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 27, 1997
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Commission file number 1-10791
THERMOTREX CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 52-1711436
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
10455 Pacific Center Court
San Diego, California 92121-4339
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (781) 622-1000
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of exchange on which registered
------------------------------- ------------------------------------
Common Stock, $.01 par value American Stock Exchange
3 1/4% Subordinated Convertible
Debentures due 2007 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 October 31, 1997, was approximately $206,309,000.
As of October 31, 1997, the Registrant had 19,249,204 shares of Common
Stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant's Annual Report to Shareholders for the fiscal
year ended September 27, 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 March 5, 1998, are incorporated by
reference into Part III.
PAGE
PART I
Item 1. Business
(a) General Development of Business
ThermoTrex Corporation (the Company or the Registrant) has three
majority-owned subsidiaries, 79%-owned Trex Medical Corporation (Trex
Medical), 67%-owned ThermoLase Corporation (ThermoLase), and 78%-owned
Trex Communications Corporation (Trex Communications). Through its
publicly traded Trex Medical subsidiary, the Company designs,
manufactures, and markets mammography and minimally invasive digital
breast-biopsy systems used for the detection of breast cancer, as well as
general-purpose and specialized X-ray equipment. Through its publicly
traded ThermoLase subsidiary, the Company has developed a laser-based
system for the removal of unwanted hair (the SoftLight(SM) system), which
is being marketed in the U.S. through ThermoLase's Spa Thira locations
and through licensing agreements with physicians, and in foreign
countries through joint ventures and other licensing arrangements.
ThermoLase also manufactures and markets skin-care and other
personal-care products. In addition, the Company performs advanced
technology research in the areas of communications, avionics, X-ray
detection, signal processing, and lasers. The Company's laser
communications (lasercom) research is performed by its privately held
Trex Communications Corporation (Trex Communications) subsidiary, which
also designs and markets interactive information and voice-response
systems, as well as call-automation systems.
In October 1997, Trex Medical's XRE Corporation (XRE) subsidiary
acquired substantially all of the assets, subject to certain liabilities,
of Digitec Corporation, a manufacturer of physiological-monitoring
equipment and digital-image archiving and networking systems used in
cardiac catheterization procedures.
Trex Medical is currently developing a full-field digital mammography
system that is intended to be capable of higher image quality. The system
is designed to enhance the X-ray image through software and to allow
near-real-time analysis. Trex Medical expects that it will be possible to
electronically transmit these images to allow off-site analysis by
another radiologist, and believes this technology may also provide better
images of dense breast tissue, which is often found in younger women.
Trex Medical has collected clinical data and, in December 1997, submitted
a 510(k) application with such data to the U.S. Food and Drug
Administration (FDA), which must grant market clearance before this
system can be sold commercially.
Trex Medical has designed its new, high-end conventional mammography
systems so that radiologists can upgrade to digital technology when it
becomes available. Trex Medical believes that the digital-imaging
technology being developed for this system may be adaptable to its
general-purpose and specialized X-ray systems, and will seek to develop
applications in these markets. Trex Medical is also working on a more
advanced version of its digital technology, which incorporates a
flat-panel, direct-digital detector and could provide still more
information for earlier diagnoses.
2PAGE
ThermoLase opened its first Spa Thira in early fiscal 1996*, and had
a total of four opened by the end of fiscal 1996. In fiscal 1997,
ThermoLase opened nine more domestic spas, and by October 1997 had a
total of 14 domestic Spa Thira locations. In June 1996, ThermoLase
initiated a program to license its SoftLight technology to physicians. As
of November 1997, approximately 150 lasers were placed in practices in
33 states and certain international markets. In January 1996, ThermoLase
established its first international joint venture and, during fiscal
1997, added two additional joint ventures and six additional licensing
arrangements. ThermoLase's international arrangements resulted in the
opening of spas in Paris in May 1997 and Lugano, Switzerland, in October
1997, and additional spas are expected to be constructed during fiscal
1998, pending regulatory approvals.
ThermoLase continues to pursue an extensive research and development
program to improve the efficacy and duration of its hair-removal
treatment. ThermoLase has developed a modification to its procedure,
called SoftLight 2.0, and began introducing this procedure in its spas
and to its licensees in September 1997. Although the clinical laboratory
results are encouraging, the results are preliminary and there can be no
assurance that SoftLight 2.0 will be successful in improving the
hair-removal process. ThermoLase believes that improvements in the
hair-removal procedure are critical elements in its ability to improve
the profitability of its business.
In March 1997, ThermoLase filed with the FDA a 510(k) application
seeking clearance to market cosmetic skin resurfacing services utilizing
its SoftLight Rejuvenation(TM) Laser, including wrinkle- and skin-texture
treatment. This technology, which uses the same laser as ThermoLase's
hair-removal system, is designed to improve the skin's appearance and
texture.
During fiscal 1997, the Company created its Trex Communications
subsidiary, and in September 1997 completed a private placement of
1,133,000 shares of Trex Communications common stock for net proceeds of
$10.6 million. Trex Communications is developing a laser communications
(lasercom) technology, which is designed to move very large amounts of
data quickly via lasers without the need for wires or licensing from the
Federal Communications Commission. In July 1997, Trex Communications
acquired Computer Communications Specialists, Inc. (CCS), which designs
and markets interactive information and voice-response systems, as well
as call-automation systems.
The Company continues to perform substantial amounts of government-
sponsored research and development and apply its core technologies to the
development of new commercial products, such as its passive microwave
camera. The passive microwave camera could be used to enhance safety in
* In September 1995, the Company changed its fiscal year end from the
Saturday nearest December 31 to the Saturday nearest September 30.
References to "fiscal 1997," "fiscal 1996," and "fiscal 1995" herein
are for the years ended September 27, 1997, and September 28, 1996,
and the nine months ended September 30, 1995, respectively.
3PAGE
aircraft navigation during low-visibility conditions and in certain
security applications.
At September 27, 1997, Thermo Electron Corporation (Thermo Electron)
owned 10,149,556 shares of the common stock of the Company, representing
53% of such stock then outstanding. Thermo Electron is a world leader in
environmental monitoring and analysis instruments, biomedical products
such as heart-assist devices, papermaking and recycling equipment,
biomass electric power generation, and other specialized products and
technologies. Thermo Electron also provides a range of services related
to environmental quality.
Thermo Electron intends for the foreseeable future to maintain at
least 50% ownership of the Company. This will require the purchase by
Thermo Electron of additional shares of Company common stock from time to
time as the number of outstanding shares issued by the Company increases.
