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 1, 2000
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Commission file number 1-9786
THERMO INSTRUMENT SYSTEMS INC.
(Exact name of Registrant as specified in its charter)
Delaware 04-2925809
(State or other jurisdiction of
incorporation or organization) (I.R.S. Employer Identification No.)
81 Wyman Street, P.O. Box 9046
Waltham, Massachusetts 02454-9046
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (781) 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
4% Convertible Subordinated
Debentures due 2005 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 28, 2000, was approximately $221,069,000.
As of January 28, 2000, the Registrant had 118,851,664 shares of Common Stock
outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant's Annual Report to Shareholders for the year ended
January 1, 2000, are incorporated by reference into Parts I and II.
The information required by Part III of Form 10-K will be filed as part of an
amendment to this Form 10-K no later than 120 days after January 1, 2000, and
such information is incorporated by reference from such filing.
PART I
Item 1. Business
(a) General Development of Business
Thermo Instrument Systems Inc. (the Company or the Registrant) is a global
leader in the development, manufacture, and sale of measurement and detection
instruments used in virtually every industry to monitor, collect, and analyze
data that provides knowledge for the user. For example, the Company's powerful
analysis technologies help researchers sift through data to make the discoveries
that will fight disease and prolong life; allow manufacturers to fabricate
ever-smaller components required to increase the speed and quality of
communications; or monitor and control industrial processes on-line to ensure
that critical quality standards are met efficiently and safely.
The Company operates in three segments: Life Sciences, which includes the
Company's 90%-owned ThermoQuest Corporation and 67%-owned Thermo BioAnalysis
Corporation subsidiaries, as well as certain wholly-owned subsidiaries; Optical
Technologies, which includes the Company's 93%-owned Thermo Optek Corporation,
78%-owned Thermo Vision Corporation, 90%-owned ThermoSpectra Corporation, and
80%-owned Spectra-Physics-Lasers, Inc. subsidiaries, in addition to certain
wholly-owned subsidiaries; and Measurement and Control, which includes the
Company's 80%-owned ONIX Systems Inc. and 70%-owned Metrika Systems Corporation
subsidiaries, as well as certain of the Company' wholly owned subsidiaries,
including certain of the businesses of Spectra-Physics AB, acquired in February
1999.
Historically, the Company had adopted a strategy of spinning out certain
of its businesses into separate public subsidiaries in which it held the
majority ownership. See Note 10 to Consolidated Financial Statements in the
Registrant's 1999* Annual Report to Shareholders for a description of the
issuance of stock by the Company's subsidiaries, which statements are
incorporated herein by reference.
ThermoSpectra and Thermo Vision announced in May and July 1999,
respectively, that they had entered into definitive agreements and plans of
merger with the Company pursuant to which the Company would acquire all of the
outstanding shares of common stock of ThermoSpectra and Thermo Vision held by
the public shareholders in exchange for $16.00 per share and $7.00 per share in
cash, respectively. The mergers of ThermoSpectra and Thermo Vision were
completed in December 1999 and January 2000, respectively, for $22.7 million and
$11.2 million in cash, respectively. The common stock of these companies has
ceased to be publicly traded. The Company's parent, Thermo Electron Corporation,
owns 10% and 3% of the outstanding shares of ThermoSpectra and Thermo Vision,
respectively.
In January 2000, the Company announced that it plans to take private
ThermoQuest, Thermo Optek, Thermo BioAnalysis, Metrika Systems, and ONIX
Systems. In addition, the Company announced that Thermo Electron plans to take
it private. These actions are part of a major reorganization plan under which
Thermo Electron will spin in, spin off, and sell various businesses to focus
solely on its core measurement and detection instruments business. Each
component of the reorganization is subject to certain conditions, as outlined in
Note 18 to Consolidated Financial Statements in the Registrant's 1999 Annual
Report to Shareholders, which statements are incorporated herein by reference.
Historically the Company has grown through the acquisition of companies,
technologies, and product lines, as well as through internal development of new
products and technologies. During the past several years, the Company has
completed a number of complementary acquisitions that have provided additional
technologies, specialized manufacturing or product development expertise, and
broader capabilities in marketing and distribution. The Company completed its
acquisition of Spectra-Physics AB, a Stockholm Stock Exchange-listed company, in
February 1999, when it acquired 17,494,684 shares of Spectra-Physics (or
approximately 99%) for approximately 160 Swedish krona per share (approximately
$20 per share) in completion of the Company's tender offer to acquire all of the
- --------------------
* References to 1999, 1998, and 1997 herein are for the fiscal years ended
January 1, 2000, January 2, 1999, and January 3, 1998, respectively.
2
outstanding shares of Spectra-Physics. In March 2000, the Company completed the
acquisition of the remaining Spectra-Physics shares outstanding pursuant to
compulsory acquisition rules applicable to Swedish companies. The aggregate
purchase price was $351.5 million, including related expenses. Spectra-Physics
manufactures a wide range of laser-based instrumentation systems, primarily for
the process-control, industrial measurement, construction, research, commercial,
and government markets. Acquisitions slowed during the months preceding the
reorganization announcement, while Thermo Electron evaluated its businesses and
the markets it serves. Thermo Electron has commenced its acquisition strategy
once again and expects to use proceeds from the sale of businesses under its
reorganization plan to bolster the Company's instrument technologies, product
lines, sales and marketing, and distribution channels. The Company also plans to
emphasize internal development as a source of growth in revenues and
profitability. The strategy calls for increasing research and development
expenses, particularly in, but not limited to, the high-growth Life Sciences
segment and telecommunications area of its Optical Technologies segment;
developing strategic partnerships to increase product sales; and divesting of
slower-growth businesses. The Company's goal is to balance revenue growth
equally, with half from acquisitions and half from internal development.
