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 September 28, 1996
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Commission file number 1-10573
THERMO POWER CORPORATION
(Exact name of Registrant as specified in its charter)
Massachusetts 04-2891371
(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 November 22, 1996, was approximately $39,307,000.
As of November 22, 1996, the Registrant had 12,486,025 shares of Common
Stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant's Annual Report to Shareholders for the fiscal
year ended September 28, 1996, are incorporated by reference into Parts I
and II.
Portions of the Registrant's definitive Proxy Statement for the Annual
Meeting of Shareholders to be held on March 21, 1997, are incorporated by
reference into Part III.
PAGE
PART I
Item 1. Business
(a) General Development of Business
Thermo Power Corporation (the Company or the Registrant) develops
and commercializes environmentally sound and economically efficient power
generation, cooling, lighting, and related products. The Company's
business is divided into three segments. The Industrial Refrigeration
Systems segment develops, manufactures, markets, and services industrial
refrigeration and commercial cooling equipment, and also rents commercial
cooling and industrial refrigeration equipment. The Engines segment
develops, manufactures, markets, and services gasoline engines for
recreational boats, propane and gasoline engines for lift trucks, and
natural gas engines for fleet vehicles and industrial applications. The
Cooling and Cogeneration Systems segment develops, manufactures, markets,
and services natural gas cooling and cogeneration systems, and conducts
research and development on applications of thermal energy. Through its
78%-owned ThermoLyte Corporation (ThermoLyte) subsidiary, formed in March
1995, the Company is developing and commercializing a family of
gas-powered lighting products, including area lights, flashlights,
emergency lights, and other lighting products.
The ThermoLyte family of lighting products is based on the
Company's patented technology for a rigid mantle, the "bulb" in gas
lights. This durable mantle allows the Company to design products that
are portable and use propane as a power source instead of batteries.
Using propane offers several advantages over batteries, including a
potentially infinite shelf life, substantially longer operating hours,
constant brightness, and no battery disposal.
ThermoLyte has developed and is now preparing to introduce a
propane-powered area light to the marketplace. In preparation for
introduction of the area light, ThermoLyte conducted focus groups to
gauge consumer reaction to the light's concept, performance, and design.
The final design is a decorative, contemporary-style area light suitable
for providing an alternative to candles, oil lamps, or battery-powered
lights in the home or backyard. Late in calendar 1996, the Company plans
to make a limited initial market introduction of its area light through a
catalog for employees and shareholders of Thermo Electron Corporation
(Thermo Electron) and its subsidiaries. The Company is also engaged in
qualifying vendors for manufacturing and consulting specialty catalog
buyers.
During the first quarter of fiscal 1996*, the Company acquired the
thermoelectric cooling module business from ThermoTrex Corporation
(ThermoTrex), a majority-owned subsidiary of Thermo Electron, for
$860,000, which was the net book value of the business acquired. The
Company's thermoelectric cooling modules are used to control the
* References to fiscal 1996, 1995, and 1994 herein are for the fiscal
years ended September 28, 1996, September 30, 1995, and October 1,
1994, respectively.
2PAGE
temperature of laser diodes in fiber-optic telecommunication equipment
and biomedical instruments, as well as thermal reference sources (TRSs),
which are used for calibrating infrared imaging systems. The Company is
also researching other potential applications for this technology.
The Company was originally incorporated in Massachusetts in June
1985 under the name Tecogen Inc., as a wholly owned subsidiary of Thermo
Electron to succeed the business of Thermo Electron's Thermal Products
Division. In March 1993, the Company's name was changed to Thermo Power
Corporation. As of September 28, 1996, Thermo Electron owned 7,915,306
shares of the Company's common stock, representing 63% of such stock
outstanding at that time. Thermo Electron is a world leader in
environmental monitoring and analysis instruments, biomedical products
such as heart-assist devices and mammography systems, papermaking and
paper-recycling equipment, biomass electric power generation, and other
specialized products and technologies. Thermo Electron also provides a
range of services related to environmental quality. During fiscal 1996,
Thermo Electron purchased 86,700 shares of the Company's common stock in
the open market at a total price of $1,165,000.
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. These statements involve a number of risks and
uncertainties, including those detailed under the caption "Forward-
looking Statements" in the Registrant's Fiscal 1996 Annual Report to
Shareholders incorporated herein by reference.
(b) Financial Information About Industry Segments
The Company's business is divided into three segments. The
Industrial Refrigeration Systems segment develops, manufactures, markets,
and services industrial refrigeration and commercial cooling equipment,
and rents commercial cooling and industrial refrigeration equipment. The
Engines segment develops, manufactures, markets, and services gasoline
engines for recreational boats, propane and gasoline engines for lift
trucks, and natural gas engines for fleet vehicles and industrial
applications. The Cooling and Cogeneration Systems segment develops,
manufactures, markets, and services natural gas cooling and cogeneration
systems, conducts research and development on applications of thermal
energy, and develops gas-powered lighting products for commercialization.
Financial information concerning the Company's industry segments is
summarized in Note 12 to Consolidated Financial Statements in the
Registrant's Fiscal 1996 Annual Report to Shareholders and is
incorporated herein by reference.
3PAGE
(c) Description of Business
(i) Principal Products and Services
Industrial Refrigeration Systems
Industrial Refrigeration Packages. The Company's FES division
designs, engineers, manufactures, and services industrial refrigeration
equipment used for cooling, freezing, and cold-storage applications in
the food-processing, petrochemical, pharmaceutical, and liquefied-gas
storage industries. FES produces complete industrial refrigeration
systems, and it also supplies components for use in industrial
refrigeration systems produced by others.
FES equipment for food and beverage customers is primarily standard
products, such as screw-compressor packages, liquid-refrigerant pump
packages, state-of-the-art control systems, and ASME (American Society of
Mechanical Engineers) pressure vessels. A screw-compressor package, which
consists of a screw compressor, an electric-drive motor, an oil
separator, a control panel, and piping and tubing, constitutes the
majority of this equipment. FES also provides screw-compressor packages
powered by the Company's natural gas TecoDrive(R) engines. These packages
are pre-engineered and are manufactured in quantity. Examples of
applications of industrial refrigeration equipment used by food and
beverage processors include the freezing, storing, and warehousing of
meats, fish, fruits, and vegetables; freezing of fruit juice
concentrates; or controlling process temperatures in brewing and
wine-making, and soft drink carbonization, where the temperature of water
is regulated to absorb a controlled quantity of carbon dioxide. In
addition, FES manufactures screw-compressor packages used to cool inlet
air for gas turbine generators at utilities.