These and any other purchases may be made either in the open market or
directly from the Company. During fiscal 1997, Thermo Electron purchased
317,200 shares of the Company's common stock in the open market for a
total price of $7.2 million. See Notes 5 and 15 to Consolidated Financial
Statements in the Registrant's Fiscal 1997 Annual Report to Shareholders
for a description of outstanding stock options and subordinated
convertible debentures.
Forward-looking Statements
Forward-looking statements, within the meaning of Section 21E of
the Securities Exchange Act of 1934, are made throughout this Annual
Report on Form 10-K. For this purpose, any statements contained herein
that are not statements of historical fact may be deemed to be
forward-looking statements. Without limiting the foregoing, the words
"believes," "anticipates," "plans," "expects," "seeks," "estimates," and
similar expressions are intended to identify forward-looking statements.
There are a number of important factors that could cause the results of
the Company to differ materially from those indicated by such
forward-looking statements, including those detailed under the heading
"Forward-looking Statements" in the Registrant's Fiscal 1997 Annual
Report to Shareholders, which statements are incorporated herein by
reference.
(b) Financial Information About Industry Segments
The Company's business is divided into three industry segments:
Medical Products manufactured by the Company's Trex Medical subsidiary,
Personal-care Products and Services provided by the Company's ThermoLase
subsidiary, and Advanced Technology Research, including research
conducted and products distributed by its Trex Communications subsidiary.
The principal products produced and services rendered by the Company in
these three segments are described in detail below. (See "Principal
Products and Services.")
4PAGE
Financial information concerning the Company's industry segments is
provided in Note 13 to Consolidated Financial Statements in the
Registrant's Fiscal 1997 Annual Report to Shareholders, which information
is incorporated herein by reference.
(c) Description of Business
(i) Principal Products and Services
Medical Products
Trex Medical consists of four operating units: Lorad, Bennett X-Ray
Corporation (Bennett), XRE, and Continental X-Ray Corporation
(Continental). Lorad manufactures and markets mammography and minimally
invasive digital breast-biopsy systems. Bennett's primary product line
consists of general-purpose X-ray equipment. XRE manufactures and markets
X-ray imaging systems used by interventional cardiologists in the
diagnosis and treatment of blockages in coronary arteries and other
vessels. Continental manufactures and markets a broad line of high-end
general-purpose X-ray systems, as well as specialized units.
Trex Medical sells its products through a worldwide network of more
than 100 independent dealers and, to a lesser extent, on a direct basis.
In addition to manufacturing and marketing its own systems, the Company
manufactures systems and system components as an OEM for other medical
equipment companies such as United States Surgical Corporation (U.S.
Surgical) and the GE Medical Systems division of General Electric Company
(GE).
Mammography Systems
Trex Medical designs, manufactures, and markets mammography systems
that are differentiated on the basis of price and performance. Its
high-end models are the Lorad M-IV and the Bennett Contour Plus, both of
which can be upgraded to accept the full-field digital-imaging technology
being developed by Trex Medical, when available. Trex Medical also offers
two lower-priced models and two mobile mammography systems.
Trex Medical has collected clinical data using its prototype
full-field digital mammography system and, in December 1997, submitted a
510(k) application with such data to the FDA, which must grant market
clearance before the system can be marketed commercially.
Trex Medical believes that demand in the market for mammography
systems is driven primarily by technological innovation that results in
better image quality. Although growth of the installed base has slowed,
demand for new systems continues as older models are replaced with those
offering technological innovations. In addition, Trex Medical believes
that the market outside the United States will grow as more countries
adopt mammography quality standards similar to those adopted in the
United States.
5PAGE
Minimally Invasive Digital Breast-biopsy Systems
The Company offers a variety of minimally invasive digital
breast-biopsy systems, manufactured by Lorad and Bennett, that provide an
alternative to surgical biopsy. These digital breast-biopsy systems were
introduced to address the disadvantages of open surgical biopsy and can
be performed on an outpatient basis under local anesthetic. The typical
cost of a minimally invasive breast-biopsy procedure is approximately
one-third that of an open surgical biopsy.
The Company offers a dedicated prone table, the StereoGuide(R), and
upright, add-on systems that can be attached to most of its mammography
systems. Trex Medical's StereoGuide system is the subject of a lawsuit
alleging infringement of a Fischer Imaging Corporation (Fischer) patent.
See "Item 3 - Legal Proceedings."
Trex Medical believes that the minimally invasive digital
breast-biopsy system market will grow as the procedure becomes more
widely accepted by the medical community and as pressures to contain
healthcare costs increase.
General-purpose Radiography
Trex Medical addresses the general-purpose X-ray market through its
Bennett and Continental subsidiaries. Bennett primarily designs,
manufactures, and markets low-cost, reliable systems to medical
outpatient facilities, such as doctors' offices and surgi-care centers.
Continental (and, to a lesser extent, Bennett) markets the more
sophisticated and expensive X-ray systems typically used in hospitals and
clinics. In addition, Bennett manufactures and markets imaging systems
designed specifically for chiropractors and veterinarians.
The U.S. market for general-purpose X-ray systems is stable, and
consists primarily of replacement sales as customers upgrade older
equipment. Trex Medical believes that the international market is
substantially larger than the U.S. market and that the installed base of
systems is still growing, particularly in developing countries. Trex
Medical has recently expanded its international sales efforts.
Trex Medical believes digital imaging will have significant
application in the general-purpose and specialized X-ray markets and that
the technology it develops for its full-field digital imaging system may
be adaptable to these applications. In general-purpose X-ray
applications, Trex Medical believes digital imaging will produce better
quality images and reduce operating costs by eliminating the need for
film, processing equipment, and chemicals. In addition, digital imaging
will permit the electronic storage of images on magnetic or optical
media, as well as the transmission of images to multiple locations.
Furthermore, Trex Medical believes digital imaging could make the image
intensifiers, which are large and expensive components in certain imaging
systems, obsolete.
6PAGE
Cardiac Catheterization, Angiography, and Electrophysiology
Through its XRE subsidiary, Trex Medical designs, manufactures, and
markets cardiac catheterization laboratories (also called cath labs) and
positioners for cardiovascular imaging systems. XRE's imaging equipment
is used in cath labs where angiography (the examination of blood vessels
using X-rays following the injection of a radiopaque contrast medium) is
performed by an interventional cardiologist. XRE systems are designed to
provide real-time images of peripheral blood vessels and of the heart and
coronary arteries for physicians performing diagnostic and interventional
procedures such as balloon angioplasty.
Trex Medical believes vascular and cardiovascular surgeons will
increasingly use balloon angioplasty and other less-invasive techniques
to treat vascular diseases. These procedures are performed under the
guidance of X-ray imaging such as that provided by Trex Medical's
equipment.