The Company was incorporated in Delaware in May 1986 as a wholly owned
subsidiary of Thermo Electron to operate the instruments businesses that were
previously conducted by several Thermo Electron subsidiaries. During 1999,
Thermo Electron purchased 2,424,700 shares of the Company's common stock in the
open market at a total cost of $37.4 million. As of January 1, 2000, Thermo
Electron owned 104,271,860 shares, or 87.8%, of the Company's outstanding common
stock.
In February 2000, the Company's $140.0 million principal amount 3 3/4%
senior convertible note, convertible at $13.55 per share, was converted by
Thermo Electron into 10,334,620 shares of Company common stock. Following the
conversion, Thermo Electron owned 88.8% of the Company's outstanding common
stock.
Forward-looking Statements
Forward-looking statements, within the meaning of Section 21E of the
Securities 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 heading
"Forward-looking Statements" in the Registrant's 1999 Annual Report to
Shareholders, which statements are incorporated herein by reference.
(b) Financial Information About Segments
Financial information concerning the Company's segments is summarized in
Note 13 to Consolidated Financial Statements in the Registrant's 1999 Annual
Report to Shareholders, which information is incorporated herein by reference.
(c) Description of Business
(i) Principal Products and Services
Life Sciences
The Company's Life Sciences segment addresses the biotechnology and
pharmaceutical markets, as well as the clinical laboratory and healthcare
industries. The segment is organized into five groups: biosciences instruments
and consumables; advanced instrumentation and consumables; scientific equipment;
clinical equipment and supplies; and information management systems.
3
Biosciences instruments and consumables encompass a broad range of
instruments, such as microplate-based handling and reading equipment, optical
biosensors, polymerase chain reaction (PCR) thermal cyclers for deoxyribonucleic
acid (DNA) amplification, and capillary electrophoresis (CE). Consumables -
disposable, one-time use, or limited life span products - include reagents,
microtiter plates, liquid-handling pipettes, and pipette tips. Biosciences
instruments are used primarily by pharmaceutical companies for drug discovery
and development, testing, and quality control, and by biotechnology companies
for research leading to knowledge about diseases and possible treatments. These
products are typically used on the "front end" of multi-instrument systems, as
the instruments prepare and handle samples prior to being loaded into other,
advanced instruments.
Advanced instrumentation and consumables includes the Company's offerings
of mass spectrometers, liquid chromatographs, gas chromatographs, and
multi-instrument combinations of these products, along with the vials, syringes,
and columns necessary for chromatography. As with biomolecular instruments,
these products are used by the pharmaceutical industry for drug development,
testing, and quality control; and by the biotechnology industry for research
leading to knowledge about disease and possible treatments. A significant, and
growing, application for these instruments is proteomics, which is the study of
proteins. Most drugs - about 90 percent - interact with proteins, so
multi-instrument systems that rapidly identify and quantify proteins are of
increasing value to pharmaceutical and biotechnology customers. In 2000, the
Company introduced an integrated, high-throughput system for the quantitative
analysis of proteins, employing the Company's new Surveyor high performance
liquid chromatograph, LCQ Deca mass spectrometer, and new TurboSEQUEST software.
Scientific equipment is used for the preparation and preservation of
chemical samples, principally in research settings for pharmaceutical, academic,
and government customers. Products in this group include ultralow-temperature
freezers, high-speed centrifuges, centrifugal vacuum concentrators, and
laboratory freeze dryers.
Clinical equipment and supplies are used by such healthcare facilities as
reference laboratories, physician-office laboratories, and hospital laboratories
to detect and diagnose disease. Products in this group include sample
preparation instruments and materials to highlight abnormal cells, blood gas and
ion-selective electrolyte (ISE) consumables, chemistry reagents, clinical
biochemistry instruments and automation equipment, and rapid diagnostic tests
for use in physicians' offices. The Company received U.S. Food and Drug
Administration (FDA) clearance in December 1998 for its FLU OIA 15-minute
diagnostic test, which detects influenza A and B in patient samples. The Company
also received FDA clearance in 1999 to market a rapid diagnostic test for
Clostridium difficile, an intestinal disease.
Information management systems provided by the Company facilitate the
monitoring and analysis of samples, as well as storage and organization of
information in laboratories, industrial settings, and clinical testing sites.
The Company is a leading supplier of laboratory information management systems
(LIMS) and provides chromatography data systems (CDS) to analyze chromatographic
data obtained via gas or liquid chromatography and capillary electrophoresis.
Optical Technologies
The Company is a leader in optical and energy-based systems and
technologies that control and apply light throughout the electromagnetic
spectrum for many different uses. Products within the Optical Technologies
segment are used in multiple markets, particularly the scientific instrument,
semiconductor, and telecommunications industries, to fabricate, analyze, and
implement advanced materials. These products are grouped into four categories:
spectroscopy, semiconductor, physical properties, and photonics. In addition,
the Company's majority owned Spectra-Physics Lasers, Inc. (SPLI) subsidiary, a
leader in the design, development, manufacture, and distribution of lasers and
laser systems for a broad range of markets, is also part of the Optical
Technologies segment. SPLI was acquired indirectly by the Company as part of its
acquisition of Spectra-Physics AB.
4
Spectroscopy instrumentation is used for molecular and elemental analysis
based upon energy and light measurements. These precision instruments use optics
to determine, in a nondestructive manner, the composition of a wide range of
complex liquids and solids. Customers include pharmaceutical, specialty
chemical, and basic material producers, who use these instruments either in a
laboratory or integrated into the production line.
