as of February
5, 1998.
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
* References to 1997, 1996, and 1995 herein are for the fiscal years
ended January 3, 1998, December 28, 1996, and December 30, 1995,
respectively.
3PAGE
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 heading
"Forward-looking Statements" in the Registrant's 1997 Annual Report to
Shareholders, which statements are incorporated herein by reference.
(b) Financial 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 1997 Annual Report to Shareholders, which information 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 broad 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 belt
scales, solid level-measurement and conveyor-monitoring systems, sampling
systems, and small-capacity feeders. These products are sold primarily to
customers in the mining and material-processing industries, as well as
electric utilities, chemical, and other manufacturing companies. In
February 1997, the Company acquired the business of RCC Industrial
Electronics Pty. Limited (RCCI), an Australia-based manufacturer of
in-motion checkweighers for the food and pharmaceutical industries. In
July 1997, the Company acquired Westerland Engineering Ltd., a United
Kingdom-based manufacturer of process-weighing and control equipment.
During 1997, 1996, and 1995, the Company derived revenues of $78.7
million, $70.0 million, and $67.5 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
manufactures electrode-based chemical-measurement products that determine
the quality of a wide variety of substances by measuring components, such
as pH, ion, dissolved oxygen, and conductivity levels. Orion's products
are used in the agricultural, biomedical research, food-processing,
pharmaceutical, and many other industries. 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 balances and Lear/Fischer filtration/moisture
4PAGE
analysis products, all marketed under the Orion brand name. Orion also
markets consumable products for its earlier instruments line.
During 1997 and 1996, the Company derived revenues from laboratory
products of approximately $53.1 million and $50.9 million, respectively.
Process Detection Instruments. Thermedics Detection designs,
manufactures, and markets high-speed on-line trace (parts-per-trillion)
measurement, detection, and rejection equipment that uses particle- and
vapor-detection and other technologies for product quality and
productivity applications. The Alexus(R) system detects trace amounts of
constituents that affect product quality in refillable plastic soft
drink, water and other beverage containers. In 1996, the Company began
selling its high-speed X-ray imaging system, marketed under the brand
name InScan(TM), which uses high-speed X-ray imaging technology to
determine accurate fill volume, net volume, and package integrity of
containers for the beverage, food, and other industries. In 1996, the
Company also introduced a high-speed gas chromatography instrument,
marketed under the brand name Flash-GC(TM), which analyzes chemical
samples at speeds 20 to 50 times faster than conventional gas
chromatography. Thermedics Detection's Moisture Systems division,
acquired in 1996, designs, manufactures, and markets equipment that uses
near-infrared (NIR) spectroscopy to measure moisture and other product
constituents, including fats, proteins, oils, flavorings, solvents,
adhesives, and coatings, in a variety of manufacturing processes. These
systems are used across the food, pharmaceutical, chemical,
petrochemical, tobacco, forest products, paper converting, plastics,
textiles, corrugating, and other industries.
During 1997, 1996, and 1995, the Company derived revenues of
approximately $37.8 million, $34.0 million, and $18.5 million,
respectively, from its process detection instrument business.
Security Instruments. Also through Thermedics Detection, the Company
designs, manufactures, and markets security instruments that use trace
particle- and vapor-detection techniques for forensics, search and
screening applications under the direction of police, border police,
transportation authorities, and carriers. The Company's principal
security instrument is the EGIS(R) system, a highly sensitive particle-
and vapor-detection system for screening people, baggage, packages,
freight, and electronic equipment such as personal computers for the
presence of a wide range of explosives, including plastic explosives that
have proven difficult to detect using conventional methods. The EGIS
system is designed for stand-alone use in the detection of explosives in
carry-on items and on personnel, and can be used in conjunction with
enhanced X-ray and other advanced imaging systems to provide a
comprehensive explosives-detection system for checked luggage. Initially
developed with internal funds and contract funding from the Federal
Aviation Administration (FAA) and the U.S. Department of State, more than
200 EGIS units have been deployed to date. The EGIS system is currently
operational in 24 countries and is in use in carry-on and checked-luggage
screening at more than 45 international airports. EGIS is also used in
government buildings and embassies, and at border crossings and other
5PAGE
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 the Federal Building in Oklahoma City and the World
Trade Center in New York, as well as in Israel, Buenos Aires, and the
United Kingdom. In March 1996, the Company supplied the U.S. government
with eight EGIS systems to provide counter-terrorism support in Israel.