To complement its cath labs, XRE has developed a line of digital
image-processing systems, workstations, and archive alternatives. XRE's
Digitec division, acquired in October 1997, manufactures physiological-
monitoring equipment and digital-image archiving and networking systems
used in cardiac catheterization procedures. In addition, Continental
designs, manufactures, and sells electrophysiology systems that are used
in the diagnosis and treatment of cardiac arrhythmia, which is
characterized by the sudden, erratic beating of the heart and can result
in cardiac arrest.
Radiographic/Fluoroscopic Systems
Through its Continental subsidiary, Trex Medical designs,
manufactures, and markets radiographic/fluoroscopic (R/F) products. An
R/F system is able to record dynamic events by capturing a series of
images in a short period of time. For example, R/F systems are used for
various gastrointestinal procedures to image in real-time the progress of
a radiopaque ingested solution (typically barium) through the digestive
tract.
Personal-care Products and Services
Laser-based Hair Removal
ThermoLase's patented SoftLight system uses a low-energy, dermatology
laser in combination with a specially developed lotion that directs and
absorbs the laser's energy to disable hair follicles. Unlike
electrolysis, the SoftLight system can disable numerous hair follicles at
one time. As a result, ThermoLase believes that it will be able to
address a larger market than electrolysis by offering hair removal from
large areas, such as the legs. The lasers, which are similar to those
used for tattoo and birthmark removal, are manufactured for ThermoLase by
Trex Medical. The lotion is manufactured by ThermoLase's CBI Laboratories
subsidiary.
7PAGE
In a typical treatment, the area from which hair is to be removed is
given a gentle cleansing. The lotion is then applied to the skin, and the
area is scanned several times with the laser beam. The laser energy is
absorbed by the lotion that has penetrated the hair duct, causing the
temperature of the lotion to increase to a level that disables the hair
follicles. The laser treatment most effectively disables hair follicles
in the active growing (anagen) stage of development, and at any one time,
a certain percentage of hair follicles are in the resting (telogen)
stage. Therefore, it is necessary for clients to return for one or more
additional treatments to ensure that each follicle is treated while in
the active stage of hair growth. The number of follow-up sessions
required and the time interval between treatments varies depending on the
particular characteristics of the client and the anatomical site being
treated.
ThermoLase's spas currently offer a variety of pricing programs,
including a fixed fee for a single treatment (occurring over two visits)
as well as fixed fees for multiple treatments during specified time
periods. The per-session cost of the SoftLight system to the customer is,
in general, substantially higher than the per-session costs of
alternative methods of hair removal, including waxing, electrolysis, and
shaving. The total cost of the SoftLight treatments in comparison to
these alternatives varies depending on factors including the body part
treated, the pricing plan selected, and the length of time for which hair
is removed in comparison to such alternatives.
In September 1997, ThermoLase introduced SoftLight 2.0, a
modification of the hair-removal process that is intended to increase the
effectiveness of the treatment. ThermoLase has modified its lotion,
thereby eliminating the need for waxing, part of the process used in
earlier treatment protocols, and added an additional step to better
direct the laser energy into the hair follicle. ThermoLase is continuing
to evaluate the results of the new protocol as well as the connection
between follicle damage and long-term hair removal.
ThermoLase opened its first Spa Thira in early fiscal 1996, and had a
total of four opened by the end of fiscal 1996. In fiscal 1997,
ThermoLase opened nine more domestic spas, and by October 1997 had a
total of 14 domestic Spa Thira locations. In addition, ThermoLase's
international arrangements resulted in the opening of spas in Paris in
May 1997 and Lugano, Switzerland, in October 1997. A spa is also under
construction in Dubai in the United Arab Emirates, and additional spas
are expected to be constructed in Japan, Saudi Arabia, Brazil, and
London, pending regulatory approvals.
The international spas are being developed pursuant to joint ventures
and other licensing arrangements. In January 1996, ThermoLase established
a joint venture in Japan. During fiscal 1997, ThermoLase established
joint ventures in France in November 1996 and England in September 1997,
and six additional licensing arrangements: in Saudi Arabia in November
1996; in Tunisia and Belgium in December 1996; in the United Arab
Emirates and Oman in March 1997; in Switzerland in April 1997; in Brazil
in June 1997; and in the United Kingdom (excluding England) and the
Republic of Ireland in September 1997.
8PAGE
In June 1996, ThermoLase initiated a program to license its SoftLight
technology to physicians. In this program, ThermoLase receives a
per-procedure royalty that varies depending on the anatomical site
treated and pricing plan selected by the client. It also provides the
physicians with the lasers and supplies that are necessary to perform the
service. As of November 1997, approximately 150 lasers were placed in
practices in 33 states and certain international markets.
ThermoLase's existing and planned spas are designed to reflect the
environment of a luxurious day spa. ThermoLase believes that the
uniformity of its centers will foster brand recognition and facilitate
the opening of new spas. ThermoLase currently uses medical staff,
including physicians and nurses, as well as other personnel, to operate
the SoftLight system at its centers. ThermoLase advertises the SoftLight
system through an advertising and public relations campaign focused on
exposure in fashion and health magazines as well as the national news
media.
Skin-care and Other Personal-care Products
ThermoLase's CBI Laboratories, Inc. (CBI) subsidiary designs,
develops, manufactures, and packages high-quality personal-care products
for sale to retailers under its own brand names and as a contract
manufacturer under arrangements with third parties. CBI develops and
manufactures most of its products, which include shampoos, lotions,
shower creams, bath salts, and facial treatments, using botanicals and
herbal extracts. CBI has the facilities and personnel to develop new
product formulations, design packaging layouts, mix and fill
formulations, and package final products for distribution. CBI does not
manufacture packaging such as containers and boxes, but contracts with
third parties for these supplies. CBI has a portfolio of approximately
3,000 formulations, and may manufacture up to 300 different products in a
quarter.
Advanced Technology Research
The Company is currently focusing its advanced technology research
efforts in the areas of communications, avionics, X-ray detection, signal
processing, and lasers. The Company has developed its expertise in these
core technologies in connection with government-sponsored research and
development.
Laser Communication System (lasercom)
Lasercom is a high-speed, high-bandwidth laser communication system,
which the Company has been developing since 1989 under government-funded
contracts. Through fiscal 1997, the Ballistic Missile Defense
Organization has provided funding totaling $12.4 million. The lasercom
system, which is in early-stage beta testing, is designed to move large
amounts of data quickly via lasers, without the need for wires. Through
the application of its lasercom technology, Trex Communications intends
to commercialize products to meet the growing demand for high-speed,
digital telecommunications technology, including opportunities in
9PAGE
ground-based networks, satellite-to-satellite crosslinks, and air-based
systems.