Semiconductor products are used in the manufacture of capital equipment
that produces and tests semiconductors. In particular, the Company is the
leading supplier of molecular-beam epitaxy (MBE) reactors for the manufacture of
gallium arsenide and other compound semiconductor devices. The largest
application is for microwave devices used in cellular telephones and other
high-speed wireless communications devices. In 1999, the Company introduced the
V150 MBE, a successor to its market-leading V100 MBE system. The V150 MBE helps
customers keep up with the rapidly growing demand for high-speed
telecommunications devices by significantly increasing semiconductor production
capacity.
Physical properties products analyze materials for viscosity, surface
tension, and thermal properties. Significant customers include the food and
beverage industries, which use high-precision viscometers to maintain quality
and consistency of their products. In addition, the Company manufactures
products for precision temperature control necessary for analytical, laboratory,
industrial, research and development, laser, and semiconductor applications.
Photonics businesses manufacture optical components that are used in a
variety of industries, including scientific and medical instruments,
telecommunications, and semiconductor applications.
Also a part of this segment, SPLI offers technologies of high-power
semiconductor-based laser and semiconductor laser pumped solid state laser
technologies, as well as conventional lasers and laser-related products.
Conventional lasers have unique performance characteristics that make them the
only current solution for certain demanding technical applications. SPLI also
manufactures high-power semiconductor-based lasers, which are generally more
efficient, reliable, cost-effective, and compact than conventional lasers.
SPLI's customers are in the materials processing, life sciences, research and
development, printing, and telecommunications markets. Research and development
emphasis will be on creating components for the next generation of high-speed
fiber-optic telecommunications. In 1999, SPLI introduced a new line of thin-film
filters, which are used to separate data (light) within fiber-optic cable,
allowing more wavelengths of light to travel down the cable to increase what is
known as the "bandwidth" or capacity of the fiber.
Measurement and Control
The Company provides a range of real-time, on-line sensors, monitors and
control systems through its Measurement and Control segment that not only help
manufacturers ensure their processes and industrial practices meet their own and
government standards for quality, reliability, and safety, but also reduce
costs, save materials, and increase productivity. The segment is organized into
four groups: environmental, quality control, field instruments and sensors, and
oil and gas.
Environmental products include a complete line of instruments and systems
for monitoring environmental pollutants generated by industrial and mobile
sources. These include continuous gaseous and aerosol monitors, and water
quality instruments for assessing ambient air quality and emissions from
stationary sources. Specific compounds measured include oxides of nitrogen,
sulfur dioxide, ozone, carbon monoxide, carbon dioxide, volatile organic
compounds, fine particulates, total organic carbon, and total organic halogens.
The Company also provides a comprehensive line of radiation and gas
detectors for controlling and detecting the presence of harmful radiation and
combustible and toxic gases for worker and plant safety. These products range
from the simplest handheld general-purpose portable equipment to more
sophisticated stationary installed systems.
5
Quality control systems are manufactured by the Company for on-line
process optimization, taking ultrahigh-speed, noninvasive measurements and
analyzing the physical and chemical properties of streams of raw materials in
real time. These systems are used primarily to analyze the composition of raw
materials for certain basic industries, such as coal, cement, and minerals
production. This technology allows the entire stream of material to be analyzed
and eliminates the need for off-line sampling, which adds production time and
cost.
Process optimization systems are also provided by the Company for the
continuous production of certain web-type finished materials, such as metal
strip, plastics, foil, rubber, glass, and paper. The Company's instruments
measure the total thickness, basis weight, and coating thickness of such
materials, and are also capable of detecting defects the size of a pinhole in
these webs. They can measure a single point on the material, several points, or
generate a web profile. Measurements are gathered without contacting the
material or interfering with the production process, and are highly accurate and
extremely reliable - even in hostile environments such as steel mills. These
systems provide tangible economic benefits for customers, while reducing
material waste and energy consumption.
Field instruments and sensors are provided by the Company for use in the
process control industry. These instruments measure level, density, flow, and
composition, acquiring data for use in controlling industrial and chemical
processes. Level and density instruments include point-level, continuous-level,
and density sensors that use a variety of technologies, including commercial
radiation, radar, ultrasonic, and vibrational measurement principles. Flow
instrumentation includes ultrasonic flowmeters, in-line turbine meters,
pitostatic air flow monitors, and electronic flow metering instruments used for
natural gas custody transfer. The Company's on-line composition analysis
instruments are used to measure chemical compounds in a variety of liquids,
gases, and solids using gas chromatographic, mass spectrographic, and X-ray
fluorescent technologies. The Company also offers strip chart and video graphic
recorders along with instrumentation for measuring and recording AC power in
industrial facilities.
Oil and gas products cover specifically designed and installed sensor
systems that are used to provide real-time measurement, data communication, and
local control of process functions, primarily for customers in the production
segment of the oil and gas industry. These special-purpose instruments and
sensors include rod pump controllers, remote terminal units, gas-injection
systems, and both topside and subsea wellhead safety and control systems. These
systems and the aftermarket services provided are required by oil and gas
companies throughout the world, particularly those operating offshore platforms.
The Company's electrical generators, switchgear, and motor control units are
used in a wide variety of industrial and commercial applications.
(ii) and (xi) New Products; Research and Development
The Company maintains active programs for the development of new
technologies and the enhancement of existing products. Research and development
expenses were $157.3 million, $113.9 million, and $107.6 million in 1999, 1998,
and 1997, respectively.
(iii)Raw Materials
Raw materials, components, and supplies purchased by the Company are
generally either available from a number of different suppliers or from
alternative sources that could be developed without a material adverse effect on
the Company. To date, the Company has experienced no difficulties in obtaining
these materials.
