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 March 29, 1997
[ ] Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Commission file number 1-9549
THERMO TERRATECH INC.
(Exact name of Registrant as specified in its charter)
Delaware 04-2925807
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
81 Wyman Street, P.O. Box 9046
Waltham, Massachusetts 02254-9046
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (617) 622-1000
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class 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 May 23, 1997, was approximately $29,800,000.
As of May 23, 1997, the Registrant had 17,568,428 shares of Common Stock
outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant's Fiscal 1997 Annual Report to Shareholders
for the year ended March 29, 1997, 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 September 24, 1997, are
incorporated by reference into Part III.
PAGE
PART I
Item 1. Business
(a) General Development of Business
Thermo TerraTech Inc. (the Company or the Registrant) provides
environmental services and infrastructure planning and design services
encompassing a broad range of specializations, including remediation of
soil and fluids, consulting and design, laboratory-testing, and metal-
treating.
The Company's majority-owned, publicly held Thermo Remediation Inc.
(Thermo Remediation) subsidiary is a national provider of environmental
services, including industrial, nuclear, and soil remediation, as well as
waste-fluids recycling. A recent severe downturn in the Company's
soil-recycling business and relaxed compliance requirements and
enforcement activities, which resulted in overcapacity in the industry
and competitive pricing pressures, have led to operating losses at
certain sites beginning in fiscal 1997. As a result, during fiscal 1997,
the Company wrote-down $7.8 million of certain assets associated with its
soil-remediation business. The Company expects that closure of two sites
with small operating losses and a write-down of certain assets at two
other sites, at which current volumes of soil being processed were
insufficient to recover the Company's investment, will improve operating
results beginning in fiscal 1998. Revenues and operating losses,
exclusive of the write-down, at the two sites being closed, aggregated
$2.9 million and $0.6 million, respectively, in fiscal 1997. In September
1996, Thermo Remediation acquired IEM Sealand Corporation (IEM Sealand),
a provider of construction services for the remediation of hazardous
wastes. As of March 29, 1997, the Company owned 69% of Thermo
Remediation's common stock and holds a $2.7 million principal amount 3
7/8% subordinated convertible note due 2000 issued by Thermo Remediation,
convertible into shares of Thermo Remediation common stock at a
conversion price of $9.83 per share.
The Company's majority-owned Thermo EuroTech N.V. (Thermo EuroTech)
subsidiary, located in the Netherlands, specializes in processing
"off-spec" mixtures of oil. In fiscal 1997, Thermo EuroTech sold its J.
Amerika division, which resulted in a loss of $1.5 million. J. Amerika's
revenues and operating loss were $4.0 million and $0.6 million,
respectively, in fiscal 1997. As of March 29, 1997, the Company owned 53%
of the outstanding common stock of Thermo EuroTech.
Through its Killam Associates subsidiary, the Company offers
engineering, consulting, and design services in the areas of municipal
and industrial water quality management; bridge and highway construction
and reconstruction; and natural resource management. In November 1996,
the Company acquired Carlan Consulting Group, Inc. (Carlan), a provider
of transportation and environmental consulting and professional
engineering and architectural services. In May 1997, the Company
purchased a controlling interest in The Randers Group Incorporated
(Randers), a provider of design engineering, project management, and
construction services for industrial clients in the manufacturing,
pharmaceutical, and chemical-processing industries. The Company purchased
2PAGE
7,100,000 shares of Randers common stock from certain members of Randers'
management, and 420,000 shares from Thermo Power Corporation, an
affiliate of the Company, at a price of $0.625 per share, for an
aggregate cost of approximately $4.7 million. Following these
transactions, the Company owned approximately 53.3% of Randers'
outstanding common stock. In addition, Thermo Electron Corporation
(Thermo Electron), which owns a majority of the Company's outstanding
common stock, owned approximately 8.9% of Randers' outstanding common
stock.
The Company's Thermo Analytical Inc. subsidiary operates analytical
laboratories that provide comprehensive laboratory-based environmental
testing, analysis, and related services to detect and measure organic
contaminants in samples of soil, water, air, industrial wastes, mixed
wastes, and biological materials. The Company's Lancaster Laboratories
Inc. subsidiary, based in Lancaster, Pennsylvania, is a provider of
high-quality analytical and consulting services to the environmental,
pharmaceutical, and food industries.
The Company performs metallurgical processing services using
thermal-treatment equipment at locations in California, Minnesota, and
Wisconsin. The Company also designs, manufactures, and installs
computer-controlled, custom-engineered, thermal-processing systems used
to treat primary metal and metal parts. In October 1996, the Company
acquired Metal Treating, Inc. (Metal Treating) from Thermo Electron in
exchange for $1.6 million in cash. Metal Treating provides heat-treating
services, including carburizing, vacuum hardening, silver and copper
brazing, and aluminum heat treating, primarily in the Milwaukee and
southeastern Wisconsin areas. Because the Company and Metal Treating were
deemed for accounting purposes to be under control of their common
majority owner, Thermo Electron, the transaction has been accounted for
at historical cost in a manner similar to a pooling-of-interests.
Accordingly, all historical information presented has been restated to
include the results of Metal Treating.
In May 1996, the Company issued and sold $115.0 million principal
amount of 4 5/8% subordinated convertible debentures due 2003 for net
proceeds of $112.4 million. The debentures are convertible into shares of
the Company's common stock at a price of $15.90 per share and are
guaranteed on a subordinated basis by Thermo Electron. The Company repaid
its $15.0 million and $35.0 million promissory notes to Thermo Electron
with proceeds from the debenture offering.
The Company was incorporated on May 30, 1986, as an indirect, wholly
owned subsidiary of Thermo Electron. Prior to its incorporation, the
Company's operations were conducted by two wholly owned subsidiaries of
Thermo Electron. As of March 29, 1997, Thermo Electron owned 14,705,658
shares of the common stock of the Company, representing 82% of such stock
outstanding. Thermo Electron is a world leader in environmental
monitoring and analysis instruments, biomedical products such as
heart-assist devices and mammography systems, papermaking and recycling
equipment, biomass electric power generation, and other specialized
products and technologies. Thermo Electron also provides a range of
services related to environmental quality.
3PAGE
Thermo Electron may repurchase shares of the Company's or Thermo
Remediation's common stock from time to time in the open market or in
negotiated transactions. During fiscal 19971, Thermo Electron purchased
203,700 shares and 30,000 shares of the Company's and Thermo
Remediation's common stock, respectively, in the open market for a total
price of $2,309,000 and $314,000, respectively.
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 caption "Forward-looking
Statements" in the Registrant's Fiscal 1997 Annual Report to Shareholders
incorporated herein by reference.
(b) Financial Information About Industry Segments
The Company conducts business in one segment, environmental services.
The Company's principal services are: remediation and recycling,
consulting and design, and laboratory-based testing. The Company also
provides specialized metal-treating services including the design,
manufacture, and installation of advanced custom-engineered thermal-
processing systems.
(c) Description of Business
(i) Principal Services and Products
Remediation and Recycling Services
Through Thermo Remediation's ReTec subsidiary, the Company provides
environmental consulting and remediation construction management to
clients in the railroad transportation, refining, chemical, wood-
treating, gas, and electric utility industries across the nation. ReTec's
consulting, engineering, and on-site services offer a broad array of
remedial solutions, all of which are applied from a risk management
perspective, to help clients manage problems associated with
environmental compliance, waste management, and the remediation of
industrial sites contaminated with organic wastes and residues. ReTec
provides particular expertise in bioremediation, and in managing wastes
from manufactured-gas plants, refineries, and railroad properties. ReTec
operates from offices in 20 cities and numerous field sites across the
country.