FES supplies entire refrigeration packages to petrochemical,
pharmaceutical, and related industries for integration into their plants'
refrigeration systems. These higher-cost custom packages require
significant design engineering and are used in a wide variety of
applications, such as chilling brine that cools chemicals used in the
production of penicillin. In another application of a custom package, FES
units are used to chill and condense toxic effluent gases normally
released to flare.
FES systems have capacities ranging from 10 to 4,500 tons, with
evaporating temperatures ranging from +50.F to -100.F. Approximately 65%
of FES's sales are of standard units for the food and beverage industry,
and approximately 35% are of custom units for the petrochemical and
pharmaceutical industries. The average price for a standard food and
beverage refrigeration package is approximately $50,000, and a
representative price for a custom unit would be approximately $300,000,
although prices for these units can exceed $1 million. FES refrigeration
packages can be designed for use with any common refrigerant, but
approximately 80% of FES's units operate on ammonia. FES's utilization of
ammonia, a cost-effective and environmentally safe substance compared
with conventional chlorofluorocarbon (CFC)-based refrigerants, places FES
in a leadership position to target the reduction of CFC systems. The
4PAGE
production of CFCs was phased out in January 1996. Ammonia does not harm
the ozone layer, costs much less than conventional refrigerants, and is
widely available on a global basis.
In 1994, FES introduced a screw-compressor package powered by a gas
engine. Powering refrigeration systems with a gas engine instead of
electricity allows FES to offer its customers in areas with high
electricity rates a more cost-effective cooling system. Many of these
systems incorporate one of the Company's TecoDrive natural gas engines.
The Company's NuTemp subsidiary serves the industrial refrigeration
and commercial cooling markets. NuTemp buys new and surplus refrigeration
equipment that it remanufactures for sale or rental. NuTemp serves
numerous markets for its industrial refrigeration equipment, including
the food-processing, petrochemical, and pharmaceutical industries. NuTemp
provides commercial cooling equipment to large institutions, commercial
building owners, and service contractors across the country. Ongoing
retrofit programs to replace CFC-based equipment continue to provide a
temporary rental business for NuTemp. One of NuTemp's key services is
responding to emergency cooling situations by providing
large-tonnage-capacity refrigeration equipment on short notice.
In 1996, NuTemp introduced its NT-Series water- and air-cooled
industrial cooling systems. NuTemp continues to custom-design industrial
refrigeration to meet customers' specific requirements, including
capacity, operating-temperature, and control-system needs. NuTemp
manufactures custom systems using both new and remanufactured components
to provide a cost-effective and timely solution for its customers. Custom
systems are offered for rental with an option to buy, providing a unique
service in this market.
Applications for NuTemp's products range from cooling water to
+60.F to cooling synthetic fluids to -60.F. The colder fluids are used in
industrial process applications, which include chemical-reaction control,
environmental testing, VOC (volatile organic compound) recovery, and
plastics production.
Revenues from industrial refrigeration packages were $66,565,000,
$55,193,000, and $53,146,000 in fiscal 1996, 1995, and 1994,
respectively.
Microprocessor Controls. FES microprocessor-based control systems
for industrial refrigeration equipment are designed to reduce energy
consumption through operating efficiencies, to anticipate problems with
built-in pre-alarms, to announce system shutdowns, to offer memory
storage, and to provide easy sensor calibration through keypads and
displays. These controls are supplied with FES products, and they can
also be fitted on refrigeration packages produced by other suppliers for
ease of integration within FES's central supervisory control system.
Other Products. FES also manufactures and sells liquid-refrigerant
recirculation systems, heat-recovery heat exchangers, and pressure
vessels for use in refrigeration packages and systems produced by others.
5PAGE
FES's liquid-refrigerant recirculation systems, or "pump packages," are
used in a variety of applications such as food freezing and storage,
industrial process cooling, and thermal storage systems.
NuTemp also buys new and surplus commercial cooling equipment which
is remanufactured for sale or rental. NuTemp's customers in the
commercial cooling industry include institutions, commercial building
owners, and service contractors. The commercial cooling industry is
currently coming into compliance with the Montreal Protocol which
prohibits the production of CFC refrigerants effective January 1996. This
retrofit process is creating an increase in the rental market for
NuTemp's commercial cooling systems, which operate on alternative
refrigerants, while customers install new equipment.
Engines
Marine Engines. The Company's Crusader Engines division (Crusader)
manufactures, markets, and services inboard marine engines and
accessories both to OEM (original equipment manufacturer) boat companies
and to a network of 35 distributors who support 400 dealers servicing
Crusader's products in the field. Crusader does not customarily
manufacture engines for its own inventory, but rather in response to
orders from distributors, dealers, and boat manufacturers. Crusader's key
customers are OEM manufacturers of "cruiser" class boats generally
ranging in size from 25 to 45 feet. The purchase price of boats
containing Crusader engines typically is in the $50,000 to $250,000
range. Sales of engines to OEM customers account for approximately 86% of
Crusader's unit sales. In fiscal 1996, sales to Crusader's top three OEM
customers accounted for approximately 35% of Crusader's unit sales.
Revenues from marine engines were $18,659,000, $21,536,000, and
$18,315,000 in fiscal 1996, 1995, and 1994, respectively.
TecoDrive Natural Gas Engines for Vehicles. The Company's extensive
development work on dedicated compressed natural gas (CNG) engines has
resulted in sales of a number of its TecoDrive engines for use in school
buses, package-delivery vehicles, and other fleet vehicles. These engines
feature substantially lower emissions than currently commercially
available gasoline or natural gas engines. In November 1995, the
Company's TecoDrive 4300 engine became the first heavy-duty natural gas
engine to be certified for Ultra Low-Emission Vehicles (ULEVs) by the
U.S. Environmental Protection Agency (EPA). This certification broadens
the market for the Company's TecoDrive 4300 engines to include states
with the strictest emissions standards.