In September 1996, the Company received a $4.9 million contract (with
options for an additional $0.4 million) from the Defense Airborne
Reconnaissance Office (DARO) for advanced development of the lasercom
system for use on aircraft. Under this contract, Trex Communications will
apply its lasercom technology to develop a system that could be used on
unmanned reconnaissance aircraft. Lasercom would provide a horizontal
communications link to quickly transmit digitized images of the ground
below the aircraft, for example, to another unmanned aircraft flying near
a command post hundreds of miles away, where the information could be
downlinked and analyzed. Under the contract, Trex Communications is
developing a fully functional prototype to be tested using small
commercial jets.
Passive Microwave Camera
The Company is developing a passive microwave camera (PMC), which is
designed to enable the user to see objects hidden by fog and clouds and
to see through certain opaque objects, such as building partitions. The
PMC will be a totally passive device that emits no radiation and can
produce real-time video images during the day or night without the
clutter typical of radar.
The Company believes the largest potential application of the PMC
would be the incorporation of the device into airplanes for use during
takeoffs, landings, and taxiing in adverse weather conditions. PMC
acceptance is subject to certification by the Federal Aviation
Administration (FAA). The U.S. Army has provided approximately
$10.7 million in funding for PMC development over the last five years.
Development continues under a $4.0 million U.S. Army Research Laboratory
contract that was awarded in fiscal 1996.
Under a $700,000 grant from the National Institute of Justice,
awarded in fiscal 1997, the Company plans to conduct a PMC technology
demonstration and evaluation program in cooperation with local law
enforcement agencies.
Other Projects
In addition to the full-field digital mammography system being
developed by Trex Medical, the Company is developing a next-generation
digital medical imaging technology. This new system would incorporate a
flat-panel, direct-digital detector that could provide even more
information for earlier diagnoses. This system is based on complementary
metal oxide semiconductor (CMOS) technology. The CMOS system would
"directly" detect the X-rays and convert them into digital information,
as opposed to converting them into visible light first before being
digitized, as is the case with the Company's current full-field digital
technology. Trex Medical has the right to license this technology as it
pertains to certain medical applications. The Company is also exploring
other nonmedical applications for this flat-panel direct-digital
detection technology.
10PAGE
The Company is currently working on government-funded projects in
several areas, including: (1) space surveillance - Under a contract from
the U.S. Air Force Phillips Laboratory awarded in 1993, the Company is
designing and building a system to produce high-resolution images of low-
earth-orbit satellites. Through fiscal 1997, the Company has received
$11.4 million under this contract. (2) ROBS (rapid optical beam steering)
laser radar system - The Company has developed and extensively tested the
ROBS system over the last 10 years, supported by more than $28 million in
government funding. In fiscal 1996, the Company received a three-year
$8.8 million contract from the U.S. Naval Air Warfare Center at China
Lake, California, to continue development of this system, which is
designed to simultaneously track multiple, fast-moving airborne objects
with extreme precision. In July 1996, the Company received a $5.9 million
contract from the U.S. Army Missile Command to build a new version of
ROBS to meet Army specifications.
(ii) New Products
The Company's business includes the research and development of new
products. (see "Principal Products and Services.")
(iii) Raw Materials
In connection with its SoftLight 2.0 process, ThermoLase currently
uses a hydrogel product that is currently available from only one source.
ThermoLase has been able to obtain an adequate supply of hydrogel to
satisfy its current needs for the product, but there can be no assurance
that it will be able to do so indefinitely or that it will continue to be
able to obtain an adequate supply of the product at prices acceptable to
ThermoLase. Other raw materials, components, and supplies purchased by
the Company are either available from a number of different suppliers or
from alternative sources that could be developed without a material
adverse effect on the Company. To date, the Company has experienced no
difficulties in obtaining these materials.
(iv) Patents, Licenses, and Trademarks
The Company protects its intellectual property through patents,
trademarks, and trade secrets, as appropriate. In addition to relying on
patents, the Company protects some of its technology as trade secrets and
uses trademarks in association with certain products. The Company also
enters into licensing arrangements to acquire rights in technology.
The technology underlying the SoftLight system, including all patents
issued thereon, belongs to the Company by virtue of a license agreement
executed in February 1993 between ThermoLase and the inventor of the
system, which grants ThermoLase an irrevocable, exclusive, worldwide,
perpetual license to the technology in exchange for a $0.1 million
commitment fee and a royalty equal to 0.25% of revenues generated from
the sale or use of the SoftLight system through February 10, 2010.
Patented inventions of the Company include certain mammography and
other X-ray equipment, lasers, telescopes, high-power diamond switches,
11PAGE
laser-radar devices, microwave cameras, a laser-based hair-removal
process, a Sonic CT system, a wind-shear detector, and methods of
producing composites and ultrafine particles. Patent applications are
pending on certain mammography equipment, a passive microwave camera, and
a free-space laser communication system.
The Company is a defendant in certain patent litigation and has been
notified that it allegedly infringes certain other technology owned by a
third party. See information under the heading "Intellectual Property
Rights, Uncertainties, and Litigation" under the heading "Forward-looking
Statements" in the Registrant's Fiscal 1997 Annual Report to
Shareholders, which information is incorporated herein by reference.
Several of the Company's patents were the result of research programs
funded by the U.S. government. With the exception of a prohibition on
disclosure of classified technology, the government does not impose
significant restrictions on the Company's use of government-sponsored
technology. The government retains a non-exclusive, royalty-free license
to use technology developed under government contracts for government
purposes, and could, in certain circumstances, transfer all commercial
rights to technology to a third party if the Company does not pursue its
development.
(v) Seasonal Influences
There are no significant seasonal influences on the Company's sales
of products and services.
(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
Medical Products segment revenues from OEM sales of a modified design
of Trex Medical's stereotactic prone breast-biopsy system to U.S.
Surgical accounted for 17% of Medical Products segment revenues and 14%
of the Company's total revenues in fiscal 1997. No single customer
accounted for more than 10% of the revenues of the Personal-care Products
and Services segment in fiscal 1997. U.S. government agencies accounted
for substantially all of the Advanced Technology Research segment
revenues in fiscal 1997. The Company's Advanced Technology Research
segment is heavily dependent on government funding through several
agencies, and the loss of any of such agencies or customers would have a
material adverse effect on this segment.
(viii) Backlog
The backlog of firm orders for the Medical Products segment was
$49.3 million as of September 27, 1997, compared with $65.3 million as of
September 28, 1996. The backlog at September 28, 1996, was affected by a
build-up of new orders for Trex Medical's M-IV mammography system, which
12PAGE
it began shipping in late fiscal 1996, and the timing of certain orders
received in late fiscal 1996. The backlog of firm orders for the
Personal-care Products and Services segment, which consisted exclusively
of orders for CBI's products, was $2.8 million as of September 27, 1997,
compared with $5.5 million as of September 28, 1996. The Company
estimates that CBI will continue to represent a decreasing portion of
total segment revenues as revenues from hair-removal services increase.