(iv) Patents, Licenses, and Trademarks
The Company's policy is to protect its intellectual property rights,
including applying for and obtaining patents when appropriate. The Company holds
numerous patents related to its technologies, with additional patents pending.
The Company also enters into licensing agreements with other companies in which
it grants or receives rights to specific patents and technical know-how. The
Company also considers technical know-how, trade secrets, and trademarks to be
important to its business.
6
(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 single customer accounted for more than 10% of the Company's total
revenues in any of the past three years.
(viii)Backlog
The Company's backlog of firm orders at year-end 1999 and 1998 was as
follows:
(In thousands) 1999 1998
- ------------------------------------------------------------------------------------- -------- --------
Life Sciences $107,784 $ 89,679
Optical Technologies 200,421 122,361
Measurement and Control 94,432 71,461
-------- --------
$402,637 $283,501
======== ========
Certain of these orders are cancelable by the customer upon payment of a
cancellation charge. The Company anticipates that substantially all of the
backlog as of January 1, 2000, will be shipped or completed during 2000. The
Company does not believe that the level of, or changes in the level of, its
backlog is necessarily indicative of intermediate or long-term trends in its
business.
(ix) Government Contracts
Not applicable.
(x) Competition
The markets for the Company's products are highly competitive. The Company
generally competes on the basis of technical advances that result in new
products and improved price/performance ratios, reputation among customers as a
quality leader for products and services, and active research and
application-development programs. To a lesser extent, the Company competes on
the basis of price. In many markets, the Company competes with large analytical
instrument companies such as Agilent Technologies; PerkinElmer, Inc.; Varian
Associates, Inc.; Waters Corporation; and Hitachi, Ltd. Certain products
manufactured by the Company also compete with products sold by numerous smaller,
specialized firms.
Life Sciences
Biosciences instruments and consumables. The Company competes with
PerkinElmer; Molecular Devices Corporation; Beckman Coulter, Inc.; Bio-Rad
Laboratories, Inc.; Agilent; MJ Research Technology; Qiagen Corporation; Biacore
International, Inc.; Nalge Nunc Inc.; Corning-Costar Corporation; Rainen
Instruments; Greiner GmbH; and Eppendorf GmbH. The Company competes primarily on
the basis of technical performance, user convenience, and, to a lesser extent,
price.
7
Advanced instrumentation and consumables. The Company's principal
competitors include Agilent, Waters, Shimadzu Corporation, and PerkinElmer. The
Company competes primarily on the basis of technical performance, customer
service and support, and price.
Scientific equipment. The Company's principal competitors in this market
are Jouan S.A., NuAire Inc., Sanyo Electric Co. Ltd., and Labconco Corporation.
In this market, the Company competes primarily on the basis of technical
performance, customer service and support, and price.
Clinical equipment and supplies. The Company competes with Leica
Microsystems; Sakura Finetek U.S.A., Inc.; Ventana Corporation; Cytyc
Corporation; Wescor Inc.; Jewett Inc.; and Mopec Inc. The Company competes
primarily on the basis of quality, price, and service.
In the clinical chemistry reagent market, the Company's competitors
include Abbott Laboratories; BioChem Pharma; Chiron Corporation; and Sigma
Diagnostics, a division of Sigma-Aldrich Co. The Company competes in this market
primarily on the basis of product quality and price.
Competitors in the market for rapid diagnostic test kits are Abbott
Laboratories; Becton; Dickinson and Company; Roche-Boeringher Manheim; and
Quidel Corporation. The Company competes primarily on the basis of its
innovative technology as well as price.
Information management systems. The Company's competitors include
PerkinElmer, PE Biosystems, Beckman Coulter, Agilent, LabVantage Solutions, LIMS
U.S., Scientific Software Inc., and Waters. The Company competes primarily on
the basis of product performance and price.
Optical Technologies
Spectroscopy. In the spectroscopy market, the Company competes primarily
with the Analytical Instrument division of PerkinElmer, Varian, Agilent, and
Bio-Rad. The Company competes primarily on the basis of quality, performance,
technology, and price.
Semiconductor. The Company competes primarily with Riber Instruments S.A.
and Oxford Instruments plc. In this market, the Company competes primarily on
the basis of quality, performance, technology, and price.
Physical properties. The Company competes with TA Instruments, Inc., a
subsidiary of Waters; and Rheometrics Scientific Inc. The Company offers
mid-level products in this market, with instruments that operate on a
personal-computer platform. The Company competes in this market primarily on the
basis of quality, performance, and price.
Photonics. The Company competes primarily on the basis of technical suitability, product
performance, reliability, and price. Principal competitors include Optical Coating Laboratory, Inc. and
Newport Corporation.
Measurement and Control
Environmental. The Company's principal competitors include Monitor Labs
Incorporated; Advanced Pollution Instruments; Rupprecht & Pataschnick Co., Inc.;
and Mine Safety Appliances Co. The Company competes in this market primarily on
the basis of technical performance, price, reliability, and customer service.
Quality control. The Company's principal competitors include Scantech
Limited, Integrated Measurement Systems, Inc., Toshiba Corporation, Yokogawa
Electric Corporation, and Infrared Engineering Limited. The Company competes
primarily on the basis of technical performance, customer service, and, to a
lesser extent, price.
8
Field instruments and sensors. In the field measurement instruments and
sensors market the Company competes primarily on quality and reliability,
technical features, accuracy, ease of use, price, and reputation for aftermarket
service. The Company competes with a few large competitors in each product area
and with many companies within specific industries. Major competitors include
Fisher-Rosemount, a division of Emerson Electric Co., Inc.; Asea Brown Boveri
(Holding) Ltd.; and Yokogawa.