Thermo Remediation's IEM Sealand subsidiary performs cleanups of
hazardous-waste sites for government and industry as a prime construction
1 References to fiscal 1997, 1996, and 1995 herein are for the fiscal
years ended March 29, 1997, March 30, 1996, and April 1, 1995,
respectively.
4PAGE
contractor and completes predesigned remedial action contracts at sites
containing hazardous, toxic, and radioactive waste. Under contracts with
federal and state governments, and other public- and private-sector
clients, IEM Sealand also provides project management and construction
services for the remediation of hazardous wastes. Most of IEM Sealand's
contract work is obtained in a bid process with the job being awarded to
the lowest qualified bidder.
Through Thermo Remediation's Thermo Nutech subsidiary, the Company
provides services to remove radioactive contaminants from soil, as well
as health physics services, radiochemistry laboratory services, radiation
dosimetry services, radiation-instrument calibration and repair services,
and radiation-source production. As part of its radiation and
nuclear/health physics services, the Company provides site surveys for
radioactive materials and on-site samples, as well as analysis in support
of decontamination programs and dosimetry services to measure personnel
exposure. As part of its on-site services, the Company usually performs a
preliminary survey using portable radiation-detection equipment. As a
result of this survey, samples are taken at critical locations and are
then analyzed radiometrically and radiochemically in a mobile laboratory
facility at the site or at one of the Company's laboratories. This data
is then used to plan cleanup operations. A substantial part of the
Company's health physics services has been performed under the U.S.
Department of Energy's (DOE's) remedial action programs, including the
Hanford site. The Company also supplies reusable thermo luminescent
dosimeter badges. These badges, worn by personnel working in areas where
radioactive material may be present, are periodically returned to the
Company for processing to determine the level of radiation exposure. In
addition, using its proprietary segmented-gate system technology, the
Company removes radioactive contaminants from soil at the Defense Nuclear
Fund's site at Johnston Island in the Pacific.
Through Thermo Remediation's TPS Technologies subsidiary, the Company
designs and operates facilities for the remediation of nonhazardous soil
and operates a network of such facilities along the East and West Coasts.
The Company's soil-remediation centers are environmentally secure
facilities for receiving, storing, and processing petroleum-contaminated
soils. Each site consists principally of a soil-remediation unit (SRU)
and a soil-storage area. The market for remediation of
petroleum-contaminated soils, as with many other waste markets, was
created by environmental regulations. The market for soil-remediation
services is driven largely by state programs to enforce the EPA's
underground storage tanks (UST) regulations and to fund cleanups. UST
compliance requirements and attendant remediation costs are often beyond
the financial capabilities of many individuals and smaller companies.
Therefore, several states have significantly reduced compliance
requirements and altered regulatory approaches and standards in order to
reduce the costs of cleanup. More lenient regulatory standards has
already resulted in lower levels of cleanup activity in most states where
the Company conducts business, which has had a material adverse effect on
the Company's business. The recent severe downturn in the Company's
soil-recycling business and relaxed compliance requirements and
enforcement activities, which resulted in overcapacity in the industry
and competitive pricing pressures, have led to operating losses at
certain sites beginning in fiscal 1997. As a result, during fiscal 1997,
5PAGE
the Company wrote-down $7.8 million of certain assets associated with its
soil-remediation business. The Company expects that closure of two sites
with small operating losses and a write-down of certain assets at two
other sites, at which current volumes of soil being processed were
insufficient to recover the Company's investment, will improve operating
results beginning in fiscal 1998. Revenues and operating losses,
exclusive of the write-down, at the two sites being closed aggregated
$2.9 million and $0.6 million, respectively, fiscal 1997. In addition,
underground and aboveground tank regulations, clean water legislation,
and real estate transfer and financing transactions also influence demand
for soil-remediation services.
Thermo Remediation, through its Thermo Fluids subsidiary, collects,
tests, processes, and recycles used motor oil and other industrial oils.
In addition, the Company collects and recycles oily water and oil
filters. Thermo Fluids has processing facilities located in Phoenix and
Tucson, Arizona, and Las Vegas, Nevada. From these sites, Thermo Fluids
operates a fleet of oil and water collection trucks to pick up waste oils
and oily water.
Through its North Refinery division, the Company's majority-owned
Thermo EuroTech subsidiary, located in the Netherlands, specializes in
processing "off-spec" mixtures of oil that contain water, ash, and
sediment into commercially tradable end products used in blending.
Although a large percentage of North Refinery's oil feedstock has
historically come from the former Soviet Union, North Refinery no longer
receives any oil from that nation as a result of political and economic
changes that make transportation of waste oil difficult. To overcome this
loss of supply, North Refinery has taken steps to replace and diversify
its feedstock suppliers. However, no assurance can be given that it will
not experience future disruptions in deliveries. The grant of a
chemical-waste permit for the processing of a special classification of
oil-contaminated liquids has also allowed North Refinery to begin
processing chemical-waste streams. The end products of this process are
commercial grade oils that can be blended to make diesel fuels and marine
fuels or be used as a feed material. The Company's strategy is to use
Thermo EuroTech as a platform from which to eventually provide a broad
range of environmental remediation services throughout Western Europe.
During fiscal 1997, 1996, and 1995, the Company derived revenues, of
$127.1 million, $77.0 million, and $58.2 million, respectively, from
remediation and recycling services.
Consulting and Design Services
The Company provides a wide range of comprehensive environmental
consulting and professional engineering services to private- and
public-sector clients. These services include the design and inspection
of water supply and wastewater treatment facilities; investigations of
different methods to clean up hazardous-waste sites; assistance in
obtaining government permits; transportation-related and similar types of
infrastructure engineering, survey, and land-use planning; and support
services including mechanical, electrical, and structural engineering. In
addition, the Company provides natural resource management services
including environmental-impact studies.
6PAGE
Through its Killam Associates subsidiary, the Company specializes in
the design, planning, and construction supervision of municipal and
privately owned water-treatment plants, waste treatment plants, and
hazardous-wastewater facilities. The Company provides full-service
contract operations to plant owners in the public and private sectors.
These services facilitate regulatory compliance; optimize day-to-day
plant operations; reduce costs; provide competent, experienced personnel;
and promote good community relations.
In November 1996, the Company acquired Carlan, a provider of
transportation and environmental consulting and professional engineering
and architectural services. In May 1997, the Company purchased a
controlling interest in Randers, a provider of design engineering,
project management, and construction services for industrial clients in
the manufacturing, pharmaceutical, and chemical-processing industries.
Through its Bettigole Andrews Clark & Killam subsidiary, the Company
provides a broad range of bridge and highway engineering services.
The Company's Normandeau Associates subsidiary's environmental-impact
assessments and mitigation/restoration studies help to determine water
quality, promote the safety of wildlife, and assist clients in meeting
environmental permitting and licensing requirements. Normandeau
Associates also provides aquatic biology expertise and ecological risk
assessment to electric utility plants throughout the country.
A substantial portion of the Company's consulting and design services
sales are made to existing customers on a repeat basis. Consulting and
design services are often performed as multiyear studies. In addition to
federal, state, and local governments, customers include public
utilities, consulting and construction engineers, waste management
companies, oil refineries, mining companies, chemical manufacturers,
architectural and engineering firms, and a variety of service companies
involved with real estate transactions.