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.
In September 1996, the Company entered into a development contract
with the FAA to develop EGIS II, a lower-cost EGIS unit for use in more
portable applications such as remote security checkpoints and
counter-terrorism activities. In November 1996, the Company introduced
its new SecurScan, a prototype of a walk-through trace detector designed
to screen 10 passengers per minute, and introduced its Rampart system, a
lower-cost unit for airport applications, in 1997. In addition, in 1997,
the Company entered into a development contract with the British Ministry
of Defense to develop an explosives-detection system that is even more
sensitive than the EGIS system.
Test Instruments and Power Products. Through its Thermo Voltek
subsidiary, the Company designs, manufactures, and markets
electronic-test instruments and a range of products related to power
amplification, conversion, and quality. The Company's test instruments
simulate pulsed electromagnetic interference, radio frequency
interference, and changes in AC voltage, to allow manufacturers of
electronic systems and integrated circuits to test for electromagnetic
compatibility (EMC). These products are used in the product-development,
design-verification, and quality-assurance stages, enabling customers to
optimize performance, reliability, and safety in the final design, and to
meet industry standards and regulatory requirements, including a European
Union directive that took effect in January 1996. The Company's power
products include radio frequency (RF) and microwave power amplifiers,
power-conversion equipment, and high-voltage and application-specific
power supplies. These power products are used in communications,
broadcast, research, and medical imaging applications. During 1997, the
Company experienced lower demand for its EMC test products, due to the
declining influence of IEC 801, the European Union directive on
electromagnetic compatibility that took effect January 1, 1996, and, to a
lesser extent, a decline in the component-reliability market for
electrostatic discharge test equipment that resulted from a slowdown in
capital expenditures by the semiconductor industry. Due in part to these
developments, during 1997 the Company implemented certain operational,
organizational, and personnel changes.
During 1997, 1996, and 1995, the Company derived revenues of $44.6
million, $48.5 million, and $36.3 million, respectively, from its test
instruments and power products.
6PAGE
Biomedical Products
Left Ventricular-assist Systems. The Company, through its Thermo
Cardiosystems subsidiary, has developed two versions of its LVAS: an
implantable pneumatic, or air-driven, system that can be controlled by
either a bedside or portable console; and an electric system that
features an internal electric motor powered by an external battery pack
worn by the patient. Both of the Company's systems employ the Company's
HeartMate(R) blood pump, and are designed for long-term use. This pump is
implanted just below the diaphragm in a position that minimizes
interference with normal circulation and other bodily functions. An inlet
tube is inserted into the apex of the left ventricle to drain blood into
the pump chamber. Blood is then forced out of the pump through an animal
tissue valve and back into the aorta. The HeartMate blood pump works with
the biological control mechanism of the natural heart to increase pumping
capability when required for activities such as climbing stairs. The
Company's LVAS devices are at various stages of regulatory approval.
Air-driven LVAS. In October 1994, the FDA approved the air-driven
system 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 United
States. In April 1994, the Company received the CE Mark for commercial
sale of the air-driven LVAS in all European Community countries. In the
air-driven LVAS, the HeartMate blood pump is coupled to an external
console connected to the body by a tube. The Company has also developed
the HeartPak(TM), a lightweight portable console that can be carried over
the shoulder. The portable console received the CE Mark for commercial
sale in European Community countries in February 1995. In July 1995, the
FDA approved the beginning of Phase I clinical trials of the HeartPak
portable pneumatic driver. The HeartPak is currently in Phase I clinical
trials in the U.S. Phase I of the study is evaluating the safety of the
system in the hospital; Phase II will evaluate the system in the home
environment.
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 its
external battery pack by wires that exit the body. Since the power source
and control elements are worn on a battery belt, the system allows the
patient complete mobility. In August 1995, the electric LVAS was awarded
the CE Mark, allowing commercial sale of this system in all European
Community countries. The electric system is used as a bridge to
transplant in the United States and Europe, and is also implanted as an
alternative to heart transplant in Europe. The electric LVAS may not be
sold commercially in the United States until it has received approval
from the FDA. The electric LVAS is currently being used in the United
States in clinical trials for patients awaiting heart transplants. In
June 1997, the Company submitted a PMA supplemental application to
receive FDA approval of the electric LVAS as a bridge to transplant. This
application is currently under review; however, no assurance can be given
that the FDA will review this application on a timely basis or will grant
approval once it completes its review.