The backlog of firm orders for the Advanced Technology Research segment
was $15.0 million as of September 27, 1997, compared with $17.9 million
as of September 28, 1996. Substantially all government contract orders
included in this backlog were funded at September 27, 1997. The Company
does not believe that the decreases in backlog are necessarily indicative
of a trend. The Company believes that substantially all of its fiscal
1997 backlog will be completed during fiscal 1998.
(ix) Government Contracts
Less than 10% of the Company's total revenues in fiscal 1997 were
derived from contracts or subcontracts with the federal government, which
are subject to renegotiation of profits or termination. There are no
pending or, to the Company's knowledge, threatened renegotiations or
terminations that are material to the Company.
(x) Competition
Medical Products
The healthcare industry in general, and the market for imaging
products in particular, is highly competitive. Trex Medical competes with
a number of companies, many of which have substantially greater
financial, marketing, and other resources than Trex Medical. Trex
Medical's competitors include large companies such as GE, the Philips
Medical Systems North America Company subsidiary of Philips N.V.
(Philips), the Siemens Corporation subsidiary of Siemens AG (Siemens),
Toshiba American Medical Systems, Inc., Toshiba America MRI, Inc.,
Shimadzu, and Picker International, Inc., which compete in most
diagnostic imaging modalities, including X-ray imaging. In addition, a
significant portion of Trex Medical's sales are to U.S. Surgical and GE
through OEM arrangements. The products sold through such OEM agreements
compete with those offered by Trex Medical directly and through its
independent dealers. Trex Medical's StereoLoc II, Cytoguide, and
StereoGuide breast-biopsy systems compete with products offered by GE,
Fischer Imaging Corporation, and Philips, and with conventional surgical
biopsy procedures. Trex Medical competes primarily on the basis of
product features, product performance, and reputation as well as price
and service. Trex Medical believes that competition is likely to increase
as a result of healthcare cost-containment pressures and the development
of alternative diagnostic and interventional technologies.
Personal-care Products and Services
ThermoLase expects that, in the near term, the principal competitors
relative to the hair-removal treatment using the SoftLight system will be
electrolysis providers. The electrolysis market is characterized by many
13PAGE
small practitioners. Although ThermoLase believes that it has a
significant competitive advantage over electrolysis, it does not have the
well-established network of client relationships that many electrologists
have. Over time, it is expected that ThermoLase will face growing
competition from other laser-based hair-removal services. Four other
laser manufacturers received market clearance from the FDA in 1997 for
hair removal. ThermoLase expects that others, in addition to the laser
companies that currently have clearance for hair removal, will seek to
develop similar technologies and products that may compete directly with
the SoftLight system. ThermoLase's services will also compete with other
hair-removal products and methods. ThermoLase believes that competition
for its hair-removal services is based primarily on efficacy, price,
comfort, and safety.
Should it receive clearance to market the SoftLight Rejuvenation
Laser system for skin resurfacing, ThermoLase expects that its principal
competitors will be providers of carbon dioxide laser and chemical peel
resurfacing and traditional spa-based services. ThermoLase believes that
its SoftLight Rejuvenation skin treatment system will offer customers an
alternative to more aggressive skin-texture and wrinkle-treatment
methods.
The professional skin-care and bath-and-body products markets are
highly competitive. In selling its Salon product line, CBI competes with
a number of small manufacturers and divisions of larger companies. The
competition in this market is fragmented with no one competitor
dominating the market. In the Custom Design and Store Brands groups, CBI
competes with numerous contract packaging companies that can prepare and
package custom formulations for customers. Some of these competitors have
substantially greater financial, marketing, and research and development
resources than those of ThermoLase. CBI competes in these markets by
offering its customers exclusive product lines that ThermoLase believes
can generally be sold at a lower price but with higher margins than CBI's
competitors.
Advanced Technology Research
Trex Communications is engaged in segments of the telecommunications
industry that are extremely competitive. In its lasercom division, Trex
Communications expects to compete with large telecommunication service
providers, such as the regional Bell operating companies, competitive
access providers, and microwave and cellular service providers. Such
companies have substantially greater financial, technical, marketing, and
other resources than Trex Communications. Trex Communications' goal,
however, is to enter into strategic relationships with certain of these
competitors to provide components for the network systems that Trex
Communications is developing and to market and sell lasercom technology
and services. No assurance can be given that Trex Communications will be
successful in creating such strategic relationships. In addition, Trex
Communications' lasercom division expects to compete with other laser-
based communication hardware and software providers, most of which have
greater financial, technical, marketing, and other resources than Trex
Communications.
14PAGE
Trex Communications' CCS subsidiary competes with a number of call
automation companies, primarily on the basis of product features, product
performance, and reputation, as well as price and service. Some of CCS'
competitors have substantially greater financial, technical, marketing,
and other resources than CCS.
The Company competes for its research and development programs
principally on the basis of technological innovations. As government
funding becomes more scarce, particularly for defense projects, the
competition for such funding will become more intense. In addition, as
the Company's programs move from the development stage to procurement of
large-scale, electro-optical systems, competition is expected to develop
and intensify. Some of the Company's competitors for research and
development funding and procurement have substantially greater resources
than those of the Company.
As the Company develops commercial products, it expects to encounter
competition from various sources, including companies that will have
substantially greater technical, marketing, and financial resources than
those of the Company. The Company believes that its overall success will
depend primarily on its ability to continue to make technological
advances.
(xi) Research and Development
During the years ended September 27, 1997, and September 28, 1996,
and the nine months ended September 30, 1995, the Company incurred
$32,067,000, $24,986,000, and $13,430,000, respectively, on internally
sponsored research and development programs, and $11,667,000,
$10,278,000, and $11,803,000, respectively, on research and development
programs sponsored by others. Approximately 344 professional employees
were engaged full-time in research and development activities at
September 27, 1997.
(xii) Environmental Protection Regulations
The Company believes that compliance with federal, state, and local
environmental regulations will not have a material adverse effect on its
capital expenditures, earnings, or competitive position.
(xiii) Number of Employees
As of September 27, 1997, the Company had a total of 1,712 employees.
(d) Financial Information about Exports by Domestic Operations
Financial information about exports by domestic operations is
summarized in Note 13 to Consolidated Financial Statements in the
Registrant's Fiscal 1997 Annual Report to Shareholders, which information
is incorporated herein by reference.