The Company has entered into a contract with the U.S. Department of
Energy to develop, emission-certify, and build a prototype 5.7-liter
TecoDrive engine. The Company expects that the prototype engine will be
emission-certified by mid-1997. In addition, the U.S. Postal Service has
ordered four of such prototype engines, subject to emission
certification, for use in mobile post office units in the New York City
vicinity.
6PAGE
The natural gas vehicle (NGV) market is still in a formative stage.
The use of NGVs in the United States results primarily from governmental
regulations and incentive programs requiring the use of alternative fuels
in certain situations. The Clean Air Act Amendments of 1990 and the
Energy Policy Act of 1992, as well as numerous state regulations, require
the increased use of alternative fuels over a period of time. There can
be no assurance that NGVs will be the most popular alternative-fuel
vehicles under the various mandates. The Company believes that many NGVs
currently in use do not comply with regulations in the United States, the
wide majority being equipped with aftermarket gasoline-to-natural-gas
conversion kits that do not provide the low emissions offered by the
Company's factory-built dedicated engines. Producing a natural gas engine
with reduced emissions and adequate power at a cost that is not
prohibitive is a key factor in the development of the market.
TecoDrive Natural Gas Engines for Irrigation and Industrial
Applications. The Company manufactures natural gas engines for the
irrigation pump engine market. The Company is the first supplier to offer
agricultural users extended warranties and total service support similar
to that offered to the Company's marine engine, cooling, and cogeneration
customers. As a result of the positive response the Company has received
from its customers in the irrigation market, the Company has developed
TecoDrive engines for other stationary applications, such as powering air
and gas compressors. There are now four OEM manufacturers incorporating
the Company's TecoDrive engines into their natural gas compressors for
NGV refueling. In fiscal 1996, the Company received orders for a total of
90 engines for pipeline gas compressors in Western Canadian gas fields.
The Company also provides engines for stationary applications for
Climaveneta, a manufacturing firm in Italy, S.A.T. Trading Company in the
United Arab Emirates, and Paramo in Columbia. In addition, the Company
offers a range of optional equipment that broadens the industrial
applications for its engines.
Propane and Gasoline Engines for Lift Trucks. The Company has
embarked on a significant program to engineer and manufacture 2.2-, 3.0-,
and 4.3-liter propane and gasoline engines for installation into lift
trucks. The Company is also developing 5.7- and 7.4-liter engines for
lift trucks. Currently, the Company is shipping approximately 100 engines
per month to Clark Materials Handling Company, one of the largest
suppliers of lift trucks in the United States. The Company is also
shipping approximately 120 3.0-liter engines per month to Toyota
Industrial Equipment Manufacturing Inc. (Toyota) for installation into
Toyota's lift trucks. In fiscal 1996, the Company received an order from
Daewoo for 600 engines, and it is also engineering lift-truck engines for
Royal Tractor Company, Taylor Machines Works, Inc., and Hoist Lift-truck
MSG., Inc.
Cooling and Cogeneration Systems
The Company designs, develops, manufactures, markets, and services
packaged cooling and cogeneration systems fueled principally by natural
gas for sale to a wide range of commercial, institutional, industrial,
and multi-unit residential users. Many of these products are powered by
the Company's dedicated TecoDrive natural gas engines.
7PAGE
The Company's Tecochill commercial cooling and Tecogen(R)
cogeneration products incorporate several proprietary features that are
the result of the Company's advances in engine, thermal, and control
technologies. One such proprietary feature is the Company's
microprocessor-based control module, which automates the operation of
such systems and can also include remote control, monitoring, and
diagnostic capabilities. The standardized designs of the Company's
products also enable rapid installation and startup, facilitate
maintenance, and allow competitive delivery time. The Company supports
its customers by offering a comprehensive maintenance contract under
which the Company assumes responsibility for substantially all
maintenance, repairs, and replacement parts.
The cost savings that result from use of the Company's packaged
cooling and cogeneration systems are directly related to the retail price
of electricity. In the past few years, electricity prices have declined
in many areas and rates remain relatively low on a historical basis in
most regions. Given prevailing rate structures, demand for the Company's
cooling and cogeneration systems has been less than anticipated.
Tecochill Cooling Systems. The Company entered the gas-fueled
cooling business by introducing its 150-ton gas-fueled cooling unit in
1988. The Company's Tecochill units are powered by the same TecoDrive
engine used in the Company's small-scale cogeneration systems. Tecochill
products are equipped with microprocessor controls allowing fully
automated, unattended operation. Tecochill units can be programmed to run
at different speeds to follow variable cooling loads for greater
efficiency than conventional electric motor-driven air conditioners that
run at a constant speed. These units are self-contained packages that are
delivered to customer sites as finished products for standard
installation. Tecochill units can be fitted with optional heat-recovery
packages yielding hot water. The Company has sold approximately 350 of
its Tecochill units to date, which are operating in 26 states and four
foreign countries. The Company is currently offering additional
gas-fueled air conditioning equipment, ranging in size from 50 to 1,000
tons, for use in multi-unit residential buildings, nursing homes,
hospitals, and similar institutions. Although the purchase price of the
Company's Tecochill units is approximately 100-200% higher than that of
electric motor-driven air conditioners of comparable sizes, lower
operating costs associated with the use of Tecochill units generally lead
to payback of the incremental capital cost in approximately four years.
The average expected useful life of a Tecochill unit is comparable to
that of an electric motor-driven air conditioner, typically 15 years.
Revenues from cooling systems were $9,135,000, $4,956,000, and
$3,772,000 in fiscal 1996, 1995, and 1994, respectively.
Tecogen Cogeneration Systems. In 1983, the Company introduced its
first Tecogen packaged cogeneration system, the 60-kilowatt (kW) CM-60
model powered by the Company's TecoDrive engine. Approximately 600 CM-60
and CM-75 units have been installed at approximately 350 sites across the
United States. These systems are automated, self-contained cogeneration
packages that are delivered as finished units to customer sites. In
general, these systems are manufactured to standard designs and are
assembled and tested on a production-line basis. The Company's
8PAGE
cogeneration systems use a single fuel source, natural gas, to
simultaneously produce electricity and thermal energy in the form of hot
water. By using energy that would otherwise be wasted, the Company's
cogeneration systems operate at a cost that can be comparable to the cost
of producing hot water alone in conventional systems. The electricity
produced is used principally to meet on-site energy requirements and
replaces electricity that would otherwise be purchased from a utility.