Oil and gas. The Company has a relatively small presence within the large
and varied process-control marketplace, which is extremely fragmented and
consists of several large companies, including Fisher-Rosemount, Elsag Bailey,
and Honeywell Process Control, as well as numerous smaller companies. The
Company competes in this market primarily on the basis of technical performance,
customer service, price, and reliability.
(xii) Environmental Protection Regulations
The Company believes that compliance 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 1, 2000, the Company employed approximately 12,200 people.
(d) Financial Information About Geographic Areas
Financial information about geographic areas is summarized in Note 13 to
Consolidated Financial Statements in the Registrant's 1999 Annual Report to
Shareholders and is incorporated herein by reference.
(e) Executive Officers of the Registrant
Name Age Present Title (Fiscal Year First Became Executive Officer)
---------------------------- --- ---------------------------------------------------------
Earl R. Lewis 56 President and Chief Executive Officer (1990)
Denis A. Helm 61 Executive Vice President (1986)
Richard W.K. Chapman 55 Senior Vice President (1994)
Barry S. Howe 44 Vice President (1994)
Theo Melas-Kyriazi 40 Chief Financial Officer (1998)
Paul F. Kelleher 57 Chief Accounting Officer (1986)
Each executive officer serves until his successor is chosen or appointed
by the Board of Directors and qualified or until earlier resignation, death, or
removal. All executive officers, except Mr. Lewis, Dr. Chapman, and Mr.
Melas-Kyriazi, have held comparable positions for at least five years, either
with the Company or with its parent company, Thermo Electron. Mr. Lewis was
named President of the Company in March 1997 and Chief Executive Officer in
January 1998. Mr. Lewis served as Chief Operating Officer of the Company from
January 1996 through January 1998, as Executive Vice President from January 1996
through March 1997, as a Senior Vice President from January 1994 through January
1996, and as a Vice President from March 1992 through January 1994. Dr. Chapman
has been President and Chief Executive Officer of ThermoQuest since its
inception in June 1995, and served as President of Finnigan Corporation, a
subsidiary of ThermoQuest, from 1992 to 1995. Mr. Melas-Kyriazi was appointed
Chief Financial Officer of the Company and Thermo Electron on January 1, 1999.
He joined Thermo Electron in 1986 as Assistant Treasurer, and became Treasurer
in 1988. In 1994, he was named President and Chief Executive Officer of
ThermoSpectra. In 1998, he became Vice President of Corporate Strategy for
Thermo Electron. Messrs. Lewis, Helm, Chapman, and Howe are full-time employees
of the Company. Messrs. Melas-Kyriazi and Kelleher are full-time employees of
Thermo Electron and certain of its subsidiaries, but devote such time to the
affairs of the Company as the Company's needs reasonably require.
9
Item 2. Properties
The Company believes that its facilities are in good condition and are
suitable and adequate for its present operations and that suitable space is
readily available in the event any lease is not extended. With respect to leases
expiring in the near future, in the event the Company does not renew such
leases, the Company believes suitable alternate space is available for lease on
acceptable terms. The location of the Company's principal properties by segment
as of January 1, 2000, are as follows:
Life Sciences
The Company owns approximately 1,070,000 square feet of office,
engineering, laboratory, and production space in Ohio, California, Pennsylvania,
Massachusetts, Italy, and Germany, and leases approximately 1,000,000 square
feet of office, engineering, laboratory, and production space under leases
expiring from 2000 through 2016, principally in Finland, England, France, New
York, Virginia, Texas, and Colorado. As of January 1, 2000, the Company had a
$6.2 million mortgage loan that is secured by 200,000 square feet of property in
California with a net book value of $14.6 million.
Optical Technologies
The Company owns approximately 860,000 square feet of office, engineering,
laboratory, and production space, principally in Wisconsin, California, New
York, Arizona, Germany, Switzerland, and England, and leases approximately
1,330,000 square feet of office, engineering, laboratory, and production space
under leases expiring from 2000 through 2017, principally in Massachusetts,
California, Connecticut, New Hampshire, and England.
Measurement and Control
The Company owns approximately 400,000 square feet of office, engineering,
laboratory, and production space in New Mexico, California, Indiana, Texas,
Louisiana, Arkansas, Germany, and England, and leases approximately 1,570,000
square feet of office, engineering, laboratory, and production space under
leases expiring from 2000 through 2011, principally in Ohio, Texas, Maryland,
California, Massachusetts, Georgia, Sweden, England, Germany, the Netherlands,
and Australia.
Item 3. Legal Proceedings
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders
Not applicable.
10
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 is included under the sections
labeled "Common Stock Market Information" and "Dividend Policy" in the
Registrant's 1999 Annual Report to Shareholders and is incorporated herein by
reference.
Item 6. Selected Financial Data
The information required under this item is included under the sections
labeled "Selected Financial Information" and "Dividend Policy" in the
Registrant's 1999 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 1999 Annual Report to Shareholders and is
incorporated herein by reference.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
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 1999 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 1, 2000,
and Supplementary Data are included in the Registrant's 1999 Annual Report to
Shareholders and are incorporated herein by reference.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Not applicable.
PART III
The information required by Items 10, 11, 12, and 13 of Form 10-K will be
filed as part of an amendment to this Form 10-K no later than 120 days after
January 1, 2000, the end of the Registrant's fiscal year covered by this Form
10-K.
11
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 Comprehensive Income and 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.
12
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 on
its behalf by the undersigned, thereunto duly authorized.
Date: March 22, 2000 THERMO INSTRUMENT SYSTEMS INC.
By: /s/ Earl R. Lewis
Earl R. Lewis
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 22, 2000.