15PAGE
(e) Executive Officers of the Registrant
Present Title (Fiscal Year First
Name Age Became Executive Officer)
---------------------------------------------------------------------
Gary S. Weinstein 40 Chief Executive Officer (1996)
John N. Hatsopoulos 63 Chief Financial Officer and
Vice President (1990)
Dr. Kenneth Y. Tang 50 Senior Vice President (1990)
David A. Teitel 34 Vice President, Finance (1996)
Paul F. Kelleher 55 Chief Accounting Officer (1990)
Hal Kirshner 56 President and Chief Executive Officer,
Trex Medical Corporation (1992)
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 Messrs.
Weinstein, Kirshner, and Teitel have held comparable positions for at
least five years with the Company or Thermo Electron. Mr. Weinstein has
been Chief Executive Officer of the Company since February 1996. For at
least five years prior to joining the Company, Mr. Weinstein held various
positions at Lehman Brothers, an investment banking firm, including
heading its global syndicate and equity capital market group from March
1995 until joining the Company. Mr. Kirshner was President of Lorad from
January 1991 to April 1997. Mr. Teitel has been Vice President, Finance
of the Company since August 1996. Prior to joining the Company, Mr.
Teitel was Vice President, Finance of Deknatel Snowden Pencer, Inc.
(Deknatel), a manufacturer of specialty surgical products, from May 1995
to August 1996, and was Director of Finance at Deknatel from August 1994
to May 1995. From August 1985 to August 1994, Mr. Teitel held various
positions at Arthur Andersen LLP, a professional services firm.
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 September 27, 1997, are as follows:
Medical Products
Trex Medical owns two office and manufacturing facilities: a
62,500-square-foot facility in Danbury, Connecticut, and a
164,000-square-foot facility in Broadview, Illinois. Trex Medical leases
a 120,000-square-foot office and manufacturing facility in Copiague, New
York, under a lease expiring in 2005, and a 156,000-square-foot office
and manufacturing facility in Littleton, Massachusetts, under a lease
expiring in 2012, and a 60,000-square-foot office and manufacturing
facility in Danbury, Connecticut, under a lease expiring in 2007.
16PAGE
Personal-care Products and Services
ThermoLase occupies approximately 213,000 square feet of office and
manufacturing space in Carrollton, Texas, under a lease expiring in 2004,
through its CBI subsidiary. ThermoLase also occupies approximately
83,000 square feet of retail space for its Spa Thira salons, under leases
expiring from 2000 through 2013.
Advanced Technology Research
The Company currently leases 90,000 square feet of office,
engineering, and laboratory space in San Diego under a lease expiring in
2006. In addition, CCS leases office, engineering, and manufacturing
space of 42,000 and 4,000 square feet in Georgia and England,
respectively, under leases expiring from 2001 through 2003. The Company
also leases 25,000 square feet of office and warehouse facilities in San
Diego under leases expiring in fiscal 1998.
The Company believes that its facilities are in good condition and
are suitable and adequate to meet current needs.
Item 3. Legal Proceedings
In April 1992, Fischer Imaging Corporation (Fischer) commenced a
lawsuit in the United States District Court, District of Colorado,
against Lorad, alleging that Lorad's prone breast-biopsy system infringes
a Fischer patent on a precision mammographic needle-biopsy system. As of
September 27, 1997, the Company had recognized aggregate revenues of
approximately $107.1 million from the sale of such systems. The suit
requests a permanent injunction, treble damages, and attorneys' fees and
expenses. If the Company is unsuccessful in defending this lawsuit, it
may be enjoined from manufacturing and selling its prone breast-biopsy
system without a license from Fischer. No assurance can be given that the
Company will be able to obtain such a license, if required, on
commercially reasonable terms, if at all. In addition, the Company may be
subject to damages for past infringement. No assurance can be given as to
the amount that the Company may eventually be required to pay in expenses
or in such damages.
Item 4. Submission of Matters to a Vote of Security Holders
Not applicable.
17PAGE
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, $.01 par value, and dividend policy is
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 required under this item 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 and Supplementary
Data are included in the Registrant's Fiscal 1997 Annual Report to
Shareholders and are incorporated herein by reference.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosures
Not applicable.
18PAGE
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.
19
PAGE
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 5, 1997 THERMOTREX CORPORATION
By: Gary S. Weinstein
-----------------------
Gary S. Weinstein
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 5, 1997.
Signature Title
--------- -----
By: Gary S. Weinstein Chief Executive Officer, Chairman
----------------------------- of the Board, and Director
Gary S. Weinstein
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: Morton Collins Director
-----------------------------
Morton Collins
By: Peter O. Crisp Director
-----------------------------
Peter O. Crisp
By: Paul F. Ferrari Director
-----------------------------
Paul F. Ferrari
By: Dr. George N. Hatsopoulos Director
-----------------------------
Dr. George N. Hatsopoulos
By: _____________________________ Director
Robert C. Howard
By: Director
-----------------------------
Nicholas T. Zervas
21PAGE
Report of Independent Public Accountants
To the Shareholders and Board of Directors of ThermoTrex Corporation:
We have audited, in accordance with generally accepted auditing
standards, the consolidated financial statements included in ThermoTrex
Corporation's Annual Report to Shareholders incorporated by reference in
this Form 10-K, and have issued our report thereon dated November 3,
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 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. The
schedule has been subjected to the auditing procedures applied in the
audits of the basic consolidated financial statements and, in our
opinion, fairly states in all material respects the consolidated
financial data required to be set forth therein in relation to the basic
consolidated financial statements taken as a whole.
Arthur Andersen LLP
Boston, Massachusetts
November 3, 1997
22PAGE
SCHEDULE II
THERMOTREX CORPORATION
Valuation and Qualifying Accounts
(In thousands)
Provision
Balance at Charged Accounts Balance
Beginning to Written at End
Description of Period Expense Off Other(a) of Period
----------- ---------- --------- -------- -------- ---------
Allowance for
Doubtful Accounts
Year Ended
September 27, 1997 $1,586 $ 279 $ (164) $ 268 $1,969
Year Ended
September 28, 1996 $1,141 $ 336 $ (163) $ 272 $1,586
Nine Months Ended
September 30, 1995 $ 643 $ 178 $ - $ 320 $1,141
(a) 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.
23PAGE
EXHIBIT INDEX
Exhibit
Number Description of Exhibit
3.1 Restated Certificate of Incorporation, as amended (filed as
Exhibit 3(i) to the Registrant's Quarterly Report on Form
10-Q for the fiscal quarter ended July 2, 1994 [File No.
1-10791] and incorporated herein by reference).
3.2 By-Laws of the Registrant, as amended and restated (filed as
Exhibit 3.2 to the Registrant's Transition Report on Form
10-K for the transition period January 1, 1995, through
September 30, 1995 [File No. 1-10791] and incorporated herein
by reference).