During fiscal 1997, 1996, and 1995, the Company derived revenues of
$74.8 million, $74.0 million, and $40.3 million, respectively, from
consulting and design services.
Laboratory-testing Services
The Company provides comprehensive laboratory-based services for the
environmental, pharmaceutical, and food industries. These laboratories
also provide analysis and related services to detect and measure
hazardous wastes and radioactive materials.
Analytical laboratory services consist of a comprehensive range of
analytical tests to detect and measure organic contaminants, inorganic
contaminants, and radioactive materials in samples of soil, water, air,
industrial wastes, and biological materials. The Company has established
detailed procedures and strict operating standards to ensure consistent
performance and to allow it to participate in the Environmental
Protection Agency's (EPA's) Contract Laboratory Program (CLP). The
Company's environmental laboratory business has been negatively affected
by reduced federal spending on environmental testing.
7PAGE
During fiscal 1997, 1996, and 1995, the Company derived revenues of
$35.4 million, $35.5 million, and $8.6 million, respectively, from its
laboratory-testing services. Revenues from laboratory-testing services
exclude radiochemistry laboratory service included in remediation and
recycling services.
Metal-treating Services and Process Systems
The Company performs metallurgical processing services using
thermal-treatment equipment at locations in California and Minnesota.
Through its equipment division located in Michigan, the Company also
designs, manufactures, and installs computer-controlled, custom-
engineered, thermal-processing systems used to treat primary metals and
metal parts. In October 1996, the Company acquired Metal Treating from
Thermo Electron in exchange for $1.6 million in cash. Metal Treating
provides heat treating services, including carburizing, vacuum hardening,
silver and copper brazing, and aluminum heat treating, primarily in the
Milwaukee and southeastern Wisconsin areas.
During fiscal 1997, 1996, and 1995, the Company derived revenues of
$44.3 million, $35.8 million, and $29.9 million, respectively, from
metal-treating services and process systems.
(ii) New Products
The Company has made no commitments to new products that would
require the investment of a material amount of the Company's assets.
(iii) Raw Materials
Prior to fiscal 1996, a large percentage of North Refinery's oil
feedstock came from the former Soviet Union. North Refinery no longer
receives any oil from that nation as a result of political and economic
changes that make transportation of waste oil difficult. To overcome this
loss of supply, North Refinery has taken steps to replace and diversify
its feedstock suppliers. However, no assurance can be given that it will
not experience future disruptions in deliveries.
The principal materials used by the Company in its manufacturing
operations are fabricated steel, alloy castings, and ceramic and
insulating refractory materials. To date, the Company has not experienced
any difficulty in obtaining any of the materials or components used in
its operations and does not foresee any such difficulty in the future.
The Company has multiple sources for all of its significant raw material
needs.
(iv) Patents, Licenses, and Trademarks
The Company currently owns or has rights under licenses to a number
of U.S. patents. Although the Company believes that patent protection
provides it with competitive advantages with respect to certain portions
of its business and will continue to seek patent protection when
8PAGE
appropriate, the Company also believes that its business depends
primarily upon trade secrets and the technical and marketing expertise of
its personnel.
(v) Seasonal Influences
A majority of the Company's businesses experience seasonal
fluctuations. A majority of the Company's soil-remediation sites, as well
as the Company's fluids-recycling sites, experience declines in severe
weather conditions. Site remediation work and certain environmental
testing services, such as the services provided by ReTec, Lancaster
Laboratories, Killam Associates, IEM Sealand, and Thermo Nutech, may
decline in winter months as a result of severe weather conditions. In
Europe, Thermo EuroTech may experience a decline in the feedstock
delivered to its facilities during winter months, due to frozen
waterways.
(vi) Working Capital Requirements
In general, 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
See Government Contracts.
(viii) Backlog
The Company's backlog of firm orders was $108,721,000 and $95,719,000
as of March 29, 1997, and March 30, 1996, respectively. These amounts
include the backlog of all of the Company's subsidiaries, with the
exception of soil-recycling, fluids-recycling, and metallurgical
services, which are provided on a current basis pursuant to purchase
orders. Included in the Company's backlog at fiscal year-end 1997 and
1996 is the incomplete portion of contracts that are accounted for using
the percentage-of-completion method. Of the fiscal 1997 backlog amount,
substantially all orders are expected to be filled within the current
fiscal year.
(ix) Government Contracts
Approximately 13%, 10%, and 6% of the Company's revenues in fiscal
1997, 1996, and 1995, respectively, were derived from contracts or
subcontracts with the federal government that are subject to
renegotiation of profits or termination. The Company does not have any
knowledge of threatened or pending renegotiation or termination of any
material contract or subcontract.
(x) Competition
Remediation and Recycling Services
Each of ReTec's offices is engaged in highly competitive, regional
markets. ReTec's competition consists of numerous small firms offering
9PAGE
limited services, as well as much larger firms that offer an array of
services. The principal competitive factors for ReTec are: reputation;
experience; price; breadth and quality of services offered; and
technical, managerial, and business proficiency.
IEM Sealand competes with numerous regional or local companies as
well as a number of national remediation contractors. IEM Sealand
competes primarily based on price, as the vast majority of the contracts
it seeks are awarded to the lowest bidder.
Thermo Nutech faces competition from many large national competitors,
and competes primarily on the basis of its proprietary technology and
price.
Competition in the soil-remediation business is intense. The
Company's principal customers are landfills, including major landfill
companies. The Company also currently competes with companies offering a
wide range of disposal options, including other fixed-site,
thermal-treatment facilities, operators of mobile thermal-treatment
facilities, bioremediation and vapor-extraction technologies, and, in
certain states, with asphalt plants and brick kilns that use the
contaminated soil in their production processes. Competition in the
soil-remediation market has always been highly localized, consisting
mostly of single-site or single-unit operators. Competitive conditions
limit the prices charged by the Company in each local market for
soil-remediation services. Pricing is therefore a major competitive
factor for the Company. Many existing landfills have relatively low
operating costs and high margins that enable them to accept contaminated
soil at relatively low prices. Reduced regulatory requirements in many
regions of the United States have resulted in increased competition,
overcapacity in the industry, and declining prices for all forms of soil
treatment. The Company believes competition and price pressure will
remain intense for the foreseeable future.
Thermo Fluids operates the largest fleet of collection vehicles in
Arizona and Nevada. Thermo Fluids competes with numerous smaller and
several larger collection companies in its current market primarily based
on quality of service and price.
Thermo EuroTech faces competition for oil from other oil processors
and blenders and from a company with a similar distillation technology in
Italy. The market for blending oils is very large and oils such as Thermo
EuroTech's end products represent a very small percentage of the total
market. Thermo EuroTech competes primarily based on price.
Consulting and Design Services
The Company's consulting and design businesses are engaged in highly
competitive markets in all of its service areas. These markets tend to be
regional. In its geographic service area, competition consists of small,
one- to three-person firms offering a limited scope of services, as well
as much larger firms that may be regional, national, or international in
the scope of services they offer. The principal competitive factors for
the Company are: reputation; experience; price; breadth and quality of
services offered; and technical, managerial, and business proficiency.
10PAGE
Laboratory-testing Services
Hundreds of independent analytical testing laboratories and
consulting firms compete for environmental services business nationwide.
Many of these firms use equipment and processes similar to those of the
Company. Competition is based not only on price, but also on reputation
for accuracy, quality, and the ability to respond rapidly to customer
requirements. In addition, many industrial companies have their own
in-house analytical testing capabilities. The Company believes that its
competitive strength lies in the quality of its services.