Revenues from cogeneration systems were $761,000, $1,594,000, and
$873,000 in fiscal 1996, 1995, and 1994, respectively.
Sponsored Research and Development. The Company conducts research
and development supported by outside sponsors. Revenues from sponsored
research and development contracts were $5,836,000, $4,917,000, and
$5,209,000 in fiscal 1996, 1995, and 1994, respectively. See "Research
and Development."
Regulation
The demand for most of the Company's products is affected by
various federal, state, and local energy and environmental laws and
regulations. All of these laws and regulations are subject to revocation
or amendment, and the Company cannot predict what effect revocation or
amendment may have on the Company's sales, business, or operations.
Industrial Refrigeration Systems
The Company's ammonia-based refrigeration equipment and
alternative-refrigerant commercial cooling systems benefit from the
worldwide phaseout of CFC refrigerants. The Montreal Protocol was
negotiated in 1987 under the sponsorship of the United Nations
Environmental Program (UNEP) to protect the ozone layer. This agreement
establishes a process to control substances that could deplete the ozone
layer, including CFCs. Regulations have been promulgated by the EPA
implementing these protocols in this country through limits on the
production and consumption of CFCs and other ozone-depleting substances.
Engines
The market for the Company's TecoDrive natural gas engine is
influenced by federal legislation that allows states to establish
programs encouraging the use of alternative fuels, including natural gas,
methanol, and ethanol. More than half of the states have some type of
alternative-fuel vehicles commission, legislation, or tax incentives. In
addition, many U.S. cities have been classified by the EPA as not meeting
acceptable air quality standards. By model year 1998, 50% of heavy-duty
vehicles bought for fleets with 10 or more vehicles capable of refueling
in these smoggiest cities must be clean-fuel vehicles.
Under the Clean Air Act Amendments of 1990, the EPA issued
regulations that delineate clean fuel requirements and vehicle emissions
standards. In September 1994, the EPA published its final rule on
certification for propane and natural gas vehicles. In November 1995,
9PAGE
the Company became the first engine manufacturer to receive EPA
certification of a heavy-duty natural gas engine for ULEVs. This
certification certifies that a certain vehicle type or engine meets
requirements of the most current applicable emissions regulations.
Natural gas is one of many alternative fuels that is addressed by
these laws and regulations. Others include methanol, ethanol, liquefied
petroleum gas, hydrogen, electricity, and reformulated gasoline. There
can be no assurance that natural gas will become a preferred alternative
fuel for vehicles or that existing and future laws or regulations or
their enforcement will create material long-term demand for NGVs.
Cooling and Cogeneration Systems
The passage by Congress of the Public Utility Regulatory Policies
Act of 1978 (PURPA), the adoption of regulations thereunder by the
Federal Energy Regulatory Commission (FERC), and related state laws and
regulations provide incentives for the development of qualifying
small-power production and cogeneration systems such as those offered by
the Company. PURPA and FERC regulations promulgated thereunder address
three issues of importance to users that own or operate cogeneration
systems, including those sold by the Company. First, PURPA exempts
qualifying users from many federal and state regulations that pertain to
electric utilities. Second, PURPA requires electric utilities to allow
qualifying cogeneration providers to connect their cogeneration
facilities to utilities' electric power systems. This mandatory
connection enables users to purchase utility-generated electricity to
start their cogeneration systems and assures users of a back-up source of
electricity during peak periods of use and when the cogeneration systems
are shut down for maintenance and repair. Third, PURPA requires utilities
to purchase electricity produced by qualifying cogeneration providers at
a price equivalent to utilities' avoided costs.
Like all electric power-generating and other fossil fuel-burning
systems, the Company's cooling and cogeneration products must comply with
federal, state, and local environmental laws and regulations. Regulation
of systems such as those sold by the Company is conducted primarily at
the state and local level, where standards can vary. In particular,
applicable environmental standards in California are stricter than
comparable federal guidelines. The Company believes that its existing
Tecochill and other Tecogen products comply with applicable federal and
state environmental standards, including those currently in effect in
California, although the Company cannot predict whether its products will
comply with all environmental standards promulgated in the future.
(ii) New Products
In March 1995, the Company formed its ThermoLyte subsidiary to
develop and commercialize a line of gas-powered area lights, flashlights,
emergency lights, and other lighting products. ThermoLyte's lighting
products are based on the Company's patented technology for a
10PAGE
rigid mantle, the "bulb" in gas lights. This mantle is more durable than
the mantles typically used in gas lighting and therefore, the Company can
design its products to be highly portable.
ThermoLyte has delayed market introduction of its propane-powered
flashlight to optimize the product's final design. ThermoLyte has
developed and is now preparing to introduce a propane-powered area light
to the marketplace. In preparation for introduction of the area light,
ThermoLyte conducted focus groups to gauge consumer reaction to the
light's concept, performance, and design. The final design is a
decorative, contemporary-style area light suitable for providing an
alternative to candles, oil lamps, or battery-powered lights in the home
or backyard. Late in calendar 1996, the Company plans to make a limited
initial market introduction of its area light through a catalog for
employees and shareholders of Thermo Electron and its subsidiaries. The
Company is also engaged in qualifying vendors for manufacturing and
consulting specialty catalog buyers.
(iii) Raw Materials
The Company purchases engine blocks for its marine and certain
other engines, as well as engines for certain of its smaller cooling and
cogeneration products, from one supplier. It does not have a firm
contract with this supplier. The Company generally maintains inventories
of engine blocks sufficient to meet its needs for a three-month period.
However, the inability of the Company to obtain either engines or engine
blocks from this supplier would have a material adverse effect upon the
Company's operations.
(iv) Patents, Licenses, and Trademarks
The Company considers its patents and licenses to be important in
the present operation of its business. The Company, however, does not
consider any one of its patents or related group of patents to be of such
importance that its expiration, termination, or invalidity would
materially affect the Company's business.