4.1 Indenture dated as of October 28, 1997, by and among the
Registrant, Thermo Electron Corporation, and Bankers Trust
Company, as Trustee, relating to $124.5 principal amount of
the Registrant's 3 1/4% Subordinated Convertible Debentures
due 2007 (filed as Exhibit 4.1 to the Registrant's Current
Report on Form 8-K dated October 28, 1997, and filed with the
Securities and Exchange Commission on October 29, 1997, and
incorporated herein by reference).
4.2 Fiscal Agency Agreement dated as of August 12, 1997, among
ThermoLase Corporation, Thermo Electron Corporation, and
Bankers Trust Company, as Fiscal Agent, relating to
$115,000,000 principal amount of ThermoLase's 4 3/8%
Subordinated Convertible Debentures due 2004 (filed as
Exhibit 4.3 to ThermoLase Corporation's Annual Report on Form
10-K for the fiscal year ended September 27, 1997 [File No.
1-13104] and incorporated herein by reference).
10.1 Asset Transfer Agreement dated December 29, 1990, between
Thermo Electron Corporation and the Registrant (filed as
Exhibit 10(a) to the Registrant's Registration Statement on
Form S-1 [Reg. No. 33-40972] 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 January 2, 1993
[File No. 1-10791] and incorporated herein by reference).
10.3 Form of Indemnification Agreement between the Registrant and
its officers and directors (filed as Exhibit 10(f) to the
Registrant's Registration Statement on Form S-1
[Reg. No. 33-40972] and incorporated herein by reference).
10.4 Thermo Electron Corporate Charter as amended and restated
effective January 3, 1993 (filed as Exhibit 10(g) to the
Registrant's Annual Report on Form 10-K for the fiscal year
ended January 2, 1993 [File No. 1-10791] and incorporated
herein by reference).
24PAGE
EXHIBIT INDEX
Exhibit
Number Description of Exhibit
10.5 Stock Option Agreement granted to Anthony J. Pellegrino dated
November 16, 1992 (filed as Exhibit 10(n) to the Registrant's
Annual Report on Form 10-K for the fiscal year ended
January 2, 1993 [File No. 1-10791] and incorporated herein by
reference).
10.6 Stock Option Agreement granted to Hal Kirshner dated
November 16, 1992 (filed as Exhibit 10(o) to the Registrant's
Annual Report on Form 10-K for the fiscal year ended
January 2, 1993 [File No. 1-10791] and incorporated herein by
reference).
10.7 Lease dated October 12, 1988, between CBI Laboratories, Inc.,
Trammell Crow Company No. 91, and Petula Associates Ltd., as
amended (filed as Exhibit 10.18 to the Registrant's Annual
Report on Form 10-K for the fiscal year ended January 1, 1994
[File No. 1-10791] and incorporated herein by reference).
10.8 Lease dated September 1, 1993, between CBI Laboratories, Inc.
and Lincoln Valwood, Ltd. (filed as Exhibit 10.19 to the
Registrant's Annual Report on Form 10-K for the fiscal year
ended January 1, 1994 [File No. 1-10791] and incorporated
herein by reference).
10.9 Master Repurchase Agreement dated as of January 1, 1994,
between the Registrant and Thermo Electron Corporation.
10.10 Master Guarantee Reimbursement Agreement dated as of January
1, 1994, among the Registrant, ThermoLase Corporation, and
Thermo Electron Corporation (filed as Exhibit 10.6 to
ThermoLase's Registration Statement on Form S-1 [Reg. No.
33-78052] and incorporated herein by reference).
10.11 Lease executed February 9, 1995, between LMP Properties Ltd.
and the Registrant (filed as Exhibit 10.22 to the
Registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1994 [File No. 1-10791] and incorporated
herein by reference).
10.12 Stock purchase agreement dated as of September 15, 1995, by
and among Bennett X-Ray Corporation, ThermoTrex Corporation,
and Calvin Kleinman, Robert P. Coe, Walter F. Schneider, and
Martin Koening (filed as Exhibit 2 to the Registrant's
Current Report on Form 8-K dated September 14, 1995 [File No.
1-10791] and incorporated herein by reference).
10.13 Lease dated as of September 15, 1995, by and among the
Registrant and BK Realty Associates, L.P. and Calrob Realty
Associates (filed as Exhibit 10.26 to the Registrant's
Transition Report on Form 10-K for the transition period
January 1, 1995, through September 30, 1995 [File No.
1-10791] and incorporated herein by reference).
25PAGE
EXHIBIT INDEX
Exhibit
Number Description of Exhibit
10.14 Incentive Stock Option Plan of the Registrant (filed as
Exhibit 10(h) to the Registrant's Registration Statement on
Form S-1 [Reg. No. 33-40972] 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 1,945,000 shares, after adjustment to
reflect share increases approved in 1992 and 1993 and 3-for-2
stock split effected in October 1993).
10.15 Nonqualified Stock Option Plan of the Registrant (filed as
Exhibit 10(i) to the Registrant's Registration Statement on
Form S-1 [Reg. No. 33-40972] 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 1,945,000 shares, after adjustment to
reflect share increases approved in 1992 and 1993 and 3-for-2
stock split effected in October 1993).
10.16 ThermoTrex Corporation - ThermoLase Corporation (formerly
ThermoLase Inc.) Nonqualified Stock Option Plan (filed as
Exhibit 10.53 to the Registrant's Annual Report on Form 10-K
for the fiscal year ended January 1, 1994 [File No. 1-10791]
and incorporated herein by reference).
10.17 ThermoTrex Corporation - Trex Medical Corporation
Nonqualified Stock Option Plan (filed as Exhibit 10.73 to
Thermo Cardiosystems' Annual Report on Form 10-K for the
fiscal year ended December 30, 1995 [File No. 1-10114] and
incorporated herein by reference).
10.18 ThermoTrex Corporation - Trex Communications Corporation
Nonqualified Stock Option Plan.
10.19 Directors Stock Option Plan of the Registrant (filed as
Exhibit 10.26 to the Registrant's Annual Report on Form 10-K
for the fiscal year ended December 31, 1994 [File No.
1-10791] 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 10.45 to the Annual Report on Form
10-K of Thermo Electron for the fiscal year ended December
28, 1996 [File No. 1-8002] and are incorporated herein by
reference.
26PAGE
EXHIBIT INDEX
Exhibit
Number Description of Exhibit
10.20 Operating Agreement of ThermoLase Japan L.L.C. dated as of
January 22, 1996, between ThermoLase Corporation and Fox
River Japan Partners, L.P. (filed as Exhibit 10.1 to
ThermoLase's Quarterly Report on Form 10-Q for the quarter
ended December 30, 1995 [File No. 1-13104] and incorporated
herein by reference).