Metal-treating Services and Process Systems
The market for metal-treating services is typically regional and
competitive. All regions in which the Company has facilities contain
numerous competitors. In addition, in-house heat-treating facilities
provide a major source of competition. The Company competes in this
segment on the basis of services provided, turnaround time, and price.
The market for thermal-processing systems is subject to intense
competition worldwide. The Company is aware of at least eight companies
that market a number of products comparable to the Company's, but
competition for particular projects is typically limited to fewer
companies. The Company competes on the basis of several factors,
including technical performance, product quality and reliability, timely
delivery, and often price. Certain products sold by the Company's
competitors are less expensive than comparable products sold by the
Company.
(xi) 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.
(xii) Number of Employees
At March 29, 1997, the Company employed 2,407 persons.
(d) Financial Information About Exports by Domestic Operations and About
Foreign Operations
The Company's exports by domestic operations and foreign operations
are currently insignificant.
11PAGE
(e) Executive Officers of the Registrant
Present Title (Fiscal Year First Became
Name Age Executive Officer)
---------------------- --- -------------------------------------------
Dr. John P. Appleton 62 President and Chief Executive Officer
(1993)
John N. Hatsopoulos 62 Chief Financial Officer and Vice President
(1988)
Emil C. Herkert 59 Vice President (1996)
Jeffrey L. Powell 38 Vice President (1994)
Paul F. Kelleher 54 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 Dr.
Appleton, Mr. Powell, and Mr. Herkert have held comparable positions for
at least five years, either with the Company or with its parent company,
Thermo Electron. Dr. Appleton has served as a Vice President of Thermo
Electron since 1975 in various managerial capacities. Mr. Powell has been
President and Chief Executive Officer of Thermo Remediation since May
1997. From January 1991 until May 1997, Mr. Powell was President of
Thermo Remediation. He has also served as Chief Operating Officer since
December 1993. Mr. Herkert has served as President of the Company's
Killam Associates subsidiary since 1977. Messrs. Hatsopoulos and Kelleher
are full-time employees of Thermo Electron, but devote such time to the
affairs of the Company as the Company's needs reasonably require.
Item 2. Properties
The location and general character of the Company's principal
properties as of March 29, 1997, are as follows:
The Company owns approximately 375,000 square feet of office,
engineering, laboratory, production, and manufacturing space, principally
in Pennsylvania, Minnesota, New Jersey, California, Wisconsin, and New
Mexico, and leases approximately 750,000 square feet of office,
engineering, laboratory, production, and manufacturing space, pursuant to
leases expiring in fiscal 1998 through 2009, principally in California,
Michigan, Pennsylvania, South Carolina, Florida, Texas, Washington, New
Jersey, New Mexico, New York, and Massachusetts.
The Company also owns approximately 96 acres in Maryland, South
Carolina, California, Florida, and Oregon, from which it provides
soil-remediation services. The Company occupies approximately 22 acres
principally in New York, Washington, California, Virginia, and South
Carolina pursuant to leases expiring in fiscal 1998 through 2006, from
which it provides soil-remediation services.
The Company leases approximately eight acres on two sites in Arizona
and one site in Nevada consisting of office space, fluids-recycling and
maintenance facilities, and sites for fluids storage tanks.
12PAGE
The Company occupies approximately 15 acres in Delfzijl, Holland,
pursuant to a lease expiring in 2059, consisting of office space,
distillation facilities, and oil storage tanks.
The Company believes that these facilities are in good condition and
are adequate for its present operations and that other suitable space is
readily available if any of such leases are not extended.
Item 3. Legal Proceedings
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders
Not applicable.
PART II
Item 5. Market for Registrant's Common Equity and Related Shareholder
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 Fiscal 1997 Annual Report to
Shareholders and is incorporated herein by reference.
Item 6. Selected Financial Data
The information concerning the Registrant's selected financial data
is included under the sections labeled "Selected Financial Information"
and "Dividend Policy" in the Registrant's Fiscal 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 Fiscal 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 March 29,
1997, are included in the Registrant's Fiscal 1997 Annual Report to
Shareholders and are incorporated herein by reference.
13PAGE
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosures
Not applicable.
PART III
Item 10. Directors and Executive Officers of the Registrant
The information concerning Directors required under this item is
incorporated herein by reference from the material contained under the
caption "Election of Directors" in the Registrant's definitive proxy
statement to be filed with the Securities and Exchange Commission
pursuant to Regulation 14A, not later than 120 days after the close of
the fiscal year. The information concerning delinquent filers pursuant to
Item 405 of Regulation S-K is incorporated herein by reference from the
material contained under the heading "Section 16(a) Beneficial Ownership
Reporting Compliance" under the caption "Stock Ownership" in the
Registrant's definitive proxy statement to be filed with the Securities
and Exchange Commission pursuant to Regulation 14A, not later than 120
days after the close of the fiscal year.
Item 11. Executive Compensation
The information required under this item is incorporated herein by
reference from the material contained under the caption "Executive
Compensation" in the Registrant's definitive proxy statement to be filed
with the Securities and Exchange Commission pursuant to Regulation 14A,
not later than 120 days after the close of the fiscal year.
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.
14PAGE
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 Operations
Consolidated Balance Sheet
Consolidated Statement of Cash Flows
Consolidated Statement of Shareholders' Investment
Notes to Consolidated Financial Statements
Report of Independent Public Accountants
Financial Statements and Schedules filed herewith:
Financial Statements of Unconsolidated Subsidiary:
ReTec/Tetra L.C.
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 the notes thereto.
(b) Reports on Form 8-K
None.
(c) Exhibits
See Exhibit Index on the page immediately preceding exhibits.
15PAGE
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: June 6, 1997 THERMO TERRATECH INC.
By: John P. Appleton
--------------------
John P. Appleton
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 June 6, 1997.
Signature Title
--------- -----
By: John P. Appleton President, Chief Executive Officer,
----------------------
John P. Appleton and Director
By: John N. Hatsopoulos Chief Financial Officer,
----------------------
John N. Hatsopoulos Vice President, and Director
By: Paul F. Kelleher Chief Accounting Officer
----------------------
Paul F. Kelleher
By: Brian D. Holt Director
----------------------
Brian D. Holt
By: Donald E. Noble Director
----------------------
Donald E. Noble
By: Director
----------------------
William A. Rainville
By: Chairman of the Board and Director
----------------------
Polyvios C. Vintiadis
16PAGE
Report of Independent Auditors
The Supervisory Board
RETEC/TETRA L.C.
We have audited the accompanying balance sheets of RETEC/TETRA L.C. (a
Limited Liability Corporation) ("the Company") as of December 31, 1996
and 1995, and the related statements of operations, members' equity, and
cash flows for each of the years then ended. These financial statements
are the responsibility of the Company's management. Our responsibility is
to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of
RETEC/TETRA L.C. at December 31, 1996 and 1995, and the results of its
operations and its cash flow for the years then ended, in conformity with
generally accepted accounting principles.
Ernst & Young LLP
Houston, Texas
February 27, 1997
17PAGE
RETEC/TETRA L.C.