7PAGE
During 1997, 1996, and 1995, the Company derived revenues of $25.0
million, $30.0 million, and $20.6 million, respectively, from its LVAS.
Blood-testing Equipment and Skin-incision Devices. The Company's
International Technidyne subsidiary manufacturers and supplies
whole-blood coagulation testing equipment and related disposables, as
well as skin-incision devices. International Technidyne's product lines
offer whole-blood coagulation systems for bedside anticoagulation
management, coagulation screening, and transfusion management. Each
analyzes small blood samples, then processes and quickly displays
comprehensive patient homeostasis information. Blood management of this
type is essential as the number of invasive medical procedures, such as
cardiopulmonary bypass surgery and angioplasty, increase. The ProTime(R)
Microcoagulation System is designed to allow long-term oral anticoagulant
patient self-testing. International Technidyne also manufactures a family
of single-use skin-incision devices for drawing blood from adults,
children, and infants.
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
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. 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.
(ii) and (xi) New Products; Research and Development
The Company maintains research and development capability to support
its existing products and to develop new products. A number of programs
are underway, funded by the Company solely or jointly with an outside
8PAGE
source. These programs include development of new products to perform
substantially all or part of the pumping function of the left ventricle
of the natural heart, process detection and security instruments,
electronic test instruments, and high voltage power supply products. The
Company also develops new grades of polymers to meet specific customer
requirements for industrial and medical applications.
During 1997, 1996, and 1995, the Company expended $24,270,000,
$21,363,000, and $14,874,000, respectively, on internally sponsored
research and development programs, and $2,890,000, $1,410,000, and
$3,125,000, respectively, on research and development programs sponsored
by others. As of January 3, 1998, 213 professional employees were engaged
full-time in research and development activities.
(iii) 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 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.
(iv) Patents, Licenses, and Trademarks
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
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
9PAGE
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.
(v) Seasonal Influences
There are no significant seasonal influences on the Company's sales
of its products.
(vi) Working Capital Requirements
There are no special inventory requirements or credit terms extended
to customers that would have a material adverse effect on the Company's
working capital.
(vii) Dependency on a Single Customer
No customer represented 10% or more of the Company's total revenues
in 1997, 1996, and 1995.
10PAGE
(viii) Backlog
The Company's backlog of firm orders at year-end 1997 and 1996 was as
follows:
(In thousands) 1997 1996
-----------------------------------------------------------------------
Instruments and Other Equipment $32,735 $39,000
Biomedical Products 3,847 2,729
------- -------
$36,582 $41,729
======= =======
Certain of these orders are cancellable by the customer upon payment
of a cancellation charge. The Company anticipates that substantially all
of the backlog at the end of 1997 will be shipped or completed during
1998. The Company does not believe the size of its backlog is necessarily
indicative of intermediate or long-term trends in its business.
(ix) Government Contracts
Not applicable.
(x) Competition
Instruments and Other Equipment
Precision-weighing and Inspection Equipment. The Company's Thermo
Sentron subsidiary encounters and expects to continue to encounter
intense competition in the sale of its products. Thermo Sentron's
principal competitors in the packaged-goods market are Ishida Scales Mfg.
Co., Ltd. and Mettler-Toledo AG. In the more fragmented bulk-materials
market, Thermo Sentron competes on a worldwide basis primarily with Carl
Schenck AG and Milltronics Corporation. Thermo Sentron believes that the
principal competitive pressures affecting the market for
precision-weighing and inspection equipment include customer service and
support, quality and reliability, price, accuracy, ease of use,
distribution channels, technical features, compatibility with customers'
manufacturing processes, and regulatory approvals.
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 each of the
Company's process detection systems is based primarily on performance,
durability, service and, to a lesser extent, price. The Company believes
that its systems' performance and speed, as well as the Company's
reputation for developing superior new technologies and for the
innovative application of existing technologies to a variety of
11PAGE
high-speed production environments and product quality-assurance
problems, are competitive advantages.
Security Instruments. In the explosives-detection market, the Company
competes with a small number of companies, including other makers 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.