Signature Title
By: /s/ Earl R. Lewis President, Chief Executive Officer, and Director
Earl R. Lewis
By: /s/ Theo Melas-Kyriazi Chief Financial Officer
Theo Melas-Kyriazi
By: /s/ Paul F. Kelleher Chief Accounting Officer
Paul F. Kelleher
By: /s/ George N. Hatsopoulos Director
George N. Hatsopoulos
By: /s/ Polyvios C. Vintiadis Director
Polyvios C. Vintiadis
13
Report of Independent Public Accountants
To the Shareholders and Board of Directors of Thermo Instrument Systems Inc.:
We have audited, in accordance with generally accepted auditing standards,
the consolidated financial statements included in Thermo Instrument Systems
Inc.'s Annual Report to Shareholders incorporated by reference in this Form
10-K, and have issued our report thereon dated February 15, 2000 (except with
respect to the matters discussed in Note 18, as to which the date is March 8,
2000). 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 12 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. This 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 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 15, 2000
14
SCHEDULE II
THERMO INSTRUMENT SYSTEMS INC.
Valuation and Qualifying Accounts
(In thousands)
Description Provision Accounts Accounts Other (a) Balance
Balance at Charged to Recovered Written at End
Beginning Expense Off of Year
of Year
- ----------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
Allowance for Doubtful Accounts
Year Ended January 1, 2000 $23,726 $ 7,301 $ 329 $(8,128) $ 6,609 $ 29,837
Year Ended January 2, 1999 $22,786 $ 4,169 $ 502 $(7,221) $ 3,490 $ 23,726
Year Ended January 3, 1998 $16,981 $ 4,366 $ 304 $(4,375) $ 5,510 $ 22,786
Description Balance at Established Activity Other (c) Balance
Beginning as Cost of Charged to at End
of Year Acquisitions Reserve of Year
------------------------------------------- ----------- -------------- ----------- ----------- -----------
Accrued Acquisition Expenses (b)
Year Ended January 1, 2000 $ 15,319 $ 16,453 $(10,399) $ (2,144) $ 19,229
Year Ended January 2, 1999 $ 20,424 $ 7,078 $ (9,444) $ (2,739) $ 15,319
Year Ended January 3, 1998 $ 19,509 $ 24,280 $(18,528) $ (4,837) $ 20,424
Description Balance at Provision Activity Other (f) Balance
Beginning Charged to Charged to at End
of Year Expense (e) Reserve of Year
--------------------------------------------- ----------- ------------- ----------- ----------- -----------
Accrued Restructuring Costs (d)
Year Ended January 1, 2000 $ 11,225 $ 1,100 $(9,994) $ (649) $ 1,682
Year Ended January 2, 1999 $ 244 $ 18,401 $(7,682) $ 262 $ 11,225
Year Ended January 3, 1998 $ - $ 953 $ (709) $ - $ 244
(a) Includes allowance of businesses acquired during the year as described in
Note 3 to Consolidated Financial Statements in the Company's 1999 Annual
Report to Shareholders and the effect of foreign currency translation.
(b) The nature of activity in this account is described in Note 3 to
Consolidated Financial Statements in the Registrant's 1999 Annual Report to
Shareholders.
(c) Represents reversal of accrued acquisition expenses and corresponding
reduction of cost in excess of net assets of acquired companies resulting
from finalization of restructuring plans and the effect of foreign currency
translation.
(d) The nature of activity in this account is described in Note 11 to
Consolidated Financial Statements in the Registrant's 1999 Annual Report to
Shareholders.
(e) Includes reversal of previously recorded restructuring costs of $2.3 million
and excludes provision of $0.1 million for asset write-down in 1999.
Excludes provision of $2.8 million for asset write-downs and $0.4 million
for loss on division sold in 1998.
(f) Represents the effect of foreign currency translation.
15
EXHIBIT INDEX
Exhibit
Number Description of Exhibit
2.1 Reserved.
2.2 Agreement and Release dated as of December 15, 1997, among Fisons
plc, the Registrant, and Thermo Electron (filed as Exhibit 2.2 to
the Registrant's Annual Report on Form 10-K for the fiscal year
ended January 3, 1998 [File No. 1-9876] and incorporated herein
by reference).
3.1 Amendment to Restated Certificate of Incorporation of the Registrant (filed
as Exhibit 3.1 to the Registrant's Quarterly Report on Form 10-Q
for the quarter ended June 29, 1996 [File No.
1-9786] and incorporated herein by reference).
3.2 Restated Certificate of Incorporation of the Registrant (filed as Exhibit 3.1 to the
Registrant's Annual Report on Form 10-K for the fiscal year ended January 1, 1994 [File
No. 1-9786] and incorporated herein by reference).
3.3 By-Laws of the Registrant (filed as Exhibit 3 to the Registrant's Amendment No. 1 on Form
8-A, filed with the Commission on January 24, 2000 [File No. 1-9786] and incorporated
herein by reference).
4.1 Subordinated Indenture, dated January 15, 1998, among the
Registrant, Thermo Electron, and Bankers Trust Company as
trustee, relating to $250,000,000 principal amount of 4%
Convertible Subordinated Debentures due 2005 (filed as Exhibit
4.1 to the Registrant's Current Report on Form 8-K filed with the
Commission on January 16, 1998, and incorporated herein by
reference).
4.2 Senior convertible note purchase agreement by and between the Registrant and Thermo
Electron as of September 15, 1993 (filed as Exhibit 10(a) to the Registrant's Quarterly
Report on Form 10-Q for the quarter ended October 2, 1993 [File No. 1-9786] and
incorporated 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 instrument with respect to other long-term debt of
the Registrant or its subsidiaries.