BALANCE SHEETS
December 31
--------------------------
1996 1995
----------- -----------
ASSETS
Current assets:
Cash $ 589,355 $ 114,330
Trade accounts receivable 1,669,294 1,506,109
Accounts receivable from parent
corporations 19,981 4,139
Prepaid expenses and other current assets 793,790 538,598
----------- -----------
Total current assets 3,072,420 2,163,176
Property, plant and equipment:
Machinery and equipment 17,966,893 13,881,832
Automobiles and other equipment 475,673 360,679
Construction in progress 1,465,117 1,430,927
----------- -----------
19,907,683 15,673,438
Less accumulated depreciation (7,645,348) (4,475,376)
----------- -----------
Net property, plant and equipment 12,262,335 11,198,062
Other assets:
Technology, patents and licenses, net of
accumulated amortization of $314,860
in 1996 and $241,694 in 1995 381,380 454,546
----------- -----------
Total assets $15,716,135 $13,815,784
=========== ===========
LIABILITIES AND MEMBERS' EQUITY
Current liabilities:
Trade accounts payable $ 274,818 $ 1,035,316
Payable to parent corporations 129,853 270,114
Accrued expenses 574,009 368,874
Current portion of notes payable 1,037,000 668,000
----------- -----------
Total current liabilities 2,015,680 2,342,304
Long-term portion of notes payable 2,635,139 2,465,000
Members' equity:
Invested capital 9,751,078 8,675,539
Retained earnings 1,314,238 332,941
----------- -----------
Total members' equity 11,065,316 9,008,480
----------- -----------
Total liabilities and members' equity $15,716,135 $13,815,784
=========== ===========
See Accompanying Notes
18PAGE
RETEC/TETRA L.C.
STATEMENTS OF OPERATIONS
Year Ended December 31
--------------------------
1996 1995
----------- -----------
Revenues $12,066,497 $ 9,417,408
Cost of revenues 9,040,440 8,176,145
----------- -----------
Gross profit 3,026,057 1,241,263
General and administrative expenses 1,664,435 1,170,802
----------- -----------
Operating income 1,361,622 70,461
Other income 15,523 0
Interest expense (386,843) (163,165)
Loss on sale of fixed assets (9,005) (23,666)
----------- -----------
Net income (loss) $ 981,297 $ (116,370)
=========== ===========
See Accompanying Notes
19PAGE
RETEC/TETRA L.C.
STATEMENTS OF MEMBERS' EQUITY
TETRA Remediation
Technologies, Technologies,
Inc. Inc. Total
------------- ------------- -----------
Balance at August 1, 1992
Capital contribution $ 800,000 $ 2,375,539 $ 3,175,539
1992 net loss (285,303) (285,303) (570,606)
----------- ----------- -----------
Balance at December 31, 1992 514,697 2,090,236 2,604,933
Capital contribution 2,400,000 1,900,000 4,300,000
1993 net loss (124,225) (124,224) (248,449)
----------- ----------- -----------
Balance at December 31, 1993 2,790,472 3,866,012 6,656,484
Capital contribution 600,000 600,000 1,200,000
1994 net income 634,183 634,183 1,268,366
----------- ----------- -----------
Balance at December 31, 1994 4,024,655 5,100,195 9,124,850
1995 net loss (58,185) (58,185) (116,370)
----------- ----------- -----------
Balance at December 31, 1995 3,966,470 5,042,010 9,008,480
Capital contribution 1,075,539 0 1,075,539
1996 net income 490,649 490,648 981,297
----------- ----------- -----------
Balance at December 31, 1996 $ 5,532,658 $ 5,532,658 $11,065,316
=========== =========== ===========
See Accompanying Notes
20PAGE
RETEC/TETRA L.C.
STATEMENTS OF CASH FLOWS
Year Ended December 31
--------------------------
1996 1995
----------- -----------
Operating activities:
Net income (loss) $ 981,297 $ (116,370)
Adjustments to reconcile net income (loss)
to cash provided by operating activities:
Depreciation and amortization 3,251,037 2,344,990
Loss on the sale of fixed assets 9,005 23,666
Changes in operating assets and
liabilities:
Accounts receivable (179,027) 37,957
Prepaid expenses and other
current assets (255,192) (228,489)
Trade accounts payable and accrued
expenses (695,624) (189,320)
----------- -----------
Net cash provided by operating activities 3,111,496 1,872,434
Investing activities:
Purchase of property, plant and equipment (4,252,649) (5,135,545)
Purchase of patents, royalties and
technologies 0 (26,357)
Proceeds from sale of assets 1,500 65,671
----------- -----------
Net cash used in investing activities (4,251,149) (5,096,231)
Financing activities:
Proceeds from long-term debt 3,585,000 3,340,000
Principal payments on long-term debt (3,045,861) (207,000)
Capital contribution - TETRA 1,075,539 0
----------- -----------
Net cash provided by financing activities 1,614,678 3,133,000
Increase (decrease) in cash 475,025 (90,797)
Cash at beginning of period 114,330 205,127
----------- -----------
Cash at end of period $ 589,355 $ 114,330
=========== ===========
Supplemental Cash Flow Information:
Interest paid $ 426,370 $ 163,165
See Accompanying Notes
21PAGE
RETEC/TETRA L.C.
NOTES TO FINANCIAL STATEMENTS
December 31, 1996
NOTE A -- ORGANIZATION AND OPERATIONS
RETEC/TETRA L.C. ("the Company") was formed August 1, 1992 as a joint
venture with RETEC/Thermal (RETEC), a wholly-owned subsidiary of
Remediation Technologies, Inc., owning 50% and TETRA/Thermal, (TETRA) a
wholly-owned subsidiary of TETRA Technologies, Inc., owning the other
50%. The Company installs and operates systems to process hazardous and
non-hazardous wastes at petroleum refineries located primarily in the
Gulf Coast region. In December 1995 Remediation Technologies, Inc. was
acquired by Thermo Remediation Inc.
NOTE B -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Concentration of Credit Risk
Financial instruments which subject the Company to concentrations of
credit risk consist principally of trade receivables. The Company's
policy is to evaluate, prior to contract signing, each customer's
financial condition and determine the amount of open credit to be
extended; generally collateral is not required. The trade receivables
primarily include activity with major petroleum refinery companies.
Property, Plant and Equipment
Property, plant and equipment contributed by RETEC upon formation of
the venture are stated at the value in the formation agreement and assets
purchased subsequent are stated at cost. Expenditures that increase the
useful lives of assets are capitalized. The costs of repairs and
maintenance are charged to operations as incurred. Assets contributed at
the Company's formation are depreciated using a declining-balance method
converting to the straight-line method. All assets acquired subsequent to
formation are depreciated using the straight-line method. The estimated
useful lives of assets are as follows:
Machinery and Equipment 2 to 10 years
Automobiles and other equipment 2 to 5 years
Technology, Patents and Licenses
Technology, patents and licenses, which relate to proprietary waste
treatment processes contributed by RETEC, were estimated at the stated
value in the formation agreement. Patents and licenses are amortized over
the estimated useful lives generally ranging from five to ten years.
Technologies are amortized over estimated useful lives from eight to ten
years.
22PAGE
RETEC/TETRA L.C.
NOTES TO FINANCIAL STATEMENTS
December 31, 1996
NOTE B -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (con't)
Income Taxes
The Company has elected to be treated as a partnership for federal
income tax purposes. RETEC and TETRA include their respective shares of
the net income (loss) of the Company in their federal and state tax
returns.
Allocation of Joint Venture Profit and Loss
In accordance with the formation agreement, net income (loss) is to
be allocated to RETEC and TETRA in accordance with their partnership
interests.