Test Instruments and Power Products. The Company is a leading
supplier of EMC testing equipment. There are numerous companies worldwide
that independently manufacture and market pulsed EMC test equipment for
electronic products, and several more that independently manufacture and
market component-reliability test equipment. In the market for RF power
amplifiers and programmable power amplifiers, the Company competes with
several companies worldwide. In the market for high-voltage power supply
systems of the general type manufactured and marketed by the Company, the
Company competes with numerous companies for both contract and commercial
sales. The Company competes in these markets primarily on the basis of
performance, technical expertise, 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 an external device, positioned on the
outside of the patient's chest, and is 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 in the United
States is a significant barrier to entry into the United States 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 that 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
12PAGE
policies of government and private insurers. Any product for which
reimbursement is not available from such third-party payers will be at a
significant competitive disadvantage.
Blood-testing Equipment and Skin-incision Devices. International
Technidyne's principal competitor in the market for coagulation
monitoring instruments such as HEMOCHRON is the HemoTec division of
Medtronic, which manufactures a whole-blood ACT instrument as well as the
Hepcon Hemostatic Monitoring System. International Technidyne also
competes with CDI, which is attempting to compete with HEMOCHRON.
Boehringer Mannheim Corporation has developed a patient blood coagulation
self-testing device similar to the ProTime, which is marketed to
professionals. Boehringer Mannheim has also recently received FDA
clearance for patient self-testing for this product. International
Technidyne's incision devices compete with products offered by a number
of companies, including Organon Teknika; Becton, Dickinson and Company;
and Sherwood Medical Company. International Technidyne's products compete
primarily on the basis of quality, reliability, price, and reputation.
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.
(xii) Environmental Protection Regulations
The Company believes that compliance by the Company with federal,
state, and local environmental protection regulations will not have a
material adverse effect on its capital expenditures, earnings, or
competitive position.
(xiii) Number of Employees
As of January 3, 1998, the Company's Instruments and Other Equipment
and Biomedical Products segments employed 1,313 and 563 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 1997 Annual Report to Shareholders, which
information is incorporated herein by reference.
13PAGE
(e) Executive Officers of the Registrant
Present Title (Year First Became
Name Age Executive Officer)
-------------------- --- ---------------------------------------
John T. Keiser 62 President (1998)
Victor L. Poirier 56 Senior Vice President (1983)
John N. Hatsopoulos* 63 Chief Financial Officer and Senior Vice
President (1983)
David H. Fine 55 Vice President (1993)
Paul F. Kelleher 55 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 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, and named President of the
Company in March 1998. 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. Dr. Fine is a
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.
Item 2. Properties
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 leases are not extended. The location and
general character of the Company's properties by industry segment as of
January 3, 1998, are as follows:
Instruments and Other Equipment
The Company owns approximately 81,200 square feet of office,
engineering, laboratory, and production space primarily in New York,
England, and Scotland, and leases approximately 607,000 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 1998 through 2010.
14PAGE
Biomedical Products
The Company owns approximately 66,000 square feet of office,
engineering, laboratory, and production space in New Jersey and leases
approximately 195,000 square feet of office, engineering, laboratory, and
production space in Illinois and Massachusetts, under leases expiring in
1998 through 2004.
Item 3. Legal Proceedings
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders
Not applicable.
15PAGE
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 1997 Annual Report to Shareholders
and is incorporated herein by reference.
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 1997 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 1997 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 January 3,
1998, are included in the Registrant's 1997 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.
16PAGE
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.
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.
17PAGE
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.
(b) Reports on Form 8-K
None.
(c) Exhibits
See Exhibit Index on the page immediately preceding exhibits.
18PAGE
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 18, 1998 THERMEDICS INC.
By: John T. Keiser
------------------------------
John T. Keiser
President
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 18, 1998.
Signature Title
--------- -----
By: John T. Keiser President and Director
-------------------------
John T. Keiser
By: John N. Hatsopoulos Chief Financial Officer, Senior Vice
-------------------------
John N. Hatsopoulos President, 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: John W. Wood Jr. Chairman of the Board and Director
-------------------------
John W. Wood Jr.
By: Nicholas T. Zervas Director
-------------------------
Nicholas T. Zervas
19PAGE
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 12, 1998.