10.1 Amended and Restated Corporate Services Agreement, dated as of
January 3, 1993, between Thermo Electron and the Registrant
(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. 1-9786]
and incorporated herein by reference).
10.2 Tax Allocation Agreement dated as of May 29, 1986, between Thermo Electron and the
Registrant (filed as Exhibit 10(b) to the Registrant's Registration Statement on Form S-1
[Reg. No. 33-6762] and incorporated herein by reference).
10.3 Thermo Electron Corporate Charter, as amended and restated
effective January 3, 1993 (filed as Exhibit 10(f) to the
Registrant's Annual Report on Form 10-K for the fiscal year ended
January 2, 1993 [File No. 1-9786] and incorporated herein by
reference).
10.4 Form of Indemnification Agreement with Directors and Officers (filed
as Exhibit 10(g) to the Registrant's Annual Report on Form 10-K
for the fiscal year ended December 29, 1990 [File No. 1-9786] and
incorporated herein by reference).
16
Exhibit
Number Description of Exhibit
10.5 Master Cash Management, Guarantee Reimbursement and Loan Agreement dated as of June 1,
1999, between the Registrant and Thermo Electron (filed as Exhibit 10.1 to the
Registrant's Quarterly Report on Form 10-Q for the quarter ended July 3, 1999 [File No.
1-9786] and incorporated herein by reference).
10.6 Restated Stock Holdings Assistance Plan and Form of Promissory Note (filed as Exhibit
10.10 to the Registrant's Annual Report on Form 10-K for the fiscal year ended January 3,
1998 [File No. 1-9786] and incorporated herein by reference).
10.7-10.15 Reserved.
10.16 Amended and Restated Deferred Compensation Plan for Directors of the Registrant (filed as
Exhibit 10.3 to the Registrant's Quarterly Report on Form 10-Q for the quarter ended July
3, 1999 [File No. 1-9786] and incorporated herein by reference).
10.17 Amended and Restated Directors Stock Option Plan of the Registrant (filed as Exhibit 10.4
to the Registrant's Quarterly Report on Form 10-Q for the quarter ended July 3, 1999
[File No. 1-9786] and incorporated herein by reference).
10.18 Incentive Stock Option Plan of the Registrant (filed as Exhibit 10(c) to the Registrant's
Registration Statement on Form S-1 [Reg. No. 33-6762] 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 3,515,625 shares, after adjustment to
reflect share increase approved in 1990; 3-for-2 stock splits effected in January 1988,
July 1993, and April 1995; and 5-for-4 stock splits effected in December 1995 and October
1997).
10.19 Amended and Restated Nonqualified Stock Option Plan of the
Registrant (filed as Exhibit 10.5 to the Registrant's Quarterly
Report on Form 10-Q for the quarter ended July 3, 1999 [File No.
1-9786] 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 3,515,625 shares,
after adjustment to reflect share increase approved in 1990;
3-for-2 stock splits effected in January 1988, July 1993, and
April 1995; and 5-for-4 stock splits effected in December 1995
and October 1997).
10.20 Amended and Restated Equity Incentive Plan of the Registrant (filed as
Exhibit 10.6 to the Registrant's Quarterly Report on Form 10-Q
for the quarter ended July 3, 1999 [File No. 1-9786] and
incorporated herein by reference). (Maximum number of shares
issuable is 5,039,062 shares, after adjustment to reflect share
increase approved in December 1993; 3-for-2 stock splits effected
in July 1993 and April 1995; and 5-for-4 stock splits effected in
December 1995 and October 1997).
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. The terms of
such plans are substantially the same as those of the
Registrant's Equity Incentive Plan.
10.21 Finnigan Corporation 1979 Long-term Incentive Stock Option Plan (filed as Exhibit 10.21
to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31,
1994 [File No. 1-9786] and incorporated herein by reference).
17
Exhibit
Number Description of Exhibit
10.22 Former Thermo Environmental Corporation Incentive Stock Option
Plan (filed as Exhibit 10(d) to Thermo Environmental's
Registration Statement on Form S-1 [Reg. No. 33-329] and
incorporated herein by reference). (Maximum number of shares
issuable in the aggregate under this plan and the Former Thermo
Environmental Corporation Nonqualified Stock Option Plan is
1,450,195 shares, after adjustment to reflect share increase
approved in 1987; 3-for-2 stock splits effected in July 1993 and
April 1995; and 5-for-4 stock splits effected in December 1995
and October 1997).
10.23 Former Thermo Environmental Corporation Nonqualified Stock Option
Plan (filed as Exhibit 10(e) to Thermo Environmental's
Registration Statement on Form S-1 [Reg. No. 33-329] and
incorporated herein by reference). (Maximum number of shares
issuable in the aggregate under this plan and the Former Thermo
Environmental Corporation Incentive Stock Option Plan is
1,450,195 shares, after adjustment to reflect share increase
approved in 1987; 3-for-2 stock splits effected in July 1993 and
April 1995; and 5-for-4 stock splits effected in December 1995
and October 1997).
10.24 Amended and Restated Thermo Instrument Systems Inc. -
ThermoSpectra Corporation Nonqualified Stock Option Plan (filed
as Exhibit 10.7 to the Registrant's Quarterly Report on Form 10-Q
for the quarter ended July 3, 1999 [File No. 1-9786] and
incorporated herein by reference). (On December 9, 1999,
ThermoSpectra merged with Thermo Instrument. All outstanding
options granted under this plan were assumed by Thermo Instrument
and converted into options to purchase 72,356 shares of Thermo
Instrument.)
10.25 Amended and Restated Thermo Instrument Systems Inc. - ThermoQuest
Corporation Nonqualified Stock Option Plan (filed as Exhibit 10.8
to the Registrant's Quarterly Report on Form 10-Q for the quarter
ended July 3, 1999 [File No. 1-9786] and incorporated herein by
reference).