The Company has research and development arrangements with the
natural gas industry and various governmental agencies, and is required
to pay royalties for any technologies developed or products
commercialized under several of these arrangements.
(v) Seasonal Influences
Crusader's marine engine sales historically have been stronger in
the first quarter of each calendar year, when boat builders purchase
engines for boats to be sold for the upcoming boating season. Sales of
marine engines generally decline gradually during the last three quarters
of the calendar year, reaching their lowest levels in the fourth quarter.
In addition, the demand for NuTemp's equipment typically has been highest
in the summer period. However, cool summer weather can adversely affect
NuTemp's business since the Company's cooling systems are used primarily
to reduce temperatures below ambient air temperatures. There are no
significant seasonal influences in the Company's other lines of business.
11PAGE
(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 fiscal 1996. In fiscal 1996, revenues from two
customers accounted for 16% and 10% of Engines segment revenues. The loss
of one or both of these customers would have a material adverse effect on
the Engines segment.
(viii) Backlog
The backlog of firm orders for the Industrial Refrigeration Systems
segment was $22.2 million as of September 28, 1996, compared with $17.4
million as of September 30, 1995. The backlog of firm orders for the
Engines segment was $1.0 million as of September 28, 1996, compared with
$4.2 million as of September 30, 1995. The backlog of firm orders for the
Cooling and Cogeneration Systems segment was $4.0 million as of September
28, 1996, compared with $6.0 million as of September 30, 1995. The
Company believes that the majority of this backlog will be shipped during
fiscal 1997. The Company does not believe that the size of its backlog is
necessarily indicative of intermediate- or long-term trends in its
business.
(ix) Government Contracts
Not applicable.
(x) Competition
The Company experiences competition in most of its product lines.
Additional competition may arise if markets in which the Company is
active develop significantly. The Company is aware of several competitors
for its product lines, some of whom have financial, marketing, and other
resources greater than those of the Company.
Industrial Refrigeration Systems
The Company's sale of industrial refrigeration systems is subject
to intense competition. The industrial refrigeration market is mature,
highly fragmented, and extremely dependent on close customer contacts.
Major industrial refrigeration companies, of which FES is one, account
for approximately one-half of worldwide sales, with the balance generated
by many smaller companies. The Company believes that FES competes on the
basis of its advanced control systems and overall quality, reliability,
service, and to a lesser extent, price.
12PAGE
The worldwide market is characterized by strong local
manufacturers. The market leader worldwide as well as in North America is
Frick Company and its affiliates, subsidiaries of York International
Corporation (York). Though comprehensive surveys on the industrial
refrigeration market do not exist, the Company believes it accounts for
approximately 20% of the North American market, 2% of the European
market, 4% of the Asia-Pacific market, and 1% of the Latin American
market.
The Company believes NuTemp is the world leader in remanufactured
refrigeration equipment. As part of its rental program, NuTemp offers an
option to buy its equipment, a service that is unique in the industry.
NuTemp's largest competitor is Aggreko, a subsidiary of Christian
Salverson Company. Aggreko is a major supplier of rental equipment for
the industrial refrigeration and commercial cooling markets. The Company
believes that NuTemp competes on the basis of price, delivery time, and
customized equipment.
Engines
Competition in the CNG vehicle and alternative-fuel engine markets
is intense, and current or potential competitors in some or all segments
of these markets include major automotive and natural gas companies and
other companies that have greater financial resources than those of the
Company.
The Company believes it has the second largest share of the inboard
marine engine market for cruiser class boats in the United States, with
about 25% market share, behind the Mercury division of Brunswick
Corporation. Crusader has experienced intense competition in the marine
engine business in recent years, primarily from vertical integration of
boat and engine manufacturers that has led to the acquisition of former
Crusader customers by competing engine manufacturers. The Company
believes that Crusader competes on the basis of quality, reliability,
service, and pricing.
Cooling and Cogeneration Systems
The Company's Tecochill products are subject to competition from
absorption air conditioning systems and electric motor-driven vapor
compressor systems. Other manufacturers of natural gas-fueled
engine-driven cooling systems have also entered the market. The Company
believes it competes with producers of conventional cooling equipment on
the basis of relative operating costs at times of peak electrical demand,
and with other producers of natural gas-fueled cooling systems on the
basis of quality, reliability, service, operational savings, and track
record.
In 1995, Enchill by MKW Power Systems, one of the Company's major
competitors, ceased operations in the gas-cooling market. Also in 1995,
York entered the gas-engine cooling market, in partnership with
Caterpillar, and is a major competitor in large-capacity (+400 tons)
cooling equipment. However, the Company's most competitive range is in
smaller-capacity equipment.
13PAGE
The Company's sale of cogeneration systems is subject to intense
competition, both direct and indirect. Direct competitors consist of
companies that sell cogeneration products resembling those sold by the
Company. In addition, electric utility pricing programs provide
competition for the Company's cogeneration products. Indirect competitors
include manufacturers of conventional water heaters, air conditioners,
and electric generator sets, since the economic benefits of the Company's
cogeneration and cooling systems depend on the cost of conventional
energy systems. The Company believes that it competes on the basis of
several factors, including product quality and reliability, operational
savings, ease of installation, service, and pricing.
The Company's sponsored research and development is also subject to
intense competition from many larger and smaller firms, universities, and
other private and public research facilities. The Company competes for
sponsored research and development contracts on the basis of several
factors, including technical expertise, market experience, and past
performance.
(xi) Research and Development
The Company has conducted research and development on applications
of thermal energy for more than 30 years. The Company's research and
development capability and expertise in engine, instrumentation, control,
and heat-recovery technologies have enabled it to obtain support from
outside sponsors, develop new products, and support existing products.
The Company's sponsored programs have been supported principally by
the domestic natural gas industry and the federal government. Within the
natural gas industry, the Company's principal sponsors have been the Gas
Research Institute (GRI) and the Southern California Gas Company, which
is the nation's largest gas utility. The Company has also obtained
research and development funding from federal and state governments,
industrial companies, and from the Electric Power Research Institute.
Sponsors of the Company's research and development generally own the
rights to technology that is developed under these programs.