10.21 License Agreement dated as of January 22, 1996, between
ThermoLase Corporation and ThermoLase Japan L.L.C. (filed as
Exhibit 10.2 to ThermoLase's Quarterly Report on Form 10-Q
for the quarter ended December 30, 1995 [File No. 1-13104]
and incorporated herein by reference).
10.22 Option Agreement dated as of January 22, 1996, between
ThermoLase Corporation and Fox River Japan Partners, L.P.
(filed as Exhibit 10.3 to ThermoLase's Quarterly Report on
Form 10-Q for the quarter ended December 30, 1995 [File No.
1-13104] and incorporated herein by reference).
10.23 Amendment to Operating Agreement of ThermoLase Japan L.L.C.
dated as of May 1, 1996, by and among ThermoLase Corporation,
Fox River Partners L.P., and ThermoLase Japan L.L.C. (filed
as Exhibit 10.29 to ThermoLase Corporation's Annual Report on
Form 10-K for the fiscal year ended September 27, 1997 [File
No. 1-13104] and incorporated herein by reference).
10.24 License Agreement dated as of October 30, 1995, between
ThermoLase Corporation and Ronald G. Wheeland, M.D.,
Professional Corporation (filed as Exhibit 10.4 to
ThermoLase's Quarterly Report on Form 10-Q for the quarter
ended December 30, 1995 [File No. 1-13104] and incorporated
herein by reference).
10.25 Management Agreement dated as of October 30, 1995, between
ThermoLase Corporation and Ronald G. Wheeland, M.D.,
Professional Corporation (filed as Exhibit 10.5 to
ThermoLase's Quarterly Report on Form 10-Q for the quarter
ended December 30, 1995 [File No. 1-13104] and incorporated
herein by reference).
10.26 Sublease Agreement dated as of October 30, 1995, between
ThermoLase Corporation and Ronald G. Wheeland, M.D.,
Professional Corporation (filed as Exhibit 10.6 to
ThermoLase's Quarterly Report on Form 10-Q for the quarter
ended December 30, 1995 [File No. 1-13104] and incorporated
herein by reference).
10.27 Lease dated as of April 12, 1995, between ThermoLase
Corporation and The Goldberg Family Trust (filed as Exhibit
10.7 to ThermoLase's Quarterly Report on Form 10-Q for the
quarter ended December 30, 1995 [File No. 1-13104] and
incorporated herein by reference).
27PAGE
EXHIBIT INDEX
Exhibit
Number Description of Exhibit
10.28 Lease dated as of December 8, 1995, between ThermoLase
Corporation and Canon Properties (filed as Exhibit 10.8 to
ThermoLase's Quarterly Report on Form 10-Q for the quarter
ended December 30, 1995 [File No. 1-13104] and incorporated
herein by reference).
10.29 Lease dated as of January 17, 1996, between ThermoLase
Corporation and Trammell Crow Equity Partners (filed as
Exhibit 10.9 to ThermoLase's Quarterly Report on Form 10-Q
for the quarter ended December 30, 1995 [File No. 1-13104]
and incorporated herein by reference).
10.30 Lease dated as of December 20, 1995, between Melvyn J. Powers
and Mary P. Powers D/B/A M&M Realty and Trex Medical
Corporation as amended (filed as Exhibit 10.14 to Trex
Medical's Registration Statement on Form S-1 [Reg. No.
333-2926] and incorporated herein by reference).
10.31 Lease dated May 29, 1996, between John K. Grady, Trustee of
Concord Associates Foster Street Trust and XRE Corporation
(filed as Exhibit 10.89 to Trex Medical's Registration
Statement on Form S-1 [Reg. No. 333-2926] and incorporated
herein by reference).
10.32 Asset Purchase Agreement dated September 4, 1996, by and
among CXR Acquisition Corp., Trex Medical Corporation,
Continental X-Ray Corporation, Alphatek Corporation,
Broadview Manufacturing Corporation, Haymarket Square
Associates, Advanced Medical Imaging, Inc., Trans-Continental
X-ray Corporation, and the Stockholders and Partners thereof
(filed as Exhibit 10.21 to Trex Medical's Registration
Statement on Form S-1 [Reg. No. 333-15381] and incorporated
herein by reference).
10.33 Master Joint Venture Agreement dated as of October 30, 1996,
among ThermoLase Corporation, Franklin Holdings, S.A., and
Yves Micheli (filed as Exhibit 10.26 to ThermoLase's Annual
Report on Form 10-K for the fiscal year ended September 28,
1996 [File No. 1-13104] and incorporated herein by
reference).
10.34 SoftLight and Spa Thira Franchise and License Agreement dated
as of November 8, 1996, between ThermoLase Corporation and
Medical Supply & Service Co. (filed as Exhibit 10.27 to
ThermoLase's Annual Report on Form 10-K for the fiscal year
ended September 28, 1996 [File No. 1-13104] and incorporated
herein by reference).
28PAGE
EXHIBIT INDEX
Exhibit
Number Description of Exhibit
10.35 Equipment License Agreement for SoftLight Lasers dated as of
November 8, 1996, between ThermoLase Corporation and Medical
Supply & Service Co. (filed as Exhibit 10.28 to ThermoLase's
Annual Report on Form 10-K for the fiscal year ended
September 28, 1996 [File No. 1-13104] and incorporated herein
by reference).
10.36 Promissory Note due April 30, 1997, issued by the Registrant
to Thermo Electron Corporation (filed as Exhibit 10.35 to the
Registrant's Annual Report on Form 10-K for the fiscal year
ended September 28, 1996, and incorporated herein by
reference).
10.37 Promissory Note due October 5, 1998, issued by the Registrant
to Thermo Electron Corporation (filed as Exhibit 10.1 to the
Registrant's Quarterly Report on Form 10-Q for the quarter
ended June 28, 1997, and incorporated herein by reference).
10.38 Amended and Restated Stock Holding Assistance Plan and Form
of Promissory Note.
10.39 Deferred Compensation Plan for Directors of the Registrant
(filed as Exhibit 10(j) to the Registrant's Registration
Statement on Form S-1 [Reg. No. 33-40972] and incorporated
herein by reference).
11 Statement re: Computation of Earnings per Share.
13 Annual Report to Shareholders for the fiscal year ended
September 27, 1997 (only those portions incorporated herein
by reference).
21 Subsidiaries of the Registrant.
23 Consent of Arthur Andersen LLP.
27 Financial Data Schedule.
99.1 Form of ThermoLase Corporation Unit Certificate (filed as
Exhibit 4.1 to ThermoLase's Registration Statement on Form
S-4 [Reg. No. 333-19633] and incorporated herein by
reference).