10.26 Amended and Restated Thermo Instrument Systems Inc. - Thermo BioAnalysis Corporation
Nonqualified Stock Option Plan (filed as Exhibit 10.9 to the Registrant's Quarterly
Report on Form 10-Q for the quarter ended July 3, 1999 [File No. 1-9786] and incorporated
herein by reference).
10.27 Amended and Restated Thermo Instrument Systems Inc. - Thermo
Optek Corporation Nonqualified Stock Option Plan (filed as
Exhibit 10.10 to the Registrant's Quarterly Report on Form 10-Q
for the quarter ended July 3, 1999 [File No. 1-9786] and
incorporated herein by reference).
10.28 Amended and Restated Thermo Instrument Systems Inc. - Metrika
Systems Corporation Nonqualified Stock Option Plan (filed as
Exhibit 10.11 to the Registrant's Quarterly Report on Form 10-Q
for the quarter ended July 3, 1999 [File No. 1-9786] and
incorporated herein by reference).
10.29 Amended and Restated Thermo Instrument Systems Inc. - Thermo
Vision Corporation Nonqualified Stock Option Plan (filed as
Exhibit 10.12 to the Registrant's Quarterly Report on Form 10-Q
for the quarter ended July 3, 1999 [File No. 1-9786] and
incorporated herein by reference). (On January 8, 2000, Thermo
Vision merged with Thermo Instrument. All outstanding options
under this plan were assumed by Thermo Instrument and converted
into options to purchase 35,826 shares of Thermo Instrument.)
10.30 Amended and Restated Thermo Instrument Systems Inc. - ONIX
Systems Inc. Nonqualified Stock Option Plan (filed as Exhibit
10.13 to the Registrant's Quarterly Report on Form 10-Q for the
quarter ended July 3, 1999 [File No. 1-9786] and incorporated
herein by reference).
18
Exhibit
Number Description of Exhibit
10.31 1997 Spectra-Physics Lasers, Inc. Stock Option Plan (filed as Exhibit 10.6 of Amendment
No. 1 to Spectra-Physics Lasers, Inc.'s Registration Statement on Form S-1 [Reg. No.
333-38329] and incorporated herein by reference).
10.32 Reserved.
10.33 3 3/4% Senior Convertible Note in the principal amount of
$140,000,000 dated September 15, 1993, issued to Thermo Electron
(filed as Exhibit 10(b) to the Registrant's Quarterly Report on
Form 10-Q for the quarter ended October 2, 1993 [File No. 1-9786]
and incorporated herein by reference).
10.34 Fiscal Agency Agreement dated as of August 3, 1995, among
ThermoQuest, Thermo Electron, and The Chase Manhattan Bank
(formerly Chemical Bank) (filed as Exhibit 10.12 to ThermoQuest's
Registration Statement on Form S-1 [Reg. No. 333-00276] and
incorporated herein by reference).
10.35 Fiscal Agency Agreement dated as of October 12, 1995, between
Thermo Optek, Thermo Electron, and The Chase Manhattan Bank
(formerly Chemical Bank) (filed as Exhibit 10.10 to Thermo
Optek's Registration Statement on Form S-1 [Reg. No. 333-03630]
and incorporated herein by reference).
10.36 $150,000,000 Promissory Note dated as of August 27, 1999, issued
by the Registrant to Thermo Electron (filed as Exhibit 10 to the
Registrant's Quarterly Report on Form 10-Q for the quarter ended
October 2, 1999 [File No. 1-9786] and incorporated herein by
reference).
10.37 Master Cash Management, Guarantee Reimbursement and Loan Agreement dated as of June 1,
1999 between ThermoQuest Corporation and Thermo Electron (filed as Exhibit 10.1 to
ThermoQuest's Quarterly Report on Form 10-Q for the quarter ended July 3, 1999 [File No.
1-14262] and incorporated herein by reference).
10.38 Master Cash Management, Guarantee Reimbursement and Loan
Agreement dated as of June 1, 1999, between Thermo BioAnalysis
Corporation and Thermo Electron (filed as Exhibit 10.1 to Thermo
BioAnalysis' Quarterly Report on Form 10-Q for the quarter ended
July 3, 1999 [File No. 1-12179] and incorporated herein by
reference).
10.39 Master Cash Management, Guarantee Reimbursement and Loan
Agreement dated as of June 1, 1999, between Thermo Optek
Corporation and Thermo Electron (filed as Exhibit 10.1 to Thermo
Optek's Quarterly Report on Form 10-Q for the quarter ended July
3, 1999 [File No. 1-11757] and incorporated herein by reference).
10.40 Master Cash Management, Guarantee Reimbursement and Loan
Agreement dated as of June 1, 1999, between Metrika Systems
Corporation and Thermo Electron (filed as Exhibit 10.1 to Metrika
Systems' Quarterly Report on Form 10-Q for the quarter ended July
3, 1999 [File No. 1-13085] and incorporated herein by reference).
10.41 Master Cash Management, Guarantee Reimbursement and Loan Agreement dated as of June 1,
1999, between ONIX Systems Inc. and Thermo Electron (filed as Exhibit 10.1 to ONIX
Systems' Quarterly Report on Form 10-Q for the quarter ended July 3, 1999 [File No.
1-13975] and incorporated herein by reference).
19
Exhibit
Number Description of Exhibit
13 Annual Report to Shareholders for the year ended January 1, 2000
(only those portions incorporated herein by reference).
21 Subsidiaries of the Registrant.
23 Consent of Arthur Andersen LLP.
27 Financial Data Schedule.