As part of the Company's research and development of combustion
technology, ThermoLyte is developing a family of gas-powered lighting
products, including area lights, flashlights, emergency lights, and other
lighting products. ThermoLyte's lighting products are based on the
Company's patented technology for a rigid mantle, the "bulb" in gas
lights. By incorporating this durable mantle into its lights, the Company
can use propane as a power source instead of batteries.
The Company is developing a unique thermophotovoltaics (TPV)
technology with funding from the U.S. Department of Defense. TPV is a
solid-state system that converts a gaseous or liquid fuel such as diesel
to electric power without the aid of any moving parts. The goal is to
replace conventional diesel engine generators with a more reliable and
lightweight system to recharge batteries used in electronic devices.
Potential commercial applications for TPV are power generation for
recreational, commercial, and military uses, as well as power cells for
electronic equipment. However, the development of TPV is in the
14PAGE
very preliminary stages, and no assurance can be given that the Company
will be able to develop a commercially viable TPV product.
The Company is also continuing to develop additional applications
for its thermoelectric cooling modules. Currently, these cooling modules
are used to control the temperature of laser diodes in fiber-optic
telecommunication equipment and biomedical instruments, as well as TRSs,
which are used for calibrating infrared imaging systems.
During fiscal 1996, 1995, and 1994, the Company spent $3,214,000,
$3,065,000, and $1,622,000, respectively, on internally funded research
and development, and $4,444,000, $3,548,000, and $4,197,000,
respectively, on research and development sponsored by others.
(xii) Environmental Protection Regulations
The Company believes that compliance by the Company with federal,
state, and local environmental protection regulations will not have a
material adverse effect on its capital expenditures, earnings, or
competitive position.
(xiii) Number of Employees
As of September 28, 1996, the Company employed approximately 550
people. Approximately 39 employees at the Company's Crusader division are
represented by a labor union under a three-year collective bargaining
agreement expiring on October 15, 1997. The Company has experienced no
work stoppages in the past, and considers its relations with employees to
be good.
(xiv) Marketing
Industrial Refrigeration Systems
FES's products are distributed primarily through independent sales
representatives who are typically specialists in industrial
refrigeration, and they are also sold directly to end users.
Approximately 75% of FES's sales are in North America. Of the sales
generated in North America, 90% are made by independent sales
representatives, 5% by FES sales employees, and 5% through direct orders
from existing customers. FES has 12 independent sales offices serving all
business regions throughout the United States. All of the independent
sales representatives are engineers who have the ability to provide
customers with quotes on entire refrigeration plants. The representatives
make sales contacts with refrigeration contractors, end users, and
consulting engineers. Sales of FES's standard food and beverage packages
are generally made to refrigeration contractors who are responsible for
installation of the total refrigeration plant at the facility of an end
user. Sales of FES's custom systems are generally made directly to end
users.
Export sales accounted for approximately 20% of FES's fiscal 1996
revenues. FES uses a combination of FES employees with demonstrated
15PAGE
industrial refrigeration expertise and several independent
representatives located in various countries, including Thailand, Taiwan,
the People's Republic of China, and Russia.
NuTemp markets its products through direct marketing techniques,
including direct mailing, and sends representatives to numerous trade
shows each year. NuTemp is also marketing its products through FES sales
employees and independent sales representatives. NuTemp's sales are made
solely in the United States.
Engines
The Company markets its TecoDrive natural gas engines principally
through a series of nonexclusive OEM and distributor arrangements. The
Company also sells its TecoDrive engines for stationary applications to
manufacturers in Europe, South America, and the Middle East, and is
actively pursuing the distribution of TecoDrive engines in Canada. The
Company has sales representatives who market the Company's engines
through an expanded network of distributors. By working through a
distributor with comprehensive overhaul, repair, spare parts, field
service, and training capabilities, the Company's engine customers in the
United States and Canada can receive aftermarket support.
The Company has marketed TecoDrive engines for irrigation
applications through a variety of channels. The engines have been
exhibited at a number of agriculture industry trade shows, and they have
been featured in advertisements in agricultural trade journals. The
Company has organized a network of dealers in large agricultural states,
including Arizona, California, Nebraska, Kansas, and Oklahoma, which is
independent of the distribution network discussed above, specifically for
the distribution of TecoDrive engines for irrigation applications.
Southwest Gas Company in Arizona and Southern California Gas Company in
California are also supporting the Company's marketing effort for
irrigation engines by offering cash rebates to farmers purchasing
TecoDrive engines to replace electric motors or diesel engines in pumping
service.
Cooling and Cogeneration Systems
The Company markets its Tecochill cooling units primarily through a
network of distributors located throughout the United States. The Company
has established its own network of sales representatives, and the
Company's marketing effort in the United States is also supported by a
consortium of gas and combined gas-electric utilities. The Company
markets its cogeneration units in the United States through its own sales
force, and in certain areas, through a team of distributors. The Company
has commenced some sales of its smaller cogeneration products outside the
United States.
(d) Financial Information about Exports by Domestic Operations
Financial information about exports by domestic operations is
summarized in Note 12 to Consolidated Financial Statements in the
Registrant's Fiscal 1996 Annual Report to Shareholders and is
incorporated herein by reference.
16PAGE
(e) Executive Officers of the Registrant
Present Title (Year First Became Executive
Name Age Officer)
--------------------- --- --------------------------------------------
J. Timothy Corcoran 50 President and Chief Executive Officer (1992)
John N. Hatsopoulos 62 Vice President and Chief Financial
Officer (1988)
Paul F. Kelleher 54 Chief Accounting Officer (1985)
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. Messrs. Hatsopoulos and Kelleher have
held these positions for at least five years either with the Company or
with its parent company, Thermo Electron. Mr. Corcoran has been Chief
Executive Officer of the Company since October 1996, and President since
April 1995. From November 1992 to April 1995, Mr. Corcoran was a Vice
President of the Company, and has been President of FES since June 1990.
Mr. Corcoran is a full-time employee of the Company and Mr. Hatsopoulos
and Mr. 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 by industry segment as of September 28, 1996, are as follows:
Industrial Refrigeration Systems
The Company owns approximately 157,000 square feet of office and
manufacturing space in York, Pennsylvania, subject to a mortgage on the
property, and approximately 15,000 square feet of manufacturing space in
Humble, Texas. The Company also occupies approximately 164,000 square
feet of office and manufacturing space in Chicago, Illinois, under a
lease expiring in 2006.