Operating Leases
The Company periodically enters into operating leases for various
pieces of equipment and warehouse space. Aggregate rental expense under
these agreements was $353,305 and $603,210 in 1996 and 1995,
respectively. Minimum future annual lease payments under non-cancelable
operating leases are as follows for the years ending December 31, 1997: -
$72,188; 1998 - $51,385; 1999 - $31,868; 2000 - $3,591. The lease for
warehouse space expires March 1997 but the Company expects to renew the
lease.
Use of Estimates
Management is required to make estimates and assumptions that affect
the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.
Accounting for Impairment of Long-Lived Assets and for Long-Lived Assets
to Be Disposed Of
In March 1995, The Financial Accounting Standards Board issued
Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of (SFAS 121), which requires impairment losses to
be recorded on long-lived assets used in operations when indicators of
impairment are present and the discounted cash flows estimated to be
generated by those assets are less than the assets' carrying amount. SFAS
121 also addresses the accounting for long-lived assets that are expected
to be disposed of. The Company adopted SFAS 121 in the first quarter of
1996 and the effect of adoption was not material.
Financial Instruments
The carrying amount of the Company's financial instruments
approximate fair market value.
23PAGE
RETEC/TETRA L.C.
NOTES TO FINANCIAL STATEMENTS
December 31, 1996
NOTE C -- CAPITAL CONTRIBUTIONS
The Company was initially capitalized with TETRA contributing
$800,000 in cash and RETEC contributing thermal plant equipment valued at
$1,775,539 and thermal desorption process technology valued at $600,000.
Each partner contributed $600,000 in 1994 and $1.4 million in 1993 in
additional capital to fund the construction of two new projects. In
September 1993, the Company acquired the assets of the Environmental
Services Division of TRW for $1 million, with each partner contributing
$500,000. Additionally, TETRA contributed $500,000 of working capital in
1993. In September 1996, TETRA contributed $1,075,540 toward the purchase
of additional equipment to be used in future projects.
NOTE D -- LONG-TERM DEBT
Long-term debt consists of the following:
December 31
-----------------
(In thousands)
1996 1995
------- -------
Revolving credit agreement of $500,000 with
an interest rate of prime and a commitment
fee of 3/8% on the unused portion of the loan.
The agreement expired December 15, 1996. $ - $ -
Promissory note payable to Texas Commerce Bank
at fixed interest rate of 8.05%, payable $100,000
quarterly plus interest and due June 15, 2000.
The note is secured by the underlying equipment
and is guaranteed by both parent corporations. 1,401 1,898
Promissory note payable to Texas Commerce Bank at
prime interest rate, payable $65,000 quarterly
plus interest and due October 15, 2000. The note
is secured by the underlying equipment and is
guaranteed by both parent corporations. 575 1,235
Promissory note payable to Texas Commerce Bank
at prime interest rate, payable $94,250 quarterly
plus interest and due May 20, 2001. The note is
secured by the underlying equipment and is
guaranteed by both parent corporations. 1,696 -
------- -------
3,672 3,133
Less: Current portion (1,037) (668)
------- -------
$ 2,635 $ 2,465
======= =======
24PAGE
RETEC/TETRA L.C.
NOTES TO FINANCIAL STATEMENTS
December 31, 1996
NOTE D -- LONG-TERM DEBT (con't)
Scheduled maturities for the next five years are as follows: (In
thousands)
1997 $ 1,037
1998 1,037
1999 832
2000 578
2001 188
-------
$ 3,672
=======
NOTE E -- RELATED-PARTY TRANSACTIONS
The Company was billed approximately $1,305,577 in 1996 and $922,164
in 1995 by the owners, primarily TETRA, for administrative services and
materials rendered on behalf of the Company.
NOTE F -- COMMITMENTS AND CONTINGENCIES
The Company is subject to litigation and other proceedings arising in
the ordinary course of business. While the outcome of the litigation and
other proceedings against the Company cannot be predicted with certainty,
management does not expect these matters to have a material adverse
impact on the Company.
25PAGE
Report of Independent Public Accountants
----------------------------------------
To the Shareholders and Board of Directors of Thermo TerraTech Inc.:
We have audited, in accordance with generally accepted auditing
standards, the consolidated financial statements included in Thermo
TerraTech Inc.'s Annual Report to Shareholders incorporated by reference
in this Form 10-K, and have issued our report thereon dated May 6, 1997
(except with respect to the matters discussed in Note 17 as to which the
date is May 12, 1997). Our audits were made for the purpose of forming an
opinion on those statements taken as a whole. The schedule listed in Item
14 on page 15 is the responsibility of the Company's management and is
presented for purposes of complying with the Securities and Exchange
Commission's rules and is not part of the basic consolidated financial
statements. 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 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
May 6, 1997
26PAGE
SCHEDULE II
THERMO TERRATECH INC.
Valuation and Qualifying Accounts
(In thousands)
Balance Provision
at Charged Accounts Balance
Beginning to Accounts Written- at End
Description of Year Expense Recovered off Other(a) of Year
- ----------------- --------- --------- --------- -------- ------- -------
Allowance for
Doubtful Accounts
Year Ended
March 29, 1997 $ 2,861 $ 625 $ 49 $ (516) $ 819 $ 3,838
Year Ended
March 30, 1996 (b) $ 3,572 $ 85 $ 84 $(1,628) $ 748 $ 2,861
Year Ended
April 1, 1995 (b) $ 3,273 $ 161 $ (579) $ 88 $ 629 $ 3,572
(a) Includes allowances of businesses acquired during the year as described in
Note 3 to Consolidated Financial Statements in the Registrant's fiscal
1997 Annual Report to Shareholders and the effect of foreign currency
translation.
(b) Historical results have been restated to reflect the acquisition of Metal
Treating, Inc., accounted for at historical cost in a manner similar to a
pooling-of-interests.
27PAGE
EXHIBIT INDEX
Exhibit
Number Description of Exhibit
------------------------------------------------------------------------
3.1 Restated Certificate of Incorporation, as amended (filed
as Exhibit 99 to the Registrant's Registration Statement
on Form S-2 [Registration No. 333-02269] and incorporated
herein by reference).
3.2 Bylaws of the Registrant (filed as Exhibit 3(b) to the
Registrant's Annual Report on Form 10-K for the fiscal
year ended April 2, 1988 [File No. 1-9549] and
incorporated herein by reference).
4.1 Fiscal Agency Agreement dated August 4, 1989, among the
Registrant, Thermo Electron Corporation, and Chemical
Bank, as fiscal agent (filed as Exhibit B to the
Registrant's Current Report on Form 8-K relating to the
events occurring on August 4, 1989 [File No. 1-9549] and
incorporated herein by reference).
4.2 Fiscal Agency Agreement dated as of May 2, 1996, among
the Registrant, Thermo Electron Corporation, and Chemical
Bank, as Fiscal Agent (filed as Exhibit 4.2 to the
Registrant's Annual Report on Form 10-K for the fiscal
year ended March 30, 1996 [File No. 1-9549] 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 Thermo Electron Corporate Charter as amended and restated
effective January 3, 1993 (filed as Exhibit 10(a) to the
Registrant's Annual Report on Form 10-K for the fiscal
year ended April 3, 1993 [File No. 1-9549] and
incorporated herein by reference).
10.2 Amended and Restated Corporate Services Agreement dated
January 3, 1993, between Thermo Electron Corporation and
the Registrant (filed as Exhibit 10(b) to the
Registrant's Annual Report on Form 10-K for the fiscal
year ended April 3, 1993 [File No. 1-9549] and
incorporated herein by reference).