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 18 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 12, 1998
20PAGE
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
----------------------------------------------------------------------------
Allowance for
Doubtful Accounts
Year Ended
Jan. 3, 1998 $ 4,903 $ 815 $ - $(1,406) $ (105) $ 4,207
Year Ended
Dec. 28, 1996 $ 4,244 $ 1,352 $ 206 $(1,048) $ 149 $ 4,903
Year Ended
Dec. 30, 1995 $ 3,908 $ 689 $ 2 $ (720) $ 365 $ 4,244
---------------
(a) Includes allowance of businesses acquired during the year as described
in Note 3 to Consolidated Financial Statements in the Registrant's 1997
Annual Report to Shareholders and the effect of foreign currency
translation.
21PAGE
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.
2.6 Agreement and Plan of Reorganization among Thermo
Cardiosystems Inc., ITC Acquisition Corp., Thermo Electron
Corporation, ITC Holdings Inc., and International
Technidyne Corporation dated as of May 2, 1997 (filed as
Exhibit 2.1 to Thermo Cardiosystems' Quarterly Report on
Form 10-Q for the quarter ended March 29, 1997 [File
No. 1-10114] and incorporated herein by reference).
22PAGE
EXHIBIT INDEX
Exhibit
Number Description of Exhibit
------------------------------------------------------------------------
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).
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).
23PAGE
EXHIBIT INDEX
Exhibit
Number Description of Exhibit
------------------------------------------------------------------------
4.5 Fiscal Agency Agreement dated as of May 14, 1997, among
Thermo Cardiosystems Inc., Thermo Electron Corporation,
and Bankers Trust Company as fiscal agent relating to
$70 million principal amount of 4 3/4% Convertible
Subordinated Debentures due 2004 (filed as Exhibit 4 to
Thermo Cardiosystems' Quarterly Report on Form 10-Q for
the quarter ended June 28, 1997 [File No. 1-10114] 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).
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).
24PAGE
EXHIBIT INDEX
Exhibit
Number Description of Exhibit
------------------------------------------------------------------------
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).
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 (filed as Exhibit 10.12 to the Registrant's
Annual Report on Form 10-K for the fiscal year ended
December 28, 1996 [File No. 1-9567] and incorporated
herein by reference).
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).
25PAGE
EXHIBIT INDEX
Exhibit
Number Description of Exhibit
------------------------------------------------------------------------
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.)
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).
26PAGE
EXHIBIT INDEX
Exhibit
Number Description of Exhibit
------------------------------------------------------------------------
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 Thermedics Inc. - Thermo Voltek Corp. Nonqualified Stock
Option Plan.
10.25 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).
10.26 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. The terms of such plans
are substantially the same as those of the Registrant's
Equity Incentive Plan.
10.27 Restated Stock Holdings Assistance Plan and Form of
Promissory Note.
10.28 Amended and Restated Master Guarantee Reimbursement and
Loan Agreement, dated December 10, 1997, between Thermo
Electron and the Registrant.
13 Annual Report to Shareholders for the year ended January
3, 1998 (only those portions incorporated herein by
reference).
21 Subsidiaries of the Registrant.
23 Consent of Arthur Andersen LLP.
27.1 Financial Data Schedule for the year ended January 3,
1998.
27.2 Financial Data Schedule for the year ended December 30,
1995 (restated for the adoption of SFAS No. 128 and the
acquisition of International Technidyne Corporation).
27.3 Financial Data Schedule for the quarter ended March 29,
1996 (restated for the adoption of SFAS No. 128 and the
acquisition of International Technidyne Corporation).
27PAGE
EXHIBIT INDEX
Exhibit
Number Description of Exhibit
------------------------------------------------------------------------
27.4 Financial Data Schedule for the quarter ended June 28,
1996 (restated for the adoption of SFAS No. 128 and the
acquisition of International Technidyne Corporation).
27.5 Financial Data Schedule for the quarter ended September
28, 1996 (restated for the adoption of SFAS No. 128 and
the acquisition of International Technidyne Corporation).
27.6 Financial Data Schedule for the year ended December 28,
1996 (restated for the adoption of SFAS No. 128 and the
acquisition of International Technidyne Corporation).
27.7 Financial Data Schedule for the quarter ended March 29,
1997 (restated for the adoption of SFAS No. 128).
27.8 Financial Data Schedule for the quarter ended June 28,
1997 (restated for the adoption of SFAS No. 128).
27.9 Financial Data Schedule for the quarter ended September
27, 1997 (restated for the adoption of SFAS No. 128).