Engines
The Company occupies approximately 104,000 square feet of
manufacturing, engineering, and office space in Sterling Heights,
Michigan, under leases expiring in 2000 and 2004.
Cooling and Cogeneration Systems
The Company occupies approximately 40,000 square feet of office and
laboratory space in Waltham, Massachusetts, under an agreement providing
for the sublease of the facility from Thermo Electron expiring in 1997.
In addition, the Company leases approximately 14,000 square feet of
engine testing and office space in Marlborough, Massachusetts, under a
lease agreement with an unrelated party expiring in 1997.
17PAGE
In addition, the Company leases approximately 300 square feet of
office space in Thermo Electron's corporate headquarters in Waltham,
Massachusetts. The Company believes that its facilities are in good
condition and are suitable and adequate for its present operations.
Item 3. Legal Proceedings
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders
Not applicable.
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder
Matters
Information concerning the market and market price for the
Registrant's Common Stock, $.10 par value, and dividend policy is
included under the sections labeled "Common Stock Market Information" and
"Dividend Policy" in the Registrant's Fiscal 1996 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 Fiscal 1996 Annual Report to Shareholders and is
incorporated herein by reference.
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
The information required under this item is included under the
heading "Management's Discussion and Analysis of Financial Condition and
Results of Operations" in the Registrant's Fiscal 1996 Annual Report to
Shareholders and is incorporated herein by reference.
Item 8. Financial Statements and Supplementary Data
The Registrant's Consolidated Financial Statements and
Supplementary Data are included in the Registrant's Fiscal 1996 Annual
Report to Shareholders and are incorporated herein by reference.
18PAGE
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" 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.
19PAGE
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form
8-K
(a), (d) Financial Statements and Schedules
(1) The consolidated financial statements set forth in the
list below are filed as part of this Report.
(2) The consolidated financial statement schedule set forth in
the list below is filed as part of this Report.
(3) Exhibits filed herewith or incorporated herein by
reference are set forth in Item 14(c) below.
List of Financial Statements and Schedules Referenced in this
Item 14
Information incorporated by reference from Exhibit 13 filed
herewith:
Consolidated Statement of Income
Consolidated Balance Sheet
Consolidated Statement of Cash Flows
Consolidated Statement of Shareholders' Investment
Notes to Consolidated Financial Statements
Report of Independent Public Accountants
Financial Statement Schedules filed herewith:
Schedule II: Valuation and Qualifying Accounts
All other schedules are omitted because they are not applicable
or not required, or because the required information is shown
either in the financial statements or in the notes thereto.
(b) Reports on Form 8-K
None.
(c) Exhibits
See Exhibit Index on the page immediately preceding exhibits.
20PAGE
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: December 6, 1996 THERMO POWER CORPORATION
By: J. Timothy Corcoran
--------------------------
J. Timothy Corcoran
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 December
6, 1996.
Signature Title
--------- -----
By:J. Timothy Corcoran President, Chief Executive Officer
----------------------- and Director
J. Timothy Corcoran
By:John N. Hatsopoulos Vice President, Chief Financial
----------------------- Officer and Director
John N. Hatsopoulos
By:Paul F. Kelleher Chief Accounting Officer
-----------------------
Paul F. Kelleher
By:Marshall J. Armstrong Chairman of the Board and Director
-----------------------
Marshall J. Armstrong
By:Peter O. Crisp Director
-----------------------
Peter O. Crisp
By:Robert C. Howard Director
-----------------------
Robert C. Howard
By:Donald E. Noble Director
-----------------------
Donald E. Noble
By:Paul E. Tsongas Director
-----------------------
Paul E. Tsongas
21PAGE
Report of Independent Public Accountants
----------------------------------------
To the Shareholders and Board of Directors of Thermo Power Corporation:
We have audited, in accordance with generally accepted auditing
standards, the consolidated financial statements included in Thermo Power
Corporation's Annual Report to Shareholders incorporated by reference in
this Form 10-K, and have issued our report thereon dated November 1,
1996. 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 20 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
November 1, 1996
22PAGE
SCHEDULE II
THERMO POWER CORPORATION
Valuation and Qualifying Accounts
(In thousands)
Provision
Balance at Charged Bad Accounts Balance
Beginning to Debts Written at End
Description of Year Expense Recovered Off Other(a) of Year
--------------------------------------------------------------------------
Year Ended
September 28, 1996
Allowance for
Doubtful
Accounts $ 530 $ 191 $ 26 $ (158) $ - $ 589
Year Ended
September 30, 1995
Allowance for
Doubtful
Accounts $ 590 $ 3 $ 16 $ (79) $ - $ 530
Year Ended
October 1, 1994
Allowance for
Doubtful
Accounts $ 561 $ (2) $ 83 $ (102) $ 50 $ 590
(a) Allowance of business acquired during the year as described in Note 3
to Consolidated Financial Statements in the Registrant's Fiscal 1996
Annual Report to Shareholders.
23PAGE
EXHIBIT INDEX
Exhibit
Number Description of Exhibit
--------- -----------------------------------------------------------
3.1 Articles of Organization of the Registrant, as amended
(filed as Exhibit 3(a) to the Registrant's Quarterly Report
on Form 10-Q for the quarter ended April 3, 1993 [File No.
1-10573] and incorporated herein by reference).
3.2 By-laws of the Registrant, as amended (filed as Exhibit 3(b)
to the Registrant's Annual Report on Form 10-K for the
fiscal year ended October 2, 1993 [File No. 1-10573] and
incorporated herein by reference).
4.1 Specimen Common Stock Certificate (filed as Exhibit 4(b) to
the Registrant's Annual Report on Form 10-K for the fiscal
year ended October 2, 1993 [File No. 1-10573] and
incorporated herein by reference).
10.1 Stock Purchase Agreement among the Registrant, NuTemp, Inc.
and Michael S. Lazar, dated May 13, 1994 (filed as Exhibit
2.1 to the Registrant's Current Report on Form 8-K relating
to events occurring on May 13, 1994 [File No. 1-10573] and
incorporated herein by reference).