10.3 Agreement of Lease dated December 31, 1985, between
Claridge Properties Ltd. and Thermo Electron Corporation
(filed as Exhibit 10(c) to the Registrant's Registration
Statement on Form S-1 [Reg. No. 33-6763] and incorporated
herein by reference).
10.4 Assignment of Lease dated December 31, 1985, between
Thermo Electron Corporation and TMO, Inc. (filed as
Exhibit 10(d) to the Registrant's Registration Statement
on Form S-1 [Reg. No. 33-6763] and incorporated herein by
reference).
28PAGE
EXHIBIT INDEX
Exhibit
Number Description of Exhibit
------------------------------------------------------------------------
10.5 Sublease dated March 30, 1986, between TMO, Inc. and
Holcroft/Loftus, Inc. (filed as Exhibit 10(e) to the
Registrant's Registration Statement on Form S-1 [Reg. No.
33-6763] and incorporated herein by reference).
10.6 Lease Amending Agreement dated January 1, 1995, between
Claridge Properties Ltd., Thermo Electron Corporation,
and TMO, Inc. (filed as Exhibit 10.6 to the Registrant's
Annual Report on Form 10-K [File No. 1-9549] and
incorporated by reference).
10.7 Exclusive License and Marketing Agreement dated March 22,
1990, among TPS Technologies Inc., Holcroft Inc., and
Thermo Soil Recyclers Inc. (filed as Exhibit 10(q) to the
Registrant's Annual Report on Form 10-K for the fiscal
year ended March 30, 1990 [File No. 1-9549] and
incorporated herein by reference).
10.8 Form of Indemnification Agreement with Directors and
Officers (filed as Exhibit 10(k) to the Registrant's
Annual Report on Form 10-K for the fiscal year ended
March 30, 1991 [File No. 1-9549] and incorporated herein
by reference).
10.9 Development Agreement dated September 15, 1991, between
Thermo Electron Corporation and the Registrant (filed as
Exhibit 10(l) to the Registrant's Quarterly Report on
Form 10-Q for the fiscal quarter ended September 28, 1991
[File No. 1-9549] and incorporated herein by reference).
10.10 Amended and Restated Development Agreement dated January
2, 1992, between Thermo Electron Corporation and the
Registrant (filed as Exhibit 10(m) to the Registrant's
Annual Report on Form 10-K for the fiscal year ended
March 28, 1992 [File No. 1-9549] and incorporated herein
by reference).
10.11 Asset Transfer Agreement dated as of October 1, 1993,
among the Registrant, TPS Technologies Inc., and Thermo
Remediation Inc. (filed as Exhibit 2.3 to Thermo
Remediation's Registration Statement on Form S-1 [Reg.
No. 33-70544] and incorporated herein by reference).
10.12 Exclusive License Agreement dated as of October 1, 1993,
among the Registrant, TPS Technologies Inc., and Thermo
Remediation Inc. (filed as Exhibit 2.4 to Thermo
Remediation's Registration Statement on Form S-1 [Reg.
No. 33-70544] and incorporated herein by reference).
29PAGE
EXHIBIT INDEX
Exhibit
Number Description of Exhibit
------------------------------------------------------------------------
10.13 Non-Competition and Non-Disclosure Agreement dated as of
October 1, 1993 among the Registrant, TPS Technologies
Inc. and Thermo Remediation Inc. (filed as Exhibit 2.5 to
Thermo Remediation's Registration Statement on Form S-1
[Reg. No. 33-70544] and incorporated herein by
reference).
10.14 Tax Allocation Agreement dated as of June 1, 1992,
between the Registrant and Thermo Remediation Inc. (filed
as Exhibit 10.3 to Thermo Remediation's Registration
Statement on Form S-1 [Reg. No. 33-70544] and
incorporated herein by reference).
10.15 Agreement of Partnership dated May 16, 1994, among Terra
Tech Labs Inc. (a wholly owned subsidiary of the
Registrant) and Eberline Analytical Corporation, Skinner
& Sherman, Inc., TMA/NORCAL Inc., Normandeau Associates
Inc., Bettigole Andrews & Clark Inc., Fellows, Read &
Associates Inc., and Thermo Consulting Engineers Inc.
(each a wholly owned subsidiary of Thermo Instrument
Systems Inc.) (filed as Exhibit 1 to the Registrant's
Current Report on Form 8-K relating to the events
occurring on May 16, 1994 [File No. 1-9549] and
incorporated herein by reference).
10.16 Promissory Note dated May 16, 1994, issued by the
Registrant to Thermo Electron Corporation (filed as
Exhibit 2 to the Registrant's Current Report on Form 8-K
relating to the events occurring on May 16, 1994 [File
No. 1-9549] and incorporated herein by reference).
10.17 Agreement of Dissolution of Partnership dated May 9, 1995
among Thermo Terra Tech (the Partnership), Terra Tech
Labs, Inc. (a wholly owned subsidiary of the Registrant)
and Eberline Analytical Corporation, Skinner & Sherman,
Inc., TMA/NORCAL Inc., Normandeau Associates Inc.,
Bettigole Andrews & Clark Inc., Fellows, Read &
Associates Inc., and Thermo Consulting Engineers Inc.
(each a wholly owned subsidiary of Thermo Instrument
Systems Inc.) (filed as Exhibit 2.1 to the Registrant's
Current Report on Form 8-K relating to the events
occurring on May 9, 1995 [File No. 1-9549] and
incorporated herein by reference).
10.18 Stock Purchase Agreement dated May 9, 1995, between the
Registrant and Thermo Instrument Systems Inc. (filed as
Exhibit 2.2 to the Registrant's Current Report on Form
8-K relating to the events occurring on May 9, 1995 [File
No. 1-9549] and incorporated herein by reference).
30PAGE
EXHIBIT INDEX
Exhibit
Number Description of Exhibit
------------------------------------------------------------------------
10.19 Note dated May 17, 1995, from the Registrant to Thermo
Electron Corporation (filed as Exhibit 2.3 to the
Registrant's Current Report on Form 8-K relating to the
events occurring on May 9, 1995 [File No. 1-9549] and
incorporated herein by reference).
10.20 Stock Purchase and Note Issuance Agreement dated as of
November 22, 1993, between the Registrant and Thermo
Remediation Inc. (filed as Exhibit 10.11 to Thermo
Remediation's Registration Statement on Form S-1 [Reg.
No. 33-70544] and incorporated herein by reference).
10.21 $2,650,000 principal amount Subordinated Convertible Note
dated as of November 22, 1993, made by Thermo Remediation
Inc., issued to the Registrant (filed as Exhibit 10.12 to
Thermo Remediation's Registration Statement on Form S-1
[Reg. No. 33-70544] and incorporated herein by
reference).
10.22 Asset Purchase Agreement dated as of November 19, 1993,
by and among All Western Oil, Inc. and certain affiliates
thereof and Thermo Fluids Inc. (filed as Exhibit 10.13 to
Thermo Remediation's Registration Statement on Form S-1
[Reg. No. 33-70544] and incorporated herein by
reference).
10.23 First Addendum to Asset Purchase Agreement dated as of
August 7, 1994, among All Western Oil, Inc. et al. and
Thermo Fluids Inc. (filed as Exhibit 10.1 to Thermo
Remediation's Quarterly Report on Form 10-Q for the
fiscal quarter ended October 1, 1994 [File No. 1-12636]
and incorporated herein by reference).
10.24 Promissory Note in the principal amount of $700,000,
dated August 7, 1994 (filed as Exhibit 10.2 to Thermo
Remediation's Quarterly Report on Form 10-Q for the
fiscal quarter ended October 1, 1994 [File No. 1-12636]
and incorporated herein by reference).