10.2 Amended and Restated Corporate Services Agreement between
the Registrant and Thermo Electron, dated as of January 3,
1993 (filed as Exhibit 10(b) to the Registrant's Annual
Report on Form 10-K for the fiscal year ended September 26,
1992 [File No. 1-10573] and incorporated herein by
reference).
10.3 First Amendment to Lease dated September 30, 1994, between
the Registrant and Thermo Electron Corporation (filed as
Exhibit 10.2 to the Registrant's Annual Report on Form 10-K
for the fiscal year ended October 1, 1994 [File No. 1-10573]
and incorporated herein by reference).
10.4 Form of Indemnification Agreement between the Registrant and
its directors and officers (filed as Exhibit 10(e) to the
Registrant's Registration Statement on Form S-1 [Reg. No.
33-14017] and incorporated herein by reference).
10.5 Tax Allocation Agreement dated September 25, 1985, between
the Registrant and Thermo Electron (filed as Exhibit 10(f)
to the Registrant's Annual Report on Form 10-K for the
fiscal year ended October 3, 1987 [File No. 0-15920] and
incorporated herein by reference).
10.6 Thermo Electron Corporate Charter, as amended and restated
effective January 3, 1993 (filed as Exhibit 10(n) to the
Registrant's Annual Report on Form 10-K for the fiscal year
ended September 26, 1992 [File No. 1-10573] and incorporated
herein by reference).
24PAGE
EXHIBIT INDEX
Exhibit
Number Description of Exhibit
--------- -----------------------------------------------------------
10.7 Master Repurchase Agreement dated January 1, 1994 between
the Registrant and Thermo Electron Corporation (filed as
Exhibit 10.6 to the Registrant's Annual Report on Form 10-K
for the fiscal year ended October 1, 1994 [File No. 1-10573]
and incorporated herein by reference).
10.8 Master Reimbursement Agreement dated as of January 2, 1994
between the Registrant and Thermo Electron Corporation
(filed as Exhibit 10.7 to the Registrant's Annual Report on
Form 10-K for the fiscal year ended October 1, 1994 [File
No. 1-10573] and incorporated herein by reference).
10.9 Lease, dated as of January 20, 1988, between Thermo Electron
Corporation and Michael I. Gilson, Trustee (subsequently
assigned to the Registrant) (filed as Exhibit 10(q) to the
Registrant's Annual Report on Form 10-K for the fiscal year
ended September 26, 1992 [File No. 1-10573] and incorporated
herein by reference).
10.10 Agreement, dated October 15, 1991, between Thermo Electron
Corporation and International Union, United Automobile,
Aerospace and Agricultural Implement Workers of America
Local 203 (subsequently assigned to the Registrant) (filed
as Exhibit 10(r) to the Registrant's Annual Report on Form
10-K for the fiscal year ended September 26, 1992 [File No.
1-10573] and incorporated herein by reference).
10.11 Form of Redemption Rights of ThermoLyte Corporation and
related Guarantee of Thermo Electron Corporation (filed as
Exhibit 10.11 to the Registrant's Annual Report on Form 10-K
for the fiscal year ended September 30, 1995 [File No.
1-10573] and incorporated herein by reference).
10.12 Guarantee Agreement between ThermoLyte Corporation and
Thermo Electron Corporation (filed as Exhibit 10.12 to the
Registrant's Annual Report on Form 10-K for the fiscal year
ended September 30, 1995 [File No. 1-10573] and incorporated
herein by reference).
10.13 Incentive Stock Option Plan of the Registrant, as amended
(filed as Exhibit 10(h) to the Registrant's Quarterly Report
on Form 10-Q for the quarter ended April 3, 1993 [File No.
1-10573] 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
950,000 shares, after adjustment to reflect share increases
approved in 1990, 1992 and 1993).
25PAGE
EXHIBIT INDEX
Exhibit
Number Description of Exhibit
--------- -----------------------------------------------------------
10.14 Nonqualified Stock Option Plan of the Registrant, as amended
(filed as Exhibit 10(i) to the Registrant's Quarterly Report
on Form 10-Q for the quarter ended April 3, 1993 [File No.
1-10573] 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 950,000
shares, after adjustment to reflect share increases approved
in 1990, 1992 and 1993).
10.15 Equity Incentive Plan of the Registrant (filed as Attachment
A to the Proxy Statement dated February 18, 1994 of the
Registrant [File No. 1-10573] and incorporated herein by
reference).
10.16 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. 33-14017] and incorporated
herein by reference).
10.17 Directors' Stock Option Plan of the Registrant, as amended
(filed as Exhibit 10.1 to the Registrant's Quarterly Report
on Form 10-Q for the quarter ended April 1, 1995 [File No.
1-10573] and incorporated herein by reference).
10.18 ThermoLyte Corporation Equity Incentive Plan (filed as
Exhibit 10.71 to the Registrant's Annual Report on Form 10-K
for the fiscal year ended September 30, 1995 [File No.
1-10573] and incorporated herein by reference).
10.19 Thermo Power - ThermoLyte Corporation Nonqualified Stock
Option Plan (filed as Exhibit 10.84 to Thermo Cardiosystems'
Annual Report on Form 10-K for the fiscal year ended
December 30, 1995 [File No. 1-10114] and incorporated herein
by reference).
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 Corporation, for services rendered to the
Registrant or such affiliated corporations. Such plans were
filed as Exhibits 10.21 through 10.44 to the Annual Report
on Form 10-K of Thermo Electron Corporation for the fiscal
year ended December 30, 1995 [File No. 1-8002] and as
Exhibit 10.19 to Trex Medical Corporation's Annual Report on
Form 10-K for the fiscal year ended September 28, 1996 [File
No. 1-11827] and are incorporated herein by reference.
10.20 Stock Holding Assistance Plan and Form of Promissory Note.
26PAGE
EXHIBIT INDEX
Exhibit
Number Description of Exhibit
--------- -----------------------------------------------------------
13 Annual Report to Shareholders for the fiscal year ended
September 28, 1996 (only those portions incorporated herein
by reference).
21 Subsidiaries of the Registrant.
23 Consent of Arthur Andersen LLP.
27 Financial Data Schedule.