10.25 Security Agreement dated as of August 7, 1994, among All
Western Oil, Inc. et al. and Thermo Fluids Inc. (filed as
Exhibit 10.3 to Thermo Remediation's Quarterly Report on
Form 10-Q for the fiscal quarter ended October 1, 1994
[File No. 1-12636] and incorporated herein by reference).
31PAGE
EXHIBIT INDEX
Exhibit
Number Description of Exhibit
------------------------------------------------------------------------
10.26 Stock Purchase and Sale Agreement made and entered into
on February 6, 1995, to be effective as of January 29,
1995, by and between Nord Est S.A., the Registrant, and
Emil C. Herkert, Kenneth L. Zippler, Franklin O.
Williamson, Jr., Fletcher N. Platt, Jr., Eugene J.
Destefano, Meint Olthof, and Stanley P. Kaltnecker, Jr.
(filed as Exhibit 1 to the Registrant's Current Report on
Form 8-K relating to the events occurring on February 6,
1995 [File No. 1-9549] and incorporated herein by
reference).
10.27 Agreement and Plan of Merger dated as of June 28, 1995,
by and among the Registrant, Eberline Acquisition Inc.,
Thermo Remediation Inc., and Eberline Holdings Inc.
(filed as Appendix B to Thermo Remediation's Proxy
Statement for the Annual Meeting held on December 13,
1995 [File No. 1-12636] and incorporated herein by
reference).
10.28 $28,000,000 Secured Promissory Note dated as of January
29, 1995, issued by the Registrant to Nord Est S.A.
(filed as Exhibit 2 to the Registrant's Current Report on
Form 8-K relating to the events occurring on February 6,
1995 [File No. 1-9549] and incorporated herein by
reference).
10.29 $38,000,000 Promissory Note dated as of February 21,
1995, issued by the Registrant to Thermo Electron
Corporation (filed as Exhibit 3 to the Registrant's
Current Report on Form 8-K relating to the events
occurring on February 6, 1995 [File No. 1-9549] and
incorporated herein by reference).
10.30 Asset Purchase Agreement by and among Thermo Analytical
Inc. (as Buyer); Lancaster Laboratories, Inc. and
Clewmark Holdings (as Sellers); and Earl H. Hess, Anita
F. Hess, Kenneth E. Hess, J. Wilson Hershey, and Carol D.
Hess (as the principal owners of Sellers) (filed as
Exhibit 1 to the Registrant's Current Report on Form 8-K
relating to the events occurring on May 10, 1995 [File
No. 1-9549] and incorporated herein by reference).
10.31 Agreement and Plan of Merger dated as of the first day of
December 1995, by and among Thermo Remediation Inc., TRI
Acquisition Inc., and Remediation Technologies, Inc.
(filed as Exhibit 2(a) to the Registrant's Current Report
on Form 8-K relating to the events occurring on December
8, 1995 [File No. 1-9549] and incorporated herein by
reference).
32PAGE
EXHIBIT INDEX
Exhibit
Number Description of Exhibit
------------------------------------------------------------------------
10.32 Purchase and Sale Agreement dated as of December 20,
1994, by and among TPS Technologies Inc., TPST Soil
Recyclers of Maryland Inc., Rafich Corporation, Harry
Ratrie, John C. Cyphers, and J. Thomas Hood (filed as
Exhibit 1 to Thermo Remediation's Current Report on Form
8-K for the events occurring on December 21, 1994 [File
No. 1-12636] and incorporated herein by reference).
10.33 Stock Purchase Agreement entered into on March 29, 1995,
by and among Stalt Holding, B.V., Beheersmaatschappij J.
Amerika N.V., A.J. Van Es, J.B. Van Es and D.A. Slager,
and the Registrant (filed as Exhibit 1 to the
Registrant's Current Report on Form 8-K relating to the
events occurring on March 29, 1995 [File No. 1-9549] and
incorporated herein by reference).
10.34 Master Repurchase Agreement dated January 1, 1994,
between the Registrant and Thermo Electron Corporation
(filed as Exhibit 10.21 to the Registrant's Annual Report
on Form 10-K for the fiscal year ended April 2, 1994
[File No. 1-9549] and incorporated herein by reference).
10.35 Master Reimbursement Agreement dated January 1, 1994,
between the Registrant, Thermo Electron Corporation, and
Thermo Remediation Inc. (filed as Exhibit 10.22 to the
Registrant's Annual Report on Form 10-K for the fiscal
year ended April 2, 1994 [File No. 1-9549] and
incorporated herein by reference).
10.36 Incentive Stock Option Plan of the Registrant (filed as
Exhibit 10(h) to the Registrant's Registration Statement
on Form S-1 [Reg. No. 33-6763] 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 1,850,000 shares, after
adjustment to reflect share increases approved in 1987,
1989, and 1992, 6-for-5 stock splits effected in
July 1988 and March 1989, and 3-for-2 stock split
effected in September 1989).
10.37 Nonqualified Stock Option Plan of the Registrant (filed
as Exhibit 10(i) to the Registrant's Registration
Statement on Form S-1 [Reg. No. 33-6763] 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 1,850,000 shares, after
adjustment to reflect share increases approved in 1987,
1989, and 1992, 6-for-5 stock splits effected in
July 1988 and March 1989, and 3-for-2 stock split
effected in September 1989).
33PAGE
EXHIBIT INDEX
Exhibit
Number Description of Exhibit
------------------------------------------------------------------------
10.38 Deferred Compensation Plan for Directors of the
Registrant (filed as Exhibit 10(k) to the Registrant's
Registration Statement on Form S-1 [Reg. No. 33-6763] and
incorporated herein by reference).
10.39 Equity Incentive Plan (filed as Exhibit 10.63 to
Thermedics Inc.'s Annual Report on Form 10-K for the
fiscal year ended January 1, 1994 [File No. 1-9567] and
incorporated herein by reference) (Maximum number of
shares issuable is 1,750,000 shares, after adjustment to
reflect share increase approved in 1994).
10.40 Directors Stock Option Plan, as amended and restated
effective January 1, 1995 (filed as Exhibit 10.39 to the
Registrant's Annual Report on Form 10-K for the fiscal
year ended April 1, 1995 [File No. 1-9549] and
incorporated herein by reference).
10.41 Thermo TerraTech Inc. (formerly Thermo Process Systems
Inc.)- Thermo Remediation Inc. Nonqualified Stock Option
Plan (filed as Exhibit 10(l) to the Registrant's
Quarterly Report on Form 10-Q for the fiscal quarter
ended January 1, 1994 [File No. 1-9549] and incorporated
herein by reference).
In addition to the stock-based compensation plans of the
Registrant, the executive officers of the Registrant may
be granted awards under stock-based compensation plans of
Thermo Electron for services rendered to the Registrant
or to such affiliated corporations. Thermo Electron's
plans were filed as Exhibits 10.21 through 10.45 to the
Annual Report on Form 10-K of Thermo Electron for the
year ended December 28, 1996 [File No. 1-8002] and are
incorporated herein by reference.
10.42 Restated Stock Holdings Assistance Plan and Form of
Executive Loan.
11 Computation re: Earnings (Loss) per share.
13 Annual Report to Shareholders for the fiscal year ended
March 29, 1997 (only those portions incorporated herein
by reference).
21 Subsidiaries of the Registrant.
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of Ernst & Young LLP.
27 Financial Data Schedule.